Cloud computing is not new – just better and more important in the battle to remain competitive. Insurers worldwide are embracing the cloud, but not as fast as they could.

There is nothing new under the sun–and that includes the cloud.

As early as the 1960s, companies were buying timesharing on old mainframes. More than 30 years later, in the midst of the boom of the late 1990s, a spate of young companies emerged as application service providers (ASPs) to offer shared services to the new Internet companies.

As Jim Kerstetter points out in the New York Times, the ASP “was meant to do what a cloud computing company does today—connect people over the Internet to software that is hosted in a giant data center. Instead of owning all that equipment and computer power or hiring all the people to manage it, you would pay the ASP to do it for you.”

Since the days of the ASP, of course, technology and businesses have grown infinitely more sophisticated, as have the cloud services, architectures and needs that help drive many of the industry disruptors we see today. Just as organizations lease just the skills they need in the gig economy and outsource core and noncore business services, many rely increasingly on the shared power and advantages of the cloud to build game-changing platforms and new business models.

By fully embracing the potential of cloud computing to enhance business value, organizations can simplify their IT infrastructures, accelerate time to market and drive innovation. Properly used, the cloud can improve efficiency, agility and scalability while reducing total cost of ownership. (TCO).

Despite these advantages, some financial service organizations remain reluctant to use the cloud or to use it as fully as they could, often citing concerns over control or data security and even where the data would reside. Meanwhile, they may be missing out on the emerging Internet of things (IoT), and the use of enablers such as telematics in personal and commercial auto insurance. When they fail to act, they sit on the sidelines while competitors continue to develop and offer the accurate, personalized insurance coverage that benefits consumers and insurers.

In truth, keeping your data on-site is no guarantee it will be more secure. Think about people who store money under the mattress because they don’t trust banks. Reputable companies that provide cloud services usually share the same goals as their clients; guarding their reputation by keeping data secure. Where necessary, good cloud providers have the focus and agility to move resources faster than their clients can, so they are usually better equipped to can handle the unexpected.

Moving to the cloud entails a lot of decisions and usually some outside assistance. There is usually no advantage to moving everything to the cloud in single a leap. Baby steps will build confidence and allow better results.

In my next post, I will write more about knocking down barriers to the cloud.

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