In addition to the flood policies, OPAC writes personal linesauto and home. Today, the flood business is about $120 million of our $180 million in premium, Jensen says, but the one-third book of $60 million in premium is growing. The affiliate writes auto and homeowners business in about 15 states. It has about 450 independent agencies, plus some Mutual of Omaha career agents who also write some P&C.

We use Fiserv SIS for our policy processing system, Jensen states. Mutual of Omahas IT department handles the hardware for us, and Mutuals IT department provides people dedicated to our P&C company, plus my own staff. The system runs on an AS/400, with the internal people using Attachmates Extra Office Client terminal emulation running on PCs. OPAC wanted to start pushing its services out over the Web to its agents, and its first project was auto. The technology in use is Java Server Pages on an RS/6000 thats running IBMs WebSphere.

The Web is a real-time, 24/7 operation, Jensen says, but the AS/400 isnt. It has to do batch processing at night. Jensen and project manager Dan Duffy kicked around a lot of different ways of handling that disparity, until Duffy came up with a concept they call Front Office/Back Office. He took the ball and ran with it, Jensen says. Heres how it works:

During the day, OPAC has a real-time connection between the AS/400 back office and front office with AS/400 data queues transporting the information to the Web server on the RS/6000. The Web server only communicates with the front office on the AS/400. If a data-entry person enters a payment on a green screen in the back office, for example, it shows up instantly on the front-office system, which in turn is viewable out on OPACs Internet solution, and vice versa. When the AS/400s back office goes into batch mode in the evening, however, the real-time connection is severed while the Web site keeps running, only it is now using static data from the front office. Once the batch processing is completed, the real-time connection is re-established, and the two systems reconcile.

To demonstrate the Web front end, Jensen dialed into Mutual of Omahas Remote Access Server (RAS), using a security device called SecureID. This is a small key fob, with a built-in clock, that displays a long number that changes every 30 seconds or so. (These security devices actually have been around for years, but their use is not as pervasive as one might imagine.) In addition to his password, which must be typed (not stored), he has to type the number in before it changes. Since the remote employees are instructed to keep the fobs separate from the computers except when actually using them, it adds one more layer of security. Someone stealing the notebook might get the data on it but cant get into the RAS.

Were getting ready to implement SERFF [System for Electronic Rate and Form Filing], Jensen says, and were in the planning stages to add homeowners for our agents over the Web. Another likely project will be to extend Mutual of Omahas imaging capability to OPAC. Although there are plenty of projects still to complete, Jensen already has had his share of successes, and certainly among them is the Web-AS/400 solution. Says Jensen: It works like a charm.

James Sullivan
Consumers Insurance USA
In developing systems from scratch with a new company, this CIO found a real advantageeverything can be Web-based and real time right from the start.

Most insurance company chief information officers join a carrier with an existing IT operation. James Sullivan, CIO of Consumers Insurance USA, came on board even before the company opened its doors.
Consumers is a relatively new carrier, formed in 1995 by fewer than 50 insurance agents in Murfreesboro, Tenn. As the states only agent-owned carrier, the companys agency focus is almost a given.

Premium is growing much faster than staff. Well do about $20 million in premium this year, states Sullivan. Drawing on the automation Sullivan and his team have built, the company operates with just 28 people, including claims, underwriting, administration, and officers. The IT component, including Sullivan, consists of five people.

When Consumers was first formed, writing only personal auto in Tennessee at that time, it outsourced its policy processing to a vendor in Des Moines, Iowa. That got the company rolling, but the insurer quickly realized the setup wasnt going to work for the long haul.

Today, virtually all Con-sumers processes are Web based, including major systems for policy processing, claims, and rating. We made a bet on the Internet, Sullivan says, describing the decision to build its real-time system. The insurer started working on the new policy processing system at the end of 1997 and rolled it out in mid-1998. By the beginning of 1999, all of Consumers business was on the new system, including new lines (eventually adding another state next door in Missouri) and all its renewal business.

Everything Consumers writes either is personal or commercial auto or related to auto. It writes various kinds of automobile businesses, such as lube shops, repair shops, even nonfranchised (read: used car) dealerships. Beyond Tennessee and Missouri, it is already licensed in three other states. Its up to more than 200 agencies, although most of the newcomers are not owners.

Sullivan attended Tennessee Techno-logical University with a major in computer science. He ran his own computer sales and programming business for three years before joining Consumers. Originally, Sullivan did all of the planning and coding, but he now has a team of programmers who are instrumental in the development of the system.

The Consumers system is all PC based, running on Microsoft SQL Server with a Web front end and the code written in a combination of VB Script, Java Script, and Dynamic HTML (DHTML); the company is starting to move to XML. It currently has more than 20,000 policies on a database of only about five gigabytes. We have a lot of capacity, Sullivan says.

Sullivan points out both the underwriters and the agents are using the same code and the same screens. The policy declarations page and key documents such as auto ID cards are issued immediately in the agents offices. Well assemble and mail the policy to the insured to reduce the printing load on the agents, he says, unless the agent wants to print the whole thing or deliver a PDF version.

Endorsements are rated and issued also in real time, including even the dread-ed out-of-sequence endorsements. It wasnt an easy thing to do, Sullivan notes. The system produces a daily activity log, a company version of what agents call transactional filing. Real-time Web reports are handled using Crystal Reports software.
In a break with the industry trend, Consumers does not do credit scoring, even though it is allowed in the states where the company does business. Sullivan points to Consumers agent ownership and focus for that decision. Agents hate credit scoring, he says. It might cost us a point or two, but we dont know that for a fact, and it makes our agents happier.

Current projects include building hooks to upload from Rackley and ITC, the two most popular comparative rating systems Consumers agents use, as well as an imaging system. It already built its claims system, which is operational, and its looking at other functionality such as electronic bill presentment.

The agents, whether owners or not, seem to like what they see. A recent survey in the August/September issue of The Tennessee Agent rated Consumers number one in the ease of doing business through automation category. Theres always a better way to do things, Sullivan says, describing the companys creativity. We keep improving all the time. I love it.