With digitalization rapidly transforming the business landscape, it is well established that the first step for any organization going digital is to embrace the cloud.
For insurance companies, cloud technology is a godsend.
Insurance companies are often seen as businesses struggling to maintain and manage legacy systems while also attempting to deliver on customer expectations.
Moving to the cloud provides enormous opportunities to replace traditional, ineffective systems used by insurers to reduce costs, build a customer-centric enterprise, and increase policyholder confidence.
# 1 | Reducing operating and technology costs
Insurers have always been under pressure to cut costs, and cloud computing can relieve this pressure.
Being a technology that requires revenue expenditure instead of capital expenditure, it can significantly decrease initial costs. With the scalable and more efficient IT services that cloud computing offers, maintenance costs are also reduced.
The cloud also makes the production of documents, archiving of data, and other processes simpler. Insurers can scale cloud-based IT services according to their needs, reducing human errors and vastly lowering processing time.
# 2 | Building a customer-centric enterprise
To stay relevant in the insurance industry, keeping up with consumer behaviors and trends must be an iterative process and requires more than just data.
The avalanche of customer information that insurance companies possess would be useless without analytics that can derive value from it. Cloud computing can help here. Not only can cloud-based solutions collect and analyze data, but they also help extract the most relevant, useful insights.
With the understanding gained from data, insurers can develop relevant products and optimize claims and policy servicing capabilities.
# 3 | Increasing policyholder confidence
Insurers can now come up with personalized products for clients, instead of force-fitting them into a one-size-fits-all solution. Cloud computing helps insurers align service levels, products, and customer interactions.
When insurance companies, through a variety of initiatives, prove to customers that they have their best interest at heart, they’re able to earn the trust and loyalty of customers and turn them into advocates of their business.
Although there’s no denying the fact that cloud technology provides many benefits to insurers, given the kind of data handled in the industry, companies need to be mindful of data privacy requirements when engaging with cloud service providers.
Unfortunately, neglecting to do so could hamper policyholder confidence and negate the benefits of moving to the cloud.