Insurance carriers have more to gain from the cloud than they have to lose.
Facing reduced premiums and investment income, increasingly sophisticated customer expectations, and strengthening competitive pressure, carriers must ask a pivotal question as we approach a new decade. And it’s not whether to leverage the cloud.
It’s how to maximize the cloud.
Cloud services make business easier, faster, and yes, safer. Whether they’re bridging data silos with cloud storage, developing cloud native apps, or standardizing systems in preparation for a merger, carriers need the cloud to compete.
And yet, while 41% of insurance carriers are interested in taking the first step to the cloud, they don’t have any plans to implement. It’s time to make those plans.
Here are a few ways the cloud solves evolving business challenges in insurance.
Operating in one of the most data-dependent industries out there, carriers need robust data analytics, management, and visualization capabilities.
Cloud solutions can unify data across organizational or federated silos. When your data is hosted in the cloud, it becomes centrally accessible, updating for all business entities in real time. This is crucial when developing new products or personalizing policies and experiences for customers.
Finally cloud computing is less expensive than legacy systems, allowing medium-sized carriers to implement systems that rival the largest enterprises with minimal up-front capital investment. From storing historic data and onboarding new customer data to crunching those numbers, you’ll spend less in the long run with the cloud.
Underwriters need access to the most current information about policies, business rules, and risk assessments to accomplish their critical tasks. But when the executive leadership adjusts their risk appetite, underwriters are often the last to know. The same goes when marketing promises a rate discount for property insurance, or operations changes the damage threshold for flood claims.
Cloud solutions bring together all the information an underwriter needs to accurately assess an application. So, when even the most minor update is made at the leadership level, or in another department, the change is made across the entire company’s software. The underwriter simply has to access their profile to view the most up-to-date policies and rules.
Moreover, cloud computing can automate many of the menial administrative burdens placed on underwriters. One cloud vendor reduced the time to set up a claim from 30 minutes to five by connecting a policy administration system to the carrier’s insurance products (WSJ). Cloud automation improves efficiency, reduces operations cost, and can even help curb employee turnover.
International partnerships can be difficult to manage for any number of reasons. One example is the difference in time zones. A claim that’s timestamped on Thursday morning in China might run through U.S. servers and come out stamped with Wednesday afternoon. Cloud vendors can implement rules like “time zone awareness” across an entire system, rapidly.
You can even expand across multiple geographies easier with the cloud. Without a data center, cloud solutions create a global standard for your business. That way, you can leverage the flexibility of the cloud to forge international partnerships and integrate with other companies.
You want to implement a new customer portal to improve customer experiences and collect actionable feedback. How fast can you do it?
The cloud improves your IT agility, shortening project implementation time and delivering new service offerings faster than ever before. You can easily collaborate with partners and vendors thanks to the global standards of your cloud environment. And you can even improve your social listening capabilities to gain a clear understanding of what customers want and need throughout the development process. Need to update your portal with a claim tracking feature that your customers are asking for? Easily update your applications on the cloud (far more quickly than on your legacy systems).
The cloud is more secure than your legacy systems. You read that right.
Storing data off-site in the cloud enables more controlled access by way of physical separation and stronger admin access rules. “Safe sharing” features mean employees can access and update documents in the cloud without actually sending the files back and forth. Meanwhile, cloud vendors are working towards a zero human touch to the cloud environment, mitigating the number one cause of data breaches: human error.
Cloud providers also boast whole teams to focus on security threats, rivaling any single carrier’s ability to monitor threats. Cloud systems are audited far more regularly than legacy systems. And redundancy in cloud systems is greater than in the typical corporate data centers, reducing risk of data loss (cloud providers typically keep data in at least 3 locations).
If you’re not convinced to start planning your cloud implementation yet, reach out and I’ll gladly answer your questions. And when you need a partner to help plan your transition, enlist the experts at Pyramid Consulting.
Our global team specializes in roadmapping insurance carriers’ transition to the cloud, helping them leverage more robust data analytics capabilities, develop customer and agent portals, and integrate modern applications with core systems.