This put up is a part of a sequence sponsored by AgentSync.
Having your head “in the clouds” may not be fascinating, however storing your information “in the cloud” actually has its advantages. As extra folks and corporations transfer to cloud storage for his or her private {and professional} information, the gold normal is cloud-native software program that’s constructed with flexibility and safety in thoughts. Read on to study the fundamentals of cloud-native software program and its rising reputation inside the insurance coverage trade.
What is cloud-native software program?
iCloud, Google Cloud, Dropbox, simply to call just a few: We’re all conversant in cloud storage in our every day lives, if for no different cause than it’s the place our images and music stay so we will entry them from our telephones, tablets, and computer systems with out carrying round a tough drive.
But what does it imply for a software program to truly be “cloud-native?” Just prefer it sounds, cloud-native refers to a software program software that was constructed particularly to operate in a cloud (distributed and web-based) surroundings, slightly than residing on a bodily drive or server.
As against older purposes that advanced to include cloud elements, cloud-native software program originates in its cloud-based type. For instance, you’ll be able to’t obtain a model of “QuickBooks Online” to your laptop regardless of how a lot you wish to, as a result of it solely exists within the cloud. Often, tech merchandise which might be offered as Software-as-a-Service (SaaS) – and require an ongoing subscription slightly than a one-time buy – are cloud-native. AgentSync isn’t any exception.
One of cloud-native software program’s defining components is its capability to be deployed shortly, and obtain ongoing updates and enhancements that may be launched in real-time, with out requiring down-time or negatively impacting the software program’s different capabilities.
Key options of cloud-native software program embrace:
Microservices structure: You can consider cloud-native software program as a group of “microservices” or “microapplications.” Google Cloud defines this as “individual, loosely coupled components” which means that as a substitute of 1 giant program, the best way we used to think about a chunk of software program, cloud-native software program is constructed by quite a lot of individually functioning components that type the entire.
Containerization: Because of this microservices structure, cloud-native software program can profit from its builders’ capability to work on small items at a time, upgrading or fixing particular capabilities, with out impacting the software program as a complete. This is named containerization.
Continuous integration: Due to the way it’s constructed, cloud-native software program can accommodate ongoing enhancements, bug fixes, and new integrations that aren’t attainable with legacy applied sciences. It’s the distinction between having to take your automobile into the store for a brand new tire and having the ability to patch a fast gap whereas on the run. The latter, like cloud-native infrastructure, causes much less disruption and little or no downtime in comparison with needing to close down a complete system to carry out upgrades or fixes.
API-first strategy: Since cloud-native software program is inherently constructed on a basis of microservices that combine, utilizing APIs to attach one software program to a different is a given.
Security and compliance: The largest cloud computing suppliers, who convey alongside top-of-the-line information safety and compliance practices, energy most cloud-native software program. Big names like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure supply their enterprise clients assurance that the information they host for various cloud-native purposes is protected and safe. For many insurance coverage companies, the peace of thoughts that an organization as sturdy as Amazon is dealing with their information safety is extra comforting than the thought of being liable for it in-house.
The rise of cloud-native purposes in insurance coverage
As an increasing number of software program strikes to cloud-based infrastructure, so does the expertise that powers the insurance coverage trade. Even although cloud-native insurance coverage software program has been available because the early 2000s, insurance coverage companies haven’t all been fast to retire their legacy techniques and undertake cloud-native infrastructure.
This appears to be altering, and altering extra quickly, as we strategy the primary quarter-century mark. According to a 2022 report by McKinsey & Company, insurers mission a 32 p.c annual progress of their use of cloud companies by 2025. With loads of room for progress in its total use of cloud companies, the insurance coverage trade can be close to the highest of the record of industries that may reap the very best financial rewards.
Examples of cloud-native software program in insurance coverage
Nearly each, if not each, kind of services or products an insurance coverage enterprise makes use of every day will be discovered as a cloud-native software. That doesn’t imply most insurance coverage carriers, businesses, or MGAs have adopted cloud-native variations of their day-to-day software program, however the selection to take action exists over a big portion of the integral insurance coverage capabilities.
Some of the most typical examples of cloud-native software program in insurance coverage embrace:
- Agency administration techniques
- Claims administration techniques
- Policy administration techniques
- Comparative ranking software program
- Customer relationship administration techniques
- Email advertising platforms
- Insurance compliance administration techniques
Benefits of cloud-native software program for insurance coverage professionals and companies
One of essentially the most vital advantages of cloud-native insurance coverage expertise is its capability to combine with different purposes by way of APIs, thus enabling corporations to automate once-manual duties and processes.
Other advantages that insurance coverage companies and the professionals working at them get pleasure from embrace:
Scalability: Cloud-native software program can help one, 100, or 1 million customers (assuming it’s constructed on stable infrastructure). This permits corporations that spend money on cloud-native expertise merchandise to broaden and contract shortly, with out interruption to their every day operations. There’s no ready on buying a brand new software program license or putting in the product. It’s normally so simple as the admin consumer inviting somebody to hitch an present platform.
Or, alternatively, deactivating a consumer instantaneously, when wanted. This is especially relevant within the insurance coverage trade, the place corporations have seasonal fluctuations and must shortly onboard new producers or adjusters to fulfill their calls for.
Flexibility: One of the largest benefits of cloud-native software program for insurance coverage professionals and their employers is the flexibleness it offers folks to work from anyplace. An insurance coverage agent or claims adjuster can theoretically log into the system they use to carry out their work from anyplace with web entry. The similar can’t be stated for legacy techniques that require a consumer to be linked to a hard-wired community or pull information from an on-premises server.
Enhanced buyer expertise: This profit bleeds over into one for insurance coverage customers too, however it most undoubtedly advantages insurance coverage companies and professionals after they can present a greater buyer expertise. Just a technique cloud-native software program can do that is by being extra dependable for folks whose job it’s to interface with clients. An insurance coverage customer support consultant or licensed agent gained’t lose entry to a buyer’s coverage data due to an area energy outage or server crash.
Cloud-native software program is constructed with redundancy in thoughts, and with assets unfold out over many factors to permit for a level of operational malfunction with out inflicting a significant snafu. Try that with a legacy system that depends solely on the facility and web working in a single particular constructing always.
Reduced prices and useful resource use: What appears like a greater use of an insurance coverage group’s cash: paying for a number of employees members to take care of legacy expertise and on-prem servers, or paying the identical variety of workers to promote insurance policies and repair clients? The reply ought to be apparent. Moving to cloud-native insurtech can release employees’s time and the corporate’s cash to spend money on issues that’ll actually transfer the needle on income and buyer satisfaction – not simply assist keep the established order.
Innovation and aggressive benefit: With most new tech improvements taking place on the planet of cloud-native software program, insurance coverage organizations which might be geared up to embrace cloud expertise might be greatest positioned to reap the benefits of new developments. Innovation can snowball as an organization that’s already applied a major cloud-based expertise can extra simply undertake others as they turn into out there (to not point out, they will combine the brand new ones into the present ones for even higher effectivity beneficial properties). Beyond the power to leverage new expertise because it comes out, these companies will even achieve a aggressive benefit within the battle for youthful insurance coverage expertise by offering a tech-forward worker expertise.
Benefits of cloud-native software program for insurance coverage customers
Insurance companies aren’t the one ones benefiting from cloud-native expertise. Consumers (and that’s actually each one in all us!) get to reap the advantages, too. From higher customer support, faster claims processing, and the power to get prompt insurance coverage quotes from a number of insurers, all of us see some great benefits of fashionable cloud-based software program in our on a regular basis insurance coverage interactions.
Challenges of cloud-native insurance coverage expertise
No innovation is with out its challenges and potential downsides. For cloud-native software program, many of those aren’t inherent flaws within the expertise itself. Rather, the challenges come largely from organizational and cultural preferences that permeate such a longstanding trade.
Legacy system alternative or integration: It will be no small problem for a corporation to revamp the best way it does issues. Moving from legacy expertise to cloud-native insurance coverage infrastructure will be time-consuming, expensive, and embrace loads of complications. And, if a corporation doesn’t transfer all of its techniques to cloud-native software program, it’s left with the problem of integrating the brand new ones into the previous (which weren’t constructed with seamless integration in thoughts).
Adoption and buy-in: People don’t all the time love change, even when the outcome guarantees to be an enormous enchancment. It will be arduous on a corporation, particularly one within the insurance coverage trade that’s been round for over 100 years, to make a large technological leap ahead. If management’s buy-in isn’t the problem, it may possibly nonetheless be a hurdle to get customers to undertake a brand new means of doing issues.
Skill gaps and coaching wants: For the very best adoption charges, and the very best return on funding, it’s very important that insurance coverage companies shifting in the direction of cloud-native software program present the help their customers might want to reap the advantages of the brand new expertise.
Initial prices: Even although cloud-native software program will be extraordinarily cost-saving in the long term, there’s all the time a value to buy and implement it. Smart insurance coverage companies will weigh the long-term prices and advantages and normally see that the preliminary value might be recouped many instances over. But for some corporations, the value of shifting in the direction of a completely cloud-based tech stack simply appears too excessive to beat.
Security and compliance: You thought this was a profit, proper? It is, however it can be a problem. Not all cloud-native applied sciences are created equal. Some prioritize safety and compliance and a few…not a lot. Luckily, there’re trade requirements that shortly let you know if a software program firm goes to take safety issues off your plate, or add to them. Read extra in regards to the SOC II and why it’s necessary.
Despite these challenges, the longer term is completely going to be extra cloud-native than not. Organizations that make the transfer in the direction of a cloud-native tech stack will begin getting the advantages sooner and be extra ready to innovate when the chance arises.
Go cloud-native together with your insurance coverage compliance
If you’re considering that these advantages, like scalability, flexibility, safety, and consumer expertise can be nice additions to your license compliance administration processes, we’ve received nice information! AgentSync is a cloud-native answer that makes managing all the compliance lifecycle for producers, brokers, broker-dealers, and adjusters fast and simple.
Contact us in the present day to find out how AgentSync will help your group, or examine how we’ve already helped insurance coverage carriers, businesses, and MGAs rework their compliance practices.