Insurers need to reach for the cloud

The re/insurance industry needs to embrace the advantages in time and processing power that the cloud can give their modelling and other computer-generated planning processes, Jonathan Silverman, director of insurance industry solutions at Microsoft, told PCI Today.

“One of the things we started doing a number of years ago was looking at the public cloud to enhance the risk process. How could customers and partners take advantage of cloud resources in order to bring back results sets faster?

“As an example we did a test where we took the world’s population, gave them all a $100,000 life insurance policy, ran a stochastic model and estimated that if we ran it on a single core [processing unit] it would take approximately 19 years to bring back the results,” said Silverman.

“We found that when we took that same model and ran it on 50,000 cores the results came back in under 90 minutes.”

He pointed out that when risk managers and actuaries ran their models in the past, some of those models would run for days.

Today, with the ability to ‘burst’—to use more cores—companies are able to run that same model in an hour over lunch.

Microsoft has been cooperating with RMS and Silverman used the latter as an example. “When RMS runs a model and the results that come back are available in a cloud environment they can take advantage of all the tools we have from a big data perspective, not only to help with analysing the data but also to make recommendations, as well as spotting anomalies in their business models.”

Silverman stressed that people should not be concerned about potentially important information being released as a result of security breaches in the cloud, largely because they do not realise how secure the cloud can be.

“When we take our customers to a Microsoft data centre and show them the difference between how we do it versus how they do it, we usually find that the customers walk away saying ‘wow, I don’t know why we’ve been so afraid of the cloud, based on the way that Microsoft deals with security and compliance and works with the regulators’. They realise that the cloud isn’t as risky as they thought it was.”

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