Digital transformation is fast becoming a norm for many corporations, even those in the finance industry. Every day, it seems that another company has decided to adapt or “move to the cloud”. While there is significant media attention on cloud computing or on-demand computing, there is also a notable amount of confusion regarding this. Moreover, cloud migration for policy administration systems (PAS) in insurers is also unpopular. This is usually because PAS cloud systems have always been bypassed by the IT department as business units. However, this does not mean that cloud computing for PAS cannot be effective.
As it has become an industry standard for insurers to improve the way they regulate and secure their data and policies, cloud computing is slowly becoming the next logical step. In order to protect the insurance company from data theft, fraud, and other cybercrimes, more insurers are considering digitization. It may be going into unfamiliar territory, but it can nonetheless be a move worth doing.
Effective PAS in a Cloud-Based System
PAS is essentially a record of all the insurance company’s past and current accounts. Every insurer has its own PAS that is specifically tailored to its products and services. When the PAS is migrated to the cloud, it is either deployed as an application service provider (ASP) or as Software-as-a-Service (SaaS). And this is where the difficulty arises for many insurers. Since PAS requires so much customization, both the ASP and SaaS models of delivery are inadequate.
The ASP model worked as a deployment method for cloud systems until it became too costly to continue customizing and maintaining multiple versions of the same application. Moreover, it also lacked any scalability that is supposed to be present in a cloud application. The SaaS model was then introduced as a more flexible alternative to solve this lack of expandability, but also left room for little to no customization needed for PAS processes.
In order to make PAS work in a cloud system, a hybrid of both models has to be deployed. The core functionality of PAS can be achieved by a more robust and customized ASP model with a more accessible SaaS approach to transaction reporting and analysis processes. This is a more superior method because the main application can integrate better with the insurer’s current infrastructure, allowing tailoring and interaction between the system and cloud to occur. Additionally, the standard web-access tools from the SaaS model can maintain cost-effectiveness and efficiency.
Advantages of Cloud Adaptation
Many of the benefits of cloud migration are largely related to flexibility and accessibility. It is a low-cost way to upgrade current PAS in the insurance company without the need to hire specialized IT personnel and purchasing new equipment. Cloud-based services are usually subscription-based, making them easy to implement and integrate into the company’s health insurance platform. This is ideal for enterprises that are experiencing rapid growth or fluctuations in their operations as the technology is scalable, requiring little to no adjustment to changes in bandwidth. Productivity and employee performance do not have to be affected when using cloud-based systems.
Compared to on-premise software, cloud-based systems consistently stay up-to-date without any initiation from staff. Updates are done automatically without paying for individual upgrade fees or additional programming. This expedites a number of workflows while allowing employees to take on more work related to customer service, product development, and other tasks. Information is also more secure in a cloud system while remaining accessible as well. Many cloud-based platforms’ enhanced security features include data encryption so breaches due to lost or compromised hardware no longer occur. Employees across the insurance company can safely and conveniently find everything they need in a safe and centralized location.
Preparing for Cloud Migration
In order to successfully transition to cloud-based PAS operations, insurers must create a comprehensive cloud strategy. It is not just about adapting cloud technology for its own sake, and should still be considered a large-scale business strategy that will encompass multiple system interactions, compliance, and more. Insurers considering the cloud for PAS should still take certain things into consideration and go about the process gradually.
It is essential for insurance companies to assess their current application portfolio and IT infrastructure. Doing so can reveal commercial and technical issues that are unique to the insurer. Doing this makes it easier to identify which applications should be prioritized during the cloud migration process and create a schedule for it.
Insurers must stay on top of their cloud implementation strategy. Technical and operational barriers need to be eliminated to make the process as smooth as possible. Pulling this off will require the participation and collaboration of the audit, compliance, and security departments right from the beginning. With careful consideration and planning, insurers can use the cloud for PAS operations correctly.