Systems Integration: Is There a Better Way?

In an industry heavy with operational costs, improving efficiency has long been at the top of insurers' to-do lists. With the weak economy and increasing competition, streamlined operations are paramount.

Clearing Data Warehouse's Name

Yorgensen also says that overcoming fears and misconceptions about data warehousing was important. ""There is always skepticism,"" he says. ""The concern for the business folks is, when does the ROI come? The challenge for the IT folks is to sustain the investment until it works. It is critical to satisfy the operational needs and also build a strategic solution.""

To satisfy the business' need for results, Hartford P&C IT delivered certain functionalities during the beginning stages of development, with the final data warehouse solution available in less than two years, also the time limit that was set for the project. Today, approximately 350 users in the actuarial and underwriting areas log between 2,500 and 3,000 hours of usage a month. The IT team took the data from 10 separate source files, reformatted it into flat files, and then remodeled the data into the data warehouse. Since Hartford P&C had specific needs, ""we didn't take a data warehouse out of a box,"" Yorgensen says, and since it didn't have a wealth of knowledge about creating data warehouses to consolidate data on disparate systems, it hired Knightsbridge as a partner.

The usage numbers of the warehouse at Hartford P&C do not include a new set of users who are also tapping into the data warehouse's functionality. ""Now it is used in many other areas of the company, including claims,"" Yorgensen reports. ""That is recent, but the data is useful because it...presents all of the information on a customer."" In fact, Hartford P&C has formed an enterprise data warehouse group. ""The team will work towards best leveraging the warehouse into an enterprise service.""

Just as Hartford P&C looks to the future by hoping to take its data warehouse enterprisewide, insurance companies are looking to newer technologies in order to help them solve systems integration in new and interesting ways. ""The notion of Web services is extremely powerful,"" says Siebel's Young. ""Everyone is migrating towards it and although there is some uncertainty to what it actually is, people are already thinking about it in terms of systems integration.""

In fact, because of Web services, ""three years from now we'll be astonished at how hard it was to consolidate things and share information,"" says Michael Corcoran, chief communications officer at Information Builders (New York), a provider of Web-based information delivery solutions. ""Even legacy systems can be used in Web services,"" as long as the functions are made to work in XML, he adds. ""Insurance companies will be able to leverage what they already have, and Web services has the potential to move insurance companies onto a level playing field"" with other financial services verticals that may have more advanced technology.

""Web services is going to help facilitate communication between systems without worrying about the infrastructure,"" something that is sometimes ""pretty ugly"" at many insurance companies, points out Metaserver's Aubin. ""Web services will definitely help, but many things still need to be fixed at a majority of insurance companies.""

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Classic Systems Integration Lives

Classical systems consolidation is still being performed by some insurance companies, including Country Companies & Financial Services (Bloomington, IL). The multi-line carrier has strategic alliances with MSI Preferred Insurance Co., Holyoke Mutual Insurance Co., and Middlesex Mutual Assurance Co. and is integrating the property and casualty policy administration systems from all of the companies onto Toronto-based Castek Software Factory, Inc.'s Insure3 policy administration system.

""We chose Insure3 because of its flexibility,"" says Alan Reiss, Country's vice president, information systems. ""Castek's Product Configuration Tool enables us to define a product and make it ready for market quickly. New product innovation and configuration can be accomplished literally in minutes. We'll better serve our customers, capture new markets and gain a competitive advantage.""

Currently, Country and its strategic partners are about halfway through the integration, where all P&C products are being consolidated on Insure3. The project started in Spring 2001.

""Country is a good example of a company that has multiple systems and is looking to consolidate because it has many silos"" of information, says Neil Betteridge, director, product marketing, Castek. ""They are looking for the opportunity to cut maintenance costs. They are also gaining efficiency,"" both in terms of systems maintenance and service to the customer, since all policyholder data is consolidated, he adds.

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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