ASKED&ANSWERED
Exclusive INN interviews with insurance thought leaders
The Case for the Cloud
With cost savings and business agility at a premium,
insurers need to give serious consideration to cloud computing.
While the hype aroundcloud computingcan seemcloying, theeconomic
realities of the insurance industry and
the promise of the technology warrant attention. Insurance Networking News
asked Dublin-based Accenture’s chief
technology architect for insurance,
Matthew Foster, and North American
technology delivery lead for financial
services, David Radvany, whether
cloud computing is ready for prime-time, and what insurers can do to ease
implementation.
having data “in the cloud” is the biggest
hurdle that insurance leaders must overcome to gain the benefits from cloud
computing. The cloud is a multi-tenant
environment, and CIOs are concerned
that their data could be stolen or compromised by hackers, mixed with data
from their cloud providers’ other customers, or released by mistake.
While these concerns are understandable, there are potential security
and privacy benefits from moving to
the cloud. Many insurers operate separate IT systems for different functions
or business lines, leading to highly fragmented and inconsistent approaches to
security and data privacy issues. Moving
to cloud computing can drive more
consistency and automation in security
and data privacy and may actually provide a catalyst for delivering greater security and reduced costs.
INN: What are some best practices
for maximizing benefits from cloud
computing?
ACC: Our experience suggests that there
are seven key steps for insurers to take
to keep data secure while making the
most of what the cloud has to offer:
1. Understand the condition of your
IT infrastructure and portfolio to create a
prioritized list of what should go to the
cloud, and when. While security concerns are top of mind, the lifecycle of an
application is another determinant. An
application that is due for a major up-
5. Set the standards for success. Make
sure goals deliverables are well understood, and projects are well aligned with
business needs. Clarify how the value
from cloud computing is to be determined.
6. Provide the necessary support.
Support extends beyond financial resources and technical talent. Establishing a community of practice, or a cloud
program office to develop skills and
share experiences, can underpin the
success of cloud initiatives.
7. Buy cautiously, appraise frequently. It
INN: What is the business case for insurers embracing cloud computing?
ACC: While cloud computing is still in
its early stages of adoption among insurers, it is clear that the cloud offers
insurers enormous opportunities to
reduce the amount of money spent on
running IT systems. It is becoming increasingly clear that the cloud also provides insurers with the possibility of
dramatic improvements in the way
they attract and retain customers, expand the markets they serve, and
design and deliver products and
services.
For more about cloud standards, search “Coalescing in the
Clouds” at www.insurancenetworking.com.
INN: Are there sufficient standards in
place for the cloud?
ACC: Most insurers tag data with different levels of sensitivity, from low level
to ultra secure. Cloud services, both private and public, should have similar appropriate levels of security built in. So,
for example, low-level data and access
may be suitable for a public cloud infrastructure service with simple password
access, while highly sensitive data may
require dedicated servers housed in ul-tra-secure data centers, with strong authentication required for access.
Insurers should approach the issue
of data security at their own pace, gain-
ing experience as they advance along
their “journey to the cloud.”
grade, replacement or retirement within
the next two years could be a good can-
didate for a move to the cloud.
is too early to predict who the major
cloud providers will be in a few years.
When selecting cloud providers, carefully
consider whether they have the potential
to be a desirable partner in the future. And,
after they are chosen, evaluate their financial stability and their ability to improve
functionality and service levels.
INN: Have the security concerns surrounding the cloud been allayed?
ACC: Security and data privacy remain
major concerns for insurers considering cloud implementation, and have
been among the primary reasons for
the industry’s cautious approach to
cloud computing to date. The fear of
INN: What would a successful cloud
migration entail?
ACC: A successful migration to the
cloud can help insurers align IT assets
and applications with their companies’
strategic aims. Insurers that capitalize
on the cloud’s lower costs, unlimited
capacity and the flexibility to develop
innovative products, services and channels—while protecting the security and
privacy of their business and customer
data—will be in position to generate
competitive advantage. INN
