Computers are supposed to shorten or take over routine tasks for us, freeing human brains and hands for creative projects beyond the capabilities of machinery. Frequently, however, users find themselves at the mercy of their mainframes, desktops and laptops, performing repetitive input chores and time-consuming database maintenance functions. Now, a technology that takes advantage of automated Internet resources is allowing carriers to skip the middlemen and take the data directly where it needs to go - the agent and the consumer - without costly delays.Being able to use this type of technology to streamline the release of new products and reduce the time it takes to announce changes in a product's pricing structure is a growing need faced by most carriers. Such was the concern of Electric Insurance Company (EIC), a Beverly, Mass., carrier whose roots date to 1966 when it provided insurance for employees of General Electric. Today EIC, licensed in all 50 states, has expanded its P&C direct-to-customer rates to the general public.
"The driver was more an efficiency issue that came to our attention when we started to implement our pricing package," says Steve Coyne, data warehouse specialist at EIC.
Identifying the pain point
As the company sought a solution to its data bottleneck, it identified its biggest problem: the time it took the IT department to code their analyst's Microsoft Excel 2003-generated spreadsheets into COBOL for distribution over the mainframe. Once the carrier knew its pain point, it turned to Hawaii-based Decision Research Corporation (DRC), with whom it already had a relationship, for help.
DRC proposed that EIC switch to a Web services-based technology (see "Web Services Defined," p. 23). This meant the company would eliminate COBOL and hand-coding entirely by converting the spreadsheets directly from Excel to XML files via DRC's V1STA RateMaker rating engine. After completing a spreadsheet, EIC's analysts launch Ratemaker's compiler, which then extracts the spreadsheet data and logic and stores it as XML files. These files are then dragged and dropped to the mainframe server and are callable by multiple platforms from another component of V1STA RateMaker, the RateMaker Broker, which generates quotes dynamically on request.
"XML-based technology is the wave of the future in business applications," claims Steven Korow, vice president of technology at DRC. "It allows you to reuse code and attain scalability and modularity. You can kick out one service and put in another and you don't have to change pieces along the value chain."
For EIC, the ability to generate data quickly across platforms was key. EIC's Coyne provides several examples. "If our pricing people decide to provide a discount or surcharge, add a new state or change the rates quickly, this technology allows them to do it quickly and virtually load it to all platforms."
Upon implementation from the spreadsheet to the mainframe, the software's XML conversion capabilities, along with the Internet services model of distribution, enables users to view the data on a wide variety of Web-based enterprise applications.
Shorter deployment time
For EIC, RateMaker's most noticeable benefit is a decrease in deployment time for its new products. "We rolled out a GE Employee Benefit, an umbrella policy offered in all 48 states, (and) introduced our homeowners product in roughly 12 states," says Coyne. "That kind of flexibility has enabled us to improve our loss ratio," says Coyne.
It also freed EIC's IT people to work on other tasks and allows its analysts to stay closely involved in the testing process, as they can now model new pricing structures in a desktop environment rather than depend on IT programmers to code and launch their calculations.
By converting the spreadsheets directly to data files, RateMaker allows analysts to take on a development role, allowing them hands-on participation in the testing phase. "It frees people up from a lot of the maintenance work and allows us to spend more time on the development side," Coyne states.
The elimination of error-prone hand-coding and data conversion is also viewed as a long-term plus. "The fewer hands involved, the better the error ratio," he says.
The benefits of Web services-based solutions go beyond time-saving automation. The universal XML protocol allows seamless communication between machines at distant locations, allowing the construction of a "virtual machine" linked from several different places but functioning as a whole. It's non-proprietary, and the open-ended nature of the metalanguage is one of its selling points. This means no one manufacturer can monopolize it, freeing buyers to mix and match what they consider to be the best products without worrying about compatibility. "It saves time and money in several ways," claims Korow. "And you get to pick best of breed." When asked what drove the creation of new metalanguages such as XML, he offered one word: "Interoperability."
Getting products to market more quickly, offering more flexibility and granularity, and responding to changes in the economic or regulatory environment more efficiently are all keys to staying competitive. With Web services-based technology coming into its own, carriers can expect to make a quantum leap in the speed at which they will be expected respond to changes and challenges.
Christopher Amati is a business writer based in Chicago.
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