There’s no way around the cloud for insurance companies

Bidding farewell to stereotypes

Those skeptical of the cloud never get tired of bringing up two important objections to using the cloud. They claim that contrary to general beliefs, the cloud is not less expensive than maintaining individual solutions and on-premises systems. This is normally followed by extensive calculations that apply to the example created by the authors.

The objections regarding the security of cloud services are even more serious. Data leaks from large cloud companies are pointed out in this connection. Of course, this must also include a reference to data access by the US authority NSA.

The increase in cloud usage by German companies shows that the decision-makers are increasingly seeing these observations for what they are: stereotypes. The economic observation of the cloud is dependent on many individual factors within an organization. These makes example calculations anything but conducive. Every organization must conduct individual calculations to determine if they should migrate systems and processes to the cloud.

Regarding data protection and data security, compliance with high security standards is essential for the insurance industry. Cloud providers located in the USA have worked increasingly hard on this. Now companies can demand the exclusive usage of cloud structures that are located in German computer centers. And trustee models can be used to rule out the possibility of third parties having access to customer data.

The technical advantages of the cloud are clear

Any way you look at it, the advantages of cloud approaches are clear. This begins with the use of commodity solutions such as Office packages or communication services from the cloud. They are available immediately after completing a contract and their costs can be scaled thanks to simple price models. Scalability and flexibility as the biggest advantages of cloud solutions continue for approaches such as “Infrastructure as a Service” (IaaS) or “Software as a Service” (SaaS).

Those in charge of IT in insurance companies were previously forced to create strategies and development plans without knowing exactly how business trends and business models would develop. It was correspondingly difficult to react to developments and trends. The cloud has a significantly higher degree of freedom, because the construction and operation of IT systems with long lead times is no longer needed.

Modern forms of cooperation (collaboration) with service providers and external partners, such as InsurTechs, are made even possible through the cloud. New companies naturally use cloud services to connect different systems with each other and to simplify the exchange of data. It doesn’t pay off to not be a part of this. We could exaggerate and say that a lot of problems that IT departments in insurance companies still have to fight with would not have occurred in the first place if there had been functional cloud services 20 years ago.

Strategy required as a basis

Security, compliance (also with the DSGVO), reliability, scalability and costs are parameters when selecting a cloud provider. Before a selection can be made, the foundation must be initially formed and an independent strategy developed for cloud usage. In addition to quick wins, which may include location-independent access to customer data or the usage of communication solutions, fields and processes must be identified where digitalization with the cloud as a motor can create real added values.