Cloud-based insurance software helps insurers make more data-driven decisions and become more nimble in response to changes in market trends. This is compared to insurers still using legacy systems, which can weigh on their agility and growth by being bogged down by outdated, on-premise technology infrastructure.
But, according to McKinsey, “Most insurers still vastly undervalue cloud’s potential.”
By adopting cloud-based software, insurers can break free from traditional limitations and unlock unparalleled opportunities for growth, innovation, and policyholder-centricity.
The Rise of Cloud-Based Software in Insurance
The property and casualty insurance space doesn’t have a reputation for being early adopters of emerging technology. But, the tides appear to be changing, as reflected in the expected annual growth rate of 32% for cloud services by 2025.
The traditional approach of P&C insurers has been maintaining their custom-built legacy systems for as long as possible. But, the advanced capabilities of modern-day cloud solutions are making it easier than ever for them to migrate their systems, and the associated benefits make it hard to pass up. In fact, between 2018 and 2022, the portion of insurers using the cloud increased from 70% to over 90%.
The increased adoption of cloud-based software in insurance has been driven by several factors, namely the advancement of cloud technology and its clear benefits.
How Cloud-Based Software is Transforming the property and casualty Insurance Space
The future of the property and casualty insurance landscape is being ushered in with the help of cloud-based software. These programs help insurers become efficient, better meet policyholder expectations, and more easily address changes in the marketplace.
Here is a deeper dive into the advantages that innovative insurers can find by migrating to cloud-based programs:
Enhanced Efficiency and Agility
Above all, cloud-based software helps insurers become more efficient and agile, which are invaluable advantages in today’s competitive marketplace. These programs allow insurers to streamline their processes and improve operational efficiency by providing centralized data access and storage, automation of workflows, and better collaboration capabilities.
Insurers that utilize cloud-based software can see more accurate underwriting, claims processing, policy management, and customer service. As a result, they’ll boost productivity and reduce the administrative burden on their team.
There is also a level of scalability that insurers can gain by adopting cloud-based insurance software. They can scale up or down their platform usage to fit demand without significant hardware or software changes. As such, they can more easily adapt to changing trends and adjust their resources to accommodate changing business needs, which is a great benefit when expanding into new markets or dealing with peak seasons.
Improved Policyholder Experiences
In the modern insurance market, the policyholder experience is becoming more important than ever. Offering a quality experience helps build loyalty and retention with policyholders, which supports insurers’ sustainable growth over the coming years.
Using cloud-based software, insurers can offer self-service portals where policyholders can access policy details, submit claims, and receive timely updates. These programs facilitate personalized services and messaging, provide automated notifications, and provide real-time support via chatbots. Altogether, these advanced capabilities are better suited to the modern-day insurance consumer.
Cost Savings
One of the biggest reasons why insurers switch to cloud-based software is the cost savings they’ll experience. In general, cloud-based software helps insurers save on costly investments in their technology infrastructure, like servers or data centers.
Cloud-based software follows the software-as-a-service (SaaS) model, which insurers typically pay for on a monthly or yearly subscription. Rather than making large upfront investments in their tech stack or paying for ongoing maintenance and security of their servers, insurers will experience more predictable and manageable costs when paying for a cloud-based program. Insurers can leverage these cost savings to invest in growth initiatives and innovation that will move the needle forward for the business.
Improved Data Security and Compliance
Some leaders voice compliance and security concerns when migrating to the cloud. An EY survey found that 59% of leaders identified data security as their most serious concern about the cloud.
But, the top cloud-based software providers prioritize data security for their users and employ robust measures to protect sensitive policyholder information. Insurers should look for providers implementing encryption, data backups, and disaster recovery plans to ensure data access and integrity. Cloud infrastructure typically offers better security than on-premise programs or local servers.
In addition, cloud-based software can help insurers with compliance rather than make it more challenging. The best cloud-based software providers build their solutions to comply with relevant security and privacy standards that insurers are subject to, like HIPAA or GDPR. Looking ahead, these programs can help insurers navigate the changing regulatory landscape as new regulations and laws are put in place.
Insurers that adopt cloud-based software programs can help relieve the burden of compliance management from their IT teams, allowing them to focus on growth and innovation for the business.
Better Collaboration and Integration
Lastly, cloud-based software facilitates real-time collaboration among various stakeholders in the insurer’s ecosystem, including agents, policyholders, business leaders, and others. This helps to provide more effective and efficient communication between all parties, giving them quick access to relevant data needed to resolve issues, make critical decisions, and more. As the workforce moves to an increasingly online and remote setting, this is a key advantage that will help innovative insurers gain the upper hand.
Further, cloud-based programs can integrate more seamlessly with other systems and tools than legacy systems. This includes third-party platforms like data analytic tools and customer relationship management platforms. With this, insurers can streamline operations and facilitate easier data exchange between relevant parties. In just one location, decision-makers can access a comprehensive dataset compiled from several sources. This enhances decision-making and helps insurers make more accurate, consumer-focused, and data-based decisions.
Find Your Edge with Insuresoft
The insurance landscape continues to become more complex as digital transformation efforts take over the space. Adopting cloud-based technology can be insurers’ secret weapon for retaining their competitive edge and expertly navigating the market’s evolving needs.
As cloud services continue to become more sophisticated, insurers that rely on the cloud for their core systems will have the agility and efficiency to successfully enter new markets, launch new products, and provide high-quality customer service.
Insuresoft’s Diamond platform is the ideal all-in-one solution for P&C insurers. We deliver mission-critical solutions to help you position yourself for success in the modern insurance marketplace.
We have a 100% success rate with client implementation. We take the time to get to know our clients and their business so we can personalize our service to fit their needs. Plus, our cloud-native architecture reduces cost, optimizes scalability, supports faster release cycles, and reduces the management burden on your internal IT team.
Contact us today to see how the cloud is leading the future for P&C insurers.
