With aging systems, and the specter of Y2K, PAULA decided to replace its disparate systems with one custom-built and highly integrated system. Using an AS/400 running a SQL database, and using IBMs VisualAge for Java as its primary development tool, PAULA began a five-phase implementation schedule, with each phase building on the work (and objects) from the previous one.

First it implemented a redesign of its basic infrastructure, for such things as rate tables, agency maintenance files, and so on. Next came fully integrated submission logging, pricing, and tracking systems. The third phase, which went live in early 2001, was the new policy issuance system, using an ISIS graphical front end to IBMs Advanced Function Printing capability. The end result: All PAULAs policy issuance and collating is now fully automated.

The fourth phase, in testing as this is being written, automates and integrates the billing functions, which include the often-changing premium requirements of installment billings, voluntary audits, and the like. Last up will be a rewrite of all the collection and cancellation functions. In preparation for this, PAULA has implemented a bar-coding system for all its installment billings and voluntary audits. Even on a heavy mail day, the entire load can be scanned in minutes to make sure cancellation notices dont go out for received items, even if it doesnt get to those items for a while.

With all these components being tightly integrated into one database, PAULA now has extensive, real-time management reporting, with almost infinite slice-and-dice capabilities.

PAULA has about 18 offices, some for claims, some for the agency, and many mixed. So Hernandez is also responsible for the LANs and WAN connecting the various parts of the company, and expects to be replacing the current frame-relay communications system with a virtual private network. The company does a little development work using Lotus Domino (such as workflow management) for use with its Lotus Notes-based desktops. And it started a trial telecommuting program for a dozen claims examiners.

The core part that Hernandez kept coming back to was the integrated, centralized database. As he said several times, The real payback is in the integration.

Tim Lewis
Western National
Insurance Group
Tim Lewis likes to think of himself as an agent of change.

When Tim Lewis joined Western National Insurance Group about two years ago as vice president and manager of information services, it was a big change. His 20-year IT career had been mostly with large companies, such as Dell, Coca Cola, Skytel, and Abbott Laboratories. With Western National, he saw the opportunity to join an established and stable regional carrier with a long history in its own market niche, long-tenured employees, and a more enjoyable lifestyle.

Western National is a century old insurance company in Edina, one of the western suburbs of Minneapolis. (More importantly, its 7.2 miles west of the Mall of America.) There are actually two companies: Western National Mutual writes mostly in Minnesota and surrounding states, while Seattle-based Western National Assurance writes in Washington. It does about $200 million in premium, writing exclusively through its independent agency force of about 400 agencies, writing mainly in seven states. Westerns business is two-thirds personal lines and the rest commercial. Of approximately 390 employees, 25 work for Lewis.

(The companys original name was the Mutual Creamery and Cheese Factory Fire Insurance Company. Western National is probably a better business name, but Mutual Creamery and Cheese seems to have more, er, romance to it.)

As soon as he got there, Lewis began speeding the modernization of Western Nationals systems. Its back office runs on a highly customized SIS systemnow called Fiserv SIS (www.fiservsis.com)and the company is happy with it. Running on a strong AS/400 platform, it feels it will continue to serve the carrier well. Western replaced its dumb terminals with PCs, added a Windows 2000 local area network, and installed a wide area network for the companys three locations.

All of Western Nationals personal lines processing, including rating, is handled by the SIS system. The carrier writes a surprising range of commercial lines, however, and it had been using CGI (the old ISI system) for rating in the Minnesota operation and InsTech for Washington. After looking around, it decided to standardize on Cover-Alls iClassic rating system. (Just the ratingnot Cover-Alls policy processing.) After hitting a few speed bumps, its got the new rating system running well. The next step will be to pass data from iClassic to SIS.

The biggest project that Lewis and Western National have going is the multi-phase effort to push its processing and interfaces to its agents. It started by using IBMs Host On Demand capability, which uses terminal emulation, to let the agents do direct bill inquiry, claims inquiry, and policy inquiry. Now its Web-enabling its SIS system, using mostly WebSphere, VisualAge Java, and MQSeries, to give its agents even more capabilities. Ultimately, agents will be able to quote, order policies (which go to a holding area for underwriter approval), do endorsements, and process renewals. Agents will be able to do business directly with Western Nationals system via the Web interface, with the resulting business being downloaded (via IVANS) to AMS, Applied, or MI-Assistant.

Theres been a lot of change at Western National over the last two years. With all the Web work under way, therell be even more.