Revolutionizing the Insurance Industry with Cloud Technology
When we look at speed and efficiency in delivering quotes for example, or for the flow of motor telematics data, most of us think of the cloud as an opportunity to scale technology easily and quickly, not necessarily about opportunities for new services.
But there is a deeper impact, about preparing for the future, and how more insurance products are going to be delivered and priced, based on pooled data and pooled internal and external information, beyond just what an insurer knows about a customer from their own systems.
Over the past few years, cloud-based hosting has become the ‘invisible hand’ that feeds all kinds of on-demand services, whether music, calendars, photos and other applications in an instant, whenever, wherever and through whatever device we want them. Now with ability to consume data (structured and unstructured) and create insights out of it using services provided by the cloud providers we are talking about the next evolution. Building applications that use complex technologies (like artificial intelligence and machine learning) via simple cloud services rather than having to build it from ground up.
Cloud computing is very much about preparing for the future of insurance, for people living in a connected eco-system in the future. There is no sign that this prospect of hyper-connection is going to stop. In fact cloud computing is enabling faster and easier connectivity paired up with a host of services from database hosting to serverless execution.
Security with cloud technologies
Some insurers fear that with cloud technology you
Since insurers handle PII data (personally identifiable information) it is of course fundamentally important for them to ensure security of this data and prevent any unauthorised usage.
Most cloud providers provide multiple layers of security. For those who do not want a public cloud (one that everyone has access to), a secure private cloud can be created. Strict access controls, firewalls and network security – similar to your physical infrastructure – can be deployed in the cloud. Several security standards have come up to ensure security within the cloud environment.
Companies who vie for certification of their cloud infrastructure can apply appropriate standards and be ISO27017 certified. IRDAI has also come up with guidelines on the usage of cloud and security of the same. As cloud adoption increases – and the data security guidelines become more stringent – cloud service providers are adopting ever-more secure mechanisms to protect all of their customers’ data.
The number of public cloud users has risen to 92 percent from 89 percent in 2016-17. In the private cloud, the figures are from 72 percent to 75 percent. As a result, the overall proportion of respondents using a minimum of one private cloud or public cloud is 96 percent.
As shown in the Right Scale 2019 State of the Cloud Report from Flexera, both private and public cloud adoptions have risen in the last few years. The study further shows that numerous corporates and numerous lines of business are now using public cloud.
The number of public cloud users has risen to 92 percent from 89 percent in 2016-17. In the private cloud, the figures are from 72 percent to 75 percent. As a result, the overall proportion of respondents using a minimum of one private cloud or public cloud is 96 percent. Surveys suggest the trend will continue through 2020.
Insurers will find that setting up the technical infrastructure will become very easy for new competition. Similar to the boom of fintech companies, new companies specialising in many aspects of the insurtech space are coming up rapidly. Some of these companies will help insurers better their processes while others will compete for the same market with innovative products. As these innovative products are adopted, cloud technologies will make it easy for scaling up of these solutions and no upfront capital expense is required - costs grow with the revenues!
Existing insurers will have to adapt to be able to move quickly and respond to this new dynamic. The fast movers will benefit while the laggards will find it increasingly difficult to compete in the new segments.
Cloud technology evolution is not just about taking your physical infrastructure and moving it to the cloud. Going from virtual servers to containers and containers to serverless – cloud is all about focusing on the business of insurance, the core competency. Building technology that supports easy and quick underwriting and fast processing of claims in the most efficient manner rather than the complexities of standing up an infrastructure, figuring out its reliability and scalability and worrying about disaster recovery! Lets outsource those complexities and focus on the core technology that enables our business partners to conduct efficient insurance business.