Standing out in tough times is something many business leadersmay fantasize about. Actually performing under intense pressure . .. well, that can be a completely different matter. As we honor theInsurance IT All-Stars for 2009, they will be remembered as a groupthat faced down an extraordinarily difficult year–both in theinsurance industry and in the global economy–and helped theircompanies continue to perform at a high level.

This year's team includes Lisa Ward of Esurance, Chris Gay ofMileMeter, Kendall Blythe of Tokio Marine, Mark Hansen of HoraceMann, and Bob Eshelbrenner of Hastings Mutual.

If there is one thing these five share in common, it's that theyhave little in common except producing excellent results for arange of companies. Eshelbrenner and Hansen are veteran insuranceIT guys, while the other three are much newer to the industry. Twowork for direct writers–Ward and Gay–while the others focus on moretraditional channels of the industry.

To select our group of All-Stars, we turned to a variety ofindustry observers and participants to get their input on who ismaking a difference for a company and the industry. We think youwill find some talented people in our list this year and learn fromsome interesting approaches to difficult challenges.

Kendall Blythe Tokio Marine

Kendall Blythe has gazed into the glazed eyes of business usersand known her message about why a technology project wasn't meetingthe business side's needs or schedule wasn't getting through.

So, when Tokio Marine Management developed a reorganization planto bring IT closer to the business side, it fit perfectly with hermix of skills.

“We needed some bridge between what the business asks for andwhat IT sometimes found difficult to provide,” says Blythe, vicepresident of enterprise business and technology services for TokioMarine.

“We focused on requirements and testing to ease the pain withthe limited resources,” she continues. “Requirements are really thefocus of the IT and business alignment. IT always has respondedwith solutions but maybe not the best ones because it did notunderstand what the use was or the purpose of the solution.”

The purpose of the reorganization, which went into effect inApril, was to improve communication, Blythe explains. Some workershad to be moved around. “We knew the skill sets of some of mypeople to be in the IT thick of things, and we had businessanalysts who were better suited on the business services side ofthis department,” she says. “We just started communicating betterat a management level.”

One improvement made was with the request-for-change systembuilt into Tokio Marine's e-mail. “I know from the business side itseemed like requests would come in and go into a black hole,” shesays.

Blythe created an enterprise PMO that focused project managerson certain internal verticals–someone who did all the financeprojects, someone who did all the underwriting projects, andsomeone who did all the claims projects.

“I made [the project managers] more visible to the businessmanagers who were working on these projects,” she says.

At the same time, Blythe did some data mining of the carrier'srequest-for-comment application and developed metrics for suchfunctions as time from submission to approval, approval to targetdate, and target date to delivery.

“We created management reports that went back quarterly to theexecutive committee that said here is everything you asked for andhere is what we can deliver this quarter,” she adds. “We basicallytime-boxed by quarter some project work we could commit to andforced [business users] to understand we also have limitedresources and we need to prioritize and watch expenses.”

The services group is flexible, indicates Blythe. “When someonecomes up with a project in mid-quarter and it's compliance related,we'll jump right on it and switch out projects within departmentsif we have the resources,” she says.

The carrier now is in the third quarter of the process. Blythereports there were good results from the first quarter, but she isnot satisfied. “We had a lot of carry-overs of projects into thethird quarter, which reduced the amount we could work on as far asnew work, but I think the requests have dropped about 50 percent,”she says.

Blythe has been with Tokio Marine for five years, starting outas manager of claims data quality. Eventually, she took charge ofdata quality for underwriting before her new position openedup.

While 2009 has been a difficult year for many insurers, TokioMarine looked upon it as an opportunity to focus on thefundamentals. “We needed to look at customer service, data quality,and find some efficiencies to do more with less,” says Blythe. “Thedata quality and business process efficiencies went hand inhand.”

The carrier also is in the midst of implementing a new policymanagement system–a project that began four years ago and is aboutto achieve fruition. “We certainly are looking forward to theefficiencies we'll find with that,” she says.

In addition, Tokio Marine purchased the OnBase system fromHyland Software for document management and workflow this year.“That was rolled out to claims knowing underwriting would be verybusy with the policy management system,” says Blythe. “In 2010, weare looking to merge those two projects. We also are going to builda data warehouse and implement some sort of master data managementand business intelligence for streamlining our managementreports.”

Blythe admits the carrier has been very aggressive at a timewhen others have backed off projects. Tokio Marine did have to showsome patience, though. When the policy management system and thedata warehouse project were begun at the same time, the carrierrealized it did not have the resources to complete bothsimultaneously. Still, with the data warehouse now at the front ofthe line, Blythe believes the early work done on the warehouse hasgiven the carrier a good start. “We hope we are at least halfwaythere,” she says.

Blythe points out in its Japanese culture, Tokio Marine has arotating Japanese staff, and the CEO is new this year. “His biginitiatives are streamlining management reports and data quality,”she says. “Now, we have that from the top.”

Chris Gay MileMeter Insurance

MileMeter Insurance may be small and it mayoperate in just one state, but there is no doubt the directwriter's pay-by-the-mile pricing policy for personal auto makes itstand out in an industry that traditionally has trouble embracingnew ideas.

“We don't fit in any of the normal boxes,” says Chris Gay,MileMeter's CEO. “We're a technology company that happens to sellinsurance. We're almost the anti-insurance insurance company. Inmany ways, we don't consider our peers to be insurance companies;we consider them to be retail brand companies or technologycompanies.”

MileMeter achieved a regulatory first in 2006, according to Gay,when Texas approved the first per-mile policy. “We formed a newinsurance company in the middle of last year and sold our firstpolicies in October,” he says.

Gay doesn't like inefficiency, which is what he sees in most ofthe insurance industry. “We think half the market currently isbeing overcharged for auto insurance and getting mediocre service,”he says. “We set out to address that.”

Creating the concept of by-the-mile insurance was one thing, butmaking it work was another. “Because the industry was so entrenchedagainst doing this, you had to become an island unto yourself as acompany,” says Gay.

Starting MileMeter from scratch also proved beneficial. “It madeour job easier in that we didn't have to start off supporting[multiple] lines of business with [multiple] legacy systems,” notesGay. “It gave us the ability to design for elegance and simplicity.We have a whole technology stack for good, old-fashioned insurancepolicy administration, claims administration, and the e-commercesites–the whole stack. Commercial off-the-shelf software justcouldn't get it done.”

MileMeter doesn't use any tracking devices or on-boarddiagnostics technology. “We feel those have a number of problems,not the least of which are cost, convenience, and privacy,” remarksGay. MileMeter uses standard variables for rating, including age,location, and vehicle.

What sets MileMeter apart is transparency in explaining rates.“If you can't explain to your customers how you arrived at theprice in one sentence, you shouldn't be selling the product,” hesays. “Anything else above and beyond that is manipulation andobfuscation designed to take from someone what you shouldn't betaking.”

MileMeter doesn't use rules it finds discriminatory indetermining rates. “It just leaves an unsavory taste in our mouthto choose between prices for customers based on whether they have10 years of education or 12 years of education; if they are marriedor single; whether they are responsible and rented within theirmeans or irresponsible and bought a house that exceeded theirmeans,” says Gay. “We don't discriminate male vs. female in ourpricing. The objective is transparency with the customer.”

The MileMeter policies are tied to a vehicle/driver pairing,continues Gay. By charging by the mile, he believes the company isgiving someone an incentive to drive less. And by making the pricetransparent–for example, five cents a mile for the coverage acustomer selected–the customer is in control.

“They decide how much they want to spend, and when people havethat kind of pricing transparency, they can see the benefits ofreduced driving,” says Gay.

This year was extremely volatile for all insurers, includingMileMeter, points out Gay. On the positive side, the economy helpedthe carrier in that potential customers reevaluated theirexpenditures. “We won a lot of business from people who werelooking for ways to be more efficient and were willing to trysomething new,” he says.

The economy hurt MileMeter because it was lumped with manytroubled businesses. “Some people were so panicked about thecondition of financial companies it didn't matter we were offeringthe best product in the world when they were watching hugecompanies topple,” he says.

What also hurt MileMeter is the capital markets slowed down. “Wecouldn't grow as fast as we'd have liked,” says Gay. “The benefitof [slower growth] is you run financially lean and focus oncustomer service.”

Currently operating in Texas alone, Gay relates the goal for2010 is to “grow, grow, grow” both in Texas and in other states.Furthermore, he reports many companies have expressed an interestin MileMeter's technology. “We'll probably begin licensing that ona service model to other insurance companies for regular insurancepolicies,” he says.

Enough states are interested in MileMeter's by-the-mileapproach, according to Gay, he doesn't see major problems inexpanding, just the usual regulatory obstacles that slow thingsdown.

“I thought government contracting [an earlier job for Gay] wasbureaucratic and slow,” he says. “Insurance makes governmentcontracting look like a cheetah. Our industry is incredibly bloatedand Byzantine. Some of that was a necessary reaction to businessfailures and ethical failures over the past century. Some of thoseproblems still exist, and others are simply just challenges andreform no one has tackled. They should be tackled at somepoint.”

Lisa Ward Esurance

The way we look at technology enhancements is generally what'sgood for the customer is good for us,” says Lisa Ward, director ofcustomer experience for Esurance.

The customer experience team at Esurance is a cross-functionalgroup focused on customer-facing touch points, explains Ward. Thereare several smaller teams within the group, such as a userinterface design team responsible for the look, feel, andfunctionality of all customer-facing applications. The apps includethe sales, policy management, and claims systems and extend to allof the carrier's e-mail communication. There's a Web analyticsteam, as well, to measure the changes to the carrier's Web site(www.esurance.com) and makesure the changes are having a positive effect.

There also is a creative services group that includes graphicdesigners and copywriters. “It's a bit of an unusual team, but it'sworked really well for us to create a cross-functional group havinga singular customer vision across all our customer touch points,”says Ward. It gives us tremendous consistency and the ability toapply lessons learned across these areas.”

The user interface for claims online applications also fallsunder Ward's direction. “Our team writes and designs the interfacefor all our claims applications–from reporting the claim online tomanaging the claim, checking claims status online, vehicle repairmonitoring, and claims-related e-mail,” says Ward. “Recently, welaunched a mobile claims application, so we are truly delivering onour brand promise to be available for our customers 24/7 via theirwireless device.”

Ward started with Esurance in 2000, shortly after the companylaunched in 1999. From the beginning, Esurance's business model hasbeen focused on using the latest, most robust technology at everypoint in the process to make the overall experience shorter,faster, and more accurate for the customer, notes Ward.

The benefit to the carrier is to perform the functions onlineand be faster and more accurate. “It was challenging as a startup,but we had advantages because we didn't have any legacy systems inplace and none of the channel conflicts that many companies have,”she says. “This was our business model from the beginning.”
Esurance always is looking to optimize the customer experience onthe Web site. Ward estimates the company has redesigned the quoteand purchase process eight or nine times in the last decade.

“We always are making changes, not only to stay current but totry to introduce new and better functionality,” she says. “We do alot of usability testing where we can watch live visitors interactwith our Web site, and that directs a lot of positive solutions forWeb site design.”

Usability testing has been a valuable tool for Esurance,continues Ward. “We find it much more effective than other modelswhere you bring consumers into an artificial lab environment,” shesays. “We also do a lot of surveying of our quoters and ourcustomers.”

Esurance has its own in-house survey system. “We survey folks ona variety of fronts–people who have had claims with us to make surethe experience went well; new policyholders to make sure theon-boarding service was positive; and we survey those who cancelledtheir policy,” says Ward. “We take a rigid approach to keeping thesurveys really short, and so they don't take any more than twominutes. You don't get a lot of responses when you have exhaustivesurveys.”

Esurance believes strongly in verifying information while thecustomer still is online. “It enables us to do things moreaccurately,” says Ward. “There is no 'we'll follow up with youlater.' All of our data feeds are done real time so when you buy apolicy, it is the real policy. It makes sense for us and for thecustomer. It's a lot of work to get there, but when you do, therewards are there.”

Recently, Esurance completed an architecture upgrade to the .NETplatform throughout the enterprise. “The upgrade deliveredtechnical benefits to IT as well as additional functionality forthe consumer, so it was a win-win,” says Ward.

Additionally, the carrier built its own e-mail system. “Thatenables us to maintain a consistent experience, understand all themetrics beneath it–and this is directly integrated into our buyingand servicing system,” she says. Every customer e-mail is stored incustomers' accounts for review at any point, she relates.

Esurance has kept a close eye on the economic turbulence thathas shaken all insurance carriers. The carrier works with comScore,a third-party data provider to measure what's going on in theindustry.

Ward reports shopping for policies has been down overall in theindustry. But a bright spot in the gloom, Esurance discovered, hasbeen Internet usage.

“Folks with direct writers have a propensity to use the Internetto shop much more than those with agent-based insurers,” she says.“We know people who come to us [for a quote] are most often with[other] direct writers.”

Ward cites a “shared focus between IT and the marketing teams”to implement the most impactful updates for customers. Two yearsago, Esurance changed its structure so each business team has adedicated set of developers who work on the business unit'sprioritized projects.

“It's an ongoing collaboration,” indicates Ward. “The businessteam for marketing, for example, has a set number of hours wemanage for every release.”

Ward's team works together with IT to ensurehighest-customer-impacting projects move to the top of the releaselist. “Any project IT has, such as a systems upgrade orarchitectural update, has to be prioritized alongside the businessteam,” she says. “IT adds value and makes our systems better, butwe understand the importance of prioritizing each project for ourmarketing goals. We also share the measured results of ourprojects, so we all see the impact to the customer.”

Mark Hansen Horace Mann

In an age when companies are turning over rocks to find newcustomers, Horace Mann remains faithful to its customer base ofeducators. It is just one of the aspects that make the carrierunique, “especially at our size,” says its CIO, Mark Hansen.

“The breadth of our product offerings as well as the way weprice them are focused on taking care of the educators' needs.”

Serving the educational community also makes Horace Mann standout as an employer, according to Hansen. “There are a lot ofcarriers that mass-market insurance, but we're focused on a uniquegroup of customers who are very special to us and, frankly, specialto the country and society, as well,” he says. “I think itgenerates enthusiasm within the company we're focused on a specificniche market. Our customer base has a special place in ourheart.”

Hansen joined Horace Mann four years ago. Prior to that, heserved as CIO at American Manufacturers Mutual (more commonly knownas Kemper Commercial) for five years. He also spent 20 years withAllstate. “I was adding it up the other day, and I have more than35 years of IT experience and more than 30 years in insurance,” hesays. “I had the opportunity to get into IT to get myself throughcollege.”

Being a multiline carrier offers great challenges for Hansen andthe IT department. “There's a certain amount of ante for playingthe game the way we do,” he says. “We support a wide array ofsystems, each specific to the product lines.”

One area Horace Mann focuses on is to make sure everything ishigh value for its market. For example, a couple of years ago thecarrier extended its life insurance offerings. “Like a lot ofannuity carriers, we had the opportunity to deal with the 403B IRSregulations, and that represented a great opportunity for us,” hesays. “We specialize in that, and we had the opportunity to retaina significant number of relationships with our school districts. Onthe surface, when [the IRS rules] first came in, it looked like anawful lot of work to get it done. But in the end, we had aninitiative called Comply and Compete, and that meant we were goingnot only to comply with all the regulations but also use it as anopportunity to compete in the market.”

On the P&C side, the carrier introduced EducatorSegmentation in which the company specially priced auto productsfor educators.

“We are the only company I am aware of that offers a trilinediscount across P&C and life and annuity products,” Hansensays. If you have any combination of the three products, you get aneven greater discount.”

From a technology standpoint, Horace Mann is focusing itsspending on hitting the target market. “Over the course of the lastfew years, we've been redirecting some of our spending that hasbeen wasted or burned in the infrastructure to get it refocused onstrategic areas,” says Hansen. “We rebuilt our entire data centerand took advantage of opportunities to reduce the cost in our coreIT operations and subsequently be able to do things such as offernew products. It's been a fun and interesting challenge.”

Asked how this process was accomplished, Hansen notes, “You knowin the IT business if you do it step by step you'll never getanywhere,” he says. “The first thing we are trying to do is reduceour underlying cost of the core technology offerings, and as soonas we start to do that, we are going to spend some resources on ourstrategic work. It's been an ongoing thing, more parallel effortthan serial.”

An important step for the carrier is the move from captiveagents to exclusive agents, similar to the model used by carrierssuch as State Farm and Allstate. “They are exclusive to us butindependent,” he says. “They are running their own agency andselling our products.”

Horace Mann has been working to rebrand the entire company alongwith the corporate Web site. “We don't have the resources of thereally big guys, but we've been in the process of adding high-valueeducator-focused opportunities on our site,” says Hansen. “We wentthrough some of the things our agents and our customer-care centersaid were the most frequent requests from our customers. We have astrategy that extends over the course of the next 12 to18 months weare going to put on the Web. We've added some self-service and someimprovements on our quote engine, but once again, rather thanbroadly try to accomplish everything others are doing, we aretrying to focus on things our educators want.”

In a difficult year, the good news for Horace Mann is it has aconservative investment portfolio. “Everybody [in the industry] gotdinged, but our [portfolio] was better than most,” says Hansen.

This meant Hansen's IT projects did not suffer greatly thisyear. “A lot of companies ran short of capital and literally had tostop [projects],” he says. “Some companies did the completeretrenching–slashing budgets by 30 percent to 40 percent. Somecompanies just hunkered down–sat there and didn't do anything.”

Horace Mann had several important initiatives that were keptalive, Hansen indicates. “While we felt the pinch, we also wereable to continue funding and move forward on critical fronts,” hesays. “It's been a very challenging year, but we viewed it as ayear to be opportunistic. The biggest pressure we had out of 2009has been to make sure the stuff gets there. There is a lot morepressure on delivery.”

The industry is slowly coming out of the economic funk, so themove to the new distribution model will fit in well for the companyand its customer base. “About 150 of our agents have converted tothe new model,” he says. “Next year we need to continue to stayahead of that. There's an opportunity in technology. They no longerare employees of the company. They'll be used to working withtechnology capabilities out there. That will create a challengelooming ahead for IT, as well.”

Bob Eshelbrenner Hastings Mutual

Bob Eshelbrenner, vice president and CIO, Hastings Mutual,claims he got in on the ground floor of insurance technology. “Thefirst day I went to work in 1972, the company I worked for was justacquiring its first IBM drum terminals,” he says. “They were muchsmaller screens. We were starting an application to rate personallines and homeowners using the mainframe.”

Eshelbrenner still is impressed with the speed with which theindustry is moving. “Companies have become more willing to investin automation projects,” he says. “The projects have gotten larger,and from a user perspective, the big thing is the systems are somuch easier to use. We were meeting this morning on a product wewill be rolling out to agents. We provide the application, atraining handbook, or a quick desk guide. We don't have to traineverybody. The test is the product has to be good enough so thepeople who know insurance can complete an act without any classroomor further detailed instruction.”

When he started, Eshelbrenner points out, the equipment wasenormous and business users treated technology as if it was all abig mystery. “Even after 35 years, you still hear fears–'Am I goingto hurt the system?'–which is not going to happen anymore andprobably never could have happened,” he says. “People have PCs,cell phones, or BlackBerry devices. They basically hold theirown.”

Eshelbrenner concedes 2009 has been a rough year, but hebelieves the fact he works for a mutual company has made it easier.“We have a certain advantage in the market because we are notdriven by the expectations of security analysts,” he says. “We feelwe can make decisions that are best for our policyholders withoutthat cloud hanging over our head of meeting some quarterly targetof earnings.”

Although he doesn't like the term business as usual,Eshelbrenner asserts that best describes how Hastings has operatedfor the last 12 months. “Our direction was we would work that muchharder to get [projects] done,” he says. “That involved someadditional spending in some cases where we brought in a handful ofconsultants–people who could help us deliver what we planned muchquicker.”

Recently, the Ward Group consulting organization named Hastingsas one of the best operating companies in the industry. “We werevery pleased to see that,” says Eshelbrenner. “We were a littletaken aback last year when we weren't on the list, but we overcamethat, and we are back on the list this year. When we look at thingssuch as financial stability, which Ward addresses, we feel we areone of the top companies in the country. No one exceeds therecognition in the industry we have received.”

It will be business as usual again for Hastings in 2010,predicts Eshelbrenner. “We have not started the formal [budget]process yet, but each department has some informal work going on,so we can build our plan in September,” he says. “I already haveheard enough to know that our significant appetite for automationis not going to change next year.”

Two areas Eshelbrenner believes are ripe for development nextyear are continued expansion of the carrier's agent portal andimprovements on the claims side.

“We have a number of [processes] we put out there–personal andcommercial lines, rating, automated underwriting–but there are afew more lines of business to do,” he says. “Fully operating ourfarm product is one we will be undertaking.” On the claims side,Hastings will look at automating first notice of loss to a greaterextent.

With the business chugging away, “there are a number of thingsthat already are on the table we will be making every effort tofinish as they are carried over from last year, and we'll kick offnew projects next year, as well.”