Canadian Underwriter

Buried Treasure XML Meets Legacy Systems

February 1, 2002   by Bob Rybak, chief technology officer, Whitehill Technologies Inc.

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Like all business sectors, the insurance industry is under enormous pressure to increase operational efficiencies, margins and profits, while reducing costs. Information technology (IT) has become pervasive within the sector in the sense that it is virtually impossible to issue a policy, process a claim or type a letter without interacting with a computer. However, the insurance industry has generally been slow to move to the electronic era, despite its extensive and well-entrenched document-generating processes. The IT systems in place today with many insurance companies have evolved organically from disparate implementations dating back to the 1960s. Despite continuous modernization and enhancement year after year, many Fortune 1000 companies continue to use “black box” programs that are 30 or more years old. Why? These components are frequently part of mission-critical systems and they work. Disrupting these areas of a company’s infrastructure is loaded with risk. This is why so-called “legacy” systems persist.

The reliability and security generally associated with host-type mainframe systems make them difficult to replace, even today, and so legacy systems continue to fulfill a critical and persistent business need. At the same time, the world has been transformed by the establishment of global networks of small computers, which are fundamentally valuable because they offer direct portals to distributed information and direct interactions with providers of goods and services.

A recent report, which surveyed over 150 top insurers and insurance-related companies in the U.S., determined that spending on e-business would rise an average of 89% over the next three years. However, the current form of e-business in the world has evolved independently from the core systems and storehouses that contain the information necessary to make e-business successful. It is now time to bring e-business and information together to ensure that the insurance industry continues to derive value from its massive investment in legacy systems, while obtaining the maximum in speed, flexibility and ability to create the electronic-based documentation promised by the latest IT software.

Aiming for simplicity

Implementing a non-disruptive mechanism for extracting, re-purposing and delivering legacy data, in electronic format, is a good idea on many levels. Imagine an inexpensive means of liberating legacy information for web-based applications. Imagine a solution that would not strain the technical resources of a company and would free programmers to work on projects of greater strategic advantage. Imagine a way of rapidly implementing complete business solutions that address immediate needs and are timely enough to provide important competitive advantages. XML (eXtensible markup language) technology can help an insurance company turn these aspirations into reality by providing a way to tap into the vast amount of in-house legacy data it possesses.

XML is an easily implemented means of rescuing legacy data and provides flexible access to a company’s legacy resources. XML does not require extensive in-house expertise or an intimate knowledge of the existing database’s data dictionary in order to devise a schema that extracts legacy data for reformatting in a myriad of electronic forms.

The fastest and most cost-effective way of re-purposing legacy information is by capturing data before it goes to print — called intercepting printer streams. Printing data is an attribute nearly all computer systems share, and presents documents such as insurance claims, policy statements and client invoices. Capturing technology enables a company to retrieve and compile high volume, ongoing data requirements through its highly flexible and simple process. This process is designed to be easy to comprehend, and output can be printed from virtually from any legacy data source, despite the fact that these systems can use a variety of output formats whose origins almost date back to the dawn of the transistor.

Maximum impact

Once captured, the next decision is how to re-purpose the information for maximum impact. This is where XML provides the absolute greatest flexibility when re-purposing information for multiple uses. Quickly and seamlessly integrated with legacy systems, XML makes retrieval, compilation and custom formatting of high volume, ongoing data requirements a highly flexible and simple process. XML is particularly well suited for encapsulating legacy data for web-based applications. Such applications run the entire spectrum from on-line presentment of critical information, to Electronic Data Interchange (EDI) between disparate systems and business partners. XML can also handle the multi-point distribution of documents, such as between branch offices, to head quarters and between brokers and insurance companies. XML has enjoyed rapid widespread adoption in a number of industries and is the foundation for many industry-standard software products.

ACORD, the U.S. insurance industry’s standards body, has developed an XML version of the ubiquitous AL3 data format and is firmly committed to this new technology.

In a real world application, a typical Legacy-to-XML process might look something like this:

A report such as a benefits statement is printed from the host system in the usual way, but directed to a special “virtual” printer which intercepts the data stream and passes it to a server for automatic processing;

The report is then disassembled and re-formatted as an XML file, conforming to a pre-defined classification structure;

The XML file is stored in a repository of some sort, like a relational database or a specialized XML repository;

A conventional web-based application can then easily access the XML data and combine it with pre-created “style sheets” for extremely flexible views of the data within a browser;

In the case of a insurance company invoice, the policy holder can then receive their bill either as a paper-based document or electronically, similarly document exchange between brokers and insurance companies can become a much more flexible process.

Quick start

Without exaggeration, these types of applications can be fully implemented in just a few days time and at a nominal cost. Also, once the infrastructure for deploying such systems is in place, there is an almost limitless potential for collecting and disseminating legacy information in new and productive ways.

Although many, perhaps even most, strategic IT decisions today focus on customer-focused e-business initiatives, the wealth of information lying trapped within legacy systems is what gives these e-business applications a purpose. With the right choice of technologies, it may be as simple to reach and disseminate legacy information as it is to print a report.

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