Insurance in the Cloud

Today anything from oil supertankers to every inch of Diego Maradona’s world cup soccer winning legs can be insured. There is a vast array of Insurance types such as Medical, Property, Casualty, Auto, Business, Life, Pension and Annuities etc. The intricacies of the various facets of the industry are many and the processes span quoting, pricing, ratings, underwriting, endorsing, claims and so forth. And, there are various providers and players across the Insurance value chain.

With all of this complexity, it wouldn’t seem that the Insurance industry is a good candidate for cloud computing—an architectural paradigm that relies first and foremost on the standardization of processes that can be offered as services and hosted by an external provider.

But, I believe just that. In fact, I foresee a time in the not-too-distant future wherein the Insurance industry will witness its parallel to what Salesforce.com provides for general CRM functions today. And here’s why.

Two Categories of Insurances Processes
Insurance--regardless of what is being insured—can be broadly classified into two sets of processes.

1. Front End Processes: comprised mainly of the processes involved in the quoting, pricing and selling of insurance policies

2. Back End Processes: involved in the fulfillment of insurance claims.

In this article we will focus primarily on the Front End Processes. Though the various types of insurance products differ greatly in their function and applicability, these front end processes through which they can be managed are quite streamlined and identical. Let’s take a closer look.

At a high level, Front End processing involves the following standard steps:

- Submission of Application (Insurance Type – Medical, Auto, Property etc.)
- Rating
- Underwriting
- Quoting
- Binding
- Endorsement and Issuance.