Insurance Carriers Reap Operational and Financial Benefits From Going Green
Q: Green computing and related concepts are hot topics in business. Why should insurers pay attention to this?
A: Mark Wood, Highmark Inc.: As demands on existing computing infrastructures continue to rise, and with even greater demands being placed on power grids and water sources across the country, companies that operate mission-critical computing facilities that consume both electricity and water to maintain operations, by default, should be looking at green computing or at least deploying energy-efficient and water-efficient concepts to minimize in-house consumptions. This, in turn, will maximize the useful life of mission-critical facilities, keep energy costs in line and help ensure that electricity and water will be available in the future.
A: Tom Bradicich, The Green Grid: The sheer amount of data required to operate in the insurance arena today is pushing companies to scale up at paces never before seen. From an efficiency standpoint, creating a computing environment focused on efficient data center practices not only saves energy by increasing the efficiency of the computing, but can likely take greater advantage of existing facilities, ensure greater efficiencies for new facilities and lower total cost of operation for both.
A: Jamie Bisker, Institute for Business Value, IBM: Insurers should pay attention to the nascent green movement for a number of reasons, but mostly as part of an enterprise risk management (ERM) program. In general, insurance companies need to pay particular attention to their role in socially responsible activities to overcome the negative perception bias under which most operate. Previous energy-saving efforts -- think '70s -- should be reviewed and leveraged to their best advantage. Couple such a review with the benefits of further cost savings and reductions in environmental impact and they will improve the balance sheets for reputational risk and accounting.
A: Subodh Bapat, Sun Microsystems: To the extent that insurance companies are like other corporate entities whose business depends on the availability, reliability and quality of data, paying attention to how that data is managed and how much it costs to keep information systems operationally efficient is important. For insurance companies, as for other corporations, investing in energy-efficient systems and energy-efficient data centers will have beneficial effects in both saving operational costs and making their own data centers less vulnerable to power outages and grid supply disruptions, enabling better business continuity.
Q: How can IT and business executives make a business case for adopting principles of sustainability and green computing internally and on behalf of their customers?
A: Wood, Highmark: Sustainability is a measurement of risk that a company is willing to take in the event of a major disruption to critical utilities on which they rely to maintain operations. There is no return on investment for this. It is an insurance policy to ensure that a company survives. In our case, the sustainability factor that we defined was to be able to run our mission-critical facility for 72 hours without outside utilities. Each company should assess its sustainability factors based on how long it can survive. Some might measure this in minutes and others in weeks. To make the case for green computing should be easy. Most executives know that being green is in. Energy costs continue to rise, and if they don't want to be green, they at least need to understand their energy and water consumption requirements.
A: Bradicich, The Green Grid: The ability to use less energy to process the increasing demand curve for data more efficiently than with previous generations of data centers not only offers companies the chance to cut their energy expenses, it gives them a chance to reduce their impact on the environment by lowering their energy usage and related capital costs. Over the life of a data center, milliseconds saved translate into dollars saved, pleasing customers and executives alike.
Q: How do green principles actually translate into IT strategies and procedures for insurance companies?
A: Wood, Highmark: Companies need to understand where they are today and benchmark power and water usage. Talk to your utility companies and understand what factors will impact their abilities to service you in the future. Inside the data center, this translates into IT strategies that work to reduce the consumption of electricity through the use of virtualization and energy-efficient hardware. We need to look at data centers in a new light and work to simplify the infrastructure. No longer can companies afford to place one application running at five percent CPU utilization on a single server.
By virtualizing servers, the ROI will come by maximizing hardware utilization and reducing the software stacks that are required to run them. If achieved, the benefits are great. Floor space can be reduced, thus extending the life of your facility. Power consumption can be reduced, which will save costs and extend available power in your facility. Cooling needs can be reduced, and that equates to less water consumption and lower operating costs.
A: Bisker, IBM: Placing a green filter on ERM as part of all IT process reviews will achieve a higher level of compliance with corporate social responsibility initiatives. Considering green constraints can help companies with decisions where modernization, efficiency and flexibility come up against cost considerations. Going green can push an idea forward and allow a carrier to realize reputational and more tangible dollar benefits at the same time. Green efforts usually mean efficiency gains, and therefore cost savings are built into the outcomes. For example, server consolidation usually means less heat generated, less electricity consumed and higher performance -- all green goals.
A: Bapat, Sun Microsystems: Choosing projects that have an immediate impact on the bottom line is the easiest criterion with which to make green IT decisions. These include investing in more-energy-efficient servers, investing in server consolidation, investing in virtualization and investing in remote work programs for employees.
Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio
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