b'Technology | Technology TransactionsCloud & As A Service TechnologiesWith data monetization initiatives a strategic priority, The trend in the insurance industry towards digitalinsurers and producers will increasingly need to work transformation continued in 2020. In transforma- with large technology companies on infrastructure tional deals, suppliers took responsibility forsolutions such as data lakes. Often housed on cloud performing critical functions and agreed to trans- platforms, data lakes enable a company to store vast form service delivery using technology such asamounts of its own internal data and enrich it with robotic process automation, cloud services and asdata from third-party sources to help extract insights a Service solutions. In particular, there was a rapidand inform key organizational decisions. While data acceleration of the move to the cloud. Insurersmonetization has the potential to improve business moved from on-premises software options toperformance and generate new forms of revenue, Software as a Service solutions and replacedcompanies in heavily regulated industries, including conventional dedicated and shared data centerinsurance, need to be particularly careful. hosting deals with hosting on large cloud platformsCompanies must manage a web of rights and such as Microsoft Azure, Google Cloud andrestrictions on their various data sets in order to Amazon Web Services.protect the companys own data (and IP rights in that data) as well as ensure compliance under third-party While these moves are not new, the pace and scalecontracts and data privacy and other laws. This can of the migration to the cloud increased significantlybe a complex undertaking and often requires over the past year. Much of this was driven by thecoordination between a companys lawyers, compli-economic effect of the pandemic. Cloud servicesance specialists, data scientists, procurement allow a company to cut costs, replace fixed costsdepartment and IT professionals. with variable costs and replace assets with operating expenses, all of which can dramatically improve aInsurtech Collaborationscompanys balance sheet, earnings and return-on- As companys look to change the way value is assets. This change also reflects growing customerdelivered to customers, incumbent insurers and expectations, with the cloud enabling more agileproducers are increasingly opting to collaborate platforms that can win business and help sustainwith new, digitally native insurtech companies. customer relationships in a competitive industry. Digital transformation requires significant change Data Monetizationfor many incumbents, with upgrades to important technology infrastructure on the back end and One effect of the move to the cloud has been toimprovements to customer-facing products and significantly lower the cost of gathering and storingservices on the front end. While incumbents are data. Lower costs have driven an exponentialworking to digitize their data and move more of increase in the amount of data stored and havetheir systems to the cloud, this can be a time accelerated a move beyond data mining and analyt- consuming process and the pandemic has only ics and into data monetization. The insuranceincreased the urgency to complete these digital industry has historically collected large amounts oftransformation projects. To quickly address data but used that data primarily for underwriting,perceived gaps or shortfalls, some incumbent marketing and servicing. We see insurers andplayers in the insurance industry have opted to producers increasingly viewing data as a core assetcollaborate with Insurtech platform companies. that has the potential to create new revenue streams[See Insurtech Investment and Transactions for and improve profitability in new ways.further information on insurtech collaborations].MAYER BROWN 99'