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Midwest Gainfully Leaves Legacy System Behind

Bob Mueller November 2007

Midwest Insurance Co. is an INNovators Award Winner runner-up, chosen for its strategy to replace an aging legacy policy administration system with one that now delivers real-time data to all end users.

Just seven years old in 2005, Midwest Insurance Co. had already outgrown its policy administration system. "It was old client-server technology," recalls Rick Vogl, the company's vice president-IT. "The legacy system couldn't handle the volume of quotes we have coming through our system, and the amount of premiums we push through it.

"And there were certain things we couldn't get from it ever," Vogl continues. "We had to look for something that was going to take us to where we really needed to be from a systems standpoint. Our tiny, little Web-based rating engine could handle the volume, but our back-end policy administration system couldn't."

Based in Springfield, Ill., Midwest is a mono-line workers' compensation carrier active in states including Illinois, Indiana, California, Minnesota, Arkansas, Kansas and Missouri, and has aggressive expansion plans. Founded in 1998, the company's premium currently exceeds $100 million. Midwest sells exclusively through agencies, but all of its business is Internet-driven.

"The agents log in and use our Web rating process, which is integrated with everything else," Vogl says.

Customers can also log onto the Web site for online payment and, as another system currently in implementation becomes available, to enter claims in that system as well.

THE CHOICE

The search for a new system began early in 2005. "From an IT standpoint, we were looking for a very robust product," Vogl says.

The system had to integrate well with Midwest's Web-based rating and rules engine and deliver real-time data to the company's end users. It had to deliver the reports and produce the documents Midwest needs. Finally, Vogl wanted to be able to make changes quickly. With the legacy system, he had to wait while the vendor made modifications. This time, he wanted the code so Midwest could do its own development.

Vogl looked at dozens of policy administration systems-"all the big ones," he says-and finally chose PowerComp from InsureWorx. (PowerComp was renamed PowerSuite following the September 2006 acquisition of InsureWorx by Brookfield, Wis.-based Fiserv Insurance Solutions.) "Honestly, the first time we saw it, we just knew it was the one," Vogl says. He was impressed by the technology, the flow, the amount of data it captured that he could see, the rules built behind it and the way the database was structured.

"A big selling point was the people who were involved in our demos," Vogl continues. "They were actual business people who had worked in [workers'] comp for 20 years. We were comfortable, since they knew how the system had to be programmed. They knew going into it what we needed."

THE IMPLEMENTATION

But there was a slight hitch. PowerComp was originally written for DB2, and a version for Oracle - Midwest's platform - was still under development in the summer of 2005 when Midwest made its choice.

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