’We’re now in the middle of the biggest transformation that we’ve ever seen in the insurance industry,’ says vice president 

Moving to the cloud is “inevitable” for small brokers despite higher costs that could “erode” their margins.

That was according to Piotr Piekoş, insurance lead at Future Processing, who said that the transition will be driven by vendors “who are constantly modernising to stay competitive”.

This came after the Insurance Times Digital Adoption report 2022, in collaboration with Applied Systems, revealed that the amount of brokers adopting the cloud increased to 41% from 22% in 2020.

Piekoş said that there was “practically no vendor who wouldn’t have cloud native products on the roadmap or be on the road to move traditional [processes] back to the cloud”.

He added that cloud adoption boiled down to three main components – competencies, availability and culture.

“When it comes to culture and technology stack, [it] also requires a shift in mentality of the technology teams,” he said during a roundtable hosted by Future Processing last week (7 June 2023).

Piekoş noted that while technology culture might be easier for larger brokers, the “cost factor” could be an issue for smaller ones.

“What we see is that some of the insurers develop tools for brokers – cloud-based products – but often it turns out that the cost associated with those cloud native tools basically erodes the brokers’ margin,” he added.

“The decision to transition from their own legacy stuff is all that more difficult because the current technology stack simply brings the higher margins.”

Touchless claims

Panellists at the roundtable, which was chaired by Insurance Times technology editor Clare Ruel, explored current challenges and future opportunities in the insurtech landscape. 

It was noted during the discussion that the Covid-19 pandemic had fast-tracked touchless claims – a claim filed with very little contact from a human via an app – and in turn also prompted a shift to a digital approach.

Bill Brower, vice president of industry relations at Solera, explained that prior to the pandemic, consumer adoption for touchless claims was “pretty slow” with a 10% uptake.

However, he said lockdowns made this type of claims processing a necessity.

“No one wanted to meet in person and so insurers began to really adopt this technology out of necessity,” Brower said.

He noted that this was also influenced by services such as Deliveroo, where a takeaway or groceries can be ordered and delivered via an app.

Brower said: “What happened is a big shift to digital.

“Probably a little over half of the auto claims today are handled by customers providing information like photographs.”

‘Biggest transformation’

Solera’s Image Capture solution allows customers to get a link in their text messages, which they can click on, take photos and hit submit.

Speaking about touchless claims of the future, Brower added: “Today, most of the time people spend 15-20 minutes on the phone reporting their claim, tomorrow, they’ll be able to click a few buttons and do this electronically by data being pre-populated.

“I would say that before Covid, the insurance industry was really trying to push technology and digital capabilities on the customer.

“We’re now in the middle of the biggest transformation that we’ve ever seen in the insurance industry.”