Businesses in an array of sectors are constantly considering their alternatives between native and cloud computing in the constantly evolving field of technology. For insurance firms, who handle huge amounts of data and need reliable, secure, and scalable solutions, this choice is especially important. This blog covers the features and advantages of native and cloud computing, in addition to the reasons insurance firms would favor one over the other.

Understanding Cloud and Native Computing

Cloud Computing often referred to simply as “the Cloud” — is the on-demand delivery of infrastructure (hardware/servers), storage, databases and all kinds of application services via the internet. Frequently these are delivered by a cloud services platform like Amazon Web Services, Google Cloud or Microsoft Azure, with metered pricing so you pay only for resources you actually consume.

  • Infrastructure-as-a-Service — off-premises hardware, data storage, and networking — is the obvious one.
  • Platform-as-a-Service then can be hired to manage and maintain all that virtualized infrastructure from a web interface, greatly reducing the load on your ops team.
  • Software-as-a-Service lets you pick and choose component applications, everything from traditional business software (think MS Office 365) to virtual infrastructure management tools, all delivered via — and operated over — the web. The provider ensures security, availability and performance.
  • -as-a-Service: if you can dream it, if your business requires it, there is probably a service for it. If there it doesn’t exist right now, just wait a month or two.  Database-as-a-Service, Functions-as-a-Service
Cloud Service Technology through cloud computing  offered by ICON Limited

Native Computing (or on-premises computing) refers to computing resources that are deployed and managed within a company’s own data centers. This includes hardware, software, and infrastructure that the company owns and operates.

Benefits and Features of Cloud Computing

Scalability: Cloud services offer unmatched scalability. Insurance companies can easily scale up their computing resources during peak periods (like natural disasters) and scale down during quieter times, paying only for what they use.

Cost Efficiency: Cloud computing operates on a pay-as-you-go model, reducing the need for significant upfront investments in hardware and infrastructure. This can be particularly advantageous for insurance companies looking to optimize operational costs.

Accessibility: Cloud services can be accessed from anywhere with an internet connection, enabling remote work and improving collaboration across geographically dispersed teams.

Disaster Recovery: Cloud providers offer robust disaster recovery solutions, ensuring that data is backed up and can be quickly restored in case of an outage or cyber attack, which is critical for maintaining business continuity.

Innovation and Updates: Cloud providers continually update their services with the latest technology, allowing insurance companies to benefit from the most advanced tools without the need for constant manual upgrades.

Benefits and Features of Native Computing

Control and Customization: Native computing offers complete control over hardware and software configurations, allowing insurance companies to tailor their systems precisely to their needs.

Security and Compliance: For some insurance companies, keeping data on-premises is essential for meeting strict regulatory requirements and maintaining the highest security standards.

Performance: On-premises systems can be optimized for specific applications and workloads, potentially offering superior performance for certain tasks compared to cloud-based solutions.

Data Sovereignty: Native computing ensures that data is stored within the physical boundaries of a country, which can be a significant advantage for complying with local data sovereignty laws.

Why Insurance Companies Should Choose Cloud Computing

Agility and Innovation: The insurance industry is undergoing rapid digital transformation. Cloud computing enables insurance companies to quickly deploy new applications and services, adapt to market changes, and stay ahead of competitors. The ability to leverage advanced analytics, artificial intelligence, and machine learning through cloud platforms can lead to improved risk assessment, personalized customer experiences, and streamlined claims processing.

Cost Management: Cloud computing’s pay-as-you-go model helps insurance companies manage their IT budgets more effectively. By eliminating the need for large capital expenditures on hardware and reducing the costs associated with maintaining and upgrading on-premises systems, insurers can allocate resources more efficiently.

Disaster Recovery and Business Continuity: The inherent resilience of cloud infrastructure ensures that insurance companies can maintain operations during disasters. With robust backup and recovery solutions, insurers can protect sensitive data and ensure quick recovery from disruptions, thereby maintaining customer trust.

Why Insurance Companies Might Prefer Native Computing

Data Security and Compliance: For insurers dealing with highly sensitive personal and financial data, native computing can offer enhanced security and control. By keeping data on-premises, companies can implement stringent security measures tailored to their specific needs and ensure compliance with industry regulations.

Performance for Critical Applications: Certain critical applications that require low latency and high performance for example ERP solutions may benefit from native computing environments. By optimizing on-premises infrastructure for these specific workloads, insurance companies can achieve the best possible performance.

– Cornelius Kipkorir

Legacy Systems: Many insurance companies still rely on legacy systems that may not be easily migrated to the cloud. For these organizations, continuing with native computing while gradually modernizing their IT landscape might be a more practical approach.


The decision between cloud and native computing is not one-size-fits-all. For insurance companies, the choice hinges on a variety of factors including scalability, cost, security, compliance, and performance requirements. While cloud computing offers flexibility, cost efficiency, and innovative capabilities, native computing provides control, security, and optimized performance for critical applications.

Microservices and Cloud Services are key to truly harnessing the power of cloud operations. On the surface, the win might look like getting rid of physical machines — but the true win is accessing all the extraordinarily sophisticated services. Specialized software as a service, turn key and ready to hook into your application. With cloud and microservices in place, you’ll be ready to iterate and deploy quickly and more often, which is where automation and orchestration come in. It can be complex, yes, but orchestrators exist to optimize all this — and these days you can simply hire those as a service as well!

Ultimately, many insurance companies may find a hybrid approach to be the most effective, leveraging the best of both worlds to meet their unique needs. By carefully assessing their specific requirements and strategic goals, insurance companies can make an informed decision that supports their long-term success in an increasingly digital world.

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