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Cloud computing is a form of computing that involves sharing resources over the

internet and delivering hosted services over the internet rather than using personal
devices. The term cloud is used for the internet and so cloud computing is a type of
internet based computing. Cloud computing provides various services like servers,
storage functions and various applications to the users via the internet, otherwise
for which the user has to pay.
In a cloud computing environment, there is a huge shift in workload from the view
point of organisational computers. They don't have to run the applications rather
the computer network making up the cloud provides it to them. The only
requirement is that the user's computer should be compatible with running the
interface software of cloud computing system. Basically the cloud computing
provides three types of services as
!"#T$%&' %! % !'&(IC' The cloud provides using a software over the
internet rather than installing it on the computer. #urther this is independent
of the user's operating system and the only thing required is access to the
I)#&%!T&*CT*&' %! % !'&(IC' This provides the hardware resources to be
built, accessed and stored on the cloud system. This involves storing
information +ust as in large data centres and access when required. This will
reduce the risk of system failure and would porvide an automatic back,up of
data in the cloud.
-.%T#"&/ %! % !'&(IC' It include the set of tools required to develop own
cloud applications for the user. This will allow insurance companies to build
there own cloud applications and cloud softwares and integrate it with their
own internal software such as premium processing softwares.
Cloud computing is compatible with the current business priorities. In the insurance
sector, by combining the features of multi,tenant architecture and virtuali0ation
methodologies with pay,as,you,go model, it has created a 1e2ible and cost,e3ective
business model. !hifting to cloud technology will permanently reduce IT ownership
cost and will also reduce operational cost by using application on pay,per,service
methodology. Cloud computing will also help in reducing administrative workload by
facilitating integration of new operations, collaborative partnership and acquisitions.
This acts as an added advantage in case of e2pansion into new product and
geographical markets. Cloud solution will also act as an added advantage in areas
requiring high information and computing power such as modelling and pricing of
insurance and reinsurance .Cloud computing provides uni4ed customer and
segment inormation and application of sophisticated analytics can help insurers to
provide 1e2ibility and ability to ad+ust price with market changes. The cloud helps
organisation follow a customer,centric approach and provides customers with
products and services that are most suited and highly responsive to their needs.
Cloud will also help insurance companies to team up with telecom service providers,
post o5ces and retail dealers to reach out to customers with whom the organisation
has no e2isting relationship and who may be di5cult to reach. Cloud solution will
also improve customer e2perience as customers can access their products and
services anytime and anywhere. By storing and integrating vast amount of
customer based information on the cloud, the insurance companies are provided
with an oppurtuinity of sophiticated analysis. This further helps in driving Business
The biggest risk associated with cloud is the lack of control relating to security
operations in respect of the resources used for internal purposes on the cloud. This
leads to an operational gap between cloud infrastructure and organisations internal
activities. #urther, unlike previous models of on,premise application deployment
where data is stored internally and is sub+ected to organisations internal policies of
data security and management, the cloud technology the data is stored e2ternally
causing huge risk of data privacy. This may also increase the risk of system
vulnerability. Cloud technology is also sub+ect to various legal and regulatory risks,
especially in case where the service provider e2tends to di3erent countries with
di3erent data privacy laws and compliances. There is also an agreement or contract
risk inherent in using the cloud technology in respect of liability of damages and its
apportionment. There is also a risk of security breach by the cloud service provider.
There is also a risk of network breach between organisation's internal network and
cloud service providers. #urther there are also risks associated with secure data
transfer via the internet, software interfaces being secured, secure access of data
and user access control. n *nderwriting 6 -olicy /anagement, use of the cloud will
reduce underwriting overhead signi4cantly. It can further provide a seamless and
transparent hando3 from the line of sales to underwriting, will ease the quote to
bind process making it more transparent, ease renewal 6 e2,date tracking and
thereby promote e5cient servicing and policy administration and help the
organisation to focus on high,value services and products. Besides, the cloud will
support online enquiries, underwriters assessment and policy serving. The cloud
will also enhance the operational e5ciency of day to day functions as it will
automate work1ow hando3s, routing of documents, claims report generation, policy
documents generation, etc. It will ease the identi4cation of customers at risk of non
renewal of policies and will provide one,click reports for e2piring policies and other
administrative matters. The cloud will also improve customer service by integrating
multiple channels and social media for providing customer service, real time
collaboration and better knowledge management . By using cloud, a self service
portal can be created for the customers so that service perception may increase
and detailed information can be provided on quote, underwriting status or
submissions quickly when required by customer. .astly, the cloud can also support
better analytics by sharing data and integrating business intelligence and analytics
with business processes. It can improve content develpoment and its sharing,
improving knowledge management and automating assignments to agents and
managers thereby improving agency performances.
%part from data privacy risk, legal risks and other risks as described above
associated with the cloud, the cloud technology requires a unique schema for the
storage of physical data of multiple clients on a physical device. The sharing of this
physical server can cause a potential risk of data bleeding accross virtual servers.
There may also be di5culties in integration of organisation's information system
and the information system of the service provider. The contractual commitments of
service provider on availability of service is also not fully reliable as the service
provider cannot guarentee the speed promised or the availability of network in
many cases. It will also cause the risk of cross,cloud compatibility as found in the
case of 7The .ink*p7 which has to shut down in 899: because of losing access to
;<= of customer data. There is also a risk of sole dependence on one service
provider. Cloud computing also lacks strength when it comes to e2ercising control as
there is no provision of auditing the operations of the service provider. This risk
further increases if the cloud service provider lacks a strong system of internal
control. There is a lack of clarity as to what security measures are used by service
/any companies have shifted to cloud technology like Intercontinental >otels
?roup, &ehabcare ?roup, )et1i2, @ero2, -interest, etc. Intercontinental >otels group
is planning to move its key systems like room reservations software over the cloud.
It had initially used a hybrid cloud by blending its own in house data center with
that of a public cloud from providers like %ma0on. It further uses
C&/. It further conduct its software testing and development fucntions on %ma0on
cloud infrastructure. It also runs websites and call centre fucntions via vendor's data
centers and cloud resources. The group is building its own private cloud called
Camelot using 'ucalyptus !ystems software and (/ware. &ehabcare ?roup is also
using hosted services over the cloud. &ehabcare group has a distributed workforce
over ;8 states and used cloud technology to capture details of treatment and
necessary reports accross the globe. @ero2 used cloud to porvide its cloud print
solution and o3er its own cloud service to small and medium businesses.
#or the insurance industry, the cloud computing technology can be used for better
analytics, better data management and better customer service. The use of cloud
technology will increase operational e5ciency primarily in the areas of %ccounts 6
%gency /anagement, *nderwriting 6 -olicy /anagement, Claims /anagement and
.ead and "ppurtuinity /anagement. In .ead 6 "ppurtuinity /anagement, the cloud
technology will help in the areas of campaigning, forecasting, team selling, cross,
selling and submission management. Cloud will more e5ciently manage targeted
customers and can e5ciently turn leads into customers. In the 4eld of Claims
/anagement, Cloud Technology has the potential to automate the process of
ad+usting claims, claims vendor management, analysis and servicing of claims , and
can provide with adequate litigation and settlement support. This will automate
claims scoring as well as #irst )otice of .oss to identify potential leakages so that
the organisation can more e5ciently concentrate on high value and high risk
claims. The cloud solutions will further help in estimation of claims, ad+ustment of
claims, repair settlement, investigation and management of frauds, management of
partner performance. I
#or the purpose of building a cloud infrastructure, the 4rst requirement is a
heterogenous systems support compatible with latest hardware and software
resources, virtualisation solutions as well as equipped with data centre's
infrastructure. #or small organisations commodity and open source solutions are
enough but for large enterprises proprietary systems is also required to built in the
cloud. !ervice management is the second need for the cloud that can de4ne and
meter the service o3erings including resource guarentees, billing cycles, metering
rules and resource management. #urther the cloud must be workload and resource
aware as it needs to make the components and functionalities of a data centre
virtualised. To satisfy the service level agreements and to be truly elastic and
provide on demand resources, policies for workload and data management should
be framed. The cloud should be able to operate while maintaining data intact in the
virtual data centres inspite of failure of one or more components so that it can be
fully reliable and should also be available 8;AB. !ecurity must be provided in this
shared pool of resources so that only authorised users can gain access. The cloud
also needs to be integrated with the traditional data center management tools as it
cannot replace them. The cloud needs to integrate "pen %pplications -rogramming
Interfaces C%-IsD with e2isting "peration, %dministration, /aintainence and
-rovisioning systems C"%/6-D. The cloud should also be compatible with strong
visibility and reporting mechanisms. The data center operations within the cloud
shoul also have real time visibility. The cloud should also incorporate self,service
portals as well as deployment models. To enable transparent scaling of
applications , transparent load balancing and applications delivery will be needed.
The cloud should be able to scale up data centres as well as applications delivery
solutions. #urther the applications delivery solution should be equipped with
intelligent monitoring capabilities. It should be able to understand what services are
o3ered form the cloud, what are the aplications available at the cloud, when a
network is adversely a3ecting the performance of an application, and when a
particular server is overwhelmed.
%lthough the cloud has its own advantages and risks associated, the primary
concern for the indurance company is the issue of data security. #or this the
insurance company must start to use cloud applications with less sensitive data in
terms of privacy and then understand the cloud's full potential and associated
hindrances move to sensitive data. It is vital for the organisation to fully understand
its IT infrastructure as well as applications portfolio to 4rst of all identify what to be
sent to the cloud and what should be kept inhouse. Cloud monitoring settings
should be well de4ned, compliance standards and cloud policies should be set for
dealing with the business needs and proper oversight should be kept on security
and reliability of the cloud solutions. The cloud should incorporte an in,built incident
management system for comple2 and threatened operational issues. The
con4guration management capabilities must be optimised for the cloud