Insurance Online: Just Point, Click & Bind

How the e-business strategy at one AS/400 site led to plans for a spin-off and additional online tools for its agents and brokers

Move over "click and mortar." There's a new game in town--one that promises to transform the way insurance companies do business.

With plans to spin-off part of its e-business development efforts to a separate company called, appropriately, Point, Click & Bind Inc.--Reliance Group Holdings hopes to make it easier than ever to quote and bind insurance policies online.

Point, Click & Bind Inc. clearly represents one of the company's most significant e-business initiatives to date, but is by no means its first, however. "Reliance has implemented a variety of e-business solutions over the past several years, and these programs are now an integral part of the company's operations," explains Arne Herenstein, VP of Information Technology at Reliance Insurance.

Headquartered in New York City, Reliance Group Holdings has major property and casualty insurance operations around the world--the largest of which are Reliance National (New York City), a provider of specialized capabilities and coverage, and Reliance Insurance(Philadelphia), which offers a range of insurance products and services to mid-size companies. Although they serve different markets, these companies benefit from many of the same information systems technology and personnel resources. "The IT group is truly an enterprise organization. My paycheck says Reliance National, but I develop Web systems for any Reliance company," says Michelle Jenks, IT director at Reliance National.

And Jenks has been doing a lot of that lately. Over the past 18 months, Reliance has cut administrative costs and improved service levels throughout its organization by launching a number of Web-enabled offerings, including: Partner Connection, for secure online access to the company's rate pages, clearance system, claims data and policy information; Marketplace, for managing a contacts database as well as an account management system for tracking new business leads and servicing existing customers; CyberComp, for online quoting and binding of workman's compensation policies; and its latest addition, Umbrella Online, for quoting umbrella insurance policies online.

Of course, none of these programs happened overnight. The company's e-business efforts started with a basic informational Web site in 1997, which was expanded during the fall of 1998 to include Partner Connection. "Then we developed the CyberComp site," says Jenks. "And when that took off, that's when Reliance really got interested in the idea of a separate company to support the development of additional online products." Marketplace and Umbrella Online soon followed.

Low Risk, High Returns
The payback on these programs? "Tremendous," says Herenstein.

He offers the following example. "One problem that often happens in the insurance business is that an agent can quote a policy for us, but there's no assurance to them or to us that they have the most current rate to make that quote with," says Herenstein. To address this problem in the past, the company would mail out reams of paper that listed the rate information for every product, in every category, in every state.

Today the company is able to obtain direct downloads from major statistical bureau agencies such as the International Standards Organization (ISO) and the National Council on Compensation Insurance (NCCI), make any necessary additions, then post these rate pages on the Internet--on Partner Connection. "Having these rate pages online is probably one of the most popular improvements we've made, because it gets right to the heart of the matter--it makes work go away," says Herenstein.

Another important piece of Partner Connection is Insight/RMS (Risk Management System), which provides Reliance personnel, customers and insurance agents real-time access to claims data and policy information. For an agent, this means that they can enter a policy number and account name and bring up all relevant reported claims, either at a detail or summary level.

CyberComp offers yet another example of how Reliance has taken advantage of the Internet to grow its business. With its CyberComp division, Reliance became the first insurer to quote and bind workers' compensation over the Internet. At $81.3 million in gross premiums written in 1998--compared to $31.5 million in 1997--CyberComp has been one of the company's most profitable e-businesses to date.

And now there's Umbrella Online, which allows umbrella insurance to be purchased over the Internet. Much like CyberComp, insurance agents can make an entry to get a quotation--they receive an e-mail with the price of the policy along with the underwriting criteria--and then they'll get the policy--all online.

Although it may not get the same kind of fanfare as some of the other e-offerings, Marketplace is one of the company's most powerful e-business initiatives because it provides a direct link to any number of mission-critical applications. Delivered as a pilot program in July 1999, the Marketplace account management system represents Reliance's ability to Web-enable the nuts and bolts and guts of an insurance business--including the submission and renewal processes that form the basis of its operations, according to Herenstein.

The AS/400 Connection
Ultimately, the AS/400 will play a big role in powering all of the company's e-business offerings and managing all the mission-critical applications. Right now, it plays a part in pieces of it. For example, an AS/400 is used to run all the mission-critical applications at Reliance National, including its main policy administration system, database, claims recording, premium recording and transaction recording systems.

"Basically, anything having to do with reporting loss history needs to look in the claims systems on the AS/400. There's a host-on-demand component that's connected to the AS/400, and the Marketplace account management component has a business rule layer and its database operations running on the AS/400," says Herenstein.

The Marketplace account management component was essentially built from scratch--so it was a more complex undertaking than some of the other e-business initiatives, says Jenks. "We had to interface to legacy systems and data, as well as to two different platforms--the AS/400 and the mainframe--which made it a bit more challenging."

But, she's very satisfied with the end results. Averaging sub-second response times for edits and database access, the account management program is performing very well. It's also one of the company's first Web-based business applications in which the business rules and the database still reside on an AS/400, with a Windows NT system used just to display the results. "Most of our other Web-enabled applications are more reporting, rather than process oriented," says Jenks.

Solid As A Rock
"Bluestone Software's (Mount Laurel, N.J.) Sapphire/Web is our Web server and that's relatively constant across all of our applications," says Jenks. "One of the nice things about Sapphire/Web is that it includes an AS/400 Java toolkit, so we were able to directly call our COBOL programs residing on the AS/400, even if they were old programs that had been there 10 years. The process was fairly simple because of the Java interface. Within a couple of days, we were able to migrate our application from NT to the AS/400 with literally no effort."

Of course, it wasn't a completely effortless task. Locating programmers with the right skill set did present a problem. It was very difficult to find people with both Sapphire/Web and AS/400 skills, according to Herenstein. "Most Web developers out on the market use JDBC or ODBC for data access. We wanted to be able to leverage what we had on the AS/400--to have our business rules and our database access remain within the COBOL program," adds Jenks. "But, once we converted to direct calls using the AS/400 Java toolkit, and that enabled the Sapphire application to call the COBOL program directly, it was almost as if it was all running on one platform. There was no IP communication programming or APPC communication program to worry about--that was a big plus."

Herenstein couldn't agree more. "We're talking about the ugly process management--old legacy system code that would have been useless if we hadn't been able to get to it. But, because of the way the Java Toolkit for the AS/400 works, we were able to make direct connections to the COBOL programs without having to rewrite everything and change all the business rules and everything else surrounding it," he explains. "So, not only was development time sharply decreased, but because we were able to access this information directly, we haven't had to deal with a lot of middleware headaches. And, that's of tremendous value to us."

Where do they go from here? Herenstein points to the deregulation occurring in the financial services sector right now and expresses the same concerns as other insurance providers. "Insurance products may be marketed very differently in the future. At the Reliance Group, the response to this threat seems to be to simply keep moving forward aggressively with its online products and services," he says. "Overall, the Reliance Group is very excited about the success of the Internet-based offerings it already has, and with the launch of Point, Click & Bind Inc., the objective is to build on that success."