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Clouds are no longer just what you see above you in the bright blue sky. Today, existing and new insurance companies are facing a new quandary: adopt a cloud-based, software as a service (SaaS) solution or go with traditional, on-premise software.
For Laird Rixford, CEO of Insurance Technologies Corporation (ITC), the answer is simple.
“I’m a big fan of how cloud supports agencies, or any corporation, in a more effective manner,” he says. “Most corporations do not have the wherewithal to not only protect their [on-premise] equipment and services, but also support those services and equipment at a level that is required today.”
With the cloud, companies eliminate the “IT debt” of carrying on-premise equipment, such as hiring IT support and implementing firewalls, and for large companies, that ‘debt’ spreads across multiple servers in multiple locations.
“By using the cloud, companies only have to worry about having to secure one central location,” says Rixford, “where you can add intrusion systems, additional firewalls and more to ensure the secure access of that information. As agencies and brokerages start going to the cloud, they don’t have to worry about all the local security that comes with having on-premise equipment.”
Cloud-based solutions can also reduce an organization’s overheads. For insurance agencies, this is particularly important when it comes to the ebbs and flows of business.
“Whenever you have services that have peaks and valleys, if you have hardware to handle those peak loads, then it can create a lot of overhead to any organization. By having your system on the cloud, you can easily spin up multiple resources,” explains Rixford.
Maybe you already know that a cloud solution is right for your business, so how do you decide on which cloud-based provider to partner with? Rixford provides two key factors to look for, and the critical questions that every business should ask their prospective provider.
“[First], make sure your vendor also shares in the responsibility and that they maintain cyber liability insurance and are vigilant in making sure their systems are working properly,” he says. “[Another] thing that is critical, one of the things that can happen in a cloud-based solution is that you get locked into a certain provider where they charge you a lot of money to get your data out or migrate it to another cloud provider. Insurance agencies and brokers need to ask upfront, ‘what happens if I want to move my services’ and ‘what is the cost to get my data out’? Those are the questions that need to be asked.”
