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With all of the hype surrounding Web services, insurance executives could easily be led to believe that the technology will solve all their customer service, compatibility and systems integration problems.

With all of the hype surrounding Web services, insurance executives could easily be led to believe that the technology will solve all their customer service, compatibility and systems integration problems. But just as with many other latest-and-greatest technologies that have come before Web services, a sound technology foundation is required in order to get the most out of Web services.

"Web services are fairly easy to implement, but before they can make an impact, carriers must assess the semantic problems that may exist in the enterprise schema," according to Larry Fortin, director, insurance practice at Edgewater Technology. "Challenges lie in defining the interface so it provides real-business value while connecting to existing systems to make the Web service functional. Each of these systems must be analyzed to determine if an API can be used by the Web service to access data. Internally, Web services can be used to 'wrap' existing legacy system APIs, providing a standard remote interface that can be used by new applications to connect to the legacy systems across the Internet."

However, since a goal of Web services is to connect external business partners to insurance carriers' existing technology (usually over Internet-based technology), insurers need to develop with their partners—both agents/producers and consumers—in mind, according to Imad Mouline, CTO at S1 Corp. "The nature of the participants and the Web services to be offered will dictate the levels of scalability, robustness and security that will be required," he says.

In addition, Web services should be built with technology that makes it easier for partners and customers to do business, according to Ric Young, chief marketing officer, AdminServer. "The only way to deliver this level of technology independence and simplicity is with true Web-based solutions, not just Web-enabled environments," he says. "The latter approach is just the continuation of investing good money in old technology that has outlived its usefulness. The investments should be made in new Web-based—not Web-enabled—back-end systems that inherently deliver the commonality, flexibility, ease-of-use and minimal technology requirements for the partners. In other words," Young adds, "the partner, whoever they may be, should require nothing more than a PC, Internet access and Microsoft Internet Explorer to access the services and data that they need."

But before the entire insurance value chain will be completely connected by Web services-enabled functionality, expect to see insurance companies test the technology in real-world, internal projects first, according to S1's Mouline. "Most organizations ramp up by first deploying Web services internally as a way of integrating different parts of the organizations, while keeping an eye on how some of these same services can be re-used and exposed to external constituents," he says. "However, we see activity in many areas, especially in connecting systems that provide new business underwriting and policy administration, and exposing them to agents. Ultimately, the entire insurance process can benefit from systems that allow Web services to be easily orchestrated into business workflows that touch all aspects of the value chain and all parts of the organization."

More information about how insurers are using Web services will appear in the April 2003 issue of Insurance & Technology, and will be available at

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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