CLOUD COMPUTING

Making sense out of cloud computing for the insurance industry

October 22, 2009

For insurers launching new business lines or organizations entering the insurance market for the first time, basing IT systems on a Software-as-a-Service (SaaS) model is one way of limiting exposure to risk. With SaaS you can leave IT to the experts, and focus instead on those customer-facing activities that will really grow your top line.

Software-as-a-Service, a subset of cloud computing, essentially refers to a business model whereby a software vendor provides applications to its customers over the internet in an “on-demand” manner. The vendor may also host the applications and take care of any system maintenance required.

The model – which offers companies a way to limit IT overheads, manage cash flow, and focus on their core activities – has taken off in a number of global industries in recent years. Perhaps most notably is the shift to cloud computing by a number of global telecom operators, many of whom essentially outsource the running and maintenance of their networks to third parties, freeing themselves to concentrate on branding and customer service.

Uptake of the SaaS concept has not been quite as rapid in the insurance industry, but the model can make good business sense for first-time entrants to the sector, or for existing insurers setting up new business lines. One benefit of SaaS is that it allows insurers to start operations with limited-scope pilot projects and then easily lease more capacity as their business develops. Insurers don’t necessarily need to install a lot of features that they may or may not use in the future – they only install what they know they need on day one.

“SaaS can provide insurers with operational flexibility that many legacy IT operations aren’t capable of,” notes Catherine Stagg-Macey, senior insurance analyst at Celent. “Using this deployment model, insurers can launch a new product or try a new geography far quicker than leveraging current IT. The cost model is also advantageous to the insurer, especially in these difficult times”.

A further advantage of the SaaS concept is that it allows new insurance technology to be loosely integrated with an existing IT system. This is unlike a fixed software implementation, where there is always a need to integrate existing infrastructure closely with a newly installed system. By offering such loose integration, SaaS not only enables effective usage of existing insurance solutions, but is also a good way to start migrating old business lines onto a more modern web-based software platform.

SaaS from Profit Software
Profit Software can offer its entire portfolio of insurance products as a SaaS model. You simply choose those services, tools and business features that complement and extend your current system, and we’ll take care of the rest.

Contact us for more on our SaaS offering.