Modernizing Insurance With Cloud-Native Technology

The insurance industry is known to be slow to adopt new technologies. It is a traditional sector with long-standing business processes and entrenched legacy systems. However, the rise of cloud-native technology is changing this narrative. Cloud-native technology has the power to modernize the insurance industry, providing flexibility, scalability and improved customer experience. In this article, we will explore the benefits and challenges of adopting cloud-native technology in the insurance industry and how it can help transform this industry.

Benefits of Cloud Native Technology in Insurance

Flexibility and Scalability

One of the main benefits of cloud-native technology is its flexibility and scalability. The cloud-native approach, built using microservices and containers and running on platforms like Kubernetes, allows for separating application logic from the underlying infrastructure. Thus, applications can be easily deployed across different cloud environments, enabling insurers to scale their services to meet the changing demand for insurance products. This is especially useful for insurers who face a sudden deluge of claims, such as in the aftermath of a natural disaster. Furthermore, cloud-native technology enables insurers to quickly launch new products or services in response to changing customer preferences or market shifts without being held back by the limitations of legacy systems.

Step 1 of 7

14%

Which of the following best describes how you currently monitor and manage systems across your hybrid cloud environment?(Required)

Multiple separate tools for different environments

Multiple separate tools for different monitoring and management functions

Single consolidated dashboard

Custom built monitoring and management solution

No full monitoring and management solution

Don’t know

How valuable would it be for your monitoring and management solution to incorporate predictive analytics to help you identify and address system issues that are critical and not waste time or effort working through all the data and “noise” that is not critical?(Required)

Extremely valuable

Moderately valuable

Somewhat valuable

Slightly valuable

Not valuable

How do you most typically address potential system issues BEFORE they impact your operations?(Required)

Automated workflows and playbooks to remediate potential issues as soon as they are detected

An orchestrated response process that leverages automation, AI, and human expertise to rapidly respond to potential issues

Advanced monitoring tools such as predictive analytics and anomaly detection to proactively identify and address potential issues

Respond to issues as they arise, using manual processes and troubleshooting techniques

A combination of automated remediation, orchestrated response, and/or proactive monitoring to address potential system issues

Don’t know

Other

What methods does your organization use to control and monitor cloud/IT spending?(Required)

Centralized procurement processes

Pre-approved budget thresholds

Automated cost monitoring tools

Department-level spending controls

Regular cost audits and reviews

Cloud cost optimization platform

Approval workflows for resource provisioning

Native financial operations tools provided by the cloud provider

No formal controls in place

Don’t know

Other

Please specify:

Which methods do you rely on most to detect security vulnerabilities in your systems?(Required)

Automated scanning tools

Manual assessments

Vendor notifications

Threat modeling (for early detection)

None of these

Don’t know

Other

Please specify:

What are the TWO most common ways you prioritize vulnerabilities to address within your environment?(Required)

Based on potential impact

Based on exploitability

Regulatory compliance requirements

Based on CVSS scores

Risk-based analysis of multiple factors

First-in-first-out approach

No formal prioritization process

Don’t know

How do you typically handle system updates and security patches?(Required)

Automated updates and patches

Manually review and apply updates and patches on a regular schedule

A combination of automation and manual review

Apply updates and patches on an as-needed basis.

Outsourced update and patch management

No defined process

Don’t know

Other

Δ

Improved Customer Experience

Cloud-native technology can also help insurers to improve their customer experience. In today’s digital age, customers expect a personalized and seamless experience when interacting with their insurance companies. Cloud-native technology allows for the development of microservices, which can be combined to create customer-centric applications. This enables insurers to provide a more personalized experience through targeted marketing and communication strategies. Cloud-native technology also helps insurers to understand better and anticipate customer needs. This can be achieved through data analytics, which can analyze customer behavior and preferences. By understanding customer needs, insurers can tailor products and services to meet their demands, leading to increased customer loyalty.

Lower Costs and Improved Efficiency

Cloud-native technology can significantly reduce the costs associated with running an insurance business. By enabling insurers to quickly launch new products, services or features, insurers can more easily maintain a competitive edge in the market. It is no longer necessary to invest in large-scale IT infrastructure for developing and launching new applications or products. The cost of infrastructure is also reduced since cloud-native technology relies on microservices and containers. This allows insurers to tailor their infrastructure to specific business needs rather than investing in a one-size-fits-all approach. In addition, cloud-native technology can help insurers to more effectively manage risk and reduce fraud, which can lead to significant cost savings for insurers. It can also improve efficiency by streamlining business processes and reducing the time wasted on tedious manual tasks.

Challenges and Considerations

While cloud-native technology presents many benefits, it is not without its challenges. Insurers need to be aware of these challenges and take steps to mitigate them if they are to be successful in adopting cloud-native technology.

Data Privacy and Security

One of the most significant challenges associated with cloud-native technology is data privacy and security. Insurers collect a lot of sensitive data from customers, such as personal and financial information. Such data must be protected from loss, theft or unauthorized access. Even more challenging is ensuring that the data complies with various regulations and laws, including Solvency II, GDPR, HIPAA and others. Insurers must put in place a robust security and compliance framework to ensure that sensitive data is always protected.

Skill Gap and Talent Acquisition

Cloud-native technology requires a certain level of technical expertise. Insurers may find it challenging to acquire the right talent to develop, deploy and maintain cloud-native applications. Upskilling is an option, but it can be costly and time-consuming. Therefore, insurers may need to consider partnering with cloud-native experts and third-party providers to fill the skills gap and ensure that they can fully leverage the benefits of the technology.

Real-World Examples of Cloud-Native Technology in Action

Despite the challenges, many insurers have already embraced cloud-native technology and are reaping the benefits. For example, Northwestern Mutual, a financial services and insurance company based in Milwaukee, Wisconsin, uses cloud-native technology to improve its customer experience. The company has adopted a cloud-native approach to be able to cut infrastructure deployment time from two weeks to minutes. With such deployment agility, the team at Northwestern Mutual can deliver data to their customers faster and on time.

Another example is MetLife, which has adopted a cloud-native approach to managing claims. The company has a single platform that enables real-time claims processing across different channels, including mobile devices. This has improved the customer experience and reduced the time taken to settle claims. The cloud-native approach also allows MetLife to quickly scale its infrastructure to meet spikes in demand.

In conclusion, cloud-native technology has the potential to modernize the insurance industry. Its ability to scale and provide flexibility, coupled with the ability to create customer-centric applications, can help insurers enhance their customer experience and reduce costs. However, insurers must also be aware of the challenges, particularly around data privacy and security, and take steps to mitigate them. With the right implementation strategy, cloud-native technology can help insurers to transform the industry and gain a competitive edge in the market.

Image source: https://vecteezy.com/key-lock-password-security-privacy-protection-graphic.jpg