Clearly, many see the value of cloud computing. In a survey of more than 800 CFOs in the United States and Europe, Google found that 81% of U.S. respondents believe a complete implementation of cloud technology would improve employee productivity, while 71% said it would reduce the time required to bring new products and services to market. The Google survey also found that in Europe, 67% of the respondents have adopted or are making plans to adopt cloud computing, while in the U.S., 52% surveyed said their companies always include cloud-based systems in their IT decision-making processes.
These benefits are not restricted to a select few industries. Insurance companies can also derive similar benefits — by adopting cloud services, insurance firms can reduce capital and operating expenses and improve productivity through the convergence of cloud and collaboration technologies, which allows employees to collaborate on shared applications from anywhere, using any device. This convergence also allows insurance firms to provide their customers with self-service platforms that enable them to report claims online, check on claims status, select auto repair facilities, schedule rental cars, chat live with insurance agents, etc. These cloud and collaboration capabilities can significantly enhance customer satisfaction, reduce customer attrition, strengthen the brand and unlock new monetization opportunities through development of uniquely targeted solutions for specific customer segments.
New Revenue Potential from the Cloud
Cloud technologies not only offer business efficiencies, but also provide new revenue sources:
- By leveraging the power of the cloud, insurers can jumpstart product development and improve speed-to-market from months to weeks and even from weeks to days. That’s because the cloud allows for enhanced project collaboration irrespective of the location of those working on the project. This is a strong source of competitive advantage, as the cloud adopters can leapfrog competition, expand into new markets, increase market share and accelerate revenues.
- The cloud can also transform the way insurance firms do business, enabling them to implement a cloud-based Agent/Broker Management system that can be licensed to independent insurance agents.
- The cloud allows insurance firms to more quickly and easily increase demand for their products by embedding insurance purchases through other websites. Examples include travel insurance purchase portals embedded in travel websites and auto insurance portals embedded in car dealer websites.
- Digital insurance professionals are developing strategies to take advantage of the new opportunities created by the increase in mobile connectivity. As such, insurance providers that have adopted a cloud strategy will be able to quickly develop and launch mobile insurance apps, products and more to their customers more efficiently and at a larger scale and scope than competitors who lack a comprehensive cloud strategy.
What Criteria Should Insurance Firms Use When Deciding How to Connect to the Cloud?
Network Service Providers (NSPs) play a critical role in the cloud ecosystem because they provide the actual connectivity solutions to the cloud. There are three main criteria insurance firms should use when deciding how to connect to the cloud: (1) the sensitivity of the applications (and users) to network performance, (2) is the importance of security and (3) bandwidth requirements.
- Security is a top priority for insurance firms due to the sensitive customer information they handle. When migrating to the cloud, insurance firms should ensure that the NSP is offering private network connectivity to the desired cloud resource, and also make sure that the provider has a comprehensive suite of managed security services to support the customer.
- Network Performance and Reliability are also important considerations. Insurance firms should select an NSP offering direct connectivity to the desired cloud resource, which increases performance and reliability. Direct connectivity means that the NSP is connected to a cloud provider’s data center, and therefore can guarantee end-to-end performance service level agreements (SLAs). Additionally, insurance firms should find out if the NSP has multiple route options for high-bandwidth, high-availability solutions and whether they provide latency guarantees. For the most demanding applications, they should find out if the NSP offers low-latency dedicated transport options.
- When evaluating SLA guarantees, insurance providers should be cognizant of the fact that network SLAs and cloud-service SLAs are separate, so they should be sure they are comparing apples to apples. Availability SLAs and latency guarantees are important to most enterprises.