As the insurance industry enters the digital age, expectations for carriers to provide a great customer experience are increasing. Fortunately, steep advances in technology, along with data management and processing, as well as cloud computing are offering insurers the agility and flexibility needed to meet the burgeoning demands of the current digital landscape.
These companies face a significant challenge of managing an ever-increasing amount of data, including internal and third-party data from traditional and emerging sources alike. Additionally, insurers must efficiently communicate that data to provide users with the information they need at the point of decision. Our industry is unique compared to others because the ability to match customer expectations depends on first improving the back-end processing and extending it toward customer touchpoints. Achieving this goal requires significant changes to IT infrastructure that are all largely connected to advancements in cloud computing.
Below are some of the current innovations in cloud computing that are quickly becoming a necessity for a digital-first insurance company.
Serverless Computing Allows Insurers to Scale Fast and Reduce Costs
Insurers are adopting the cloud at a quicker rate than ever before. According to recent research from Novarica, cloud adoption has tripled in the last few years. One reason for this shift is that many of the requirements to run an agile digital insurance business depends on a cloud-based IT infrastructure. Years ago, insurers could incrementally build products and support them through disparate core systems because rapid change wasn’t commonplace. Now, they must iterate their products to keep up with the ever-changing market. On-premises systems can’t scale quickly and increase up-front IT costs for insurers that must purchase additional servers in advance of new products. It also makes them solely responsible for any maintenance issues that should arise. Cloud-hosting, or serverless computing, shifts the majority of the maintenance responsibility to the cloud managed service provider that can also scale computing power needs up and down as necessary. Most insurers simply can’t build in-house infrastructure with the computing capacity necessary to run emerging technologies such as advanced artificial intelligence (AI) solutions.
Microservices Offer Unprecedented Flexibility and Agility
Insurers are familiar with building IT infrastructure for the present but now must be future forward. Changes to existing products or functionality can happen every few days or weeks as opposed to months, which used to be standard. This level of flexibility requires a microservices architecture, which allows applications to be deployed independently from other digital infrastructures. Paired with serverless computing, insurers can build or configure new functionality and tailor unique experiences to each user without changing the foundational infrastructure. This becomes increasingly important as carriers find value in swapping out one service for another or regular changes need to be made to rating or pricing. Microservices are one of the most important components to a digital insurance company because they support agility.
Data Management and AI Automate Processes and Yield Insights
As insurers increasingly must deal with burgeoning data sources entering their core systems, it’s a challenge to handle and process the insights effectively enterprise-wide, from policy administration through claims. AI is making it possible to automate much of this data internally as well as alleviate the onerous input required from new customers during policy binding. The ability to turn data into actionable insights and reduce friction for the customer will be one of the most important focus areas for carriers in the near future. Insurity understands the importance of properly managing and processing data to increase agility, recently being named “Best-in-Class” by Aite Group for our third-party data integration services. Through the usage of Application Programming Interfaces (APIs), we can seamlessly integrate third-party services into our platform and allow insurers to offer an enhanced customer experience.
While these three innovations in cloud computing represent a focus for insurers in the coming year, they barely scrape the surface of what’s possible. For more information on forward-looking advances in cloud computing including 5G, Edge Computing, Advanced Biometrics and Quantum Computing, read Strategy Meets Action latest Report “Insurance and the New Era of Computing”.