While most insurers scramble to consolidate sales, marketing and service into call centres Hill House Hammond is going in the other direction, expanding from 150 to 250 branches in the past 5 years, and gaining 1.25 million customers in the process.
In searching for the ideal way to upgrade infrastructure, they wanted to keep working with existing IT providers, to ensure correlation between branches, call centres and the head office systems, which were running on high end IBM RS/6000 servers under AIX, the IBM version of Unix.
That's why Hill House Hammond has adopted Linux technology. As part of a two year plan to fully upgrade its existing systems, the company chose the Linux/IBM Netfinity route for its branch network, instead of basing the solution on Microsoft's NT, achieving the largest ever installation of this sort in the financial sector.
IT director Neil Turner says: "We're the second-largest personal lines intermediary and one of the top-ten claims handling operations in the country—but our IT infrastructure was getting left behind.
"Although we do use the internet and call centres to market our products, we still successfully manage relationships with our customers through local branches. We want to retain and build on that strength. We had to find an IT solution to give us increased capacity with long term cost-effectiveness, and the flexibility and reliability to develop our branch systems"
Lower total cost ownership
Originally, the company had chosen Pick Systems to build the operating method, management tools and database of its customer-facing systems.
"Linux has a lower total cost ownership than the alternatives we considered," Turner adds. "While the hardware is the same price, the software and installation costs were significantly lower and, after the initial installation period was over, the ongoing support costs are a lot lower than we anticipated—it just doesn't go wrong.
"In additiion, IBM are strongly supportive of Linux—they're pumping millions of pounds into its development. This installation was of special interest to them as it was a 'first' and, working with Pick, they convinced us that it would succeed. Migrating to Linux OS seemed to make sense because it was Unix-based and would offer very low support costs.
"For instance, we were able to install the new system in the branches in a matter of minutes rather than hours, and when you multiply that by 250, these savings alone were huge," he says.
In total, 290 IBM Netfinity 3000 servers were purchased and installed in the branches—and for development and training purposes— in autumn 1999. Each server is equipped with a Pentium II processor, 64mb of RAM (random access memory) and 9.1GB of hard disk storage. The new system also gives an ISDN connection between all the company's operations for the first time.
The new branch hardware uses a version of Linux from Red Hat. It was the version previously used by Hill House Hammond on its other servers, so they had experience of it, but it is also suitable for current and future needs. The language remains Pick, but the newer D3 version. Pick worked for almost a year defining both the hardware and software architecture to create a revolutionary solution for the company.
Turner continues, "Their final coup was consolidating the entire installation process— the operating system, drivers, software, D3 and HHH's application—on a single CD, so anybody could install the system without needing special skills."
Amongst other benefits, from the branch perspective, are the replacement of manual re-inputting of data by automated data transfers, and, through the IBM on-site warrantee, the immediate, local response to servicing and repairs.
At the same time, changes were being made in the call centres and central operation. The previous IBM RS/6000 servers were transferred to one D3 AIX DBMS server, running on a new 10-node RS/6000 SP server at Hill House Hammond's head office in Bristol. Each node runs a different part of the operation—call centres, claims, finance, central database and one for resilience (hot-swop in case of error).
"We now have a complete, scalable, multi-platform system where we have central control, and a base for all functions to talk to each other," comments Turner.
"Not only does this give us the power to cope with a continuing rapid rise in business volumes, but also it allows us to be different from the others, to diverge from the proven path, which was vital to our continuing support of the branch network."
In America, IBM and Pick's excitement at the success of the operation has generated extensive media coverage and business enquiries. However, the company has not gone down the Linux route exclusively.
"We chose Linux for the branch operation and areas where it is most appropriate", says Turner, "but we still use Microsoft where necessary". The BBC's Money Programme were 'desperately seeking sanity' for a feature on Microsoft/Linux back in February, and fell with glee on Hill House Hammond. That half-hour slot resulted in thousands of enquiries.
Turner concludes, "With this implementation we achieved our immediate objectives - cost efficiency and increased capacity. But it doesn't stop there. We're working on full branch networking. We intend to free staff time for focusing on the business of looking after our customers. Watch this space'!"