This post is part of a series sponsored by AgentSync.
While it may not be desirable to have your head “in the cloud,” there are certainly benefits to storing your data “in the cloud.” As more people and businesses move their personal and professional data to cloud storage, cloud-native software built with flexibility and security in mind will become the gold standard. Learn the basics of cloud-native software and its growing popularity within the insurance industry.
What is cloud-native software?
iCloud, Google Cloud, and Dropbox, to name a few, are where your photos and music are stored and you can use your computer without having to carry your phone, tablet, or hard drive.
But what does it actually mean for software to be “cloud-native”? As the name suggests, cloud-native means that software does not reside on a physical drive or server, but instead resides in the cloud (distributed and web-based). Refers to a software application that is specifically built to function in an environment.
In contrast to older applications that evolved to include cloud components, cloud-native software begins life in a cloud-based format. For example, the version of “QuickBooks Online” exists only in the cloud, so you can’t download it to your computer no matter how much you want to. Technology products that are often sold as Software-as-a-Service (SaaS) and require an ongoing subscription rather than a one-time purchase are cloud-native. AgentSync is no exception.
One of the characteristics of cloud-native software is that it can be rapidly deployed and receives continuous updates and improvements that can be released in real time, without requiring downtime or negatively impacting other features of the software. is.
Key features of cloud-native software include:
microservices architecture: Cloud-native software can be thought of as a collection of “microservices” or “microapplications.” Google Cloud defines this “Discrete loosely coupled components” means that cloud-native software is built from many independently functioning parts that form a whole, rather than one big program as we traditionally thought of software. means.
Containerization: This microservices architecture gives cloud-native software the advantage of allowing developers to work on small pieces at a time and upgrade or fix specific features without impacting the entire software. This is known as containerization.
continuous integration: The way cloud-native software is built allows for continuous improvements, bug fixes, and new integrations that are not possible with traditional technologies. It’s the difference between having to take your car to the shop for new tires and being able to quickly patch the hole while you’re on the road. The latter, like cloud-native infrastructure, is less disruptive and requires little to no downtime compared to having to shut down the entire system to perform upgrades or fixes.
API-first approach: Since cloud-native software is inherently built on a foundation of integrated microservices, it makes sense to use APIs to connect one software to another.
Security and compliance: The largest cloud computing provider brings cutting-edge data security and compliance practices to power most cloud-native software. Leading companies such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure provide enterprise customers with assurance that the data they host for a variety of cloud-native applications is secure. For many insurance companies, the peace of mind that a robust company like Amazon is managing data security is more comforting than the idea of taking responsibility for data security in-house.
The rise of cloud-native applications in insurance
As more and more software moves to cloud-based infrastructure, so too will the technology supporting the insurance industry. Although cloud-native insurance software has been readily available since the early 2000s, not all insurance companies have immediately retired their legacy systems and adopted cloud-native infrastructure.
This situation appears to be changing, and even more rapidly as we approach our first quarter century.according to 2022 Report by McKinsey & Company, insurance companies predict that usage of cloud services will increase by 32 percent annually by 2025. There is significant room for growth in the use of cloud services overall, and the insurance industry also near the top of the list Among the industries with the highest economic rewards,
Examples of cloud-native software in insurance
Almost all, if not all, types of products and services that insurance companies use on a daily basis can be found as cloud-native applications. That does not mean that most insurance companies, agents, and MGAs: adopted Although we use cloud-native versions of everyday software, there is a choice to do so for most of the integrated insurance functions.
Some of the most common examples of cloud-native software in insurance include:
- agency management system
- Complaint management system
- policy management system
- Comparative evaluation software
- customer relationship management system
- email marketing platform
- insurance compliance management system
Benefits of cloud-native software for insurance professionals and businesses
One of the most important benefits of cloud-native insurance technology is the ability to: Integrate with other applications via APIThis allows businesses to automate tasks and processes that were once manual.
Other benefits that insurance companies and the professionals who work for them enjoy include:
Scalability: Cloud-native software can support 1, 100, or 1 million users (assuming it’s built on a robust infrastructure). This allows companies that invest in cloud-native technology products to scale up and down quickly without disrupting daily operations. No need to wait to purchase new software licenses or install products. It’s usually as simple as an admin user inviting someone to an existing platform.
Alternatively, you can deactivate users immediately if you prefer. This is especially true in the insurance industry, where companies experience seasonal fluctuations and need to quickly hire new producers and adjusters to meet demand.
flexibility: One of the biggest benefits of cloud-native software for insurance professionals and their employers is the flexibility to work from anywhere. Insurance agents and claims adjusters could theoretically log into the systems they use to do business from anywhere they have Internet access. The same cannot be said for traditional systems that require users to connect to a wired network or retrieve data from on-premises servers.
Improving customer experience: This benefit extends to insurance consumers, but there are definitely benefits for insurance companies and insurance professionals as well, if they can provide a better customer experience. One way cloud-native software accomplishes this is by increasing the trust of those responsible for interacting with customers. Insurance customer service representatives and authorized agents won’t lose access to customer policy information due to a local power outage or server crash.
Cloud-native software is built with redundancy in mind, with resources spread across many points to tolerate some operational glitches without causing major problems. Try it on legacy systems that are completely dependent on power and internet running at all times in a given building.
Reduce costs and resource usage: Is it a better use of an insurance company’s funds to pay multiple staff members to maintain legacy technology and on-premises servers, or to pay the same number of employees to sell insurance policies and service customers? Sounds like? The answer should be obvious. Moving to a cloud-native insurtech frees up staff time and company funds that can be invested in things that make a big difference in revenue and customer satisfaction, rather than just helping you maintain the status quo.
Innovation and competitive advantage: With most new innovations happening in the world of cloud-native software, insurers that are ready to take advantage of cloud technology are in a position to take full advantage of new developments. Innovation snowballs because companies that have already implemented key cloud-based technologies can more easily adopt other technologies as they become available (not to mention integrating new technologies with existing ones). (can be integrated to further increase efficiency). These companies can not only take advantage of emerging technologies, but also provide a technologically advanced employee experience that gives them a competitive advantage in the war for young insurance talent.
Benefits of cloud-native software for insurance consumers
Insurance companies aren’t the only ones benefiting from cloud-native technology. Consumers (literally all of us!) can benefit too. We’re all seeing the benefits of modern cloud-based software in our day-to-day insurance operations: improved customer service, faster claims processing, and the ability to instantly obtain insurance quotes from multiple insurance carriers.
Cloud-native insurance technology challenges
No innovation is without challenges and potential drawbacks. In the case of cloud-native software, many of these are not inherent flaws in the technology itself. Rather, challenges stem primarily from the organizational and cultural preferences that pervade these long-standing industries.
Replace or integrate legacy systems: For organizations, reinventing the way things are done is no small task. Migrating from legacy technology to cloud-native insurance infrastructure can be time-consuming, costly, and fraught with many headaches. And if organizations don’t migrate all their systems to cloud-native software, they’re left with the challenge of integrating new systems with older systems that weren’t built with seamless integration in mind.
Adoption and endorsement: People don’t always like change, even if the results promise significant improvements. Making big technological leaps can be difficult for organizations, especially those in the insurance industry that have been around for over 100 years. Even if leadership buy-in isn’t a challenge, getting users to adopt new ways of doing things can still be a hurdle.
Skills gap and training needs: To achieve the highest adoption rates and highest return on investment, it is important that insurers moving to cloud-native software provide the support their users need to reap the benefits of the new technology.
Initial cost: While cloud-native software can save you a lot of money in the long run, there is always a price to pay to purchase and implement it. Smart insurance companies weigh the long-term costs and benefits and make sure that the initial cost is usually recouped many times over. But for some companies, the cost of moving to a fully cloud-based technology stack can seem too high to overcome.
Security and compliance: I thought this was an advantage, right? That’s true, but it’s also a challenge. Not all cloud-native technologies are created equal. Some people prioritize security and compliance, others less so. Fortunately, there are industry standards that can quickly tell you whether a software company intends to eliminate security concerns or increase them. Learn more about SOC II and why it matters.
Despite these challenges, there is no doubt that the future will be cloud-native. Organizations that move to a cloud-native technology stack will start reaping the benefits sooner and will be better prepared to innovate when opportunities arise.
Cloud-native insurance compliance
If you’re looking for added benefits like scalability, flexibility, security, and user experience to your license compliance management process, we have great news. AgentSync is a cloud-native solution that makes managing the entire compliance lifecycle quick and easy for producers, agents, broker-dealers, and adjusters.
Contact us now To learn how AgentSync can help your organization, or Read how we’ve helped Insurers, agents, and MGAs will transform their compliance practices.
