Caution Is a Lifestyle Choice for Insurers

It's been said many times but it bears repeating: Insurance carriers often are late to the party when it comes to adopting new technology. Yet another example of the industry's  propensity toward patience can be seen with cloud computing.

Blue Cod Technology's Simon Walker analyzed the cloud issue in a blog post on the sramanamitra.com Web site. He writes:

“There is no doubt that the cloud can deliver value to the insurance sector, so why is adoption so slow? Certainly there are fantastic emerging offerings in the insurance space and traditional players that are migrating to SaaS and cloud-based offerings. However, the vast majority of technology consumed in the insurance market leans toward more traditional stock. With industry influencers focusing so much on the emergence of cloud computing and SaaS over the past five years, it is difficult to understand why the insurance market is still hesitant to adopt.”

Walker places part of the blame on the vendor community and also makes a good point about the way insurers are buying technology these days. In the past decade, business leaders have increasingly taken part in technology purchases and that has led to refocusing IT shops into architecture, support, and procurement organizations.

Deb Smallwood, founder of Strategy Meets Action, lists cloud/SaaS maturation as one of the five next-generation technology trends in a SMA Research brief. She writes

“A willingness to investigate new approaches is mandatory for insurers that want to keep up with the demands of customers and agents and the need for innovative new product and service offerings.”

In the past there weren't enough of those types of insurers operating to turn some of the newer technology into competitive differentiators, but that has begun to change. It only takes a few radical thinkers to turn a slow-to-react field like insurance into a place where new tools have become a necessity.

Insurance hasn't quite reached that point yet, but it seems the industry is moving in that direction. Do you see it that way or are you among those who view tools like the cloud as fads?