The impact of climate change around the world is a major concern for the insurance industry. Insurers can help reduce climate change by becoming aware of environmentally sound practices in their data centers and software development.
The breakneck pace of digitization demands ever more reliance upon the cloud. In this respect, the insurance industry is no different than other industries. Digital business models and the collection/processing of ever larger volumes of data and measuring points (IoT, telematics, AI) are difficult to imagine without the cloud. The offers of hyperscalers have completely transformed software development: the virtualization of instances, the linking of microservices that communicate with each other in seconds, and containerization are just a few examples. However, our widespread enthusiasm for new technologies often neglects a vital truth – data (and its processing via code) also leaves a carbon footprint.
Skyrocketing energy consumption in data centers
Cloud adoption may have slowed down in some places, but companies in all industries continue to be quick to invest in virtual computing services. No wonder: using the services of hyperscalers seems to save a lot more energy and resources than running their own data centers and on-premise solutions. After all, with cloud computing, several companies share a single infrastructure. But this is only part of the truth. Extensive cloud use results in more and more data and digital services – and ultimately, continually increases the amount of energy required for IT. In fact, this amount doubles about every four years. The greenhouse gas emissions generated by this energy are equivalent to those of the entire aviation industry. Even if savings are made, the IT industry will still account for around 8 percent of global electricity demand by 2030.
Reducing carbon footprints during development
As early as the development phase, insurers can help achieve the goals of climate neutrality initiatives set up by associations such as the German Insurance Federation. Cloud providers, of course, are also striving to increase their energy efficiency and reduce their greenhouse gas emissions. But this alone will probably not be enough. Armed with the awareness that program code and the design of services and architecture can have a negative impact on the environment, development and operations teams can do their part to reduce climate change. Hyperscalers are addressing this increased awareness in a variety of ways. Amazon, for example, offers its “AWS Customer Carbon Footprint Tool” so developers can estimate the carbon footprint of their workloads.
It matters little whether the company still engages in “classic” development or has adopted a DevOps approach: specialists must share their experience and come up with common solutions. Today’s agile software development teams make important design decisions that take into account the needs of clients or their own business. The choice of architecture, the interaction of services, and even the layout of code affect the consumption of energy. Maintenance, scalability, and costs are some of the parameters that are already taken into account during development. Energy consumption could be an additional consideration.
Operations specialists should probably also be included in this discussion. On the one hand, it may be difficult for these workers to make suggestions on how to optimize the energy efficiency of workloads since they are not in direct contact with customers. However, they possess cross-departmental knowledge when it comes to infrastructures. Customizing templates for virtual machines can reduce energy consumption, as can using more efficient processors for instances. These measures can make a huge difference as they usually affect a number of applications and services simultaneously. What’s more, most monitoring tools provide information on the utilization of infrastructures. This data can be used to optimize planning (e.g., shutting down certain services during off-peak periods).
These simple actions could go a long way, not only in optimizing the use of resources in the cloud and energy consumption to reduce climate change, but also in reducing overall costs – which is also good for the company.
As a specialist in standard software, adesso insurance solutions helps insurance companies surmount the challenges of the future. For more information, feel free to contact our expert Karsten Schmitt, Head of Business Development.
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