Business Agility for Insurance ‘Pipe Dream’ or Attainable? An Overview of OMG Insurance Working Group Activity September 24 th 2007 By: OMG Insurance Working Group

2 From the Desk of a CIO: Business Agility in the ‘Flat World’  What is it, why do we need it and how do we get there? High Quality Information –The Holy Grail Why Models enable Agility The Thing called Metadata and why it is important An Overview of OMG Insurance WG Activity  Mission  Standards in Development/Proposed P&C Information Models Business Services for Insurance Other OMG Standards of interest Next steps/upcoming events/relevant Links Agenda

3 What is Business Agility? Agility is defined by Gartner as "the ability of an organization to sense environmental change and to respond efficiently and effectively to that change Another point of view: Ability of a Business to ‘Sense, Interpret and Respond’ to ‘Events’ that may impact its survivability and competitive edge

Data Center New market New Markets “Flat World” we live in drives the need for Business Agility New Markets Call Center Global HQ (Business Leadership, SMEs) Customers APAC Data Center New Markets Data Center Software Development Center Call Center BPO Center New Markets Software Development Center Customers EU Data Center

5 Why is Business Agility necessary? Business Agility is necessary for survival in the 21st century, because of  Constantly changing business needs and conditions  Constantly changing services and supply chains  Constantly changing infrastructure and support If "nothing endures but change" ( ), the winning organization will have the best foreknowledge of change

6 What Should a Business do? Enable access to, and internalization of, the best information, which is  Of ‘High Quality’ - defined using industry standard Business Glossaries  Available to mission critical systems when needed in real or near real time -- and  Exchangeable across heterogeneous systems using standard format and interfaces Understand the ‘Assets’ (People, Products, Business Processes, IT Portfolio –Hardware/Software inventories, Data…) -- and the relationships/dependencies among the ‘Assets’ Develop, deploy, re-use and govern the Assets in a timely and efficient manner

High Quality Information: ‘Holy Grail’ of Business Agility “As a general rule, the most successful man in life is the man who has the best information” - Benjamin Disraeli, British Prime Minister,1868 Data+Metadata =Information

8 Do Models enable Business Agility? Models can Visually describe your Business & Technology  Promote communication and alignment among business and technology stakeholders  Capture facts and provides answers to:  Who? –The People  What? –The Data/Information  Where? –The Location/network  When? –The Time  How? –The Process  Why? – The Motivation Models developed using a standard business glossary, modeling language and exchanged via a standard format promote re-use --and quicker deployment on a platform of choice Simply stated: ‘Model Once, Deploy Anywhere’

9 Do Models enable Business Agility? (continued) SOA is supposed to enable ‘Agility’ business is looking for Models become the building blocks for SOA by describing the  ‘Payload’ (data) – The What?  Process – The How?  Network –The Where?  People (consumers/providers) –The Who?  Time –The When?  Motivation –The Why? of a Service If the Payload being delivered in a Service is not Semantically accurate, SOA is DOA  In other words: Data Models can help deliver better ROI for SOA initiatives

10 The Thing called ‘Metadata’ and why it is Important! What is Metadata? Metadata is ‘Data about Data’ – perhaps an oversimplification!  A library Catalog is Metadata because it describes publications/Books Policy NumberDate of BirthSocial Security Number Annual Premium Amount ($) Data without Metadata is of very little value if at all! Metadata Simply stated: Metadata adds ‘Meaning/Context’ to Data and makes it valuable across Business and IT Good Metadata is like ‘Good Karma’… just keep doing it

‘Metadata’ for Business Agility Gartner makes clear in their opinion that you need access to a wide range of metadata to succeed in delivering agility, even with SOA  Gartner estimates that some 50% of SOA projects will not achieve maximum agility because they won't deal with Metadata properly  The report also talks about models and metadata together and that you must have explicit rule models as well as process and data models to deliver on SOA's agility promise OMG’s Standards (adopted and in development) model ‘metadata’ pertinent to all aspects of a Business: Motivation, People, Business Process, Data, Events…

12 Model Driven Architecture (MDA): The ‘bedrock’ of Agility Unified Modeling Language  Addresses system modeling Common Warehouse Metamodel/Information Management Metamodel (IMM)  Addresses information modeling & metadata exchange  Traceability of information (source to targets) Meta Object Facility (MOF)  Addresses the definition of modeling languages (metamodels)  Integration, interchange and management of models Core MDA Standards are ISO Standards Modeling is OMG’s Core Competence… MOF/XMI Facilities for defining, interchanging, transformation and managing All models and metamodels Business Modeling(motivation, Intent..)Process ModelingApplication, Service, Event Modeling Other.. Information Modeling Security, Performance, Testing, Compliance Modeling

13 Agenda

OMG Insurance Working Group: Mission Help establish a ‘Model Driven, Platform Agnostic’ foundation for ‘Business Agility’ Insurance Businesses are striving for Lower the cost and time-to-market and increase the quality of solutions for the Insurance industry through open, vendor- neutral, widely-deployed standards Develop formal ‘Business Glossary’ of Insurance Business Concepts leveraging OMG’s modeling standards Develop Insurance Information Models by leveraging OMG’s Model Driven Architecture (MDA) and related standards for Information Modeling and Interchange Define standard ‘Business Services’ for Insurance to facilitate ‘Business Driven SOA’ Partner with other Insurance standards organizations to leverage respective strengths

15 P&C Standard: An overview Model Driven Architecture (MDA) ( Foundation of P&C Standard) Property and Casualty Standard Mandatory Components XSD SQL DDLRDF, OWL XMI, XML Logical (ER) Data Model Conceptual Data Model P&C Business Glossary, Rules Traceability of P&C Business Concepts  Models Optional Components Ontological Model Business Glossary Translated in other languages Traceability of P&C Business Concepts  conceptual, logical data models… XML Schema Model Physical Data Models (Transactional, Analytical) Core Components

16 Business Glossary: ‘Lingua Franca’ of an enterprise Subject Matter Experts Define the Business Concepts, Rules, Context Business Process Modelers Business Analysts, Data Modelers, DBAs, Data Integration, Data Quality, ETL Users Vendors, System Integrators, Partners.. Legal, Compliance Application, Service Developers Business Glossary, Rules, Context Producers and Consumers of a Business Glossary

P&C Business Glossary: The ‘DNA’ of P&C Information Models DDL XSD Traceability OWL, RDF… Physical Data Models Conceptual Data Model P&C Business Glossary, Rules Logical (ER) Data Model (LDM) Relational Model Dimensional Model XML Schema Model Ontological Model Core Components (CCTS) Bottom line: Same Business Concepts represented in many different Models and Formats for a stated purpose

Business Glossary: an example

19 P&C RFP: Scope The RFP ( solicits proposals for Information Models to address the data management (modeling/database design, analytics and exchange) needs of the P&C Insurance Communityhttp:// Glossary of P&C Business Terms and accompanying metadata (definition, source - SME/Authority/Standard…, format, date, revisions/version, Acronyms, Aliases for example)  Proposed Subject areas in scope (not the final list): Premium/Policy Management, New Business, Reinsurance, Claims, Agency, Billing, Compensation, Contract Management Reference metadata (Party, Party Roles such as Agent, Producer, Adjuster, Address…)

20 Analytical (Dimensional) Model requirements  A set of Fact Tables and ‘Conformed Dimensions’ that provide a standard set of measurements to support: Regulatory requirements reporting Loss Analysis Policy Event analysis Underwriting analysis Policyholder behavior analysis Customer Risk analysis Dimensions include: Geography, Policy, Industry, Class Code, Time, Payment, Litigation, Services, Subrogation Service, Independent Service Adjuster (Events), Accident, Catastrophe (Loss Unit), Statistical Codes, Claim Occurrence Dimension P&C RFP: Scope continued

21 Summary: Benefits of P&C Information Models Improved communication among stakeholders Reduced project costs and time-to-market Re-use of Information Assets Enforcement of Architectural and process conformity Support the design/development of SOA: Business Glossary to P&C Services Improved data quality, eliminating redundancy of processes and data stores

Business Services for Insurance – Proposed RFP Define industry standard ‘Business Services’ for Insurance to support Business functions such as Claims Processing, Policy Management…  Classification of Insurance Services (Process Services –Create Quote, Pay Bill, Process Claim, Information Services, Infrastructure Services – security, system mgmt…)  Service Motivation, correlation of Services to Business Processes such as Payments, Underwriting, Claim Servicing…  Service payload  Associated Rules  … Proposed RFP to be developed by OMG Ins. WG in partnership with OMG SOA SIG  Use of Service Modeling standard in development  Draft RFP presentation planned for Dec. 07

Other OMG standards of interest Semantics of Business Rules and Vocabulary (SBVR)  Combines natural language expression with precise logical underpinning Ontology Definition Metamodel  Enables development of Ontologies for a given domain  Can be used by people, with emphasis on machine interpretability to exchange domain information Common Warehouse Metamodel (CWM)/Information Management metamodel (IMM)*  IMM will enhance CWM and bridge the gap between UML, data and XML modeling XML Metadata Interchange (XMI)  Enables exchange of metadata across data modeling, BI, ETL… tools and repositories Organization Structure Metamodel (OSM)*  Organizations, relationships, positions and roles

Other OMG Groups/standards of interest continued OMG Finance Domain Task Force standards  Payment modeling and conversion formats OMG SOA SIG  Standard for Modeling Services and traceability to Business Processes (in development)  Standard for Event modeling (RFP to be issued in Dec. 07) Architecture driven modernization Task Force  Create specifications and promote industry consensus on modernization of existing applications

Summary Business Agility is attainable if we establish a robust, Model Driven foundation and develop and deploy standards driven solutions that allow Insurance Businesses Sense, Interpret and Respond to ‘Events’/Changes  A MUST HAVE is a ‘metadata’ management capability Insurance Businesses must invest in models and generate code from models We must manage the Enterprise ‘Assets’ and the interdependencies among the ‘Assets’ including impact analysis Intel has demonstrated that using OMG’s standards it is possible to establish a robust metadata management capability

Next steps/upcoming events/relevant Links Participate in development of P&C Standard  Contact Bill Jenkins/Harsh Sharma for details Participate in developing the ‘Business Services’ for Insurance RFP  Contact Harsh Sharma for details Delivering Business Agility in the Insurance Industry with SOA and Modeling – Workshop sponsored by OMG Insurance and SOA SIG ( )  Planned for the week of Feb. 11, 2008 in the NY/CT area  Tutorials, case studies, tools demos on how MDA, SOA, BPM and domain modeling enable Business Agility  Contact Ken Berk, OMG for draft agenda/sponsorship/participation… OMG Insurance working Group Wiki  OMG Finance Domain Taskforce 

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