Basic data integration, the act of extracting, transforming and loading (ETL) structured data from disparate systems into a single data store so it can be manipulated and evaluated, carries with it certain logical elements and processes.In today's insurance IT department, however, the vast amount (approximately 80% according to experts) of new data being generated is unstructured, (Web, VoIP, IM and e-mail) and being lopped into data silos that are growing exponentially. Integrating structured and unstructured data brings with it yet another layer of complexity.

Add to that some of the nuances inherent to the insurance industry: numerous product lines, each with its own anthology of regulatory compliance, state-by-state rules and multi-layered reporting requirements.

"I'm seeing the insurance industry as being 10-15 years behind everyone else as a result," says David Egbert, CIO at Markel Corp., a Glen Allen, Va., provider of specialty line insurance. Egbert, who spent several years in consumer electronics goods before joining Markel, brings a different perspective.

"You would never see the typical insurance carrier's technology at Wal-Mart," he says. "They have to have end-to-end systems. If you compared how a consumer goods company operates, an insurance company's data integration project would have to take a broader look at the supply chain and combine data, from wholesaler through to claims."

Yet it is because of the industry-specific complexities that insurers' integration activities are on the rise, says Donn Vucovich, managing director and practice area leader for business technology solutions at Chicago-based Navigant Consulting.


Vucovich maintains that increased regulation and control, regulations around data access and retention, and the information lifecycle associated with data and application integration have the potential to force carriers to deal with reality.

"People are seeing how bad their data is," he says. "It's located on several platforms, sometimes in duplicate form, and often it's not up-to-date, relevant or complete. We all kind of knew it, but now that we are being forced to go through it, significant efforts are going into data quality."

Vucovich admits that the insurance industry is still in Phase I but not because funding is limited.

"Insurance boards are starting to respond prudently, because they now understand that we must fund regulatory efforts and the best way to do that is to have new ways to work with our ever-growing stores of data and information," he says.

A recent Web poll conducted by Insurance Networking News confirms Vucovich's point: When asked to cite the No. 1 challenge to data integration efforts, only 27% of respondents cited a lack of executive-level buy-in, and 23% cited lack of budget and tools. The remaining 50% of respondents cited the many silos created from legacy systems as being the biggest challenge.

Vucovich confirms the enormity of both data and enterprise application integration (EAI) initiatives, which often spin into multi-year projects.

"It's very disciplined-not a one-off approach," he says. "And it is a business process management issue. You have to analyze and structure what you want to do, and there's a good deal of deep thinking that goes into the creation of indexes, the meaning of data, etc."


On the upside, a data integration project opens the door to other opportunities, says Vucovich. "Carriers are leveraging these efforts and tying them to operational and front office efforts," he says.

Egbert reports that, like most insurers, his company has several legacy systems that hold structured and unstructured data, making Markel prime for data integration at some point in the future.

"Markel has been around for 75 years and we've done an excellent job of meeting our clients' needs," he says. "Management understands that our information systems are so important. So we are starting with a strategic plan, and we're looking for a refresh. We also know what we are facing-integration can be a real challenge."

Insurers that commit to a data integration project typically do so one functional area at a time-and with the end in mind.

Successful integration efforts begin with the creation of a strategic plan such as Egbert's, along with a core task force composed of individuals from both IT and business units. Then come the tough questions: How will we determine which systems should be involved, which data from those systems is relevant and what steps are necessary to clean it? How will we address the semantics, or taxonomies, of data across systems? How do we intend to repurpose the data? And what kind of analytical tools are necessary to find new ways of looking at our new data stores in order to successfully support decision-making? Should we go for an enterprise application integration tool or use ETL tools for moving data?

In a recent software review published by Insurance Networking News' sister publication DM Review, Todd Okuley, director of application development at Columbus, Ohio-based Nationwide, spelled out the business drivers behind his company's decision to integrate legacy customer information across its lines of business, the largest of which is the property and casualty customer information file, into IBM's WebSphere Customer Center (WCC).

"Nationwide wanted to create a single view of its 35 million customer relationships as a means of improving customer service and cross-selling opportunities," reports Okuley.

Due to the segmented nature of Nationwide's business units, a single repository of customer data did not exist. Additionally, says Okuley, relationships with brokers who sell some of Nationwide's products and services required a system that would provide a view of only those products that a broker or call center representative needed to see.

To achieve that goal, Nationwide is working with a systems integration partner, IBM Global Business Services, to match and duplicate suspect processing algorithms used to aggregate customer data from 16 separate sources, while ensuring that each customer appears in its system only once. So far, 10 data sources have been ported into WCC, and by mid-2007, the remaining six sources will be brought in, says Okuley.

In the future, Nationwide plans to make more use of WCC's service-oriented architecture (SOA) by porting its sales and support applications to customer information services that can be shared across the enterprise. As a result of WCC's functionality, Nationwide expects to achieve a consistent, up-to-date customer view across all of its sales and service channels, including call centers, the Internet and the offices of its network of brokers.

"By March 2008, WCC will provide Nationwide's claims and service centers with real-time access to customer information," he says.


Once this data becomes information it needs to be accessible to internal and external users, who often need coaching-and even coaxing-to embrace the newly created system.

"Business drivers, such as the need to create a single view of a particular customer set or to streamline or automate a manual process, mandate that target be the end user, who is required to deal with multiple systems in order to go about their daily job functions," says Vucovich, "so it's prudent for an insurer to get users involved from the very beginning."

And as carriers continue to align IT with ever-changing business drivers, the need to give users what they need to streamline and automate functionality is more important than ever.

At Meadowbrook Insurance Group Inc., a Southfield, Mich., provider of traditional and alternative risk insurance and management services, the need to give users what they need became paramount once a "pain point" was identified that was costing internal users undue labor and time to re-key information from agents' account current report submissions.

The 50-plus-year old company's history of growth through acquisitions added to the complexity: Meadowbrook has many organizations within one, all with their own structured data, applications and systems.

To tackle the problem, Meadowbrook business analyst Cindy Prudhomme established a team of three developers, an internal project manager and a tech project manager from business process management (BPM) technology provider Adeptia, which is headquartered in Chicago. Representatives from the business side also played a key role, and the newly formed team studied the situation leading to the project's green light.

In the past, agents rendered an account current report that may contain three tabs, one for each of Meadowbrook's subsidiary carriers that pertained to them, Prudhomme explains. Each tab had an average of 700 transactions on it, which would require a week's time to key in.


"Once we got the larger team together, we realized we were facing more than just the typical data integration challenges," she says. "We recognized immediately that we needed to focus on human workflow issues for both internal and external users."

The integration project, which is now in beta, has taken close to a year to complete. It automates much of what was once mostly a manual submission process, and uses Adeptia's BPM, change management and rules-based processing to adapt to the few submission exceptions that require human intervention.

"Now agents upload their files to Meadowbrook's FTP site, and we can take a straight import of that file. For each tab of 700 entries, we might have 20 items that a human being needs to review and approve," Prudhomme says.

Prudhomme says that the newly designed account current submission system is by no means totally automated, "because we don't intend it to be. Our goal is to have human intervention only when needed or appropriate."

Prudhomme says that the project's largest challenge has had little to do with integration and automation; rather, it's been the user community's acceptance of change.

"The first step in any integration project is to make sure the user can visualize what the world will look like when it's done," says Prudhomme. "To that end, it does require a bit of hand-holding."

The Meadowbrook leadership team took painstaking steps to build users' trust.

"During our weekly meetings, users would ask, 'how do I know this will work?' To get them to embrace the new operational functionality, we built tests and had them work with the data."

Markel's Egbert believes managing user expectations is one of the keys to integration project success. "It's foolish to communicate anything but the process-you have to be realistic. Then the answers to questions such as 'What's the next generation going to look like?' will come naturally."

Vucovich says managing leadership's expectations is important, too.

"I tell my clients, 'Look, this is still an emerging environment, so people should not feel as if the horse has left the gate,'" he says. "We are still learning and applying new and different skill sets to the processes, such as people skills, negotiation, and special attention to good communication."


The integration market is evolving at a rapid pace and is even more complex than when last reviewed in 2005 by Boston-based Forrester Research. In its March 2007 report, "Evaluating Integration Technology Options," Forrester cites the reason for the evolution: extensive product enhancement driven by the convergence of service-oriented architecture (SOA) and business process management (BPM).

"The resulting increase in demands from businesses has enterprise architects scrambling to put in place the integration infrastructure needed to accommodate the multifaceted process improvement opportunities that have recently surfaced," says Forrester principal analyst Ken Vollmer, one of the reports' authors.

The business drivers for this demand include:

* Improving business processes to drive business performance;

* Enabling faster time-to-market for new applications;

* Responding more quickly to new challenges and regulations;

* Improving customer service;

* Integrating customer and product data.

Forrester reports growing demand for SOA in organizations of all sizes and projects a 20%-plus growth rate for BPM software over the next five years.

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