How Cloud Technology Is Driving Optimization in the Insurance Industry
Technology and innovation are key pillars continually shaping the insurance industry’s future. From a steadier pace gradually to an accelerated growth, COVID-19 further fuelled technology’s role ensuring financial protection for the millions in a socially-distanced, virus-infested world. While the transformation had been in the works even before the pandemic, the unprecedented health crisis expedited that process to a never-seen-before pace. Why not? This is a decisive moment for the stakeholders to warm up to cutting-edge technology and offer a whole new world of possibilities to the end consumer.
Today, we are at the cusp of complete digital transformation of the sector with digitization, machine learning (ML), data analytics, artificial intelligence (AI) and automation becoming the differentiators in the sector. Cloud technology is the fulcrum of this evolution, making it possible for insurance companies to deploy modern technologies to modernize and optimize their businesses. Why? The future belongs to companies that are extremely data-driven and consumer-centric. Such companies can be built by moving as much of their business, including data, processes, applications and infrastructure, to the cloud. Thus, the cloud is widely recognized as one of the most transformative technologies for businesses today, especially for customer-centric businesses like those in the insurance sector.
Capabilities, at the heart of successful business models of tomorrow, like AI, ML and smart data analytics to gain predictive insights and make more informed decisions, are primarily consumed from the cloud. With high computing power, elasticity, scalability, reliability, and storage, cloud technologies also help insurance companies build and manage their applications with a few clicks. Hence, leading insurance companies across the world are adopting software-as-a-service (SaaS), platform-as-a-service (PaaS), IaaS (Infrastructure as a service) and other cloud-based native services.
Adopting cloud-based technologies not only improves business process, performance, easy management but also reduces cost. Companies adopting cloud systems need not spend on purchasing and managing hardware, thanks to on-demand and pay-per-use systems. Essentially, the heavy investment in data centres and servers -
even before knowing the return on that investment - can be avoided. Instead, you only pay for what you have consumed based on how optimally you use these resources. Another major advantage of cloud technology is the improved availability it offers whether it is in relation to business-critical information, applications, and services with disaster recovery and timely restoration from images of backup after disasters and security events. This helps businesses to maintain system availability and business continuity.
Moreover, the security and safety of the data – which has always remained a big challenge for companies in the modern data-driven world – is taken care through several cloud security tools and measures. Companies providing cloud technology solutions following best security practices and active preventive measures to maintain the integrity of their servers and to protect stored data. Also, businesses get access, at an affordable cost, to several advanced sets of tools and services – like data loss prevention (DLP), identity and access management (IAM) and security information and event management (SIEM) – which are specifically designed to ensure the security of cloud data. Through a combination of remediation alerts, data encryption, automated threat monitoring, detection, and response in cloud-based environments, these services keep the data safe.
The future belongs to those insurers who can master cloud adoption, which in turn empowers advanced data analytics and AI
Therefore, without an upfront investment, insurance companies can access abundant computing resources quickly, easily, and with the flexibility that their business needs. In a cloud computing environment, new IT resources are only a click away, which means that you reduce the time to make those resources and applications available to your developers from weeks to just minutes. This translates into a drastic upswing in agility for the organization or business since the cost and time it takes to experiment and develop are significantly lower. Also, this flexibility allows them to remove resources just as efficiently resulting in improved optimization. This directly results in overall better performance and internal processes.
From a consumer perspective, cloud computing makes it possible for businesses to collect and analyze large amounts of data quickly to gain predictive insights and make highly-informed consumer centric decisions. This data-driven approach has proved to be among the most effective ways of serving all kinds of consumers. Apart from acquiring new customers, cloud-based technologies, like automated chatbots, can help businesses provide a satisfactory customers support experience which boosts customer loyalty. Cloud-based models help achieve this by providing a personalized experience to each customer, addressing each of them differently depending on their unique characteristics, behaviour, and needs.
Today, the insurance industry clearly recognizes that a comprehensive view of cloud transformation is the key to success. The future belongs to those insurers who can master cloud adoption, which in turn empowers advanced data analytics and AI. Not only this would lead such insurance companies to greatly increase their capacity for innovation, but would also enhance their speed to market with new products and solutions.