The IT systems at insurance companies around the globe are seeing a sea change and CIOs at those firms reportedly have warmed to the idea of deploying externally hosted solutions such as cloud computing, software as a service (SaaS) and platform as a service (PaaS).

Clark Troy, research director at Aite Group, recently explained to Information Week that third-party vendors of cloud services have been steadily working their way into the sector.

"Vendors of SaaS online applications, new business and underwriting, and claims solutions continue to tack up wins," he said. "Just not in the same volumes one sees in other industries."

Insurance companies have been continuing on a slower path towards the cloud, but, according to Rick Roy, CIO of CUNA Mutual Group, cloud applications are still being put to work in their systems.

"We are hearing more about how insurers are adopting SaaS solutions outside their core systems of policy admin, claims, and financials," he said.

However, "security for non-public, private information remains a huge concern for insurers, as it is a business issue that spans beyond just a technology issue," Roy said, adding that insurance IT managers have kept a watchful eye on recent outages.

Troy agreed that there's been some hesitation about using cloud solutions on the part of insurance companies due to concerns about privacy and security.

"Recent headlines about major data breaches have by no means allayed insurers' anxieties around client data confidentiality," he said.

However, insurers continue to be drawn towards the cloud, as the computing systems on offer are more efficient than legacy systems.

Written by Jason Morton

Insurance companies embrace cloud services