Head into the Clouds

At the recent IASA Business Show and Conference in Grapevine, Texas I attended the session “Head Into the Cloud: Classic Insurance Applications for Cloud Computer” with speakers Aaron Harris, CTO, Intacct Corporation, Steve Boyd, President, Commercial Lines, Arrowhead Insurance Group, and Andy Scurto, ISCS.

The session was very interesting and brought forward some great debate on both the pitfalls and benefits of the Cloud.  Overall it seems that there is a vast majority of Chief Information Officers/Chief Technology Officers that are hesitant to hand over the keys to their business – especially when it comes to mission critical core applications such as their policy administration system.

Some of the pitfalls discussed:

- Security – ensuring your data is safe from unauthorized eyes

- SLA of cloud vendor – Performance,  Response to system outages

- Loss of control over your systems and data.

- Liability- who is liable if the data is exposed.

- How do you get your data back from the vendor?

Of course there are benefits to cloud computing including:

- Access to systems and data over any browser – anywhere, anytime.  This is especially valuable where you have highly distributed work forces

- Cost savings with lower overhead for both infrastructure and resources to support

- Always being on the latest version of the software

- Vendor accountability – “pay as you go” helps to ensure that you get the level of service you expect.

- Can leverage the Cloud to quickly scale up and back-down for short-term projects without major investment

- Support

A great example of how the Cloud is being used today is to support non core business applications such as CRM or e-mail.  With e-mail, the carrier can be on the latest version of their e-mail platform and don’t have to worry about internal expertise to support integration with BlackBerry, iPhone or the plethora of other Smartphone technologies out there to ensure that e-mail and calendar synchronization work.

Do the benefits outweigh the risks?  At this point, it is hard to say if Cloud Computing will see rapid adoption within the insurance industry.  And will the preference be for Private Clouds or Community Clouds?

What are your thoughts on Cloud Computing?  Is there an application for Cloud Computing in Insurance today?

A great example of how the Cloud is being used today is to support non core business applications such as CRM or e-mail.