In a cloud computing environment, there is a huge shift in workload from the view point of organisational computers.

They don't have to run the

applications rather the computer network making up the cloud provides it to them. The only requirement is that the user's computer should be
compatible with running the interface software of cloud computing system. The cloud computing technology brings a big oppurtuinity for the
insurance sector. Basically the cloud computing provides three types of services as: It further uses salesforce.com !". It further conduct its
software testing and development fucntions on #ma$on cloud infrastructure. It also runs websites and call centre fucntions via vendor's data
centers and cloud resources. The group is building its onw private cloud called amelot using %ucalyptus &ystems software and '"ware.
!ehabcare (roup is also using hosted services over the cloud. !ehabcare group has a distributed workforce over )* states and used cloud
technology to capture details of treatment and necessary reports accross the globe. +ero, used cloud to porvide its cloud print solution and
offer its own cloud service to small and medium businesses.
loud computing is a form of computing that involves sharing resources over the internet and delivering hosted services over the internet rather
than using personal devices.
-.#T/0!" #& # &%!'I%: It include the set of tools required to develop own cloud applications for the user. This will allow
insurance companies to build there own clod applications and cloud softwares and integrate it with their own internal software such
as premium processing softwares.
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The biggest risk associated with cloud is the lack of control relating to security operations in respect of the resources used for
internal purposes on the cloud. This leads to an operational gap between cloud infrastructure and organisations internal activities.
5nlike previous models of on6premise application deployment where data is stored internally and is sub7ected to organisations
internal policies of data security and management, the cloud technology the data is stored e,ternally causing huge risk of data
privacy. The potential threats in security systems of the service provider relating to cryptographic keys management and on the fly
solution may also lead to unauthorised access to data. This may also increse the risk of system vulnerability by employees.
loud technology is also sub7ect to various legal and regulatory risks, especially in case wher the service provider e,tends to
different countries with different data privacy laws and compliances.
There is also an agreement or contract risk inherent in using the cloud technology in respect of liability of damages and its
apportionment and also entity responsible for service in case if service is availd from a group of service providers.
There is also a risk of security breach by the cloud service provider. The cloud service provider may also follow poor security
practices causing data integrity into risk. There is also a risk of network breach between organisation's internal network and cloud
service providers.
/urther there are also risks associated with secure data transfer via the internet, software interfaces being secured, secure access
of data and user access control.
I8/!#&T!5T5!% #& # &%!'I%: This provides the hardware resources to be built, accessed and stored on the cloud system.
This involves storing information 7ust as in large data centres and access when required. This will reduce the risk of system failure
and would porvide an automatic back6up of data in the cloud.
&o, the cloud service providers should find some way to educate the users as to how they mitigate such risks and there should also be
arrangements for internal security tools e,tending to the cloud.
The Interontinental 4otel (roup has initially used a hybrid cloud by blending its own in house data center with that of a public cloud from
providers like #ma$on. The term cloud is used for the internet and so cloud computing is a type of internet based computing. loud computing
provides various services like servers, storage functions and various applications on the users application via the internet, otherwise for which
the user has to pay for them. Thus the cloud brings different internet and non6internet developments and technologies under one head for
being used by the user. loud computing will also help in reducing administrative workload by facilitating cheaper and easier integration of new
operations, collaborative partnership and acquisitions. This acts as an added advantage in case of e,pansion into new product and
geographical markets.
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loud computing is compatible with the current business priorities. In the insurance sector by combining the features of multi6tenant
architecture and virtuali$ation methodologies with pay6as6you6go model, it has created a fle,ible and cost6effective business model for the
insurance industry.
In the period of reducing premium and investment income and increasing competitiveness, to achieve profitability, cloud solution
may act as a paranoma. &hifting to cloud technology will permanently reduce IT ownership cost as a measure of cost reduction and
will also reduce operational cost by using pay6as6you6go methodology. &0/T3#!% #& # &%!'I%: The cloud provides using a
software over the internet rather than installing it on the computer. /urther this is independent of the user's operating system and the
only thing required is access to the internet. pricing of insurance and reinsurance and risk calculations in investment banking.

Thus it helps in incresing financial fle,ibility. "any companies have shifted to cloud technology like Intercontinental 4otels (roup,
!ehabcare (roup, 8etfli,, +ero,, -interest, #pple, #ma$on, etc. /urther, Intercontinental 4otels group is building a private cloud to
move its !" systems. It is using private cloud for applications testing and development. It is also planning to move its key systems
like room reservations software over the cloud.
loud solution will also act as an added advantage in areas requiring high information and computing power such as modelling and
loud computing provides unified customer and segment inormation and application of sophisticated analytics can help insurers to
provide fle,ibility and ability to ad7ust price with market changes.
The cloud helps organisation follow a customer6centric approach and provides customers with products and services that are most
suited and highly responsive to their needs. It helps the organisaton to tap the product adn service innovation based online and
mobile channels as a key of competitive differentiation.
The cloud provides an oppurtuinity to create innovative services. loud will also help insurance companies to team up with telecom
service providers, post offices and retail dealers to reach out to customers with whom the organisation has no e,isting relationship
and who may be difficult to reach. Thus the cloud also has the potential to provide insurers with alternative growth strategy like
providing wholesale insurance services outside their geographical boundaries without having a physical presence by acquiring some
established brand.
loud solution will also improve customer e,perience as customers can access and use their products and services anytime and
anywhere. This will help in attracting and retaining customers. /urther cloud provides *)9: access for the consumers to their
insurers.
By storing and integrating vast amount of customer based information on the cloud, the insurance companies are provided with an
oppurtuinity of sophiticated analysis. /urther, process cloud and collaboration cloud will provide an oppurtuinity to get e,pert
feedback and advices for customers. This further helps in driving Business Intelligence.
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Inspite of having a huge upside, the risks associated with it specially with respect of pulbic and hybrid clouds acts as a hinderance to the
adoption of cloud technology.
#s the data is stored e,ternally there is a privacy risk of unauthorised access attached with sensitive data stored on the cloud as many
unauthorised persons as well as employees of the organisation can access to confidential data not meant for them via the cloud as found
in case of %dward &nowden.
There are various regulatory an legal risks associated with the cloud solutions, especially in case where the service provider e,tends to
different countries with different data privacy laws and compliances. The accessing of data from a particular place or the location of data
itself may cause various regulatory risks apart from those arising out of protection of personal information of customers.
loud technology requires a unique schema for the storage of physical data of multiple clients on a physical device. The sharing of this
physical server will require the service provider to ensure that no data bleeding occurs accross servers.
There may also be difficulties in integration of organisation's information system and the information system of the service provider. This
in itself has the potential to create a security breach.
#n agreement or contract risk is also inherent in using the cloud technology, especially when the service is availed from a group of service
providers. This will cause problems in identifying the entity responsible for service. /urther the contractual commitments of service
provider on availability of service is also not fully reliable as the service provider cannot guarentee the speed promised or the availability
of network in many cases. (enerally such contracts lacks clarity regarding apportionment of liability in case of loss of data or termination
of contract and other penal provisions.
The cloud technology will also cause the risk of cross6cloud compatibility as found in the case of <The .ink5p< which has to shut down in
*==> because of losing access to );? of customer data.
# risk of loss of data integrity, problem of unavailibility of data or procesing of data are also potential risks which arises because of sole
dependence on one service provider or unavailibility of technical e,pertise required.
loud computing also lacks strength when it comes to e,ercising control as there is no provision of auditing the operations of the service
provider or obtaining a right to audit. This risks further increases if the cloud service provider lacks a strong system of internal control.
There is a lack of clarity as to what security measures are used by service providers.
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/or the insurance industry, the cloud computing technology can be used for better analytics, better data management and better customer
service. The use of cloud technology will increase operational efficiency primarily in the areas of #ccounts B #gency "anagement,
5nderwriting B -olicy "anagement, laims "anagement and .ead and 0ppurtuinity "anagement.
In .ead B 0ppurtuinity "anagement, the cloud technology will help in the areas of campaigning, targeting, forecasting, team
selling, cross6selling, lead management and submission management. loud will more efficiently manage targeted customers, segment and
engage prospects and can efficiently turn leads into customers. It can also efficiently guide cross sell and up sell and also guide efficiently
marketing collateral and sales collateral. In the field of laims "anagement, loud Technology has the potential to automate the process of
ad7usting claims, claims vendor management, analysis and servicing of claims , and can provide with adequate litigation and settlement
support. It will automate claims scoring as well as /irst 8otice of .oss to identify potential leakages so that the organisation can more efficiently
concentrate on high value and high risk claims. The cloud solutions will further directly help in estimation of claims, ad7ustment of claims, repair
settlement, management of litigations, investigation and management of frauds, management of partner performance. In 5nderwriting B -olicy
"anagement, use of the cloud will reduce underwriting overhead significantly and for quotes, this can provide faster turn6time. It can further
provide a seamless and transparent handoff from the line of sales to underwriting, will ease the quote to bind process making it more
transparent, ease renewal B e,6date tracking and thereby promote efficient servicing and policy administration. Thus it will automate low6risk
undertaking by improving quoting, rating and binding process and help the organisation to focus on high6touch services and products. Besides,
the cloud will support online enquiries , underwriters assessment and policy serving. The cloud technology will streamline the process of
agency planning, territory management as well as call report management, improve organisation's competitive profiling as well as household
profiling and better off the 8et -romoter &core.
The cloud will also enhance the operational efficiency of day to day functions as it will automate workflow handoffs, routing
of documents, claims report generation, policy documents generation. It will ease the identification of customers at risk of non renewal of
policies and will provide one6click reports for e,piring policies and other administrative matters. The cloud will also improve customer service by
integrating multiple channels and social media for providing customer service, real time collaboration, better knowledge management and
better escalation of consumer issues. By using cloud, a self service portal can be created for the customers so that service perception may
increase and detailed information can be provided on quote, underwriting status or submissions quickly when required by customer. The loud
will further make it easy to use contact routing function or computer telephony integration or voice response unit , service kiosks, universal
queue and online chat. .astly, the cloud can also support collaborations and analytics by sharing data and integrating business intelligence
and analytics with business processes. It can improve content develpoment and its sharing, improving knowledge management, automating
assignments to agents and managers, improving forecasting, campaign effectiveness and agency performances.
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loud computing requires to provide the business with access to hosted private as well as public resources on demand after ensuring speed,
security and availability. /or the purpose of building a cloud infrastructure, the first requirement is a heterogenous systems support compatible
with latest hardware and software resources, virtualisation solutions as well as equipped with data centre's infrastructure. /or small
organisations commodity and open source solutions are enough but for large enterprises proprietary systems is also required to built in the
cloud. &ervice management is the second need for the cloud that can define and meter the service offerings including resource guarentees,
billing cycles, metering rules and resource management. /urther the cloud must be workload and resource aware as it needs to make the
components and functionalities of a data centre virtualised. #lthough the cloud has its own advantages and risks associated, the primary
concern for the indurance company is the issue of data security. /or this the insurance company must start to use cloud applications with less
sensitive data in terms of privacy and then understand the cloud's full potential and associated hindrances move to sensitive data. It is vital for
the organisation to fully understand its IT infrastructure as well as applications portfolio to first of all identify what to be sent to the cloud and
what should be kept inhouse. lear policies and governance structures should be established for the cloud. loud computing should recieve
focussed thinking, appropriate planning and the required follow up. -roper standards on the cloud should be set for dealing with the business
needs and proper oversight should be kept on security and reliability of the cloud solutions. # cloud program office may be developed. /inancial
and technical resources should be provided as and when required. onstantly review the IT assets and applications.
loud monitoring settings should be well defined, compliance standards and cloud policies should be well
organised. The cloud solution should incorporte an in6built incident management system for comple, and threatened operational issues. The
configuration management capabilities must be optimised for the cloud encironment. The metering and chargeback features must also be
incorporated with the cloud system.
To satisfy the service level agreements and to be truly elastic and provide on demand resources, policies for workload and data management
should be created. The cloud should be able to operate while maintaining data intact in the virtual data centres inspite of failure of one or more
components so that it can be fully reliable and should also be available *)9:. &ecurity must be provided in this shared pool of resources so that
only authorised users can gain access. The cloud also needs to be integrated with the traditional data center management tools as it cannot
replace them. /or e,ample, in many data centers, carious tools are used for systems management, security, billing, etc . The cloud cannot
remove them and so it needs to integrate 0pen #pplications -rogramming Interfaces D#-IsE with e,isting 0peration, #dministration,
"aintainence and -rovisioning systems D0#"B-E. The cloud should be compatible with strong visibility and reporting mechanisms. The data
center operations within the cloud shoul also have real time visibility. The cloud should also incorporate self6service portals as well as
deployment models. The cloud should be able to make a transparent delivery of services irrespective of the physical implementation in the
cloud. To enable transparent scaling of applications on demand, transparent load balancing and applications delivery will be needed. The cloud
should be able to scale up data centres as well as applications delivery solutions. !eal time or on demand scaling can also be required for
using application infrastructure resources in best possible ways. /urther the applications delivery solution should be equipped with intelligent
monitoring capabilities. It should be able to understand what services are offered form the cloud, what are the aplications available at the cloud,
when a network is adversely affecting the performance of an application, and when a particular server is overwhelmed. &ecurity concerns
should be properly taken care of.
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