A glimpse inside the personal technology arsenal and strategies that empower todays leading insurance IT professionals.
BY G. BARRY KLEIN, CPCU, CLU
We need to be outstanding in our underwriting capability and effective in our claims handling, asserts John Golden, executive vice president and CIO of CNA, the Chicago-based, $11 billion-plus insurance giant. That should be true for any insurance company, but it is especially true for us. He explains that CNA doesnt have the luxury most carriers have of spreading risk between personal and commercial lines. CNA is the fourth-largest writer of commercial lines insuranceand thats all CNA does. As the market changes, we need to move quickly to respond, he says.
Golden wasnt looking for a job when CNA came calling. He had a long career in telecommunications with companies such as GTE, Verizon, Ameritech, and SBC (actually only two jobs, but each company merged and changed names a few times along the way). Taking early retirement after the latest merger in his tenure, he pursued his passionwoodworking. Then, while he was happily creating new pieces of furniture, some members of his previous work team arrived at CNA and realized they could use his help in delivering an e-business project. He signed on for a short-term project as CTO for e-business.
Although Golden didnt have a background in insurance, he knew how to drive organizational change. When I arrived in 2001 as e-business CTO, we were spending more than $520 million on IT and had only 600,000 discretionary hours to work on projects for our internal customers. This year, weve cut the expenses by more than 40 percent to about $300 million and have 1.7 million hours of discretionary programming time. As Golden measures it, vacation time, for example, is nondiscretionary as are other commitments, such as training. Its simple supply and de-mand, he says. Our discretionary time is the supply of programming hours we have, and the demand is the need for updates and new programming for our customers. He accomplished this transformation with 1,300 of CNAs 12,000 employees. The absolute minimum nondiscretionary time is mathematically around 20 percent, according to Golden, al-though that percentage realistically is unobtainable. Since his arrival, he and his team have reduced nondiscretionary time from 70 percent to 33 percent, which is how they can do more programming on a smaller budget.
The teams speed and success in turning around CNAs IT operation did not go unnoticed, and he quickly was promoted to CIO. Late last year, CNAs CEO, Steve Lilienthal, asked Golden to take on two additional and large responsibilities. Golden now leads all back-office insurance processingsuch as policy administration and billing/collectionsas well as expense management, which has added another 1,400 employees for whom he is responsible. Theres always risk in insurance operations, he notes. We can live with the insurance risk. What were doing now is driving the risk out of our [back-office] operations. He began by analyzing leadership talent and reviewing the effectiveness of processes already in place. We need to be using our resources so that were always working on our most important work first.
As for his own resources of the personal technology kind: As far as my home goes, I think Apple does a better job of keeping it simple, so I have a Macintosh wireless setup for my family. I still can use my [PC] notebook on the wireless system. Like many other busy executives, he relies heavily on his BlackBerry for on-the-go wireless e-mail. He admits to one vice, however.
Cell phones are my weakness, he confides. Im always buying the latest and greatest phones from Europe, which tends to get cell-phone technology about a year ahead of the U.S.
And what about the tools for his passion? Golden, who specializes in making large, custom-built furniture usually of his own design, describes the setup: I have a 3,500-pound table saw, custom-made for me in Austria, which is the centerpiece of his shop, he says. The physical operation is a 2,000-square-foot wood professional wood shop with commercial-grade, three-phase power. He also has all the attendant routers, planers, sanders, and assorted tools one would expect from a master of technology who also just happens to be a master craftsman.
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