LEGACY SYSTEMS
The Technology Everyone Loves to Hate

Like many industry analysts, Jamie Bisker, TowerGroups directorof research-insurance practice, has heard the gripes from carriersabout legacy systems. Everybody complains about them, but nobodydoes anything about them, he says. I put this [research note]together to see if theres a common thread between the carriers wetalk to and the vendors we talk to. The result of his study, 10Things I Hate About Legacy Systems, was a confirmation there arefewer reasons to look at legacy systems as a way to move forwardand more reasons to look at them as a drag on the business.

Its possible the legacy system was done correctlybuilt open-endedand flexible and with no trouble adopting to XMLbut that seemsunlikely, says Bisker.

The first step in the research was to establish a qualitydefinition of what a legacy system is. We use the words so freely,Bisker says. We all know what we mean [by legacy system], but foreverybody, there [still] is a separate definition. Bisker offerseight points he believes define legacy systems:
Developed for a specific business operation, often by location andline of business (silos).
Written and maintained in a language that is not widelysupported.
Constituent applications written without the benefit of softwareengineering tools or methods.
Present limited interfacing mechanisms to other systems.
Utilize less flexible storage architectures and products.
Not designed for extension or expansion.
Bound to a particular infrastructure or architecture.
Restrict business options or plans.
The definition is critical, says Bisker. When the thing thatsholding you back is your systems, thats a legacy problem.
There always are those who try to solve the legacy problem bydeveloping another system that extends the legacys life. In todaysworld that means integration. Thats the latest trend, says Bisker.How can we continue to live with our legacy systems that areholding us back in such a way they dont hold us back as much, orthey allow us to do things we want to do or get into technology wefeel will give us a competitive advantage, cut costs, or make ourcustomers happier?

Four or five years ago, the answer was supposed to bemessaging-oriented middleware, a mechanism that allowed carriers tolink their back-end systems to the front end in a more automatedway. The question becomes: At what point did those systems becomelegacy? Bisker asks. Did they become part of the problem they weretrying to solve?

Of his 10 reasons, Bisker sees three of them as being extremelyimportant: slowing time to market, difficulty in developingcustomer-centric processes, and external forces that make thesituation ripe for IT to make mistakes. Any time a change inbusiness produces a groaning in IT, that tells you there is alegacy system problem, and it usually shows up in time to market,says Bisker. None of these 10 should be a surprise to anyone.

One thing that holds carriers back is the expense. Budgetingdecisions often constrain business needs. Partially thats becauseIT has a reputation of being a department you really have to watch[regarding] how it spends its money, says Bisker. It seems [projectfailures] happen more often in IT than anywhere else.

Carriers have put off changes long enough, Bisker believes,maintaining the technology is available to make something positivehappen. There arent any good technical excuses not to proceed withimproving your legacy systems, he says, or developing a strategyfor replacing them.ROBERT REGIS HYLE

10 Things I Hate
About Legacy Systems

1. Slows my time to market for new products or regulatorychanges.

2. Cost of system maintenance only is going to increase.

3. The cost associated with holding back staff (full-timeequivalent, or FTE) from working with current technology.

4.Concerns over demographic brain drain (experienced legacy staffretiring) or outsourcing experience drain.

5.Even though they work for now, there is a limit to how long I canperpetuate the legacy core systems.

6. New technology costs more every time I have to integrate it withlegacy systems.

7. Analysis and metrics are two to three systems removed from mycore systems and too slow sometimes to be as useful as they couldbe.

8. Customer-centric processes become more difficult to develop,manage, and maintain when they are dependent on legacy code anddata flows.

9. The longer I wait to fix/replace/buy my legacy system, the moreit will cost (in development and lost opportunities).

10.External forces (regulation and com- petition, primarily) areforcing my hand on this issue, and that makes the situation ripefor IT to make mistakes.

Source: TowerGroup

AGENT MANAGEMENT
Zurich GAs Receive Daily Appointment Status Online
Zurich Life has taken an additional step to relieve general agents(GAs) from the stress of appointments through the introduction ofTXLife Appointment Data Feed. It allows Zurich Life GAs to receivedaily agent appointment status through their agency managementsystems.

Our GAs told us they wanted to be able to upload appointment statuselectronically through their agency management systems (AMS), saysKen Olson, president of brokerage Zurich Life, so we gavethem thatcapability. Through our TXLife Appointment Data Feed, manual dataentry and calls to home office to check on appointment status areeliminated.

An agent completes the appointment application through Z-appoint,and once the appointment is complete, the GA is notified. TheTXLife Appointment Data is collected on a daily basis, so theinformation sent to GAs is updated daily.
Currently, the ACORD-certified appointment data feed is availableto limited Zurich Life GAs, depending on their AMS vendors. ZurichLife recognizes the importance of ACORD standards, and our goal isto have this data feed available to all GAs through their agencymanagement systems, says Michael Sladek, vice president, fieldtechnology services, for Zurich Life.

WHOS USING WHAT
The Savings Bank Life Insurance Company of Massa-chusetts hasselected the software company Array Works, Inc., and itsInterTask-Insurance software to support anticipated growth andprovide a platform to help manage sales, marketing, and customerservice.

Extraordinary Markets, the corporate-owned life insurance unit ofTransamerica Life Insurance Company, has implemented the ADASTARsystem to integrate policy administration, illustrations, and planadministration.

QBE Reinsurance Corporation has selected CATEX, an IT provider forthe reinsurance industry, for development of enhancements that willtrack facultative geographic risk exposures and aggregates.

The Guardian Life Insurance Company of Americahas chosen PeopleSoftFinancial Management to strengthen the carriers financial andregulatory reporting and analysis capabilities through the use ofPeopleSoft General Ledger, Accounts Payable, and AssetManagement.

Amerisure Insurance Company has selected Compu-ware Corporation andits Compuware Vantage performance management system and CompuwareQACenter testing tools to manage all new applications.

COPIC Insurance, a Colorado-based medical professional-liabilitycarrier, is using Informatica Corporation and its InformaticaPowerCenter to migrate data from its mainframe to a client/serverplatform.

Guarantee Trust Life Insurance Company has implemented the LifePROInsurance Company Administration System from Professional DataManagement Again, Inc.

Standard Mutual Insurance now is using the services of eAutoclaimsand its Accurate Loss for first notice of loss services and PremierGlass Network for auto glass repair and replacement.

Esurance Inc., a direct to consumer personal auto carrier, hasjoined the InsWeb online insurance marketplace.

Great American Life Insurance Company is using iPipeline tools todistribute its content electronically, which will allow the carrierto publish its life and annuity products directly on the Web sitesof managing general agents. In addition, Safeco Life Insurance hasagreed to use the iPipeline forms engine for life and annuitynew-business forms. Jackson National Life Insurance Company alsoreached an agreement with iPipeline to distribute electronicallyits life product information through iPipelines My Agencytool.

American Forest Casualty Company is licensing the Internet versionof FormsPlus XP from QualCorp, Inc.

Uniformed Services Benefit Association, a nonprofit insurance andfinancial services provider for active and retired militaryfamilies and veterans, has selected CSC and its Convenienceinsurance administration system to administer the associations lifeinsurance products.

GE Financial has chosen E-Z Data, Inc., to provide itsEnterprise CRM Platform to enhance sales and marketingeffectiveness by utilizing a common Web-based platform.

Horizon Blue Cross Blue Shield of New Jersey has addedHealthConnect, a provider of sales and marketing solutions for thehealth insurance industry.

Liberty Northwest has reached agreement with IBQ Systems to providean Internet sales platform for Libertys auto and homepolicies.

AEGON Canada Inc. has selected CheckFree Financial and ComplianceSolutions from CheckFree Corporation to use the CheckFreeRECON-Plus for Windows.

Atlantic Mutual Insurance Company has integrated geographicinformation system technology from ESRI for underwritingpurposes.

Conseco has chosen Universal Conversion Technologies as a solutionsprovider and integration project manager to convert Consecosexisting health business.

Builders Insurance Group has reached a licensing agreement withAcroSoft Corporation to license AcroSofts Insurance ContentManagement document imaging solution.

Royal & SunAlliance USA has signed an outsourcing agreementwith BPO and IT outsourcing solutions provider ACS that willprovide the insurer with network management services includingtransport assets and carrier services management.

Florida Farm Bureau General Insurance Company has purchasedImageRights Document Management and Workflow solution, which willbe used in the insurers claims operation.

Sammons Financial Group has selected Document Sciences and itsxPression universal content processing software. Sammons, aninsurance holding company with life and annuity products, will usethe tool to design, create, and deliver correspondence, statements,policies, and other communications.

Argonaut Insurance Company has reached agreement with Insurity Inc.to extend the use of Insuritys property/casualty policy processingservices to support the carriers rating and policy issuance forgeneral liability and commercial auto insurance.

OPTAS, a Netherlands-based insurer, has licensed PrincetonFinancials PAM portfolio management and accounting system.

Mutual Fire Insurance Association of New England has reached anagreement with Adesso Systems to supply field inspectors with amobile solution using the Adesso technology platform.