A report from New York-based Novarica finds insurers are warming to software-as-a-service (SaaS) and cloud computing platforms—albeit at a glacial pace.
The insight, derived from the results of an online survey conducted during October 2010 of 75 members of the Novarica Insurance Technology Research Council, confirms the contention that while adoption of these technologies is far from widespread, interest is beginning to percolate. Indeed, while the average percentage of the respondents current IT budget they were allotting to cloud investments was a paltry 1.1%, the number expected for 2011 rises to 1.4%.
“Cloud and SaaS solutions are off to a slow but promising start in insurance,” the report, authored by Novarica Principal Chad Hersh and Analyst Kimberly Markel, states. “Carriers are using them in the most appropriate areas. Insurers are looking for advantages primarily in cost and flexibility, while concerns over security, integration, and control are still widespread.”
As a result, the authors expect adoption to continue to rise as the technologies mature.
“While the results of the survey appear in large part to be pessimistic, it is important to remember that SaaS and cloud are very new to insurance and even the modest interest shown by a number of respondents is quite a leap forward,” the authors say. “Few true SaaS or cloud solutions are available today, so most carriers have low usage expectations. As the availability and maturity improve over time, we expect the responses to become significantly more positive.”
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Corrected December 3, 2010 at 9:03AM: yes