The role of cloud and DevOps in accelerating insurance innovation

Global investment in cloud computing services reached $498.2 billion in 2022, representing a year-over-year increase of 22.0%, and is projected to grow to $591 billion by 2023. As enterprises grow acclimated to cutting-edge capabilities offered by cloud service providers and identify shortages of traditional IT infrastructure as a bottleneck to faster innovation, more vertical segments are embarking on fast-paced cloud adoption journeys than ever before. Insurance is one of the most recent and perhaps intense examples of this evolving digital transformation dynamic. Insurance companies view cloud as the key technology driver for insurance transformation: Around 88% of survey respondents recognized cloud as the top modernization technology, followed by 82% pointing to artificial intelligence/machine learning platforms and 81% pointing to data analytics platforms (Bass et al., 2015; Gruhn & Schäfer, 2015; Erich et al., 2017).

The role of cloud platforms, however, extends much deeper and intrusively into the realms of enterprise innovation capabilities than being a mere modernization technology or a technology enabler for adjacent centralized or decentralized enterprise functions like data analytics or AI-microservices. Cloud Computing introduces a set of native capabilities built into the technology layer itself that enable the enterprise unlike any other past innovations to accelerate speed to innovation such as elastic scale-up and scale-down, push-button infrastructure provisioning, consumption-based costing for on-demand resources, infra-as-code, etc. Consequently, an entire family of newest technologies and applications such as software DevOps, microservices, data lakes, AI/ML, etc. that require these capabilities are native to the cloud. These capabilities and such newest technologies together intrinsically reshape organizational processes, team composition, resource, and scheduling decisions, in a way that acts to standardize, simplify and optimize core technology-heavy, business-critical, and innovation-rich enterprise functions of products and services Research and Development, core platform Engineering Hub Services for test, dev, and production, application development, business operations (Pahl & Xiong, 2018; Sousa & Gonçalves, 2020).