Numerous studies underline the importance of cloud technology as a driver of digitisation. Instances of this within the insurance industry include the creation of new ecosystems, the development of new business models and their integration into platforms, and new ways of collaborating with various partners in particular.

The disruptive power of the cloud is becoming a key characteristic of changing IT landscapes, as cloud solutions are also becoming usable in the field of core or policy administration systems for the first time. Complex, customisable standard software for administrating insurance contracts can now be operated and used without a dedicated data centre. This results in significantly lower development costs for insurers – hardware-specific maintenance and operating costs can also be lowered and the lower administrative costs per contract can be passed on to the end customer.

This is exactly what it boils down to; with rising cost pressure and new regulatory requirements having to be implemented constantly, insurers have to do one thing first and foremost: save money. Cloud solutions can help them do this, as they offer flexibility and a fast time to market, but also enormous opportunities in terms of cost reduction and control, performance and reaction speed.

According to the PwC study entitled ‘Cloud computing in the insurance industry 2022’, most insurers prefer software-as-a-service (SaaS) models. The use of SaaS provides insurers with a range of advantages. Usage-based pricing models are transparent and offer excellent planning certainty. As maintenance and operation are the responsibility of the SaaS provider, they do not incur any additional costs. Small and medium-sized insurance companies can profit too as they can participate in complex systems in line with their requirements and without the need for large, risky investments.

Data protection, data security and storage location, IT security and operational resilience are some of the most important factors in a decision for or against the cloud. Compliance with the duties and requirements (VAIT, DORA, C5 etc.) is a time-consuming and cost-intensive endeavour. SaaS models offer relief here as the operator of the cloud, with appropriate processes and resources at its disposal, assumes responsibility for implementing all the requirements in a lawful manner.

Regular security updates from the cloud provider also ensure that vulnerabilities and security flaws are dealt with quickly. Cloud providers offer high data protection and security standards and have the certificates to prove it. Insurers should only choose cloud solutions that meet their standards and specifications in terms of IT security, compliance, risk management and data integration.