Empowering Insurance Using Cloud

By Ron Geurrier, CIO, Farmers Group of Insurance Companies

Technology has driven a paradigm shift in busi­ness operations today. In addition to catering to customer demands, companies seek to of­fer them an outstanding experience. In the insurance sector, serving the customers requires companies to be mindful of the needs of intermediar­ies like agents, besides their own staff. As a consequence, CIOs of insurance companies are tasked with the re­sponsibility of addressing the issue on all fronts, along with improving the revenues or at least without im­pacting it adversely. Cloud technolo­gy has offered them a solution.

"CISOs must also be a part of the panel formulating the cloud strategy, as they are capable of identifying potential risks in various cloud environments"

 

Task Ahead for CIOs

Cloud technology has disrupt­ed the insurance sector, where companies have taken to leverage cloud to simplify business work­flow besides improving user expe­rience (UX) by offering attractive and user-friendly applications. This requires CIOs to ponder over technology, strategies, and security.

1. Leveraging both Tech­nology and Experience

Technology remains at the forefront of custom­er-centric operations and therefore realizing this, Farmers has set up an In­novation Lab to examine the possibilities of next-gen­eration technologies like mobile, Artificial Intelligence (AI), and Internet of Things (IoT), affecting the insurance industry which can help agents and customers alike. We also have an Experience Lab (XLab), where the technologies currently in vogue, are being examined for the benefits of agents and customers. Agents and other users are allowed to give their feedback on system drawbacks, which the company addresses. Based on the findings, Farmers identifies three main areas that companies can work on.

• Customers’ demand for agil­ity and flexibility in being able to choose between numerous insur­ance offerings would remain. With customers putting forth demands like the inclusion of additional risks under an existing policy or flexibili­ty in premium and payment period, insurance companies are witnessing a massive inflow and exchange of in­formation, like never before. In this case, on-premise data centers cannot be feasible as the cost of data storage increases manifold. Cloud environ­ments counter these problems by offering greater benefits in terms of cost and storage capacity.

• The second important thing is empowering the agents. Compa­nies must be agent-based and cus­tomer-centric and therefore, agents must use the latest in technology to remain mobile and attend to cus­tomers’ demands sans hurdles. Here again, cloud becomes beneficial as mobile platforms connect with cloud environments more efficiently than traditional data centers. With over thirteen thousand agencies and thir­ty-five thousand exclusive agents and around forty thousand independent agents under its fold, Farmers ac­cords immense priority to agent mo­bility and convenience.

• The third is the focus on cus­tomer-centric innovation for a healthy Return on Investment (RoI) and experience for customers. Cloud technology has enabled companies to offer personalized self-service applica­tion portals for customers to manage their insurance portfolios anywhere, anytime.

2. Formulating a Cloud Strategy

With the cloud technology’s ability to help the insurance sector becoming clear, it is vital for CIOs to formu­late the right strategy to implement the technology, within the business. An important element to factor while formulating a cloud strategy is the legacy systems. For start-ups with no legacy systems or data centers, cloud technology is the way forward; by hiring cloud vendors, these com­panies can remain customer-friendly from the start. Cloud systems - unlike legacy systems - offer configurability, which organizations can leverage to add more agents and customers.

In the case of larger enterprises, legacy systems have always played a crucial role due to which, a gradual migration to the cloud, by sun-set­ting them is advisable. This is be­cause systems turn into legacies due to excessive customization following which their usage and maintenance can be carried out only by companies owning them. This could potentially impact the migration process. With widespread maintenance support, cloud-based systems are easier to maintain and can be customized to accommodate the “enterprise DNA.”

While migrating to the cloud, de­pending on their requirements and usage, companies can examine hybrid cloud models, which allow them to pay vendors accordingly. For exam­ple, companies using 2 Terra Bytes (TB) of space in a cloud, can pay vendors only for that amount, as op­posed to data centers where they pay for 10 TB offered by vendors despite using only 2 TB. Cloud technology allows CIOs to discuss the economics through ROI and efficiency, unlike legacy systems. In case of problems, CIOs can coordinate between service providers and end-users, to address them. Further, CIOs could also seek the inclusion of new features into the services provided by the cloud ven­dors, for their agents’ (or customers’) benefit.

3. Balancing Growth and Security Concerns

Deploying more systems into the environment would only lead to greater inflow of data, which even­tually presents security concerns. As a good amount of data dealt by in­surance companies revolves around customers, CIOs and CISOs need to work in tandem to safeguard their enterprise cloud environments. Com­prehensive assessment of cloud infra­structure by the CISOs is mandatory for going live. CISOs must also be a part of the panel formulating the cloud strategy, as they are capable of identifying potential risks in various cloud environments.

Also, to combat threats jointly and understand how different tech­nologies can help in simplifying workflow besides enhancing cus­tomer experience, CIOs and cloud vendors today are debating the topics in online forums. The bottom line is that protecting enterprise assets and safeguarding customers along with their assets and data, comes first for a company.

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