Imagine the Possibilities

Insurance CIOs are attracted to the cloud operating model's massive scalability/elasticity, rapid provisioning, autonomic and location-agnostic computing, pay-as-you-go model, built-in disaster recovery, and service-oriented software. There are three basic cloud computing types: public, private and hybrid, and each vendor has its own definition that plays to its advantages. For insurance carriers looking to introduce a new product line, cloud-based offerings may be a good alternative to traditional packaged software. The cloud also provides large P&C carriers with a means to accelerate the replacement of a policy admin system. But the real value lies in the possibilities that cloud computing enables.

One of our clients is moving its internal and partner-user identity management functions to the cloud. When it is done, all of the company's major applications will utilize cloud-based services to authenticate their users. A user's identity created in this manner becomes fungible across multiple organizations as more partners participate in the identity network. Imagine what that makes possible in managing the sales force of captive and independent agents.

But insurance carriers must be diligent in identifying the number and complexity of interfaces needed to fully integrate cloud computing into their enterprise. As with any software solution, companies considering cloud-based offerings must first evaluate how well the targeted business functions map to the current business or stated direction; how many customers, policyholders, claims, etc., currently are in production; how the solution is designed to accommodate scalability; what approaches are available to integrate with other legacy systems, such as financials and reporting; and the vendor's background and credentials. To ensure value from a cloud offering, organizations also must test min/max/likely growth scenarios to ensure that the vendor's pricing model is as attractive as it may first appear.

Since no single vendor has it all, IT leaders must evaluate their companies' systems architectures to determine their cloud readiness and potential vendor fit. They also must provide the rest of the business with a clear business case that demonstrates business value and a clear road map for cloud shifts.