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Private Cloud, Public Cloud: Bringing Together the Best of Both Worlds

Joe McKendrick
Insurance Experts' Forum, April 23, 2010

Many in the insurance industry are rightfully concerned about the security of sensitive data in cloud computing environments. That's why the best approach is a hybrid one, in which resources are brought in from outside providers, while an internally supported cloud can provide similar efficiencies while staying inside the firewall. Narragansett Bay Insurance Co. is an example of a company that is moving operations to both internally and externally supported cloud-based systems as a way to consolidate and streamline its sprawling server infrastructure.

“Even though we have the cloud, its all managed by our people—we're just borrowing the services and getting the cost benefit of that hardware and software while paying it over time,” explains Michael Anselmo, CIO of Narragansett Bay.

I had the opportunity to speak with Anselmo and a number of other cloud implementers and experts across the insurance industry in preparing Insurance Networking News' latest article on cloud computing. Anselmo made a rock-solid case for tapping into the efficiencies of cloud while still keeping tight control over data and operations.

Cloud computing is nothing new for Anselmo. He first deployed cloud back in 2005 over a virtual desktop environment when he was CIO with Clarendon Insurance, now a division of Hannover Re.

“Two big benefits back then were expense reduction, and hardware server collapsing,” he recalls. “We had hundreds of servers that were collapsed into a few physicals, which were handled by virtualization. This also solidified the company's security requirements. “All of our IT was housed in a server area, hosted somewhere else,” Anselmo adds. “Everybody was virtualized, and everything was hosted somewhere else.”

Now, at Narragansett, Anselmo is extending these internal cloud capabilities from internal users to external users such as agents and customer service representatives. One core system is entirely in the cloud. “We're running our Exigen policy management system on a [Software-as-a-Service] basis,” he explains. “We also have our own internal cloud model, hosting our claims systems, Web site, and portal being hosted by a cloud computing vendor, but managed by us.”

The hosted cloud consists of equipment and resources dedicated to Narragansett. “It's a secure network, no one else has access to our data,” Anselmo says. “It's run in the cloud, but you can't compare it to an Amazon or RackSpace cloud. It’s an internal cloud, only us. Our data is secure.”

Anselmo advises forging a deep relationship with cloud hosting providers, including frequent onsite visits. “You can log onto a service, put your credit card number in, and for a few hundred bucks a month, you get a server. But I don't think that works in a corporate cloud model. You have to go much deeper with the service providers, deal with the actual engineers and go see the site. We even have card key access to our cage.”

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.

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