When Insurance Companies Become IT Businesses
Insurance Experts' Forum, January 27, 2011
With the growth of cloud, especially private cloud computing, the lines between IT and non-IT companies are blurring.
Consider how not too long ago, Amazon, the online retailer with a massive IT infrastructure to support e-commerce, started to offer excess capacity as IT services. Now, Amazon Web Services is a viable business unto itself.
With impressive infrastructures and stables of skilled professionals, it’s not a stretch to call many insurance companies IT businesses in their own right. In fact, many have more IT assets under their roofs than most IT or software vendors. Not to mention years of real-life IT experience.
Some insurance companies recognize this large base of skills and assets, and find new ways to leverage them. On a few occasions, I have spoken to insurance CIOs who have seen their operations spun off independently as an IT support companies, which serve their parent company and enable it to stick to its core insurance business. Plus, there are opportunities to sell these services to outside companies.
Recently, Buckeye Insurance Group announced it formed an IT service company called Marias Technology, providing IT services to companies in all industries, but with a strong specialization in insurance IT services. Examples areas of concentration are legacy system migrations, managing insurance company/system vendor relationships, third-party interface and relationship management, process improvement and automation analysis, and strengthening disaster recovery and business continuity practices.
The new company will be run out of former Buckeye offices in Ohio, and Buckeye CIO R. Christopher Haines and IS Manager Jim Kessler will lead the new venture.
These IT spinoffs are not necessarily new, and we will likely see plenty more in the future. With private cloud computing, however, it may be easier than ever to offer online services to customers outside the firewall—be they other insurers, or any other industry.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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