By Bob Violino  |  Posted 2009-03-02 Print this article Print

Business intelligence and analytics, enterprise risk management and virtualization are critical technologies for success in today’s insurance market.


XL Global Services, a Stamford, Conn., provider of fire, marine and casualty insurance, is among the organizations discovering the benefits and challenges of virtualization. The company began using virtualization in 2005, when it deployed VMware software to provide file, print and domain controller services for users in regional offices.

In 2006, XL Global Services began using the virtualization software in its data centers and labs, mostly for lightweight applications and R&D work, says Howard Fingeroth, vice president of infrastructure architecture, capacity and configuration management. A year later, it made a bigger move to virtualization, migrating many applications to virtual machines in its data center. By the end of 2007, the company had deployed more than 200 virtual machines.

The key drivers for virtualization were the desire to reduce server sprawl and reliance on physical servers, and to cut real estate, power and cooling costs. A study of the firm’s computing resources showed that its utilization of servers was low, “so we were a perfect candidate for virtualization,” Fingeroth says.

XL Global Services generally has multiple versions of insurance products being worked on at any time, and environment sharing wasn’t always possible. Virtualization “allowed us to maximize the use of physical servers and share the resource without the applications coexisting in the same operating system instance,” Fingeroth says.

The technology enables the company to fully utilize all its computing resources. As a result, turnaround time for new environments has been drastically reduced; redeployment of older hardware is now possible for nonproduction environments, extending their use and delaying the costs of procuring new hardware; and there’s increased availability of applications hosted within the virtual environment. In addition, XL Global Services is able to avoid the cost of maintenance and service contracts on physical servers.

Of course, there were some challenges. For example, since XL Global Services was an early adopter of the technology, it had a tough time selling virtualization to its application developers. “Several proof-of-concept conversions and lots of testing were done to prove that applications function the same in a virtual guest as on a dedicated server,” Fingeroth recalls. The company has “spent a great deal of time building this environment and getting user buy-in.”

Still, it was worth the effort. “Virtualization has allowed us to provide a better quality of service to our users,” he says. This has been done by reducing the time required to provision new environments and by offering higher availability.

This is likely to be a challenging year for insurance firms, but IT can help identify ways to improve services and business processes, manage risk, reduce costs and increase agility.


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