Cloud computing is popular among those in the insurance industry, and with good reason. Let’s take a look at why insurers are embracing this form of information technology:
1. The Infrastructure is Massive
The original cloud model dealt with a number of issues, including limitations in the forms of private networks, software offerings and investment in bandwidth and architecture. Today’s version is free of such limitations, and can be based on the “available-anywhere” internet, as well as on private networks. Additionally, cloud investors have put millions into creating massive-scale infrastructures and data centers. This investment in capacity made it easy for cloud providers to lower cloud computing costs.
2. Comfort Factor
Insurers used to want their IT in-house, but today’s industry is utilizing cloud technology for point services including damage estimating, bill review and more. Insurance company employees are also using cloud for personal reasons, including data backup, the sharing and storing of files, business transactions, and more.
Cloud computing further makes it possible for any web-enabled software to function as a network delivery candidate through web services and service-oriented architectures (SOA). Additional candidates for a utility computing model include core processing of policy, claims, and billing administration. Many core solution providers now offer cloud options. The industry will therefore move away from on-premise, packaged software in favor of cloud technology. Since many components are available publicly, it’s less expensive for insurance companies to go with cloud than to build such capabilities in-house.
3. Survival of the Fittest
Insurance companies are currently engaged in a “survival of the fittest” struggle, and those that succeed will be the ones with the greatest flexibility, the fastest speed to market, and the lowest operating costs. Cloud’s many business benefits make it easy for insurance companies to achieve these goals.
In the past, the installation, customization and maintenance of insurance systems was a very time-consuming activity, regardless of whether systems were worked on in-house or through a service bureau. Cloud saves time thanks to its quick solutions, and therefore allows insurance companies to launch new products and services at a much faster rate.
Besides saving time, cloud technology also saves money. On-premise hardware and software deployment means up-front investment, whereas cloud transforms technology into a true utility. This means carriers pay only for what they use, and can scale capacity as necessary.
Cloud will no doubt become more and more essential to insurers, especially in light of social and mobile technology initiatives in high demand by today’s consumers.