By Raj Srinivasaraghavan, Chief Technology Officer, SecureKloud Technologies
The Indian insurance market has been growing at a healthy rate of 17% CAGR over the last
two decades, reaching $131 billion in 2022. And it is expected to hit $222 billion by 2026,
according to a study by Redseer. Riding on the uncertainties of the pandemic, the life
insurance sector in particular has taken rapid strides toward the growth path. Still, India
remains largely an under-penetrated market, with much headroom for accelerated
growth thus not only presenting significant further growth opportunities but also
throwing many challenges in the process.
A new set of futuristic technologies like artificial intelligence, machine learning, data science, and predictive analytics are changing the way how the insurance industry is operating. But this has also accentuated the need for data storage and data security among many things.
Though initially reluctant to embrace the cloud, unlike other industry segments in the world, primarily due to security concerns, now the Indian Insurance industry has also realized the potential of cloud computing as the answer to the above challenges. Cloud has revolutionized the way companies operate in all sectors and now the insurance sector is also warming up to the idea in a big way.
The multifarious benefits of cloud computing in the insurance sector can be summed up from three perspectives – i.e., three Cs (company, cost, and consumer). The insurance
company stands to gain in many ways from improved efficiency to scalability with the
cloud in full play. The cloud-native tools and platforms hosted in the cloud allow insurers
to quickly and easily deploy new applications and services.
The industry is realizing that a good combination of public and private clouds is the optimal way for storing and analysing data in a secure, reliable, and scalable way, especially with the integration of future-first technologies like AI, IoT, blockchain, and machine learning more than ever before in the digitalized environment. A typical example is cloud deployments can run marketing campaigns quickly across all populations and can instantly analyze the data effectively to arrive at suitable product offerings for different population segments.
Undoubtedly, the insurance sector has become highly data-reliant now. API integration, enterprise resource planning, and customer relationship management systems are done easily with enterprise cloud software which helps to improve the overall efficiency of the insurance companies.
It brings higher flexibility to the insurers. Since an insurance company needs to focus on
day-to-day IT operations have considerably come down due to its cloud deployments, it
has given ample opportunities for it to innovate, develop and deploy new products and
services. This has also led to optimisation of underwriting, intelligent claims processing,
and effective fraud analysis.
Rising costs continue to be one of the biggest challenges in the Indian industry. Cloud
deployments help by allowing companies to cut down infrastructure costs by around 25% as the cloud can store data in cost-effective ways, according to a survey by EY.
The flexibility of the cloud also helps companies to scale the computing resources up or
down as and when needed. Instead of investing heavily in complex infrastructure, now
companies can go for SaaS or PaaS solutions with a pay-per-use model. In addition,
the cloud helps to lower the costs of maintaining their legacy systems, which form a major
chunk of their annual budgets.
The best part of the cloud that is being appreciated by insurance companies is its ability to
help them be customer-centric. The latest technologies hosted in the cloud can shorten the turnaround time for products and services. The companies can settle the claims on a real-time basis. Data can be harnessed to customize the underwriting process and approve, or deny a policy in just minutes and all of this can be dynamically done through cloud-deployed customized applications.
Technology helps companies build customer relationships more effectively and with ease, whether with existing clients or new clients. What makes a significant difference in the service sector now is the speed, which is another remarkable benefit of using CI/CD pipelines for the cloud deployment of insurance applications. Personalized products and services with the help of the cloud can make the customer happier. For the majority of customers, the brand experience is critical.
Cloud makes this experience more meaningful. The customer is better understood and
taken care of. No doubt, cloud computing is the future for the insurance business with a majority of insurers already leveraging its potential. This phenomenon is leading India strongly on a path to emerging as the sixth-largest insurance market in the world.