Insurance companies are no longer only there for their customers in times of disaster. Modern approaches to insurance and changes in customer expectations mean that the insurance business model looks very different than it used to. This change also demands a new business strategy in order to enable the flexibility and agility needed to meet the demands of increasingly tech-savvy and time-sensitive customers. For many insurers, this means investing in cloud.
King Price, a South Africa-based, privately held short-term insurance provider, were able to radically transform their business strategy, increasing system resilience, customer expansion and market adaptability in the process of adopting cloud technology. Eugene Wessels is the Group CTO at King Price (South Africa & Namibia), Stangen (South Africa) and NEXT Forsikring (Denmark), through the Porcupine Union group servicing entity. With his guidance, use of cloud technology has enabled the insurance providers to become more agile and more flexible for changing times, and makes it possible for them to better meet changing customer needs.
CIO Africa has chronicled King Price’s adoption of AI. Now, in this Q&A, Wessels delves into the company’s journey to the cloud, unpacking how cloud technology helped them innovate their offerings and highlighting the importance of change management.
CIO Africa: What are some of the biggest tech trends making a mark on your industry? And what trends are you watching?
Over the next decade, a range of existing technologies will mature and converge to drive a technological step-change in our personal lives and business activities. For example, mobile connectivity and bandwidth is increasing at a rapid pace, with projects like Starlink (satellite Internet) leapfrogging us into the future.
The adoption of cloud computing is increasingly becoming mainstream, with all the big tech giants starting to standardise services and drive down costs. And quantum computing is outgrowing its infancy and becoming capable of processing vast numbers of transactions at a fraction of traditional speeds The result of these trends converging? Mobile devices that use insane bandwidth to connect to cloud solutions, providing complex AI services trained from absurd amounts of historical data, to help optimise our daily activities.
CIO Africa: We’re keen to find out more about your cloud journey. As a starting point, when did you make your cloud move and what was the business problem you were trying to solve?
Like many other organisations, our cloud journey was a mix of gradual maturity and forced adoption. We started using basic cloud services in our IT back-office functions: Microsoft’s Office 365, Active Directory, and other SaaS, like Azure DevOps or Confluence, for writing development specifications. Over time we’ve started using cloud to support business operations, including Xero for financial accounting, NeupartOne for risk and compliance and PureCloud for our call centre telephony.
We’ve also started experimenting with specific cloud services that focus on artificial intelligence (AI) and machine learning – from traditional optimisation models published as bespoke intelligent services to proprietary intelligent services in the form of chatbots, text, voice and image processing. For example, our pay-as-you-drive product used vehicle odometer uploads, which we pushed through image recognition algorithms to confirm the kilometres travelled, as well as the authenticity of the photo.
Our next phase of cloud adoption came about through the acquisition of two new businesses. To date, we’ve mainly used Microsoft Azure, but our Stangen Life business acquisition required us to quickly adopt Amazon Web Services and then we bought a Danish company whose entire bespoke insurance platform is cloud-based. These acquisitions rocketed our cloud adoption and expertise.
We’re currently focused on the ‘cloudification’ of our bespoke internal systems and their respective digital channels in the form of websites, portals and mobile apps. This phase includes the migration of our data warehouse and business intelligence capabilities, using Synapse and PowerBI respectively. The motivation behind this project is our organisation’s expansion into Europe and our ability to host, develop and deploy our bespoke systems across various geographical areas, without needing large supporting teams.
CIO Africa: How did you and your team settle on this particular solution to solve the business problem?
We didn’t. A single cloud vendor strategy is a short-sighted approach, especially given the fact that the big vendors are standardising core products and services. That said, there are certain vendor-specific cloud services that offer unique propositions, typically in the form of functional capabilities, processing speed or cost reduction. Being deeply embedded with one specific cloud provider has its pros and cons. Our bespoke developments have committed to various capabilities on all three of the major cloud platforms, including Azure’s service fabric, AWS’ app mesh and GCS’s cloud vision.
CIO Africa: How did you identify the specific project requirements? Who did you involve and why?
It is important to differentiate between a cloud hosting strategy or solution and building a true cloud solution — which is the future state we all desire. In-house architects and developers are often over-committed to the functional developments in an organisation, which means they can become distanced from the latest technologies. For this reason, it was invaluable to partner directly with cloud providers and external partners who could help us accelerate the cloud transition process and in-house skills development.
Our approach was to handpick certain projects with limited scope and to gradually test the development approach and technologies, looking at how the costs will scale over time. These small projects build up a larger momentum that will ultimately support our desired trajectory.
CIO Africa: What was the process like? How long did it take? Were there any hiccups or surprises?
The initial process of deploying these bespoke development cloud solutions has been challenging. The assessment phase was followed with a proof of concept, which in return initiated the major migration/redevelopment phase for the development of the larger scope. A key part of speeding up this process was our partnerships with preferred vendors, working with our developers in their daily sprint cycles and helping us to optimise the implementations post-deployment.
The process of finding these vendors, establishing partnerships and hand-picking the individuals to complement our development team should not be underestimated. The most challenging part of this journey has been the balancing act of delivering business value within the given timeframes while giving the team time to upskill. The partnerships we’ve formed have helped to manage this balance, but the danger was always that the in-house team would be left behind. In this regard, we’ve made a special effort regarding delivery, skills transfers and knowledge transfer.
CIO Africa: If you had to do it all over again, would you do anything differently?
In hindsight, we would probably spend more time preparing those involved for the intended change, as well as providing more formalised training or conditioning well in advance. These key individuals will champion your change, and become the technical custodians to help others grow their new skillsets.
CIO Africa: Did you have to make any changes to your team’s culture or skill mix to succeed? If yes, how did you approach that?
To manage the substantial challenges and changes required to drive our cloud migration, we had a strong technical architecture team, with the rest of the teams comprising both consultants and our own staff. There was also a ‘bomb squad’ team that was responsible for delivering prioritised business requirements at speed without worrying about upskilling other teams.
CIO Africa: And how did you secure buy-in from business?
We’re blessed with progressive business leaders who understand the relevance of technology, and in particular, the journey to cloud adoption.
CIO Africa: What were the results? Has the project transformed your business in unexpected ways? Has it helped you to identify additional opportunities?
Our project is ongoing and will be that way for the foreseeable future. It’s a massive task to essentially rewrite bespoke developments to be cloud ready. We’ve already seen several benefits, including the ability to scale infrastructure on demand; the automation of functions that previously required staff involvement; and centralisation and simplification of complex matters such as security.
From a development perspective, the benefits include flexibility around service models; faster cycles because the provisioning of resources is substantially simpler; ease of deployment; and various advanced services that are sometimes unique to specific cloud providers. It’s widely acknowledged that the retention of IT skills is becoming more challenging every year.
The importance of retaining staff by using technologies that dovetail with their education and future aspirations is vital. Lastly, there are also inherent benefits that cloud infrastructure offers, like being compliant by default to most legislative prescriptions regarding infrastructure hosting. It can also significantly simplify governance topics such as disaster recovery and data protection.
Do you have any advice or best practices you’d like to share with our readers that you think may be facing similar business challenges or undertaking similar projects?
Cloud adoption is a costly journey, both financially and in terms of the impact on staff, and should not be underestimated. These projects cannot be undertaken with split attention, as they often require a fundamental re-architecture of certain IT foundations, if not also a re-write of system modules.
