Insurance is Looking at Cloud with Cautious Optimism

Cloud can be described to be still in a very nascent stage, when it comes to addressing the needs of an industry like insurance. There are many open issues like security of data, regulatory issues around data storage outside the insurers premises, cloud enabling the legacy applications, locking with a cloud provider, licensing issues, and patch management. Corporate IT in the near future would be trying to find answers to these questions so that future strategies can be developed, says N Eswaranatrajan, head, operations and technology, ICICI Lombard GIC.

Cloud is certainly assuming a significant role. There are certain perspectives that are of utmost importance considering the volume of sensitive data that resides with an insurance company. At this moment of time, we are exploring and investigating the usage of cloud from various perspectives, namely technical, licensing and regulatory compliance. We ideally require a single cloud provider who is capable of addressing all the 3 issues, he says.

Currently in the market, there are many cloud providers promising accelerated deployments and lower costs. However, variability of costs is still not clear as development and license costs are fixed. Corporate IT in the insurance industry is looking at cloud with a cautious optimism to accelerate deployments. But, cloud providers need to provide solutions for legacy applications, validation of applications in a cloud environment and compliance issues, says Eswaranatrajan.

Most of the cloud providers are currently offering it as a technology solution and lesser emphasis is being laid on important issues. Hence, cloud providers need to provide industry specific solutions. In fact, there are fewer technology challenges in the adoption of services, but more business considerations. As a word of caution, Eswaranatrajan says, In a highly regulated industry like insurance, data residing outside the insurers premise is a big challenge.

There are sufficient opportunities existing which provide an industry specific cloud solution. It appears that cloud providers having a good expertise in domain consulting will offer holistic solutions rather than an infrastructural proposal of implementing cloud. Compliance related changes will have to happen soon if a rapid cloud adoption needs to happen.