If you have been following the recent news on the technology front, you may have observed that the space is abuzz with details of huge investment by large IT organizations. Alibaba to invest $1.0 billion in cloud computing or Intel to invest heavily in software that enhances cloud-computing capabilities are some of the recent news that you may have come across.

Most of these large organizations are today spending huge amounts of money towards cloud computing technologies and are developing industry specific solutions to address niche requirements of their customers. Cloud computing has already made its mark in almost every industry like Energy & Utilities, Pharma and Healthcare, Online Retail, Online Ticketing, Telecom, Banking, Capital markets as well as Insurance.

In the insurance industry, I believe cloud computing is set to be the next big disruptive change in the way insurance carriers are positioned now. Justifying the name and its original non-technical characteristic, "cloud" is going to blur the difference between the so called large (Tier 1 and Tier 2) insurance carriers and Tier 3 and Tier 4. And this is surely going to make a lot of difference the way the large insurance companies operate today. According to Forrester, the global market for cloud computing is forecasted to grow at 34.9% annually from an estimated US$25.5 billion in 2011 to US$113.9 billion in 2016 - more than 30% of this being currently contributed by small carriers. The main differentiators of cloud computing with the traditional hosted solutions which attract the small carriers are:

• Very little or no requirement for capital investment to enable usage
• Pricing which is based on consumption; that is "pay per-use"
• Rapid acquisition, deployment and scalability
• Lower ongoing operating costs than IT owned and managed in-house
• Extremely adaptable in use and a lot of supports provided by the cloud computing vendors

The immediate benefits which can be reaped by carriers adopting cloud computing technologies are:

• Greater social listening and higher conversion rates from opportunity to sale through targeted campaign management, superior opportunity/lead engagement model
• Improved cross-sell, up-sell and retention rates through active monitoring of customer interaction histories
• Enhanced claims experiences with reduced claims expenses leakage through superior customer service and better communication with end customer

For large carriers, it's going to be a critical challenge when it comes to differentiating themselves on the basis of use and appetite towards adopting cutting edge technology or reach and engagement with customers or designing innovative products and ensuring far and wide distribution of it. Hence for large carriers, I believe, it will largely be a game of underwriting capacity. However, if that holds good for a large commercial lines business deals, it will be quite an intriguing movement to observe on the efforts from the large carriers who are engaged largely in the retail space to differentiate them from the rest.

And finally, for the end consumer, it will be a delight in terms of customer experience and superior customer service on top of the soft market benefits that they have been enjoying for quite some time now.