Insurance has always been a data-heavy sector that relies on insights and predictive analyses for protecting customers across a wide range of risks. While every industry is facing disruption from the rapid rise of cloud-enabled technologies, it has become imperative for insurance firms to adopt such tech to keep up with ever-evolving consumer demands. Yet, at the same time, being inherently averse to risk, the sector has been among the slower to innovate.
The challenges of migrating to a decentralized computing model that combines the benefits of public and private clouds and in-house computing resources are undoubtedly substantial. For established companies, legacy insurance applications still depend heavily on in-house data centers storing huge amounts of information that can’t easily be migrated. But these firms also face increasing threat from more innovative startups offering on-demand services.
Becoming more data-driven
Every established insurance firm has a huge amount of data, but that doesn’t mean they’re all data-driven. In fact, many financial institutions aren’t making the best use out of the data they have because they don’t have the computing resources necessary. As data analytics are essential for risk modeling in the insurance sector, firms face increasing pressure to find newer and smarter ways to derive insights from customer and operational data.
One of the biggest disruptors in the industry is the proliferation of data itself. With the amount of data doubling approximately every two years, companies are finding it increasingly difficult to keep up. There’s simply no way to make sense of this so-called Big Data through manual means alone. Artificial intelligence (AI) and its various subsets, such as machine learning (ML), are now essential for helping organizations become more data-driven.
However, parsing increasingly vast amounts of data — particularly in cases where the data isn’t structured in a standardized database format — requires an immense amount of computing power. Cloud technologies potentially provide a way around this limitation by allowing firms to tap into computing resources on demand, including those enabling the use of AI. For example, emerging solutions like cloud-based quantum computing are already shaking up the financial sector by offering raw computing power on demand that almost no companies can afford to implement in-house.
Adapting to an evolving market
Technological evolution is driving constant change in customer habits such that yesterday’s business processes simply can’t keep up anymore. More than ever, customers expect faster and more complete service, and they’re increasingly unwilling to wait multiple weeks or months for insurance claims to be resolved. When an insurance firm can’t keep up not only with the increased demand, but also with the changing needs of their customers, it’s only a matter of time before they find themselves being usurped by more agile competitors.
This is where the cloud comes in handy. Today’s cloud data centers are operated by some of the biggest and most influential companies in the world like Amazon, Microsoft, and Google. With practically unlimited resources, these companies enable you to outsource to them your computing workloads, giving you the flexibility and scalability you need to easily adapt to changing times. And you’re able to do this without having to make potentially risky investments in new data center hardware and costly software licenses. Instead, you can tap into the resources you need on demand and obtain complete visibility into your expenses.
Finally, since cloud computing takes place over the internet, employees can access the systems they need for work no matter where they are or which internet-enabled device they’re using. With today’s increasingly mobile workforce, that’s no longer just a desirable business model to adopt — it’s a business imperative to retain talent and maximize employee productivity.
Founders Technology Group provides cloud solutions and business strategy to professional services firms across Connecticut. Call us today to schedule a consultation.