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Oregon Mutual Achieves Ratings Independence -- In the Cloud

Working with ClarionDoor, Oregon Mutual was able to rapidly go to market with a cloud-based rating system for personal lines auto that ends dependency on comparative raters’ manufactured rates -- an implementation that received a 2013 SMA Innovation in Action Award.

How did you decide on the cloud-based approach? Did you consider "traditional"/non-cloud options?

Fowler: As the cloud technologies and processes have grown and matured, I've become more and more open to looking at the possibilities, in terms of vendor-supplied functionality and OMI-built functionality and capabilities. Beyond infrastructure agility and cost management, I believe there are many "-aaS" opportunities. I remain a fan, and where appropriate reliabilities and assurances can be met, verified, and confirmed on an ongoing basis, I will always have an open conversation and mind.

We knew that our internal, legacy technologies would not support a web service interaction with the comparative raters, and we did evaluate a vendor solution that would have been installed on our server infrastructure. While our server infrastructure was quite capable, other factors led to that evaluation being a frustrating dead-end, and I knew we needed to find an alternative. When I first encountered a vendor that provided cloud-based rating, it took some education to get me to see how it could actually all fit together. Once I had that though, I was open.

How did you select the ClarionDoor solution?

Fowler: To be honest, it was a pretty easy call. When I asked them how long it would take to stand up rating for a state, they told me "two weeks." Given the difficult experience we'd had leading up to that point, I couldn't let that go unanswered, and I called their hand. Thirteen days later, together we were rating our first state on their cloud implementation. Not in production, but the foundation was there, and so was my confidence. Also, they embodied my vision of vendors I look to do business with: they approached our conversations and needs as full partners, making our success theirs, too. They also were flexible: putting a key business process in the cloud does come with worries. Technology worries, data worries, and business worries. Together, we carved out a number of processes and accommodations that help with those worries.

It seems like you rolled this out very quickly, compared to the typical IT project -- how did you accomplish that?

Fowler: We mobilized both IT and business resources, and put a single-minded focus on delivering to production. Just a few months earlier, at OMI we had made a bold shift to how projects get staffed and focused. It was (and is) bold, because of our small size. Recognizing that the shallow bench strength associated with a small staff leads to considerable and ongoing fragmentation of priorities, we changed the model of delivery to eliminate or dramatically reduce the fragmentation during key projects, for both business and IT staff. The ClarionDoor team did the same.

Were there concerns at Oregon Mutual about the security or "competitive advantage" aspects of a cloud solution -- if so, how did you address them?

Fowler: There always are and as far as I can see out, there always will be. While I can imagine a time when processing and services in the cloud have standards and rigors that inspire much greater confidence and assurances, we're not very close yet. We did have concerns, but we were able to get very crisp in articulating what those were, and to work with ClarionDoor on appropriate accommodations that give us a greater degree of assurance. While the one-degree-of-separation of the technology custodianship does continue to cause concern, I believe that the tools and processes we have in place are the right ones. Also, the concerns of cloud-based security and competitive advantage are not things that are "once and done." Even though we have things in place, we revisit them periodically to ensure they are meeting our needs in an ever-changing landscape.

What were some of the lessons learned from the implementation, and will you be able to apply them to future rollouts in other lines of business?

Fowler: Building out cloud-based transacting where OMI is the center of the transaction was new to us. We knew about web services design, but a high-volume transactional environment with multiple web service interactions was new to us. We learned things like volume-based services design and load balancing on the fly. I give the team a lot of credit for their tenacity as they worked through the frustrations and on-the-job learnings. I know, too, that the learning isn't done. The future of the cloud holds processes that involve multiple vendors, in some cases interacting with each other on our behalf, towards a single successful transaction. This happens every day in some sectors; insurance is behind on this, but won't be for long.

Another area is the business-to-business partnership characteristics and specifics that a cloud-based partnership needs. Being this deep in a core process relationship on the cloud was new to me, too. I've come out the other side with new strategies and tools for future partnerships.

[To learn about The Role of the Cloud in the Transformation of IT, check out the session at Interop on October 4.]

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

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