Cloud service providers

The Insurance Business’ Ultimate Guide to Getting It Right with Cloud

December 9, 2016


Cloud computing isn’t actually that new. The first mainstream acceptance of cloud computing was what we would today call an SaaS application. It was a cloud-based CRM (customer relationship management system) launched in 1999 that is still widely used among present-day businesses. The concept behind cloud service providers came much earlier, way back in 1955. The term “the cloud” or “cloud computing” is a little newer. It was coined in 2006, unsurprisingly, by one of Google’s gurus.

But even by today’s standards of rapid technical change, the speed at which cloud computing has evolved is breathtaking. In just one decade, an entire market has emerged, offering a staggering number of products and services that are working toward a global market value of $240 billion as we march ahead to the year 2020.

The cloud growth was stalled a bit while businesses determined what its real potential is, how secure it is, and whether or not it’s a long-term change or a short-term trend. Those questions have been answered now, as it is clear that cloud service providers can actually offer a higher level of security than most on-premises data centers, and come with substantial cost savings, to boot. But the cloud is now much more than just mainstream, with about 88 percent of all businesses using some sort of public cloud service and about 63 percent using at least some private cloud services.

What do you need to know to take your insurance company to the cloud?

What the Insurance Business Needs to Understand About the Cloud

Know your cloud terms. When comparing products and services, you’ll hear these terms tossed around, but without comprehension of what the terms mean, you could end up with products (and pricing) that you aren’t happy with. Here’s what to know:

Public Cloud — Most of the time, when someone talks about storage, applications, or other products in services “in the cloud” they are talking about the public cloud. The public cloud is essentially any data storage or application that is accessible via the internet, but most often it’s used to denote products and services offered through a cloud service provider. These services range from data storage to business applications to backup and disaster recovery products.

Private Cloud — Private cloud environments are usually those built on-premises in a data center. The difference in an onsite data center and a private cloud is the use of virtualization and hypervisors, technologies that are outside of the scope of this article, but allow for easier data access and use. Private clouds are so expensive and difficult to maintain that only the largest, richest companies choose this option.

For instance, State Farm and Allstate own and operate their own data centers, but Wilson’s Insurance on Main Street should instead turn to a cloud service provider. Not only is it way too expensive, security is a concern, since these small mom and pop type shops couldn’t afford to hire a round-the-clock IT security specialist, in addition to a systems administrator, networking pro, and likely a programmer, too, which is the minimum staff it takes to run a private data center with cloud capabilities.

Hybrid Cloud — This is by far the most popular choice among mid-size businesses, allowing them to keep the most sensitive, highly regulated data on site, while taking advantage of the low cost and convenience of public cloud storage for the rest. In a hybrid cloud solution, some data is kept on premises, usually on computers or servers, while the rest of the data (such as archived data, less sensitive data, backups, etc.) are stored off site in a public cloud.

However, for smaller businesses, it simply doesn’t make sense to maintain on-premises servers when the public cloud is so much more affordable and secure. As discussed, keeping data secure onsite takes a full-time IT security specialist, which isn’t just expensive, but is also extremely hard to find these days. Most small- to mid-size insurance companies opt for data storage and applications based in the public cloud. Their cloud service provider can handle everything from regular server maintenance to keeping applications current and up to date to securing data and authorizing user access.

What Do Cloud Service Providers Offer Insurance Businesses?

Insurance businesses have a variety of great cloud-based products and services to choose from. Ideally, get as many as you can from the same cloud service provider, because it’s more affordable that way. Plus, one excellent vendor relationship is easier to find and maintain than several. Here are some of the cloud products available to your business:

Comprehensive IT Services — Your cloud service provider can act as your offsite IT department. They handle everything from data storage to user access privileges to monitoring your network for potential problems. This is an all-in-one service that saves you a lot of money over contracting for each specific service you need.
Software Applications & Services — You can get almost all of the software applications and services you need via the cloud, including email, print services, document management and workflow, systems and network monitoring for both performance and security, mobile device management, networking services, and all of your Microsoft applications: Exchange, SharePoint, SQL Server, Windows Server, OneDrive, Skype for Business, and more.
Backup & Disaster Recovery — The chances of a business surviving a significant disaster without a solid, tested, proven backup and disaster recovery plan are very small. While there are numerous backup products on the market, backup alone isn’t enough to recover from a real disaster. For example, say you backed up once per week. Four days out from your backup, you were hit with ransomware. The data collected in those four days is your most critical, because it likely pertains to the new business you’ve brought in and changes, additions, and updates to your existing clients’ products. If you have backups only, it’s likely that those are corrupted, rendering all of your data useless. Even if all you lose are the last four days’ worth of data, you’re in a bind. Only with a comprehensive disaster recovery plan can you go on with your business as if nothing has happened.

To learn more about what it takes to keep IT systems secure in this day and age:

How to Choose Among Cloud Service Providers

As we mentioned, it’s best to get all of your cloud services through a single cloud service provider. This keeps your costs low and simplifies your vendor relationship management. There are many providers to choose from, but you can narrow your search considerably by looking for a few essentials, especially those that are relevant specifically to insurance businesses.

Choose a provider with knowledge and experience managing the complexities of regulatory compliance in the insurance industry. Not all cloud vendors are aware of the challenges associated with storing and working with the highly sensitive types of data you collect and hold. Additionally, not all are experienced with regulations that vary so much from state to state.
Ask about encryption techniques, user access levels, mobile accessibility, and other security precautions. There is always a fine line to walk between easy accessibility and strong security. Make sure your cloud service provider has found the right balance.
Look for a provider that offers flexibility and scalability. Migrating data into and out of the cloud or from one cloud provider to another isn’t exactly easy, so you don’t want to do it unless it’s necessary. Find a provider that offers scalability and flexibility, so that your service can change, grow, and expand as your business does. Otherwise, you’ll end up with some costly and not-fun migration issues as your business and IT needs grow.

Is the Cloud Right for Your Insurance Business?

There are a few quick questions to determine if the cloud is right for your insurance business.

You need to cut costs. While there are many reasons businesses go to the cloud, the primary one is that it’s so much cheaper than operating similar IT services onsite. If you’re looking for that competitive edge over other insurance businesses in your area, the cloud could allow you to cut costs enough to outpace the competition down the street.
You always want access to the latest features of your software. Upgrading your software means money and downtime, and downtime means even more money. With a cloud service provider, you always have the latest version of your software at your fingertips, with no additional monetary investments (it’s included in the price of your cloud services) and no downtime for installation, testing, and troubleshooting.
You want to provide customers or employees with round-the-clock service. Want to give your employees a way to work from home, or empower your customers with 24-7 mobile access? You can do that with the cloud, without having to staff your offices all day and all night. Whether you need to be able to take a client’s claim at 4 am on Christmas morning, or just want to give your customers the option to change their policy beneficiary at midnight on a Saturday, cloud services empowers these activities securely and affordably for you.
You’re concerned about the environment. If every business ran their own servers onsite, the carbon footprint would be enormous. On-premises data centers consume tremendous amounts of electricity, not just to run the servers, but because that equipment needs to be kept cool continually. Every business that migrates to the cloud lowers the impact on the environment, leaving a cleaner, healthier, more resource-rich world for our children and grandchildren.

To find out exactly what cloud products and services your insurance needs and how much those cost:




Let's Start a Conversation.

Connect with us and experience the TOSS difference.

Send this to a friend