As Ohio Casualty Insurance’s first CTO, John Kellington places a high priority on building internal systems that can address the needs of external users. Winning the hearts of independent agents, Ohio Casualty’s key distribution channel is essential to success in the increasingly competitive insurance business. “Those companies that are easy to do business with will most likely get the [customers who are the] better ‘risks,'” Kellington explains. So, he adds, “We are trying to build linkages between the agent’s own management systems to our systems.” To address this external audience, Kellington knows a company has to get its internal systems in order. Although he joined Ohio Casualty last April — one of several new executives hired after a money-losing year — he had been working with the Fairfield, Ohio-based company as a consultant from Armonk, N.Y.-based IBM Global Services. In his IBM position, he consulted with Ohio Casualty during the design and construction of PARIS, the new Policy Administration, Rating, and Issuance System. As early as 1996, the insurance company decided its vital policy administration systems needed to be overhauled. The legacy system built in the 1980s, which included five distinct systems covering everything from commercial auto insurance to personal life insurance, was code-driven and cumbersome, making it difficult to learn or add new capabilities. The systems did not support Internet interfaces, EDI (electronic data interchange) transactions, or even graphic interfaces. After searching for third-party solutions, Ohio Casualty’s IT professionals decided to roll up their sleeves to create a new policy administration system. With IBM Global Services’ help, Ohio Casualty leveraged the Computer Science (CSC) Cogen Rating Engine, the CSC Cogen Client System, and IBM’s IAA (Insurance Application Architecture) object and data models. Component-based and written in Java, PARIS uses MQSeries, CICS, and DB2. Its advanced user interface is a Web-enabled Java applet. Ohio Casualty is currently working on an HTML interface for agents, as well as using IBM’s WebSphere as the application server. Immediately before Kellington joined Ohio Casualty as CTO, the insurance company went live with the system offering general liability insurance as its first product. Inland marine insurance soon followed. Commercial property, crime, and commercial package lines will pilot this quarter. The rest of the products will be offered through PARIS through next year, according to the CTO. The system is being brought to the company’s 12 branch offices. Beginning this quarter, some agents will be able to get quotes from PARIS via a secured Internet link with a standard Web browser, Kellington expects. To allow agents to complete transactions online, Ohio Casualty is looking to standards being established by the Association for Cooperative Operations Research and Development (ACORD) to use XML for transmitting data between agents and carriers. Ohio Casualty has also licensed technology from Greenwich, Conn.-based Ivans, called Transformation Station, which will permit independent agents to transmit transactions directly to PARIS over the Internet. To forge an effective development team, Ohio Casualty pulled together about 75 professionals working on PARIS under one project office. Before, those programmers and business analysts were dispersed throughout the company, reporting to different managers. Unifying the builders of a system is vital to creating a unified system, Kellington explains: “They have to see the intent of the change and potential value of the change to get buy-in.” With its Microsoft wizard-style interface, PARIS has proven easy to use. Whereas it took a branch office underwriter or rater as long as six months to become proficient in the old green-screen system, it takes just a week to teach experienced staff members how to use the new browser-based interface to issue and maintain policies, Kellington claims. Also, there’s a 75 percent reduction in time to process new business. “What was taking 20 minutes, takes five,” he says. Kellington, who oversees the entire IT organization of about 425 people, has support from above. He reports directly to President and CEO Dan Carmichael, who previously was CEO of Ivans, an industry organization that specializes in IT solutions for the insurance industry. “It’s awesome working for Dan. He really understands the technology and the value of it,” Kellington says. That’s good because making changes in the insurance industry is far from simple. “Insurance systems are by far the hardest systems in the world to build,” notes the CTO, because “every single policy we ship is unique” and often-changing regulations that impact the policies vary from state to state. “Then we have to endorse, cancel, reinstate the policy, then ship a new policy six months to a year later. It’s mass customization to the grandest scale.” Technology Industry