Cloud-based solutions have been a subject of much focus in the insurance industry over the past few years for several reasons. It can provide scalability, cost-advantages over your own data centers, redundancy and stronger data security. All these benefits are important and can lead to solid ROI on your investment in moving to the Cloud. The greatest benefit, though, may be from the fact that it can enable flexibility at the core of your operation.

One of the greatest competencies of any business is the ability to shift quickly and completely along with the market. This can protect you from bottoming out in the troughs and allow you to ride the cycle of business waves at the peak.

What does this have to do with the Cloud? At their essence, Cloud-based insurance solutions are really about having the ability to deploy quickly, scale up dynamically and on-demand, connect to other tools and solutions and virtualize access so you can do business wherever and whenever. That is, they are flexible and allow your organization to be flexible.

Scaling & Deploying

With your own data center, no matter how large, you can hit a wall in terms of storage, computational power or bandwidth. This can cause your processes to be so slow that your employee efficiency is impacted, customers churn out of frustration, or you are held back from new solutions that require more storage, bandwidth and computational speed.

When you hit this wall, your options are either to expand your existing data center or build or buy a new one. Neither of these options are quick nor inexpensive and could take over a year and millions of dollars in capital expenditure to set in place. For some businesses, that amount of time may not matter. But what happens if you are seeing rapid growth, come upon a new opportunity with a limited window to seize on it, or, as many of us faced; are forced to dramatically change your data needs because your workforce suddenly must work from home?

If your systems and tools run on the Cloud, you would not face these constraints. You can simply turn on additional bandwidth, storage or speed and add instances or locations, often by changing settings in your account without having to speak to anyone in IT! You can seize those opportunities as they arise and avoid minefields before getting stuck in them.

read more about harnessing the power of digital and the cloud for business agility

Creating an Ecosystem

While scaling and deploying faster and easier are critical parts to the flexibility the Cloud affords, greater long-term value may come from the way it enables connections and collaborations. A core component to Cloud-deployed and Cloud-enabled solutions is the ability to tap into libraries of APIs so different tools can talk to each other, passing on data or functionality in the process. This forms a richer set of capabilities as a cohesive whole. These capabilities are more than you could ever achieve through independently-deployed solutions requiring involved integration efforts or manual processes to rekey information across tools and systems.

It also means that as tools evolve and better options come to market, you can more easily swap them out by replacing the old API connections with the new tool. This can greatly lengthen the lifespan of major investments like Underwriting or Claims core systems because you continuously support that core with the right tools in the right situation. In a pre-Cloud world, you would likely be stuck with the various ancillary tools like document generation, rating, communications and more for long periods. After a long implementation and organizational effort of getting these older tools live in the first place, ripping and replacing could bring down the whole due to the deep integrations.

You may also have the ability to integrate tools that before would have been too difficult to tie together. Through the Cloud, for example, you may be able to turn on capabilities like Single enterprise text messaging, accessing third party data and analytics solution through connecting to the APIs of other Cloud-deployed solutions, or enabling capabilities built into your Cloud solution itself, like single sign on capabilities or real-time translation.

Flexible Minds
The World Economic Forum named cognitive flexibility as one of the most important career skills to thrive in 2021. Cognitive Flexibility has many meanings but is described in the article as “the ability to spontaneously restructure one’s knowledge, in many ways, in adaptive response to radically changing situational demands.” When your thinking tools allow you the freedom to scale, shift, enrich, speed up and deploy flexibly, your mind no longer operates with many of the constraints it historically had. You will start to think more creatively and freely about what is possible. Sure, you will respond flexibly to the market and customer demands in front of you, but perhaps even more valuable is your ability to discover opportunities or avoid risks you would never have thought of before.

  • cloud computing
  • cloud managed services
Bryan Falchuk

Bryan Falchuk Bryan Falchuk is the Founder and Managing Partner of Insurance Evolution Partners, an advisory and consulting firm helping the Insurance industry on the subject of innovation. A best-selling author, he has written for many top publications like Inc. Magazine, The Chicago Tribune, LA Times and more, been a guest on over 200 podcasts and radio shows, and presented multiple TEDx Talks. Bryan spent 20 years in the insurance industry, including time in McKinsey & Company's insurance practice and serving as CCO for a billion-dollar carrier before joining an InsurTech startup. With his unique experience in carriers, consulting and InsurTech, he founded IEP to help carriers evolve in a market facing disruption. Bryan holds an MBA from the Tuck School of Business at Dartmouth College and a BA in Economics from Bowdoin College. His best-selling book, The Future of Insurance from Disruption to Evolution, shares case studies of 7 carriers who innovated at a time of change and pressure in the industry.