When he was charged with the difficult task of bringing disparate claims, underwriting and billing applications, and siloed databases, into one common platform, "I couldn't believe" where Highmark's business system environment was, recalled Matt Piroch, chief information officer, Highmark Life & Casualty Insurance Co., a Pittsburgh-based underwriter of life, disability, workers' compensation and stop loss. "I thought, what have I gotten myself into?" Piroch discussed the carrier's experience during a presentation titled "J2EE: an Insurance Case Study" at this week's IASA 2003 Conference & Business Show in Denver.
The old system required "many hand-offs, so Highmark Life wasn't able to track information such as when a policy was sold," said Piroch. "People were looking at me and saying, 'What are we going to do to fix this?'" In order to achieve its eventual goal of a browser-based single data source, Highmark Life decided that its back office needed to be replaced. In order to gauge the proper scope of the organization, in 1999 the carrier began its project with an enterprise blueprint that outlined the three customer touch points of claims, underwriting and billing. Highmark Life then produced comprehensive functional blueprints for each area.
After evaluating a number of vendors, including Tenfold, Microsoft and Siebel Systems, Highmark Life chose WorldGroup Consulting (Emeryville, CA). WorldGroup would meet the carrier's requirements through the use of its InsureWorx J2EE, claims, underwriting, policy administration and billing solutions, as well as GroundWorx-an extended J2EE development infrastructure. GroundWorx, utilizes and is closely-tied to IBM's WebSphere platform. In order to validate its vendor/partner selection, Highmark Life consulted with KPMG and IBM. Soon after, the project plan for the implementation of the new system -- called OPUS -- was under way.
According to Victor Lioz, project director, WorldGroup, the OPUS implementation began with the building of common application services and facilities (CAF). It was determined that the technical infrastructure, GroundWorx, would be used for user interface and business object and session management support. Individual business functionality would then be rolled out, beginning with claims.
Completion of CAF took place in 2001, Piroch reported. After the baseline infrastructure was in place, claims was the first touch point that was tackled, because it was expected to reap the largest ROI. Although the implementation of the claims piece was completed for workers' comp in May 2002 and for stop loss in September 2002, in retrospect Piroch conceded that it would have been more efficient to start the functionality roll-out with sales and underwriting because they are the first touch points in the cycle.
The underwriting piece of the project, which was the next to be rolled out, was completed for workers' comp last month, said Piroch. He expects that underwriting for stop loss and disability will be rolled out later this year, and projects the roll-out of billing and commissions to be completed in two years.
Referring to the project's success, WorldGroup's Lioz noted, "two years later, the application works well and the users like it. We didn't know of any J2EE projects of this scale that had been deployed, and two years later we feel good about it." Looking back on the implementation, Piroch explained that now "there is one platform and system and one version of the truth." Still, he conceded, "it hasn't been easy."