Lately, the insurance industry has made impressive strides in moving to the cloud. Fears about security have lessened, and there is a growing comfort level among managers in the use of public cloud services.

There are well-known reasons for going with a cloud services – there are the low, monthly, pay-per-use fees associated with subscribing to an online service, versus the up-front capital investments required for computer equipment and systems. There’s the flexibility cloud services afford – businesses can tap into the expertise and functions needed without the need to buy and install on-premises systems.

But there are some other, less-well-known benefits that emerge as well. Here are some examples, along with possible caveats that need to be considered to successfully realize the benefits:

Cloud services have well-tested processes baked in. The services offered by cloud providers are the result of input from many customers that have gone before, and therefore reflect many best practices. Caveat: There is no competitive advantage in adopting the same processes as all your competitors. If there are unique processes on that in-house mainframe which still provide competitive advantage, stick to it.

Cloud elevates the roles of IT professionals. With the arrival of cloud, IT managers and professionals will see their job roles shift away from that of coders and technicians and more toward consultative roles to the business. The business will need technology professionals to research and determine what cloud services will fit best for the business, and the best way to secure and embed the service into the enterprise. At one major insurer, for example, the move to cloud has transformed the insurer’s IT roles to program and project management, business analysis and architecture. Caveat: The organization needs to be supportive in helping IT staff make this transition, with additional training and education in the business side of things.

Cloud services offer greater security than in-house IT. For the providers, security means life or death to the business, so they make sure their personnel are trained and they are certified in the latest practices and technologies. One CIO pointed out to me that he feels a lot more comfortable with relying on the security practices of a cloud provider than trying to keep his own IT staff up to speed. Caveat: Security should always be the responsibility of the customer company, which shouldn’t attempt to contract it out. Hold cloud vendors’ feet to the fire when it comes to security assurance.

Cloud services may make it easier to get into new lines of business. Often, getting into new product lines meant developing entirely new applications and systems to go along with it. This is especially true in an era of digital products, which require robust IT behind them. The ability to tap into reusable services from a cloud provider, or change functionality as required, means the ability to launch new business lines much quicker than in times gone by. 

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on do not necessarily reflect those of Insurance Networking News.

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