More insurers embracing Web services in past year.

Web services are a growing part of many insurers' operations, due in part to their ability, to improve customer service and reduce operating costs, according to a recent survey of more than 130 insurance industry executives and information technology managers conducted by MapInfo Corp.

Insurers have become increasingly interested in the past 15 to 18 months, said Kimberly Morton, director of location intelligence risk management for the Troy, N.Y.-based company. "Insurers' challenge from a technology perspective is working with decades-old legacy systems-something the industry says isn't going away for at least another decade. Web services is the answer to helping them do business smarter."

When working with legacy systems, Morton said, Web services are a convenient way for insurers to bring in applications that can be integrated into existing applications, as well as work with back-end legacy systems. As a result, applications will be more scalable going forward. "And if they eventually change over from legacy systems, they'll have applications they have been building in-house, especially for some of their key processes, and will be able to integrate them into whatever it is new that they bring into the organization."

The majority of survey respondents (34%) said policy administration is a key application for Web services. Twenty-seven percent said they will use Web services for sales/territory management and claims processing applications.

Technology standards are another important part of the mix. Nearly 30% of survey respondents ranked .NET as the most important standard, followed closely by J2EE and ACORD.

Technology obstacles associated with legacy systems, cost and security were cited as the top three concerns for deploying Web services-based applications. In addition, respondents said connecting with partners and customers beyond the enterprise was the most important goal of adopting Web services. The survey also showed that integration with traditional/existing applications within the enterprise and ease of integration with new applications are also driving Web services' adoption.

Many departments across insurers' organizations are already using location or geo-spatial software for territory/sales management (23% of respondents), risk assessment/underwriting (21%) and claims processing (20%), according to the survey. "We've seen a tremendous interest from the insurance industry recently to bring in geo-spatial capabilities to their current key processes, such as underwriting and policy administration," said Morton. Analysts are predicting, she added, that in three to five years geo-spatial technology will become mainstream in the industry, especially in the property/casualty market.

"Carriers are in dire need of technology change, and the major change that needs to happen at some point is to replace existing legacy systems. But while that's too costly now, Web services is the answer to helping them get through until they make that change," Morton said.

Morton also said that in the past four to six months, more insurers have increasingly become interested in the trend of automation. "And what's great is that Web services is your key to automating your processes, and they go hand-in-hand."

MapInfo's Web services platform--Envinsa--is an XML, standards-based technology platform integrated with IBM's WebSphere portal server.