The idea of cloud computing or consuming information technology as a utility resonates a lot like the Application Service Provider (ASP) approach of the 1990’s. This ‘out of the box’ platform gives claim departments the opportunity to transition their business model to address 21st century market trends, and provide their customers speed and results.
What is Cloud Computing?
Cloud computing equips claims managers with hardware and software computing resources that are delivered as a service over a network (typically the Internet). Also known as Software as a service (SaaS) or Business Process Outsourcing (BPO), cloud computing essentially extends the idea centralized computing services first offered in the 1960’s with time-sharing and database storage.
How are claim departments benefiting?
The use of the cloud computing platform gives claim professionals several advantages, including:
- Accelerated feature delivery. As claim managers begin to revamp their core systems and processes, many understand the importance of streamlining their workflow to achieve effective claim outcomes. Given the complexities of scenarios that come up during the claim management process a continuous workflow improvement is implemented. As workflows are updated and new possible features are identified, a cloud hosted system provides the benefit of faster implementations of new system components.
- The benefit of storage scalability. Data has become a high priority source in claim departments to shed light on trends, market changes, and can be used as a strategic advantage. Scalable computing power and storage is advantageous for claim managers to meet the growing needs of administrative and claims processing procedures.
- Reducing the costs of hardware, software and in house IT support. Cloud computing turn’s technology into real utility, allowing companies to pay only for the capacity they use and to scale that capacity only as it is actually required.
- Broadband Internet remote access to centrally hosted applications that deliver equivalent speed to on-premises software. Cloud services can be based on the available-anywhere, anytime internet. This gives claim mangers the opportunity to access data through any internet connection.
The Future of the Cloud
The stage for the explosive growth of cloud computing in the claims management industry is set. Across all industries, cloud computing service revenues grew 15 percent in 2012, reaching $12.5 billion. In the insurance industry alone, cloud is already being widely consumed in non-core applications like bill review, damage estimating, and other peripheral processes.
The second significant driver in cloud growth is speed to market. Customizing, installing and maintaining insurance systems have historically been time-consuming undertakings regardless of whether the systems were installed in-house or deployed at a service bureau. The cloud’s considerable performance benefits even in its early life cycle includes flexibility, agility, scalability, reliability, cost savings, operating system support, and makes less and less financial sense for insurance companies to build core systems capabilities in-house.