As Hawaii-based insurer DTRIC expands its commercial lines in the second half of the year, it is doing so with a newly built service-oriented architecture-based policy administration system that allows it to pick and choose features from its existing legacy technology.

DTRIC established itself in Hawaii in 1992 at a time when many insurers began pulling out of Hawaii following Hurricane Iniki, the state’s costliest hurricane ever. Soon after, DTRIC stepped in to replace a major insurer who canceled the group automobile program for the state’s largest public employee union. The company sells through a combination of direct and agency channels, and has for years offered a combination of personal lines and limited commercial lines. With new approval to expand its commercial lines to the full gambit of coverage, the company sought a policy administration system that would facilitate entering the market quickly while providing flexibility in creating a commercial lines system that would fit with the rest of the company.

“We have a policy administration system but only for personal lines,” says George Lucas, vice president of technology for DTRIC.

Hawaiian Insurer DTRIC will expand commercial lines to the full gambit of coverage by year end.

DTRIC chose DecisionMaker Extended Lines from Decision Research Corp. (DRC). An add-on feature for DRC’s policy administration system, DecisionMaker Extended Lines facilitates quick time-to-market in part because it gives business users the tools for configuring the system by allowing much of the configuration to be based on Microsoft Excel. As DRC’s vice president of product development Karen Yamamoto explains, this speeds the process because of the wide usage of Excel on the business side.

“There is substantial time savings due to the fact that the business users are provided the tools to configure the system,” Yamamoto says. “In our experience, Excel is used in over 95 percent of insurance companies to model their rates. Many of the business users such as actuaries and underwriters are familiar with the Excel front end and absolutely love the control they are given. There is very little training to bring these users up-to-speed.”

The project is still in its early days; as of late August DRC had turned over one commercial line while a second had been moved into quality assurance testing. The company aims to roll out all of the commercial lines by the end of the year. But already Lucas noted that the system’s service-oriented architecture (SOA) was providing much flexibility in building a new system that retained aspects of existing in-house processes.

“SOA really allows us to pick and choose, and keep what we need to,” he said.

That flexibility will be particularly essential because after DTRIC finishes rolling out a policy administration system for its new commercial lines it plans to replace its legacy policy administration with DRC as well.

“I don’t say we chose DecisionMaker Extended Lines; I say we chose DRC because we will have a lot more eventually. Our total plan goes ahead to 2010,” he says.

The existing policy administration system for personal lines that will eventually be replaced is a mainframe application on an AS400.

“It is difficult to maintain and we were going to either have to build a new front end or replace it,” Lucas said.

While that project hasn’t started yet, the personal lines system, which has been in place more than a decade, has several longstanding components the company will likely want to maintain.

“We have done a lot of work in the area of management reporting in creating reports that are very customized, so that will probably be kept,” he says. “We also have very complex reinsurance agreements – we’re a small company; we can’t take on that much risk, we must spread it out,” he adds, noting that the system for managing those relationships would likely also be retained.

“It really allows us to be best of breed,” he says.

DTRIC was not unfamiliar with DRC prior to tapping the vendor for this long-running project. DRC had worked on smaller projects in connection with the personal lines policy administration system in the past including a middleware component.

“As far as due diligence we contacted the different analysts and got a lot of feedback,” Lucas says.

Besides, he adds, the analyst told DTRIC that if the vendor is in the same city as the client company it increases the chance of success by 300 to 400 percent. “They are not only in the same city but in the same building seven stories down,” he says.


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www.dtric.com

By Renee Wijnen Caruthers