From collaboration to customer service, companies are turning to networks of applications and individuals to accomplish tasks, increase competitiveness and improve productivity. As a result, pressure is on enterprise networks to constantly keep increasing capacity, intelligence, speed and performance-both inside and outside the firewall.The typical insurance carrier is increasingly becoming a networked organization, albeit at a slower rate than other industries.

"The average insurance company is about five years behind in networking technology," observes Chad Hersh, senior analyst with the insurance practice of Boston-based Celent LLC. "Insurers are scrambling to keep up."

The pressure is on to support a range of new initiatives, such as customer and agent e-business channels, Web services, service-oriented architecture, collaborative computing and mobile computing, which require robust networks with higher bandwidth thresholds. Add to this a plethora of multimedia files, which individually run into the multi-megabytes in size-that are choking current systems. For carriers, growing volumes of digital photos, workflow documents and customer data are taxing current systems.

The industry may have not been ready for this onslaught of network bandwidth and networking requirements, Hersh points out. For example, insurance companies were not on the dot-com bandwagon at the beginning of the decade, and therefore did not build out their capacity as companies in other industries did. However, new types of applications are changing this need, resulting in an explosion of networking needs across the insurance industry.

"A carrier's network may be unprepared for that new imaging workflow system that passes thousands of huge images back and forth a day, or these rich Web clients running on every desktop for every conceivable transaction," says Hersh.

As a result of this explosion of new activity, capacity management has become a front-burner issue for many insurance companies, particularly those that have been through mergers or other changes in their business lines, relates Greg Beat, senior consultant for Compass, a Naperville, Ill., IT services firm. "We have seen many insurance companies with significant levels of excess infrastructure capacity-for example, 50% utilization of LAN ports, which is excessive," he points out. "This situation leads to higher costs for maintenance and support."

Pressure to keep a lid on network costs is another factor, Beat continues. "The pressure to reduce costs is being driven by the need to manage excess infrastructure capacity." For networks, he calculates, "hardware and software constitute at least 60% of the total costs. The remaining 40% comprise services or personnel providing operational support." As a result of these cost pressures, he adds, he has seen some insurers actually reduce personnel and maintenance of the infrastructure.

Yet, network growth will only keep accelerating. IBM, Armonk, N.Y., estimates that, by 2010, the amount of digital information is expected to double every 11 hours. One industry study recently estimated that over the past three years, Fortune 1,000 companies have, on average, seen their total data environments grow from 190 TBs to one petabyte (one million gigabytes), and data at midsize companies has grown from an average of 2TB to 100TB, according to TheInfoPro Inc., Redwood City, Calif. Another new study conducted by IDC, Framingham, Mass. for Hopkinton, Mass.-based EMC Corp., put the total "digital universe" at 161 billion gigabytes (161 exabytes) - the equivalent of 12 stacks of books, each extending more than 93 million miles from the earth to the sun. This is predicted to grow at a rate of 57% a year to 988 exabytes by 2010.


At Columbus-based Nationwide Mutual Insurance Co., a growing e-commerce business has required increased capacity. Company growth has put pressure on the network, "so that manifests in a number of ways," says Jim Gay, assistant vice president of Internet technology solutions at Nationwide. "Our internal network has to grow to support increasing capacity. We have many applications now facing customers on the Internet, requiring us to consistently add more capacity bandwidth to our Internet connectivity."

Not all demand for more robust network capabilities comes from sexy new technologies and multimedia presentations. Events over the past few years have driven concerns around companies' abilities to recover from disasters. The ability to ensure business continuity within carriers' operations call for robust network infrastructure that is based on the establishment of secondary data centers and systems that are linked into the primary data centers as close to real time as possible. Nationwide also has also beefed up its network infrastructure to achieve higher availability, Gay added. "As you need higher availability, and you want to do disaster or continuity management planning, you end up with building redundancy into your network."

Celent's Hersh also advises carriers to stay ahead of the curve in terms of networking capacity. "Once a decision gets made to go with a bandwidth-sucking technology, it's late to be thinking of upgrading your network at that point. It's a relatively inexpensive way to stay ahead of the curve," he says. "Even if your enterprise isn't doing anything today to cause huge bandwidth issues, they will. It's just a matter of when. So get out ahead of the curve and stay there. It's one of the least expensive things to do for the value. And the cost of not being ready when the need is there is significant."

Nationwide, for one, has taken care to plan at least six months ahead for upcoming network needs. "We really have to be six months ahead of normal capacity planning," Gay says. "Provisioning still takes time. You can't really order something, particularly a high-speed connection, and expect to get it in even 30 days. So we need to get out in front of that." Nationwide also employed application performance and capacity planning solutions from HyPerformix, Inc., Austin, Tex., to predict, optimize and validate end-to-end performance of mission-critical, enterprise applications and IT infrastructures.

Bellevue, Wash.-based Symetra Life Insurance Co. recently built its new corporate headquarters in 2004 with future networking requirements in mind. The carrier currently employs a 100-megabit Ethernet to support desktop access, with a gigabit Ethernet on the backplane.

The company also pre-wired its newer corporate facilities for future wireless access points, according to Jim Ryan, assistant vice president of technology services for Symetra.


At Symetra, the most acute demand for more robust network connectivity is coming from partners and outside access. "We have seen an increase in our bandwidth requirements traversing our DMZ to and from the Internet," says Ryan. "As staff members leverage 'software as a service' solutions from our vendor partners-for example, HR and accounts payable portal solutions-and as we build solutions in support of our self-service strategies for our external business partners and customers, we'll continue to see utilization increase on our Internet pipes and across our infrastructure."

The need to support connectivity outside the firewall is becoming a major focus of carriers' network initiatives. "We want to make it easy for our strategic business partners to do business with us," says Symetra's Ryan. "We have a distribution network of more than 20,000 agents, advisors and financial institutions who sell our products, and we need to exchange information and provide them with access to our systems securely and reliably." Symetra delivers this capability through electronic data interchange (EDI), file transfer infrastructure, and Web-enabled applications access. "Networking is the foundation, including continuous monitoring to ensure the security and reliability of our third-party network traffic," says Ryan. Symetra contracted with Compass, to address these issues.

Mobile applications bring their own special challenges as well.

"Large digital photos, sent via wireless by adjusters are examples of stuff coming into the enterprise," says Hersh. "It's another area in which bandwidth hunger is growing. Providing the right levels of bandwidth to sales forces-via wireless modems-is going to be a big issue."

In addition, the increasing mobile expansion of their networks brings up several significant issues for insurance companies: application management, device security and data integrity. Providing for growing wireless access by independent agents was the challenge at Colonial Supplemental Insurance, Columbia, S.C. The carrier has a sales force of 6,500 independent contractors that require access to the corporate network. "They are required to use specific technology in the form of laptops, and printers, and signature pads that we have tested with our enrollment applications," says Tim Sox, manager of enrollment technologies for Colonial.

Originally, the sales representatives used offline applications that were loaded into their laptops. However, recently, reps have been able to access online applications. "In the past few years, we've been developing a new online enrollment application that will bring a lot of new capabilities to our salesforce, and allow us to get into new areas and sell insurance where we may not have been able to before," Sox says.

Colonial implemented a mobile device management and security solution from Sybase, Dublin, Calif., to manage devices through the online Web environment and remotely administer and update the agents' computers-allowing them, for instance, to encrypt agents' hard drives and to disable lost or stolen laptops.

The company did not require a significant upgrade in bandwidth to support data transfers back and forth between the core systems and representative's systems. However, Sox notes, "our new enrollment application will require high-speed bandwidth. We're currently researching availability of connectivity, including wide-area networks and air cards." However, this is a complex undertaking, since Colonial's field force is often either on the road or at customer sites, he adds. "When our agents go into an account, their IT department may not necessarily be open for them to come in and plug into their network."

Nationwide has also been looking at the challenges of supporting network connectivity beyond the corporate firewall. "Nationwide has entered into the wireless market in several ways," says Gay. For example, the company has invested in air cards, and also maintains a fleet of portable satellite units for handling claims in disaster zones. "Our adjusters need to be mobile anyway," he says.

"With wireless, we recognize that mobility is not only important as we service our customers, but it is also important to us for the productivity of our associates," Gay continues. "We have invested in a wireless infrastructure inside of our buildings that creates a Nationwide hot spot. These hot spots serve as secondary connectivity for our associates, who might be collaborating with one another."

Joe McKendrick is an author and consultant based in Doylestown, Pa.

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