SANs Are The Future Of Storage For Insurance

The storage area network has been around for some 30 years, but only now is it emerging as the data storage paradigm of choice in the insurance industry.

According to Chuck Cronin, executive vice president of Pasadena, Calif.-based Synergy 2000–a systems integrator that works in the insurance industry–a prime reason for the boost in SANs popularity is that they are becoming more affordable for smaller companies.

A SAN “is a dedicated, centrally managed, secure information infrastructure that enables any interconnection of servers and storage systems,” according to Somers, N.Y.-based IBM.

The British Computer Society, in a technology briefing, notes that, “the idea is to put all storage in one place and connect it via a fast network This enables central management, security and the balancing of the storage needs of separate computers running different applications.”

SANS have long been the preferred storage method for larger companies, but the technology is reaching the point where it is now affordable for small and mid-sized companies, says Cronin. Until recently, he adds, “you had to have terabytes of data to make it cost effective.”

Unable to afford SANs, smaller companies have turned to “network attached” solutions like RAID (redundant array of inexpensive disks), says Cronin. RAID is a set of two or more hard disks, with a specialized disk controller.

While such systems can store data for individual servers, SANs store and share data in all servers throughout the network and allow access to the data from “anywhere,” Cronin explains.

In the past, a large company that used a SAN would be forced to buy a piece of proprietary software and the software makers hardware in order to get a functional system. “A small implementation would cost $250,000,” he notes.

Thanks to declines in hardware and disk costs, and the “unbundling” of the SAN software and hardware, however, companies like IBM and Hewlett-Packard (Compaq) have been able to sell SAN systems into smaller companies, says Cronin.

He adds that the cost of SAN storage today is “one-fifth” of what it has been in recent years.

Where large companies SANs might handle as much as 50 terabytes (TB) of data, SANs today can be cost-effective for smaller companies handling as little as 1TB, Cronin notes. “Most insurance companies probably have that much data either on hard drives or on tape.”

Attesting to the plunging costs of SANs, Sunnyvale, Calif.-based Fujitsu Softek earlier this year announced a bundled package of storage management software and hardware for “less than $100,000.” The company claims its system “reduces the total cost of owning and operating a sophisticated, scalable one-terabyte SAN to about 15 cents per megabyte over a three-year period.”

“Theres more data than ever; the datas not going away,” says Cronin. “If a companys data is growing by 25% a year, which is typical, SANs are expected to grow by about 50% a year. Its moving toward being the predominant storage method.”

According to Tom Turkenkopf, IBMs global segment manager for the financial service sector, in todays economic environment, SANs represent an effective way to reduce and control costs.

“Most insurance companies and other institutions are looking to consolidate storage to save money,” says Turkenkopf. Typically, he notes, a company has “servers all over the place and each of them has its own storage device. Thats a very complex environment and it requires a lot of people to manage all those storage devices.”

SANs, Turkenkopf explains, consolidate the information from many servers on a network that is separate from a companys existing network. “It separates storage data from the traffic of the regular server network,” he says. This allows each server to access the central storage device when needed.

Turkenkopf also points out that because many of the storage devices on multiple servers tend to be smaller, companies may not back up the data on those devices as often as they should. A SAN, however, makes it easier to get a backup copy of any data. The SAN could also be placed at a remote location for additional protection of backed up data in the event of damage to a companys primary systems, he notes.

“At one insurance company in Germany, there is about 700 meters between the two [SAN] sites, and each is a remote copy of the other,” he says. “But the sites can be many miles away.”

Another SAN benefit, says Turkenkopf, is easier integration of new systems with a companys existing systems. “All of the data is stored on one place, so its easier when bringing in new applications to share and access existing data,” he states.

Turkenkopf adds that agents who are allowed access to a carriers SAN will be able to call up data on customers from various systems (sales, claims, accounting) much more quickly. The alternative would be going to each of the networks individually to get bits and pieces of the customers profile.

In one case, says Turkenkopf, a company saved 15% in hardware and 30% in “relative costs” (mainly personnel costs and reduced downtime) by implementing a SAN. “I think thats relatively typical,” he notes.


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 19, 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.