AIA Group will use cloud technology to improve actuarial modelling across its subsidiaries, including Australia.

The insurer has awarded a contract to technology group FIS to use its Prophet Managed Cloud Service.

AIA will now seek regulatory approval from the 14 Asia-Pacific markets in which it operates to implement the system.

AIA Group CFO Garth Jones says the actuarial modelling system will enable enterprise-wide control and consistency in risk models and the assumptions that underlie them.

“FIS will assist in managing Prophet Enterprise operating on the Microsoft Azure public cloud infrastructure, helping to provide greater flexibility and scalability in use of the application as well as improved cost management,” he said.

“Increasing modelling agility is vital. We look forward to the flexibility of creating virtualised model environments in the cloud when we need them and turning them off when we do not.”

Jamie Macgregor, Senior VP with technology consultant Celent Insurance Practice, says insurers are becoming more comfortable with cloud operations.

“Resource-intensive calculations, such as actuarial models, are a striking example of how the cloud is being used to achieve greater levels of efficiency,” he said. “It is also delivering a capability uplift without the need for procuring an internal grid.”

Mr Macgregor says more complex risk modelling is inevitable as regulations tighten.

Meanwhile, AIA Group has joined R3, a financial innovation partnership.

It is designing and applying distributed and shared ledger-inspired technologies to global financial markets.

AIA will collaborate with 50 of the world’s largest financial institutions to develop commercial applications for the financial services industry.

COO Simeon Preston says distributed ledger technology, or blockchain, offers significant opportunities to the life and health insurance industry.

“R3 provides us the possibility to understand, together with other leading global organisations in financial services, the potential applications of blockchain technology around the world and particularly in the Asia-Pacific region,” he said.

“We look forward to taking a leadership role in exploring how this technology might result in increased efficiency and improved service for our customers.”