Cloud technology has brought a revolution in almost all commercial sectors, and insurance is not an exception. The insurance industry has been taking a good time to adapt to technological trends and industry changes.
It is still running slow in the race toward innovation where legacy systems are dominant and outdated. Technology systems cannot help companies actually innovate and meet customer demand.
Whereas, cloud technology offers opportunities to improve processes, achieve customer satisfaction, reduce operational costs, and innovate quickly without spending much. By 2021, the userbase for cloud will double, and the market size of this technology will grow to an estimated $302 billion.
However, several companies remain skeptical about the implementation of cloud and question about its advantages. Still, there are a whole lot of companies that are putting efforts and capital investments in the adoption of the cloud; let’s discuss why.
Top Benefits of Cloud Adoption in the Insurance Industry:
Cloud Helps Insurers Gain the Competitive Edge
The main path toward increasing profitability in the current business world is to write concrete, transparent, sustainable policies. More and more companies in the insurance industry have now understood the importance and necessity of adopting tech to get help in adapting to the new normal.
Carriers must become determined through competitive advantage, smarter underwriting decision-making, speed to market new products, and better customer experience. These depend on technology adoption, and insurers accept that technology is the key to future-proofing their organization.
Cloud is that small element in the technology landscape that plays a vital role in helping insurers gain a competitive edge. A cloud-based solution offers insurance workers easy access to applications and data. That they can use to collaborate more effectively and efficiently, leading to increased productivity.
Additionally, insurers now can easily integrate multiple insurance products and processes within their organization and serve customers in a more connected environment, reducing almost all customer-relationship issues.
Cloud Helps Clear IT backlog
Technology culture has invaded almost all commercial sectors. Allowing companies to build IT infrastructure from scratch and make a wave of new offerings. On the other hand, insurers have been facing a big challenge of moving from legacy systems to new ones and transferring policyholders’ data. That they have been maintaining historically within several platforms.
Once this is done, insurers will be able to make their business grow with the help of technology intuitively. This has left carriers with a vast IT backlog that will probably require a considerable investment in technology and human resources to clear it.
Cloud can help accelerate the digital transformation insurers seek. Consequently, insurers are increasingly replacing the systems they are traditionally using with cloud-based platforms. That reduces the efforts needed for costly clearance of IT backlog. Besides, carriers can solely focus on business expansion and adaption to new market trends in less time.
Cloud Streamlines System Maintenance & Upgrades
Insurance innovation is happening so quickly that insurers need to upgrade the software as soon as possible to remain competitive. With the cloud, insurers are not burdened anymore and can handle installing and maintaining hardware and software.
This frees their time that they can use to focus on adopting technology that can help generate greater business value. For this, they might want to have a partner company with experts who understand in and out of the insurance industry and specialize in utilizing a cloud-based platform for insurance operations.
The industry continues to experience a considerable talent shortage as fewer candidates retain the skill set required to bring new technologies in place. Moreover, with insurance being a complex business, there are core systems, such as insurance policy administration, claims, customer communication, billing, compliance, underwriting, etc. Hence, there are a lot of chances for things that might go wrong if systems are not appropriately maintained or not upgraded on time.
Cloud adoption can help with system maintenance as it simplifies the process of updating core systems quicker. This is certainly crucial to remain in compliance with operational regulations. That varies with states and ensure consistent delivery of greater customer service.
Cloud Simplifies the Process of Data Decoding and Organization
Data is the utmost need of any business, and when it comes to insurance, there are additional reasons for its value. The need for data is derived from the need for real-time decision making, which requires valuable insights into the operational workflow.
Carriers store and manage an abundance of data (both internal and external) that is still growing with each passing minute and seek economical and quick ways to analyze it. Cloud acts as the medium to integrate internal data with external data sets.
A SaaS (software as a subscription) solution can manage the vital third-party data sources and integration with the use of APIs (application program interfaces). For instance, an insurer is making a home insurance product that requires data from an external source – ABC a real estate and property data provider.
Besides, the SaaS solution will curate the data received from external sources and third-party services. And it also integrates with core systems for seamless access and usage of data by end-users.
Cloud Helps Insurers to Focus on Business Scalability
Insurance is a demanding business, as customers require innovative and flexible solutions that meet their specific needs. Traditionally, insurers have not been able to quickly build new products and take the ‘test & learn’ approach, which is commonly used in other technology-driven sectors. Insurers have had to incur substantial upfront costs in IT even before delivering a product that may or may not succeed in the market.
Here, the need of the hour is the cloud. The flexibility cloud-based platforms offer to insurers in scaling their business up or down as per their requirement. This is one of the most significant advantages the cloud technology gives.
It removes the need to manage servers, IT infrastructure, switches, etc. Thus, it eliminates the capital expenditure burden to scale and develop their products quickly. Cloud helps minimize the use of resources in operations that generate low value; it means allocating them elsewhere (innovatively building new products) can help scale overall business.
Cloud Enhances Security
In the past, insurance has been one of the main targets of cybercriminals. Considering the threat, we can say that a cloud environment offers insurers accessibility to utilize the information security expertise of the SaaS providers. That ensures meeting state, federal, and global compliance requirements.
This is more beneficial for small-size insurance businesses. Small size businesses usually don’t have the resources and time required to study and implement new security and compliance protocols. Insurance agency management becomes a little easier with the cloud. Insurers can rest assured knowing their cloud-based systems are protecting their data and processes against any potential threat.
Wrap up:
Cloud, without a doubt, is the insurance future. In a year or two, it won’t be easy to imagine a competitive insurance carrier without the cloud’s presence. However, it is also not easy to migrate from traditional to new. Cloud-based systems as it requires significant time, resources, and planning.
It is also advised to select a SaaS provider that can understand a specific insurance space. A company is into and has enough skilled staff to keep the workflow streamlined.
Cloud-based platforms can be fully utilized to run core business processes. Cloud enables insurers to accelerate innovation, deliver products and services. That is meant to satisfy or surpass customer expectations, encouraging success and business growth in the long run.
