From Legacy to Service-Oriented Architecture: The
Strategic Importance of Services in the Insurance
Industry
Brandon Werner
Senior Application Designer, American Modern Insurance Group
bwerner@amig.com
IBM Rational Software Development Conference 2007
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®
© 2007 IBM Corporation

IBM Rational Software Development Conference 2007
About American Modern Insurance Group
• Founded in 1938 as an Automobile finance company
• 2001 Midland named to Forbes "200 Best Small Companies".
• 2001 Midland's assets exceed $1 billion.
• 2002 A.M. Best upgrades Life Companies to "A- (Excellent)" and affirms
P&C rating of "A+ (Superior)".
• 2004 American Modern Insurance Group exceeds $700 million in premiums
written.
• 2006 The Midland Company Announces Inclusion in the NASDAQ
Financial-100 Index
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IBM Rational Software Development Conference 2007
Technology Leadership
• 2004 American Modern Insurance Group receives A. M. Best E-Fusion
Award for modernLINK suite of applications.
• 2006 AMIG receives "Best in Class" Award from Computerworld Magazine.
• 2007 AMIG launches modernLink: The Next Generation.
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IBM Rational Software Development Conference 2007
Insurance Industry Challenges
• Legacy Applications Hosted On Mainframe Environments
• Different Applications From Various Venders (DuckCreek, ChoicePoint)
• Increasing Willingness To Outsource Insurance Technologies
• Regulatory and Compliance Issues In Information Technology (SOX, State)
• Differentiation Isn’t A Problem, It’s A Business Strategy
• Industry Relies Deeply On Complicated Business Processes and Procedures
That Change Frequently
• Insurance Companies Are Becoming Manufacturers, More Products Tailored
Deeply To A Specific Market Segment.
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IBM Rational Software Development Conference 2007
Insurance Industry Challenges From
Serving The Customer Perspective
• Agents Of Various Sizes Use Different Technology Standards (.Net, Java)
• Agent Management Tools Flooding In To The Marketplace (AMS, Applied)
• Many Home Grown Agency Management Solutions (Web, Contract)
• Customers Demanding Same Customer Service Experience Despite Unique
Constraints On Insurers (Banks, Investments)
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The Solution: Service Oriented Architecture
• Technology Agnostic (If You Do It Right)
• Standardized Business Rules Allows For Agility Even Within Complicated Business
Processes related to Claims and Issuance
• Reliance on the Process, Not The Technology, Allows for Differentiation And Strategic
Advantage Even If Outsourcing Technologies To Third Parties
• Allows For Easier Agent and Customer Integration with XML and standards
• Can Integrate Existing IT Assets In to The Architecture (COBOL has webservices)
• Because Services Can Be Combined & Managed, New Mash-Ups For Each Line Of
Business or Agent Can Be Created
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Most Important: Renewed Role For Business
Abstraction Of Business Process From Services Means Use Cases and Design
Become More Important (SOA Governance)
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How Does An SOA Work?
SOA is an architectural approach to defining integration architectures that are
based on the concept of services. A service can be described as a function that
can be offered or provided to a consumer. This function can be an atomic
business function or part of a collection of business functions that are wired
together to form a process.
Most Important Implementation Aspects of SOA
• Services encapsulate a reusable business function
• Services are defined by explicit, implementation-independent interfaces
• Services are invoked through communication protocols that stress location
transparency and interoperability
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IBM Rational Software Development Conference 2007
How Do We Define Services In An SOA?
Many descriptions of SOA refer to large-grained services. However, powerful
examples of successful, reusable, fine-grained services exist. For example,
getPremium is a useful service that is not large grained. More realistically, there
are many useful levels of service granularity in most SOAs.
Different Types Of Services
• Technical functions (such as logging)
• Business functions (such as getPremium)
• Business transactions (such as Policy Payments)
• Business processes (such as Issuance and Quote)
In The RuP Process, Architecture and Design
Become Very Important For Orchestration
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Different Granularity Is Necessary for True Service
Orchestration Flexibility For Insurance Providers
Business Process (Mediation Flow)
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IBM Rational Software Development Conference 2007
Throughout this presentation, we’ll see how
the entire Rational suite helps us realize each
of these scenarios.
• Web Service Enabling CICS Programs
• Orchestrating Those Processes in Websphere Process Server 6
• Revealing Those Processes In Websphere Portal Server 6
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Business Process (Mediation Flow)
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What Are We Choreographing?
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What Are We Choreographing?
Through using a Service Component Architecture (on which WPS is based)
processes are abstracted in to modules for processing.
module component module component
implementation
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The SCA approach divides up the steps of developing SOA capability into two
major parts:
• Implementing components which provide services and consume other services
• Assembling sets of components to build business applications through the wiring of
service references to service interfaces.
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How Do These Services Call Each Other?
• Enterprise Service Bus (ESB)
• Routing of messages between services
• Converting transport protocols between
consumer and provider
• Transforming requests between consumer
and provider
• Handling of business events from
disparate sources
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How Does This Look In An Insurance Provider?
Enterprise Service Bus
Decision
Document Image Mainframe
Support Credit Score
Management Management Claims System
Systems
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Nice Idea.. but......
Because of product and regulatory complexity, Insurance and other financial
companies invested heavily in Mainframe environments in the 70s, 80s & 90s.
• 70 percent of the world's business data is still being processed by
mainframe applications written in COBOL.
• 30 billion COBOL transactions are processed daily — which is more than
the number of total Web pages viewed during that same period of timed
• Over 35 years and $1 Trillion invested in Applications
• Over $1 trillion processed/day
Source: IDC, July 2005
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What Are Other Insurance Providers Doing?
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Ways Forward
• Keep Things The Way They Are (Shrivel / Die)
• Build New From The Ground Up Leveraging Services(Modernize / Replace)
• Leverage Existing Assets Through Wrapping & Mash Ups (Extend / Surround)
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Source: Aberdeen Group, September 2006
For Those Using IBM Mainframe
and UNIX Technologies Migration
Away From Legacy Systems
Seems To Win.
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IBM Rational Software Development Conference 2007
Source: Aberdeen Group, September 2006
Although migration seems to win out,
Composite Services seems to be the best
way forward for Insurance companies
wanting to leverage Service Oriented
Architectures and leverage existing assets.
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How Do Go From Legacy To SOA?
(Composite Services)
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RoadMap
• IBM CICS Transaction Server with Service Flow Modeler
with Rational Software Architect Version 7
• IBM Websphere Process Server with Rational Integration
Developer v.6
• IBM CICS Connector for Websphere Process Server
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IBM Rational Software Development Conference 2007
CICS Service Flow Modeler
• Can graphically choreograph 3270 transactions and/or COMMAREA based
programs into callable XML webservices
• Can generate artifacts necessary to expose the choreography as a Web
Service in CICS
• By migrating to webservices using this approach, DFHCOMMAREA 32KB
max message limit is lifted for existing CICS programs.
• Can invoke webservices exposed on your Enterprise Service Bus so that
your mainframe applications become possible to orchestrate without extra
steps or concerns
• EXEC CICS INVOKE WEB SERVICE
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IBM Rational Software Development Conference 2007
Demo
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IBM Rational Software Development Conference 2007
Demo Review (For Playing At Home)
JAVADIR='<java install dir>' This is prepended with /usr/lpp/ to point to the directory
where Java™ is installed.
WORKDIR='<support pac dir>' This is the directory where the SupportPac is installed.
TMPDIR='/tmp' The directory for temporary files.
TMPFILE='ws2sr' A file name prefix for temporary files.
LOCATION=/usr/lpp/cicsts/samples/webservices/wsdl/dispatchOrder.wsdl
NAME=dispatchOrder.wsdl
LOGFILE=<directory and filename for log of activity>
DESC=CICS Catalog Application dispatchOrder
HOSTPORT=http://<your server:port>
PROP1NAME=Publisher
PROP1VALUE=CICS SupportPac CA1N
PROP2NAME=Application
PROP2VALUE=Catalog
SYSOUT job card output:
Reading parameter file /tmp/ws2sr.in
Writing log to '/u/millwoo/ws2sr.log'
INFORMATIONAL: 'VERSION' parameter not set. Version 1 assumed.
INFORMATIONAL: 'ENCODING' parameter not set.
Starting publish of WSDL document to WSRR
Returned bsrURI is
WSRR--c8e644f7.f101e566.3321150a.10d832d48fe.4cc94d1.27
Program 'DFHWS2SR' completed SUCCESSFULLY. Check log file for details.
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Demo Review (For Playing At Home)
How your CICS WSDL file will look in Websphere Process Server’s UDDI Registry
(we will use this later):
Full source code from this demonstration is on your IBM Conference CD and
printed with these slides!
Thanks to Daniel Millwood (millwood@uk.ibm.com) for helping with this Demo!
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IBM Rational Software Development Conference 2007
IBM Rational Software Architect Version 7
• Quickly Consume And Expose Webservices
• Quickly And Flexibly Deploy New Business Services Through Changing Your
Business Flow and Rules, Not Your Code (Mediation Flows)
• Application Connectors For Various Legacy IT Assets Provide Wrappers For
Existing Processes Without Servitizing Them (CICS, Database Connectors)*
• Little Programming Knowledge Needed For Managing and Deploying New
Services (Abstraction Fall Through Possible)
• Provides Enterprise Service Bus, Discovery and Services Management Out Of
The Box
• New Services And Processes Can Be Deployed Without Interrupting Current
Business
* - Like action figures, Sold Separately
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IBM Websphere Process Server Technology Stack
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IBM Rational Integration Developer and Websphere Process Server
WebSphere Integration Developer is the Eclipse based business process modeling
tool that enables modeling, design, analysis and generation of business
processes and reports. It provides integration and evolvement of new and revised workflows,
and helps define the organization structure, resources, and business items.
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IBM Rational Software Development Conference 2007
This Provides The Flexibility Insurance Companies Need
Process modeling facilitates the creation of robust
business process models by describing and building a
sequence of tasks and processes linked
by connectors.
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IBM Rational Software Development Conference 2007
The Paradigm Shift Using IBM Rational Products
For Insurance Providers
• Insurance Providers can differentiate without worrying about underlying changes to
the code (provided services can be orchestrated)
• Changes to regulatory or business conditions can be dealt with through changing the
mediation flows between the services, reducing business risk
• New product introduction, which is the competitive life blood of an insurance
company in the current marketplace, can be quickly assembled and deployed through
mediation flows and process choreography.
• Product configurations and legacy programs are now part of the mediation flow
without rework (assuming CICS was used previously)
• Business Becomes More Involved In IT
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IBM Rational Software Development Conference 2007
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IBM Rational Software Development Conference 2007
Demo
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IBM Rational Software Development Conference 2007
SOA and Customer / Agent Focus
• Need for Insurance Providers to rapidly adopt to how Agents and Customers want to
do business.
• Agents increasingly are using Agency Management Software and interfacing with
Insurance Companies the way Quicken interfaces with a bank.
• Need for integration in to existing websites and offerings through custom branding
and portal development.
• Present anywhere the Agent / Customer is for Claims, Bill Payment & Other Service
Inquiries.
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IBM Rational Software Development Conference 2007
IBM Rational Application Developer 7 and
Websphere Portal
• Any webservice exposed can be used to quickly create a web form in a portal
environment with any branding or supporting style surrounding it.
• Even internal webservices of a more fine grain variety (getPremium) can be created
for internal testing away from the presentation of the application
• Because we are now free to orchestrate our business processes and product
configurations, we can rapidly create two sites that offer different interfaces depending
on context (agent vs. customer)
• You can discover portlets at runtime (much like webservices) using UDDI in WPS
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IBM Rational Software Development Conference 2007
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IBM Rational Software Development Conference 2007
Demo
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IBM Rational Software Development Conference 2007
Demo Review (For Playing At Home)
<portlet>
<description xml:lang="en">
Displays details for a particular order
</description>
<portlet-name>StandardQuoteDetail</portlet-name>
<display-name xml:lang="en">Standard Quote Detail</display-name>
<portlet-class>
com.ibm.wps.portlets.quote.QuoteDetailPortlet
</portlet-class>
<expiration-cache>3600</expiration-cache>
<supports>
<mime-type>text/html</mime-type>
</supports>
<supported-locale>en</supported-locale>
<resource-bundle>nls.StandardQuoteDetail</resource-bundle>
<portlet-preferences>
<preference>
<name>
com.ibm.portal.propertybroker.wsdllocation
</name>
<value>/wsdl/Quote.wsdl</value>
</preference>
<preference>
<name>com.ibm.portal.context.enable</name>
<value>true</value>
</preference>
</portlet-preferences>
</portlet>
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IBM Rational Software Development Conference 2007
Questions
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Thank You
Brandon Werner
American Modern Insurance Group
bwerner@amig.com
(Look me up in LinkedIn!)
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