I&T’S EXECUTIVE SUMMIT 2012: THE AGE OF …

November 2012 Business Innovation Powered By Technology

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I&T’S EXECUTIVE SUMMIT 2012: THE AGE OF CONSUMERIZATION:COMPETING ON INSIGHT, SPEED & TRUST SEE PAGES 20-21

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A U B M T E C H W E B P U B L I C A T I O N

SUSAN GUELINationwide Financial

GRAEME BODDYBuilders Mutual

BRIAN LECLAIREHumana

ELLEN FECTEAULiberty Intl. Underwriters

GREG CLANCYIndiana Farm Bureau Ins.

MARK CLARKJackson National Life

MICHAEL FERGANGGrange Insurance

SALVATORE ABANOTower Group Companies

For years, insurance companies were widely regarded as behind the times when it comes to technology. Insurance products are relatively complex and labor intensive to administer, creating challenges for back-end systems and processes. Further, the insurance sector has undergone decades of mergers and acquisitions, leaving most major players saddled with complex application portfolios and aging legacy systems.

Faced with increasing competition and demands from consumers and agents for online and mobile services, insurers are rethinking their organizations, processes and technology to tackle large-scale modernization programs.

In many respects, the global insurance industry ($4.5 trillion in premium revenues, 2011) has moved to the forefront of some of the most difficult challenges — modernizing core applications and processes, creating enterprise architectures, and gaining insight about products and customers from multiple sources of data.

Gartner in 2012 ranked “modern core systems” as one of the top technologies with the greatest impact on insurers, yet with so many variables affecting operations — products, risk tolerances, sales and distribution channels, and regulatory requirements — insurance companies are taking many different paths to modernization.

CSC is helping the world’s leading insurers find the best path — whether that involves replacing legacy systems, using specialized technology to modernize legacy components or moving to a new operational model based on Business Process as a Service (BPaaS). Transformative programs are enabling insurers to cut costs, better align IT solutions to business priorities and create shared applications and services that cross traditional organizational lines.

Here’s a look at four insurers and the paths they followed.

Example 1 — High-Performance Business Transformation

China’s decision to open its financial markets to foreign competition set one of the nation’s leading insurers on the path to the industry’s largest-ever business transformation program.

Taking the Best Path to Modernization

Insurers Transform Operations with New Applications, Platforms and Business Process Services

The company serves more than 115 million customers — nearly as many policyholders served by the top 50 U.S. life insurers. However, it was administering policies on multiple legacy systems spread across 38 regional branch operations and nearly 1,900 sub-branches.

Key processes such as responding to customer requests and introducing new products were challenging. To compete more effectively, the company chose CSC’s policy processing software used to support more than 60 million policies for multinational and regional insurers across Europe and Asia.

The sheer size of the nationwide rollout posed daunting challenges — from mapping the data to other systems to creating a scalable environment to process transactions for 45 million policies a day.

CSC specialists in software and high-performance computing proposed a massively parallel computing solution to right-size capacity to daily operating demands. To map data across the enterprise, CSC’s business intelligence experts created a first-of-its-kind Insurance Industry Data Model (now used by North American insurers).

*Graphics are based on a 10-point scale and depict relative values of total costs, internal labor and costs, and implementation timelines for these four projects.

Customer service was improved with 15,000 employees and 210,000 agents, brokers and external partners accessing the system with a response time of less than 2 seconds. With a single system, month-end reports are now completed in 3 hours instead of 10 days, giving the management team reliable data and much greater control.

Example 2— Rapid, Low-Risk Nationwide Rollout

What if you could roll out a new insurance business nationwide in a matter of months — without hiring staff or installing new systems? A large U.S. commercial carrier asked that question after deciding to launch a workers’ compensation insurance business.

“Transformative programs are enabling insurers to cut costs, better align IT solutions to business priorities and create shared applications and services that cross traditional organizational lines.”

Rich Carreau, Global Chief Technology Officer for Financial Services, CSC

Approach: Replace core systems and hardware

Results: Improved service and access to enterprise data Accelerated product introduction

Cost: 5 Effort: 7 Project Duration: 8

The specialty lines company wanted to enter the workers’ comp market and complying with varying state laws on work-related injuries posed a major barrier.

The company talked to CSC about Workers’ Compensation as a Service™, a cloud-based BPaaS platform that provides access to CSC’s processing system and trained staff to manage reporting and compliance.

The company signed a contract in September 2011 and just three months later quoted the first policy — a rapid launch for any type of insurance product. And it did so without hiring additional staff or implementing new software and hardware.

Example 3 — Low-Cost, Flexible Platform

A market-wide downturn in demand for investment products sent a North American life and annuity provider on the path to a new technology platform that could save millions of dollars.

The company has relied on CSC’s software for annuity administration for more than 20 years. With the market for annuities softening, the company talked to CSC about ways to modernize and reduce technology and support costs — while retaining the software’s many features.

CSC proposed converting the software from a mainframe to a virtual mid-tier, distributed platform using the open-source Linux operating system. CSC used specialized tools to speed the process so the firm could take advantage of IBM’s System z with Linux.

The replatforming project reduced the company’s annual costs for software and computing capacity by more than $2 million. CSC’s hosting service essentially provides the company with a distributed private cloud infrastructure that enables secure and scalable virtualization.

Better still, the company continues to benefit from CSC’s

client community, comprised of hundreds of business and technology professionals using the same systems.

Example 4 — New Components, Shared Services

A leading U.S. financial services company grew substantially through a merger, making it one of the top 25 writers of U.S. automobile and homeowners insurance.

Rather than replace its in-house systems, the company worked with CSC to install CSC’s Java-based software components for client information, policy administration, underwriting, billing and information ordering. CSC also provides application management support.

CSC’s components integrated with the company’s service-oriented architecture, which was created to bridge its systems. As a result, the organization has so far created corporate shared services focused on supporting policy processing, billing and collections, client management and claims operations.

This approach enables the company’s IT staff to be more agile and responsive to business priorities and new initiatives.

What’s the Best Path?Organizations can take many different paths to application

portfolio modernization. That’s why the first step is planning. Each organization must first conduct a candid assessment of its technology and operations.

Once the current state is understood, organizations must map out the desired future state and how quickly that goal must be achieved.

These examples are just a few of the paths CSC’s clients have taken to modernization. Some vendors only give you one or two options, so don’t let an outside vendor’s limitations hold your organization back. Talk to CSC about the many choices and combinations of choices for technology and services to meet your company’s unique circumstances.

Get More InformationTo learn more about CSC’s capabilities

download our latest insurance industry report, 10 Things Most Vendors Won’t Tell You about Modernization. www.csc.com/AppModReport

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Approach: Access off-premises system and staff through Business Process as a Service (BPaaS)

Results: Rapidly launched nationwide business Avoided upfront costs for staff and systems


Approach: Move existing system from mainframe to zLinux distributed platform

Results: Cut annual software and hardware costs 42%Improved services and integration


Approach: Retain core systems, plug in new components to a service-oriented architecture (SOA)

Results: Enhanced processing capabilities Created shared services to streamline operations


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10 GROWING INFLUENCE As the technology-driven transfor-

mation of the insurance business

continues to accelerate, insurance

CIOs have earned greater influ-

ence on the strategic direction of

their companies than ever before.

Insurance & Technology’s 2012

Elite 8 honorees have risen to

the challenge, helping to shape

the competitive postures of their

firms. Our Elite 8 advisory board

members describe how the respon-

sibilities of the insurance CIO

have evolved in recent years and

offer tips on how technology lead-

ers can maximize their strategic

value to the insurance enterprise.

November 2012 insurancetech.com

SUSAN GUELI GRAEME BODDY

BRIAN LECLAIRE ELLEN FECTEAU

GREG CLANCY MARK CLARK

MICHAEL FERGANG SALVATORE ABANO

THE ELITE 8 EXECUTIVES

13 Susan GueliNationwide Financial

17 Graeme BoddyBuilders Mutual

22 Brian LeClaireHumana

25 Ellen FecteauLiberty International Underwriters

29 Greg ClancyIndiana Farm Bureau Insurance

33 Mark ClarkJackson National Life

37 Michael FergangGrange Insurance

40 Salvatore AbanoTower Group Companies

TABLE OF CONTENTS

Michael Anselmo, SVP, CIO, Narragansett Bay Insurance Co.

Lori Beer, EVP, Enterprise BusinessServices, WellPoint

Mark Boxer, CIO, Cigna

Mark Clark, SVP, CIO, Jackson National Life

Joe Cooper, EVP & CIO, Manulife Financial

Bob Fullington, President, LOTSolutions; EVP, Fortegra Financial

Michael Kim, Chief AdministrativeOfficer, Torus Insurance

Barbara Koster, SVP, CIO, Prudential Financial

Scott McKay, SVP, CIO, Genworth Financial

Al Parisian, CIO, Montana State Fund

Rick Roy, SVP, CIO, CUNA Mutual

Mark Showers, SVP, CIO, RGA Reinsurance

Piyush Singh, SVP, CIO, Great American Insurance

Karl Uphoff, CIO, Commercial Insurance, Chartis Insurance

Andy Wood, SVP, CIO, Wilton Re

6 November 2012 www.insurancetech.com

DIGITAL ISSUES

Bull’s-Eye: The Big DataAdvantage From sharpening under-writing to improving thecustomer experience to fighting fraud, bigdata is transforming the insurance industry.Insurance & Technol-ogy’s October digitalissue looks at how carriers are harnessing big data to build a competitive advantage. insurancetech.com/digital-edition/oct2012

MUST READ

Enterprise Mobility The total number of mobile devices globally will soonexceed the human population, the World Bank reports.Accordingly, the mobile channel and the expectations ithas spawned are redefining financial services. This specialdigital report examines the opportunities and challengesfinancial services firms face in the mobile arena andexplores the strategies leading firms are using to turnmobile into a competitive advantage. insurancetech.com/enterprise-mobility

SPECIAL REPORT

5 Keys to Securing Your Mobile Apps Mobile capabilities for policyholders are table stakes, andone way or another, insurers need to secure the mobilechannel. I&T checked in with the executives who live and breathe data security to find out how they balancecutting-edge mobile service offerings with security.insurancetech.com/secure-mobile

LIVE EVENTS

The Age of Consumerization Insurance & Technology’s Executive Summit 2012Nov. 4-7, 2012The Terranea Resort, Rancho Palos Verdes, Calif.Insurance companies have longaspired to become truly cus-tomer-centric, and today carriersare taking the lead in exploringinnovative technologies toimprove the customer experience. Join an exclusivegroup of senior insurance technology executives atInsurance & Technology’s 14th Annual ExecutiveSummit to network and gain insight into the strategiesand technologies that are transforming the industry. insurancetech.com/summit2012

Insurance & Technology (ISSN# 1054-0733) is published 4 times per year (March, May, July, Nov.) by UBM LLC,600 Community Drive, Manhasset, NY 11030 (516) 562-5000. All rights reserved. Subscription information,address changes and single-issue requests: $65 per year in the US, $85 in Canada, $105 elsewhere (payable inUS funds). Single issue requests, write to: Insurance & Technology, P.O. Box 1053, Skokie, IL 60076-8053, or call(1-800) 255-2824, (847) 647-2105, or e-mail to [email protected]. Editorial Offices: 240 W. 35th Street, 8th Fl.,New York, NY 10001; (212) 600-3000. POSTMASTER: Send changes of address to Insurance & Technology, P.O.Box 1053, Skokie, IL 60076-8053. Periodicals postage paid at Manhasset, NY, and additional mailing offices. Registered for GST as UBM LLC, GST No. R13288078, Customer No. 2116057, Agreement No. 40011901. Copy-right 2012 UBM LLC. “Bulk mail enclosed, standard rate permit #476 paid at Ithaca, NY.” Return undeliverableCanadian addresses to APC, P.O. Box 503, RPO West Bvr Cre, Rich Hill, ON l4B 4R6. Printed in the United States.

EMERGING TECHNOLOGIES

43 The Next Big ThingThe 2012 Elite 8 honorees know their technology. They

weigh in on the latest and greatest enterprise solutions.

WHERE ARE THEY NOW?

47 Adapting to Changing TimesAs digital and mobile technologies transform insurance,

we caught up with the Elite 8 Class of 2011 to see how

changing expectations are reshaping their focus.

CIO-CMO ALIGNMENT

52 Crossing the New Digital DivideNew technologies offer huge opportunities to engage

customers. But marketing and IT leaders must work

together to maximize the value of digital channels.

TRANSFORMING THE BUSINESS

53 The Future of Health InsuranceBig data and other technologies that can deliver a per-

sonalized experience are transforming the industry,

says Cigna’s Mark Boxer, a former Elite 8 honoree.

WORK/LIFE BALANCE

54 Off the ClockHere’s how some of the 2012 Elite 8 honorees blow

off some steam when they’re not in the office.

8 From the Editor

insurancetech.com

ReaderAdvisoryBoard

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TABLE OF CONTENTS

W W W. A D M I N OVAT E . C O M I I N F O @ A D M I N OVAT E . C O M

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NNOVATION has become a hot topic in the insurance industry.We’ve come a long way from the caution of past decades, when insur-ers resolutely avoided any initiative that was based on still-emergingtechnologies. Today, however, insurance companies of all sizes areracing to deploy still-evolving technologies that can provide them withcompetitive advantage in critical areas ranging from underwriting and

product development to claims management, service and cross-selling.The sea change that has brought the industry from resolute resister to

change to aggressive pursuer of new business models has been driven bytechnology and a dramatic transformation of insurance company IT organ-izations. As the saying goes, technology is the business. There is no multichannel distribution, no regulatory compliance, no risk management,no customer experience without the IT team’s ability to translate businessneeds into dependable, scalable and secure technology solutions.

Of course, some carriers’ IT organizations dothis better than others, and some of the very bestare led by the executives Insurance & Technology

recognizes in this issue, our annual Elite 8 specialreport on some of the most innovative and effec-tive technology executives in insurance. These talented executives will be recognized at I&T’s14th Annual Executive Summit, Nov. 4-7, at theTerranea Resort in Rancho Palos Verdes, Calif.

This year’s honorees represent companies ofall sizes, across multiple lines of business. Whilethey are focused on a variety of challenges specific

to their businesses and markets, they do share some priorities. They arenot afraid of big, transformational projects, especially around core sys-tems modernization. They understand the complexities of the customerexperience and the ways that technology can enhance — or undermine— that experience. And they are committed to “smart” innovation thatprovides competitive advantage but is not an end in and of itself.

“Innovation all starts with an idea, trying to fix a problem based onknowledge and experience,” Deb Smallwood, founder of Strategy MeetsAction, told attendees at her firm’s recent SMA Summit in Boston. I&T’s2012 Elite 8 honorees are experts at generating those transformativeideas and inspiring and leading their IT organizations to successfully turnthose ideas into measurable improvements. The really good news is thatthis kind of innovation is becoming an industry standard in insurance IT.

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FROM THE EDITOR

IYOU’VE COME A

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Today’s insurance CIOs are better placed than ever before to influence their companies’ success. Technology-driven changes are altering the ways insurers do

business, making the CIO’s input critical in reshaping competitive posture. I&T’s 2012 Elite8 Advisory Board members discuss what’s different about the insurance CIO role today,and how top IT executives can maximize their strategic influence within the enterprise.

OPTIMISM UNDER PRESSURE CRAIG WEBER, CELENT

The successful insurance CIO acts in a spirit of “optimismunder pressure.” Most CIOs have resources at their dis-posal — not as many as they’d like, perhaps, but enough

to make a big difference in their companies’ performance.There’s a sense that technology is gaining traction and deliveringimprovements more efficiently than ever before.

CIOs are definitely key players in senior management now. Thepast decade has taught us that getting value out of IT spending ishard to do, and most business people know they lack the skills andexperience to do it well. Secretly, lots of business people (includingCEOs) are terrified of the complexity in today’s technology.Effective CIOs have job security and/or high employability.

Setting strategy is about managing tradeoffs, and no oneknows better than a CIO what is possible using current andemerging technologies. But too often, CIOs are caught up injustifying IT costs or addressing short-term needs and can’tmake the mental shift toward defining the world of the possibleto other inhabitants of the C-suite.

THE CIO’S GOLDEN RULEFRANK PETERSMARK, X BY 2

Today’s environment is completely different from just a fewyears ago. CIOs are expected to be strategic leaders whileworrying about operational business alignment, innovate

while battling strong headwinds against change within their organ-izations, and contribute directly to top-/bottom-line revenue whileseeing overall investments in IT stay flat or slightly decrease.

Alignment is yesterday’s challenge for CIOs; if they’re not strate-gically integrated into their firms, then they’re not functioning effec-tively as a CIO. Where that hasn’t occurred it’s often due toundelivered promises on IT initiatives — over time, over budget,unrealized efficiencies, etc. That’s how credibility and trust are lost.

CIOs must be careful about how they communicate the com-plexity and effort required for enterprisewide IT initiatives. MoreCIOs than not get into trouble by oversimplifying what it will taketo get something done; when things go awry, they’ve left them-selves in a vulnerable position and risk damaging whatever hard-earned credibility they’ve attained. The golden CIO rule is still todo what you say you’re going to do, and implicit in that is thinkingcarefully about what you and your division can and cannot do.

KNOW YOUR BUSINESS STEVE CALLAHAN, ROBERT E. NOLAN CO.

Know your business — that is the key to success in today’svolatile world. Technology has always been complex, butthe shift in complexity from the “hard” world of managing

raised floors and data farms to information-driven “soft” tech-nologies imposes an amplified demand for business acumen. Forthe former, technical depth was key; for the latter, a blend of busi-ness-specific knowledge and continually updated technological

POSITION OF INFLUENCE


STEPHEN APPLEBAUM,Senior Analyst, Aite Group(Boston)NEAL BAUMANN, U.S.Insurance Leader, DeloitteConsulting (New York) STEVE CALLAHAN, PracticeDirector, Robert E. NolanCompany (Simsbury, Conn.)DAVID HOLLANDER, GlobalInsurance Advisory Leader ofErnst & Young LLP., Ernst &Young (New York)

MATTHEW JOSEFOWICZ,Partner and ManagingDirector, Novarica (New York) JOHN MULLEN,VP, Insurance, Capgemini(New York) FRANK PETERSMARK, CIOAdvocate, X by 2 (FarmingtonHills, Mich.)DEBORAH SMALLWOOD,Founder, SMA (Boston) CRAIG WEBER, CEO, Celent(Boston)

ELITE 8 2012 ADVISORY BOARD

breadth is a necessity. Actionable thought leadership able to deter-mine which combination of increasingly diverse options will driveoptimal business value, and then deliver it on time, is today’s exec-utive jackpot. A CIO capable of driving rapid implementationswith agility and flexibility is the rare find that truly stands out.

Many of the other demands on a CIO — resource balancing,scope management, governance, communication skills, staff lead-ership — have always been and will continue to be foundationalskills. Knowing which specific solution to run, why it is best for thebusiness, and how to get it in place ensures C-level trust, a place atthe strategic planning table, and a more successful business.

RISK AND SUCCESS STEPHEN APPLEBAUM, AITE GROUP

The greatest risk for CIOs lies not in which projects they pur-sue, but how well the ones they select align with the needsand expectations of the business. Large-scale, cross-enter-

prise legacy integration projects have proven to be career makersfor insurance CIOs. Transformation of IT units from maintenancedepartments to delivery and transformation organizations can bea prerequisite to such large-scale projects or can simply be impor-tant stand-alone successes. Some of the more visible career mis-takes include improper selection and/or execution on core systemreplacements and integration partners, projects that are costly anddisruptive even when they go well but that can represent disastrousconsequences for the entire business when they go badly.

Recent CIO success stories — and lessons learned — dohave some recurring themes, and adopting market-tested andproven technologies is surprisingly not one of them. The imple-mentation of a project management office (PMO) with properauthority and executive support has proven effective in manag-ing large, complex projects that have cross-enterprise impact.CIOs who have achieved real transformation have had to culti-vate trust among their management teams over time throughpersistence and the use of thoughtful and compelling analyticswhile also leveraging initially small successes that can be scaled.

BEYOND TRADITIONAL ROLESDAVID HOLLANDER, ERNST & YOUNG

The demand for technology-enabled change throughoutthe business has never been greater. Amid competingbusiness and regulatory demands, ever-growing enter-

prise intelligence, analytics and predictive modeling needs existthroughout the entire insurance value chain. To meet these chal-lenges, CIOs must continue to move beyond their traditionalroles to become strategic partners with the business in priori-tizing the allocation of scarce capital and IT resources.

Among the greatest challenges CIOs face today are: simul-taneous need for growth and profitability; increased focus onthe customer; the need for a more precise regulatory reportingresponse, powered by multiple data sources; and coming toterms with the emergence of the chief data officer role.

CHIEF INSIGHT OFFICERDEBORAH SMALLWOOD, SMA

The business challenge is all about growth and optimization.This requires IT investment. For the CIO, it often becomesa capacity and speed issue. It’s a real challenge to shift IT

investments and resources to deliver more value (typically forless dollars) while continuing to deliver the high quality for currentoperations and reduce IT operational and project costs. The part-nership between business and IT has never been more important.

Successful CIOs will be those who begin to think of theirrole more as the “chief insight officer” than the chief informationofficer. Over the next decade, CIOs will face a formidable chal-lenge in making sure their organizations are positioned to cap-italize on the explosion of information, all the new ways tointeract, the hyper-connected world, and the host of options forsourcing IT services. But ultimately, the real challenge will bethe ability to drive new insights to more effectively guide thebusiness strategy and deliver competitive advantage. ■


8 WAYS TO MAXIMIZE INSURANCE CIO SUCCESS

1. Focus on the Business. Keep your focus on business-enabled IT capabilities rather than on the underlying technolo-gy/delivery of those capabilities. Use the best tool for the job. 2. Execution is Fundamental. Strong project managementis essential for building the business organization’s faith in IT.Don’t neglect proactive communication on project statusand anticipated problems. 3. Embrace Agile Development. Insurance CIOs shouldembrace the Agile development methodology not because it’scool, but because it leads to closer business/IT collaboration. 4. Reverse Engineer Analytics Initiatives From BusinessGoals. Start with an anticipated business outcome and workbackward. What will change if there is better data? 5. Distinguish Partners From Suppliers. Be sure you knowwhich vendors are suppliers and which are partners, andtreat them accordingly. 6. Understand the True Costs of Outsourcing. Understandwhether you are outsourcing for cost or for capabilities. Makesure you understand the whole picture, and that you haveimplemented adequate measures to ensure acceptable quality. 7. Tap Virtualization and Private Cloud Synergies. Thinkabout how to leverage your virtualization investments in aprivate cloud environment. 8. Invest in Your People. Make sure that they have anunderstanding of the impact they have on the business and reward their contributions.

—Matthew Josefowicz, Novarica

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USAN GUELI, SVP and CIO of NationwideFinancial, recalls the excitement of leaving OhioState to become an entry-level programmer atNationwide in downtown Columbus, Ohio. “Havingbeen at a large school, I was thrilled at the tremen-dous amount of opportunity at a large company,”

Gueli recollects. Her enthusiasm has been vindicated during a26-year career at the company that has been a tour of prepara-tion for her successful CIO tenure.

Although she has served in other parts of the Nationwideenterprise, Gueli spent the first eight years of her career in Nationwide Financial, adivision of Columbus-basedNationwide Mutual InsuranceCo. ($20.7 billion in 2011 oper-ating income), working insmall teams and learning toperform a variety of roles.Gueli recalls from that era aparticular manager who hada lasting influence on hercareer: “She had very highexpectations but would never ask anything of her team thatshe wasn’t willing to do herself,” Gueli recalls. “It taught me agreat deal about what it means to be a leader.”

Gueli spent the next eight years in Nationwide’s infrastruc-ture delivery organization. While it provided an opportunity forher to utilize skills she had acquired, she describes it as animportant departure from her previous experience. “It wasinstrumental in opening up my mind to the broader enterprise,”Gueli explains. “I had the opportunity to deliver for the broadNationwide organization, including all of our business — P&C,Nationwide Financial and our affiliates — as well as workingwith a different dimension of our technology environment.”

According to Gueli, one of her last assignments as part ofthe infrastructure delivery team gave her responsibility fordelivering infrastructure for a set of business units with a smallteam of professionals outside her organizational structure. “Itreally helped me to build muscle in how to utilize the broadcapability of an organization, not just the resources withinyour own scope of responsibility,” she says.

In 2002, Gueli put that muscle to use with her appointmentas VP of information risk management (IRM), a function thatcomprises information security, continuity management andcrisis management. “During my time at IRM I had the opportu-nity to work with some distinguished experts in those disci-plines,” Gueli relates. “We had the opportunity as a team tobuild our enterprise practice and drive a very significantimprovement in the company’s risk posture.”

She refers to an observation she made to Nationwide’s enter-prise CIO Mike Keller about two years into the job: “It doesn’tmatter what I do next, whether infrastructure delivery or back

to application development, Iwill execute those roles dra-matically differently now thatI have a deeper understandingof the risk management por-tion of the role.”

At that stage in her career,Gueli relates, she had discre-tion about her next move andchose in 2006 to return to the oldest discipline on her

resume, heading Nationwide Financial’s application develop-ment center. “The year or so that I spent there gave me theopportunity to dig deep into application development again,making me a better candidate for the CIO position when itbecame available,” she comments.

In the Name of the AdviserGueli has put her accumulated muscle to work in driving initia-tives that play to the needs of the company’s adviser distributionstrategy. For example, her team recently rolled out theInvestment Solutions Builder tool, which allows retirement planadvisers to create highly specific, high-performing investmentmodels within plans based on criteria such as age, risk toleranceand where the investor stands in the savings cycle. “It’s a toolthat helps them deliver plans that perform for the participant,based on that individual participant’s needs,” Gueli explains.“It’s a very exciting tool with features that have patents pending.”

Earlier this year Nationwide rolled out a single-sign-onsolution that allows advisers to link directly from their firms’

Nationwide Financial CIO Susan Gueli has led a highly motivated teamto simplify systems and build market-leading capabilities for the company’s

adviser distributors. By Anthony O’Donnell

BUILDING MUSCLE AND ENERGY

S“WHAT WE WANTED TO BE ABLE

TO DO WAS DRIVE CHANGE IN THEORGANIZATION IN A WAY THAT WAS

NOTICED AND FELT BEFORE IT WAS TALKED ABOUT.”


websites to Nationwide.com. “We’ve implemented it for afew adviser firms and are in the process of rolling it outmore broadly,” Gueli reports.

Toward the end of 2011, Nationwide Financial begandelivering tablet technology to its field wholesalers, whomGueli characterizes as key players in the company’s salesand service strategy. The program began with the rolloutof lower-risk mobile capabilities, such as email and cal-endaring, to the entire wholesaler population; Nationwidecurrently is working on a secure tablet-based CRM solu-tion. “We have been very deliberate about what gets storedon a personal device versus what they can access but getsstored remotely,” Gueli specifies.

Gueli’s team is nearing the end of a consolidation initia-tive to take retirement plan administration systems downfrom three systems to one. Nationwide Financial shut downthe first system in 2009 and is on track to decommissionthe second in 2013, leaving only the company’s in-house-developed DC Direct system. The initiative delivers signifi-

cant business benefit as well as a raw operating efficiencyexpense reduction of 11.5 percent, according to Gueli. “Wewill have the opportunity to have a single public sectorretirement plan platform with innovative capabilities andstrong functionality,” she comments.

Power SurgeIt’s not just “muscle” that has driven these successful initia-tives, but also the energy and commitment of the NationwideFinancial team, Gueli notes. However, she confides thatearly in her tenure as CIO, employee engagement wasn’twhere she wanted it to be. Gueli had earlier undergone whatshe supposes others would see as a personal transformationas the result of her interest in human performance and ener-gy management. “What got me started was seeing a speakerfrom the Human Performance Institute (HPI, Orlando, Fla.),after which I began to study their materials,” Gueli recounts.“Later I had the opportunity to participate in their CorporateAthlete program, which had grown out of HPI helping ath-letes to manage their energy and performance.”

Gueli says she worked with HPI to apply its practicesand tools to drive cultural change at NationwideFinancial’s IT organization. The effort began with Gueli’sleadership team learning the principles and tools of energymanagement with an eye toward leading by example later.“They have been amazing, driving a change in themselvesfirst and then through the organization,” Gueli relates.“What we wanted to be able to do was drive change inthe organization in a way that was noticed and felt beforeit was talked about.”

Gueli takes great satisfaction in associates reportinghow the energy management initiative made changes intheir overall personal health or performance. But it alsohas had a significant impact on the organization. “IT hasdriven amazing changes in our organization that are excit-ing and fun to be a part of,” Gueli says.

The metrics bear that impression out — according toanalysis by Gallup, the Nationwide Financial IT organiza-tion’s ratio of engaged to disengaged associates improvedfrom 3 to 1 to 16 to 1 over two years. During the same period,the percentage of teams with top quartile engagement scoresjumped from 41 percent to 72 percent.

But Gueli emphasizes that the purpose of energy man-agement is by no means directed solely at organizationalgains, but rather at a kind of win-win situation in whichassociates have energy not only for work, but outside ofwork, in such a way that improves work/life balance — andthus morale generally. “As human beings, we can’t generatemore time for ourselves, but we can generate more energy,”Gueli observes. “Most people say that they see the benefitsat home first, because they typically apply so much energyat work and are neglecting other things. They love the factthat we are focused on the whole person.” ■

SIZE OF IT ORGANIZATION: 750.IT BUDGET: $200 million.EDUCATION: B.S. in Business Administration andComputer Science from Ohio State University. HOBBIES: Gueli enjoys traveling, skiing, biking and exer-cising with her husband and son, as well as participating inactivities surrounding her son’s high school baseball games.She serves on the board of directors of Directions for Youthand Families, a Columbus, Ohio-based non-profit that helpslocal children and their families make positive life choices.

SUSAN J. GUELINATIONWIDE FINANCIAL, SVP, CIO

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T SHOULD NOT BE SURPRISING that a com-pany whose major customers are construction firmsanticipated an economic downturn that began with thehousing market. So when management at Raleigh, N.C.-based Builders Mutual Insurance Co. told CIO GraemeBoddy in 2007 that it expected economic slowdown to

occur in the near future, he began building the business casenot to clam up IT development, but to accelerate it.

“We didn’t expect quite the precipitous drop thatoccurred, but we saw that the economy was going to declinequite dramatically,” Boddy recalls. “The last thing we wantedto happen was to come out of the recession and be readyfor business to grow, but be limited by our capabilities.”

It was clear, Boddy says, that companies that were leadersin ease of doing business would be in the best position torecover quickly from the downturn. But the company’s existingsystems were not able to deliver the capabilities that it antici-pated its agents would demand — principally around e-com-merce. Builders Mutual ($5.3 million in 2011 net income)executives and the board of directors unanimously agreed thatthe company would have to go through a full modernizationeffort to build a foundation for the post-recession economy.

A Portal Into the FutureAchieving this end state, Boddy explains, required a mul-tipart project. First, the company had to convert its work-ers’ compensation book — about two-thirds of its totalbusiness — from Falls Church, Va.-based CSC’s Point 9application to Point IN C.0. Once that was completed, allother lines — including general liability, property, andpackage, among others — were changed over. After all ofthe conversions were completed, it was time to bolt on e-commerce functionality for agents.

“The main thing that agents really wanted was to knowvery quickly if we were going to be playing in the e-com-merce game,” Boddy says. “We created a quick-quote capa-bility that allowed them to enter the absolute minimumamount of information that we needed to provide a roughrate. Within two to three minutes, an agent would be ableto know — at least on workers’ comp — if our rate wasgoing to be competitive.”

Today, more than 40 percent of all new Builders Mutualbusiness originates through the company’s agency portal —and that proportion is growing, reports Boddy, who saysembracing e-commerce has led to major cultural changesacross the Builders Mutual organization, from its agents’ expec-

For Builders Mutual CIO Graeme Boddy, the recession offered an opportunity to build infrastructure for a new kind of insurance agent andcustomer. Today, the company is reaping the rewards. By Nathan Golia

AHEAD OF THE COMPETITION

I

SIZE OF IT STAFF: 25 internal staff.IT BUDGET: $6 million.EDUCATION: After he finished high school, Boddy started programming with a friend in the late 1970s. “I neverlooked back,” he says.PREVIOUS POSITIONS: VP, Business Applications,BCBSNC; VP, IT, CIGNA HealthCare.FAVORITE QUOTE: “It is easier to be critical than correct.” (Disraeli)HOBBIES: Sweep and scull rowing, golf.INSPIRATION: Fighting esophageal cancer.FAVORITE GADGET OF ALL TIME: The Atari 2600 (or the iPad).

GRAEME BODDY BUILDERS MUTUAL, CIO


tations to its customers’ service needs. While this transition isongoing, the company and its IT infrastructure need to supporttwo different models for interaction and experience, he adds.

“Some of the younger, more tech-savvy agents are quitehappy for the insurance company to have a relationshipwith the policyholder to offer things like billing capabilities,while others want to be the person who does everything onbehalf of the policyholder because they feel that their secretsauce is a full-service offering,” Boddy says. “And some ofthe policyholders themselves are very savvy and do a lot oftheir work electronically, while some are very paper-driven.We have to be able to offer capabilities for both.”

As part of that customer-centric focus, Builders Mutual alsorecently implemented San Francisco-based Salesforce.com asthe new platform for its call center. The software-as-a-serviceoffering represents an early move for the company into theCRM realm, according to Boddy. He says the implementationcame out of a strategy to build first a foundation for next-gen-

eration customer relations through advanced core systems,then make it easier for agents to do business, then upgrade thelevel of service for both agents and policyholders.

“We have a whole new service center that will do levelone and two calls — everything from answering queries totaking payments and doing the more simple problem solv-ing,” Boddy says. “If they can’t do it, through our workflowsystem it will get to the right person in the right departmentto close that transaction down.”

Boddy says he likes Salesforce because of the quality ofits data model, its distinct agent and policyholder views, andits ability to link reasons for the service calls with informationabout policy and claims in the company’s new data ware-house. “As an initial step into CRM, it allows us to significantlyimprove our service offering,” he says. “The second step tothat is moving into sales force automation and closing thatCRM loop, and that’s something we’ll be doing next year.”

Jumping Into the CloudSalesforce.com is notable not just for being a cloud-basedsystem, but also for early and vociferous defense of thecloud and SaaS models. Boddy also champions thisapproach, noting its value in extending the range of IT capa-bilities to small companies. He says he currently is exploring

its potential value for analytics — it would be easier tosend data to a cloud-based predictive modeler with extract,transformation, loading and dashboarding capabilitiesincluded rather than buying, installing and configuring asystem internally, he argues.

“When I look at my business and what it is that IT canbring to the table, I now have many varied options thatdidn’t exist before,” he says. “Now my business can startthinking about how they can use these things to make a dif-ference. We couldn’t have those conversations beforebecause we couldn’t afford to buy the software.”

In addition, cloud services are funded by contract ratherthan big up-front installation costs. This allows small com-panies like Builders Mutual to jump right in with the advancedfunctionality without having to justify (and complete) a largeinitial investment and implementation, Boddy notes. Still,many CIOs have eschewed the cloud due to concerns aboutdata security and control of data. Boddy explains that heaims to solve this issue by using his data warehouse as a bro-ker, passing only the data that’s needed to the cloud whileleaving sensitive data safely in the transaction system.

“We’re looking more and more at whether we can buy aservice — is it something that’s affordable? Is it somethingthat has a good ROI? Can we afford to keep it?” he says.“And when it doesn’t work for you anymore, you can gosomewhere else for the service or you can stop paying forit. You’re not left holding the bag.”

One area in which Builders Mutual could benefit frombetter analytics is claims, Boddy acknowledges. The com-pany implemented Advanced Claims from CSC as a first stepto that end. “It enables better workflow, and it enables us tocapture better information to do the claims analysis anddrive down the loss expense/loss ratio,” Boddy relates. “Allthat information is further captured in the data warehouse,where we can do our own analysis and modeling to deter-mine if we need to make any changes in terms of product.”

If all of this modernization over a three-year period does-n’t sound daunting enough, consider that Boddy stewardedBuilders Mutual through it while at the same time the com-pany moved its location, started a subsidiary company anddoubled its geographic footprint. It all comes back to thecorporate mandate at the outset of the economic downturn,Boddy says: The company was sure that the economy wouldcome back, and it wanted to be ready.

“There was no doubt or other place to go. There was nodiscussion to be had. Every person — director and above —was engaged in the planning and communication and changemanagement to deliver this kind of work,” he says. “Andsince the recession ended, we’ve grown maybe up to 25 per-cent per year primarily because we executed on all of thosedifferent things. A lot of our growth is from existing business,as exposure and workforce starts to increase. The real secretfor us as a company was enterprise execution.” ■

“THE LAST THING WE WANTED TOHAPPEN WAS TO COME OUT OF THE

RECESSION AND BE READY FOR BUSINESS TO GROW, BUT BE LIMITED

BY OUR CAPABILITIES.”

Pay only for Outcomes

Most business leaders like you realize that the highly popular Input based Outsourcing models are not aligned to your business imperatives. While you want to achieve the desired output, the service providers are busy managing the inputs and enjoying risk free revenues.

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2012INSURANCE & TECHNOLOGY

INSURANCE & TECHNOLOGY

INSURANCE & TECHNOINSURANCE & TECHNOLOGY

Are you ready for the age of consumerization in insurance?THE TERRANEA RESORT, RANCHO PALOS VERDES, CANovember 4-7, 2012

Conference Highlights:• It's All About the Customer: The Customer Experience Payoff – Hear about

the types of technology investments insurers are making to improve the customer experience, and how these are paying off in terms of retention, channel optimization and revenue generation.

• Big Data, Big Opportunities, Big Challenges – What does it take to build a truly data-focused culture, and how are insurers that have accomplished this leveraging big data to gain a true competitive advantage?

• View from the CMO, the CIO's Most Powerful Ally – We’ll discuss how these twoaspects of the C-suite work together to: facilitate innovation within the organization, translate IT projects into measurable growth, and Improve the customer experience.

• Voice of the Insurance CIO: Realities, Recommendations and Renaissance –What's on the horizon for the industry in 2013?

Why Should You Attend the Executive Summit?• Learn and Network with C-level and other senior technology and business

executives in a casual environment.

• Get Insights into today’s best practices from leading insurance industry IT and line-of-business decision-makers.

• Gain Knowledge about how insurance industry leaders are driving transformation in order to seize new growth opportunities.

• Unsurpassed Networking Opportunities, including receptions, workshops, activitiesand 2012 Elite 8 Awards Dinner (Elite 8 Awards Dinner sponsored by Tata Consultancy Services)

®

Diamond Sponsor Platinum Sponsors

Consumerization is transforming the insurance business and affecting everything from the way insurance products are sold tohow customers receive service to the ways insurance companyemployees do their jobs. At Insurance & Technology’s 14th Annual Executive Summit you’ll gain an insider’s access to information about the ways consumerization is remaking the business. Join an exclusive group of senior-level insurance company executives at this year’s event to network, make new contacts and learn how to harness the explosion of data,adopt new digital-based forms of customer interaction, and implement frictionless and secure transaction models that will redefine the model of how an insurance company operates, grows and succeeds.

The Age ofConsumerization:Competing on Insight, Speed & Trust

Register Now!Visit our website to see complete agenda and registration information.

Gold Sponsors

Silver Sponsorswww.insurancetech.com/summit2012

Please note that attendance at this Insurance & Technology event is limited to insurance company/carrier executives. Event producer reserves the right to qualify and deny any interested party.

IST_Spread_Print_Layout 1 10/1/12 4:16 PM Page 1

2012INSURANCE & TECHNOLOGY

INSURANCE & TECHNOLOGY

INSURANCE & TECHNOINSURANCE & TECHNOLOGY

Are you ready for the age of consumerization in insurance?THE TERRANEA RESORT, RANCHO PALOS VERDES, CANovember 4-7, 2012

Conference Highlights:• It's All About the Customer: The Customer Experience Payoff – Hear about

the types of technology investments insurers are making to improve the customer experience, and how these are paying off in terms of retention, channel optimization and revenue generation.

• Big Data, Big Opportunities, Big Challenges – What does it take to build a truly data-focused culture, and how are insurers that have accomplished this leveraging big data to gain a true competitive advantage?

• View from the CMO, the CIO's Most Powerful Ally – We’ll discuss how these twoaspects of the C-suite work together to: facilitate innovation within the organization, translate IT projects into measurable growth, and Improve the customer experience.

• Voice of the Insurance CIO: Realities, Recommendations and Renaissance –What's on the horizon for the industry in 2013?

Why Should You Attend the Executive Summit?• Learn and Network with C-level and other senior technology and business

executives in a casual environment.

• Get Insights into today’s best practices from leading insurance industry IT and line-of-business decision-makers.

• Gain Knowledge about how insurance industry leaders are driving transformation in order to seize new growth opportunities.

• Unsurpassed Networking Opportunities, including receptions, workshops, activitiesand 2012 Elite 8 Awards Dinner (Elite 8 Awards Dinner sponsored by Tata Consultancy Services)

®

Diamond Sponsor Platinum Sponsors

Consumerization is transforming the insurance business and affecting everything from the way insurance products are sold tohow customers receive service to the ways insurance companyemployees do their jobs. At Insurance & Technology’s 14th Annual Executive Summit you’ll gain an insider’s access to information about the ways consumerization is remaking the business. Join an exclusive group of senior-level insurance company executives at this year’s event to network, make new contacts and learn how to harness the explosion of data,adopt new digital-based forms of customer interaction, and implement frictionless and secure transaction models that will redefine the model of how an insurance company operates, grows and succeeds.

The Age ofConsumerization:Competing on Insight, Speed & Trust

Register Now!Visit our website to see complete agenda and registration information.

Gold Sponsors

Silver Sponsorswww.insurancetech.com/summit2012

Please note that attendance at this Insurance & Technology event is limited to insurance company/carrier executives. Event producer reserves the right to qualify and deny any interested party.

IST_Spread_Print_Layout 1 10/1/12 4:16 PM Page 1

OP QUIZ: Which signature piece of legisla-tion proposed by President Barack Obama ledto the greatest shakeup in the health insuranceinformation technology environment? AskBrian LeClaire, chief information and serviceofficer of Louisville, Ky.-based health and well-

being company Humana ($36 billion in revenue 2011), andthe answer might not be what you expect.

When it comes to the Patient Protection andAffordable Care Act (PPACA), “We have a lot of existingsolutions that are relevant to the job at hand,” LeClairetells Insurance & Technology. “It means a lot to us as acompany, but from a technology perspective it hasn’t yetrequired as much heavy lifting.”

According to LeClaire, it actually was the AmericanRecovery and Reinvestment Act — more commonly

known as the economic stimulus — that spurred thegreat majority of the recent IT innovation during histenure at Humana. “The way this legislation has beenconstructed is to encourage all elements of the care deliv-ery system to invest in technology,” he says. “The visionis one of many systems that are connected via standards-based health information exchanges.”

These systems break down into four major categories,LeClaire explains: workflow capabilities, informationstorage, information exchange and clinical decision sup-port. He adds that Humana has used a mix of customdevelopment, partnerships and acquisitions to build anintegrated infrastructure that attempts to solve the inef-ficiencies in healthcare delivery.

The custom-developed components of the four-pronged

approach are the workflow capabilities and informationstorage — better known as electronic health records. Forthe information exchange component, Humana partneredwith several other insurers — WellPoint (Indianapolis);Health Care Services Corp. (Chicago), parent to four BlueCross and Blue Shield insurers and Dearborn National;Florida Blue (Jacksonville, Fla.); and Blue Cross and BlueShield of Minnesota (Eagan, Minn.) — to develop a solution.The final product, Availity, is the third-largest informationexchange of its kind in the country, LeClaire reports.

Healthcare’s Version of Big DataBut it’s the clinical decision support that LeClaire saysbrings the most value to the entire endeavor. “When youstart ramping this up on a major scale, the amount of clin-ical information and exhaust data generated is massive,which becomes healthcare’s version of big data,” he com-ments. “You need to then provide automated clinical deci-sion support so you have a scalable mechanism to workthrough all that big data and inform the clinician who isdelivering care, when and where it is most impactful.That’s really where the secret sauce lies.”

Humana initially attempted to find a vendor with apackaged solution to deliver this link in the chain,LeClaire relates. Unsatisfied with the commercialoptions available, however, the company changed direc-tion and decided to develop its proprietary CareHubsolution, pairing custom-developed clinical workflowcapabilities with San Diego-based Anvita’s InsightEngine, a state-of-the-art clinical analytics engine thatHumana acquired in 2011.

“[Anvita] take lots of data and looks through it for pat-terns of care that they see in the data and they put togetheralgorithms that are repeatable,” LeClaire explains. “UsingCareHub and Anvita, we can take a member’s clinicalinformation, apply those algorithms and it will tell us thingslike, ‘This member has a contraindication with a medica-

Humana’s Brian LeClaire leads an organization deeply invested in leveraging the power of big data and advanced analytics to improve

healthcare outcomes. By Nathan Golia

A DATA-DRIVEN HEALTHCARE MISSION

“THE TECHNOLOGY IS OFTEN WHATTHE MEMBER EXPERIENCES.”

P


tion,’ or that they might need a mammography, or thatthey should have their blood levels checked because thelab values suggest that something might be going on.”

The large amount of potential data sources in health-care, as well as government- and market-based incentivesto deliver on the promise of that data, makes health insur-ers a vital component of a big data crucible, LeClaire sug-gests. The term isn’t just a buzzword in the insuranceindustry, he says, explaining that in the healthcare context,leveraging big data means understanding three major ele-ments: volume, velocity and variation.

“Volume, simply enough, is just the sheer magnitudeof the information that’s being generated every day now,”according to LeClaire. “If you look at the amount of infor-mation that’s being generated daily, since the 1980s thatamount of data is doubling every 40 months. And that’strue in the care delivery system.”

And with this increased amount of data comes anincreased demand for real-time analysis of that data, orin LeClaire’s term, velocity. “Back in the old days of ana-lytics, when we talked about population health, if infor-mation was seven days old or 30 days old, that was OKbecause you were looking at broad trends,” he says.“Now, when you talk about looking at, for instance, anEKG, and the speed at which variations of that data maychange, and you can spot something when someone isgoing through surgery and you’re using decision supportin real time, you’re in a different world.”

Finally, there’s variation. Data comes in a wide rangeof structures, LeClaire says. “You could be talking aboutdigital medical images or an EKG stream,” he indicates,adding that that’s where the real change has come in theway health insurers handle data. Health insurers nowhave access to far more structured medical data thanthey had in the past. “A health benefits management com-pany like Humana is experienced with handling big data— but one of the challenges it has is understanding andaccessing some of the deep clinical information that’sclose to care delivery,” LeClaire explains. “But some ofthose obstacles are going to fall away over time.”

All of this focus on aligning with the health IT provisionsin the stimulus doesn’t mean that Humana isn’t addressingthe PPACA, of course. But on that front, LeClaire notes,it’s been more a case of adaptation than ground-up devel-opment. “When you look at the health insurance exchangesand the approach that the government has taken there,they’ve patterned that after a lot of what they did in theMedicare space,” he says. “We have strong Medicare expe-rience — No. 2 in the nation — and as such we have a lotof the infrastructure already in place, like tools and abilitiesto take enrollment from a variety of sources.”

Humana corporate and LeClaire see the big data initiativeas one prong in a greater initiative called OneDream. With

the mission statement, “To help people achieve lifelong well-being,” LeClaire describes the data-driven component as“delivering better medical outcomes and well-being at loweroverall costs to our members for clinical care.”

The second prong, he says, is “providing customerswith a disruptive, differentiated consumer experience.”To that end, Humana has made heavy technology invest-ments backing mobile applications and a retail-like loy-alty and rewards program, HumanaVitality. “It isimpossible to separate the technology from HumanaVitality,” LeClaire says. “The technology is often whatthe member experiences.”

That technology includes digital pedometers and heartrate monitors that link to an online dashboard so memberscan see how well they’re adhering to their healthy habitsobjectives. Loyalty points are awarded through a new part-nership with Walmart for achieving certain goals, includingeating right, LeClaire says. “When you go through checkoutat Walmart, and you share that you’re a Humana Vitalitymember with a barcoded loyalty card, it will calculate adiscount against healthy food purchased,” he explains.“So there was collaboration at a technology level betweenus and Walmart to connect those two worlds.” ■


SIZE OF IT STAFF: 4,100.EDUCATION: B.A. in Psychology from Ripon College; an M.B.A. with accounting emphasis from the University ofWisconsin-Oshkosh; and a Ph.D. in Management InformationSystems with a quantitative analysis emphasis and a doctoralminor in computer science from Oklahoma State University.PREVIOUS POSITION: VP, Product Development,Telecommunications Division, Alltel Information Services.FAVORITE SAYING: “It’s about the prize, not the pain,”LeClaire says. “I’ll take the pain for the prize.”INSPIRATIONAL MOMENT: Being in New York City, near the World Trade Center, at 8:40 a.m. on 9/11.FAVORITE GADGET: The Garmin (Olathe, Kan.) heart rate monitor.

BRIAN LECLAIREHUMANA, CHIEF INFORMATION ANDSERVICE OFFICER

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PECIALTY INSURERS face significantly dif-ferent technological challenges than do their stan-dard-lines industry peers. Underwriting an array ofdifferent types of risk in many different locationsrequires systems that are flexible, powerful andeasy to use, according to Ellen Fecteau, who says

much of her career as CIO of specialty commercial insurerLiberty International Underwriters has been based arounddeploying a global IT framework to ensure that the firm is com-petitive and doesn’t have a lot of overhead costs.

Fecteau’s strategy has been to keep the major technologyinfrastructure as simple as possible — no easy task when thecompany operates in four different regions based out of fourcities: the U.S. and Latin America, headquartered in New York;Canada, out of Toronto; Europe, based in London; and Asia-Pacific, headquartered in Sydney. That’s in addition to the firm’sglobal headquarters in Boston. “In a global organization, youreally do have to pay attention to regional and cultural differ-ences, what’s happening in each marketplace, and your differ-ent competitors by marketplace,” Fecteau says.

While there are some localized systems — telecom, for

example — her focus has been on signing global contractswith strong vendors that can handle the currency, languageand regulatory differences within each region. “We try to doglobal contracts so we really manage our expenses, while ourcompetitors may do an implementation or an instance of anapplication within a region or a country,” Fecteau says. “Thesystems work or the development is more centralized withinput from all regional operations. It’s, ‘How do we cut ourexpenses where it makes sense by reusing or sharing our basetechnologies?’ All our regions use the same platform and thesame instance of that platform, rather than country-specificapplications and region-specific data centers.”

Three Keys to Quick ImplementationsDespite all of these considerations, however, Liberty InternationalUnderwriters, part of Boston-based Liberty Mutual ($9.2 billionin revenue Q2 2012), prides itself on rolling out technologiesquickly, Fecteau adds. The company has used its combinationof Agile and waterfall development strategies to implement newsystems from Guidewire (Foster City. Calif.) and SAP (NewtownSquare, Pa.) in just 10 months, she reports. Crediting the “caliber

Liberty International Underwriters CIO Ellen Fecteau has built a global technology strategy that promotes collaboration among different

constituents and enables growth of the business. By Nathan Golia

A GLOBAL VIEW

S

SIZE OF IT ORGANIZATION: Approximately 400, including full-time employees, contractors and partners.IT BUDGET: $90 million.EDUCATION: B.S. in Economics from the University of New Hampshire.PREVIOUS POSITION: Head of IT at Liberty Mutual Life Insurance Co.HOBBIES: Kayaking, jewelry making, art.FAVORITE QUOTE: “One day at a time.”INSPIRATION: Fecteau says she draws inspiration each dayfrom “the beauty of nature, people and life.”

ELLEN FECTEAULIBERTY INTERNATIONAL UNDERWRITERS, CIO


and commitment of our people,” along with the company’s gov-ernance and prioritization best practices, for the quick deploy-ments, Fecteau points to three keys to a speedy implementation,starting with discipline. “For us, time to market and right-sizingthe cost of initiatives is the crucial piece,” she explains. “Most ofour projects, even at a strategic level, we try to break into man-ageable components that you can deliver in nine to 10 months.”

Noting that even the largest vendors are used to doing region-al implementations rather than distributed global deployments,Fecteau admits that Liberty International Underwriters’s (LIU)technology strategy is not a common approach among globalinsurers. This leads to her second key to streamlined deploy-ments: finding the right strategic partners. Fecteau says enablingcollaboration among in-house and outsourced developers, aswell as selecting and reusing implementation partners thatunderstand the company’s approach, are key parts of makingthe insurer’s approach successful. The company reviews andstreamlines business processes before each implementation,leaning on clear metrics to measure success and effectiveness,all with the goal to develop partnerships and governance sothere’s skin in the game from both vendor and insurer, she adds.

The third key to deploying new technologies quickly,Fecteau says, is ensuring closealignment with business spon-sors within LIU to support theimplementation. Many times,she relates, teams from thebusiness unit with the techno-logical need and the IT depart-ment are colocated at theimplementation site. “IT is really closely aligned with the busi-ness at LIU. We’re very business-case focused so we look atcost-benefit before we start,” Fecteau explains. “We implementtechnologies to support that rather than saying, ‘It’s a majorinitiative and we’re redoing all of those systems.’”

Marshaling DataOf the major systems that she has redone, however, claimsoffered Fecteau and her team the most significant challenge.At a time when many insurers are revamping their claimsorganizations to collect and analyze more data at a high level,LIU’s rapid growth over its first decade of existence had leftmuch of its information in rather disparate formats, she recalls.With a mandate to use data as more of a strategic asset, theclaims organization required a lot of work to get it to a modernlevel, Fecteau explains. “Our data initially was in spread-sheets,” she says. “We’re now moving in the future to capturemore data internally and join it with external data to bettermanage claims outcomes.”

At the same time, however, LIU isn’t in the same position aspersonal lines or standard commercial lines insurers that arelooking to glean the benefits of big data from their claims organ-izations, according to Fecteau. The company doesn’t have a

high volume of claims, she explains, but deals with high-severityclaims from catastrophic losses. “Really being able to get at thedata and do historical kinds of analysis and forward-lookinganalysis based on industry trends is important,” Fecteau says.“Big data comes into play if you’re a volume business; you don’tdo analytics the same way with the volumes of data we have.”

LIU conducted a very detailed and forward-looking businesscase analysis of its claims processes and system beforerevamping them, Fecteau continues. From the onset of theproject, there was a focus on having integrated systems and asolid data warehouse as part of an overall move toward makingthe claims organization more cost-efficient. “Because we willhave the data in a system we didn’t have in the past, it willmake a huge difference in creating a business case,” she says.“And, in managing vendors, the legal expenses are very meas-urable in terms of how they can reduce expenses by havingaccess to the information.”

The data focus at LIU isn’t unique to the claims side. It’s alsoa huge benefit to other business areas for LIU, such as under-writing, which Fecteau’s team also reworked recently.Establishing the right risk profile and pricing policies accord-ingly goes a long way toward the company’s success, she says.

The Gulf of Mexico, forexample, is a hot spot forcatastrophe activity — bothman-made (such as the BPrig explosion) and due toweather (such as HurricaneIsaac this year and historicalevents such as Hurricanes

Katrina and Gustav). With a significant presence in that area,better use of data will help LIU decide from year to year whatits strategy should be in terms of risk and portfolio management,Fecteau insists. “For certain segments of our business, CATmodeling is critical,” she says. “We plan for a certain number ofCAT events and you really need to model that in your under-writing process and in your pricing accordingly.”

Due to LIU’s unique data needs, developing these capabili-ties isn’t as simple as selecting software off a shelf, Fecteaunotes. She says the company uses a combination of market-leading vendors, including Microsoft and other householdnames, to complement internal expertise and development inorder to advance their capabilities in collaboration, data andanalytics. This often takes the form of bringing in industryexperts in analytics to put together targeted proofs of conceptthat illustrate for business users how these tools can best beleveraged in their businesses.

In the end, Fecteau says, she believes firmly that the key tothe success of her technology unit is in the relationships herteam forms with the business and in the collaboration amongthe people who are delivering technology and those that needit. Together, she insists, they can bring innovative solutions tothe marketplace quickly and on budget. ■

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VEN BY THE STANDARDS of an indus-try known to be cautious about change, IndianaFarm Bureau Insurance (IFBI) was behind thetimes when Greg Clancy joined the writer offarm, personal lines and life insurance as seniorvice president and CIO in 2003. “It was like

stepping back into time, technology-wise,” recalls Clancy,who came to IFBI from the student loan industry.

It wasn’t just that core systems and key infrastructuresuch as phone systems were seriously out of date, accord-ing to Clancy, who notes that where there had been invest-ment in new systems, the implementations were not goingwell. Clancy’s mandate was to transform the role and per-formance of IT at Indianapolis-based IFBI, whose life com-pany has $2 billion in total assets and whose P&C companyhas $900 million in assets. “The vision was to enable thecompany to do business the way it wanted to do business,because systems and technology were not enabling andwere holding back how they wanted to do business,”Clancy says. “A longer-term goal was to somehow get closeto what the Geicos and Progressives were doing as thereal technology differentiators in our business.”

Clancy says his immediate challenge was to resolvean implementation-gone-wrong of CSC’s S3+ solution,an effort that took almost two years. “It was a prettyred-alert-type of situation,” he recalls. “A lot of it justhad to do with promoting the wrong people into leader-ship positions, not providing appropriate leadership, notbeing able to execute in general.”

It was apparent to Clancy that, despite the problemswith the S3+ deployment, IFBI had to replace its hodge-podge of home-grown systems with packaged solutions,and ultimately the decision was made to partner withFalls Church, Va.-based CSC for the modernization ini-tiative. “It looks like it’s paying off,” he says. “But it wasa leap of faith at the time.”

In fact, over the past six years, Indiana Farm Bureauhas replaced the policy management systems (includingclient, policy, billing and claims modules) for five of itscore lines of business. IFBI now runs its personal linesauto and home products on CSC’s Exceed system, its

commercial and farm products on CSC’s POINT IN sys-tem, and its life products on CSC’s CyberLife system,according to Clancy. Rather than implementing eachcomponent of homeowners separately, he relates, IFBIpursued a “vertical” slice implementation of its client,billing, homeowners and claims components simultane-ously. This occurred in a “big bang” effort that took placeover Thanksgiving weekend in 2007.

Governance and AccountabilityClancy also created a governance process that not onlyfacilitated the core systems modernization but also trans-formed the way IT worked at IFBI. “Governance neededto be fixed as well,” he says. “IFBI always had run projectsby committee. In my thinking, that’s a problem. When youhave a committee running things, then no one is responsi-ble. So one of the things I told the other executives wasthat we wouldn’t start any project until they made oneperson on the business side responsible for a project.”

Clancy encountered some pushback, as people werereluctant to give up control, but, “My boss backed meup,” he relates. “That was a huge change, and lookingback it was one of the big wins.”

With modern technology and improved governancein place, it didn’t take long for IFBI to start reaping benefits. To start, complexity has been reduced — forexample, seven billing systems have been consolidateddown to one, Clancy reports. This also has enabled more-customized billing.

Additionally, the company now can tier its rates,

Indiana Farm Bureau Insurance SVP and CIO Greg Clancy has overseen the replacement of nearly all of the company’s primary systems. And he had to

remake the IT organization in the process. By Katherine Burger

BACK TO THE FUTURE

E

“I’VE GOT A TEAM OF PEOPLE WHO KNOW HOW TO GET THINGS DONE AND WORK WELL TOGETHER.THAT’S PROBABLY WHAT I’M THEMOST PROUD OF.”


which it could not do on the old systems. “We had a sin-gle rate, whether great customer or bad customer,”Clancy says. “We also put other variables in place forcustomers, so prices and premiums are much moregeared to whether the experience has been good thanwe were ever able to do before. We also are able to makechanges more quickly than we ever dreamed.” Updatingforms and contracts is also much easier now that IFBIis able to use ISO contracts, he adds.

But it wasn’t just IFBI’s core systems that needed tobe overhauled; Clancy also has overseen implementationof a corporatewide imaging system from Vertafore’sImageRight (Bothell, Wash.), a new document creationsystem from Thunderhead (London), and implementationof a Cisco (San Jose, Calif.) unified communication systemin 140 field offices and the home office that replaced aphone system dating back to 1985. Prioritizing all theseprojects — and maintaining focus — has been essentialto their success, Clancy emphasizes.

Not surprisingly, once things started to change in IT,

there was tremendous pent-up demand for new solutions.“People wanted 100 things done at same time because wewere behind on everything,” Clancy says. But he knew theIT group simply didn’t have the bandwidth to take on mul-tiple critical projects at the same time. “We prioritizedwhat we would address first, which [projects] were morefoundational and which ones could wait until later.”

The next areas of focus for Clancy include developingIFBI’s online presence, enabling mobility and improvingdata management through implementation of datamartsand a bigger data warehouse. “We’re catching up on businesspractices, now that the technology is in place to supportthem,” he explains. “We had made a decision not to do loton the Internet channel — that was part of the prioritizationprocess, since we didn’t have the foundational systemsthere. Now we have business decisions to make there [andaround] support of remote workers and remote devices.”

IFBI’s captive agency force is “much more mobile now,”Clancy says. “Technology is enabling them to do their jobsin a more efficient manner.” Initiatives planned for 2013include a tablet-based electronic app for life insurance,based on technology from Planetsoft (now part of Atlanta-based Ebix), incorporating e-signatures.

Raising ExpectationsIFBI will be embarking on these projects with a signifi-cantly different kind of IT organization, Clancy notes.“Back nine or 10 years ago, expectations were pretty low,”he acknowledges. “We’ve raised them. We recognize whenpeople are doing great things.” In addition to an automatedperformance evaluation system and incentives, the IT teamis motivated by the “sense of working for a competentorganization, and working on projects that really affectthe business,” Clancy says. “There’s a pride in being partof that type of organization that motivates people.”

Ultimately, Clancy — who recommends the books ofteam-building authority Patrick Lencioni — considersdeveloping a high-performance IT organization at IndianaFarm Bureau Insurance to be his most significant accom-plishment so far. “When I came here, there were somepeople who were not in the right places, there were peoplewho shouldn’t be in the places they were in,” he recalls.“The IT group was very siloed; they didn’t work well evenwithin themselves.” While Clancy did bring in some newblood from outside, for the most part people in the groupembraced the need for change. “They just needed differentexpectations, to be a part of a team,” he says.

“Now I have a great team of people,” Clancy declares.“I’m proud of what we accomplished, because I do verylittle of it. I’ve got a team of people who know how to getthings done and work well together. That’s probably whatI’m the most proud of. When you have team like that, youare able to accomplish great things.” ■

SIZE OF IT ORGANIZATION: Approximately 165 people.IT BUDGET: $27 million.EDUCATION: B.S. in General Management from Purdue University.RECENT READING: Clancy has read several books byPatrick Lencioni, team-building expert and author of “The FiveDysfunctions of a Team.” “He really hits the nail on the head,”Clancy says of Lencioni’s work.

GREG CLANCYINDIANA FARM BUREAU INSURANCE, SVP AND CIO

Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates.Other names may be trademarks of their respective owners.

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HEN MARK CLARK took overthe CIO role at retirement solutions-focused Jackson National Life in2009, his predecessor and mentor,George Napoles, advised him, “If Iwere you, I’d hold my budget fairly

level for the next year to prove to leadership that you canmanage money.” But it didn’t work out that way.

The 2008 financial crisis drove players out of the variableannuities market, and over the intervening years, Jackson’s($129.9 billion in total IFRS assets as of June 30, 2012) supe-rior hedging strategy rocketed the company from 12th placeto second in the sector, driving up the Lansing, Mich.-basedinsurer’s technology spending, according to Clark. “Thegrowth of this company has been explosive over the pastthree years, and IT has grown along with it,” he reports. “Asa consequence, my focus has been on building IT capacity.”

Until the late 1990s, Jackson’s IT department completelyoutsourced to EDS (Plano, Texas), now part of HP. Napoles, a2007 Insurance & Technology Elite 8 honoree, founded an ITteam of eight individuals and built it up to 500 strong. Clark hassince expanded the team to about 800, but, he says, he runs ashop that is far more concerned with quality than quantity.

As CIO Clark has presided over a long line of initiativesaimed at world-class service and greater efficiency. Forexample, Jackson’s Genius contract-specific product refer-ence guide applies an unconventional use of Thunderhead(Elstree, U.K.) correspondence management software toenable call center reps to answer all potential individualcustomer questions about the company’s full range of vari-able annuity products. And Jackson’s Electronic FilingCabinet self-service capability, launched in 2009, allows pro-ducers and customers to receive and access their Jacksondocuments securely through an intuitively designed userportal. Clark notes that more than 30 percent of Jackson’sin-force VA policyholders have converted to e-delivery,which has saved the company more than $8 million.

In addition, Clark’s team has worked continually to enhanceself-service on the Jackson.com website, including appoint-ment licensing capabilities. And Jackson’s Jackson ProcessOn Demand (JPOD) uses an inference engine to automate

business rules, thereby freeing associates from more mundaneprocesses and enabling them to perform more valuable tasks.

Clark also has led Jackson’s ongoing single platformpolicy administration consolidation initiative, including thedevelopment of a methodology for the systematic conver-sion of customer data from legacy systems to Jackson’starget CSC (Falls Church, Va.) Cyberlife system. Convertingpolicy data to a common system reduces support and main-tenance needs, allowing Jackson to wrap its mainframe

Through SVP and CIO Mark Clark’s sound technology philosophy and a focus on team excellence, Jackson National’s IT organization has become not merely an

effective business supporter, but a driver of growth. By Anthony O’Donnell

GROWTH ENGINE

W

SIZE OF IT ORGANIZATION: About 800 employees.IT BUDGET: $123 million.EDUCATION: B.S. in Mathematics from Brescia University(Owensboro, Ky.) and an M.B.A. from Michigan State University(East Lansing, Mich.).HOBBIES: Clark is an avid reader who recently completed“Outliers,” by Malcolm Gladwell. He enjoys spending time with his family and playing golf, and he currently is learninghow to play the piano.

MARK CLARKJACKSON NATIONAL LIFE, SVP, CIO


system with web-based technology and provide access toother critical systems, according to Clark.

Also under Clark’s stewardship, Jackson has imple-mented Thunderhead for batch correspondence and, cou-pled with a newly created document tracking system, willuse the solution for “on-demand” requests in 2013. Further,Clark’s team rolled out a Workday (Pleasanton, Calif.) HRsystem this fall and is in the throes of developing the in-house built JDS (Jackson Document System), which willreplace a vendor solution.

Buidling RelationshipsMeanwhile, through its support of the business during a timeof rapid growth, IT has strengthened its relationship with thebusiness thanks to close alignment and reliable delivery, Clarksays. “The various departments within the business look atIT as partners in how they can do their job better and moreefficiently and at lower cost,” he relates. “And as a result, wehave some of the lowest unit costs in the industry.”

That said, calling the IT organization a partner may notadequately state the importance of technology to the rapidlygrowing firm. “Our COO, James Sopha, says that Jacksonwas a distribution company, then we became a manufactur-ing company, and now we’re starting to become a technologycompany, where technology is taking on such a key role thatit is what’s driving the company now,” Clark reports.

According to Clark, the ability to deliver industry-leadingtechnology begins with the way he builds his technology team.Working as a consultant before his 15-year career at Jackson,Clark says he came to the conclusion that too many IT shopswere overpopulated with people who didn’t belong in thefield. “There are many intelligent people attracted to IT whodon’t have the aptitude to write computer programs,” heinsists. “With that in mind, we have taken a variety of measuresto determine the aptitude of a person before we hire them.”

Clark’s efforts to secure a first-rate team of technologyprofessionals goes as far as maintaining close relationshipswith faculty at universities near Jackson’s Lansing, Mich.,

headquarters and Nashville, Tenn., facility. He has consis-tently called attention to the need to address a lack of ITprofessionals in the insurance industry, and he has encour-aged students to pursue a computer science degree. He also

has advocated that universities teach Cobol, and he runsan IT training program at Jackson in Cobol and Java.

Once professionals enter Jackson’s IT organization, Clarksays, he takes great pains to cultivate their talents. He relatestwo stories that shaped his leadership philosophy. While work-ing at a family BBQ restaurant early in his work life, Clarkrecalls, his uncle told him not to be afraid to make a decisionbecause having the courage to do so would make him standout from the crowd. Later, while working at a steel mill, theyoung Clark was stuck with workmates with a bad attitude.

“I noticed how miserable it made my job,” he says.“Then I did the same job with a couple of guys with a greatattitude and it made me realize that it’s not just the job —the attitude about the job is everything.”

In that regard, Clark leads by example, but he also worksto keep morale high through active outreach to his employ-ees. He holds quarterly meetings with the entire organiza-tion, where he both communicates how he’s talking aboutIT to senior management and listens to what his team mem-bers have to say. “The more ways you can find to communi-cate with your staff, particularly as it gets large, the bettermorale will be,” Clark comments. “It also gives you insightsinto things that are going on that you otherwise might miss.”

To that end, Clark created a form called “Question Mark,”whereby IT employees can anonymously ask him questions,which he strives to answer promptly. Clark also sends out“Messages from Mark” on the company intranet to promptdiscussions about quality-related initiatives, among other top-ics. And of course, he says, he also maintains an open-doorpolicy. “People are reluctant to come and talk to you some-times, but I do constantly tell them, ‘Any time you want to,feel free to come and chat,’” Clark says. “Some do; some don’t.”

Clark insists that employees’ choices about how theyprioritize work and life activities be respected, but he alsoencourages employees to “invest in themselves” by com-mitting time to learning new capabilities and by taking onleadership challenges. “I tell them, ‘The harder you work,the better your career is going to go,’” Clark relates. “If youwant to put the priority on your career, there are a lot oftoys available in the development environment at JacksonNational that allow you to learn your craft.”

Jackson maintains a library of books and subscriptionsto allow its people to either be trained or train themselves,Clark notes. He also drives an annual exercise in which heasks every manager to create a kind of “dream team” scenarioand then work backward to develop a training program thatwould help the team arrive at the dream destination.

“Education is extremely important to us, and in the pastyear we have run Java and Cobol classes from which we haveadded 16 new developers,” Clark says. “We brought in 20interns this year, and we find that once those college studentssee what we do, they want to come back and work with us. Ofthose we’ve hired, we haven’t lost a single one yet.” ■

“WE’RE STARTING TO BECOME A TECHNOLOGY COMPANY, WHERE

TECHNOLOGY IS TAKING ON SUCH AKEY ROLE THAT IT IS WHAT’S DRIVING

THE COMPANY NOW.”

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Transcend your technology

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© Zengine 2012. The name, logo, and “transcend your technology” are trademarks of Zengine.

www.zengine.com


ICHAEL FERGANG insists thathe owes much of his success to let-ting the talented people in his shopdo what they do best, and to havingbeen in the right place at the righttime. The Grange Insurance CIO cut

his technology teeth on Wall Street in the 1980s, at atime when, he says, rapid adoption of technology —combined with a dearth of experienced professionals— made it easy to accumulate experience in a widevariety of technology areas. “Because of the immaturityof technology, if you expressed interest in something,you were afforded the opportunity to get involved, andyou were able to move fairly easily within a companyor between companies,” Fergang recalls. “The ’80s werea great time to learn all different disciplines in IT.”

According to Fergang, the breadth of experience hegained enabled him to take on the position of CIO at afinancial holding company fairly early in his career. Theexperimental atmosphere of the time, he says, left himwith an abiding interest in innovation that has coloredthe activities and accomplishments of his IT organization.

Accordingly, Fergang was influential in makingColumbus, Ohio-based Grange (more than $1 billionin 2011 premium) the first insurance company to pro-vide real-time endorsements via agency managementsystems, and one of the first to implement a real-timebridge between those systems and comparative raters,according to the carrier. Grange also was the firstinsurer in the country to use the F# programming lan-guage to develop and implement a rating system,which reduced the turnaround time for actuaries toperform “what/if” analysis and validate the impact onpremiums from six hours to nine minutes, Fergangreports. He also oversaw the development and imple-mentation of a fraud system that utilizes unstructuredadjuster notes to detect potential fraud.

Fergang stresses that at Grange, innovative spirit iscombined with an ethos of efficiency to find ways ofhelping the business to “work smarter.” Every one ofFergang’s managers are tasked with both efficiency and

innovation objectives with associated metrics that impacttheir performance reviews. “You read a lot about inno-vation that’s self-contained within IT,” Fergang com-ments. “That can be valuable, but what excites us iswhen we’re able to influence how Grange does business.”

As an example, Fergang points to a billing portal ini-tiative originating in IT that consolidated multiple sys-tems and reduced the duration of customer calls by 30percent. He also mentions Grange’s Quote Options sys-tem, which automatically generates options for agentsseeking quotes. After the agent has entered preferencesfor coverage, deductibles and so on, Grange’s ratingengine automatically generates two other options — abare-bones price with less coverage and another, inter-

mediate option between the extremes. All the informa-tion, Fergang notes, is presented on a single screen andcan be printed for agents to present to customers.

“The agent can change any variable and have an intel-ligent conversation with the policyholder or prospect: ‘Ifyou’re willing to take some risk or change your deductible,we can save you this much in real time,’” Fergangexplains. “The system is no longer just taking orders; it’sdriving a value-added sales proposition to help an agentor CSR have that conversation.” Grange also automati-cally generates a term life quote for every auto quote, inorder to promote cross-selling, Fergang adds.

Empowering CreativityThe degree of IT/business alignment that enables thekind of opportunistic thinking behind these innova-tions is a matter of culture, insists Fergang. At thecompany’s Columbus, Ohio, headquarters, IT devel-opment teams sit on the same floor as their business

Grange Insurance CIO Michael Fergang’s tenure demonstrates thatdeveloping a creative team with the right business mind-set can result in delivery of solutions unforeseen by the business. By Anthony O’Donnell

CULTURE OF INNOVATION

“WHAT EXCITES US IS WHEN WE’REABLE TO INFLUENCE HOW GRANGEDOES BUSINESS.”

M


partners, and there are special areas of the buildingdesigned specifically for Agile development. “We havestructured meetings based on the demands of each ofthe business units, but we also have a very concisemeeting format across all the units,” says Fergang. “Ifthe president of commercial lines were to go to a per-sonal lines meeting, he’d see the exact same format.”

Fergang acknowledges that Agile development fitswell with his IT philosophy, but he insists it is not merelyfor the typical reasons. “What really gets me excited aboutAgile is the way it allows the teams to be self-directedand creative,” he confides. “We want risk takers and entre-preneurs, and assuming they’re appropriately compen-sated, these people care more about the autonomy andcreativity you afford them than anything else, and that’spretty much the structure by which we manage.”

The value of providing that autonomy was demon-

strated in an initiative to introduce a new business own-ers’ policy and craftsmen and tradesmen product builton a new rating engine, with 200 new classes, a new ratingalgorithm and embedded predictive modeling. Fergangdescribes the project as incompatible with the incremen-tal approach of Agile because of the all-or-nothing natureof the product launch and an urgency on the part of thebusiness. “Management came to me and said, ‘OK,Michael, we love what you’re doing, but we have no ideawhen you’re going to give us what we need,’” he recalls.

Fergang says he dispatched two teams to estimatehow quickly the work could be done, and while bothcame back with 10-month timelines, in the end, they gotit done in seven months. “With their own creativity —without me or the resource managers’ intervention —they figured out how to reduce the time by 30 percent,”he reports. “That’s tangible. The business was thrilled.”

Fergang also grants his team the freedom to rewardtheir colleagues’ achievements, including those ofexternal consultants working within the team, withpeer bonuses. “If any associate thinks that anotherassociate has either gone out of their way or come upwith a good idea, they very quickly can go to my admin,they pick up an Amazon card and they give it to themto thank them for their effort,” he explains.

In addition to giving ambitious staff freedom,Fergang also oversees so-called “Skunk Works” proj-ects, innovative explorations led by IT rather than thebusiness organization. A team member will proactivelytake ownership of an opportunity, invite others to par-ticipate and see the project through to completion.“One of these efforts resulted in a web applicationused by the claims department to display a geographicmap depicting the path of a wind event interlaced withclaims data, which has aided the claims departmentto assess the impact of a storm,” he recounts.

Fergang also instituted training and networking ses-sions inspired by the innovations spawned in Europeancoffee houses in the 17th and 18th centuries. “Grange’sCoffee House” meetings are held on a quarterly basisand allow IT team members — no managementallowed — to gain exposure to new technology and tomeet other IT professionals within the organization.

Grange also runs quarterly “Hands-On Meetings”that provide a forum to share general updates toensure the entire IT organization is informed, receivefeedback from Skunk Works and Coffee House venues,and share updates on innovation-driven activities,according to Fergang. The result, he asserts, is a highlycreative organization that generates strategic value.“If you have the right IT people with the right businessmind-set, the team will achieve solutions unforeseenby the business,” he insists. ■

LINES OF BUSINESS: Personal and commercial lines P&C and life insurance.SIZE OF IT ORGANIZATION: 285.IT BUDGET: $47.5 million.EDUCATION: B.S. in Operations Management from theUniversity of Delaware and an M.S. in Computer Science from New York University.HOBBIES: Fergang is involved in Amethyst, a non-profit organization that helps homeless, addicted women. For relaxation he likes to lift weights and enjoys watersports,including fishing and stand-up paddle boards.

MICHAEL FERGANGGRANGE INSURANCE, CIO

HEN THE IED exploded on thatdesert road in Iraq, there was atremendous bang followed by complete darkness inside the leadHumvee of the 11-vehicle column,relates Sal Abano, the convoy’s com-

manding officer. Abano says he recalled how shock can causea person to continue to perceive sensations in his extremitiesafter he’d lost them. As the dust began to settle, Abano adds,he located his hands and feet in their proper places.

But the gunner was spinning around helplessly in theHumvee’s ring mount. “He got hit, and I was waiting to see

blood,” says Abano, now SVP and CIO of New York-basedTower Group Companies ($1.8 billion in gross written andmanaged premium; $2.4 million in total investments andcash). Fortunately, the explosive device was planted toodeeply, and instead of shrapnel, all that struck the gunnerwere some small pebbles.

Nobody in the convoy was seriously injured. But theexplosion left four vehicles disabled and without commu-nication capabilities, including the lead vehicle’s GPS-sup-ported Blue Force system that tracks location and enemyactivity, according to Abano. It would be some time beforethe base could locate the stranded troops. “We were deadin our tracks for four and a half hours in the desert withno vehicle support,” Abano recounts. “My guys wanted toblast the living daylights out of anything that got close onthat stretch of roadway, so I needed to keep them calm.”

Abano’s task on that day was, admittedly, remote fromthe kinds of emergencies an insurance CIO might face onthe job. Nevertheless, it is not without its application toinsurance leadership challenges, he insists. “When you’rein IT, somebody’s always coming to you with a problemas if the world is coming to an end,” Abano says. “Youneed to be a good listener, and you need to be able to calmthat person down and engage multiple parties to solve theproblem collaboratively.”

Abano’s insurance technology career runs more or lessparallel to his military experience. He enlisted in the U.S.Marine Corp Reserve in the early 1980s and began workingin the insurance industry before the end of the decade.Making a compromise between family life and his desireto continue his military career, he joined the U.S. Army inorder to become a commissioned officer and retainreserve status. “My family made sacrifices to enable meto do that,” he says.

Abano worked at AIG and ACE USA early in his insur-ance career and later held senior positions at AmericanRe (Now Munich Re America) and Kemper, where he wasVP and CIO of the company’s Northeast region, when hewas called to active duty in 2004.

During his deployment, Abano served as the Army’sCTO for the central region of Iraq during Operation Iraq

CIO Sal Abano has drawn on a 26-year military career, including his experience as the U.S. Army’s regional CTO in Iraq, in applying a team leadership approach in IT

to support Tower Group Companies’ growth. By Anthony O’Donnell

TEAM LEADER

W


SIZE OF IT ORGANIZATION: 400. IT BUDGET: About $100 million. EDUCATION: B.S. in Computer and Information Science,Brooklyn College, The City University of New York; an M.B.A. in Business Management and Technology, Regis University.

SALVATORE ABANOTOWER GROUP COMPANIES, SVP, CIO

Freedom III. He was awarded the Bronze Star, the CombatAction Badge and other service citations.

When he returned home in 2006, Abano wasapproached by Mike Anselmo, whom he had known fromtheir days at American Re. Anselmo (now CIO atNarragansett Bay Insurance), then CIO of PraetorianFinancial Group (now QBE the Americas), recruited Abanoto be Praetorian’s VP of technology, systems and infra-structure. Two years later, Abano entered into discussionswith Tower Group Companies, which was looking for aCIO to help take the company to a new level. “I wanted tobecome a part of an organization where I could say that Iwould make an impact on the organization’s growth andhelp IT become an entity that it didn’t even realize that itneeded to become,” he relates.

Building CredibilityWhen Abano joined Tower in June 2008, he says, he under-took a variety of strategic initiatives to create transparency,streamline technology spending, foster accountability andimprove business/IT collaboration. His task, as he saw it,was to establish IT as a credible business partner to theorganization. “Not just an IT partner, but a business partner— one that can sit at the table, interact meaningfully, withthe confidence of the organization that it will deliver theneeded solutions,” Abano specifies.

That credibility has grown with the delivery of successfulprograms in support of the company’s goal to transformfrom a Northeastern regional carrier to a national insurancecompany through both acquisitions and organic growth.Since Abano joined the carrier, Tower has grown from a$700 million company to a $2 billion company.

Abano developed a three- to five-year IT strategic planto support Tower’s organizational growth plan for its threemajor business segments — commercial, specialty and per-sonal lines. As part of the plan, he deployed a complete per-sonal lines processing platform that included Accenture’sDuck Creek (Bolivar, Mo.) policy admin system, Guidewire’s(Foster City, Calif.) ClaimCenter and BillingCenter,Vertafore’s (Bothell, Wash.) ImageRight document manage-ment system, and data warehouse and executive dashboardcapabilities in less than two years.

Abano also led an initiative to automate program busi-ness, requiring the construction of several interconnectedcore insurance systems for personal and commercial linesfrom the ground up. Working with vendor partnerAgencyport (Boston), Tower interacted intensively withthe program business community to create detailed risk,claims and accounting templates for personal and com-mercial lines and integrate them with the vendor’sAlchemy product, Abano reports, adding that the initiativestreamlined the program business data acquisition andinternal data analysis by the finance, underwriting and

actuary teams, resulting in significant efficiencies.Abano has co-led Tower’s integration strategy, which incor-

porates technology compatibility and a detailed assessmentof integration costs as criteria for target companies. Duringhis four years at the company, he has overseen the technologyintegration of eight acquisitions and book rollovers, includingOneBeacon’s personal lines business in early 2010, accountingfor about $420 million in 2009 net written premium.

“There is significant discussion at the senior level abouttechnology for every acquisition,” Abano reports. “And ITis at the table giving valued input.”

All For OneAbano insists that Tower’s IT organization’s accomplish-ments are not his own. While by no means discounting hisleadership role, Abano characterizes the way he works as amilitary approach that focuses on team accomplishmentrather than individual distinction. He believes that the leader’srole is to analyze problems, facilitate communication, provideguidance, and protect his or her employees.

“You’ll get much more out of people, both as individualsand in teams, who trust you and know that you won’t hurtthem,” Abano advises. “But make no mistake: As a leader,while you’re directing, delegating and managing expecta-tions with the business, it’s your subordinates who aredoing all the work.”

Abano doesn’t believe in managers taking a prima donnaattitude and insists that in all organizations people are pro-moted based on others’ accomplishments. “I tell my IT lead-ership that leadership is not a perk, that the title means they

get paid more and have more responsibility,” he explains.“To be a leader is to be a servant to your subordinates.”

A more military approach to organization might not workin many corporate settings, Abano acknowledges, but hehas found that his approach coincides very well with Tower’scompany culture. President and CEO Michael Lee is not amilitary man himself, but as the company’s founder, he seeshimself being in a kind of combat, responsible for drivingthe insurer’s success, doing what needs to get done byaccomplishing the mission with a high degree of passion,commitment and dedication, according to Abano.

Abano and his CEO have a similar perspective on achiev-ing Tower’s goals, Abano adds. “You have your troopsaround you, you’re charging, and you’re taking a hill,” henotes. “It’s all about how you achieve that in a collectivefashion as opposed to an individual fashion.” ■


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DATA, DATA EVERY-WHEREWhat emerging tech-nologies are you keep-ing an eye on?Susan Gueli, Nation-wide Financial: Cer-

tainly it is cloud, andthere’s also mobile, and data and data analytics.Being able to utilize the data that we collect andstore to drive meaningful analytics for the businesswill become more and more important.

Nationwide is working on projects related to the‘consumerization’ of IT. Do social and collabora-tion technologies fit into that?Gueli: Financial services institutions have beenvery interested in social and collaboration tech-nologies. But we also have the regulatory environ-ment to manage, so it’s another area where you’remanaging risk and how you utilize those technolo-gies in productive and effective ways.

—Anthony O’Donnell

SETTINGTHE TABLEFOR INNOVATIONYou’ve been a majorvoice on the potentialfor tablet technolo-

gies to change theinsurance industry. What kinds of tablet initiativeshas Builders Mutual implemented?

Graeme Boddy, Builders Mutual: It’s actually avery powerful tool for business intelligence —we’ve found that we can download a lot of infor-mation for our sales force so that they have graph-ical representatives of the data when they go in toreview things with agents. The sales force can havevery robust discussions and review items on thetablet, with the agents able to click and look forthemselves at how well they’re doing on the pre-mium they’re giving us, what their loss ratios are,what their claims histories look like.

What’s keeping tablets from becoming moreintegrated in the insurance industry?Boddy: Tablets are really great at content con-sumption, showing and bringing data to the table— as with business intelligence. But at this point,the tablet is not ready to replace a laptop, and peo-ple do not want to carry both. I’m hopeful that asMicrosoft brings its Surface tablet and its profes-sional tools to market, given that it has such a hugeinvestment in Microsoft Office, we’ll see a bit morecontent creation capability in the tablet platform.That might lead to replacing some of the laptopswith tablets. —Nathan Golia

STORMCLOUDSWhat emerging tech-nology do you find themost problematic?Michael Fergang,Grange Insurance:“Cloud” is so overusedalready. The adoption isnot as high as the vendorshad hoped for. Plus, there are several different

The executives selected as Elite 8 2012 honorees have reached the heights of their profession by being savvy observers of the digital

landscape and prudent marshals of technology. Here are some oftheir views on the latest and greatest enterprise solutions.

GO, GO, GADGET



cloud definitions — private, service, hardware. Itis kind of crazy.

Which emerging technology do you think isthe ‘real deal’?Fergang: Mobility, and by that I mean both smart-phones and tablets. We see statistics now thatsmartphones and tablets are both outselling PCstoday. It’s just the way business is going to be trans-acted. —A.O.

SHARPER MEMORYWhat would you identifyas the next hot technol-ogy? What technologiesdo you see as havingthe biggest impact onthe insurance industry?

Mark Clark, JacksonNational Life: Certainly, server virtualization andcloud computing are having a huge impact rightnow, and I see that trend continuing. You’ll seemore insurers in the future move non-strategicapplications to the cloud. We moved our HR sys-tem, Workday (Pleasanton, Calif.), and some of ouraccounting systems to the cloud.

What about a technology that’s off the radar,so to speak?Clark: Phased memory computing — it’s going torevolutionize the way computers work and replacesome of the solid-state stuff with even faster stuff.As memory gets cheaper and cheaper and cheaper,you see more applications built to take advantageof that instead of having to store all this transac-tional data on disks and in databases. You mightsee a large amount of data throughout the daybeing kept in memory to make things much, muchfaster as applications are being developed

Where does this leave legacy technologies?At the same time that you’re looking at theseemerging options, you also are a big supporterof teaching Cobol at colleges and universities.Clark: I can think of no business case for rewritingCobol into Java, and it’s also a very dangerous careermove. The CIO graveyard is littered with the bonesof people who have tried. Our business rules engineand our Genius application and other newer systemsall access data from the mainframe with web serv-

ices. You don’t have to rewrite the whole system totake advantage of new technology. —A.O.

MOBILE ENTERPRISEHumana’s done a lotof work in mobileunder your leader-ship. What is yourmajor objective withthese investments?Brian LeClaire,Humana: Our view is that mobile is another meansfor providing a consumer experience to our mem-bers. It’s been very important to us to support thatas much as inbound service calls. For those whowant to interact with us that way, it becomes anoth-er channel to provide services and support to themwhen and how they want it.

We’ve been working to support different plat-forms — obviously that means iOS and Androiddevices, but also different form factors. So we sup-port a browser-based experience that’s developedto the footprint of each device. We’re focused onproviding self-service support as well as a mecha-nism for requesting information and making a con-nection in the sales space.

What about mobile within the enterprise?LeClaire: We recognize that people want choiceabout how to access their work environment. It’sdifficult for someone today to discern betweenusing his iPad for work reasons or personal reasons. Now, when you say, “I’m going to work,”it means you’re doing a certain activity regardlessof where you are. We’ve moved away from a strongrigor and focus that’s only on the device side, to where we now have both trusted devices andtrusted applications.

Can you give an example?LeClaire: One is that we’ve tech-enabled our salesforce with a trusted application that’s a custom-devel-oped capability. We also provide access to e-mail andcalendaring with Good Technology (Sunnyvale,Calif.). That’s a growing, secure platform for organi-zations like ours to develop and deploy insight intothose corporate applications that will then connectinto the corporate network. We also support Citrix-based access so that, for example, on my iPad I canremote into my corporate laptop. —N.G. ■


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GOOD LISTENERSANNABELLE BEXIGASENIOR MANAGING DIRECTOR AND CIO, TIAA-CREF

Annabelle Bexiga had been sen-ior managing director and CIOof TIAA-CREF for a little more

than a year when she won the Elite 8honor in 2011. In that short time, she had driven an initiativethat shortened IT project life cycles and increased speed tomarket for the firm’s life insurance, annuities and other financialproducts. She also was working to complete a upgrade of TIAA-CREF’s network by the end of 2011.

In the past year, Bexiga says, completing a significant ITtransformation program aimed at building more flexibility andsophistication into TIAA-CREF’s infrastructure has been a majorfocus for her technology team. “It has significantly enhancedour technology services and web experience,” she explains.“This has enabled us to now focus on delivering innovative dig-ital business solutions and client capabilities to our customers.... The lines have blurred between technology, sales and mar-keting. Our IT transformation is designed to make all these func-tions work together more seamlessly.”

Through this transformation, Bexiga adds, she has seen herrole shift to more cross-functional responsibilities. “It is criticalfor me to understand the goals of our marketing and sales organ-izations and determine ways my team can support those goalsthrough tech innovation,” she acknowledges.

The transformation required Bexiga’s team to build variousmobile apps for its clients in order to deliver a simplified, on-the-go customer experience. “We have been focusing on givingour clients specific tools to better access their account infor-mation wherever and whenever they need it,” she relates.

During the next year, Bexiga says, she will continue to stay ontop of technology trends and changing customer expectations. “Weare geared to listen to our customers, which is what led us toexpand on the mobile front,” she remarks. “Social media is a great

platform for learning about what works for our customers andwhat doesn’t. It helps shape what we’re doing to better serve theclient, so we plan to use social listening more moving forward.”

RINGING UP THE ACCOMPLISH-MENTSSTUART TAINSKYSVP AND CIO, PRIVILEGE UNDERWRITERS RECIPROCALSEXCHANGE (PURE)

When Stuart Tainsky, SVP and CIO of PrivilegeUnderwriters Reciprocals Exchange (PURE), was rec-ognized as an Elite 8 honoree in 2011, he had been

leading the specialty personal lines carrier’s ambitious growthstrategy, rolling out two new states per month. He also was spear-heading an ongoing effort to improve PURE’s data model and BIreporting capabilities.

Tainsky’s IT organization remains busy as PURE, which nowserves members in 41 states, continues its growth. Already thisyear, Tainsky automated PURE’s Personal Watercraft product forall of its states in May. June saw the firm implement Salesforce.com.In August, PURE introduced Auto Data Pre-Fill, which has con-siderably reduced manual data entry in the auto quoting process.And most recently, PURE launched Agent Self-Endorsements in apilot to advance its ease-of-doing-business efforts.

Tainsky describes his primary responsibilities as helpingdevelop new product offerings and expand current coveragesto better meet members’ needs; enhancing efficienciesthrough innovative technology solutions; managing and miti-gating the organization’s enterprise risks; and providing excep-tional service to agents and members. “Data,” says Tainsky,“continues to drive our industry and we consider using andtweaking views of our data to be an evolutionary process thatwill continue forever.”

As mobile and digital technologies continue to reshape the insurance industry, we caughtup with some of the 2011 Elite 8 to see how the changing expectations of consumers,

employees and partners are transforming their focus. By Peggy Bresnick Kendler

DRIVING TECHNOLOGY IN A DIGITAL WORLD

ANNABELLE BEXIGA

STUART TAINSKY


A GROUP EFFORTDANIEL GRETEMANSVP, CIO, NATIONWIDE

Dan Greteman, SVP and CIO of Nationwide’s Allied,Commercial and Specialty busi-

nesses, who received Elite 8 recogni-tion in 2011, continues to oversee information technology forthe Allied Group, a group of predominately independent agencycompanies under the Nationwide umbrella, including AlliedInsurance, Scottsdale Insurance, Titan Insurance and NationwideAgribusiness. But this year, Greteman has added a key additionto his responsibilities: bringing on the team, capabilities and sys-tems of newly acquired Harleysville Insurance.

The technology team is enabling growth for the Allied Groupcompanies and the other Nationwide businesses that it serves,Greteman explains. “I am really pleased with the positive impactthat my team is having through technology enablement,” hesays, noting that it has delivered significant capabilities in theAllied web, billing and call center technology spaces, as well asnew capabilities in Agribusiness, Titan and Scottsdale that willenable growth while reducing expense.

This year, Greteman says, he has been focusing on “keepingthe firm’s business partners happy,” with a specific focus onsome key macro IT trends such as mobility, BYOD, big data andcloud. In addition to maximizing the value gained from theHarleysville acquisition, Greteman says his 2013 priorities willinclude delivering on key growth and operational systems forScottsdale Insurance and enhancing the customer experienceacross all of the Allied Group companies.

RIDING HEALTHREFORM’S WAVEJOSEPH S. SMITHSVP & CIO, ARKANSAS BLUE CROSS AND BLUE SHIELD

Since receiving Elite 8 honors in2011, Joseph Smith, CIO and SVPof private programs at Arkansas Blue Cross and Blue

Shield, has had to deal with some new challenges. “Complexitieshave risen significantly with the entire healthcare industry trans-formation to new business models under the Accountable CareAct [ACA],” Smith points out. “New competitive players, newbusiness structures, new sales channels require new integrationto [IRS, SSA, DHS and U.S. Treasury systems].”

In fact, Smith says, “Staying ahead of the plethora of federalregulations drowning the entire healthcare industry” has beenhis team’s major area of focus in 2012. And that focus has paidoff. To date, Smith says, the team is still way ahead of many ofthe regulatory requirements and on target for meeting others.

The ACA is driving a business model transformation, Smithadds, and this will remain one of his top priorities for 2013. Othertop priorities, he reveals, will include business diversification tounregulated markets and segments, as well as developing alliancesin traditional markets and new related markets, to enable risk shar-ing and shared capital investment directed at delivering innovativenew capabilities for the healthcare and insurance industries.

UNCOVERING VALUEJOSEPH COOPEREVP AND CIO, MANULIFE

When Joe Cooper stepped intohis current roles as Manulife’sCIO and EVP for global serv-

ices in 2007, he began to implement aglobal strategy. His efforts, which earnedhim Elite 8 honors in 2011, have capturedhuge efficiency gains, driven serviceimprovements, and saved the company more than $100 million.

While Cooper’s extensive responsibilities haven’t changedover the past year, he continues to find new ways to contribute.Cooper still is in charge of all of Manulife’s infrastructure serv-ices, application services and information and risk management,overseeing close to 3,000 people in the U.S., Canada and Asiaas well as staff of about 3,000 in the areas of business processingand application services in facilities in Manila, Kuala Lampur,Malaysia and China. His global procurement requires him tooversee close to $2 billion in third-party expenditures.

“We continue to look across all those different functions, ...focusing on creating more global subject matter experts in eachof the disciplines,” Cooper remarks, noting that Manulife isinvesting more heavily than it has in the past in business processmanagement. Looking ahead, he adds, “Driving to more of aservice-oriented culture across the function of global informa-tion services is a top focus. We’re not only there to deploy tech-nology, but to deliver service to the enterprise.”

A MATURING FOCUSMIKE ANSELMOCIO, NARRAGANSETT BAYINSURANCE CO.

In November 2011, when MikeAnselmo, CIO of Narrangansett BayInsurance Co., was named an Elite 8

honoree, his firm was in full build mode,developing an entire new platform forpolicy administration. Anselmo is stillcharging ahead full-force, although he now sees his IT areas inmore of a growth mode.

DANIEL GRETEMAN

JOSEPH S. SMITH

JOSEPH COOPER

MIKE ANSELMO

This year, Anselmo explains, his job is more about sup-porting growth and business objectives than about supportinga start-up company. “Now we’re more focused on businessgrowth and what the business needs technology to do for it,”according to Anselmo.

“We need to ensure that we follow company objectives andstrategies more closely, making sure that the ROI and businesscases are focused toward these goals,” he continues. To helpsharpen the technology organization’s focus, Anselmo adds,2013 will see the introduction of a strict release managementprocess, a better ability to refine profitability levels and anenhanced focus on data management.

A WELL-DESERVED REPUTATIONROBERT BUCHANANSVP OF INFORMATION SYSTEMS AND TECHNOLOGY, AUTO-OWNERS INSURANCE CO.

When Bob Buchanan of Lansing, Mich.-based Auto-Owners Insurance Co. received the Elite 8 honor in2011, he was SVP of information systems and tech-

nology. In the past year, Buchanan waspromoted to CIO at the firm, which hasa reputation for claims experienceexcellence and for the ease in whichagents do business with the company— due in large measure to the effortsof Buchanan and his IT team.

Despite the promotion, Buchanansays, his job responsibilities haven’t changed — he stillremains proactive in upgrading and modernizing his firm’ssystems. In fact, he is currently knee-deep in several sys-tems-related initiatives, including the implementation of theGuidewire ClaimCenter solution, replacing Auto-Owners’legacy collection system with SAP, and migrating one of thefirm’s databases to DB2. And his team recently completedthe implementation of the ImageRight content managementand workflow solution.

In the coming year, Buchanan says, his department will com-plete the Guidewire claims system implementation and alsoimplement a new life policy administration system. “We arenow evaluating a new replacement policy administration systemfor our life company, and we’ll make that decision in the nextfew weeks,” he says. ■

ROBERT BUCHANAN

Statement of Ownership

HE DYNAMIC BETWEEN marketing andtechnology has become intertwined to the point ofdependency — but it also has become strained andchallenged to what often feels like the point of break-ing. Gartner reports that by 2015 the chief marketingofficer will control more technology spend than the

CIO. Meanwhile, customers are more connected and dependenton digital channels to research, react and transact.

This technology boom has increased the strain on IT depart-ments, which are entrusted with keeping the proverbial technol-ogy lights on across the organization. Marketing simply doesn’talways make the IT priority list. But rather than wait in line, mar-keters have decided to make an end run around the technologyblockade and set up their own systems and solutions.

In the end, marketers more often than not fail to drive realdigital marketing performance by leveraging the right plat-

forms, people and processes and instead are amassing a patch-work quilt consisting of random acts of marketing. Thisdisconnect is further challenged in the insurance industry,which relies on a more complex business-to-business-to-con-sumer model that includes managing and embracing a complexdistribution model of agents, each with varying degrees ofmarketing and technological savvy.

In a recent study, “What’s Critical in the Insurance Vertical,”the CMO Council revealed that the insurance industry is in theenviable position of having consumers who are actively inves-tigating where and how insurance organizations could becomemore involved in their lives. But the study also uncovered thatinsurance marketers did not have programs or strategies inplace to truly exploit this opportunity through robust retention,cross-sell or upsell strategies.

In truth, this is a systemicproblem that plagues a majorityof industries. In a separate CMOCouncil study, marketers admitted to skirting IT assistance anddeploying tools and solutions that continued to fall short of expec-tations. Just 9 percent of the marketers surveyed said they had ahighly evolved digital marketing model with a proven and clearpath of evolution, while 36 percent reported a random embraceof marketing point solutions that are not well integrated or unified.

Marketing admitted that it was partnering with IT only to lever-age existing infrastructures or to understand legacy systems; only27 percent of respondents were including the CIO in a joint task-force to identify technologies, and only 24 percent were teamingwith IT to assess marketing platform needs. Rather than embracingthe expertise of the in-house tech guru, an astounding 77 percentof marketers turned to internal marketing teams to evaluate anddeploy technologies — only 17 percent turned to the CIO.

But the report also revealed some significant best practicesoffered by leaders such as Chartis Insurance. According to RichardStamets, a strategic marketing executive with the specialty solu-tions group at Chartis who was interviewed as part of the report,insurance remained a predominantly person-to-person business,but technology could be effectively used to open new doors andsupport discussions with clients about products and services.Even across a complex, distributed network, Chartis was activelyleveraging technology to connect business to agent and streamlinethe conversation between agent and local customer.

Regardless of industry, the collision between marketing andtechnology is inevitable. The difference between success andfailure will be how deeply and comprehensively marketing andtechnology executives collaborate to create a fully integrateddigital marketing and technology road map. This map must putthe customer experience at its center, ignoring issues of own-ership or internal politics that threaten the simplest points ofexecution. While marketing may hold a growing technologybudget, the partnership between the CMO and the CIO holds agrowing power that will shape an organization’s growth, effec-tiveness and efficiency. ■

Liz Miller is VP of marketing programs and operations at

the Chief Marketing Officer (CMO) Council.

For insurers to maximize digital opportunities, marketing and ITleaders must collaborate to create an integrated digital marketingand technology road map, says Liz Miller, CMO Council.

A NEW DIGITAL DIVIDE

77 PERCENT OF MARKETERSTURNED TO MARKETING TEAMS —NOT THE CIO — TO EVALUATE AND

DEPLOY TECHNOLOGIES.

T


LIZ MILLER

CIO-CMO ALIGNMENT


VERY INDUSTRY faces peri-ods of transformational change thatfundamentally shift underlyingbusiness models, and healthcare isin such a period right now. Since2007, when I was honored by being

named one of Insurance & Technology’s Elite8, the role of technology in healthcare has accel-erated transformational change. Technologyholds the key to unlocking the improvementsnecessary to create a sustainable healthcare sys-tem. This includes the use of data to improvehealthcare and better serve customers, and the application oftechnology to create a more personalized experience for them.

Back in 2007, many healthcare companies were focused onmanaging transactions: processing claims, managing calls andmaking sure that clients were well-serviced. The web took onprominence, but in the context of self-service. And analyticswere beginning to take on some importance in advancing evi-dence-based medicine. Today we’re more focused on helpingpeople live healthier lives, with the customer now at the centerof everything we do. The abilities to automate access to data,aggregate and analyze data, and apply that information arechanging how healthcare is delivered and how customers areunderstood holistically. We’re improving health by making surethe right care is delivered at the right time in the right setting.That ultimately optimizes costs and creates a more sustainablesystem. Most important, itresults in better care.

Global health servicescompanies such as Cigna canadvance this model of infor-mation-driven healthcaredelivery by serving as a clini-cal information hub, bringingtogether structured andunstructured data on medicalclaims, pharmacy therapies, lab results, medical records andclinician notes. We can add value through analytics to provideevidence-based tool kits. We can even help individualize care.

While the underlying power of big data will help improve care

delivery, technology also is being used to betterconnect with people. Our customers are bringingexpectations from other retail experiences intotheir healthcare experience — particularly withtechnology. We cannot expect to engage with cus-tomers unless we are relevant, timely and alwaysavailable, any time and anywhere. Meanwhile,with the explosive pervasiveness of mobilephones and tablets, customers now expect alevel of personalization in all aspects of theirlives — including how they manage their healthand interact with their health service company.

Through technology-enabled digital engagement strategies— such as personalization, location-aware experiences, socialnetworking, gamification and real-time analytics — we can turnmundane or onerous tasks into something meaningful, reward-ing and even fun. For example, knowing that 80 percent ofchronic illnesses are the result of lifestyle behaviors, analyticscan identify people who are at risk before they become ill. We’reengaging them to adopt healthier behaviors — using an inte-grated social media, mobile and gamified tool set with appro-priate rewards and incentives to drive behavior change.

Today, healthcare is more personalized, more data-drivenand becoming more retail-oriented. Technology innovation isshaping the customer experience, and that innovation holds thepromise to transform the industry — to truly make a differencein consumers’ health. That’s why at Cigna, we’re focused on

delivering targeted solutionsthat engage the customer —any time, anywhere andthrough any channel — in ahighly personalized way thatis based on their individualneeds and preferences.

Five years from now, I hopewe’re talking about how tech-nology transformed healthcare

and delivered on the promise of a more sustainable system. ■

Mark Boxer is executive VP and global CIO for Philadelphia-

based Cigna Corp.

The use of big data and other technologies that can deliver more personalized experiences and also improve care will shape the future of health insurance,

says Cigna’s Mark Boxer, a 2007 Elite 8 honoree.

A MORE SUSTAINABLE SYSTEM

E

TRANSFORMING THE BUSINESS

TECHNOLOGY HOLDS THE KEY TOUNLOCKING THE IMPROVEMENTS

NECESSARY TO CREATE A SUSTAINABLEHEALTHCARE SYSTEM.

MARK BOXER

MAKING BEAUTIFUL MUSICARK CLARK, CIO, Jackson National Life, suspects that if you have amind for programming, you probably also have a mind for music. He’s put-ting the theory to the test by endeavoring to teach himself piano, which he

says is fun and takes his mind off of pressing concerns. “I’ve always heard that ITand music go together, and we’ve had music majors on the floor,” he comments.

To learn the piano, Clark is using a method designed for busy adults, which hesays is moving him forward — albeit at a slow pace. “Music is very logical, and Iget that part of it,” Clark reports. “It’s making my fingers do what my mind wantsthem to do that is the hard part!” —Anthony O’Donnell

In today’s highly charged insurance market, the pressure on technology executives can be extreme. Here’s how some of this year’s

Elite 8 leaders balance their work and personal lives.

RECHARGING THE BATTERIES

M


WORK/LIFE BALANCE

TAKE ME OUT TO THE BALL GAMEHEN HE’S NOT inthe office, there’snothing Sal Abano

likes better than spending timewith his family — at YankeeStadium. Abano, who has twodaughters in their 20s, is spendingquite a bit of time keeping up withhis 16-year-old son Anthony’scross-country, baseball and bas-ketball games. But that doesn’tstop the die-hard Yankees family from seeing professionalevents. “We see 10 to 15 games a year, and when we watch theYankees away, we also try to catch a game at a nearby NationalLeague park,” Abano says. —A.O.

BY THE DOCK OF THE BAYRANGEINSURANCE CIOMichael Fergang likes to

spend downtime on the water.He and his wife own a home ona lake. “My favorite thing is justsitting on the dock and hearingthe waves hit it,” he says.

But Fergang also enjoys vari-ous water sports, including fish-ing, kayaking, jet skiing and his“new passion” — stand-up pad-dle boards, which he characterizes as the fastest growingsport in the country. “It looks like a big surfboard, and youpaddle around on it,” Fergang explains. “It’s great exercisefor the core.” —A.O.

WHERE INSPIRATION STRIKESOME EXECUTIVES go on retreats to clear theirheads, but for Indiana Farm Bureau Insurance SVP andCIO Greg Clancy, the path to clarity is much closer to

home. “Cutting the grass is one of great things in my life,” hedeclares. “I do my best thinking when I’m cutting the grass.”

Pushing a lawnmower also gives Clancy a tangible sense of

accomplishment. “When I get done with it I say, ‘Wow, Iaccomplished that!’” he notes. “When you’re in a position

[where] you accomplish things through other people,that’s a great thing.” Clancy says he lets his mind

“go on auto pilot” and might “think about 11other things while mowing the grass” —

sometimes not even realizing he’s finished his task. —Katherine Burger

W G

S

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