Benefits of Deploying a Hybrid Cloud

Hybrid cloud models smooth digital transitions because they can easily operate their existing on-premise infrastructure during the shift.

Several long-established industries are considered “legacy” — having little motivation to change and slow to adopt new, critical technologies. Large, stable industries that provide essential or compulsory goods and services--like insurance--often fit squarely within this realm. But in 2020, the COVID-19 pandemic forced business leaders in legacy verticals to quickly adapt their technological infrastructure to support the long-term remote workforce. 

In the insurance industry, organizations already considering digital transformation sped up their plans. Some started nearly from scratch. , Leaders focused on innovations in areas like personalization, IoT, process digitization and even artificial intelligence. However, one essential area that is still frequently overlooked is the adoption of hybrid cloud models. 

The ability to undergo agile digital transformation while maintaining the same customer service levels and keeping up with shifting markets is possible--if the underlying infrastructure can adapt rapidly to changing needs. Cloud technologies, and specifically hybrid cloud models, enable smoother digital transitions for traditional industries because they can easily operate their existing on-premise infrastructure during the transition process.

What are the advantages of implementing a hybrid cloud model for insurance companies? Here’s a closer look.

What is the hybrid cloud model? 

A hybrid model in its most basic form is a computing environment that shares data with both a private and public cloud. Private clouds are dedicated specifically to an organization while a public cloud is delivered via the internet and shared across an organization. Less critical workloads can move to the public cloud without opening public access to data, while more sensitive information is kept in a more secure private cloud. Hybrid is an accommodating approach, especially for insurance businesses, which often store sensitive or protected customer information. 

Many industries cycle through short periods of increased demand. For example, insurance companies are busier when home and real estate sales are higher in the spring and summer and slower in January-February. Instead of investing millions of dollars to accommodate increased data and information during a small window of time, a hybrid cloud model scales seamlessly to accommodate evolving needs. Organizations may have the flexibility to only pay for services they use when needed. 

The hybrid cloud model affords many other advantages:

Improved data security and privacy

Data security and privacy is an ever-growing concern for IT and business leaders, especially in industries like insurance that house sensitive or legally protected customer information. For this reason, moving to the cloud can seem like a risky option. However, a hybrid cloud model can alleviate some of these concerns as doing so can reduce the risk of data loss or exposure. 

In a hybrid model, companies may opt to store their most sensitive data on-premise and shift functions like accounting or other operational processes to the cloud, all of which drives process optimization and cost savings.

See also: Tapping Cloud’s Ability to Drive Innovation

Enhanced flexibility over infrastructure 

Some business leaders in the industry have been hesitant about making the jump to the cloud due to concerns that they won’t achieve the same performance as that of on-premise infrastructure. However, the most important aspect of this transition is deciding which parts of the workflow must stay on-premise and which can be shifted over. This is a process that actually provides IT teams more flexibility and control within the overall system. 

The teams also can strategically use more of their budget through hybrid models because pay-as-you-go plans with no upfront costs are available. Cloud-only solutions can be costly upfront and disrupt workflows through complete lift and shift, but hybrid allows internal teams to define where multi-tenancy is needed. And, of course, any operations moved to the cloud will also benefit from automatic application fixes and updates--so they’ll always be using the latest technology.

Better disaster recovery measures 

Disruption, data breaches and physical infrastructure damage were prevalent in 2020 and early 2021. Insurance leaders must keep these concerns top of mind when making decisions about where and how to house varying types of data. 

A totally on-premise solution presents risks in disaster recovery. Contrarily, hybrid models can scale noncritical workloads while allowing IT teams to secure the most sensitive data and act quickly in the event of a disaster. 

Legacy industries don’t have to get stuck in the past or be forced to lift and shift all workloads into a full-scale cloud migration. Instead, organizations with critical infrastructure like insurance should implement a hybrid cloud model to reduce costs, improve security and enhance overall operations and productivity during peak seasons.

Gary Kay

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Gary Kay

Gary R. Kay serves as Excellarate's chief operating officer, with responsibility for several key enterprise functions, including leading the insurtech business, North American delivery, integration, alliances/ partnerships, analysts and internal IT operations.

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