The Hartford Financial Services Group inked a six-year agreement in which it will pay IBM $500 million for a private, cloud-based infrastructure to better manage its data and reduce operational expenses.
The Hartford has two data centers, one in Hartford and another in Boulder, Colo., filled with mainframes and servers. The IBM PureFlex Systems cloud infrastructure is built into both data centers. The system will allow the insurer to buy and pay for computing resources through the Internet, which is a better way to manage customer data, policy information and claims data.
As part of the agreement, IBM will provide services related to the mainframe, data storage, backup and resiliency. The technology affects back-end IT systems and infrastructure at The Hartford.
“Insurance companies, large financial institutions have tremendous amounts of data. We believe that understanding and gaining insight from the vast amount of information will provide competitive advantage,” said Philip Guido, general manager, IBM Global Technology Services, North America.
For example, insurance could be more specifically crafted based on claims data, market or customer information, Guido said.
The Hartford made the decision because cloud technology has matured as a product offering and technology investments are a part of its strategic plan, according to the company.
The Hartford is making significant technology investments “to increase operational effectiveness and improve our competitiveness,” Andy Napoli, president of Consumer Markets and Enterprise Business Services at The Hartford, said in a statement.
“The partnership with IBM will help The Hartford implement a strategic technology infrastructure that will provide us with greater agility and offer us more flexibility and transparency as we continue to grow our businesses,” Napoli said in a statement.
IBM has 1,560 patents related to cloud technology.