Insurance innovation

Press, 12 November 1985, Page 28

Insurance innovation

MR JIM SHEFFIELD,

until recently a

senior lecturer in information systems at the University of Auckland, is the author of this article on AMPS, a software product from the Auckland company, Advanced Management Systems, Ltd. Mr Sheffield, who is now at the University of Arizona told “The Press,” that, in his opinion, it appeared to have the same potential in the marketplace as products such as LINC and Exsys.

Insurance companies are not noted for radical behaviour. However, in 1981 Royal Insurance Fire and General (N.Z.), Ltd, decided to implement a major insurance system using a then unknown local software house, Advanced Management Systems, Ltd (AMS), and its product AMPS. The decision appeared radical for several reasons. First, the system was to be the backbone of data processing at Royal Insurance. Terminals significantly reduced paperwork. The system allowed processing such as new policy additions and policy alterations to be accepted by telephone from agents and clients and entered immediately at a terminal before the telephone conversation was. completed. This enabled the discussion to include the new or increased premium charge and the method of payment. Where payments were by instalment, the computer calculated monthly instalments and reported them on the spot. Second, the system was both large and complex. The database included 320 different record layouts which involved more than 3000 data elements. Extensive processing was required to create, maintain and report such a variety of data elements. However, fire and general insurance always involves multiple relationships between clients, poli-

cies, items insured and risks insured against. These relationships formed a complex network and necessitated quite involved processing logic. Third, although upwards of 200 terminals would be involved, Royal Insurance did not want a data processing department. Reliability, ease of use, flexibility and fast response time had to be guaranteed. Fourth, Royal Insurance was a pioneer user of AMPS, a software environment which included an operating system and a modern (“fourth generation”) development language. Conventional wisdom tells us pioneers get killed! It js therefore most interesting to see how Royal Insurance has fared in the four years since 1981. Mr Derek Sole, head of

management services at Royal Insurance, played a major role in the initial decision to use AMPS, and oversees the use of the system. He recently described his company as “very happy” with the application, and felt that the AMPS approach “offers tremendous advantages to those with the courage to make a fresh start.” These advantages, he said, related to the flexible and reliable software, and the savings that this software permitted him to achieve on hardware. Mr Sole said that the programs, custom-made for Royal Insurance using AMPS, produced a solution that was clearly superior to the package that had been available. The reasons cited were the ability of non-data processing employees to change the function of the

programs quickly and easily, the ability of AMS staff to write the programs quickly and to change them quickly, and the stability of the software. In AMPS both the choice of the screen and report layouts and the choice of the data fields to occupy these layouts are largely controlled by parameter files. Menus, help functions and input screens are provided to allow users to set these parameters. Thus existing screens and reports can be customised within minutes. The AMPS development language, Ample, provides powerful screen and database handling functions and is extremely “programmer friendly.” Royal Insurance’s Auckland office uses a PDP-11/ 23 mini-computer with 256 K bytes of memory, five printers and 45 terminals. Mr Sole described the response as “frequently immediate, never bad and generally quicker than the two seconds specified in the contract.” In mid-1985 a reorganisation necessitated increasing . the terminal load at the Auckland office from 40 to more than 60. The present PDP-11/23 wilL be relegated to a smaller branch office and replaced with a PDP--11/73. With AMPS this machine will drive high performance peripherals including a 400 megabyte disc drive.