INSURANCE IT ALL-STARS 2008

Kim notes he has been fortunate at The Hartford to work with a talented group of individuals whom he's come to trust. "I just need to keep out of everyone's way and make sure I provide the assistance for them to do their jobs more effectively," he says. "I remove obstacles and offer feedback and guidance. For me, the job is much easier given how talented the group of individuals is who work with me."

RAY VOELKER

CIO, Progressive

When Ray Voelker joined Progressive Insurance in 1985, he was part of a 200-member IT staff. "It was a different-size company and a different environment for insurance," says Voelker, who has been the carrier's CIO since 2000. "Certainly, the IT presence is different now with about 3,200 or so [employees]."

Progressive consistently is looked upon as one of the leading insurance carriers in the world in its use of technology. Voelker remembers a letter Progressive president and CEO Glenn Renwick sent to shareholders several years ago that noted Progressive had become almost a technology company applied to insurance–a compliment indicating the importance of technology as a strategic tool.

"I'm proud of being at Progressive and of Progressive's success, but one of the things that has kept me here for more than 20 years is technology is thought of toward the front lines of company strategy and is not a back-office, general-support operation," Voelker says. "It's great to work with some highly talented business people who get it that technology is important and will collaborate with you to help move the business forward."

Voelker concedes there also is pressure in being perceived as one of the industry's technology leaders, but he sees it in a positive light. "We clearly recognize the things we did 10 or 15 years ago, which would have been considered groundbreaking as far as the capabilities our staff had, now are readily available in the marketplace," he says. "If we are to maintain our edge, it means we have to focus continually on the innovations in technology, how we keep abreast of them, and how we continually look for ways to leverage improvements in technology in the context of moving the business forward."

Progressive has a tremendous focus on training its staff brought on by growth within the carrier. "I would say just the pace of change in technology creates a profile of typical IT workers where they really see an investment in training as important to whether they want to remain with the company or not," says Voelker. "If they feel they are working for a company where their skills will deteriorate or not stay current, they will not want to stay with that company."

The carrier has its own training capability known as IT University. Voelker reports the carrier budgets approximately two weeks of training per year for everyone in IT. In addition, Progressive sponsors on-site degree programs, both at the bachelor's and master's levels in technology along with an MBA program. Universities in the Cleveland area near Progressive's home office come to the carrier's location to teach the classes.

The IT University also runs a nightschool program. A typical IT training class might involve extra training for skills the company feels its IT people need, Voelker explains, such as a Web developer interested in learning more about Flash technology. "We bring in someone to teach Flash for a few days, so the Web developers go to that class," he says.

Turning a COBOL programmer into a .NET developer in a three-day class is not going to happen, but if a COBOL programmer were interested in doing something like that in an extended 10- to 12-week course, the company would offer it. "All that costs [the employee] is time," he says.

It doesn't bother Voelker some believe insurance is considered behind other industries when it comes to using technology. "I spend my time focusing on Progressive doing the right things," he says, adding he doesn't believe it's accurate to paint every insurance carrier with the same broad brush. "The insurance industry is a very complex industry, and different players have different business problems," he says.

Progressive has a business model that allows it to leverage technology in a way that meets with the core business model, continues Voelker. Not everyone in insurance has the same business model, though. "I recognize that, for example, Progressive has not done a lot of mergers and acquisitions, so I don't have to devote a lot of resources into building a mergers-and-acquisitions machine to bring that into the core business," he says. "I can use those resources to work on our usage-based insurance product or to work on our Web site features or something like that. Progressive does have the reputation, based on actual results, of having a business model that now and for the foreseeable future is amenable to leveraging technology sooner rather than later."

Voelker's goal for each day is he and his team must get better. "My problem is not how we are going to get better, but [rather] we have these opportunities, so how are we going to seize them," he says. "It is exciting moving us forward both from a pure IT capabilities standpoint and a business standpoint by being good at seizing the opportunities that are in front of us."

JIM KNIGHT

CIO, Chubb Group

The Chubb Group of Insurance Companies successfully has followed a federated model in its IT operation, but Jim Knight, who became CIO of the company in March of this year, wants to incorporate an enterprise view for the technology professionals under his direction within the organization.

"That will be a big part of my focus," says Knight. "A federated model is very good from a responsiveness point of view. The business units have dedicated IT people and a dedicated divisional CIO. They have the budget, and they have accountability."

What the federated model lacks, though, is economies of scale across IT, explains Knight. "They all build their own systems, and they don't always share, not only on an asset level but on a knowledge level," he says.

Chubb created an enterprise initiative leadership council, relates Knight, which is made up of three divisional CIOs (from throughout Chubb) and Knight. "It's their job to work across the enterprise," he says.

Knight maintains governance, but other IT leaders are in charge of innovation, strategy, and integration. "They have to pursue those disciplines across the enterprise," says Knight. "We either all succeed or we all fail. [The council] is forging teamwork as well as the enterprise perspective."

All of Chubb's senior IT leaders gather together to work through issues collectively, Knight adds. "It's part of our culture now," he says. "We have an enterprise architect whom we didn't have before. We also have a number of competency centers that work across the enterprise."

Knight indicates it was his enterprise view that helped him land the CIO position. He has been with Chubb for a dozen years and became a divisional CIO in charge of claims eight years ago. Three years ago, when Chubb CIO Chuck McCraig retired, the company brought in June Drewry as a transition CIO to continue the company's progress and bring up the next CIO. Knight reports all the divisional CIOs were in the pool, and he was selected for the job based on his performance in a couple of special assignments that came his way.

"One real test was an outsourcing study–how, when, and if Chubb should pursue application outsourcing," says Knight. "I presented [the report] to the board, and it was well received. We also had an HR function that was outsourced, and a new HR system was being implemented internally as part of the arrangement. The project was in tremendous trouble, and [Chubb executives] asked me to come in and fix it. It was way out of control, but we brought it in and got it straightened out, and it forged more positive relationships."

Knight realizes his knowledge of technology is secondary in importance in his role as CIO. "Mainly [my job] is about understanding business and leadership," he says, adding he is comfortable with that. "My leadership combined with my ability to execute were two things that got me this job," he notes. "For me, it wasn't hard to go from a technology-focused position to a leadership position. It evolved to that as I went up the ranks."

Chubb has an enterprise PMO where people from different areas of IT have been charged with monitoring another area's major program as a best practice. "It's being received extremely well," says Knight. "We have great business/IT alignment, and [the business] understands when we say we have a problem. IT folks in general are good at crisis management, so when there is a problem, that's when we tend to shine, especially on the negative-visibility jobs such as infrastructure and support functions that typically are looked at as utilities."

Knight describes himself as a sucker for a challenge, and the bigger the challenge the more enthusiastic he becomes. "There is never a dull moment," he says. "It's not hard to find something to get my blood going, especially for this company. Chubb appreciates IT. At other companies, IT is secondary, and they treat [IT personnel] like stepchildren. My role is critical, and I personally can make a difference. I walk into work holding my head high."

MICHAEL KIM

Chief Technology Officer, The Hartford

What gets Michael Kim pumped up about his job at The Hartford is change. "If it were a job that was much more operational, day to day that wouldn't excite me. But what does excite me are the investments we are making, the impact we are having, and the ability to add value and help The Hartford," says Kim, who serves as chief technology officer for the carrier.

Technology is integral to enabling the carrier's strategies, he adds. "There is a great deal of change going on in the insurance industry right now, so it is interesting to be [here] right now," he says. "I think it's similar to what it would have been like working in technology in banking 15 years ago."

Kim spent some time in the banking industry as a consultant before joining The Hartford a little more than four years ago. He admires the way the banking industry has spent the last two decades renovating its legacy applications to the point where banks don't face the same set of issues insurers still face today.

"I think it would take a huge investment in today's environment to get to that same situation," he says. "Within the environment and the market conditions we have today, it would be nearly impossible for any insurance company to [renovate its applications completely]. The key is to find the highest returns on investment as you develop new capabilities for the business that will help move the business forward."

An example of that would be The Hartford's architecture discipline, which Kim asserts has matured significantly. "When we look at a project, we look to see whether there are services we have an opportunity to reuse or whether we did actually reuse those services," he says. "And were there applications or services we could sunset through the course of [this project] by performing renovation? When we go through the architectural steering committee, every project has to answer those questions."

Kim joined The Hartford to lead the business technology development group, which combines technology, strategy, planning, and internal consulting. Next, he was asked to lead the data warehouse and information management team, and finally he was named CTO in 2007. He kept both of his earlier responsibilities and assumed charge of the enterprise architecture group along with one of his favorite areas, the innovation lab.

In describing the innovation lab, Kim points out the efforts in many large companies focus on technology issues related to day-to-day business needs. "I think our company felt there was a need to look at things a little bit further out and not tied to any specific pain points we might have today," he says. "The innovation lab provides an outlet to look at things with a longer-term time horizon and may offer a competitive advantage but not something that was on the forefront of people's minds as they were thinking of technology investments."

Kim believes this philosophy is a reaction to The Hartford's legacy of being an operating company. "Every year you look at what investments you make," he says. "Oftentimes that becomes a bit of shotgun approach–what is going to have the best return next year for the investments you make?"

The Hartford's innovation lab is only three years old, so it still is maturing and gaining momentum, reports Kim. To achieve that maturity, the lab has developed partnerships, working with consultants and universities. "When we talk with them, we are looking much more broadly because I think insurance is a bit back-water when it comes to technology innovation. So, we are looking for state-of-the-art outside of insurance and outside the broad financial services industry," he explains.

Still, there always is pressure as the scope of job responsibilities and expectations increase, Kim admits. "There is a lot more pressure today than there was four years ago when I started, but I think I've adjusted and don't even think about it anymore," he says. "Most people, me included, tend to have higher expectations of themselves than perhaps others have. I'm always disappointed with my own performance–that's what drives me."

AKHIL TRIPATHI

Senior Vice President and CIO, Harleysville Insurance

Akhil Tripathi thrives on change. When he joined Harleysville Insurance three years ago as senior vice president and CIO, the carrier already was on a path for a transformation, "and that's the kind of organization I enjoy being part of," he says.

It helped that Harleysville CEO Michael Browne and the rest of the leadership team shared the same passion for change and IT's role in it. "After several meetings [with Browne], I was eager to pursue this role at Harleysville," says Tripathi. "It was a perfect fit. We continue to transform the organization, and there is much to do."

Bringing about change in an organization, particularly for someone from the outside, is difficult. One way Tripathi went about it was to develop relationships with his colleagues throughout Harleysville. "Day to day, building relationships, trust, and confidence is the first part," says Tripathi.

Second, Tripathi found a great deal of hunger for technology capabilities within the carrier. "It was fairly easy to partner with them and talk through the technology-driven initiatives we needed to launch," he remarks.

When deploying solutions for Harleysville, Tripathi stressed they needed to be Web based so business users, its independent agency force, and other business partners could access the carrier's systems and capabilities 24/7 from any location. "That was a big change for the technology infrastructure and the staff skill set," he says.

Harleysville first decided to focus on an agent portal that allowed agents to access all of their information and conduct business through the carrier's system. "Usability was an important consideration in terms of how we delivered the functions and from the perspective of the ease of doing business with us," says Tripathi.

The carrier had agents participate in the design and development of those capabilities. The way the company approached building the solutions as well as understanding the needs of the business users was important, notes Tripathi. "We took quite a nontraditional approach to building out solutions that would have an immediate effect in terms of [customers'] ability to do business with us," he says.

Tripathi believes the insurance industry is evolving in how technology is leveraged to transform the way business is conducted. "In terms of products and services, [the industry] is changing slowly," he says. "In terms of how we conduct the business–that is changing [more quickly]."

Among the factors for driving these changes is the competitive landscape. "Every carrier is going after more market share," he says. "Technology plays an important part in how you achieve that."

Tripathi points out in the past in commercial lines it would take days and sometimes weeks to complete the policy cycle. That cycle time is much shorter today. "The first player who is able to provide a good product at a good price has a good probability of winning out," he says.

When Tripathi joined Harleysville in 2005, the carrier performed a three-year strategic plan for technology rollout. "Recently, we were updating our plan, and [in retrospect] it's no coincidence we followed our game plan quite rigorously," he says. "I was pleased at how accurate it was in terms of what we planned and what we delivered. We are working on our next three-year plan, so we are focused on what we will do going forward and how we are going to get there."

Tripathi sees a number of capabilities that need to be transformed in that time frame, such as claims and financial systems. "How do we support our agents to do business with us more conveniently and in concert with their workflows?" he asks. "How do we communicate in a multichannel way? How they want to do business with us becomes a priority. We have focused on those needs and how we will deliver them over the next year, two years, and three years."

Tripathi also looks into the challenges and problems his IT team deals with–both how to solve the problems and how to remove barriers. He believes one of the key components for success for any IT leader is to have a team that can deliver and align with business and drive the change. To that end, he brought in many people with different skill sets to supplement the expertise already on staff. "I couldn't do it all by myself," he says. "I feel very fortunate we have a team that is driven toward leading the transformation. They have a good insurance background and experience."

MIKE SCIOL?

CIO, IFG Companies

Mike Sciol? isn't afraid to side against conventional wisdom. For one thing, the CIO at North Carolina-based IFG Companies disagrees with the view the insurance industry trails other financial services fields in its technology.

"I never thought we were behind," Sciol? says. "I thought that was a great vendor ploy. The vendors would say the banking industry was doing certain things, such as real-time processing, but it wasn't. If you go to your bank and deposit a check, does it show up in your account that day–or the next morning? It shows up the next morning. It was a mainframe batch job that updated your checking account. It's been that way since Moby Dick was a minnow."

Sciol? isn't angry at vendors for perpetuating what he believes to be a myth. "It did kind of move things along; however, as far as the insurance industry is concerned, tell me when you really need real-time processing of a policy? You don't."

The insurance industry is more heavily regulated than the banking industry, as well, points out Sciol?. "[Banks] will tell you the SEC is all over them," he says. "Well, guess what? For publicly held insurance companies, you have the SEC and you have state and federal rules, guidelines and compliance, filings, and departments of insurance. There are so many institutions we have to comply with, and there is so much more control over what we do in terms of how we price, how we endorse, and what we exclude."

Sciol? came to IFG from the Bearing-Point consulting firm. "I did enjoy consulting, but frankly, I enjoy being on the front line more than sitting in the press box," he says. "When you consult, you are putting together strategies and opining on what they should be doing going forward. You don't have your hands on the day-to-day activities or witnessing the execution."

Like many people today, Sciol? feels external pressures from market conditions. IFG includes an excess and surplus lines carrier, so market conditions stem from what's being done on the standard lines side and how that affects IFG. In addition, competition influences market conditions. However, Sciol? claims some of the biggest pressure he deals with comes from managing expenses for the IT operation. "There are things we'd love to do, but you have to look at them from a business impact perspective," he says. "When you are in a soft cycle, hard-dollar savings tend to carry a lot more clout than soft-dollar savings."

Insurers also must manage the growing pressure of governance and regulatory compliance. "Right now, compliance seems to be pretty high on the list, especially with SOX going private in 2010 and being applicable to privately held companies of more than $400 million," says Sciol?.

Companies such as the privately held IFG have not needed formal governance processes in the past as much as larger companies, which Sciol? regards as a positive. "One of the advantages for us is agility," he says. "We can make a decision and do something about it. With the added pressure of compliance, we have to have formal processes but not make them so bureaucratic we lose our nimbleness."

Transformation is a huge part of the insurance IT landscape, asserts Sciol?. "When I was starting out, I had a seasoned mentor tell me that every five to seven years you see a new cycle–something that changes things," he says. "We had the dot-bomb where everybody wanted to put up a Web site and have policies bound and issued. Then [carriers] needed a new policy administration system and real-time processing. I'm seeing the shift now going over to governance and compliance."

IFG places great emphasis on training, although Sciol? doesn't feel his staff members get as much as they would like. "When you have a smaller shop, the impact of having several people in a training class is higher than when you are in a larger shop," he indicates.

For his own growth, Sciol? likes to read all the trade publications and attend summits and conferences. "When you go to these [meetings] and network, you get a considerable amount of information," he says. "Formal training, such as financial management or a leadership class at Harvard, is kind of off the board for me. I get a lot of my information from my peer groups and the conferences I attend."

STEVE BOYD

CIO, Arrowhead Insurance

For most technology leaders, problems are a fact of life, but for Steve Boyd in his job at Arrowhead Insurance, problems are something that can be turned into an opportunity.

Arrowhead isn't afraid to take risks in solving its problems, either. When difficult situations arise, Boyd turns to members of his technology staff to share their views on making the operation run more efficiently. "There's a lot of energy in this group," he says. "Plus, we live in San Diego, which makes everything in life a lot easier."

Boyd has been with Arrowhead for 13 years in a variety of different roles. "They've all been technology related, whether they were marketing or underwriting related," he says. "Ease of doing business always has been a core focus of our business, and technology has been a big driver in that. Certainly having some focus there was important."

Boyd asserts his knowledge of Arrowhead's business has been an important factor in his success. "I'll be honest–I don't think we could survive if we didn't have tight alignment," he says. "At least in our environment it's important the CIO has a very strong link back to the business."

Arrowhead recently completed a reorganization plan Boyd believes will better align business with IT. "As Arrowhead has grown, the challenges to run a centralized IS organization have picked up," he says. "It's not that I felt we were doing an inefficient job, but I felt there were some things we could do to improve the process and build better alignment with our business."

What had been lacking, in Boyd's view, was a focus on strategic projects that needed to get done. "[Projects] were all moving forward at an adequate pace but probably not at the pace we need in our environment today," he says. "That was probably the precursor to the [reorganization]."

A new strategic team will be looking at Arrowhead's long-term data needs and examining whether the company's disaster recovery plan is sufficient or should be retooled. Arrowhead also is studying its rating strategy to determine whether it is where it ought to be. "Being a fast-moving company, we've made some acquisitions, and as a result, we have a multitude of systems we've been trying to consolidate," indicates Boyd. "We're hoping to have an enterprise team to lend a little focus to streamlining that process."

One of the things that makes for a great team at Arrowhead, Boyd claims, is the longevity of some of its members. "Ten of the folks on my team have worked with me for 10 years or more," he says. "There's a lot of trust among the team."

A few years ago, Arrowhead decided to look closer at expanding its distribution capabilities, particularly with the advent of Web services. "We recognize there are other portals and distribution channels out there," says Boyd. "We presented our IS team with the business challenge: How do we push out our products to any touch point?"

Using Web services, the company externalized rating and binding services and then the payment processing services. "That's a project we've grown very proud of because it was a great collaboration between business and technology and one we can leverage across multiple lines of business," says Boyd.

Being the CIO at Arrowhead is challenging, according to Boyd. "One thing that keeps my motor running is we have a sharp bunch of people here, both in the technology and the business areas," he says. Although his background isn't as purely technology focused as some of his staff, Boyd definitely isn't fazed. "I'm very clear about what I don't know," he states, "but I certainly know enough to call someone out if something's not legitimate."