Managed cloud services

Should Insurance Firms Move their Core to the Cloud?

January 11, 2017

Legacy systems in the insurance world are still very prominent. It is not uncommon to see systems that are 30 years old. Many insurance firms feel that if the systems still meet the needs of the business, there are people with the skills to work on those systems, and support can be found, then the system is adequate. Although some of these companies rely on managed cloud services to store data and with other services, they have not brought their core into the cloud.

Out with the Old and In with the New
Legacy systems can only last so long. Repairing and upgrading legacy systems can be costly, not only in parts, but mainly in labor. Technicians cost a lot more than they used to, and the amount of time it takes to make repairs has remained the same. A managed cloud provider, such as TOSS C3, can make sure you have the best equipment available.

Servers remain in the cloud and that takes away more down time from the institution. Servers are always maintained and upgraded with no extra cost to the insurance firm. Software is constantly updated in the cloud, and can be downloaded to localized computers in a very short amount of time. So, it only makes sense to move your core IT hardware and software to the cloud.

The Cloud is here for the Insurance Companies
The cloud world is creating software tailored to the insurance market. This is fairly new, but the security, administration panels, and other software are solid. As the insurance industry continues to gravitate to the cloud, the cloud will reciprocate with better technologies. Insurance Innovation Reporter shows three prime trends across the cloud:

  • “Insurers still seek to improve product speed-to-market and product design agility to meet new market opportunities and exploit profitable niches.
  • The P&C industry also remains concerned with reducing the costs associated with legacy core systems platforms. Many carriers report that more than 75 percent of their IT budgets are spent on system maintenance, constraining spending on new product innovation and other opportunistic initiatives.
  • Insurers’ data access needs are growing as BI and data analytics are increasingly used for objectives such as more accurate pricing, fraud prevention and detection, and other uses of predictive modeling.”

The Numbers
The cloud is an ever-growing business for insurance companies. Legacy systems continue to consume valuable financial resources without giving P&C insurers the computing firepower they need to transform operations and deliver the quality experiences today’s policyholders expect. According to EY:

  • “59% of insurers globally are fully deployed, in trials or planning deployment with cloud-based solutions – and only 20% are not considering any cloud-based solutions; these percentages are similar across all sizes of insurers.
  • The three most common uses of cloud-based solutions are customer service, policy administration and regulatory compliance.
  • 68% of insurers will significantly or moderately increase their budgets for investing in the cloud.
  • The expected benefits, in the eyes of insurers, are support for geographic expansion, ease of support for new technology, reduced need for internal development and reduced IT costs.”

There is a growing concern that a system’s livelihood is shrinking. Paying top dollar for a mega server used to be worth it as it might have lasted 20 years or better. But in today’s market of the ever growing cloud, servers are required to be upgraded every 2 to 5 years depending on the size of the company. Rather than upgrading every few years, it is a better investment to allow managed cloud services to take the hit on the cost of the servers.

Could your insurance firm benefit from managed IT services?

Let's Start a Conversation.

Connect with us and experience the TOSS difference.

Send this to a friend