In the insurance industry, you can hear the drumbeat of innovation getting louder and louder by the day. It seems that on a daily basis there is a new start-up with a new idea to innovate. Change seems to be the only constant thing in the world. So how does the traditional insurance carrier succeed in this ever-changing world and meet the expectations of its customers, partners and employees?

We all know the insurance industry is very risk-averse and rightly so. You have to deal with regulators and ensure you are solvent to pay claims which might come years down the pike.

In this challenging environment, where you need to run a business and keep your eyes out for innovation, how do the incumbent insurance companies thrive and succeed?

One of the ways to move forward and succeed is for insurers to move their applications to the cloud. These days cloud computing is not just about IT architecture; it offers a way to use modern technology to solve real business problems. For insurance carriers, the cloud creates an opportunity for flexible, rapid, and sustainable growth. Moving to the cloud creates a quicker path to launch new digital initiatives and compete effectively in this digital age.

#1 - Who Is Moving To The Cloud?

A recent study by industry researcher Novarica estimates cloud usage is on the rise and the number of insurers using the cloud for their technology infrastructure has tripled in the last two years from 20% to 70%.

According to this study the growth in cloud computing, also known as Infrastructure as a Service (IaaS) or Platform as a Service (PaaS), has followed the growth of the acceptance of Software as a Service (SaaS) adoption in insurance. Like SaaS, the adoption of IaaS and PaaS cloud services was led by the large innovative carriers, but more mid-size carriers are now moving to the cloud as can be seen by the higher adoption numbers.

#2 - How Does The Cloud Drive Innovation?

The reason insurers are moving to the cloud is the significant advantages that can be reaped both in terms of ability to innovate rapidly along with the ability to significantly reduce operating costs.

A recent IBM Survey lays out the significant advantages of moving to the cloud and how leading insurers are leveraging cloud services for innovation:

Operational innovation:

• Simpler and faster way to drive internal efficiency
• Reduce complexity for better governance and expanded access to new types of data
• IT capacity is better aligned to business volumes

Revenue model innovation:

• Customer relationships, data and other assets are monetized more readily
• Time-to-market is tremendously reduced

Business model innovation:

• Third-party services become part of the insurance ecosystem
• New types of business can be pursued

#3 - What Are The Benefits Of Moving To The Cloud?

Carriers are not only able to innovate and bring new products rapidly, but they are able to reduce their infrastructure cost significantly.

According to Celent’s The New Recipe That Is Changing Insurance, moving to a cloud infrastructure:

• Improves implementation speed
• Reduces development cost and runtime cost

But carriers need to understand the business value and develop a plan for their transformation. This new recipe must have both technical architecture and implementation methodology to be successful and should include:

• Microservices
• API integration
• Cloud migration
• Agile adoption
• User-centric design

#4 - Should I Be Concerned About Security?

It is very interesting to note that according to the same Novarica study the conventional wisdom on security and cost has flipped. Security is widely seen as a benefit of cloud technology, and by careful management, there are significant cost savings by moving to the cloud. Most cloud infrastructure providers offer a very robust security platform and have SOC certification.

Conclusion

The insurance industry has clearly identified that a cloud infrastructure is one of the stepping stones to digital transformation. Using cloud infrastructure services, insurers moving to the cloud can accelerate their time-to-market and provide a real-time customer experience that their clients crave.

Are you interested to learn how can mondCloud help you develop new applications and move existing applications to the cloud? Click below for more information on mondCloud’s state-of-the-art AI driven cloud platform.

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