How the Cloud will Revolutionize the Insurance Industry


How the Cloud will Revolutionize the Insurance Industry

Once considered nothing more than a futuristic concept, cloud computing has not only become a standard term used among business professionals, it is changing the face of the insurance industry as well as the insurance software vendors who provide it. While most of the information about cloud computing tends to concentrate on how it affects a company’s IT department, the possibilities extend further into other aspects of the business.


As access and standardization of internet technologies have progressed, so have the advantages of utilizing the cloud for small to medium-sized insurance companies. Just as social media and other applications have become popular for managing information on a personal scale, the growth of the infrastructure of the internet has resulted in the emergence of data service providers with far-reaching capabilities for insurers.


By taking advantage of this type of technology, these insurers can implement systems that rival the in-house enterprise insurance software that larger insurance companies use with very little up-front capital investment. Additionally, these systems can be acquired and implemented in a comparatively short period of time with a lower ongoing cost.


There are four levels in which the cloud is helping insurance companies transition from traditional enterprise insurance software: (1) Infrastructure level; (2) Platform level; (3) Application level; (4) Business process level.


The infrastructure level allows companies to utilize basic computing resources with the advantage of greater storage capacities and bandwidth to run their operations. They also enjoy greater flexibility and ease of use than with traditional enterprise insurance software.


The platform level allows insurance software vendors to work with a company’s IT professionals to design and implement online systems in a timely manner, using the cloud provider’s infrastructure.


The application level can be thought of in two sectors. One is commonly referred to as SaaS (Software as a Service) and falls within the scope of CRM (Customer Relationship Management). The second sector deals with the development of desktop tools such as word processing, spreadsheet applications, and communications such as e-mail.


The business process level encompasses an entire business process using an externally provided service via the internet. This level manages all aspects of the insurance business including sales leads, claims processing, accounting, analytical reports and the identification and management of cross-selling opportunities.


The main challenge facing smaller insurance companies when it comes to using the cloud is not a lack of interest. It is inexperience. Fortunately, there are companies that are stepping into the shoes of insurance software vendors to ease the migration of applications and services to the cloud.