Make a Wish

Having a technical degree is becoming more important for some carriers, but if you have a technical degree and [technology] is all you do your entire career, oftentimes you dont learn the business side, says Markham. Good CIOs know how to assemble the teams to do the work, but they dont do the work themselves.

Greco believes todays valued CIO is someone who will be part of the business process. Everyone is trying to get more out of less, and that is directly affecting the CIO, she says. The CEO needs someone with IT experience but also an operations background. Ob-viously, [the CIO] has to understand technology, but [the CEOs] really are looking for the business experience.
Tech Decisions asked the CEOs of four insurers to address what matters most to them in their CIOs and how their top tech executives work within the business structure of the carrier. CEOs from Nationwide, Prudential Life, Selective, and ACUITY share what makes or breaks a valued CIO.

On His Side

W. G. Jurgensen is chief executive officer of Nationwide. He was elected to that position in July 2000. Nationwide is a more than $148 billion insurance and financial services giant based in Columbus, Ohio. Jurgensen, who has worked in banking the majority of his career, has experience encompassing the breadth of financial services. His background includes serving as a chief financial officer.

Mike Keller is enterprise CIO for Nationwide and a member of Jurgensens 11-person management team, which oversees the business of the Nationwide family of companies. The IT function plays a critical en-abling role in Nationwides business capability and success, says Jurgensen. I ex-pect my CIO to participate actively in strategic business planning, to make sure we are leveraging technology to make our businesses more competitive, and to build an IT team that can deliver the solutions and results we need.

Nationwide operates under a shared business model, which calls for Keller to work closely with all the business units of the carrier. The basic concept of the shared business model is to have our leaders cooperate and collaborate to leverage strategies and best practices across all lines of business, says Jurgensen. Additionally, we have established business unit CIOs who dually report to Mike and our business unit presidents. Mike works closely with the business units to make sure the right IT capabilities are developed and deployed. In addition to his role as enterprise CIO, Mike is president of Nationwide Services Company, which houses a number of important shared services.

Jurgensen points to communication as a critical factor in the success of the IT department. Success depends upon continuous communication and information sharing between IT and the businesses to achieve the best possible solutions for the entire organization, he says.

At the CIO level, Jurgensen wants a leader with a great understanding of the business. Leadership and business acumen are more important than specific technical skills, he says. Mike needs to make sure we get appropriate returns on our large IT investments and provide strong leadership to a team of more than 4,000 IT associates. That said, I dont believe he could be successful in his role without a solid understanding of the information technology field.

The ability to react to business changes is another important trait, according to Jurgensen. A CIO always must be willing to adapt and adjust to meet specific business needsand be knowledgeable on what those needs entail, he says. Above all, a CIO needs to be adept at developing and reinforcing our values-based culture within what we call our One IT Community.

Good Selection

Gregory E. Murphy has been chairman, president, and chief executive officer of Selective Insurance Group, Inc., since May 2000. He served as president and chief executive officer from May 1999 to May 2000, president and chief operating officer from 1997 to May 1999, and senior vice president and chief financial officer from 1995 to 1997. He joined the company in 1980. Murphy has played an integral role in developing and implementing Selectives successful geographic and revenue diversification strategies as well as major automation initiatives aimed at making Selective the single source solution for its independent agents. Selective reported $1.2 billion in net written premium for last year.

There are very few business decisions made today at Selective and throughout the industry that do not incorporate technology as an integral component, Murphy says. Our CIO, Richard Connell, and his team are involved with most aspects of our business planning processfrom project review and budgeting to implementation and monitoring of results, he says. This interaction is facilitated through our Enterprise Project Management Office [EPMO], managed by Richard and a cross-functional senior leadership team, through which all high-level proj-ects are reviewed and approved.

The interaction between Connells IT team and the Selective business units is constant and fluid, he says. They work in concert to ensure our technology is designed to enhance ease of doing business, streamline underwriting operations, and lower expenses for both the company and our agency partners, says Murphy. For example, our Web-based commercial lines automated system enables agents to process quotes, new business, renewals and endorsements with ease directly from their offices.

Another initiative Connell has guided has been the claims service center, which provides 24/7 support to agents and their customers, while the mobile claim system allows Selective claims personnel to work with agents and clients from any location. Richard oversees these initiatives to ensure they support straight-through processing, provide real-time access to accurate information, integrate with other company systems, and utilize state-of-the-art technology platforms, explains Murphy.

Varied skills are needed to make a successful CIO, he adds. A successful CIO has depth and breadth in his or her skill set, including strategic thinking, decision-making, planning and execution, talent management, innovation, creativity, and the ability to run IT like a business, he says.

Solid as a Rock

James J. Avery, Jr., has been president of Individual Life Insurance at Prudential since 1998. He is responsible for all aspects of the companys domestic individual life insurance business, including the distribution of individual life insurance products through independent representatives. In 2003, Prudentials In-dividual Life Insurance business generated total revenues of almost $2 billion. Avery joined Prudentials corporate actuarial department in 1988. In August 1997, the board of directors appointed Avery a senior vice president of Prudential. Avery previously served as chief actuary and chief financial officer for Prudentials Individual Insurance Group.

Like most business leaders, Avery views the CIO as a critical member of the leadership team and a key partner in the development and continuous evolution of short- and long-term business goals and strategies. I consider our CIO to be an adviser and an advocate for change, someone who can envision and implement technology solutions to enable our business to fulfill its obligations and deliver on its promises to investors, producers, customers, and employees, he says.

The relationship between CIO and business unit is interactive and fluid, he believes. I want the CIO to have an understanding of all major business processes and decisions, and I expect the CIO to be thoroughly engaged in understanding and enabling the business end to end, says Avery. I see the CIO as having a responsibility to introduce creativity aggressivelynew ways of solutioning existing business issues and addressing emerging industry trends.

The business environment for CIOs today is highly competitive, according to Avery, with a growing emphasis on e-business. The CIO also must possess a myriad of technical skills and competencies. In addition, the CIO must understand the dynamics and the economics of the business and how the recommendations and decisions he or she makes impacts customer satisfaction and profitability, says Avery. Personally, I want my CIO to be a visionary; an innovative leader able to attract and retain top-quality, team-oriented, creative personnel; an executive who is flexible and adaptable; and someone who understands and is motivated by the challenges of the life insurance industry.

An Acute Talent

Ben Salzmann has been president and CEO of ACUITY for five years and has a unique perspective on the relationship between the CEO and the CIO. ACUITY reported net written premium of $616 million in 2003. Prior to making the jump to CEO, Salzmann served as CIO for the company. One of his first decisions was to appoint Neal Ruffalo as CIO.

Salzmann loves a particular saying he feels applies extremely well to the work of the CIO with the business units: Never give your customers what they want. Give them what they didnt think of.

Thats where a CIO can come in, he says. When were going through a meeting the CIO can ask, What if you could get this turnaround in half the time? What if you were paperless there? What if we eliminated sending all these documents to state regulatory bodies? We have a monthly review of the entire companys detailed business. We have weekly status meetings and our series of strategic planning sessions. Our CIO is at every one of them.

The three most important abilities a CIO can develop are vision, world-class communication skills, and project management skills, according to Salzmann. He rates vision at the top. Our CIO is involved in every industry association, he says. I want him meeting with vendors. I want him meeting with competitors. I want him to know where the entire industry is going from an automation perspective.

Once armed with that intelligence, Salzmann maintains it is important to bring that knowledge back and add it to his own vision to develop a master plan for the carrier. A true business-enabling automation vision, he says.

Critical in achieving this vision is the ability of the CIO to communicate with the officers and directors, the staff, the vendors, and the competitors. IT, because of its [small] size, often is unfairly labeled as poor in communication, comments Salzmann. You need a communicator to break that barrier.
Salzmann doesnt think the CIO should manage a project, but the CIO should have the skills to assess any problems correctly. I believe IT people dont lie to other people, he says. IT people lie to themselves first. They convince themselves of the lie and then go out and tell other people what they now view as the truth.

He is amazed when carriers contemplate outsourcing some of their IT operations but look aghast when the idea of outsourcing a business task such as underwriting is brought up. They say, The underwriters are making important business decisions. But those decisions might last an entire policy terma year, he says. Yet your technical staff is making decisions that will affect you for a decade. It doesnt make sense. Im not against outsourcing, but Im against outsourcing the brain. If you are going to be doing new systems, its great to outsource for programmers but not your design people. Your own design people know insurance, know your company, and will be there after the outsourced people leave.

Biggest Threat to Automation? The CEO

Ben Salzmann has been CEO of ACUITY for five years, and prior to that he was CIO of the company, so he has seen things uniquely from both sides of the aisle. His view is the CEO often presents the biggest threat to a companys automation.
CEOs ignore technology, says Salzmann. Even if they say its important, they wait until the last minute and then want to make a snap decision. He tells a story about one unnamed carrier whose CEO finally realized the company had fallen behind the competition and went into a state of panic over the situation. He calls in the CIO and says, This is what our competitors have, and I need it right now. The CIO goes away, does all his homework, comes back with a carefully laid-out plan, and tells the CEO he can deliver it in four years, says Salzmann.

The CEO pitched a fit, threw the CIO out of his office, and went out and hired a contractor, he continues. The contractor came in with programmers at $250 an hour who dont know insurance and dont know the company. Even if they do successfully learn [the business] and actually finish the system, they leave with all the knowledge. The IT employees who work for the company dont know anything about the new system, and now they are supposed to maintain it.

This insurer, Salzmann adds, hired the contractor for six months, and at the end of that time period, the contractor reported problems, and so the CEO kept re-signing the contractor until eventually four years and millions of dollars had been wasted, and the company did not have a single deliverable.
CEOs are the biggest threat to automation, Salzmann concludes, be-cause they usually just are interested in putting things on the back burner until they realize they are behind and they need an instantaneous solution.