At Cincinnati Equitable, Web services have opened up new avenues of connectivity. Agents can now access rating applications housed within the Cincinnati-based carrier's Windows-based servers to look up territory and verify policy status.This is not remarkable news, since agent portal Web sites have been around for years. What is remarkable is the fact that this new application took two hours to set up and deploy-a process that usually took several weeks, according to Terry Brown, vice president of information systems for Cincinnati Equitable Insurance Co.
That's because the carrier, along with its partner, IBS Inc., Oak Brook, Ill., used .NET-based components to build the system on Microsoft Windows servers. "The speed of development was shocking," Brown says. "The ability to get this process extended to our agents is much faster than it was when we had to code everything."
Throughout the industry, interest is growing in Web services, which may enable carriers' IT shops to link or create applications with far less fuss and muss than the complicated application integration schemes of times gone by.
For most, there are two paths to Web services-through Microsoft Corp.'s .NET environment, or through Java 2 Enterprise Edition (J2EE)-compliant application servers, led by IBM Corp.'s Websphere, Oracle Corp.'s Application Server, BEA Systems Inc.'s WebLogic, and Sun Microsystems' ONE.
Both .NET and J2EE are complex environments that purport to hide the "plumbing" and protocols required to link systems and applications across a network. Both support the four key Web services standards-XML, SOAP, WSDL, and UDDI.
The difference between the two is reach. J2EE is built on Java specifications, which will run on most types of hardware, from mainframes to Unix machines; while .NET is designed as the next-generation platform for Microsoft Windows.
Application servers make Web services more palatable for enterprise application developers, who, for years, had to cobble together applications in languages such as Visual Basic, C/C++, Cobol, RPG, and lately, Java.
Now, the race is on between proponents and suppliers of .NET and J2EE solutions to win the hearts, minds, and wallets of insurance carriers and service firms. However, although there are distinct differences between the two platforms, many insurance IT executives say they're likely to incorporate elements of both environments.
Both platforms are making progress within the insurance industry, primarily in the area of Web services implementations for Web portals that serve producers and agents, according to Jamie Bisker, analyst with TowerGroup, a Needham, Mass.-based research and consulting firm.
"Many carriers now have Web sites that enable agents to look at claims and policy information," he says. "But it's an effort to keep things up and running somewhat close to real time, with nightly refreshes and data extracts."
Web services make all that possible, he says. "Web services technology is another evolutionary step in enabling computer systems to work with each other, requiring less input or fewer human interfaces."
An evolutionary step
Web services are also paving the way to straight-through processing, long the dream of insurance industry IT executives. This is certainly the goal at Providence Washington Insurance Cos., Providence, R.I., which is rolling out a Web services-based portal for its agents, which is built on .NET using middleware from Metaserver Inc., New Haven, Conn.
"The first project we're doing is to get transactions from our independent agents electronically and post them to our system," says Ed Leveille, CIO at Providence Washington. "Then the agent can go in and obtain a quote for the premium for the policy. Once various partners and third parties adopt XML transactions, Web services give us the possibility to make the insurance transaction true real-time, straight-through processing."
Industry analysts agree that neither platform has emerged as a clear leader within insurance industry IT shops. "Carriers have not yet made any final decisions as to strategic deployments," says Matt Foster, senior manager with Bermuda-based Accenture. In most cases, IT executives want to keep their options open, typically by supporting both approaches.
"It's still very early on in the Web services game," says Greg Schueman, vice president and CTO of Mercury Insurance Group, Santa Monica, Calif. "Our own custom work is in J2EE, but we're likely to purchase some things that are .NET in the future."
Mercury Insurance, which provides auto and homeowners insurance through independent agents and brokers, recently rolled out a Web services-based interactive voice response system, built on IBM Websphere, which employs DE Management Server from Digital Evolution Inc., in Santa Monica, Calif.
The system enables customers to pay homeowners insurance bills with credit cards, Schueman explains. As part of this initiative, Web services are exposed to retrieve policy and billing information, process credit card transactions, and obtain agency-related information. "We're going to switch over our auto payments systems to the same technology in the next few months," he says.
Likewise, at Nationwide Mutual Insurance Co., Columbus, Ohio, the thrust is to build new applications on both J2EE and .NET-compliant platforms as appropriate.
"The Nationwide Insurance side of the house is all Microsoft, and most of our financial services units, and some of our other affiliates, are on J2EE," says Srinivas Koushik, vice president and CTO at Nationwide. As part of its preparation to move to Web services, Nationwide is migrating all its application sets off older Java code to J2EE, and from Microsoft's older DCOM structure to .NET.
"We have many affiliates and companies that are part of the enterprise, and if we want to share information, the integration challenge was a nightmare," says Koushik. "Getting our individual companies to J2EE and .NET enables us to make that integration happen."
Nationwide is still in the early stages of Web services. "With these technologies emerging, we want to make sure that we can prove it, before we throw a ton of money at it," Koushik explains. The company is currently testing Web services linkages at its recently acquired Provident unit.
"The vehicle we're using to make that integration between J2EE and .NET happen is Web services," says Koushik. "Provident's retail producers need to be able to access our core systems, and sell our products. We took a couple of key business transaction systems, and provided linkage between them."
At Providence Washington, Leveille expects the benefits of Web services to quickly become evident. "Our agents will have various transactions they can perform online-quoting, archives and first notice of loss," he says. They won't have to rekey information-such as name, address, policy limit, and so forth-into the system to get the quote.
Today, they have to type it all in. With the Web services transaction, the application will fill in the blanks, and when the agent presses enter, they'll get a real-time quote within seconds.
Not surprisingly, there are proponents on both sides that see one platform having advantages over the other. Microsoft pitches .NET as a more cost-effective alternative to J2EE.
"We see quite a large number of .NET projects being delivered faster and under budget all over the industry," says Josh Lee, lead technical strategist for financial services at Microsoft.
As is common with the risk-averse insurance industry, many insurers see their Web services applications as either not newsworthy or as a competitive advantage, he says.
As a result, they don't want to talk about their implementations. Still, among large carriers, "you will find a number of .NET projects."
Some carriers' IT executives agree that .NET offers the path of least resistance at this time. "Both .NET and J2EE are very valid choices," says Jay Chenoweth, director of information systems for PIC Wisconsin, Madison, Wis. "We're emphasizing .NET because it provides more productivity and a little head start to the development efforts, compared with what I've seen with some of the J2EE platforms out there. It seems like there's more moving pieces with J2EE, compared with .NET, which is all integrated."
J2EE proponents, on the other hand, claim their environment provides more robust support for specific industry functions, such as workflow and transactions. For example, IBM's latest edition of Websphere Application Server enables you to build workflow that ties in Web services and Java applications, says Dr. Robert Sutor, IBM director of e-business standards strategy.
TowerGroup's Bisker believes that companies with large IBM systems are most likely to adopt J2EE for back-end systems, while .NET will support front-end applications. "The insurance industry tends to be very IBM-centric. Over 90% of insurance carriers have IBM hardware," he says.
"I see Websphere at the middleware for lower-level access, and.NET implemented for the externalized views of data and services," says Bisker.
Joseph McKendrick is a freelance writer based in Doylestown, Pa.
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