Up In The Clouds

We are hearing increasingly more about clouds.  The July/August 2009 edition of Technology Review has a wonderful section – actually what they call a Briefing – on cloud computing. In the series of articles in this briefing, you’ll read about both public and private clouds.

And that got me thinking…. Is there a natural progression of types of clouds that we will see in the marketplace each offering different capabilities that can be leveraged in the insurance industry?

By the way,  I relize there are significant issues centered around security, privacy, standards, data interoperability as well as time to move data to and from the clouds. For the purposes of this blog post, I’m going to put those issues aside for now.

Three Cloud Types

  • Public clouds – brought to the market by the likes of Amazon, Google, Microsoft, IBM and others.
  • Private clouds – built by and managed within the boundaries of specific corporations or possibly trade associations (LOMA, ACORD, III, or even the National Association of Insurance Commissioners)
  • Personal clouds – created by the public cloud firms but scaled significantly down to a size that individual consumers or employees within a company can use .

Insurance Industry Cloud Applications

As those of us in the insurance industry know, to us glacial is fast. Slow and steady wins the race…. heck, we have a business to run: premium to collect, commissions to pay, regulations to comply with. So, we experiment, we pilot but we don’t race ahead to the bleeding edge. Wouldn’t want to create a disruptive force and make our competitors react to us….

But having let loose with that little rant, there are some opportunities here:

  • Private clouds are a distinct possibility. I don’t see insurers trusting public clouds with their core administrative systems (policy administration, billing, claims, ..) or even financial and investment processes. But I do think it makes sense for insurers who can craft private clouds to do so. This gives them another option to the usual cast of characters (CSC, StoneRiver, Guidewire, Camilion, …). One possibility – contradicting myself here – is that insurers who have very strong relationships with their core admin technology providers might be willing to experiment with a cloud arrangement if their core admin provider creates and manages the cloud (preferably to very high SLA arrangements)
  • Personal clouds– I see personal clouds used by agents or brokers as well as by their agencies or brokerages. Clouds and mobility go together well. Same reason I see the use of personal clouds for any field staff including claim adjusters.  One issue here that stands out is the critical need for data standards so data can flow from the field staff or broker personal clouds to the insurer’s private clouds.

What do you think? Is there a cloud too many here? What are some of the other applications you can think of in our wonderful, wacky world of insurance?

Published in: on August 14, 2009 at 9:25 am  Leave a Comment  

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