Cloud Computing Enables Digital Insurance

Insurers can use cloud computing to quickly and cheaply implement the digital version their company. Because of the changes in the market, insurers need to accelerate their digital ambitions. They also need to deliver exceptional mobile and online self service functionality to their customers, distributors, and partners.

Market challenges

It is the “End of Business as Usual” (Brian Solis). Digital is rapidly changing the insurance landscape and many Insurance companies find it difficult to adapt to these changes. Social media and mobile will impact sales, distribution, and operating models. This will require adaptation of new marketing strategies and innovative technologies. For Insurers to be able to adapt quickly and become fully Digital Insurers, new technologies and services are readily available. Mobile and online applications can be delivered quickly and cheaply, and social media provides all technical integration and services that integrate with the Insurance business. Big data analytics tools, cloud computing, and cloud computing are all available to give Insurers a competitive edge and transform the current paradigm.

Digital Insurance Ambitions

Every Insurer has a plan to become a digital Insurer over the next few years. The outcome will vary depending on how well an Insurance company can implement internal change. Digital Insurers have digitalized customer interaction, distribution, and service partners using mobile and online apps for new business, policy servicing and renewals, expiries, claims, and inquiries. This includes social and digital marketing, big data analytics, and rule-based claims management. Digital Insurer has completely digitalized its internal processes. Management and staff have instant access to mobile and online applications. They can also work remotely from their devices. These changes will transform the organization from an administrative entity to one that is focused on sales and services. The sales, distribution, and customer services departments will have more employees than those who work in traditional processing or administration. The Digital Insurer can create innovative products, offer excellent services, and is cheaper than the current market. The Digital Insurer can be accessed anywhere, any time, and from any device.

There are many benefits to digitizing an insurance company:

  • It’s easy to do business
    • Online and mobile applications that provide new and renewed business functionality, including illustrations, quotations, and payment.
    • Advanced self-service tools to assist with claims notification, endorsements, and inquiries
    • Referrals to underwriting are automated and minimized.
    • Access to the Internet 24×7, from any location in the world.
  • Rapid business growth
    • Analytics and availability of big data.
    • Advertising and promotions personalized to you
    • Daily campaigns and price changes
    • Cross-selling and upselling digitally
    • Retention is higher
  • Operational costs reduced
    • Straight through processing
    • Manual work that is minimally controlled and BPM-controlled can be minimized.
    • Organisation paperless
    • Digital integration with service providers
    • Rule-based underwriting is available for simple mass products.
    • Management of simple mass claims using a rule-based claim management system
  • Customers and partners will be better served
    • All information online and mobile, including advanced call center access.
    • Digitalized notifications and rule-based decisions allow for fast claim processing.
    • Claims service personnel are “on the move” with their mobile devices.
    • Download and up functionality.

Cloud computing

Cloud computing refers to distributed computing that uses the Internet as a real-time communication network. Cloud providers provide integrated IT services that are charged according to usage. The cloud computing services are provided by IT service providers that provide public clouds from data centers all over the globe. Software as a Service (Software as a Service) provides applications, data storage, and databases that are accessible from anywhere and anytime via the Internet. Cloud solutions can be used in many ways (SaaS/PaaS/IaaS), and cloud solutions can be implemented in private, hybrid, hybrid, and multiple clouds. Infrastructure, platforms, and software can be shared in public clouds with other cloud providers. Private clouds are private, but these resources are only available to the company. Large global corporations are theoretically able to create a private cloud. The risk of failure is high because of poor internal governance, culture and insufficient knowledge, budget, and lack thereof. If companies don’t feel comfortable using a public cloud and prefer to use a private cloud to run their business, it is a good idea to outsource all IT infrastructure and applications to cloud-specialized IT firms and to make use of existing infrastructure to create a hybrid cloud.

The digital insurer in cloud

A Digital Insurer can use cloud computing to provide a complete digital service for its customers, partners, and employees. Cloud computing connects all types of mobile and online applications to do business with the Insurer from any location. Customers, partners, and employees can access online and mobile apps that are connected to the cloud’s integration backbone. All back-end systems, databases and the integration backbone of Insurer are hosted in the cloud. They are protected by all security measures and systems to avoid compliance issues. Cloud computing offers flexibility and can scale up or down to suit your needs. Digital projects can be small, but once they are successful, you can easily increase bandwidth and storage without compromising on IT delivery times. Combining cloud computing and digital insurance will significantly reduce IT and Operations costs.

Cloud computing is a great option for Digital Insurer.

  • Access to the Internet 24×7
  • Independency of device and location
  • Rapid time to market
  • Flexible work environment and opportunities for collaboration
  • Pay as you go/Usage-based charging
  • There is no initial investment, you can simply shift from Capex into Opex.
  • Automated and flexible self-service scaling.
  • Globally optimized infrastructure allows load balancing.
  • Centralized storage
  • High availability, reliability and disaster recovery.
  • Outsourced IT maintenance services
  • IT departments can focus on online and/or mobile app change management, process and service improvement, analytics and efficiency, agility, and agility.

What does it mean?

All servers, network and IT infrastructure are accessible in the cloud data centers provided by the IT service provider. They can also be connected to the internet. A secure operating platform can be used to deploy Insurer-specific back-end systems. The following systems are typical ones that can be deployed in the cloud:

  • Management of clients.
  • Management of policies (Life, P&C, Health, Group).
  • Management of Claims
  • Financial management.
  • Content management.
  • Management of correspondence (printing).
  • Management of business processes/Workflow.
  • Management and product development.
  • Other (HR, Partner management and Projects, Governance, Procurement etc. Other (HR, Partner management, Projects Governance, Procurement, etc.

All systems can be connected to an integrated system. This connects the back-end systems and connects transactional and data warehouse/analytic database(s). It also provides connectors to external gateways and online and mobile apps. Mobile and online applications will be available in the cloud or mobile app shops. All apps will be available for download by customers, partners, and employees.

This model can be applied at any level depending on the centralization strategy and the selection of systems and tools. It can be used on a country, region, or global basis to provide flexible solutions for local differences in language and currency.

The challenge

Boardrooms are more or less accepting of the urgency of Digital Insurance. Digital Insurance is still not fully accepted by sales and distribution, underwriters, or operations. To adopt cloud computing and digital insurance, it is essential to change the mindset of the insurance industry. Even though the benefits of cloud computing are obvious, internal control, security compliance, knowledge, and mindset issues can prevent rapid adoption. This could delay the implementation of Digital Insurance. This is not just for IT departments that are faced with major outsourcing. It also affects all departments within the company. For example, will actuaries be able to store and use their models in cloud storage?

Cloud Computing is secure and should be treated in the same manner as IT outsourcing. Cloud providers have invested heavily in security and business continuity, high availability, and performance. It has been a long-standing practice to outsource IT. We have the experience and knowledge to ensure that you have strong governance, ownership, continuity of business and seamless migration.

The bigger challenge is to make insurance back-end systems cloud-ready. In most cases, the back-end systems do not integrate and front-end systems are built on top back-end systems that are not tightly coupled. The basic components of an integration layer and transactional data are required to integrate the back-end systems with the front-end systems. They also provide access to data and functionality to support online and mobile apps.

Considerations for Implementation

The foundation for cloud computing and digital insurance will be a digital IT strategy. Cloud computing is possible by moving non-mission critical systems to cloud computing and getting familiar with the cloud. To speed up the implementation, the priority should be to transform mission-critical systems into cloud-ready systems and then migrate them to the cloud. Cloud readiness is based on the integration of online and mobile apps and core systems as well as the availability of large integrated data such as customers, transactions, and claims. A project must include the following:

  • Service levels and their scope.
  • Cloud architecture.
  • Architecture for application and integration.
  • Security and compliance requirements
  • Cloud governance.
  • Selection of cloud providers
  • Contract and Service Level Agreement
  • Database development and cloud readiness system.
  • Development of mobile and online applications.
  • Technical migration
  • Digital and cloud transformation.

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