Once known for its slow-growing technology path and long business process, insurance enterprises around the world are active to adopt the technology. Insurance companies realized that the technology can solve many of the current challenges, and embracing the robust solutions will improve the operational efficiencies, assist in leveraging analytics with more actionable steps and assist in building the front-end systems that can solve the process challenge. One of the primary reasons why many of the insurance companies have adopted innovative technology is to make the customer experience more satisfactory. Over the course of last decade, we have seen a number to technologies being adopted by the insurance industry however one of them has stood out because of it’s an influence on the complete Insurance infrastructure. The migration towards cloud-based solutions has increased many folds. According to the recent report by Novarica’s “Insurer IT Budgets and Projects,” 63 percent of the insurers will be looking towards the cloud as an application alternative in 2019. Many of the Insurance industry experts have added that the need for technology to improve the bottom line of the process. The current range of policy providers encumbered by legacy systems that will be no longer sustainable or efficient there isn’t much choice left for those wishing to compete in the business of customers that demand simplicity and speed. The cloud business needs to understand the underlying industry motivation that is pushing the insurance providers towards different technology and here is a glimpse of them.
Speed and Connection
Insurance was historically considered as a laggard in the technology innovation and as we moved towards the customer-centric approach the providers were defined with haves and have-not. The technology is considered as the strongest disruptor for any sector and how can insurance providers avoid the whirlwind. The early adopters of technologies in the sector used predictive analytics, were more informed about the risk assessment for any customer or business. The insurance industry can drive profit in two major ways- premium paid on policies and investment of those funds. Previously we saw many of the insurance providers earning revenue through high-interest rates to maximize the profit with certain conservative investment portfolios but increased customer underlying about different products and competitive low rates is influencing the decision making. The future of the insurance market is driven by the competitive advantage of speed to market, smarter underwritings in decision making and improved customer experience. What makes the cloud an opportunity to gain an edge over the other providers is the speed of decision making; the access to data, applications facilitates more efficient and effective collaboration towards the improved stakeholder’s productivity. Insurers will have an opportunity to integrate multiple business products within an organization and assist the customers through a more connected environment.
Eliminate IT Backlog
Insurance corporations have a significant challenge when it comes to replacing the legacy systems and migrating the historical policyholder data trapped within a multitude of platforms. Once the migration is completed insurance providers can reach a point wherein they can actively use the technology as a foundation to improve their business operation. However with adoption for modern technology in-house comes significant investment of resources, training of resources and capital commitment to overcome the challenges. Cloud is third-party managed technology, with a control in your hand. This has led many of the cloud platforms to bypass the need to address costly IT backlog. Insurance providers that have adopted cloud are set to be more independent of the technological needs making way for operational innovation.
Insurance is influenced by many steps and attributes, several such factors like policy decision support, claims, billing and customer communication, risk assessment, compliance ability, and investment strategies all affect the insurance provider’s decisions. There are several such functions that can actually go wrong and affect the decision if the decisions are not being maintained properly. Cloud adoption streamlines the system mandating by simplifying the process of refreshing predictive models and updating core system processes at a far quicker pace.
If the insurance providers fail to organize the data based on the usage, the data losses its purposes and value for the organization. The increased focus towards decision making, that demand usable insights integrated directly from the workflow. Due to the sheer greater number of data, the investment is such sectors have tripled over the course of years, more than $2.4 billion in 2018. The insurers need to reorganize the decision-making process when adopting the cloud technology that can provide with an optimized insurance product. Cloud is on the path of public and private options but with private cloud offering system applications that influence the decision making.
Insurance is increasingly developing with customer’s requirement for innovation and flexible solutions that adapt to their diverse and dynamic needs. However, insurers have lacked the required ability to build new products and technology. They have lacked the ability to test and learn, an approach that is so common in other technology-based industries. One of the biggest advantages with the cloud is the increased flexibility that offers insurance companies an edge over the competitors. This eliminates the resources requirement across various positions thus allocating them elsewhere, such as innovating and building new products.
Cloud is the required insurance technology that will provide solutions to consumer demands and reimage service access. Without cloud many of the insures within next few years might find it jarring to compete with growing requirements, however a conscious step towards the cloud with a focus towards the migration with planning, time and resources. Insurers must select a SaaS provider with an understanding of various operational and infrastructure requirements of insurance space.