The Importance of MSPs in Insurance

Due to a few key trends in the managed service provider market, insurance companies will continue to hire MSPs to help them achieve key business goals in the New Year.

What is a Managed Service Provider?

A Managed Service Provider (MSP) is a company responsible for remotely managing their clients’ IT infrastructure and/or end-user systems. This is typically done on a proactive basis under a subscription model. The terms cloud service provider and managed service provider are also used to describe this service when the MSP is supported by a service level agreement (SLA) and services are delivered via the internet.Small and medium-sized businesses (SMBs) are ideal candidates for managed IT services because they usually have finite in-house IT capabilities. Employing the services of an MSP allows these companies access to much-needed IT expertise at a predictable monthly cost.Another advantage of outsourcing IT needs to an MSP is that they take a proactive approach to stopping cybersecurity threats so that business operations are not disrupted. In 2016, more than 50 percent of SMBs reported at least one cyberattack, and those breaches are estimated to cost those companies about $879,582. Therefore, it is imperative to protect your business’ data from online predators before you become a target.

MSP Trends for Insurance in 2020

Due to a few key trends in the managed service provider market, insurance companies will continue to hire MSPs to help them achieve key business goals in the New Year:

  • Cybersecurity will be prioritized.

Managed service providers will continue to make cybersecurity a top priority. After all, cyberattacks are now a matter of when, not if—approximately 4.1 billion records were exposed via these attacks in the first half of 2019 alone. Thus, MSPs are moving toward a “security-first” mentality by leveraging the latest strategies to protect networks at every level and preparing their clients for how to respond in the event of an attack. Data security is essential to the success of an insurance company, which makes partnering with an MSP a beneficial move.

  • Cloud Management gains popularity.

In order to remain competitive, insurance companies need to migrate their operations to the cloud. Both public and private cloud services are widely used, however, as we move through 2020, a customized hybrid cloud solution will continue to grow in popularity. With this hybrid option, the opportunities for driving growth and streamlining business processes are endless. Insurance companies need an MSP on their side with the knowledge and skills to continuously perfect their cloud platform as technology advances.

  • Internet of Things (IoT) Technology continues to grow.

Internet of things (IoT) refers to the system of computing devices embedded into everyday objects, enabling them to send and receive data via connection to the internet. The number of IoT devices is expected to grow from 10 billion this year, to 22 billion by 2025. The innovation and growth in this market has the potential to revolutionize how insurance companies collect, manage and use data. However, there is a rather large gap between the possibilities and practicality of utilizing this market. But with an MSP on the team, this technology could add long-term value to an insurance agency’s operations.

Why Should Insurance Companies Consider an MSP?

Insurance agencies depend on secure network infrastructures to serve their clients; however, they usually do not have the trained personnel to maintain and support that infrastructure. This is why more and more small- to medium-sized agencies are considering managed IT services to meet their needs. Here are a few more reasons why insurance companies should consider an MSP:

  • Time to focus on the core of the business.

An insurance agency’s forte is, well, insurance, not IT infrastructure or cybersecurity, and that’s okay. They should be focused on serving the insurance needs of their market while the rest is handled by their MSP.

  • 24/7 monitoring and support requirements are easily met.

Insurance agencies need 24/7 support and monitoring for several reasons. Customer portals need to be maintained so that clients can login and make payments or check their claim activity at any time. And 24/7 monitoring is also imperative to avoiding security breaches and critical breakdowns.

  • Proactive data security methods keep data safe.

Forty-seven percent of small businesses have no understanding of how to protect themselves against cyberattacks. This may, in part, be due to the fact that it’s not practical for agencies to attempt to safeguard data on their own. However, MSPs are extensively trained and equipped to provide proactive and highly technical security solutions so that these companies can focus on serving their clients, rather than worrying about security breaches.

  • Backup and Disaster Recovery (BDR) ensures business continuity.

Power outages, data loss, and hardware failures are, unfortunately, commonplace in our digital society and can pose real problems for SMBs. A small in-house IT department is not well-equipped to deal with these issues swiftly. However, an MSP is capable of restoring systems quickly and efficiently, minimizing disruption to business operations.Between serving clients, staying up-to-date on compliance regulations, marketing, and managing risks, insurance companies already have so much on their plate. It’s nearly impossible to adequately handle all of the above on top of managing IT infrastructure and/or end-user systems. Hiring an MSP is the best practice in this scenario.

How to Choose the Right MSP

SMBs in every industry are turning to managed service providers for the day-to-day management of their IT infrastructures. When deciding on the right MSP, it is important to consider the following:

  • Technical Expertise

The best MSPs will not only handle your infrastructure management needs, but they will also have technical specialists on staff to work with your team to meet all of your technical needs, as well.

  • Advanced Technology

Your MSP should be able to offer you the latest and most sophisticated technology so that you do not need to make those investments yourself.

  • Flexibility and Scalability

The MSP you choose to work with should understand your business’ unique needs and offer flexible data, application, level-of-service, hardware, and cloud options that work for you. And, as your needs change, the provider should be capable of scaling up or down as needed.

  • Proactivity

A good MSP will never wait for something to break or for your employees to complain before reacting. They will automate IT management to avoid problems from occurring in the first place, and if an issue does arise, your MSP should make you aware of the situation before it impacts users and have an automated response to resolve that issue as quickly as possible.

  • Transparency

You should always have complete access to your IT environment and should know what has been done to your infrastructure, what is currently being worked on, and what still needs to be completed.

  • 24/7 Support

The MSP you choose should monitor and support its services on a 24/7/365 basis. This can primarily be accomplished remotely, however, the provider should also offer expeditious on-site service when problems cannot be diagnosed and/or solved via the internet.

  • Business-Class Service Level Agreements

Your service level agreement (SLA) should be easy for you to understand and quantitatively measurable. The best MSPs will have triggers and penalties built into your contract so that you receive credits if any SLAs are forgotten. However, the top MSPs rarely make these mistakes.

  • Security

The MSP you choose should have security certifications and the ability to meet HIPAA, PCI, or other regulations to keep your company in compliance.With Alexant’s managed network services, you will receive all of the above and more. We deliver highly-responsive, secure, reliable, and cost-effective computer network systems and services via cloud, on premise or hybrid architectures. And with over five decades of experience in the insurance industry, as well as outstanding capability specific to insurance applications, we understand and have what you need to be successful. In fact, our clients boast that by partnering with us, their agencies have continued to run efficiently as they’ve grown! Learn more about our managed network services.

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