Insurance must embrace the cloud

Organisations in the insurance sector don't have a reputation for changing their software very often. Every 10 years is typical. Most IT managers, whether at brokers or insurers, realise that to be ready for the next 10 years, they have to consider cloud-based services for any new software they use.

More and more businesses are turning to cloud-based systems - also known as 'software as a service'. In simple terms instead of running your own software in-house, an external software provider run it on your behalf, often hosted and accessed via the web. IT research and advisory firm Gartner predicts that worldwide sales of SaaS, will total £6.5bn in 2011, a 16.2% increase on last year.

The insurance market is benefiting from sophisticated SaaS designed specifically for its needs. Axa, for example, uses cloud-based services to manage household claims, and claims it has led to faster handling of notifications, higher quality scores, and fewer supplier calls into the office.

Pick at random any of the computerised elements that an insurance business uses, and brokers and insurers have already found cloud-based systems to handle it. There are cloud-based systems for managing schemes, policies, fraud, and supplier relationships; for underwriting; for automating payments; for configuring products and generating quotes; and for validating and fulfilling claims. The list goes on.

The cloud is ideally suited to making data visible to all the people who need to access it - both internally throughout an insurance business, and externally with its suppliers or customers. Because the software and data are managed centrally, all of these different stakeholders can communicate knowing they are looking at the same set of information - one version of the truth. Access to reliable information allows insurers to provide better service to their customers - for example, instructing and authorising suppliers fulfilling a claim.

Cloud computing is often quicker and cheaper than other technology forms. Cloud providers have existing and scalable infrastructure, which allows them to provide services to big and small customers alike. With cloud-based systems, both the software and data are managed centrally, and updated in real time, so it is possible to make updates available to all users instantly. Providers can run services for customers, allowing them to scale back and pass on the savings to customers.

In addition, knowing that their data is held centrally, insurers and brokers using cloud-based services no longer need to keep local copies of data on laptops or memory sticks. This significantly reduces the chances of data getting into the wrong hands.
Cloud-based services are the future, helping insurance businesses to stay competitive in today's challenging marketplace.

Julian Clay, chief operating officer of insurance technology provider Editrack