Pekin Insurance Co. is about to leapfrog its way into the future.
The moment is certainly ripe. Pekin, an Illinois-based property and casualty insurer, still runs its core systems as Cobol applications on vintage mainframes, some of which are 30 years old.
Now that is about to change. Pekin, working with systems integrator PwC, will deploy software to move its entire P&C line to the cloud.
The move actually began two-and-a-half years ago, when Pekin hired a new CIO, Neal Kaderabek. Finding himself with dated IT inventory, he decided to make lemonade. “Other insurers are ahead of us, in that they’ve already invested significantly in infrastructure,” Kaderabek says. “Because we did not make that decision two, three, four years ago, we’re in an interesting position where we can seriously consider putting our entire environment into the cloud.”
Pekin is a multistate P&C insurer, and one of four companies that make up the larger Pekin Insurance Group. Founded in 1921, the privately held group is based outside Peoria, Ill., and serves more than 900,000 policyholders across several states. Its Pekin Insurance unit was founded in 1961 and today operates with 700 employees, 1,500 agencies and 8,500 independent agents.
Kaderabek hopes to achieve three primary goals with the IT initiative: faster times to market, more rapid system changes and the ability to perform predictive modeling for home and auto policies. The total project has been budgeted at $38 million and is expected to take four-plus years.
Two cloud-based software providers were selected through an RFP process conducted jointly by Pekin and PwC: Guidewire Software and Thunderhead.
Guidewire, based in Foster City, Calif., develops software solutions for P&C insurers, including core processing, data and analytics, and digital engagement applications. Pekin plans to deploy several Guidewire components, including InsuranceSuite, an underwriting, rating and policy administration platform; LiveSpotlight, which automates location-based risk assessments, and InfoCenter, Guidewire’s data management and business intelligence software.
Since Guidewire offers a complete insurance suite, the various modules are already integrated. “We could have bought individual applications, Kaderabek says, but most of them don’t play well with each other, and we would have had to build all the integration.”
From Thunderhead, a U.K.-based provider of business-communications software, Pekin will make use of Smart Communications, a cloud-based, Software as a Service (SaaS) solution for customer-communications. The application should give Pekin greater control over creating and managing personalized, multichannel communications with its customers.
Another plus from Kaderabek’s perspective: PwC is an official Guidewire integrator, and Thunderhead is a Guidewire business partner, meaning that all three companies are very familiar with each other’s technology and have worked together in the past.
Still up in the air is whether the new software suite will be hosted over a public cloud or on a private cloud in Pekin’s own data center. To make a final decision, the insurer will conduct a 12-month test that compares an on-premises setup with one running on Microsoft’s Azure cloud service. “We’ll evaluate them on performance, reliability and security,” Kaderabek says, “and then decide.”
