Carriers Give OK to SOA

Web services technology has been advertised as an industry-transforming means of enabling communications among insurers, their business partners and end-customers. Security, performance and standards issues have resulted in cautious adoption of Web services, but the technology has been a boon for insurers working to integrate applications within the enterprise. Web services can provide effective point-to-point connections between pairs of applications, but to maximize long-term value, many insurers are making an investment in the initially more expensive and complex goal of creating an enterprise services-oriented architecture (SOA).

Foundation for the Future

For the businesses that use them, SOAs provide a way of converting existing software into a set pattern of software components and networking protocols that can create a Web service. This kind of architecture can also provide a foundation for future applications that are built on the same architecture. When implemented correctly, services-oriented software can speed application development, allow companies to reuse code and provide standardized means of integration among applications.

"The greatest challenge in implementing services-oriented architectures is not the technology, it's getting end-user buy-in," says Tim H. Kennedy, director of R&D for CSC's (El Segundo, Calif.) life and health division. Many insurers have implemented short-term integration solutions based on screen-scraping, Kennedy notes. Such solutions are inexpensive, but they are not scalable, don't perform well and are susceptible to being out of synch when screens change. Still, says Kennedy, "It's a challenge to build a business case to replace what works with a long-term foundation for enterprise application integration, business process management and user interface surround solutions."

The Guardian Life Insurance Co. of America (New York, $34.1 billion in assets) is one company that has made that case, according to architecture team lead and senior business systems officer, Jaime Sguerra. The firm implemented a heavily J2EE-oriented, component-based SOA in February. Remarks Sguerra: "Do you need buy-in from the business? Absolutely. Can you explain [SOA] to them in terms of what they're going to be saving? Absolutely."

Among the benefits of SOA to Guardian are reliability, scalability and maintainability, according to Sguerra. Since the services-oriented approach is based on uniformity of applications architecture, it fosters reuse of components and development workforce flexibility. "The enterprise architecture takes away the complexity of creating an application from scratch. All the good stuff that you need for an application to be written - we take care of that for you in advance," Sguerra explains. "You're able to leverage what's been done in other areas."

Sguerra says that Guardian has realized a 30 percent reduction in new application development costs as a result of deploying SOA.

The Hartford (Hartford, $18.7 billion in revenue) is employing SOA as a means of leveraging legacy systems by drawing out useful functionality, according to Mike Byam, CIO of business insurance for the insurer's P&C company. "We've been able to decouple some of the things that would have been entirely in a COBOL system and said, 'What are those things that make us competitive in the marketplace?' We can now export those out of what was once a big legacy system and place them in services available to consumers."

This year, the Hartford developed an application built with a services-oriented approach meant to encourage small, independent insurance agents to submit business to The Hartford for quotes. The application cuts across a variety of IT systems, including mainframes and Unix servers, and software such as BEA Systems' (San Jose, Calif.) WebLogic application server, IBM's (Armonk, N.Y.) WebSphere MQ messaging software, Oracle (Redwood Shores, Calif.) databases and business apps from Siebel Systems (San Mateo, Calif.).

When the company made apps from these systems available on the Web to help agents decide how to classify their customers and assess risks, using the software required no specialized knowledge from agents other than how to reach the Hartford Electronic Business Center portal via a browser, says The Hartford's Jim Ruel, senior vice president, small-business insurance.

Byam says that the lack of complete uniformity of standards continues to present a challenge when using SOAs, as does coping with performance issues. "If an agent calls with an issue of going from screen to screen, it's more complicated to track the problem." The benefits of SOAs, however, are too great to ignore. "SOA helps the speed of change; it allows me to more quickly integrate business functions into the marketplace, both internally and externally," Byam says. "In terms of the way it enables us to change and adapt, the dial has been turned up."

This article includes a contribution from Charles Babcock of InformationWeek, a sibling publication of Insurance & Technology.

SOA Snags

For all the potential benefits of a services-oriented architecture, there are many opportunities for efforts to go astray. Marc Maselli, CEO of Boston-based professional services firm Back Bay Technologies, points out some of the pitfalls of SOA:

Picking the Incorrect Level of Service Exposure - Application functionality should be exposed as coarsely grained as possible. Using coarse-grained interfaces allows other apps to access the service at a business-function level.

Designing Services With Inappropriate Synchronization - The more asynchronous communications that can be used, the better; asynchronous execution eliminates a potential performance bottleneck.

Not Sticking to Standards - Some vendor offerings use proprietary features. Proceed with caution and balance the importance of portability with SOA capability.

Forgetting to Redesign Outdated Processes - Analyze existing processes to ensure they fit the current and anticipated business requirements.

Not Creating a Knowledge Management System or Service Repository - Without a centralized, searchable and up-to-date library of available services with their uses and interface signatures, it is unlikely that services created for one application will be used correctly - or at all - by another system.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio