Insurance companies’ plans to store all data, including customer data, on cloud servers may not be implemented in the immediate future. This is because there are concerns raised by the insurance regulator over data breach or leak.
Industry officials said that while companies abroad use cloud servers for all insurance-related activity, here there is restricted usage. Moving the entire IT infrastructure to cloud including all the customer data would help reduce overall costs, said senior executives.
At present, insurance companies, both life and general, have both cloud servers as well as physical servers for data storage and protection. Back-up data is also stored on cloud in case of any IT-related faults in the physical systems to ensure that no vital information is lost in this process.
“Moving totally to cloud servers would help reduce costs by atleast 45-55% overall for the industry since it is easier to maintain and retrieve. Especially for an industry like ours that deals with larger quantity of customer data everyday. Though there have been some cases of data breach in countries abroad, there are security software available to prevent such cases,” said a senior general insurance executive.
While both life and general insurance companies have a huge log of data of customers, life insurers have a higher quantum of data owing to mandatory Know-Your-Customer norms. In general insurance while companies encourage customer to disclose personal details for better servicing, not all policyholders choose to give information.
Meanwhile, regulatory officials have made it clear that unless the appropriate safeguards in place, insurers may not be allowed to store such sensitive data on cloud.
“Technology-related processes, especially the newer ones like cloud have their own share of weaknesses, given that they are still in an evolutionary stage. Data leak or breach in such cases can prove to be very expensive for the insurance companies and individuals, since it can be put to wrong use,” said a cyber security expert.