People are using their smartphones to access everything from garments and food to transportation and entertainment. Modern customers also want the same level of service from their insurance agents. However, the insurance business has slowly adapted technology to its traditional ecosystems.
Today’s customers are leveraging their smartphones to buy insurance. The cloud-based solution enables insurers to streamline operations and improve customer service. The cloud enables customers and brokers to interact and cooperate remotely. Insurance companies leverage cloud computing features such as unlimited storage, low maintenance, and high data security to ensure smoother and safer operations.
The cloud migration testing can help insurance companies with several advantages, including cost-effectiveness and scalability, quick deployment and risk management, minimized IT backlog, and simplified data access.
This post discusses the benefits and challenges of cloud migration for insurance companies.
Benefits of cloud adoption
Cloud adoption comes with several benefits that can help insurance companies offer better customer experience.
Easy scalability
Traditionally, insurers over-allocate computing and IT resources to manage demand spikes. However, this practice results in waste and additional costs. On the other hand, the cloud’s architecture is flexible and instantly scalable. As business requirements change, insurers can increase or decrease these resources while controlling costs and eliminating resource waste.
Dynamic accounting
It is a necessary module for all insurance companies, and the accounting module should have customizable charts, dynamic reporting, and commission management. It will help your accounts staff efficiently manage policy deposits, reversals and refunds, ledgers and trial balances, and claims reimbursement.
Document security
Insurance companies need to streamline their document management. A GUI block editor with workflow-enabled email and safe document storage boosts productivity. In addition to digital signature integration and other user-based security controls for the customer data in question, the platform must also offer digital signatures.
Claims management
The platform should provide complete policyholder lifecycle management. Streamline your processes with a stand-alone claim portal and provide insurance claim help with a custom mobile app. In addition, the platform should offer workflows that you may modify to produce reports and quick settlement facilities.
Agent and broker management
The cloud-based platform must offer a central dashboard with bulk policy import, search, and FCA capture. Another essential element is customizing onboarding operations, which may increase the transparency of agent and broker management.
Policy lifecycle management
The cloud model enables end-users to view policy details and make rapid decisions. However, you must create different workflows for different teams and products. Other vital features include logging, email tracking, document generation, and auditing – all available from one dashboard.
Data analysis
The insurance industry collects a large amount of data. Using cloud technology facilitates the comparison and analysis of data for decision-making. Statistical proofs enable insurers to launch superior products and explore new markets.
Reduce costs
In a study, after migrating to AWS (Amazon Web Service), respondents reported an average of 27.4% savings in IT infrastructure costs per user, according to a survey. With cloud-based solutions and SaaS platforms, insurance businesses may eliminate the hardware and data center costs of on-premises IT infrastructures.
Innovative automation
Insurance companies can automate processes using advanced technologies. These include advanced analytics for evaluating unstructured data, RPA for rules-based task automation, and cognitive capabilities to simulate human-like decision-making.
Web and dev application modernization
Replacing your current technology is the most efficient and cost-effective cloud migration method. Choose the most suitable cloud-native SaaS platform. It relieves you of managing your infrastructure while giving you complete control over your data, regardless of the size of your database.
Challenges of adopting cloud technology
Compliance, cost, and security
Governance and risk controls (GRC) compliance becomes a concern using cloud solutions. Rewriting the app’s architecture and interoperability issues are the technical challenges.
In addition, businesses are unable to estimate the bandwidth expenses, total cost of ownership, and cost incurred due to latency and downtime, which further prevents them from moving to the cloud quickly and without hassle.
Aversion to change
It is difficult for insurance businesses to adapt to traditional governance processes, and they want to avoid developing a solution from scratch while migrating to the cloud.
Performance issues
The core functionality of cloud systems affects insurers’ decision-making and delays the adoption of the services.
Already deployed legacy solutions
Maintaining customer data is vital for insurance companies. Even after implementing cloud technologies, the company must manage certain legacy apps to access historical information. Maintaining both methods concurrently becomes a hassle for them.
Process complexity
The bulk of insurance companies is still using outdated technology. Their management is unsure of the technological migration’s difficulty and length. They lack the support required to lead them and help them find solutions to their queries.
Quality engineering (QE) can mitigate the risks of cloud migration
Robust quality engineering from an independent software testing vendor can help insurance companies achieve flawless cloud migration. Software testing services can help insurance companies mitigate risks of data security, scalability, customer experience, and accessibility without affecting the time to market. QE services can also enable faster and reliable integration of third-party applications into the system without affecting operational efficiency.
Conclusion
Moving to the cloud may seem costly to insurers, however, in the long term, it is a cost-efficient and reliable solution. Forward-thinking early adopters will have a competitive advantage, and those that resist this change may struggle to match their competitors in the future.
Insurance companies must budget for bandwidth, adoption, training, migration, and rewriting application architecture. During a migration period, cloud and legacy infrastructure integration can be challenging. In the long term, however, it would assist in reducing IT overhead costs by enhancing interoperability and efficiency.