Let's start with the question
Let's start with the question
One day, exercising her prerogative as the tormenting older sibling, my sister asked me, "Do you walk to school or carry your lunch?" The obvious fallacy in that question is one of relevance: One's mode of transportation to school bears no relevance to the procurement of one's noontime repast. Likewise, the fallacy in a question that continues to haunt the insurance distribution system--Will the Internet replace SEMCI?--is one of relevance. The mode or technology by which work is deployed or transmitted bears no relevance to the flow of that work. The Internet is a means of deployment or transmission. SEMCI (single entry, multiple-company interface) is a process of workflow. The Internet may facilitate the dissemination of information generated through SEMCI, but it will not replace it.
The promise of "true" SEMCI has been the golden carrot dangled before the wondering eyes of insurance agents for years. The prospect of soliciting competitive quotes from any number of carriers with the push of one magic button remains justifiably enticing. But the promise ignores the math. On one side of the equation, insurance carriers built mainframe databases to house the data and transactions necessary to process their myriad lines of business. Those mainframes were versed in various programming languages and constructed on various operating platforms that were never intended to communicate with other languages or across platforms. They became what is now known in the vernacular as "silos"--vertical systems, erected to perform specific tasks, with no horizontal integration across their own organizations, let alone across the distribution system.
On the other side of the equation, agencies that were willing to make investments in computer technology and office automation were able to purchase any number of agency management systems, most of which were designed to communicate with one or another of the carrier's mainframes---but allowed no flexibility across languages and platforms. In that equation, the sum did not add up to SEMCI.
As an inadvertent complication, carriers developed proprietary methods for delivering products and rating protocols. Who could blame them? Since each of them had incentive programs for the "captive" agents who wrote the preponderance of their business with them--and since each carrier also could count on some percentage of independents to write business with them--it made little difference that their systems didn't communicate with each other, let alone with those of other carriers or the remaining percentage of independent agents that never quoted business with them. Such businesses' processes remained relatively static for years. Unfortunately, technology--and the calendar--didn't.
Why 2K?
The calendar, of course, brought the threat of the Y2K Bugaboo. Heeding its implications, insurance companies deepened their investments in their increasingly deployment-unfriendly legacy systems by expending the resources necessary to ensure they would be compliant on January 1, 2000. Unfortunately, that date was followed by January 2. On that date, the Bug's bite had been avoided; but insurance companies now had even more investment-heavy IT assets that were no more deployment-flexible than they'd been on December 31. Still reliant on proprietary methodologies--and having been sidetracked from "mission-critical" issues such as Web deployment--insurance companies were no closer to fulfilling the promise of SEMCI than they were to bringing their legacy systems to Web-enablement. Given the new century, we might call that dilemma Catch 21.
The good news is that the post-Y2K world now booms with enterprising methodological developers who can enable interfaces heretofore undreamed of, who recognize the need for agencies and carriers to increase their speed to market, and who understand that competitiveness demands that businesses be able to reach their markets via flexible deployment means--enabling any system to talk to any other system in any language or on any platform. Most important, the visionary players in the Bold New Technological World, some of whom have no history in the insurance industry, may not be encumbered by the political or proprietary technological concerns that have kept SEMCI from fulfilling its promise. In the dawning of a new technological age, that is indeed a wake-up call.
Resolved of its own ACORD
The development of ACORD electronic standards has clearly been a step in the direction of SEMCI. The extent to which agents pin their hopes for SEMCI on those standards was made evident by the proliferation of "Vote for SEMCI" buttons distributed at this year's ACORD Conference by the Independent Insurance Agents of America. But the technological gaps between proprietary carrier interfaces, the Internet, and the ability of ACORD standards to bridge those gaps remains real, despite the obvious benefits SEMCI would deliver to agents by improving workflow--and to carriers by reducing operating costs. While the slow pace of technological uniformity may be cause for dismay, it is not cause for alarm because, technology notwithstanding, the insurance distribution system is not going to change in any profound way: Given the public's desire to have professional insurance services delivered by professional insurance agents, the role of agents in that system will always be necessary, despite their worst fears.
The big surprise is that if new software products, new business models like application service providers (ASPs), and new Internet media like insurance "exchanges" and "trading floors" take too long to develop or never catch on at all, the key to SEMCI may reside in the last place we'd expect to find it--in those big, old, Y2K-compliant legacy systems we'd been so ready to write off.
One company, MTW Corporation, not only has made that realization, it's helped a number of large insurance and financial services companies rejuvenate their legacy systems by "wrapping" critical information and transactions to create re-usable "business components"--functionally rich software objects that can be employed regardless of location or technology platform. Using features of object-oriented (OO) technology (while adding information engineering, structured analysis and design, and rapid application development), MTW developed the ProgressionTM Method to seamlessly integrate and use legacy-wrapped functionality, purchased application components, and packaged software applications to quickly deploy flexible delivery of high-volume, mission-critical, transactional applications. This component-based flexibility allows existing data to be used in new and exciting ways while maximizing the usefulness of and investments in legacy systems. And the data they contain can be used to populate a variety of forms, including ACORD forms, and to be deployed in a variety of media depending on need--from client/file servers to voice-response units, from agency management systems to the Internet.
According to Mark Stender at Travelers, "The work we did with MTW pre-dated new languages like XML and any of the e-words that now dominate our technological vocabulary. Most important, the specific technical work MTW performed for us was directly driven by our short-term business needs, as well as our long-term business strategy.
"MTW was able to assist us in re-architecting our legacy systems, which we had begun to fear were obsolete. And they enabled us to extract data from our old silo systems, and deliver information to our agents and customers in the ways our agents and customers needed it. Our goal was to automate the quote, rate, and policy-issue processes. Through MTW's technological expertise, we've made it simple for agents to write business with us through an easy-to-use, fast, SEMCI/ACORD compliant application.
"As a result, we're now able to deploy to the Web and to agency management systems with real-time insurance processes. By focusing on business needs, not technology buzzwords, MTW helped us transform our rigid legacy systems into flexible, Web-enabled applications that are helping us reach more agents and customers more effectively--and increase our market share."
By taking high-level, consultative approaches; transcending the historical stovepipe view of enterprise systems; creating new business processes that preserve the data, the transactional capabilities, and the sizable investments that have been made in existing mainframe databases; and by enabling those new transactions to populate ACORD forms and communicate across various platforms and to various agency management systems, companies like MTW are bringing SEMCI closer to reality by separating the workflow from its means of deployment. In doing so, they are making the fruits of platform-independent agency/carrier interface all the more bountiful. *
The author
Mark O'Brien is the director of public relations at Martino & Binzer, a full-service marketing communications firm in Avon, Connecticut. O'Brien formerly was employed by The Hartford, Aetna, and The Travelers.
For more information
MTW Corporation
Mission Woods, KS 66205
Contact: John VanBlaricum
Director of Marketing
E-mail: jvanblaricum@mtwcorp.com
Phone: (800) 669-9689
Web site: www.mtwcorp.com