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Mainframes Still Have A Home In The Industry

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Mainframes Still Have A Home In The Industry

A recent article in Technology Decisions, one of the National Underwriter Company’s other publications, suggested that insurers may not need to dump their legacy systems–including their mainframe computers–despite the rapidly advancing technology in networked systems.

This view resonates with at least two major insurance entities: insurer The Hartford, based in Hartford, Conn., and broker Willis North America, Nashville.

The Hartford has used mainframes since the 1970s, says Chief Technology Officer Ken Barger. He indicates that the company has kept up with mainframe technology through the years and will continue to use its legacy systems.

Currently, The Hartford uses several Hitachi mainframes. But for the past year, the company has been moving toward the IBM Z series, Barger says.

He cites several reasons for his company’s decision to keep its mainframes:

The Hartford has many staffers with “very good expertise in the mainframe arena” who operate “a very cost-effective environment for our business.”

“The mainframe itself is cost-effective as a technology platform.”

The Hartford runs several “very critical systems” on the mainframes every day, which represents “a major investment in applications that run on the mainframe environment,” Barger states.

Andy Nissenberg, CTO for Willis of North America, indicates that his company also uses mainframes. However, while keeping its “back-end processing” on the mainframe, Willis has been “migrating” away from the mainframe for its “client-facing applications.”

But Nissenberg still sees mainframes as an invaluable tool, particularly when a company has invested substantially in it.

A brokerage such as Willis does not have as heavy a transaction volume as, say, a manufacturer, he observes. Instead, different operations produce different transaction volumes, and Willis has found that the mainframe is “perfect” even for the heaviest of these volumes, he says.

He adds that the mainframe is very good at “process-management from an operational standpoint.”

He also says “the beauty of a mainframe is that it packs a lot of horsepower into a small space.”

Another potential problem for companies is the availability of staff that understands the particular mainframes that were installed years ago.

At The Hartford, this does not appear to be a major concern.

“I think The Hartford has had a very good retention rate,” Barger states. He attributes this to the fact that the company values its employees, and he notes that they, in turn, have maintained “very high” technological skills.

Nissenberg says it is important to challenge staff by providing opportunities for exposure to and training in the evolving technologies. Then you “pray that they’re going to stick around.”

He also notes “there are those folks that will be comfortable staying in the role[of] managing and working with what they know.” At the other end of the spectrum are employees who “always want to do more and be challenged. You have to be able to pick and choose between the two,” he says.

Another viewpoint is that once the decision is made to retain a mainframe system, it may be better to utilize it as a database server rather than to add functions that mainframes are not designed to handle efficiently.

While Barger agrees mainframes are good for running databases, he notes that at The Hartford they also have performed “very, very well in running a number of our mission-critical business systems.”

Still, he indicates that in his company’s view, “the mainframe is just another server” in the infrastructure.

He also reports that The Hartford’s mainframes have been integrated to the company’s Internet environment along with other systems.

“We have a number of Internet-based applications that access critical data from the mainframe,” Barger says. In addition, the company has managed to integrate those Web applications through some of its e-business portal technologies, such as its electronic business center, he says.

Barger explains that the Web-based systems obtain information from both the mainframe and other open-system environments while still providing “a nice portal to all that information for our agents.”

Nissenberg considers the mainframe “a good repository and data storer” for electronic information. He also believes mainframes can be used for distributing information or that other systems can “front” for mainframes to move data around.

In contrast, the browser component of Internet-based systems “is much more geared toward a client-server environment,” he states.

Nissenberg indicates that Willis is finding that its clients increasingly “are looking for information to be provided via the Internet,” he says. This client demand that has helped prompt Willis’ move toward browser-based technology.

But Nissenberg stresses that he does not favor technology for technology’s sake. Instead, he is interested in having the right tools to “enable business development,” he indicates.

“At the end of the day, for us what’s important is gaining new clients” and servicing them “in the best manner possible,” Nissenberg says.

E.E. Mazier is an assistant editor of NUs Property & Casualty/Risk & Benefits Management Edition.


Reproduced from National Underwriter Life & Health/Financial Services Edition, April 1, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.



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