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Web Services: Walk Before You Run

Insurance companies must build a sound technology foundation before using Web services to support the insurance value chain.



Vice President, Information Technology, MetLife, New York


Chief Marketing Officer, AdminServer, Inc., Malvern, PA


Director, Insurance Practice, Edgewater Technology Wakefield, MA


Chief Technology Officer, S1 Corp., Atlanta


Global Technical Strategist, Insurance Enterprise and Partner Group, Microsoft, Redmond, WA

Q: Before Web services makes a significant impact in the insurance process, what fundamental technologies have to be in place in order to make a Web service successful?

A: George Foulke, MetLife: In addition to a well-defined business strategy and a development organization, a readied operational infrastructure is essential. One very important aspect of operational readiness is performance monitoring. The nature of Web services requires that components be highly available with unvarying response time. Complete response and capacity monitoring (network, processor, DASD, etc.) is critical. Security of Web services is also critical for widespread business-to-consumer adoption over the public Internet.

A: Ric Young, AdminServer: In order to fully take advantage of the power of Web services, the carrier needs to get to the heart of the matter; with the "heart" being the lifeblood of the insurance process-the back-end policy admin system. These systems, like it or not, dictate the business process and determine the limitations of the process. While many in our industry are looking to Web services to build Web front-ends for legacy systems or utilize XML to cobble together the legacy silo systems, these initiatives are best viewed as time-consuming and expensive interim steps to what really needs to be done—replace the back-end systems with new technology.

A: Imad Mouline, S1 Corp.: For Web services to be successful, you have to decide first on the "who" and the "what" and then the "how." A participant in the insurance process will first need to decide who, either internally or externally, could benefit from consuming a Web service.

Furthermore, the participants should plan for the appropriate scalability, robustness, and security considerations. Finally, the more successful Web services will go beyond exposing basic business transactions. Instead, they will offer mechanisms that will tie multiple services together in order to expose higher-level business processes.

A: Josh Lee, Microsoft: Web services is firmly rooted in the technology and infrastructure that emerged with the Internet era. Therefore, an understanding of a Web-based infrastructure is critical. This can range from the servers that host the system to the application logic that is perhaps hosted elsewhere in the enterprise. Having a good understanding of securing the Web infrastructure, scalability and allowing for rapid development and deployment are all areas that providers of Web services can gain a competency in.

Q: What does a carrier have to do to make sure that its Web services can be utilized by business partners?

A: Foulke, MetLife: Web service applications require data retrieval from all lines of business. Facilitating this type of event necessitates back-end applications be accessible through the firm's IP backbone, and be connected using XML data-tag bridging. XML has standardized communication architectures, promotes re-use and standardization of data structures, and raises the general awareness of the need for standards for B2B transaction processing. ACORD's XML standard provides both vendors and insurers with a neutral vocabulary that developers can use for broad industry acceptance.

A: Lee, Microsoft: This is all about the standards. Web services-in a very "heritage" sense—have been around for some time, but using proprietary protocols and closed point-to-point connections. With the emergence of standards for dynamic discovery, service description, security and more being developed by companies like Microsoft and IBM, there are now open standards that are allowing real-time service integration of the developed Web services.

A: Young, AdminServer: More and more, the distribution channel and partners, including the policyholder, are demanding more services and better products from their carriers. In order to address these demands and be a "carrier of choice," the carrier needs to ensure that they simplify the partner's technology environment as much as possible and ensure that there are little or no financial expenditures on the part of the partner.

A: Mouline, S1 Corp.: While Web services are designed with interoperability in mind, the participants still have to agree on a common vocabulary. A carrier should strive to adopt a standard, such as ACORD XML, whenever possible. In preparing to expose or consume Web services, participants should make sure that they have internal XML schemas of the data that will eventually be exchanged, so it can be easily mapped to either the applicable standards, or to the chosen common vocabulary.

Q: How do Web services facilitate connecting with the insurance value chain (agents, adjusters, policyholders, underwriters)?

A: Foulke, MetLife: Web services can facilitate any business process needed by an agent or field administrative staff member, including all aspects of the business workflow-new business prospecting, online application entry, e-mail, checking policy status and transactions. Historically, these business activities have been completed individually.

A: Lee, Microsoft: Since many of the entities that exist in that value chain are distributed, it is likely that connections will occur as Web services. What they will do is to look to exposed Web services, using standards, for integrating those endpoints more seamlessly. In addition, the need to integrate many computing platforms and devices creates a bigger driver for the use of standards.

A: Larry Fortin, Edgewater Technology: This is the inherent value of Web services. If a carrier exposes its policy management system via a Web service, then the agents can link their agency management systems directly to the carrier system via the Web services. In turn, utilizing a series of Web services, the insurance carrier can now make the policy values available for internal consumption, which enables the agent to view specific policy values in the event a client requests them.

Q: Where will Web services first make an impact in the insurance process?

A: Foulke, MetLife: Web services can make an impact on virtually all of its insurance processes, including inquiry and transactions available to both customers and agents, success and workflow enhancement through the use of portal technology, checking policy status and online policy application.

A: Young, AdminServer: Rather than viewing the process as discrete siloed tasks—which is what the industry has traditionally done—we need to view the insurance cycle as one complete and continuous process. The phrasing of the question keeps us thinking in "silo mode" and as long as the industry is in that state of mind, Web services will not have the impact it can have. Using Web services as an adjunct to the current prevalent technology architecture in the insurance industry (i.e. legacy mainframe) is more like Web "disservices."

A: Lee, Microsoft: There are already Web service-based systems for claims that are making a significant impact on the way that claims are being processed and the speed in which they are being settled. All that makes direct impact on loss ratios, which is undoubtedly an area needingimprovement. There are also Web services right now on the market for the agency, producer, and financial advisor functions.

A: Fortin, Edgewater Technology: Web services will open up the internal business processes to new applications that enhance the relationship between the carrier, agent and policyholder, and can be used to expose a standard interface to existing applications. Web services will impact customer service processes the most since it will enable customers to do more self-service and provide them the availability to leverage the Internet and/or IVRs to make policy changes.

To learn more about Web services' role in improving processes, attend "The Insurance Value Chain: Driving Process Improvement," co-produced by Microsoft and Insurance & Technology: March 18, The Hilton Boston Back Bay; or April 4, The Sutton Place Hotel, Chicago. To register and for more information, visit

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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