As it faced the unenviable task of selecting and then implementing a systems integration solution across its various business components, Cincinnati-based American Modern Insurance Group discovered a modern approach to an age-old problem.In late 2001, AMIG adopted a program known as the Virtual Insurance Community (VIC), the brainchild of PwC Consulting, a business unit of New York-based PricewaterhouseCoopers LLP. VIC is a pre-integrated, component-based e-business solution designed for processing insurance transactions.
Believed to be the first end-to-end pre-integrated solution of its kind targeting insurance, VIC falls under the aegis of an umbrella program PwC dubs as Integrated Financial Services Solutions, or iFS Solutions.
AMIG-a provider of insurance tailored toward manufactured housing, site built dwelling, motor home, travel trailer, motorcycle and watercraft-recognized the virtues of iFS Solutions and the Virtual Insurance Community in what was an IT investment born of necessity. Over the last decade, AMIG, which generated more than $471 million in net written premium in 2000, has seen its premium volume grow at more than three times the industry average.
As such, AMIG understood that as the business grew, it needed to upgrade the automation strategy driving the operation. In short, it needed to adopt a solution robust and yet flexible enough to meet the needs of this growth-one that could Web-enable its business processes and provide self-service capabilities to its producer network. These affiliates comprised a network of general agents who in turn aggregate sales from sub-producer affiliates-independent agents, specialty agents and point-of-sale partners such as lenders, dealers and manufacturers.
Like many carriers, American Modern Insurance explored the notion of implementing a best-of-breed solution strategy that would enhance the efficiencies of not only these affiliates, but also AMIG's internal operations, such as policy administration, underwriting, billing and claims.
However, many carriers that have explored best-of-breed solutions have been exposed to a rude awakening: The piece-by-piece implementation of best-of-breed solutions can be a painstaking process. Just because a carrier selects the "best" doesn't guarantee a quick and easy integration process across disparate operating systems.
Enter PwC and its Virtual Insurance Community. As it explored its options, American Modern in 2001 unveiled an internal program called modernLink, a multiyear systems integration and business process change initiative. As it conducted its due diligence, AMIG was sold on the power behind PwC's external and internal competencies and, in turn, selected VIC to provide the framework for integrating the modernLink program.
PwC offered expertise in such areas as customer relationship management, operations, finance, IT infrastructure and Web development. The VIC team began with 65 individuals and has since grown to about 100 as the program has continued to evolve.
These attributes were taken to heart by AMIG's senior executives as they scouted for systems integration solutions to support modernLink. "We actually stumbled upon VIC architecture as we were exploring our options. It was like 'ah hah'-we knew we had found the solution that was compatible with our own business plan," explains John Campbell, executive vice president and CIO for AMIG.
"One advantage is the intellectual capital that PwC brings to the table. Before VIC came into the picture, we realized that we needed to upgrade the systems that supported our business. We developed a layered enterprise architecture approach: component by component."
One of the dynamics that sold AMIG's top brass on VIC was the solution's pre-integrated architecture. For example, Toronto-based Castek Software Factory is one of the technology partners aligned with VIC. Castek designed the policy administration application built into the overall architecture. If a carrier licensed Castek's solution as a standalone, out-of-the-box entity, it may be burdened with spending months mapping the policy administration system to comply with its own IT architecture requirements. However, VIC was designed to conform to the user-not for the user to conform to VIC.
Embarking upon a 12-week planning schedule to launch the first phase of VIC within AMIG's operation, PwC's team members joined AMIG's IT and business personnel to perform "gap analysis." Once the functional "gaps" were identified, the team proceeded to formulate a "roadmap"-the basis on which AMIG would develop and integrate components over several years.
What AMIG has learned adopting VIC within its operation is that "it's not a case of reopening the curtain and saying 'voila, the project is complete,'" Campbell explains. "Every six to nine months over the next several years we expect to deliver a new function. It's a process."
Even before the Virtual Insurance Community came into the picture, AMIG-a subsidiary of the Midland Co., an auto finance provider-had been upgrading its Web-based infrastructures. It incorporated Microsoft Corp.'s NT servers and Unix servers into the system architecture, designed a browser-based policy inquiry and policy status function, electronic forms distribution for its affiliates, a Web-based system for recreational vehicle policy rate, quote and submittal, and a Web-based security solution.
Throughout this component-based initiative, Burlingame, Calif.-based CrossWorlds Software Inc. provides the enterprise aApplication integration (EAI) piece. CrossWorlds offers out-of-the-box support for multiple standards-based data types, protocols and Internet security, providing carriers such as AMIG with the ability to plug right into their already-automated processes and existing environment.
Through this middleware layer, CrossWorld's mapping connections are linked to all the applications within the VIC architecture. However, many carriers, including AMIG, have invested a significant amount of capital for their own proprietary rating engines. As such, carriers might be unwilling to scrap an application investment in favor of VIC's pre-integrated options.
But they don't have to-VIC conforms to user needs, with CrossWorld's serving as the enabler to various non-native applications.
For example, AMIG recently selected Bolivar, Mo.-based Duck Creek Technologies Inc. to provide rating management. Duck Creek's Example Platform enables carriers to rapidly develop rating, underwriting and other policy services to enhance their businesses.
"VIC will enable us to plug in the Duck Creek solution," Campbell says. "We can use the middleware piece during the conversion, turn off the legacy system and point to the Duck Creek rating engine."
Replacing its legacy applications will enable AMIG to improve its internal efficiencies-all associates will eventually have access to the modernLink program anywhere and anytime through a browser. But like most carriers, AMIG realizes how crucial it is to Web-enable its external partners. "We do business with a diverse distribution channel," Campbell explains. "Over the years, many of these producers have operated on our home-grown 'green screen' systems."
With modernLink up and running, Campbell says that AMIG can provide self-service capabilities to many of these producers. "It's about ease of doing business," Campbell explains. "Our Web-enabled security strategy will allow our general agents to delegate authority to sub-producers-they can distribute the right products to the right sub-producers."
Campbell adds that its POS partners will also benefit through the systems integration project. "These partners typically have their own systems, and we will be able to interface these systems to modernLink-to the back-end infrastructure platform, but not necessarily to the front-end presentation layer," Campbell explains.
One step at a time
Going forward, "VIC will be an evolving tool we'll always have a need for. I think the solution possesses the flexibility to evolve as we evolve," he says.
One major initiative AMIG has on its radar screen is implementation of a data warehousing program. "Our data is really our fundamental problem. We want to know more about our customers. Our sources of data and information are scattered, and we have a non-industry-standard coding structure," Campbell says.
"We intend to adopt the ACORD XML standard. But our sources of data were also designed when manufactured housing was our only product line," she adds. "We've expanded the lines greatly over the years, but the data capture abilities are not very dynamic."
In the near future, AMIG, which has total assets of more than $682 million through 2000, plans to establish a central data warehouse with data marts, incorporating lines of business a little at a time, beginning with manufactured housing insurance.
When AMIG embarks upon data warehousing, PwC Consulting-via VIC-will be ready. "We can provide data warehousing solutions that are embedded into the VIC architecture based on ACORD XML," says Patricia Hamilton, management consulting services, PwC Consulting. "We have a traditional data warehousing model as part of the iFS Solution, and in turn provide customers such as AMIG with an enterprisewide view of their customers."
While Campbell would not disclose the costs that AMIG assumed to adopt the VIC solution, he states that building out this architecture "will enhance revenue growth, streamline internal processes and improve profitability through better selection."
AMIG envisions efficiency enhancement through productivity, such as self-service capabilities for general agents. "This takes the burden off of us internally," Campbell says. "We realize that there can be major benefits when we effectively enable associates and producers to take ownership and responsibility for service delivery. Through the entire multiyear business transformation, we always have to remember that this project is first and foremost a business-driven project that is being enabled by technology," Campbell concludes.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access