Insurance is a dynamic industry and there is a huge competition among insurers. The insurance companies are constantly looking for new ways to improve their business processes, increase customer acquisition, and reduce cost and complexity. This is where cloud computing is giving opportunities to insurers in order to stay ahead of the competition.
According to a survey by Novarica, 70% of the insurers are using cloud computing, thus helping them drive business growth. The number of insurers implementing cloud computing in their business has increased thrice from last 2-3 years. Insurers are seeing significant improvement in their business processes using cloud over traditional methods.
Overcoming the operational challenges with cloud computing in the insurance business
Surged Efficiency – With cloud-based solutions, the insurance companies are making the transition from traditional methods to a modernized insurance structure. Along with increasing the efficiency of management processes at different levels, it is helping insurers in many ways:
- Provide greater storage capacity and increases bandwidth
- With the development of new-age communication and desktop tools like word processing, spreadsheet applications, etc. performance of insurance software is improving day by day
- Improvement in business processes like sales lead, claim processing, accounting, etc.
Provides flexibility and agility – A cloud-based solution offers insurers the flexibility & agility by providing the ability to easily access applications & data, serve customers in a better way, and make smart underwriting decisions. In order to increase productivity, cloud computing facilitates an efficient collaboration between the stakeholders and offers seamless integration of multiple insurance business products within the organization.
Reduced complexity – According to a survey conducted by IBM’s Institute of Business Value, the leading insurers leverage the cloud to reduce complexity. It enables insurers’ to access to new types of data with greater ease.
Optimized Risk Management – Cloud computing is among the most secure IT solutions. It allows insurance agencies to do risk management, integrate risk data, and risk indicators within the domain, which protects data against data theft and breaches.
System Maintenance and Upgrades – Insurance is a complex industry as it includes customer communication, policy and claims management, billing, underwriting, risk selection, investment strategies, data security, and many more things. So there are many possibilities where things may go wrong if IT systems are outdated. Therefore, insurers need to upgrade their systems/software timely to succeed in the business.
With cloud computing, insurers don’t have to worry about installing or maintaining their IT infrastructure. With cloud adoption, IT infrastructure maintenance becomes easier and faster that includes processing refreshing predictive models, updating the core system, etc.
Optimize multichannel interaction – Cloud computing offers you an advantage of transforming distribution channels, enhancing marketing effectiveness, increasing employee productivity, improving customer experience and grow revenue. A unified distribution channel allows you to get real-time data and capture the opportunities. A cloud-based solution provides insurers the collaborative environment, which reduces the cost of providing collaborative tools to your insurance team.
Conclusion – The insurance companies are proactively using cloud-based solutions that benefit them by providing differentiated customer experience and accelerating their business growth. Most of the insurance companies have moved to the cloud but still, there are some agencies that are willing to move. However, migration to the cloud requires significant thought, planning, time and resources.
So, for those insurance companies that are unable to migrate or need substantial investment; they can outsource their back office tasks like claims management, policy management, and commission management to insurance outsourcing companies to gain a competitive edge in this dynamic industry.
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