“We expect the next move will be shared storage pools with multiple vendors all using the same open standards for their products. But that's probably going to take some more time,” he said.

Hartford, which has some 27,000 workers and a data storage capability of more than 100 terabytes over 2,000 servers, uses 10 specialists to monitor its storage facilities around the clock.

“Most of our new systems use a SAN environment where we essentially provide shared storage pools for a variety of business applications across the company. The backbone of our data storage is magnetic disk storage, supplemented by tape cartridge silos, which are still the most cost-effective means for long-term storage needs. We also use optical storage to a small degree, generally for document imaging,” Mr. Annis said.

Hartford has been deploying SAN for well over a year now, he added. “The business case for SAN is very compelling. As companies move away from direct-attached storage, they can get a much higher degree of utilization for business units.”

The company currently has two large data centers and half a dozen smaller centers around the country; it backs up the data at off-site locations. For business units that have high availability requirements and can't afford significant downtime, the company also provides real-time mirroring of information across multiple physical locations.

But despite the expanding volume of managed dataa development shared by all successful companies across all industries, Mr. Annis notedthe good news is that the cost of conventional magnetic disk storage has been decreasing dramatically.

But the falling cost and improving performance of conventional storage could be bad news for optical storage, whose viability is being called into question by some industry experts.

“The jury is still out on whether optical storage is a viable alternative. The question is whether it will be a cost-effective choice. Companies now have the capability to store large amounts of data very cost-effectively [using] a relatively small staff,” Mr. Annis said.

Newark, N.J.-based Prudential Financial Inc., another major player that has adopted SAN, currently uses standard magnetic disks along with optical disks and utilizes tape libraries to back up its data. The company has 160 terabytes of capacity for its distributed storage arena and some 60 terabytes for its mainframe.

“Storage requirements are continuing to grow as we retain more and more information from our clients,” said Anthony Costa, vice president of systems engineering at Prudential. “We've gone from standard direct-attached storagea base technology that's been around for a whileto SAN, supplemented by network attach storage (NAS), which is file sharing over existing networks.”

Although Mr. Costa also foresees an industry-wide standard for the SAN environment, he noted that the change is probably going to take at least a few more years.

“The industry as a whole is trying to create a standard, but it's a difficult challenge,” he said. Looking forward to 2003, Mr. Costa asserted that optical storage still has a lot of potential, especially as ultra-dense optical is poised to hit the market next year.

The move towards SAN is embraced by smaller players as well. For example, mid-sized specialty P-C carrier American Modern Insurance Group Inc., part of The Midland Company in Amelia, Ohio, has also been deploying SAN.

“I am a big proponent of SAN. It is a trend we are seeing and it is something our company will continue to expand on,” said John Campbell, chief information officer at American Modern Insurance. “We are also in the process of building data warehouses and data marts that will drive our storage needs for next several years. We use traditional direct access storage devices, as well as some optical storage for images, and we have tape backups.”

The company's storage system vendor is EMC Corp. in Hopkinton, Mass., while its primary database management is done by Redwood City, Calif.-based Oracle Corp. It backs up data to tape libraries from Louisville, Colo.-based Storage Technology Corp., Mr. Campbell added.

Kent Sunderland, director of enterprise operations administration at Country Insurance and Financial Services in Bloomington, Ill., said he has been examining SAN for some time to figure out what best fits his company's needs. Currently, Country Insurance has some 400 servers, all using direct-attached storage, as well as two automatic tape library silos for a backup. His company is also considering using emerging iSCSI, a new Internet protocol-based storage networking standard for linking data storage facilities, which works in much the same way a SAN does.

“iSCSI can offer the flexibility of a SAN without the cost of creating a whole new network, but it hasn't really matured yet,” Mr. Sunderland said.

Many insurance brokers have also been busy upgrading their data storage systems. Arthur J. Gallagher & Co. in Itasca, Ill., and Chicago-based Aon Corp., for instance, have been moving away from direct-attached storage and are migrating toward SAN environments, with some NAS when appropriate.

“Data storage needs for brokerages continue to grow, and more companies have been moving into this space. Benefits are tied to better availability and recovery. It also allows you to expand your storage much more easily,” Aon's Chief Technology Officer Greg Casagrande said.

Overall, the insurance industry has seen enormous changes in the way its companies store and retrieve their corporate data.

“For the most part, just a few years ago, companies had big warehouses that stored claim files. The first thing companies had to do to retrieve data was to drive to a warehouse and then look through boxes,” said John Eager, senior director of claims services at National Association of Independent Insurers in Des Plaines, Ill.

“But today, we are in a completely different world. Now, employees don't even have to leave their desks. Companies can get into data storage and search with file numbers, dates or places of accident, and they can retrieve files right away. And the storage capacity is enormous compared to just a few years ago,” he added.

Other developments that have been contributing to less use of paper in the industry involve the utilization of the Internet to create and retrieve files.

“Many people can now report claims on the Web. This is a great blessing. If you report by phone, there is an extra step where someone has to type the information in. Online filing is routed right into the adjuster network, and when claims are closed, they go straight into data storage. Any extra step you can eliminate is beneficial, which cuts down on paper and makes it faster to retrieve data,” Mr. Eager said. “Once insureds get their claim numbers, they can log in and check the status. It's akin to how we track the status of express mail.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, December 16, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.