Kiln builds a bigger insurance data pot

It's not hard to see that the UK financial services landscape is changing in quite fundamental ways. While the specialised insurance market isn't suffering the privations of the mortgage industry, City-based insurance company Kiln is undergoing fundamental corporate changes underpinned by a no-less sizeable IT upgrade.

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Five years ago, the family-owned insurance and reinsurance company decided to move away from its reliance on Lloyds of London and expand globally. Along with this shift in business strategy was a move away from the 'old school tie' approach to insurance, opening the company up to a wider talent pool in terms of recruitment and career progression and to new ideas in terms of how the business will be shaped in the future.

Two years ago, the company decided to embark on a tech overhaul to support the change in direction.

While underwriters at the company were used to a spreadsheet-based approach, the decision was taken to build an in-house underwriting application and bring in risk assessment modelling techniques, all of which necessitated a new storage architecture.

Kiln IT director Chris Locke told silicon.com the commercial landscape has made it difficult to raise premiums on the sorts of products the company deals with, including airline, marine and property insurance. As a result, the company must find other ways of maximising profit.

"There was a need to be smarter about what we chose to insure. We underwrite £1bn of premium: in a downturn it may be difficult to increase premiums, which means we needed more powerful modelling tools, so that we can decide where we need to cover the risks to maximise profit," he said.

The other prong of the company's attack is in an aggressive acquisition strategy that has seen it move into six countries. Kiln was itself acquired by Tokyo Marine in February this year, opening up opportunities in the US.

Kiln is already two-thirds the way through upgrading to an in-house underwriting system which is being developed to be distributed throughout Kiln's international offices.

Locke added that a basic SOA platform will support custom bolt-on applications as they are written for the processes of each company, while generic processes will be absorbed into the common platform.

Locke said: "We've just about done London and now we are starting Europe but we already have 80 per cent of what we need completed. It means we can get apps out to support our international offices within weeks. It also means that it's a Kiln office out there. People do business with us because they know who we are. Each office has the same hardware, the same desktop, the same standards."

The changes meant the company also required a powerful SAN storage architecture. Locke considered incumbent supplier HP but decided the storage offering from Hitachi was better able to support the sort of data throughput Kiln demanded and was better optimised for the company's back-up and disaster recovery needs.

Locke said: "We have a requirement to completely rebuild all systems within 48 hours. With the amount of data we are using, it would be physically impossible to restore systems from a tape back-up in that time."

Alongside many other financial institutions, insurance is increasingly under the glare of regulators. Locke said the industry as a whole has been put on alert by the FSA to review its data security protocols.

"Some of our products require us to hold personal data, including health records, for a specified amount of time. Hitachi's SAN provides the technologies we need to identify where we are holding data. Plus, as we move into the US, we will start being hit by some of the SOX [Sarbanes-Oxley] regulations," he added.

Locke believes Kiln's IT strategy will set it up as a nimble player in the future global specialised insurance market although he concedes that not putting these initiatives in place would not stop the business.

"There are other ways of achieving our goals but they would be more expensive," he concluded.