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Many Paths to Integration

The ideal of a fully integrated, end-to-end, real-time enterprise is a worthwhile goal, no matter what your lines of business may be. But who you are will shape how you get there.

When it comes to envisioning the integrated enterprise, everyone has the same goals: achieving maximum automation and enabling seamless, end-to-end, real-time access to information for all one's internal and external consumers. One might say that, like Tolstoy's happy families in Anna Karenina-who are all happy alike-integrated insurers will all be alike in integration. But like unhappy families, "un-integrated" insurance companies are all fragmented in their own unique ways. And given their different systems, lines of business and competitive pressures, their paths to integration will also vary.

Size is an especially important determinant of an insurer's appropriate path, according to Judy Johnson, Sapiens (Research Triangle, N.C.). Small- to mid-size insurers may look to core application replacement as their path to the integrated enterprise, while very large insurers may look to expanding ERP (enterprise resource planning) systems to be the glue that holds their enterprise together, Johnson asserts. Some mid-size companies are looking at data integration for better underwriting and pricing, and for better understanding of their customers, she adds.

"Many larger mid-tier and Tier 2 companies are looking at their legacy and selectively replacing applications that are too costly, unwieldy and feature-poor to maintain in the long term," Johnson says. Such organizations are developing application architectures that feature Web services and component applications that can be organized and reused to meet needs, she asserts.

Different companies have different business needs, and they have different legacy-system, organizational and process issues to resolve, as well. "For some companies, a front-end portal is the way into the organization for channels, customers and prospects," Johnson comments. "For others, a front-end system for new business connects with many back-end processing and accounting systems. Others care about integrating the data and having all the silo systems access the single data store for data consistency. There's no oneformula for enterprise integration, unless you're a consultant with a specific methodology to sell."

From the perspective of The Hartford's (Hartford, $198.7 billion in assets) P&C company, the road to integration is through the points where distribution partners and customers interact with the carrier's portfolio of systems. "Building new front ends is probably the best place to invest most [in integration efforts] because through the use of Web services and middleware, or message-switching transactions, you can now access just about every data source or application that you need to in the back office," says Bob Lukas, senior vice president and CIO of the insurer's P&C operations. "It's not a matter of rebuilding the legacy systems to become more integrated-they're still a separate stand-alone; it's just that we're able to access them all and put together a solution that looks as if it's integrated."

As an example of front-end building, Lukas cites hart.Source, which The Hartford describes as an electronic toolkit that supports workflow management and gives business insurance underwriters and customer service reps, among others, access to information needed to service agents and end customers effectively for sales, underwriting, customer service and management activities. The application provides a central point from which to obtain customer account data from back-end sources, including policy and invoicing information. "It's essentially a new Web-based, front-end system with Web services, which, through middleware products, activates transactions in our legacy portfolio and goes against legacy databases," Lukas explains.

A very different kind of inquiry inspired integration efforts at Chicago-based CNA ($155 million 2002 net income). The carrier decided to implement a common integrated data warehouse using technology from Informatica (Redwood City, Calif.) to enable an analysis of rates and customer retention data in CNA's P&C lines. To accomplish that goal, CNA needed to bring together detailed exposure, limits and coverage data from 26 policy issuance systems among more than 50 lines of business-each with its own rate algorithms and data formats.

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

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