Two disparate technologies are likely to collide in 2011 and beyond, opening new markets and opportunities for insurance companies alive to the opportunities they present, writes Richard Firth, chairman and CEO of MIP.
They are cloud computing/software as a service (SaaS) and mobile computing, and they are set to have a fundamental impact on the insurance industry – but only if management identifies, accepts and rolls with the opportunity.
It calls for visionary management and an abandoning of legacy mindsets.
For the purposes of this article, and especially in the South African context, cloud computing and SaaS will be refered to as one and the same thing.
They have become interchangeable locally, but because of bandwidth restrictions in South Africa, users need to refer to SaaS rather than the cloud.
The arguments for SaaS in the insurance sector are compelling, and it’s worth repeating them. SaaS allows companies to defer capital expenditure, to smooth payment on a monthly basis, and to align implementation with business success.
As a client’s business grows, so does its solution costs. If the SaaS solution has no direct, discernible impact on the business, then payment is in line only with the value derived.
This compares most attractively with the current ERP model, where large amounts of money are paid to software vendors and consulting houses, without any guarantee of value. Just think of the cities of Cape Town and Johannesburg and their salaries and billing crises.
In addition, insurance companies of all sizes can benefit from access to best-practice solutions at an affordable cost, which means even smaller insurers can benefit from enterprise-class system excellence.
Cloud computing, as its name implies, means that systems are not necessarily tethered to any premises.
They can be – there is no need to become evangelical about the definition of cloud computing, as in “it has to be available via the cloud”.
It can be anywhere, but the primary definition is that it does not belong to the client, along with all the attendant responsibility and technology refresh obligations, and that payment is taken off balance sheets and to the operational expense side of business.
This neatly takes it out of the budgeting cycle, as one benefit.
Now, if applications exist in the cloud – they are stateless, to invoke the current phrase – it makes perfect sense that they should be accessible via the cloud.
In other words, it should not worry to an insurance consultant, broker or other professional, or a customer, where something is, as long as it works, is always available, secure, doesn’t cost a bomb and has forward continuity and assurance of tenure.
Stateless applications are exactly what tablet computing was designed for. They are made without wires, with long battery life, with keyboard-less data capture, ruggedised bodies, spill-resistant touch-screens, wireless, 3G and Bluetooth and lots of memory and applications built in.
A tablet or other mobile device is accessing the cloud, and the application is delivering functionality via the cloud.
They are exactly what was envisaged over the last three decades, a time during which many vendors have tried with varying degrees of success to devise computers that are light and small enough to pose no challenge to people on the go, but powerful enough to mimic desktop functionality.
What this means is that for the first time, insurance agents, brokers and other employees can operate in the field without any limitations, whether they relate to power, functionality, ease of use, time in the field or connectivity.
This is set to have a profound impact on time to accept and fulfil new orders, process applications and claims and more. It is the reason why an organisation such as SAP believes it can have a billion users, and why it acquired Sybase, the world’s leading mobile infrastructure company.
So, if it doesn’t matter where users are, and that they have so much power in their hands, that boots up instantly, and lasts for days; and it doesn’t matter to users or anyone else (customers, employees, brokers) where the applications reside, then surely cloud computing and mobile devices such as tablets are an insurer’s match made in heaven.