How Cloud Adoption in Insurance Can Drive Efficiency, Innovation, and Growth
Introduction
Personalized policies, rapid services, instant claim settlements, easy fraud detection, accurate risk analysis, cost optimization, and increased customer satisfaction - the list of cloud insurance benefits is too long. This explains why cloud adoption in the insurance industry is steeply rising. According to industry insights, cloud adoption in insurance has seen a rise of over 90% in the past couple of years.
While everyone is rushing to adopt the cloud, let us take a moment to understand cloud computing and why everyone is so enthusiastic about this transformative technology.
Cloud adoption means assessing storage, databases, software, and servers through the internet. Cloud-managed service providers like AWS facilitate organizations' access to computing resources over the internet, anytime, from anywhere. Cloud computing is like a genie in a bottle, granting you computing resources anytime, anywhere, and as needed. Cloud removes the burden of maintaining bulky on-premises IT infrastructure and facilitates resource availability at a much-reduced cost.
Accenture says cloud adoption in insurance can reduce IT investments by 30-40%. In addition to the cost benefits, cloud insurance also drives efficiency by streamlining insurance processes.
Cloud insurance platforms enable insurers to assess critical data. They can assess risks, process policy purchases, and handle claim settlements quickly and efficiently. What used to take days can now be done in minutes! It also results in enhanced customer satisfaction. Customers can view and compare different policies, understand coverage details, and pick the one best suits their needs. The cloud provides transparency, facilitates informed decision-making, and sets the right expectations.
Many insurance companies are already leveraging the powers of cloud computing. From enhancing their data security to streamlining internal operations, insurance companies are exploring various use cases of cloud technology.
How is Cloud Computing Leveraged in Insurance?
Cloud-based solutions enable insurers to store and process applications on remote services via the Internet.
It is like renting a car. You could buy a high-performance Maserati, but it’s expensive, requires heavy maintenance, and lacks practicality. Also, purchasing a Maserati is not a feasible option for many.
Renting offers flexibility and cost-effectiveness.
Similarly, migrating to the cloud makes sense, considering the long-term cost benefits, scalability, and flexibility. Insurers can scale their resources up or down based on the demand.
For example, companies can scale up their resources during peak demand periods, such as monsoons or natural disasters, and scale down when the demand drops. Thus, cloud-based platforms offer unbeatable cost savings and enhanced efficiency.
Cloud-based solutions also enable insurers to securely store vast amounts of data related to policies, claims, and customers on the cloud. This central repository facilitates automating and streamlining policy issuance, renewals, and cancellations, improving speed and accuracy.
Delloite says ‘speed’ is the new currency in insurance, and rightly so.
Today’s digitally driven customers expect everything at the touch of a finger. Their groceries get delivered within minutes, and their travel bookings are done in a click, so why not their insurance?
With cloud technologies, insurance companies are pushing the envelope of innovation.
7 Benefits of Cloud Adoption in Insurance
Cloud computing has fuelled a paradigm shift in the ‘build-buy-acquire’ mentality. Today, big or small companies are moving to a more dynamic and cost-effective model of a ‘rent-try-evolve.’ With access to unlimited resources, insurance companies can afford to experiment, innovate, fail, and grow.
Check out the benefits of cloud adoption in insurance -
1. Streamlined Operations
In a recent survey, 52% of participants picked operational efficiency as one of the most crucial factors driving cloud adoption.
Lemonade uses cloud tech to streamline onboarding and claims. MetLife, too, migrated to the cloud to automate its processes, approvals, and payouts. Progressive Insurance implemented cloud technology to automate many aspects of claims management, resulting in quicker processing times and more efficient operations.
Several insurance companies are implementing cloud tech solutions for real-time data analysis, better risk assessments, predictive modeling, and easy claims management.
2. Optimized Cost Savings
Cloud migration can curb IT spending by about 30% - McKinsey.
Cloud-based solutions enable insurers to move from legacy systems and infrastructure to advanced cloud technologies. This enables them to automate and optimize workflows, significantly reducing operational costs.
3. Scalability and Flexibility
73% of insurance executives see scalability as a significant benefit of cloud adoption.
Scalability and flexibility fuel insurance businesses amid rising risks, market shifts, and changing consumer demands. Cloud computing enables companies to adjust resources on demand, avoiding over- or under-provisioning.
4. Simplified Data Management
One of the biggest benefits of cloud adoption is simplified data management.
Data is the backbone of insurance. Legacy systems ran on fragmented data, which hindered information accessibility and impacted performance and efficiency.
Cloud data storage solutions like AWS or Azure offer centralized and secured data storage and management. This not only makes the data easily accessible but also paves the way for data analytics, predictive modeling, and data-driven risk management.
5. Improved Internal Process
Medigap Life, a prominent US-based online insurance aggregator, optimized its internal workflow by migrating to the cloud. This resulted in an 88% reduction in their process execution time.
Cloud migration and modernization facilitate process automation, thus enabling reduced redundancies and faster responses. From policy underwriting, claim handling, and lead generation to ongoing support, cloud-based platforms elevate several internal processes.
Read more: How is AI in Underwriting Poised to Transform the Insurance Industry?
6. Efficient Team Collaboration
Cloud-based collaboration helps businesses shorten time to market, quickens product upgrade cycles, and gives a competitive edge. – Forbes
Cloud-based insurance solutions offer centralized platforms for accessing and sharing data securely. Teams enjoy enhanced capabilities in communication, product and service delivery, information sharing, tapping knowledge resources, and group problem-solving. Such collaborations improve business processes, including purchasing, manufacturing, marketing, sales, and technical support.
7. Innovation and Digital Transformation
According to McKinsey, with advanced analytics, companies have achieved a 40% reduction in average handle time, a 5-20% increase in self-service rates, and up to $5 million in employee cost savings.
Cloud computing has brought a seismic transformation in the insurance sector. From data analytics and AI to IoT and telematics, cloud tech is reshaping the insurance industry in unprecedented ways.
Today, insurance companies are breaking new ground with real-time asset monitoring and usage-based insurance coverages that take customization to the next level. With AI-enabled image recognition, insurers further push the edge with end-to-end automated claim processing and instant settlements.
Cloud Adoption in Insurance: Use Cases
90% of insurers are planning to increase their cloud investments.
This is because the use cases of cloud adoption in insurance are myriad. Cloud technology is transforming the industry's foundational pillars from revolutionizing claim processing and underwriting to redefining risk management and disaster recovery.
Here are some of the most compelling cloud computing use cases -
1. Platform Hosting
With cloud platforms, insurers can quickly deploy new applications and services. This empowers them to frequently release new features and enhancements and stay competitive in a dynamic market.
2. Advanced Analytics
Cloud-based advanced analytics tools process large volumes of customer data to create personalized policies, uncover risks, and offer customized pricing, leading to more effective insurance offerings.
3. Data Storage
Cloud data storage solutions like Microsoft Azure offer secure storage and management of policyholder data. These cloud platforms offer easy data accessibility, reliable backup, and disaster recovery capabilities.
4. Enterprise Resource Planning (ERP)
Cloud-based ERP systems are very effective in simplifying workflows and intelligently automating processes. Insurance companies like Prudential Finance have implemented cloud-based ERP systems to streamline financial operations, automate processes, and integrate business functions.
For instance, they offer insurance policies to HIV-positive patients based on statistical evidence showing their longer life expectancy derived from collected data over time.
5. Marketing Campaigns and Cost Reduction
Advanced analytics facilitated by the cloud empowers insurers to create cost-effective marketing campaigns. They can now leverage their data to understand customer behavior, discover hidden patterns, and create hyper-personalized marketing campaigns.
6. System Modernization
Insurers can modernize their systems by migrating legacy applications to cloud environments like Google Cloud Platform (GCP). Cloud migration improves system performance, scalability, and agility.
Cloud Adoption in Insurance: 7 Best Practices
About 83% of insurance leaders believe that cloud adoption is crucial for staying competitive and driving innovation within the industry. However, successful cloud migration is complex and requires a well-defined action plan to manage risks and opportunities.
Many industry giants have faced challenges and failures due to poorly executed cloud migrations, underscoring the need for careful planning.
Here are seven cloud migration best practices to facilitate a smooth transition:
1. Understand how cloud migration can help meet your business needs.
Identify the business goals and objectives that can be achieved through cloud migration, such as cost savings, improved scalability, enhanced collaboration, and increased agility.
2. Curate a migration strategy and a detailed roadmap.
Develop a comprehensive plan outlining the scope, timeline, and resources required for the migration, including assessment, planning, design, implementation, testing, and deployment.
3. Assign dedicated teams and define roles for managing the migration process.
Establish clear roles and responsibilities for team members, including project managers, technical leads, engineers, and stakeholders, to ensure effective communication and coordination throughout the migration process.
4. Ensure proper data security management and compliance.
Implement measures to ensure the secure data transfer to the cloud, including encryption, access controls, and monitoring to meet regulatory requirements and industry standards.
5. Define key metrics for evaluating cloud performance.
Establish key performance indicators (KPIs) to measure the success of the migration, such as uptime, latency, scalability, and cost savings to ensure optimal cloud performance.
6. Educate your employees on optimizing cloud services.
Provide training and education on cloud services and best practices to ensure employees can effectively use cloud resources and optimize their usage.
7. Select the ideal public, private, or hybrid model tailored to your requirements.
Evaluate the pros and cons of public, private, or hybrid cloud models to determine which best meets your organization's needs.
How Maruti Techlabs Helped a Major US-Based Insurance Aggregator Reduce Execution Time by 88% Using the Cloud
Our client, a leading online insurance aggregator, aimed to enhance their CRM and workflow systems to address scalability, speed, performance, and functionality issues, ultimately seeking to improve customer service and operational efficiency.
Challenges They Faced
- Their traditional CRM system hindered internal efficiency.
- The legacy system lacked flexibility and scalability.
- Unable to handle a large consumer base and concurrent requests.
- Poor performance impacted agents' work efficiency.
To cope with these issues, they sought an experienced team who could guarantee a seamless migration without disrupting their ongoing business operations.
Solution We Offered
We proposed a distributed, configurable, and scalable solution and implemented it by meticulously sorting and prioritizing the most crucial migration workflows.
Here’s how we implemented a seamless migration to the cloud -
- The client's CRM system was migrated to Apache Airflow for scheduling complex workflows, utilizing its horizontal scaling, parallel task execution, flexible scheduling, and monitoring capabilities.
- Amazon Elastic Kubernetes Service and Elastic Compute Cloud achieved optimal speed and performance.
- Amazon Simple Storage Service (S3) and Relational Database Service (RDS) ensured secure data storage and access.
- Integration of Amazon CloudWatch enabled comprehensive monitoring, rapid issue identification, and streamlined operation of the data pipeline.
Results
The migration resulted in phenomenal improvement in system performance.
- An 87.5% reduction in SMS campaign execution time.
- A 50% improvement in CRM page load time.
These results aided in elevating their customer service, enhancing customer retention and loyalty.
Read our detailed case study to learn more about how Maruti Techlabs accomplished this migration seamlessly.
Make the Leap towards Cloud Insurance Today
Cloud insurance is revolutionizing the insurance landscape, dismantling infrastructural barriers in insurance. Cloud-based platforms make advanced insurance technology and data storage facilities accessible and affordable for insurers of all sizes, paving the way for innovative solutions and enhanced efficiency in the industry.
Companies can now streamline their operations, automate repetitive tasks, eliminate much of the tedious paperwork, save costs on infrastructural investments, and easily gain scalability.
With centralized data, scalable resources, and advanced analytics, cloud insurance also sets the foundation for integrating artificial intelligence and machine learning. Thus, cloud insurance is no longer a choice but the only way to win customer loyalty and survive cutthroat competition. However, migrating to the cloud involves technical, operational, and security challenges. Connecting with a cloud security service provider helps implement robust security measures and ensure data protection.
With over a decade of expertise in cloud application development services, Maruti Techlabs has experience successfully executing highly customized cloud-based solutions in the insurance industry. Our expert cloud consultants can help you analyze the intricacies of your current system, assess the feasibility of cloud adoption, and create a detailed roadmap for a seamless transition to the cloud.
Contact us today to leverage the power of cloud insurance.
FAQs
1. How is cloud computing used in insurance claims?
Cloud computing is revolutionizing the insurance claims process by providing secure, scalable data storage and management, electronic intake, real-time tracking, and automation of routine tasks through AI and machine learning. One key benefit is the implementation of machine learning for claim processing, which enables AI-powered algorithms to analyze claims data, identify patterns, and predict outcomes. It also enables collaboration through secure online portals and predictive analytics to identify patterns and prevent potential losses.
2. How can companies successfully implement cloud-based solutions in the insurance industry?
Implementing cloud-based solutions requires proper planning and strategy. Here are a few steps that you can follow to ensure successful implementation -
- Assess your company’s resource requirements and define clear goals.
- Select a trusted partner with experience and expertise in cloud migration.
- Compare different cloud-managed service providers and choose the right cloud model.
- Sketch a cloud implementation roadmap.
- Plan integration with existing systems.
- Employ proper security and compliance measures.
- Monitor performance metrics and optimize performance.
3. What is the full form of CDP in insurance?
CDP in insurance stands for ‘Customer Data Platform’. A CDP collects and unifies customer data from multiple sources, creating a single, comprehensive view of data.
4. What are the use cases for the generative AI insurance industry?
Insurance companies are using generative AI for analyzing vast datasets that aid in -
- Developing personalized products.
- Assessing risk and detecting frauds.
- Underwriting and customized pricing.
- Improving customer engagement and retention with chatbots and virtual assistants.
