Whether it's underwriting, billing or customer systems, legacy mainframe applications persist among even the most technologically advanced insurance companies. Enterprises are being forced to introduce new products and services faster than ever, and the implementation of cost-cutting strategies means that they have to do more with fewer resources.Service-oriented architecture (SOA) is an effective and pragmatic approach that enables greater system agility, including the legacy mainframe solutions that house enormous amounts of policy data. New legacy-SOA integration strategies must tap into mainframe performance, security and programming resources, as well as valuable data. When they do, good things can happen. Insurers taking this more comprehensive approach and making the mainframe an active participant in SOA initiatives are experiencing success.


One current example drives home the point. As of May 23, 2007, large health care and insurance providers are required to use a federally provided National Provider Identifier (NPI) number on all claims transactions. This unique, 10-digit identification number is assigned to each provider, and must be used by all providers, health plans and health care clearinghouses in the administrative and financial transactions specified by HIPAA.

In the past, health plans assigned identification numbers to providers to be used within their own information systems. As a result, providers who do business with multiple health plans have had multiple identification numbers.

While the NPI will help standardize provider identification across systems, its use creates challenges for health plan companies, which can no longer use internal provider identification numbers on externally filed claim documents.

Typically, health plan companies have implemented high-performance, mainframe-based batch applications to process the enormous number of claims they deal with daily. These batch systems must now talk to external systems, such as Web services applications, in order to perform a translation of internal identifiers to the new NPIs, and then return the translated data for completion and publication of claim documents.

In order to accomplish this task, the batch system must be able to call the Web service repeatedly in a single session, while still maintaining required performance levels, processing a specified number of claims per hour. Technology now exists to enable this automated servicing, which might have been impossible just a few years ago.


Another area where SOA can pay big dividends is agent service. For example, an insurer in Michigan used the SOA concept as some routine maintenance projects evolved into a full-fledged customer information center.

The multi-line insurer, which has 2,000 employees, agents and staff throughout the state, set out to facilitate regular updates to IBM's WebSphere application server and modernize the look of an outdated claims inquiry system. What emerged was a full-scale customer center that now serves 1,500 total users online.

In the process, 150 mainframe "green screens" have been updated with graphical user interfaces (GUI), and the system is more accessible to agents working on cases.

The initial challenge facing the company was the regular updates to WebSphere, which the company used for its homeowners quote system. The data source was the mainframe, using data and processes that would continue to reside on the mainframe in their native formats. The insurer needed to access them using Java applications, and WebSphere enabled them to do so. They also needed to replace an inefficient claims inquiry system, integrating many mainframe screens and processes into a streamlined GUI.

The insurer also built a framework to keep the business programmers from having to know how to code calls and parse results. The programmers could now make a call to a proprietary software-based "black box" that passes the call to the mainframe, which performs the interaction and then returns the result to the business programmer.

This approach enabled the company to retool existing applications to operate in a loosely coupled environment where they could easily incorporate new releases from WebSphere.

This process of revitalizing legacy applications continued with the life insurance area, where the company integrated its billing administration system, so all payments emanating from the agent's office are processed through the customer center. Plus, the ability to link a policy to search results from the company's document management system enables agents to easily pull up and review all related documents and photos.

The vast majority of the conversation regarding the impact of SOA on an organization revolves around the use of Web services in a transactional context, according to a 2007 report from Stamford, Conn.-based Gartner Inc. Insurers need not retire these assets, which provide ever-increasing value in a modernized environment.

Robert Morris is senior vice president of marketing and strategy at Atlanta-based GT Software Inc.

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