The insurance industry has always been concerned about data security, so insurance companies have historically maintained their databases on-site, where only authorized employees have access to the information. With the continued explosion in data and the advent of cloud computing, insurance companies are having difficulty storing, processing, and securing the massive amount of data that is now being produced. The cloud is a more extensible, versatile, and cost-effective data management platform, but secure data integration remains an ongoing challenge.
According to Aite Novarica, 90% of insurance companies use cloud resources, up from 70% in 2018. Insurers also indicate they intend to expand cloud usage for policy administration, rating, underwriting, claims, billing, and investments.
Managing secure data access is part of the migration to the cloud, and insurance companies are working with developers on integrating these cloud applications to ensure that data can be safely and securely shared between these applications.. Data is often stored in different repositories; therefore, it must be secured and encrypted before being shared. The issue is that data usually isn’t processed in one location, so developers need to secure the data manually at an application level. To further complicate things, information must be tracked and secured, which means applying multi-layer encryptions to protect data accessed from legacy systems.
Insurance companies are assessing new integration strategies to consolidate data access points and protect customer data.
The Need for Cloud Integration
Consumers are used to the functionality, reliability, and immediacy that cloud services offer. To remain competitive, insurance companies need to provide the same type of positive cloud computing experience, which means integrating data sources.
Using hosted computing resources also means that IT managers don’t have the same control over data resources. However, insurance companies must comply with data protection and privacy legislation such as GDPR and SOC2. Regulatory compliance dictates how data is collected, shared, managed, and secured, including how data is administered in the cloud.
Regulators assess how well companies safeguard personal data and how well the controls are executed. Even the tech giants such as Google, Amazon, and Meta have all paid massive fines for not disclosing how they were using customer information. When modernizing and integrating computer systems, there is a risk of failure to comply with security regulations, resulting in penalties.
More software-as-a-service (SaaS) providers are entering the market offering services that consolidate data from multiple sources into a central location. However, many of these solutions are often inflexible, making it difficult to keep up with the growing complexity of emerging security requirements. Finding the right provider to integrate a company’s cloud applications and secure insurance data can be challenging.
Demonstrating that customer data is secure and accessible is an essential consideration for customers and partners. The lack of data security will also make brokers and business partners hesitate before working with insurers.
Securing Insurance System Modernization
More insurance companies are seeking to update their computing infrastructure and have begun adopting a Hybrid Data Integration platform (HIP) as part of their cloud strategy. The right HIP solution reduces risk by automating compliance measures while simplifying data integration. A good HIP approach will connect siloed data systems and integrate new data stores with legacy systems while maintaining security protocols.
Hybrid Integration Platforms use fully encrypted channels for security to ensure SOC2 compliance. This makes it easier to upgrade computing systems to incorporate cloud data without the need for additional encryption and security protocols. A HIP has the ability to access client data behind a company’s existing firewalls, bypassing the need to move data to a server before it is transferred to a modern cloud application. This adds even more security since aserver is a security weak point.
Adopting a hybrid cloud data integration model should simplify data delivery. The goal is to get the right data, to the right person, at the right time. If it requires three or four steps to move data between business applications, it reduces the value of modernization and increases the risk of a data breach. Cloud resources will continue to power innovation in the insurance industry, and insurers who can effectively use cloud and legacy resources will be a step ahead of their competition. As companies continue to add new web capabilities, implementing data privacy and security at every point will be essential. Partnering with a Nimble, Simple, and Powerful data integration provider will make the task easier.
Guest Author: Jamie Peers, VP of Business Development and Alliances, Synatic
Jamie Peers is the Vice President of Business Development and Alliances for Synatic, overseeing strategic partnerships, business growth, and GTM strategies.