For close to a decade, the “cloud” has been a hot topic among insurers — that is, the use of a remote server network, hosted on the Internet, to store, manage and process data. Carriers have long been tempted by the opportunity to decrease their data center footprint, to save money and to boost flexibility, scalability, portability and mobility. And multiple sales channels and processing operations have created heavy IT demands, for which cloud computing offers a natural support.

However, while the cloud computing market continues to grow quickly — according to Gartner, by 2016 cloud computing will become the bulk of new IT spend — the insurance industry has hardly rushed over the past few years to join the crowd in the cloud. Concerns about security risks, arising from shared technology vulnerabilities, account hijacks or data breaches, have remained top-of-mind and slowed adoption of public cloud computing options, which use storage capacity and processor power that is not owned by the business itself, but by the primary vendor or by a cloud infrastructure vendor. No insurance company wants important personal data on thousands of clients compromised outside the company’s firewall.

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