Leaving Legacy: ING Unit Institutes Three-Phase PlanLeaving Legacy: ING Unit Institutes Three-Phase Plan

ING Re, the life reinsurance division of ING Group, took a long, hard look at its legacy systems and found them lacking. Beyond the technical worries, the systems were holding back new-product innovation.

"Some of our mainframe systems were over 15 years old, and we were having risk-management problems--not to mention the systems were inflexible, so we couldn't revise existing products or generate new products," CIO Larry Erb says. In some cases, replacement was the only option, such as with an IDMS platform that the vendor no longer supported.

Since the life reinsurance business is a relatively small piece of the insurance industry, ING Re didn't have a long shelf of packaged applications tuned to its business. "There was only one product, but it wasn't mature, and custom-built solutions were too expensive," Erb says.

That was the technology hurdle; then there was the challenge of making the business case for getting rid of legacy systems. One of the drivers was unit cost reduction--basically reducing the cost and head count needed to process a transaction. "We needed to be able to show that we could accept much more new business, and the head count would remain the same," he says.

Through an ING acquisition at the time of ReliaStar Financial Corp., Erb got to know a vendor, Wyde Corp., that provided component-based development tools, which ING Re used to first rebuild its individual life reinsurance systems. ING Re developed a three-phase plan to replace its legacy systems. First, it improved the the quality of incoming data by putting the data into a standard format. Second, it replaced the administrative systems and migrated the data to new information-management systems. "The data transfer was the most painful process," Erb says. "We had the legacy data, and we had data coming in from clients daily."

The third phase, which the company is still in, is using the data from the clients for better business intelligence, such as understanding risk by geographic location--a need that became more evident after 9/11, Erb says.

As for the future, Erb says that half of the components used in the individual life systems can be repurposed for group life reinsurance. "The reusability got us approvals a lot faster," Erb says. How well are the new individual life systems working? Erb says the old legacy systems will be shut down in a few months.