Cloud Migration in Insurance Sector: Factors to Consider
There have been a lot of talks later in the insurance sector about cloud migration and rightly so. A study by Bain & Company found that insurers stand to achieve a 28 percent increase in revenue and a 19 percent decline in claims payments with cloud migration — and all of that within just five years. Besides that, cloud migration can also help insurers improve customer experiences, optimize costs, etc.
However, one must not dive head first into cloud computing; i.e. insurers must carefully consider some points before undertaking cloud migration. The cloud services market is already growing at a steady rate, and it was fast-tracked due to the pandemic. And, while insurers were initially cautious about moving key business applications and functions to the cloud, with the rapid acceleration of digital transformation and the arrival of ‘insurtech’ eating into the market share of insurers.
Now, let us take an in-depth look at the key factors you must keep in mind before you undertake cloud migration for your insurance business:
1. Cloud fitness: Commonly, companies want to see the benefits of cloud computing instantly. Unfortunately, that can be a tad challenging because insurance companies typically make use of legacy IT infrastructure and technology stacks. So, make sure before you migrate, you have realistic strategies in place for both the short- and the long-term.
2. Security: Insurance companies have access to troves of highly sensitive information about not only their customers but the market and the business as well. Hence, cyber security is rendered a crucial consideration when it comes to cloud computing. After all, the cloud service you use must be able to safeguard data, apps, and the company’s overall data ecosystems to build trust with customers as well as ensure compliance with regulators. So, carefully evaluate the cloud service’s technical and operational resiliency among other things.
3. Data and analytics: Data-driven insights are, of course, a critically important factor while analyzing the effect of switching to the cloud on the organization. It is well known that such insights can improve decision-making. However, over the long term, data-driven feedback can prove to be more important, especially in realizing better returns from investments in cloud computing. Hence, it is imperative to factor in your business’s unique needs and situations to gain access to valuable insights from your cloud applications after the migration.
4. Regulations: Yet another vital factor insurance companies must keep in mind while migrating to the cloud is the laws and regulations that govern the relevant ecosystem. Also, remember that these regulations continue to evolve rapidly since cloud computing is still a fairly new concept. To address this aspect of the process, make sure that your IT, legal, and compliance departments are in sync.
There you have it folks, some of the essential considerations of cloud migration in the insurance sector. Now that the initial reservations that the sector held about making the switch are being quickly and effectively addressed, it is a good time to make the transition. Not to forget that the growing demands on the industry are also driving the need for advanced solutions such as cloud computing. It helps to know that the market now offers plenty of advanced cloud computing options that can be easily adapted to the unique requirements of an insurance company. So, what are you waiting for? With cloud adoption in the insurance industry on the rise, it is time you jump on the bandwagon as well. A good place to start, then, would be to start looking for an expert service provider to help you with the migration process.
