Can insurance companies risk ignoring the cloud?
Since joining Bluewolf, I have been blown away by the expansive success we have had transforming businesses - including those competing in the most commoditised and regulated environments.
Until recently, I’d spent my entire career in the insurance industry - an industry that is highly regulated, fairly traditional and generally slow to adapt to technology. The evidence shows that insurance companies that don’t leverage cloud technology to create unique customer experiences are at high risk of getting left behind.
Insurers tend to depend on core legacy system applications due to compliance concerns around storing their data in the cloud. The multi-tenant environment of the cloud triggers complex and continuously evolving federal regulations such as the Gramm-Leach-Bliley Act (GLBA) and the Health Insurance Portability and Accountability Act (HIPPA).
A number of states, like Massachusetts, have now imposed their own unique information security standards on how businesses maintain non-public personal information.
While perhaps overwhelming at first, a robust and secure cloud solution can be achieved by taking precautionary measures, for example:
- Contractually including indemnity provisions to protect against liability
- Giving and restricting access to certain pieces of data
- Encrypting mobile data
- Obtaining cyber insurance
Insurers can look to their counterparts in this heavily regulated environment to see that cloud technology is increasingly being endorsed as a secure model insurance companies and agencies can embrace.
In my opinion, the real risk associated with cloud computing is the opportunity cost to insurers if they do not leverage the cloud.
In today’s social and mobile world, customers expect their insurance providers to know them, their preferences, and their prefered method of transacting. If that’s not delivered, the customer can very easily go elsewhere.
Innovators, like The Standard Insurance Corp, are using the cloud to proactively address these competitive risks head on. As the basis for a new collaborative approach to customer relationship management, cloud technology enables insurers to integrate systems, databases, and processes into a holistic view of all customer activities for cross- and up-selling.
That’s very difficult for companies to do if they are using inflexible technology.
Those who empower their sales reps with social and mobile technologies will have a big advantage. In partnership with Bluewolf, GlaxoSmithKline (GSK) has developed an iPad app that automatically prompts reps with the right questions to ask physicians, and makes it easy to access information and track activities on the go.
The app has not only helped to elevate GSK’s image and brand loyalty in a highly commoditised market, but it has provided the leadership team with real-time visibility into sales calls and compliance with regulations.
The writing is on the wall: innovative insurance institutions that overcome the fear of storing data in the cloud and embrace agile processes will gain a competitive advantage and win market share.
So as people who analyse risk for a living, I challenge insurers to consider this: Can you really withstand the risk of not innovating at the speed of business?