IBM Grid in The Insurance Business

IBM  said it has created IBM Grid and Grow for
Actuarial Analysis, a new grid computing package to help life insurance
companies cut the time needed to run detailed insurance model scenarios.

The offering is consistent with Big Blue’s desire to offer specific solution
sets in areas such as grid computing , one of IBM’s
technological strengths and where IBM and rival Sun Microsystems
 see great growth in the future.

Typically, an actuary, whose job is to calculate the probability of risk for
insurance companies, uses a computer or distributed processing systems to
drum up calculations.

Although accurate, these methods are slower, affecting the actuary’s ability
to do his or her job. Traditional systems can also cost the company a lot of
money, said Ken King, vice president of grid computing at IBM.

“Many of them are workstation-based actuarial solutions, or simple
departmental solutions that are very manually provisioned, and they don’t
have the kind of computing power to support the kind of more aggressive
compute models to deliver the results they need in a time frame they need,”
King said.

New-fangled regulatory
compliance issues compound the actuary’s efficiency challenge. Sarbanes-Oxley and SEC 17a-4, for instance, impinge an actuary’s ability to accurately apply life insurance premiums and manage risk for pensions and annuities.

Enter the IBM Grid and Grow for Actuarial Analysis, a bundle of hardware,
software and services.

The package is designed to let actuaries at life insurance companies use
grid software to do the math, accelerating the way they assess risk, and maybe
even give them a leg up on competing firms.

“We’re taking a number of actual actuarial applications that are out in the
market today and enabling them on top of our grid technology, which will
decrease the time that is needed to run these complex insurance model
scenarios and increase the number of scenarios they can run in a certain
time period,” King said.

These applications include a choice of grid software offerings from ISVs
such as Milliman, SunGard, DFA Capital Management and GGY, as well as
middleware from IBM partners DataSynapse and Platform Computing.

These applications and middleware will run on top of an IBM BladeCenter
blade server box running Intel Xeon Woodcrest chips and either Microsoft
Windows or Linux operating systems.

IBM is also throwing in its Director monitoring software and implementation
services for hardware and software installation.

Noting that IBM clients already using an early version of the solution are
reporting a rapid payback in their investment, King said customers can
embrace the package at a starting price of around $100,000.

The package is the first specialized offering from IBM’s Grid and Grow
program, which was launched
in August 2005.

The program is geared to help erase the perception that grids are for
scientific research by helping corporations make grid computing a
part of their everyday IT infrastructure.

News Around the Web