Network computing is not an area at which insurers typically look to gain a competitive edge, and indeed internal and telecommunications functions are often targets for outsourcing. But New York-based AIG (more than $600 billion in assets) is taking a different view, as it embarks on a two-year initiative to build what it calls its Next Generation Network (NGN).
"We're taking the stance that telecom is a strategic tool that can provide a competitive advantage," says Mark Popolano, AIG's enterprise CIO. "We decided to build a secure infrastructure, based on our internal network, that allows us the availability, scalability and control required for our transmission and transaction base to be transmitted around the globe."
Popolano envisions a structure that is cost-effective, amenable to evolving technology and capable of supporting the insurer's business needs for the next 10 years. "Because we see the convergence of data and voice, as well as video," he says, "that will then allow us to be able to supply a much faster reaction time to a changing marketplace."
AIG's initiative breaks with typical telecommunications structures by taking on the development of the network's long-range distribution capabilities. "That provides AIG the flexibility to move access points to local jurisdictions and be served by any number of [telecommunications] carriers," Popolano relates. "We don't have to look at long haul lines or capabilities anymore."
Quality of Service
Within the core of the NGN, AIG is designing the capability to track and identify all the packets that travel through the pipes, according to data type. "We will be able to do quality of service from any access point, locally or internationally, and be able to track it," Popolano says. "This will cut down the number of hops within the corporation itself, allowing us to span the globe while having the local access points where we do key processing."
AIG is looking to gain both control and efficiency by avoiding a model whereby private networks are linked into major telecom carriers or the "cloud" - the public or semi-public space on transmission lines that occurs between the terminal points of communication. "IP telephony is allowing you now to control your internal messaging through your own internal network," Popolano explains. "There is an advantage here: You can actually shave off a considerable amount of cost by managing it yourself and not going out into cloud."
What the NGN will enable is an enterprise equipped with the capability of a virtualized or on-demand network that can maximize utilization of hardware and software infrastructure and provide quality of service at the lowest levels of use. The NGN supports mobile technologies - an area of strategic emphasis for AIG, according to Popolano - by treating wireless as another access point, and providing state-of-the-art security, enabled by the network's comprehensive tracking capabilities. "As long as users can connect, you can service both the internal employee and end-customer," Popolano remarks. "The virtualization gives you the strategic advantage of a very mobile and agile workforce."
The insurer is nearing completion of the first phase of the project, which involves architectural design and mapping, as well as consolidation of information. The construction phase of the project is scheduled to begin around the second quarter of 2005 and will last a year to 18 months. Popolano declines to talk about costs or vendors, but he expects to invest in a wide range of technology, including routing infrastructure, directory services, identity management solutions, blade technology and storage area network technology for data capture and logging. "All our major partners will be involved in this," he says.
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