Even though global insurers are embarking on digital migration projects to cloud environments, it is not happening quickly enough with independent brokerages sitting at an average adoption rate of 44%.
Patrick Ashton, managing executive at the SilverBridge Group, believes the benefits of using the cloud provide compelling evidence to make the move sooner rather than later.
“While many still consider the cloud to be an abstract concept, it really is just a different way of saying that the likes of applications, data, storage, and software are hosted securely in a data centre and accessed through the internet. This means users can access services from any location irrespective of their device, provided they have an active connection,” says Ashton.
This gives insurance field agents real-time access to insights on the key data that they would ordinarily only have when sitting at their desks connected to internal networks. This access empowers agents to resolve customer queries and provide services face-to-face seamlessly reporting back to the office via cloud solutions. Not only is this more efficient than the traditional way of submitting information only once or twice a day when at the office but saves costs as well.
Reducing IT spend
The cost-savings benefit is an often touted one when it comes to arguments for the cloud or hosted solutions. This is not without its merits. The economies of scale achieved by migrating to this environment (whether it is public, private, or a hybrid model) mean an insurer can share resources much more efficiently to reduce costs. Whilst cloud may not immediately result in cost-savings for the insurers due to the costs associated with migration, over the medium-to long-term the savings become significant.
“Instead of having to acquire, install, and maintain expensive servers on-site, an insurer can opt for a pay-per-use model in the cloud. It also frees up the IT department to focus on more strategic business needs instead of being stuck maintaining on-premise hardware and software. By leveraging the resources of cloud providers, insurers can be more agile and adopt to shifts in the market faster as they are not limited by their own infrastructure.”
This managed services model sees the entire IT infrastructure of an insurer being managed in the cloud at significantly lower costs than employing teams of full-time personnel to do the same job. And because the insurer only pays for the resources being used, the ability to scale as the insurer or brokerage grows is a fundamental strength of the cloud. Adding or removing users, scaling resources up or down, and adding new environments or applications become almost a button-click exercise.
Data reliability
Cloud-based environments can also manage the influx of data more effectively while reducing concerns around limited (and expensive) on-premise storage space. This also enables the insurer to manage the way it captures and analysis data in a more digital-centric way.
“Data has always been the lifeblood of any insurer. But not having optimised processes and systems in place to deal with the significant growth in data sources such as social networking and connected devices, mean insurers have become inundated with information. Using cloud-based solutions, they can more effectively manage that data and analyse it for faster decision-making.”
The cloud is far from mature as technology continues to evolve at a blistering rate. However, it is imperative for insurers to become part of the process if they are to find value from the innovative applications and solutions that are becoming available, which enable them to remain competitive in an ever-increasingly complex world.