There's no shortage of talk about cloud computing, to the point where the hype is deafening. But there are two areas where insurance companies are seeing benefit from going the cloud route.

Ed Laczynski, CTO of Ltech, is in the business of helping companies transition to the cloud, and recently explained to me where insurance company clients are gaining their most traction in cloud: in messaging and collaboration, and infrastructure. Interesting to note: Even the largest insurers are turning to the two cloud behemoths, Google and Amazon Web services, for new capabilities in these areas.

“On the messaging side, large insurance firms we are working with are adopting platforms like Google Apps, which provide a very competitive price point, and little to no on-premise IT management requirements,” Laczynski says. “The platform enables mobile access, live collaboration, and archiving and compliance.”

On the cloud infrastructure side, Laczynski continues, “We've seen our insurance customers look toward Amazon Web Services for processor and resource intensive applications, like rating engines and overnight claims processing.”

Many insurance jobs that see spikes in workloads, such as claims processing, can be scaled out using cloud resources, Laczynski says.

“The Amazon Web Services platform allows insurance companies to forklift most applications, and enable them for scalable cloud deployment,” he says. “For example, in a claims processing scenario, instead of supplying real estate, electricity, cooling, network, storage and computing power for a large farm of servers that do intensive processing once or twice a day, insurance IT can spin up hundreds or thousands of servers for a few hours to complete a job, and spin down when not necessary.”

What about data security and privacy concerns, which are particularly sensitive areas for the insurance industry? Laczynski says he sees a lot of virtual private cloud implementations, combined with “best practices like encryption and key management” to lower the risks.

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