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The Impact of Cloud Computing on the Insurance Industry

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Cloud computing has a significant role to play in businesses across diverse industries. It helps industry players to respond to the current competitive environment as cloud platforms enable operational flexibility and provide necessary tools. These platforms also provide businesses with an alternative to develop their in-house infrastructure. With the pandemic, most organizations have realized the need to drive agile services to become resilient during this uncertain time.

Cloud computing has had a huge impact on all sectors, in terms of business processes, production dynamics, and in the relationship with customers, employees, and suppliers.

Recent threats and major cybercrimes have provoked the insurance sector to move towards a more sophisticated and secure platform for storing their data. Today, the insurance companies are readily accepting and leveraging the robust cloud computing services. Cloud-based solutions, besides providing security and flexibility, also offer rapid provisioning, better asset visibility, and robust data governance facilities. Cloud computing has a huge impact on the insurance industry, with benefits for internal processes, new customer acquisition, and building policyholders’ loyalty.

Key challenges

Going forward, we believe insurers’ interest in the Cloud will increasingly turn into concrete action as the industry faces a unique set of challenges now rising up the industry agenda. Each of these challenges can be tackled through the capabilities and benefits delivered by cloud-based solutions.

  • Tougher time and cost pressures — Insurers need to achieve profitability in a period of reduced premiums and investment income. These challenges can be addressed through an infrastructure cloud solution, which will boost financial flexibility, permanently reduce costs of IT ownership, and also cut operating costs by ensuring that services are paid for only when they are used.
  • Need for agility – The availability of customer and segment information anywhere, the ability to apply sophisticated analytics quickly and flexibly, can transform insurers’ ability to adapt and reprice their products and services in response to market. This helps to maintain competitive edge in a dynamic marketplace.
  • Demanding customers – Customers expect products and services that are more suited and responsive to their needs, and provide value for money. The advantages of the Cloud in terms of cost, flexibility, agility and availability of unified customer information all of these help insurers to meet these demands.
  • New market structures – The flexibility and adaptability of the Cloud boosts an insurer’s ability to respond to market change and reshape its operating model to address new and emerging opportunities and challenges.

The 3 main advantages of cloud computing in the insurance industry

  1. Better Business Growth

Cloud computing solutions, specifically tailored to meet the insurance sector issues, could help the businesses to grow more efficiently. Cloud-based insurance services offer the user a more complete view and help them to understand consumer needs better. When the needs of the consumer are fully understood, the insurer could more easily develop the solutions to meet them.

  1. Faster Deployment

Cloud computing offers rapid deployment allowing businesses to be ready to take advantage of it in the short duration. Cloud has enough resources available at its disposal to allow for multiple users in the shared environment. These resources are always scalable.

  1. Improved Customer Experience

While cloud-based systems help the insurance companies to easily identify the customer needs with unified customer data enabling customer centricity. With cloud computing, the insurers could seamlessly access big data and by leveraging the data and those trends, they could develop new solutions catering to the needs of the customers.

Best Practices that Insurers should adopt while migrating to the Cloud

  • Understand the scope and life cycle of the application
  • Review and choose an IT partner that can meet SLAs.
  • Properly manage software licensing
  • Monitor the Cloud usage periodically
  • Leverage service provider support

For more details on migrating your applications and technology to the cloud, you can also refer to our Cloud Migration Guide.

It won’t be wrong to quote that cloud computing has become an essential aspect of the global technology ecosystem. That’s because cloud solution helps companies to secure not only their data from breaches and cyber thefts but also provides flexibility in managing that valuable data. With cloud computing, the insurers could seamlessly identify new trends and ensure higher productivity by satisfying the emerging customer needs.

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