As insurance companies' systems grow and IT becomes a larger part of insurance, many carriers are becoming software or cloud companies in their own right.

In a survey I conducted last year as part of my work with Unisphere Research, we found that 12 percent of companies not only were deploying private clouds, but also extending the clouds as services to outside customers and partners.

For example, Progressive Insurance just announced it is licensing its auto tracking technology to United Services Automobile Association (USAA). USAA will begin using the Progressive technology in April 2015.

Other businesses within the industry are shifting their business models to software delivery. Eric Knorr recently spoke with Van Beach, product manager at Milliman, an independent actuarial and consulting firm. Milliman already was offering an applications MG-ALFA, which it recently moved to the Windows Azure public cloud. In essence, the company has evolved to become a cloud provider.

In an article posted last year, Rob Preston points out that some of the world's leading companies are rapidly evolving into IT providers. “Scores of companies, including NYSE Euronext, Sears, United Stationers, The Associated Press, Zynga, Google, and Union Pacific, not only are innovative users but also committed builders and sellers of IT systems, software, and services,” he says.

As insurers build up their IT assets and services, it's inevitable their business models will evolve as well. Companies will no longer just be in the business of selling insurance policies, but also be in the business of managing big data, as well as designing and maintaining software. The line between software providers and consumers has blurred.

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

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