What's the benefit of an insurance-specific cloud platform?
An industry cloud platform is a collection of cloud-based or cloud-native solutions designed for a specific industry. Industry clouds differ from the broader, general-purpose cloud platforms like Amazon Web Services (AWS) or Microsoft Azure because they offer solutions, features, and capabilities that are customized to match the specific needs of industries such as healthcare, finance, logistics, retail, energy, agriculture and others.
The most significant benefit of an industry cloud is the ability to meet an array of specific needs with features like workflow automation, data storage and analysis, processing and auditing tools, self-service customer portals, and more. As Deloitte explains, “Industry clouds can help accelerate the development of industry-specific digital solutions to build a continuously evolving digital core, on top of which you can layer capabilities to help you modernize and innovate—one tech capability or business use case at a time.”
While the insurance industry has been slower than some to adopt these technologies, cloud platforms designed for insurance are starting to emerge. The digitalization of the industry is already underway. Which platforms will take the lead, and which businesses will take advantage of them first?
First and foremost—what are the potential benefits of an effective insurance industry cloud platform?
Enhanced operational efficiency
The right industry cloud solutions stand to revolutionize the way insurance companies operate, providing a scalable and flexible digital infrastructure for their systems. By migrating operations to the cloud, insurers can reduce the burden of managing on-premises infrastructure and focus more on core competencies.
Through integrations, a cloud platform can enable seamless collaboration, eliminating geographical barriers and allowing teams to access and share critical data and applications from anywhere, anytime, on any smart device. This allows for real-time communication and decision-making, enhanced by easy access to data and analytical tools.
Where human insight and decision-making aren’t needed, a cloud platform can also increase efficiency through automation. By automating repetitive tasks, insurers can free team members to focus on what they do best, increase service and processing speeds, and eliminate potentially costly human error.
Cost savings
It stands to reason that enhancing operational efficiency can save insurers by reducing labor costs and improving resource utilization. The scalability of cloud platforms enables insurers to quickly scale their resources up or down based on demand, further reducing costs. Additionally, cloud platforms can greatly reduce the need for physical storage, cutting costs associated with maintaining and securing on-premises data centers.
By leveraging cloud infrastructure, insurers can reduce capital expenditures on hardware and software, as cloud providers handle infrastructure maintenance and upgrades.
Moreover, a pay-as-you-go pricing model can allow insurers to purchase only the resources they use, eliminating overprovisioning.
Improved customer experience
An effective insurance cloud platform will equip insurers to create seamless experiences for customers, allowing them to interact through multiple channels, such as mobile apps, websites and chatbots.
Cloud-based customer relationship management (CRM) systems can give insurers a comprehensive view of customer lifecycles. Automated analysis of customer data can provide insights into customer preferences and behaviors, enabling targeted marketing, personalized offers, and more accurate risk assessments.
Additionally, cloud-based analytics and machine learning capabilities can allow insurers to quickly process vast amounts of data, improving the speed and accuracy of underwriting and processing and reducing the time and effort required for customers to file and settle claims.
All this stands to boost customer satisfaction and retention, as well as creating new opportunities for acquiring new customers.
Increased flexibility and innovation
Key to success in our industry is an insurer’s ability to quickly innovate and adapt to changing market conditions. The cloud platform can facilitate the rapid deployment of new products and services, helping insurers to stay ahead of the competition.
With the ability to scale resources in real-time, insurers can handle surges in demand during peak periods, such as open enrollment periods or after natural disasters. The cloud also facilitates integration with external data sources, such as weather data or telematics, enabling insurers to offer usage-based insurance and personalized risk assessments.
What’s more, cloud-based ecosystems and marketplaces allow insurers to collaborate with insurtech startups and other industry partners, fostering innovation and driving the development of new products and services. An effective cloud platform also enables insurers to experiment with new technologies—such as blockchain or artificial intelligence—to enhance their operations and create unique value propositions for their customers.
Data security and compliance
As promising as the digitalization of the insurance industry is, it is also creating new challenges regarding data security and regulation compliance. To address those challenges, an effective insurance cloud platform will provide advanced security measures, including data encryption, access controls, and regular backups, all to ensure the protection of sensitive customer information.
The right cloud providers will also invest heavily in maintaining robust security frameworks that comply with region-specific regulations.
Early adoption of an industry cloud platform can give insurers an advantage in the marketplace. It can drive innovation, boost efficiency, help meet evolving customer expectations and generate new growth opportunities. Insurers looking to get a head start should work with their CMOs, CIOs, CTOs and chief digital officers to assemble a clear picture of what exactly they will need from an industry cloud platform. They should question potential providers about the flexibility of their solutions and the level of support they can expect during and after implementation. And, crucially, they should ensure the platform is sufficiently modular to accommodate new solutions as our industry continues to evolve.
For example, an open API infrastructure is essential for insurance organizations that want to leverage an industry cloud. APIs are the facilitators of insurance technology ecosystems, enabling your technology and systems partners to connect and collaborate.
