Praised by the companies, cloud computing has been growing fast and is confirmed to be a new way to conceive information technology. Cloud computing has been adopted quite spontaneously by SMEs for its clear benefits (simple access, on-request developments etc...) and it is widely implemented in large organisations. This interest for cloud computing is not recent. Risk managers and insurers have taken advantage of cloud computing for over ten years that is to say largely before the invention of the term itself.
By Pascal Stopnicki, managing director at Effisoft
To briefly explain the concept of cloud computing, let's remind ourselves that it is the delivery on remote servers or on the user's machine, of computer processing traditionally hosted on local servers.
In the business world, this solution represents multiple advantages such as access to online services without needing to manage the related infrastructure which often represents a complex problem.
The web browser, or any other standard way becomes the gateway to the service. This is possible if an appropriate bandwidth is provided to ensure the fluidity of the system thereby significantly reducing the user's constraints.
Traditionally, the main five features are :
> Pooling of resources in order to reduce costs
> Free access to resources (provider’s intervention not required)
> Adaptability of the service (customisable according to needs)
> Universal access to resources via the network
> Pay-per-use invoicing (service is measurable)
Cloud computing's expansion is explained by a significant evolution of IT systems and their integration into companies in order to meet customers new requirements, especially their need for continuity and quality of services.
Some features are provided hereafter:
According to IDC, cloud computing services' global market represents approximately 5% of worldwide TIC's investments, which equates to 17 billion dollars. This percentage could double by 2013 (annual growth of 25%) which would represent 44 billion dollars.
All companies are thus concerned by cloud computing which finds a wide application in risk management and insurance. The management of risk and insurance, in fact, is largely facilitated by using software as a service.
On the one hand, risk managers need a system which is accessible 24/7/365 and easy to install on multiple sites around the world, in order for subsidiaries to share sensitive data at the group level, notably exposures and incident reporting for example.
On the other hand, the group should inform its subsidiaries and share with them some elements such as local claims, loss prevention recommendations etc... This means that a large number of users all around the world can access the software at any time, even at the same time.
Moreover, risk managers need real-time accurate data relating to the company's exposure to risk, to the reliance on the insurer, suppliers, claim payments etc. Such indicators, as well as other central analysis can be obtained only via a centralised database fed by all risk and insurance stakeholders.
Finally, risk and insurance management needs the intervention of different parties, such as brokers, insurers, experts and management, who might need access to data relevant to them. Local software implementation with compatibility and stability problems connected to each company doesn't seem the optimal solution.
This corresponds precisely to the cloud computing description which allows strategic applications to be put into production simplifying integration and setting problems. IT responds to business' needs and represents a key element of the process.
As to security, it is important to emphasise that cloud computing is not an obstacle to risk mangers working on strategic data. On the contrary, current technologies ensure platform availability and a perfect integrity of exchanged data.
Access to data and backups are better secured by a host for whom it is core business. Let's not forget that cloud computing is not irreversible. It is always possible to return to a traditional architecture. However I have yet to see this happen; users who try the Cloud, adopt it.