Columns

Insurance giant

• By Elizabeth U. Harding
• July 23, 2001

USF&G Corp., Baltimore, Md., a holding company for property/casualty and life insurance operations with assets of $14.4 billion, is more than halfway through a major technology overhaul from mainframe-based systems to a nationwide network of client/server computers. About two years after the effort was started, USF&G is running two mission-critical applications over the newly-installed network of Microsoft Corp.'s Windows-based client machines and Unix-based servers from NCR Corp., Dayton, Ohio. Tom Lewis, USF&G executive vice president and chief information officer (CIO), said the insurance giant's I/S organization has so far moved approximately 60% of USF&G's core business software technology to the new platforms.

Lewis attributes the so-far successful migration effort to the use of a good architecture, the hiring of engineers skilled in current technology and the modeling of the I/S department's development unit to run like a commercial software house. The latter characteristic was easy for Lewis, who co-founded development tool supplier Seer Technologies, Raleigh, N.C., and held executive posts there prior to joining USF&G. Prior to Seer, Lewis was director of automated systems in the White House during the administration of President Ronald Reagan.

Lewis describes the I/S department he found upon joining USF&G in 1993 as a very traditional data processing operation. The company had struggled in the years prior to his appointment as CIO, to the point of approaching bankruptcy in 1990. For a period of almost five years after that, USF&G couldn't afford to make needed investments to improve its technologies.

"Moving to client/server requires a very serious commitment," said Lewis. "Once the decision was made to make the move to a new technology, and the financial hurdles were cleared, we had two options -- to make incremental improvements to aging core technologies or to take a leap-frog approach and step beyond what our competitors were doing. Although it was a higher-risk alternative, we opted to take the leap-frog approach -- to replace the mainframe-centric core technology with Internet-protocol compatible object-based applications in a client/server environment."

Tom Lewis USF&G started to lay the foundation for the evolution to client/server computing in 1995. I/S personnel began replacing all the backbone technologies of the corporation. Every desktop system was replaced with a Windows-based machine, the local-area networks (LANs) were changed, the wide-area network (WAN) was upgraded to frame relay, and the software was standardized. "It was a very serious commitment. USF&G was willing to pull the plug on some long-term projects in order to make it a success." According to Lewis, the warts and problems associated with client/server computing become very obvious when organizations move to implement the technology first on a small scale. "That's when they see all the warts and all the problems. Corporations must commit to any client/server effort and be willing to tolerate pitfalls -- even critical ones.

"I'm fortunate that I have a boss [Norman Blake, Jr., USF&G chairman, president and CEO] that doesn't lack courage and continues to have faith in us even when we have serious problems," Lewis said. "We started off with a pilot and really screwed that up. Then we went back and redid the project. The first six months (of the client/server project) were pretty ugly. We missed our dates and designed things incorrectly. "

Nonetheless, by January 1996, the I/S unit had delivered its first mission-critical client/server application -- a business owners policy system, or a commercial property/casualty application for small businesses. This large-scale application incorporates about 6,000 function points and is described by Lewis as core processing for the corporation. The application logic was built in the Smalltalk programming language iteration from Parcplace/Digitalk, Sunnyvale, Calif. which runs in Windows 95 and Windows NT environments. Meanwhile, Lewis said USF&G is also in the process of shifting the bulk of its development portfolio on the client to an HTML/Java Internet environment.

The server applications currently run on Unix-based machines from NCR Corp. which will soon be replaced by systems running the Solaris Unix implementation of Sun Microsystems Inc., Mountain View, Calif., according to Lewis. The client/server system runs the Sybase relational database management system (DBMS) from Sybase Inc., Emeryville, Calif. Microsoft's DCOM technology is standard on the client systems and the Common Object Request Broker Architecture (Corba) from the Object Management Group (OMG), Framingham, Mass., is the server standard technology.

That is really a source of tension, Lewis noted contending that Microsoft's DCOM strategy is too proprietary. "ActiveX, OLE and DCOM are nice but other than Microsoft, everyone has embraced the Corba technology." Lewis did say that Microsoft's decision to be more active in the Object World conferences, long seen as a Corba lovefest and formerly sponsored by the OMG, as an indication that the software giant is moving to support Corba in some way. Lewis said he hopes that Microsoft and the OMG can agree on some kind of a blending of DCOM and Corba.

Nonetheless, the USF&G policy processing client/server system now supports about 400 people, according to Lewis. "It's supporting about $67 million worth of premiums with about 37,000 business policies and three factory locations across the U.S.," said Lewis. "That system was conceived, developed and deployed, including all of the infrastructure upgrades, in less than two years."

USF&G developers are now at work redesigning the mainframe-based claims processing application. The developers are also using the Smalltalk language to build the massive application, which is slated to run over the client/server network and the Internet in a Lotus Notes Domino environment, Lewis said.

Lewis maintains that Notes does not compete with the Internet. "We have found roles for both Notes and the Internet, and we are not duplicating costs," said Lewis. "We introduced Notes here about two years ago and found it to be a wonderful environment for workflow management and remote transaction management. The Internet alone has not been mature enough regardless of what technologies we slap on top of it to manage the replication the Notes provides and the method management we find in this environment."

So far, developers have completed the piece of the claims processing application that handles first notice of loss for all of USF&G policy processing for personal insurance products. Within 60 days, Lewis said the I/S unit will begin delivering modules for handling the company's commercial insurance products. "By end of the year, we will deploy that to all of our field locations for handling end-to-end claims processing and interaction with all of our adjusters located in the field," said Lewis.

Lewis said the migration to client/server technologies would have been far more difficult without experienced technical people. "We've hired over 450 people in the last three years, and we have implemented extensive training for our staff," said Lewis. The training effort includes eight semesters of full-time night school a year. The school can accommodate about 250 developers per semester. The company also runs a certification program and boot camps for new and veteran developers.

The greatest mistakes people make when trying to manage, plan or deploy a client/server environment is not building the proper level of skills and not putting enough of their confidence behind client/server, said Lewis. "We've been able to attract wonderful talent," Lewis said. "I don't think you can just buy people. What you need to do is provide a stimulating environment for them that's open and allows them to use their creativity."

In addition, Lewis said, "We do run I/S much like a commercial software house. We have an integration quality insurance function where we prepackage our products and services, kind of shrink-wrap things and send them out to the field. We standardized the environment, and we have a high focus on quality control, methods and procedures."