Insurers are not unique among businesses in the world in facing significant challenges. They’re constantly looking for new ways to reduce costs, drive revenue, improve collaboration, offer value to their customers and reduce time to market for products.
Today’s customers demand customized, high-value products that are delivered efficiently across every chosen channel. But insurers’ profits are being eroded by drops in demand and regulation requirements continue to slow them down. Meanwhile, competition is increasing. Insurers must be able to adapt and price their products and services in response to dynamic markets and competitive changes.
These tough demands spur the need for insurers to constantly upgrade and expand their computing capabilities and become more agile, which impacts both their IT and business operations. The complex applications, data warehouses, server software and new business solutions they require to meet these challenges demand a great deal of expensive computing power. They also require qualified teams of professionals to install, run, maintain and update them.
Legacy systems simply weren’t built for modern challenges. Aging hardware requires constant investment in new infrastructure. Evolving web application requirements and user demands result in regularly needing to scale-up servers with additional resources. Growing companies need to expand infrastructure. All this comes at a very high cost.
Cloud computing, in general, and cloud managed services in particular, are a massive opportunity for the insurance industry. The industry is heavy on data and processes, while on the other hand, insurers constantly need to stay ahead of the competition and increase customer engagement (while keeping costs down). The implementation of cloud-based applications and services heralds a sea change in how to approach marketing, delivery, technology and customer service. By embracing the new world of cloud computing, insurers are, in effect, turning infrastructure into a utility that is paid for when it’s used, scaled up or down based on need, and upgraded automatically. Most importantly, cloud computing enables insurers to work more flexibly and get to market quicker, while realizing major cost savings.
While cost savings is clearly an important reason for shifting to cloud computing, this approach to IT and business is also about changing decades of operating habits to be more engaging to customers and offer them value, and in so doing, create a stronger customer base and brand.
It may have emerged as an efficient way to turn storage into a utility, but today, cloud computing has gone far beyond just serving as an infrastructure solution, and insurers are taking advantage of the opportunities it offers. Cloud-based platforms, storage and applications are changing how insurers create and deliver their products and services, manage risks and claims, collaborate with channel members and partners, and communicate with customers, agents and brokers.
A private cloud improves insurers’ operational efficiency and performance by ensuring data security, while offering accessibility to their employees in a low risk and efficient way. The public cloud helps insurers reduce costs by making data and services available to their customers and external networks.
Overall, cloud computing and cloud managed services make a big difference in answering the needs of today’s customers. Using cloud computing, which unifies data, insurers can get products and services to market faster and can improve the renewal process with external systems. Analytics on the cloud give rise to customer-oriented services. Cloud-based collaborative tools enable insurance advisors to answer questions on products and offering services 24/7 from any location.
Insurers today are taking advantage of cloud computing and cloud managed services to:
- Deploy their core systems cheaply and affordably, and support critical functions, such as billing and underwriting
- Introduce new business models and applications
- Capture real-time intelligence about an accident situation through mobile devices and mobile applications
- Support agent management, including sales document management and application submission
- Run email and whiteboard applications from the cloud so agents, employees, field reps and developers can collaborate in real-time, from any device
- Provision and scale computing resources to meet periodic demand for actuarial and financial workload
- Preserve data for audits
- Shift workloads to lower-cost and higher efficiency service providers
If you’d like to learn more, please check out Sapiens’ NEW white paper, How Cloud Computing is Reshaping the Way Insurers Work.