Guest Blog By Ruth Fisk, Senior solutions consultant, Department of Professional Services, DataBank
The Next Step for Insurance in the Cloud Adoption Journey
Insurance is an especially conservative industry. Once considered a taboo subject, the life insurance industry was late movers to cloud. Today, cloud deployments in insurance have reached a tipping point according to Property Casualty 360. Insurers from the property and casualty, commercial life insurance, and health payers are all at the forefront of this growth.
This is the first year that a majority of new core systems will not be deployed on-premise and 58% of insurers made the critical decision to outsource the hosting, maintenance, and upgrades.
Let’s review some of what has prompted this change:
- Insurers of all sizes are choosing cloud for storing critical documents and record retention, the cloud market differentiators that keep them ahead of evolving technologies and energize their customer base and client interface.
- The cloud also gives insurers access to more advanced cybersecurity than they could foster in-house.
- Automated notification systems give broader functionality within core systems like portals and data capture solutions, which are often reintegrated within cloud solutions, saving the insurer time and implementation costs.
- New digital ecosystems create new demands on insurers and non-insurers that write insurance.
More than $1 trillion in IT spending will be affected by the shift to cloud computing during the next five years. This will make cloud computing one of the most disruptive forces of IT spending since the early days of the digital age.
As the impact of this shift goes way beyond the impact of IT Budgets, working with insurance organizations from all over the world, there are significant benefits for insurers to consider moving to the cloud.
Benefits of moving to the cloud
- Decrease infrastructure costs by the use of cloud offerings.
- Opens up new avenues for insurers to create, deliver and service products.
- It provides new ways to reach customers, to collaborate with and interact with partners, constituents and others within the insurance value chain.
- Gives the ability to build a customer-centric business model that drives profitable growth and increases performance capability.
- Providing real promise in developing new markets and services, giving insurer competitive advantage in rapidly changing markets.
The Next Step for Insurance and Cloud
Leading, forward-thinking insurance core system providers like Guidewire have been working to deliver their best in breed solutions in the cloud, which will enable customers to have more agile, flexible solutions to meet the increased demands of the insurance market.
Core systems in the cloud are not the only applications that the insurer should consider when looking at hosted solutions. Insurance software solutions give new opportunities for storing critical documents, business information, and digitized paper files in a hosted solution.
There are major benefits of storing critical business information and content that support business operations in a hosted solution. The movement insurers are making to the cloud offer benefits beyond optimizing IT spend, especially when companies host not only the core systems but also mission-critical applications like content services platforms. Next, learn about key considerations when considering a move to the cloud.