How Cloud Is Revolutionising The Insurance Industry
Compared to other industries, insurance has been slow on the uptake of cloud technologies, primarily thanks to misplaced concerns over security and compliance. However, as cloud technologies grow further advanced and prevalent, more and more insurance companies are beginning to see the value of the cloud and incorporate it into their IT infrastructure.
These companies are now at a natural advantage thanks to the innovation that cloud technologies enable within the industry. The cloud has begun to revolutionalise insurance, offering new cloud solutions to old challenges and empowering greater operational efficiency in doing so.
What are the benefits of cloud adoption?
The benefits of the cloud extend to many other industries as well as insurance, offering a variety of advantages to companies that adopt cloud technologies. One of the main advantages is the superior accessibility that the cloud provides, securing remote working and redefining collaboration through shared, cloud-hosted storage systems.
Another notable benefit of the cloud is that it can significantly reduce the operational costs of IT infrastructure, reducing the need for on-site hardware and lowering maintenance and running costs as a result. Moreover, the cloud is highly scalable, allowing companies to modify and scale up their computing capacity when necessary very quickly and generally seamlessly.
While these benefits are enjoyed by most industries adopting the cloud, it offers a variety of unique opportunities to the insurance sector, making space for new innovative approaches and solutions.
Cloud opportunities for innovation in the insurance industry
Cloud computing and infrastructure has opened up a variety of new capabilities for the insurance sector. Centralised, accessible databases alongside adaptable software and new cloud-native technologies such as artificial intelligence (AI) and machine learning have opened the doors to new and improved functionality. These evolutions provide the industry’s cloud leaders with the tools to revolutionise their approaches to old problems and build success out of innovation.
Improved safety and compliance
Contrary to certain widespread misconceptions, cloud hosts offer powerful security measures for their clients. Encryption, consistent updates, AI-based tools, and other cutting-edge security measures make the cloud an extremely secure environment – which, given the amount of sensitive data that insurers handle every day, makes it the ideal storage solution for the insurance industry.
Cloud storage solutions also come with automatic backups in many cases, adding a further layer of protection to critical databases. The robust security offered by the cloud means that data can be centralised within a single environment and be readily and safely accessible all the time from almost anywhere.
This in turn, allows a more modern approach to compliance, a long-standing challenge for the insurance industry. Centralisation within the cloud means it’s easier to apply blanket policies to data management and protection and also makes it easier to implement changes to these policies – an important consideration given the ever-shifting landscape of compliance requirements.
Thanks to a range of improvements in operational efficiency, the cloud allows insurers to work more productively and effectively, especially when it comes to computational processes. Through cloud computing, cloud-native applications and Software as a Service (SaaS) offerings, the cloud can replace vast swathes of the on-site hardware insurance companies would otherwise need to access.
This gives companies two options – get rid of their on-site hardware to reduce costs or keep selected hardware and use it for additional functions now that everyday processes can be handled in the cloud. The latter option means that companies have access to greater computational capacity that can be used for new innovative functions.
The cloud also offers greater accessibility to policies, forms, contracts, customer data and other key information, allowing remote working, improved flexibility and agility, and easier management of a range of data. Shared workspaces on the cloud mean collaboration is also more expansive and accessible.
Perhaps the most significant advantage the cloud offers in terms of operational optimisation, however, is the use of AI and other tools to automate specific processes. AI solutions enabled by the cloud can automatically handle various functions, from document creation and management to basic underwriting and claims processing. Automating these processes through the cloud allows insurance teams to work on more complex, high-value tasks instead.
Data Collection & Analysis
Cloud-enabled AI is also fundamental to new data collection and analysis methods in the insurance sector, alongside other operations such as machine learning and centralised, cloud-native databases.
AI can be used to more effectively gather a broader range of user data, especially when it comes to “Big Data” activities making use of trace user data from around the web. This data can then be hosted in centralised, cloud-native databases and analysed en masse through AI and machine learning to gain invaluable new perspectives on consumer behaviour.
Due to the scalability of the cloud, these big data approaches no longer necessitate maintaining high amounts of on-site IT infrastructure at all times. Instead, cloud computational capacity can be scaled up and down as needed, allowing cost savings while empowering innovative approaches to data analysis.
Through more intelligent, AI-powered statistical analysis, insurance companies can work to create data-driven products, processes and business solutions. The insights gained through cloud-enabled research also extend to more focused marketing and customer acquisition strategies with higher success rates and lower costs per customer.
Personalised Customer Experience
Delivering a personalised customer experience has always been one of the core challenges of customer retention in insurance. Cloud technology allows for a modern-day approach to this old problem.
As a result of the powerful data gathering and analysis functions detailed above, insurers can now access more detailed profiles of each of their customers. As a result, customer interactions can be tailored more closely to their unique characteristics and needs.
The cloud enables customer service agents to readily access this information at any time, equipping them to create more personalised experiences. Personalised dialogues, troubleshooting, and service lead to a better customer experience and higher levels of customer loyalty, all driving higher customer retention.
As with most industries, the cloud offers all manner of benefits to insurance companies. However, the unique need for personalisation and data-driven approaches within the insurance sector means that the cloud’s capacity to significantly improve the customer experience and retention rate is vital for insurance companies.
Given the slow adoption of cloud technologies within the industry, the companies that invest in the cloud are at a natural advantage compared to competitors.