Cloud computing offers compelling benefits for insurers

Rob Stavrou, Commercial Director, Northdoor

Rob-StavrouCloud computing is one of the most exciting developments to come out of the IT industry for a while now and it’s easy to see why.  Cloud computing gives you easy access to computing power via the internet. No matter where you are, you can plug into ‘the cloud’ to access your data, your stored files or applications from any computer or mobile device, 24 hours a day, seven days a week.

In addition to this flexibility, the ability to have greater control over your IT expenditure is another compelling aspect of cloud computing.  In the past, with hardware in particular, many insurers have found themselves locked into a multi-year investment, even though they had no way of knowing whether they would need to scale up (or scale down) this infrastructure to meet the demands of the business during that time. 

As a result, many insurers have often been wary of starting new lines of business, as the upfront costs can be very high, and therefore something of a gamble. Just think of the provision of IT alone to enable the critical business processes: the hassle setting up the infrastructure, the headaches of installation and implementation, and the on-going support and maintenance. What happens to these investments if the new business doesn’t materialise? Surely there must be a way to reduce risks when it comes to establishing your own infrastructure and IT.

Likewise, some insurers have been reluctant to launch new products and services due to the capital and diligence required for Solvency II and other regulations.   With cloud computing, however, you can be certain that your investments in the internal operation can be carefully managed. For insurers in particular, cloud computing offers many other benefits, including:

  • Easy access to data for remote and mobile users. Cloud computing can support your wider globalisation strategy by providing easy access to your data and applications across all of the different offices and regions in which you operate. 
  • Greater control over your data by centralising your core processes, thereby giving you better visibility of your data and process flows. 
  • The opportunity to consolidate your legacy systems and benefit from the newest, most flexible technology available.

For example, a premium calculation and administration application (‘app’) can now be uploaded onto an iPad or other mobile device easily, so that employees working in the field can access this information from anywhere, at any time, via the cloud.

Currently the UK insurance industry is facing a number of key challenges, including the need to manage and maintain cumbersome legacy systems in the face of tight budget constraints and a difficult market. Fortunately, there is a significant investment in cloud infrastructure and offerings to help insurers modernise their core systems, and improve their business intelligence.

With benefits like these, cloud computing is clearly the way of the future.  Comprehensive cloud-based portals are already making it possible to perform the entire risk placement process online, from rate checking and quote preparation through to the issuing of the policy itself.  As a result, brokers and coverholders now expect to have easy access to online channels that allow them to conduct business more efficiently.

For all of these reasons, it’s inevitable that many traditional IT systems will be replaced by Internet-based applications, which means that the popularity of cloud-based systems will continue to soar.  For insurers that are willing to embrace this change, the benefits of cloud computing are not only compelling, but actually be an essential ingredient for competing on a global scale.

 

 

 

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