Cloud computing

3 Reasons Why the Insurance Industry is Embracing the Cloud

June 23, 2017


Even the most traditional and stoic of industries are being disrupted by cloud computing. The healthcare, finance, and insurance industries are finally taking advantage of the model, and even though they’re late to the party, they’re doing their best to make up for lost time.

Of these three industries, insurers may actually benefit the most from cloud computing, because of the small business model inherent in the property/casualty and health insurance sectors.

This article takes a closer look at how the insurance industry is leveraging cloud technology to achieve a competitive advantage.

What’s a Cloud and How Can it Help My Agency?

The digital revolution has enabled everyone access to information and services via the Internet, or cloud technology. These services can be accessed anytime on any digital device. Businesses can leverage IT-focused solutions from applications to business processes, infrastructures, and platforms.

In the past, server hardware, local area networks (LANs), and installed software provided the tools that powered our businesses. These tools were always expensive and installed “on-premise” at a customer site. They always required in-house or on-call technology experts to install, maintain, and upgrade the infrastructure.

Cloud computing simply means that your computer resources, whether they are data storage, email, software, or other business tools can be accessed through the Internet instead of installing it locally at your business. To find out all the benefits:

When these business solutions were virtualized in the cloud, the need for expensive hardware disappeared; small businesses with small budgets could suddenly access the same tools as the large enterprise organization. Technology in the cloud is characterized by:

  • Pay per use subscription models
  • Rapid deployment – simply sign up and dial in
  • Customizable and adaptable

Cloud tools are dividing into a small, but growing set of services that are called “as a service” models. These services are characterized by ease of access on standard Internet browsers from any digital device. Some examples of “as a service” models include:

  • Software as a Service (SaaS) allows you to access accounting, sales, or other software, without installing it on your computer.
  • Platform as a Service (Saas) includes technology that you leverage to build applications in your business, such as Google App Engine.
  • Infrastructure as a Service (IaaS) includes the equipment that forms your network backbone, such as data storage, or email servers.

Insurance agencies can take advantage of the cloud in an escalating model that may begin with a simple SaaS subscription to QuickBooks, and then escalating up the chain to infrastructure, by utilizing cloud storage, or even platform architecture. Each level of cloud services brings a widening array of benefits specific to your agency. However, there are three key benefits of any cloud architecture, no matter the service model:

  • Cloud models reduce IT costs for small agencies.
    Your key business functions can now be housed off-site, with a remote technology team to service them. With the advent of managed service models (covered in the next section), your entire IT infrastructure can be managed in the cloud for a much lower cost than hiring an in-house resource.
  • Cloud models allow for scalability to handle shifts in growth.
    Any of these services can be increased or decreased at the need arises. This is particularly important for the small company on an acceleration growth trend. It’s simple and cost effective to add more storage bandwidth or user licenses in the cloud.
  • The cloud supports the integration of other services in the cloud.
    Cloud services are designed to support business processes that include claims processing, procurement, or expense management. These models leverage a common one-to-many standardized application platform that lends itself to the adoption of additional services in the cloud. These models help insurers expand their global footprint across market segments.

Small and mid-sized insurance agencies often lack the financial resources to control and maintain their technology assets. Today, not only can you create a completely virtual technology stack in the cloud, you can leverage a remote IT staff to keep your network secure and functioning effectively.

Download our cloud report to find out more about network security in the digital era.

Cloud Service Models – Managed Services

We’ve discussed the benefits of taking your agencies internal hardware and software applications and putting them in the cloud. But there is another type of “as a service” that you should know about, which includes the category that takes the virtual concept and extends it to human management of your network. We’re talking about managed services, which is a very useful model for the small insurance agency. Managed service providers take care of your IT infrastructure to leave you free to handle regulatory compliance, marketing, customer growth and retention and all the other areas that a small agency owner must handle.  Get a free assessment of the benefits of migrating your business functions to the cloud.

 




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