LEGACY SYSTEMS
The Technology Everyone Loves to Hate

Like many industry analysts, Jamie Bisker, TowerGroups director of research-insurance practice, has heard the gripes from carriers about legacy systems. Everybody complains about them, but nobody does anything about them, he says. I put this [research note] together to see if theres a common thread between the carriers we talk to and the vendors we talk to. The result of his study, 10 Things I Hate About Legacy Systems, was a confirmation there are fewer reasons to look at legacy systems as a way to move forward and more reasons to look at them as a drag on the business.

Its possible the legacy system was done correctlybuilt open-ended and flexible and with no trouble adopting to XMLbut that seems unlikely, says Bisker.

The first step in the research was to establish a quality definition of what a legacy system is. We use the words so freely, Bisker says. We all know what we mean [by legacy system], but for everybody, there [still] is a separate definition. Bisker offers eight points he believes define legacy systems:
Developed for a specific business operation, often by location and line of business (silos).
Written and maintained in a language that is not widely supported.
Constituent applications written without the benefit of software engineering tools or methods.
Present limited interfacing mechanisms to other systems.
Utilize less flexible storage architectures and products.
Not designed for extension or expansion.
Bound to a particular infrastructure or architecture.
Restrict business options or plans.
The definition is critical, says Bisker. When the thing thats holding you back is your systems, thats a legacy problem.
There always are those who try to solve the legacy problem by developing another system that extends the legacys life. In todays world that means integration. Thats the latest trend, says Bisker. How can we continue to live with our legacy systems that are holding us back in such a way they dont hold us back as much, or they allow us to do things we want to do or get into technology we feel will give us a competitive advantage, cut costs, or make our customers happier?

Four or five years ago, the answer was supposed to be messaging-oriented middleware, a mechanism that allowed carriers to link their back-end systems to the front end in a more automated way. The question becomes: At what point did those systems become legacy? Bisker asks. Did they become part of the problem they were trying to solve?

Of his 10 reasons, Bisker sees three of them as being extremely important: slowing time to market, difficulty in developing customer-centric processes, and external forces that make the situation ripe for IT to make mistakes. Any time a change in business produces a groaning in IT, that tells you there is a legacy system problem, and it usually shows up in time to market, says Bisker. None of these 10 should be a surprise to anyone.

One thing that holds carriers back is the expense. Budgeting decisions often constrain business needs. Partially thats because IT has a reputation of being a department you really have to watch [regarding] how it spends its money, says Bisker. It seems [project failures] happen more often in IT than anywhere else.

Carriers have put off changes long enough, Bisker believes, maintaining the technology is available to make something positive happen. There arent any good technical excuses not to proceed with improving your legacy systems, he says, or developing a strategy for replacing them.ROBERT REGIS HYLE

10 Things I Hate
About Legacy Systems

1. Slows my time to market for new products or regulatory changes.

2. Cost of system maintenance only is going to increase.

3. The cost associated with holding back staff (full-time equivalent, or FTE) from working with current technology.

4.Concerns over demographic brain drain (experienced legacy staff retiring) or outsourcing experience drain.

5.Even though they work for now, there is a limit to how long I can perpetuate the legacy core systems.

6. New technology costs more every time I have to integrate it with legacy systems.

7. Analysis and metrics are two to three systems removed from my core systems and too slow sometimes to be as useful as they could be.

8. Customer-centric processes become more difficult to develop, manage, and maintain when they are dependent on legacy code and data flows.

9. The longer I wait to fix/replace/buy my legacy system, the more it will cost (in development and lost opportunities).

10.External forces (regulation and com- petition, primarily) are forcing my hand on this issue, and that makes the situation ripe for IT to make mistakes.

Source: TowerGroup

AGENT MANAGEMENT
Zurich GAs Receive Daily Appointment Status Online
Zurich Life has taken an additional step to relieve general agents (GAs) from the stress of appointments through the introduction of TXLife Appointment Data Feed. It allows Zurich Life GAs to receive daily agent appointment status through their agency management systems.

Our GAs told us they wanted to be able to upload appointment status electronically through their agency management systems (AMS), says Ken Olson, president of brokerage Zurich Life, so we gavethem that capability. Through our TXLife Appointment Data Feed, manual data entry and calls to home office to check on appointment status are eliminated.

An agent completes the appointment application through Z-appoint, and once the appointment is complete, the GA is notified. The TXLife Appointment Data is collected on a daily basis, so the information sent to GAs is updated daily.
Currently, the ACORD-certified appointment data feed is available to limited Zurich Life GAs, depending on their AMS vendors. Zurich Life recognizes the importance of ACORD standards, and our goal is to have this data feed available to all GAs through their agency management systems, says Michael Sladek, vice president, field technology services, for Zurich Life.

WHOS USING WHAT
The Savings Bank Life Insurance Company of Massa-chusetts has selected the software company Array Works, Inc., and its InterTask-Insurance software to support anticipated growth and provide a platform to help manage sales, marketing, and customer service.

Extraordinary Markets, the corporate-owned life insurance unit of Transamerica Life Insurance Company, has implemented the ADASTAR system to integrate policy administration, illustrations, and plan administration.

QBE Reinsurance Corporation has selected CATEX, an IT provider for the reinsurance industry, for development of enhancements that will track facultative geographic risk exposures and aggregates.

The Guardian Life Insurance Company of Americahas chosen PeopleSoft Financial Management to strengthen the carriers financial and regulatory reporting and analysis capabilities through the use of PeopleSoft General Ledger, Accounts Payable, and Asset Management.

Amerisure Insurance Company has selected Compu-ware Corporation and its Compuware Vantage performance management system and Compuware QACenter testing tools to manage all new applications.

COPIC Insurance, a Colorado-based medical professional-liability carrier, is using Informatica Corporation and its Informatica PowerCenter to migrate data from its mainframe to a client/server platform.

Guarantee Trust Life Insurance Company has implemented the LifePRO Insurance Company Administration System from Professional Data Management Again, Inc.

Standard Mutual Insurance now is using the services of eAutoclaims and its Accurate Loss for first notice of loss services and Premier Glass Network for auto glass repair and replacement.

Esurance Inc., a direct to consumer personal auto carrier, has joined the InsWeb online insurance marketplace.

Great American Life Insurance Company is using iPipeline tools to distribute its content electronically, which will allow the carrier to publish its life and annuity products directly on the Web sites of managing general agents. In addition, Safeco Life Insurance has agreed to use the iPipeline forms engine for life and annuity new-business forms. Jackson National Life Insurance Company also reached an agreement with iPipeline to distribute electronically its life product information through iPipelines My Agency tool.

American Forest Casualty Company is licensing the Internet version of FormsPlus XP from QualCorp, Inc.

Uniformed Services Benefit Association, a nonprofit insurance and financial services provider for active and retired military families and veterans, has selected CSC and its Convenience insurance administration system to administer the associations life insurance products.