The 22nd-Century Insurer: Taking a Cloud-First IT Approach
Cara McFarlane | October 01, 2019
For a technology that’s been around for decades, the cloud gets a bad reputation ̶ especially within highly regulated industries like financial services, insurance, and healthcare that covet data security above all else. While other industries have seen a rapid increase in cloud technology selection and deployment, insurers are still hesitant – often set in old habits and relying on on-premises solutions that have always worked for them. However, competition from insurtech has caused many organizations to reevaluate their business strategies and technologies approaches to compete with new entrants and offer the best solutions to their customers.
While organizations evaluate the best approach to modernize business practices and technology, they should also strongly consider a cloud-first technology approach. Here’s why.
On-premises enterprise technology solutions are aging at a quick pace. The future of work, and how people prefer to interact with information, is changing. However, the need to access secure information will always remain constant – regardless of the industry. A cloud-first technology approach offers an organization many benefits, including IT freedom, increased data availability, data security, and faster revenue pace.
- IT freedom: Many IT departments are feeling the strain of managing hundreds of software platforms. The implications of IT sprawl can have a devastating effect on a business – most notably the inability to maintain technology applications. With a cloud-first technology approach, an insurance organization’s IT department can do more with less because standardization of cloud platforms reduce IT oversight and allows IT personnel to focus on priority projects.
- Increased data availability: Access is often the biggest challenge and a leading reason more organizations choose to migrate to cloud-based technology. Insurers require access to business-critical information whenever, wherever to ensure they can deliver exceptional service to their customers. With a cloud-first technology approach, insurers can achieve 24/7 access to data, documents and processes to business running regardless of what is happening around them. This also increases disaster recovery and decreases risk if an emergent situation happens.
- Security and compliance: Security, privacy, and compliance can become a herculean effort for insurers if the right precautions and controls aren’t in place. And because of strict and ever- changing regulations, insurers’ concerns around security and compliance are valid. The need to select a proven cloud platform -- with advanced security standards, certifications, and regular audits -- is absolutely necessary for insurers looking to migrate technology to the cloud.
- Achieve faster revenue pace: An agile IT approach built on a cloud-first technology strategy ensures insurers don’t have to wait on internal resources or IT backlog. Because cloud services can support IT in an agile technology environment, internal resources can dedicate their time to higher priority tasks, helping to focus on building revenue generating products or services and deliver them to the market faster.
Insurers are definitely starting to feel the strain of on-premises technology and seem to be on the verge to migrate to the cloud. Before they do, there are a couple of considerations organizations should keep in mind when considering a vendor or cloud-based solution.
First, look for the security you need. Make sure the vendor never comingles data with another organization’s information. Strict protocols should be in place to ensure the security of an organization’s data whether it’s in use, in transit or at rest. Second, make sure the cloud solution is flexible and scalable. Organizations’ needs change over time, and the solution you choose should be able to grow and evolve with you to accommodate your evolving needs. Finally, look for the right certifications. Vendors should use reliable and accredited data centers that are SOC 1 and 3 or 2 audited, ISO 27001 certified (or the local equivalent), and TIA Tier 3 or 4.
Tackling a new business or technology strategy is no easy feat. However, with the right education and business partners, insurers can be sure they made the right decision and are able to keep up with the changing demands of the industry and their clients.
Cara McFarlane is the global solution marketing manager for Hyland's insurance vertical.
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