As the data storage challenge continues to grow for insurers and everyone else, one of the obvious solutions is cloud technology. Storing data on remote servers rather than in-house is definitely a money-saver, but in insurance circles, the worry has been that having critical data reside outside the physical and virtual walls of the insurance enterprise is a risky situation. As the IT field is rapidly moving towards Cloud Computing, software industry's focus is shifting from developing applications for PCs to Data Centers and Clouds that enable millions of users to make use of software simultaneously. Attempting computation on sensitive data stored on shared servers leaves that data exposed in ways that traditional encryption techniques can't protect against, the article notes. The main problem is that to manipulate the data, it has to be decoded Now a new method, called fully homomorphic encryption (FHE) that performs computation with the encrypted data and send to the client and offers a realistic hope that such calculations can be performed securely in the cloud. Keywords: Cloud computing, fully homomorphic encryption, security threats. I. Introduction Homomorphic is an adjective which describes a property of an encryption scheme. That property, in simple terms, is the ability to perform computations on the cipher text without decrypting it first. Our ultimate goal is to used a fully homomorphic encryption scheme E. Let us discuss what it means to be fully homomorphic. At a high-level, the essence of fully homomorphic encryption is simple: given cipher texts that encrypt m1,m2,m3,…………………mt , fully homomorphic encryption should allow anyone (not just the key- holder) to output a cipher text that encrypts f(m1,m2,m3,…………………mi) for any desired function f, as long as that function can be efficiently computed. No information about m1,m2,m3,…………………mt or f(m1,m2,m3,…………………mt) or any intermediate plaintext values, should leak; the inputs, output and intermediate values are always encrypted.