The Benefits of Cloud Software for Insurance

Part Two in a three-part series

By Mark Orosz, CIO/CSO, Oceanwide

Montreal, QC (Mar. 25, 2013) – One of the transformational concepts sweeping the insurance software world is that of Cloud Computing. “Cloud Software” is an expression being heard with increasing frequency as companies in every industry move to adopt a delivery model which is more cost efficient than traditional software delivery models. Cloud computing is now seen as a safe and secure option to enable business and IT to focus on core competencies.

One of the biggest challenges when deciding on a purchase of software is preparing the ROI and having the ability to make a compelling argument that the software will improve the quality of a customer’s offering, grow revenues, improve internal performance or reduce costs. A major obstacle has historically been the costs required to buy, configure, install and support the software. The Total Cost of Ownership (TCO) under the traditional delivery model can often be large enough to overshadow the value the new software is seeking to provide. Research conducted by CIOIndex, an online resource for CIOs concluded that:

  • TCO for cloud software solutions is 35% lower for deployments with more than 200 users.
  • IT infrastructure costs are approximately 11% of the total cost of on premise solutions. These costs do not exist for cloud computing.
  • TCO for cloud systems is $730,000 less than for comparable on premise deployments with 100 users.
  • Spending for application implementation and support (including internal IT staff, VAR, consultant or SI resources) is 3.5 times more for comparable on premise deployments with 100 users.

Software solutions that might have been rejected due to cost or complexity in the past are now viable options for a growing group of companies who are benefiting from cloud systems’ lower TCO. Cloud software has become an instrument of change and a game changer in “go to market solutions.”

The importance of being first to market or quickly addressing a market need is another key benefit of cloud systems. By avoiding the requirement to have IT research, purchase, install and configure hardware and software, the time to market for a new product is dramatically reduced. Many Saas offerings are geared towards self-service, including the ability to configure the application to meet business needs without the requirement for traditional development resources. As such, projects that used to require many months to complete are being accomplished in a matter of weeks. This further supports the ROI case as revenue can be realized much faster along this accelerated implementation timeline.

Equally important, as a company’s customer base expands in terms of both size and geographical location, the necessary resources to support this growth can be brought online by leveraging the cloud software provider’s global infrastructure. The costs related to this growth are variable and will grow or shrink as usage increases or decreases.

This reliable, scalable and non-disruptive business model and can be rapidly implemented at a relatively low cost. This allows for increased profitability as well as improved predictability of income. Karen Monks, analyst with Celent’s Insurance group, states that “Insurers have stepped up their use of emerging technologies and have had successes in doing so.” Cloud software is an excellent example of how insurers benefit from cloud system vendor’s expertise in areas such as the use of scalable and flexible technology, modern disaster recovery solutions and rigorous security than what can typically be provided by internal IT.

To find out more about cloud software for insurance, please visit http://www.oceanwide.com/en/insurance-technology/cloud-system.

About the Author

Mark has over 20 years of hands-on experience in application systems design and development, strategic planning, information systems and network design, security auditing, prevention planning, and business solution development.

About Oceanwide, Inc.

Oceanwide has been providing multi-line solutions to the global insurance industry for over 15 years. Its cloud based applications enable carriers, brokers and MGAs to get to market quickly and efficiently, enhance the customer and agent experience and provide access to new revenue generating opportunities. Oceanwide’s proven track record of successful implementations, unparalleled customer service and domain expertise provide a comprehensive solution to their clients and enable them to differentiate themselves from their competitors. Visit www.oceanwide.com.

Source: Oceanwide