Selecting between SaaS, PaaS, IaaS, or some hybrid of these approaches to IT is critical for insurers looking to differentiate themselves and minimize overhead.
In the age of cloud computing, insurance carriers have a plethora of software and hardware solutions to choose from that facilitate back-office functions and interactions between agents and policyholders. That’s the good news. The bad news is that selecting the right model from that huge variety for the ideal configuration for meeting your unique and complex requirements is anything but simple.
How insurance carriers structure the infrastructure that supports their online services helps them differentiate themselves from one another, making this wide range of possible IT configurations an advantage. But then again, the industry is highly regulated, meaning that new or unorthodox structuring of services is going to come with potentially cumbersome regulatory concerns. It’s for this reason that many insurers choose to rely entirely on either software as a service (SaaS) or platform as a service (PaaS) for their IT needs.
But while it may require some ingenuity, there are a lot of exciting advantages to be gained by some combination of these approaches to service delivery. In the end, insurers may opt for a hybrid solution.
SaaS, PaaS, and IaaS
Probably the most well-known of cloud computing options are SaaS software packages. These ready-to-go, quickly deployed applications migrate operations such as CRM (customer relationship management), ERP (enterprise resource planning), and other services to the cloud. Many companies in all industries use SaaS, especially for what are standardized functions.
For the insurance industry, SaaS presents some drawbacks, as Maan Thakur, VP of architecture at VUE Software, details in PropertyCasualty360. Since SaaS is basically a communal application shared by all users, each is forced to adopt any and all changes made to the software — whether they want those changes or not. And if one insurer initiates revisions, he or she could forfeit a proprietary asset as other insurers gain access to it.
Insurers also require heightened security that protects customer data, something that is notoriously more difficult on the cloud than it is on physical servers. Further, a shared server may not hold the tremendous volume of data that all insurers accumulate.
Those insurers not interested in SaaS may be more disposed towards an IaaS (infrastructure as a service) program. In this model, insurers link with a virtual (or physical) server for file storage while receiving basic computer services such as firewalls and virtual LANS (Dropbox is a prime example). IaaS allows insurers to control the cloud environment without having to maintain any equipment. But the company must install or develop the software applications, which takes training and time.
Straddling SaaS and IaaS is Platform as a Service, or PaaS. As CEO of Vaughan-Nichols & Associates Steven Vaughan-Nichols explains in a blog on Hewlett Packard Enterprise, a PaaS layers a software development capacity to the IaaS. Therefore, users can transfer in-house applications to the cloud. Though a PaaS, insurers can set up their own applications, while another entity is responsible for the deployment platform.
SPaaS: The Hybrid Solution
Thakur argues for another solution more suited for the insurance industry — SPaaS. Essentially, a SPaaS offers an insurer the ability to offload the cloud hardware platform while maintaining control over it, as well as enabling it to maintain and upgrade its software applications (away from the prying eyes of other users).
SPaaS, in Thakur’s view, combines the best features of SaaS and PaaS. “It would be more secure and walled than conventional SaaS systems, but would provide the proprietary advantage carriers covet, yet take the burden of maintaining the environment off the carrier,” he writes.
A hybrid like SPaaS furnishes the insurance industry with a tech network that shields proprietary data and allows for SaaS customization, without the need to oversee the infrastructure. SPaaS might just be the software solution carriers need now. Regardless, the question of how to approach the delivery of online services deserves deliberate, critical thinking on every insurer’s part before making a decision.