Enterprising Developments

Good Candidate for Cloud: Anything That Can be Automated

Joe McKendrick
Insurance Experts' Forum, June 25, 2010

What types of insurance work are “commoditized”—meaning everyone does it, so there's no competitive value in it—and thus ripe for more cloudy type platforms?

I had the chance to run these questions past Krish Khambadkone, client architect for Infogain, a global systems integrator involved in implementing solutions across the insurance industry.

 

Khambadkone says in the cloud examples he's seen, insurance front-end quoting functions have been the most likely candidates for cloud sourcing to external vendors. He cites one vendor in Southern California that operates a “hybrid cloud” specifically for such tasks, which serves a number of insurance companies. Which means the vendor hosts and runs the software, but the applications and server instances are dedicated to the clients, and not shared as publicly available services.

He adds that front-end quoting is a highly commoditized and routine function that lends itself to such approaches. “Processes involved in the issuance of a quote for many commonly issued policies, such as medical, auto, casualty, property are quite standard and follow a set pattern,” Khambadkone explains. “Broadly speaking, it involves submission of questions, rating and pricing, underwriting, binding and quoting.”

The cloud model lends itself well to applications in which workflows can be automated. “There is no more need for a human actuary to rate and price a quote,” he points out. “These are achieved through straight-through processing; even the pricing is done using sophisticated pricing engines that use vast amounts of statistical data, algorithms and factors to arrive at the quote.”

Khambadkone hits at something here. There has been quite a bit of uncertainty about cloud within the insurance industry, and it doesn't make sense to take those systems and processes that offer competitive advantage and hand them over to a third party. But there are those many commoditized and automatable processes in which the pains and expenses of maintenance and upgrades could be handed to someone else to worry about. 

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

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

On Thanking the Regulator … Really

The Financial Conduct Authority is demanding higher standards of consumer protection from insurers, which could lead to greater customer engagement and understanding.

Competing with the Coasts for Tech Talent

Are heartland-based insurers at a recruiting disadvantage for tech skills?

Putting Your Investments Where Your Transformation Is: Part 2: Optimizing Your IT Investments Portfolio

Sam Medina continues a 3-part series on Transforming the IT Investment Budget in order to fund new programs and initiatives without the necessity of additional capital expense.

Boosting Performance with Integrated Underwriting Tools

A unified, comprehensive platform can help underwriters perform their jobs more efficiently and profitably.

Apply Mindfulness to Leadership

Managers can benefit from applying this theory both to their career aspirations as well as to interactions and expectations of staff.

Opinion: Halbig Decision Creates New Level of Uncertainty for Obamacare

Time will tell if the Halbig decision remains viable. But in the meantime, a new level of uncertainty has been injected into the process.

Advertisement

Advertisement