Modern insurance buyers are more tech-savvy than ever. Being so aware of the latest technologies, they expect the same service from their service providers. Keeping this in mind, the insurance industry is adopting modern innovations to transform its traditional ecosystems. One such technology that enables insurers to streamline their work while offering better customer experiences is – cloud technology.
- The revenue from public cloud infrastructure in the insurance sector is forecasted to reach $411 billion by 2022.
- 51% of insurers believe that cloud technology gives them an advantage over their competitors.
These statistics point towards the growing popularity of cloud technology in the insurance sector. Below are some ways cloud technology is positively influencing the insurance industry.
How insurance companies benefit by migrating to the cloud
The cloud solutions offer several features, such as unlimited storage, high levels of data security, and low maintenance, which help insurance companies in the following ways:
- Facilitates better marketing with higher speed
- Leads to the innovation of new products
- Ensures business agility
- Automates processes
- Makes meeting compliance norms easier
Some other benefits include:
Cloud service providers offer subscription-based online solutions, which is a blessing for small insurance business owners who don’t have the budget and resources. Thanks to such services, they can save costs of hardware, licensing, installation of back-end server systems, and maintenance. Additionally, routine cloud processes, such as claims management, enrolment, and underwriting, bring down operational costs.
Massive amounts of data are collected by the insurance industry. Using cloud technology, data handling, analysis and comparison become more manageable, which aids better decision-making.
Cloud-computing solutions are easy to deploy. Tailored IT systems can make the implementation process more agile. The cloud platforms are shareable and scalable, allowing multiple organizations to benefit from their infrastructure at the same time and save money.
Policy lifecycle management
Besides document generation, logging, email tracking, and auditing capabilities, cloud technology allow the end-users to view the details of their policy, which enables them to make faster decisions.
With the traditional technology, the insurance companies do not have the flexibility to handle spikes in demand. Cloud systems equip insurance companies to scale as per demand.
Efficient risk management
With regular risk assessment and identification, cloud solutions offer higher data security and safety to insurance companies. Cloud solutions are so secure because their servers are located in warehouses, and most workers don’t have access to it. Also, the data is secured on the cloud using encryption, which doubles its safety. Digital signatures are used in cloud-based platforms to increase security.
Simplified data access
IAM (Identity and Access Management) is an excellent feature of cloud-based solutions. It simplifies the login procedure by providing a single sign-on facility. Moreover, the data is easily accessible from anywhere. The access to the data can be assigned as per team roles to prevent sensitive information from falling into the wrong hands.
No IT backlog
With the help of cloud technologies, the digital transformation of insurance companies speeds up as there is no need to migrate policyholder data from across various platforms. Another advantage is that there is no data loss during migration, and the process can be completed fast, resulting in no data lags.
The cloud-based platforms are generally equipped with dynamic reporting, customizable charts, commission handling, and more advanced features, which helps the accounts professionals efficiently manage policy deposits, trial balances, ledgers, refunds, reversals, etc.
How the cloud is deployed in the insurance industry
There are three models of cloud deployment:
Insurance companies generally do not implement a public cloud model as they deal with sensitive public data, and they do not wish to host it in the public sphere. For this reason, they prefer the private cloud model.
Public, private, or hybrid – no matter which model you go for if your insurance company has decided to take the cloud route, below are some critical points to consider to make the migration of your legacy system seamless.
- Analyze your business needs.
- Carefully understand the condition and life cycle of the cloud application that you have chosen.
- Next, examine your existing applications to identify the scope of integration.
- Establish clear rules for decision-making and assign roles within your team.
- List down your security and compliance concerns.
- Before choosing a cloud service provider, review their ratings and don’t hesitate to ask questions.
- Set the Key Performance Indicators and use them to ensure both current and long-term needs are being met.
- Conduct regular training and skill development sessions to encourage the cloud-adoption in your organization.
Cloud-based systems can help insurers seamlessly transform their legacy systems to satisfy emerging customer needs. All they need to do is carefully research their options, understand their core issues, and how using cloud technology can help address them. With a planned approach, the insurance companies can solve their immediate problems and reap great rewards in the long run.