More and more industries are relying on the cloud for data storage and optimization. And despite everyone being aware that the cloud exists, many don’t really understand what the cloud means.  And that’s okay!

The cloud refers to the transfer of data and services from a computer to the internet versus how data was previously commonly stored (on a computer's hard drive).

Below is an image of an in-house data center in which a company's data is stored locally on their own hardware and systems. Data centers can become extremely complicated and expensive to maintain. Cloud servers provide more accessible and easy-to-use services that allow companies to save costs and adapt to flexible and innovative technologies. 

Technician walking in hallway of server room


Transferring data to the internet may sound unsettling but advanced technologies have made it so that storing critical information in the cloud proves to be safer and easier than relying on outdated computers and software. 

By utilizing cloud computing, companies are able to save 15 to 20 percent on their computing through cloud services. By saving money and utilizing modern technology, companies can invest in long-term business strategies and incorporate innovation into their operations. 

Why the cloud?

While storing data in the cloud is not a new phenomenon, the insurance and financial services industries have been more wary of transferring personal data to these “unknown” entities. 

Some believe that storing data in the cloud leads to unprotected information and cyberattacks. In reality, cloud servers have built-in security mechanisms that protect critical data and only allow authorized personnel to obtain it. 

Over time, migrating data to the cloud from mainframe systems will reduce IT costs, improve system efficiency and effectiveness, and protect these companies from security breaches. 


Insurance and the Cloud

In a highly regulated and competitive environment, insurance companies are increasingly trusting the cloud more as it is proving to be an effective asset in solving industry-specific issues and addressing consumer needs. 

In 2014, The Hartford, a prominent insurance company in Connecticut, signed a 6 year deal with IBM for cloud computing services. They opted for a private cloud infrastructure that will help them reduce costs, provide more user-friendly services, and bring products to market faster and more efficiently. The company’s focus is to be more accessible to customers and agents while realizing the benefits of modernizing their business practices for greater agility, flexibility, and transparency. 

Competitive markets are enticing insurance companies to upload their data to the cloud and move away from antiquated systems that utilize custom code and are vulnerable to system failures. 

Competition is heavily based on the user-friendliness of products and modern technological features. Consumers want quick and efficient systems that they can use and trust and utilizing cloud services can attract more clients and keep them satisfied.

Investing in updated IT systems and cloud computing will allow for more growth, attract new customers, inspire innovation and collaboration, and reduce the costs of maintaining older infrastructure.

Switching to cloud infrastructure will…  

  • Safely protect sensitive data and documents
      • A good place to start would be utilizing the cloud in an area that is not overly intrusive and can provide real value such as leveraging a private cloud for infrastructure: infrastructure-as-a-service, or IaaS.
  • Create a customer-focused enterprise
      • The cloud provides for innovative and strategic solutions for modernizing systems and making sure that these systems are user-friendly and 21st century certified.
  • Reduce costs and maintenance problems
      • Updating to the cloud will reduce maintenance costs associated with fixing older systems and allow companies to invest their savings into other areas.
  • Increase flexibility and streamlines operations
    • With several vendors and software options to choose from, insurance companies can choose what suits their needs and issue areas with the help and expertise from IT experts.



User-friendliness and Innovation 

By updating their software and transferring data to the cloud, the insurance industry can continuously update and modernize their systems while delivering user-friendly capabilities to their customers. 

The cloud also allows for innovation in delivery of services and efficiency in acquiring important data. 

The cloud reduces IT costs because storage is optimized and most providers have built-in security precautions that protect against any sign of a data breach. 

Research also shows that more than 70% of insurers utilize cloud computing because such services have become mainstream and have continued to demonstrate success in data speed, flexibility, and storage capacity. 

In an ever-modernizing world, insurance companies have to make changes that will benefit both their business and their customers.

Change can be scary but updating information to the cloud does not have to be.

The cloud provides a platform for commercial industries to improve their methods of operation and performance by modernizing their systems and modes of work. With a plethora of options available and room for innovation, the cloud can update a business to the 21st century and beyond. Don't forget to do a through analysis on the different cloud systems out there!


To learn more about cloud services and systems modernization in the insurance industry, visit for case studies, white papers and more blogs about the commercial services that RG provides. 

Join the Conversation

If you have any questions or feedback please fill out the comments below.