Grange Insurance Group is in the midst of a major systemsmigration project, moving its policy, claims, and billing systemsfrom two mainframes to a client/server architecture. At the sametime, the regional property/casualty carrier is refining its set ofrate tiers, implementing download and upload projects, andcompleting a business intelligence initiative.

Ralph Carlile, vice president and CIO, says the simultaneous BigFive projects are part of a companywide plan to position Grange togrow its business and become more competitive. “When I came here, Ihad a mandate to transform the technology base of the company, andwe've been on a mission to do that,” he explains.

Headquartered in Seattle, Grange provides auto, home, and firecoverage to farm and ranch families in six western states. Thecompany, in business since 1894, employs 222 people and posted $130million in direct written premiums in 2005. About 30 people workfor Carlile in the IT department.

Carlile joined Grange in 2001 after working as director oftechnology and development at a small start-up firm and as seniorsystems director at Allstate. Before entering the insuranceindustry, he spent 16 years working on software development andsystems integration projects for several defense companies,including Honeywell, McDonnell Douglas, and Northrop. Carlileearned a bachelor's degree in physics from Virginia Commonwealth,attended graduate school for physics at Wake Forest, and earned apost-graduate certificate in microcomputer engineering from theUniversity of California at Irvine.

The policy, claims, and billing systems migration project atGrange began when Carlile first arrived. Two years intodevelopment, however, the project was put on hold after Carlilerealized the application it was using was not as mature as heoriginally thought. The project was resurrected about a year agowith help from Insuresoft, a spin-off of Applied Systems.

Grange is rolling out the new system for personal auto inphases. Migration of policies in Idaho already is complete.Policies in Wyoming and Colorado will be migrated by the end ofsummer, followed by Washington, Oregon, and California.

In addition to improving efficiency and reducing costs, movingto a Microsoft-based client/server environment helps Grange attractexperienced Microsoft developers and technicians. “We're located inMicrosoft's backyard, and this will make it easier for us to hireemployees with those skill sets,” Carlile notes.

A client/server-based environment also gives Grange a bettercapability to move forward with its IT projects.

“We are looking at rapid development and implementation ofadditional Web services, and a client/server environment provides acleaner and easier path in that area,” Carlile says. “As we becomemore involved with object-oriented development programming, we'llbe able to push the envelope more.”

That push includes finalizing the other projects such as theupload initiative, in which agents can upload applications directlyinto Grange's system, and the download project, which will allowagents to enter data transactions into their own agency managementsystems. Both projects are in various rollout stages.

“If we can't adapt easily to the changing needs of our agentsthrough Web services and connectivity into our company, then we'renot going to be competitive in the future,” Carlile remarks. “Wewant to be in a position where we at least can have parity with thelarger insurance companies.”

Grange also is creating a multitier rating system for its autoand home policies and completing the implementation of anend-to-end business intelligence and data warehousing solution thatallows employees to access data and analyze business trends.

Before Grange could move forward with any of these projects,however, Carlile says the carrier had to undergo significant changemanagement and reengineer its business processes.

“We have been making fairly rapid progress in transforming thetechnology here,” Carlile acknowledges. “But that change in culturetakes a lot of time and effort. Our challenge has been in keepingthe business expectations and the applications expectations inalignment.”

Once the Big Five projects are complete, Carlile and his teamwill move on to other initiatives, including revisiting thebenefits of speech recognition technology–Grange was a beta testerfor Microsoft's Speech Server software–and working with Microsofton its Insurance Value Chain initiative to provide straight-throughprocessing for insurance on the Microsoft platform.