Three Trends in Cloud Computing Affecting Insurance Agencies
The shift from premise-based to cloud-based technology is well underway. In fact, it’s likely that your agency already has adopted cloud solutions in one form or another. Here are three trends in cloud computing that are affecting agencies and some thoughts on how your agency should respond to each.
Many agencies already have their agency management system in the cloud, since the three systems with the greatest market share (Vertafore’s AMS360 and Applied’s EPIC and TAM) all have had hosted versions for several years. Hosted agency management permits providers to streamline product support and simplify the enhancement and patch processes.
For those of you considering a move from a premise-based agency management system to a hosted agency management system, there are a few factors to weigh. If you are considering AMS360 your options are simplified as Vertafore only offers AMS360 as a hosted application. For those considering EPIC, you have a choice between premise based or Applied’s hosted environment. We usually recommend having Applied host EPIC.
Exceptions to this rule exist for some very large agencies or agencies that already have a significant investment in recent server hardware and software capable of running EPIC. For agencies running TAM in a local environment, we generally recommend staying local until and unless you migrate to a different agency management system.
There is one caution when evaluating a move of your agency management system to the cloud: make sure you understand the full cost of the move. We frequently see agencies overestimate the savings. No doubt, less investment will be necessary for server hardware and support when moving your agency management to the cloud. But agencies often falsely assume that their Microsoft Office costs and local user support needs will go away, only to find out differently after committing to the migration.
Of the approximately ninety insurance agencies that we serve, 25% currently use Office 365. This trend is expected to expand rapidly due to the economic and functional advantages of Office 365 subscriptions. Our estimates indicate that over half of our agency clients will have Office 365 by the end of 2018.
Office 365 provides significant benefits including version upgrades at no additional charge and accessibility to your Microsoft Office apps including Word, Excel, and Outlook from any device wherever you have a web connection. Some versions of Office 365 integrate features that greatly enhance collaboration such as Skype for video conferencing, Sharepoint for document management, and the new Microsoft Teams application, a chat-based workspace for businesses.
Before you replace an Exchange Server with new hardware or make a big investment in a new version of Microsoft Office, check out the benefits of Office 365. It’s likely the best choice for your ongoing email and Office needs.
If you still have agency management, email, or other important files stored locally, then cloud-based data backup should be very important to you. Many of you will remember the days when backing up data offsite meant popping a tape out of a drive and taking it home. Nowadays that process is automated by systems that encrypt and securely send your backup data to a cloud-based repository through your Internet connection. As insurance professionals, you, of all people, know that disasters can and do happen. So, unless all your critical data already resides in the cloud or, God forbid, you still have that old tape drive, you should have a strategy that backs up data offsite.
Even if your data is already offsite, you need to make sure it is being backed up to a different location. The cloud has actually complicated backup requirements because it is common now for agency data to be dispersed to different sites for your agency management system, email, and critical files. Make sure you thoroughly quiz your IT service provider to ensure the security of ALL your critical data regardless of where it resides.
Agencies who have moved agency management and email to the cloud are well on the way to being “fully in the cloud”. But there are still other “local” considerations. File storage, user access/security, and management of printers/scanners still need to be addressed. Cloud solutions are in varying degrees of maturity to address these needs, as well. Now, more than ever, it is important to lean on expert advice. The situation reminds me of a funny Dilbert cartoon:
Pointy-haired boss tells Dilbert he has good news – they just won a huge bid to build a wireless network. Dilbert explains that they don’t know how to build a wireless network. Not to be dissuaded, pointy-haired boss asks rhetorically, “How hard could it be to not install wires?”
Similarly, some agencies assume that the absence of back office infrastructure they can see and feel greatly simplifies their needs. You may not be able to touch your servers when your stuff is in the ether, but it still exists and needs support.