The on-demand capabilities of cloud computing make it acompelling alternative for insurers looking to reduce costs aroundboth applications and infrastructure. Yet concerns about security,stability, control, and other risks have caused the insuranceindustry to be relatively slow adopters of cloud technologies.

Three breakout sessions today will explore the benefits insurerscan derive, examine how to mitigate risks, and attempt to separatehype from reality around cloud computing.

According to Bob Hirsch, one of the challenges of any discussionis agreeing on what the term “cloud” actually means.

“The issue is there’s a lot of marketing hype,” says Hirsch,director at Deloitte Consulting. “Just about every company thatsells software has defined cloud to meet their marketingobjectives.”

Hirsch’s session, “Cloud Computing for Insurers: Time to GetYour Head in the Clouds,” aims to clear up the confusion. It alsoplans to detail the benefits insurers can derive from thetechnology.

“Cloud is helping insurance companies achieve objectives aroundflexibility, speed, and cost,” Hirsch says. “One of the key reasonscloud is getting so much excitement in the insurance space is thatit is an enabler of so many other technologies insurers areexploring, such as social networking and mobile computing. It’s allinterrelated.”

Hirsch will illustrate the benefits of cloud with a case studyfrom the insurance industry. That study will examine the strengthsand weaknesses of cloud, with the objective of helping attendeesdetermine how to utilize the technology successfully in their ownorganizations.

“There are challenges around privacy and security that can makeIT very skeptical of cloud, whereas the business side tends to bemuch more open to it,” Hirsch says. “In fact, perhaps the biggerissue is that the cost of entry is so low and deploying cloudsolutions is so easy that it can result in ‘shadow IT’ deploymentsacross the organization that is hard to manage.”

Hirsch also stresses that cloud is not an “all or nothing”proposition. “Cloud can augment components of technology that arealready in place internally in IT organizations,” he says.

“To me, it’s not a choice of ‘yes or no,’ it’s a decision of towhat extent cloud should be utilized,” Hirsch adds. “If insurersare looking for new solutions to address business problems, cloudshould definitely be an option.”

Enterprise Cloud Computing

One insurer that is a strong proponent of cloud computing isPennsylvania’s Harleysville Insurance. Harleysville CTO Steve Byrnewill reveal how his company has leveraged the technology across thecompany in today’s session, “Check in and Take off: Cloud Computingand the Enterprise.”

Byrne reports that Harleysville uses cloud computing on both theplatform and application levels. On the platform level,Harleysville has completely outsourced its mainframe, freeing thecompany’s IT staff from the capital expense of having to maintainand upgrade hardware.

Additionally, the cost model of a platform cloud means theinsurer is only paying for the capacity it uses. “We no longer haveto purchase excess capacity just to be sure we have the resourcesnecessary to build, test, and operate applications,” Byrne says.“We’ve been able to reduce support needs around people, softwareand other mainframe infrastructure components because they are nolonger housed in our data center.”

Harleysville also makes extensive use ofcloud-based software-as-a-service (SaaS), particularly in non-coreareas. Byrne will explain how using SaaS in areas such as HR,expense management, and credit card processing has helped theinsurer reduce expenses while eliminating the need to support andupgrade software. “Insurers should seriously consider SaaSfor utility-type applications,” he says.

Lastly, Byrne also will detail how Harleysville is building a“private cloud” within the enterprise. “Currently, we’vevirtualized more than 60 percent of our data center,” he says. “Ournext phase of development will be to diversify our assets acrossother data centers, using the private cloud to co-locate thoseassets.”

Audience members will learn from Byrne’s view of both near- andlonger-term opportunities of cloud computing, his first-handexperience, how Harleysville views key areas of cloud, includingrisks and mitigations.

Content in the Cloud

The cloud is ideally suited for storing and sharing content witha widely distributed user base. Serving that user base was anobjective targeted by Global Aerospace, the world’s largestaviation insurer.

With worldwide operations, the insurer had faced an acuteproblem when trying to share information and collaborate on contentacross distributed offices. “While using email was fine for simpleinteractions, we were essentially breaking the workflow to movedocuments from one user to another. We had no good way to managecontent centrally,” says Tom Assenza, senior vice president and ITservices manager, Global Aerospace.

Globally distributed content posed particular challenges for theinsurer’s claims operation. “Information we thought was onlycontained in the U.S. was actually replicated in other officesworldwide,” Assenza explains. “We couldn’t easily maintain versioncontrol or establish an audit trail when moving documents viaemail.”

How Global Aerospace solved that challenge is the focus ofAssenza’s session, “Using the Cloud for Worldwide Workflow &Content Management.” Starting with the claims process, the insurerdeployed Hyland Software’s OnBase enterprise content management(ECM) solution. The deployment connects content distributed in twomain repositories—one in London and one in New Jersey—that areaccessible to users across the globe in real-time.

Since OnBase is integrated with the insurer’s claimsadministration platform, users have a complete view into customers’claims from a single platform. The insurer has achieved objectivesaround collaboration, content access, and version control.

“Today, a claims manager in Paris and one in Chicago can viewand collaborate on the same claim file in real-time,” Assenzasays.

The company has also enhanced its ability to investigate andanalyze loss, leading to better claims outcomes. As a result,interest in the platform has grown, with Global Aerospacecontinuing to deploy the OnBase system to other processes. Assenzawill detail these and other benefits in today’s session.