The cloud has become a significant driving force for digital innovation in insurance.
In business, 77% of enterprises operate on cloud services, and 31% of enterprises manage over 1,000 servers in the cloud . Cloud is transforming insurance companies by shifting focus toward customer-centric and environment-driven technologies. The impact of this innovation can be seen in a number of tech trends, including digital customer relationship management, digital customer interaction, legacy replacement, modern architecture, algorithmic risk assessment, and live streaming of IoT analytics.
Yet for all of its importance, the number one cloud challenge companies face is lack of expertise . Insurers who take time to understand how the cloud works and what it has to offer see an increase in automation support and efficiency received by web-based services.
What is the Cloud?
The cloud refers to a network of connected services that manage, distribute, and connect computers. Designed to operate through the sharing of resources, the cloud offers four key advantages to carriers: durability, scalability, security, and growth efficiency.
Web-based services are built with digital in mind and cater to modern standards. Companies like Amazon Web Services (AWS) build networks available with 99.95% uptime. AWS uses live failover, distributed hosting, self-healing server clusters, and automated backups to deliver consistent, reliable service with built-in, fully automated disaster recovery.
Technology is becoming exponentially smaller yet exponentially more capable. The cloud provides carriers with an ever-expanding system to keep pace with shifting workloads. A number of web-based services allow carriers to maintain application availability by auto-scaling capacity according to load conditions. Scalability increases speed to market and agility by helping carriers respond rapidly to customer, market, or application demands without tons of manual intervention.
Security is especially important in insurance as providers are responsible for keeping their policyholders’ personal, banking, and identification information private and secure. The cloud offers top value in information security putting strong safeguards in place to protect customer privacy. By using AWS (or other highly secure web-based services), carriers automatically receive the following benefits of a robust safety platform:
- Infrastructure Security (user access, firewalls, encryption, and connection)
- DDoS Mitigation (defensive strategy for mitigating DDos attacks)
- Data Encryption (encryption, key management, integration)
- Inventory and Configuration (assessment, deployment, management)
- Monitoring and Logging (monitoring, logging, API calls, and notifications)
- Identity and Access Control (identity, access management, and MFA)
- Penetration Testing (vulnerability testing)
- Auditing and Reporting (published compliance reports)
Not only is cloud use heavily regulated and well-certified, but it is also used and endorsed by NASA, the Nasdaq, and the United States CIA. (Read more about AWS cloud security here: https://aws.amazon.com/security/)
Growth efficiency promotes minimum cost and maximum ROI through the use of specialization. Specialization leads to better progress, as companies focus on doing a few tasks exceptionally well rather than getting many tasks done passably. Just as underwriters, agents, and adjusters each specialize in their area of expertise rather than completing all tasks simultaneously, investing in cloud services frees up company resources by outsourcing infrastructure, computing power, storage, databases, networking, security, and applications.
Using the Cloud
There are a number of cloud-based products and services carriers can use to increase agility, lower IT costs, and scale business. To acquire these benefits, insurance companies can deploy Infrastructure as a Service (IaaS) or use Software as a Service (SaaS).
Deploying Infrastructure as a Service
Modern technology systems depend on a vast array of network services and architectures collectively known as Infrastructure. Infrastructure as a Service is for companies that want to build infrastructure for cloud applications. Amazon Web Services is the leading provider of infrastructure services with hundreds of tools offered as pay per use. Modern cloud technology typically utilizes many of these. Some of the most popular include:
- Identity and Access Management (IAM) for authentication
IAM controls user access to services and functions through processes such as key management and multi-factor authentication. IAM also provides central identity management through a single control point and automatic logging for auditing. IAM is useful for user management, SSO, HR events, contractors, and audits.
- Virtual Private Cloud (VPC) as a firewall
The VPC contains a logically isolated network and subdomains to protect your computer from outside attacks. Requiring no dedicated hardware to maintain, it continuously extends existing networks into the VPC for maximum security.
- Route53 (R53) as a domain name service
R53 is a domain name service that registers domains and routes traffic to connect clients to the closest possible server. This provides lightning-fast connecting services, as well as name dynamic and elastic services to automatically scale to traffic needs.
- Elastic Compute Cloud (EC2) as a server
EC2 works as a server for infrastructure, providing elastic web-scale computing. It’s massively scalable in that it adjusts to infrastructure needs, scaling down to save money when less infrastructure is needed, and expanding as needs increase to keep infrastructure available. EC2 is useful for application hosting, server virtuaSQlization, and disaster recovery.
- Relational DB Service (RDS) as a database
RDS provides fully managed database instances. RDS provides available, durable, and scalable database capabilities so that users have faster databases, disaster recovery, and parallel workloads. An example of an RDS is AWS’ Proprietary Aurora Engine, which has created an average 500% performance boost! 
- Simple Storage Service (S3) for file storage
S3 provides durable, scalable, secure file storage. S3 offers network scalability enhanced with massively parallel deployment, meaning the system is able to perform multiple file uploads and retrievals at once without diminishing performance. In addition to a 99.99% durability and availability rate, S3 encrypts data in transit and at rest in a distributed file system to keep data incredibly secure.
- Auto-Scale Groups (ASG) for scaling
ASG performs vital scaling features, scaling instances up or down based on system demand. Through scaling down during low usage, ASG reduces costs, while scaling up during peak usage prevents slow or unresponsive performance.
- Elastic Load Balance (ELB) for enhanced performance
ELB enhances performance by routing network traffic based on capacity and job type. This creates even site performance and balanced server use.
- Elasticache for caching
Elasticache stores frequently accessed data in-memory, providing processing speeds that are even faster than disk processing. By managing persistence, installations, and updates, Elasticache ensures the network is running in peak condition. It’s especially useful for gaining session info, query results, ads, and FAQ content.
- Cloud Front (CF) for caching
CF as another caching building block. It caches trusted sources more quickly in a browser, heightening performance significantly and reducing download bandwidth. This quickens connections, improving website, web app, and mobile content performance.
- Simple Que Services (SQS) for Queue
SQS can be used for tasks such as batch processes, month-end reports, and long-running jobs. It employs messaging service routes requested between machines to ensure dependable delivery and response without failover.
- ElasticSearch (ES) for searching and index capabilities
ES performace searches across domains, offering practical advantages such as managed availability, failure detection, and patching. It provides a wide variety of useful tools, such as speedy searches, very large indexes, and analytics capabilities.
Using Software as a Service
Software as a Service (SaaS) is for companies that want to utilize cloud applications. SaaS services are downloaded or accessed from the internet and managed by the cloud. The Google App Suite is a prime example of SaaS. Google Apps offers centralized productivity deployment, real-time collaboration, and use across devices so teams can collaborate, create, and innovate together. Specific services include email, document creation and storage, calendar, distributed teams, and integration. Google Apps comes available with industry-leading security where all value is delivered directly from the cloud and is available anytime, anywhere.
There are countless other examples of SaaS services that can enhance performance for insurance companies including:
- RingCentral comes with high-quality VoIP, conferencing, video chat, messaging communication that’s supported across desktop and mobile devices––great for mobility and catastrophic planning.
- Expensify is a travel and expense application that can be used to track and report personal or business expenses via desktop or mobile.
- Amazon Workspaces is a software platform that allows users to build virtual windows workstations for centrally managed environments and mobile device access to support mobile, temporary, and remote employees.
- ZenDesk is a support channel with ticketing automation, centralized communication, feedback, and reports to promote agent/insured relations, claims, and service.
- Trello is a team collaboration tool that organizes projects into boards.
- Toggl is a time tracking tool that contains integrated reports and internal communication. Time in toggl can be organized by client, project, or custom tag.
- #Slack is a messaging service for teams that promotes internal communication, remote teamwork, and knowledge transfer via a centralized hub.
- EventBrite event planning software that allows users to build event pages, email contacts, track registrations, and collect/process payments. Great for simple planning of conferences, training sessions, or agent meetings.
- Hubspot marketing, sales, and CRM software that focuses on building an automated inbound sales and marketing strategies that engage customers in real-time.
Web-based services offer a number of benefits to insurers. Companies investing in IaaS and SaaS are seeing huge gains in efficient, durable, scalable, and secure automation support. Time-draining processes such as printing and document organization can be made efficient as documents are stored online and can be sent automatically to insureds. Time and resources are saved as team members can access files, tools, and internal systems from anywhere with internet access at anytime. Most importantly, all of these processes can be carried out without fear as the cloud contains secure, reliable services, protecting both your company’s and your clients’ information. By distributing IT work to other service providers, insurance companies can focus more attention on their business to deliver higher value to their customers.
Information in this article was previously published by Phil Reynolds on slideshare at: http://www.slideshare.net/PhilReynolds2/using-the-cloud-67010589
- RightScale (2016). State of the Cloud Report. Retrieved from: https://www.rightscale.com/lp/state-of-the-cloud
- Amazon Web Services (2013). Amazon EC2 Service Level Agreement. Retrieved from: https://aws.amazon.com/ec2/sla/
- Amazon Web Service (2016). Amazon Aurora. Retrieved from: https://aws.amazon.com/rds/aurora/
- Amazon Web Services (2016). Amazon S3. Retrieved from: https://aws.amazon.com/s3/?sc_channel=PS&sc_campaign=acquisition_US&sc_publisher=google&sc_medium=s3_b&sc_content=s3_e&sc_detail=aws%20s3&sc_category=s3&sc_segment=105589467882&sc_matchtype=e&sc_country=US&s_kwcid=AL!4422!3!105589467882!e!!g!!aws%20s3&ef_id=WECHnwAABOp38Ugc:20161208182932:s