Redwood City, Calif. — Oracle Corp. made official what has long been known—it is targeting its sights on the insurance industry.
The launch of the new global business unit, Oracle Insurance, is intended to demonstrate the company’s commitment to serve the insurance industry apart from the other financial services industries. The public unveiling of the unit comes close on the heels of the Redwood City, Calif.-based software giant’s acquisitions of well-regarded insurance application vendors AdminServer and Skywire Software.
Yet, Chuck Johnston, VP for strategies and alliances for Oracle Insurance, tells Insurance Networking News that Oracle’s move to focus on the insurance industry as a vertical began in earnest with the earlier acquisitions of Peoplesoft and Seibel systems, which gave the company a beachhead in the enterprise application space.
According to Johnston, the AdminServer and Skywire acquisitions, which roughly doubled Oracle’s installed base of insurance customers to 2,000, enable the company to offer insurers everything they need to run their processes except the hardware. “Now that we’ve made some very specific acquisitions in the core technology space for insurance, we have a full-featured platform,” he says.
Johnston says the recent additions did more than enhance Oracle’s technology offerings. He points to the insurance-industry expertise the company gained by acquiring subject-matter experts and developers along with the underlying technologies, citing former AdminServer President and CEO Rick Connor, who is currently SVP and GM of Oracle Insurance, as a prime example. “In filling the technology gap, we also filled a people gap,” Johnston says. “There was a need to greatly expand not only the technology platforms for insurance, but also our ability to deliver these solutions.”
Aiming to underscore the company’s investment in the space, Johnston says Oracle is committed to acquiring, developing or creating the best of breed solution in the segment. Apparently, in the case of AdminServer and Skywire, which were strong in policy administration and document management, respectively, Oracle found that it was better to buy than build. “In the acquisition business timing is everything,” Johnston says. “We’re finding incredible synergies, both between the acquisitions, and with Oracle.”
In addition to unveiling Oracle Insurance, the company announced an integration framework dubbed Oracle Application Integration Architecture (AIA) Foundation Pack. “We’re giving them the ability to mesh this into their existing architecture,” he says.
The company will offer separate reference models for the life, property/casualty and health lines. The goal of the model is to enable the business process that insurers need to function, Johnston says, adding that taken to its terminus, the AIA represents the prospect of “insurance in a box.”
While the “insurance in a box” concept is viable in places with nascent insurance industries such as Eastern Europe and parts of the Pacific Rim, Johnston acknowledges the AIA framework was developed with the realization that all insurers won’t go all Oracle. “We realize that most customers won’t want the end-to-end asset, so we’re taking a Lego box approach to this using AIA.” Johnston says, adding that AIA will give insurers a glide path to renovate in a progressive manner. “We’re not going to require every customer to be on the latest version in order to integrate.”
Accordingly, the framework was developed to help ease integration with an insurer’s existing infrastructure, even legacy applications and products from Oracle competitors such as SAP. “We recognize that mainframe systems are not going to go away. If you’re running a closed book of business, there may be no good reason to take it off the mainframe until the cost of the platform becomes too expensive.”
Johnston says the ultimate goal was to give insurers something functional out of the box. “These are really very practical integrations based on the ways customers are asking us to integrate applications today, as opposed to trying to boil the ocean and say ‘here’s how you build an entire insurance enterprise.’”
Sources: Oracle, INN archives
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