2013 Insurance IT All-Stars: Learning from the Past; Excited about the Future

One of them learned technology hundreds of feet underwater in a submarine; another started his own consulting business while still in college. To say the 2013 Insurance IT All-Stars is an eclectic group is no understatement.

This is the seventh edition of the all-stars and this year's group of five insurance IT leaders has made its marks with a variety of companies. We asked them what scares them about the future and also what excites them and one theme was shared by all—technology offers immense challenges for what lies ahead, but also great opportunity not only for themselves, but for the industry as a whole.

The 2013 All-Stars include: Suren Gupta, executive vice president, Allstate Technology and Operations; Peter Settel, senior vice president and CIO of Homesite insurance; David Lawless. executive vice president and chief administrative officer, Magna Carta Companies; Tracey Berg, vice president and CIO, West Bend Mutual Insurance; and Dan Colarusso, senior vice president, operations, and COO, Cypress Insurance.

Suren Gupta

As executive vice president, technology and operations for Allstate Insurance and a member of Allstate's senior leadership team, Suren Gupta explains that his initial career goal was not to be a technologist, but rather to work on the business side. He came to realize, though, that technology is indispensable for business people.

“Tom Wilson (CEO and chairman of Allstate) says it best,” says Gupta. “Everyone's a business person—some happen to know technology more than others.”

Gupta is responsible for enterprise-wide technology strategy, network infrastructure, enterprise applications, and technology-related governance, security, and compliance activities for Allstate. He also directly supports the Allstate Protection president, leading all aspects of Allstate Protection technology, and agency and customer support functions. In addition, Gupta is responsible for the integration of shared service functions.

Gupta has had several mentors throughout his career. On his first job, he was taught the importance of organizing his thoughts and the key concepts he needed to get across when developing and delivering a presentation. As the years passed, Gupta learned the importance of strategy, planning, execution, and operational excellence. He continues to incorporate these lessons today, particularly when assembling the managers who work with him.

 “We need leaders that are focused on customer needs while empowering their employees and continually improving,” he says. “All of that is balanced with accountability. It's critical that we deliver the capabilities our customers desire and support our employees so they can deliver their best work. I look for leaders who will take personal responsibility for ensuring these things happen.”

Gupta joined Allstate in 2011, bringing leadership, information technology, operations, and sales experience to the insurer. Since then, he has been instrumental in enhancing delivery capabilities and focusing on innovation. He also has deployed a three-year plan and roadmap, ensuring a clear technology and operations direction that accounts for trends in the industry and facilitates long-term decision-making.

“What I'm most proud of is bringing technology and operations closer to the business,” he says. “It used to be that the business areas told technology and operations what they needed and we delivered it.  But now, with the importance of technology in all industries, we've adopted a balanced approach, incorporating both strategy driven by the business and strategy driven by technology. That enables us to bring technology solutions to the business that will drive innovative support of our customers.”

Nothing really surprises Gupta when it comes to technology anymore.

“History tells us that technology will continually evolve and people will dream up new ideas that will revolutionize the industry,” he says. “We›re at a time where something amazing is always right around the corner.  The key is staying up to speed on the new advances and even the early thinking to be ready to capitalize on the opportunity and deliver for your customers.”

Staying open to new ideas is why Gupta believes carriers such as Allstate have placed such great emphasis on technology.

“As an information and data company, technology is at the center of how we service our customer—determine ratings, conduct underwriting activities, and provide access through mobile and the Internet,” he says. “Allstate greatly values technology and its capabilities.”

Being open is also why Gupta doesn't worry about the future.

“I see many more opportunities in front of us,” he says. “If we focus on protecting customers and their assets by utilizing the most current technology capabilities, we'll continue to add the value they've come to expect from us.”

Gupta is excited about the future because he feels the evolution of technology will continue to showcase amazing ways companies can help customers stay safe, healthy, and financially stable.  

“We're already doing that for our auto customers with the DriveWise product; this device provides customers information about their driving, giving them the opportunity for bigger discounts with improved driving habits,” he says.

Peter Settel

Peter Settel doesn't believe there's been a time since the Internet first hit its stride where we've witnessed so much technology innovation and opportunity moving in so many directions simultaneously.

“When you had the dot-com movement there were incredible changes in so many directions so quickly,” says Settel, senior vice president and CIO of Homesite Insurance. “It's different now, but you are seeing the phenomenon of amazing and important things happening simultaneously and in many different directions. You need to be close to the action because just as the dot-com era rose and then descended, nobody can ignore the lasting impact of the Internet. This is an important time and some amazing things will pop up. You will want to be very close to that action. It's a pretty amazing time right now.

Still, Settel knows there are limits to how quickly things are going to change even if the technology is in place and if there is a rationale for using that technology. For insurance companies, that involves the ability to handle massive volumes of data and then being able to make use of that data for product, pricing or improved customer experience.

“There are limits to how quickly you can produce change within an organization,” says Settel. “Technology can enable you to move at a quicker pace, but it is our ability to use that appropriately, effectively, and safely that will be the constraint. There may also be regulatory constraints as well. While we are at a time of amazing opportunity and change, we want to make sure we are working in a proven manner and mindful this is all new. We don't want to do things that will create more risk.”

In Homesite's early stages as a start-up company, Settel was interested in putting together a staff with strong technical skills, passion, a level of creativity, and problem solving.

“To me that was a key to growing quickly and building a strong organization,” he says. “That has to be at the nucleus.”

But Settel also contends strong management is needed to build a fully-formed organization where people can be successful.

“If there is just a bunch of hard chargers, it's hard to build an organization,” he says. “We have a team structure where people can come in and be successful.”

Homesite's plan was to grow quickly, so Settel and his IT staff set out to take three steps to establish the back office—automate, outsource, and simplify.

“We didn't want to be burdened by outgrowing the back office, which becomes very labor-intensive and a strain on middle and senior management,” he says. “You want to focus on other things. We started from nothing and built out a back office infrastructure with in-house technologies, integration between packaged software, and working closely with BPO partners based on how they fit within the infrastructure.”

Homesite continues to leverage that strategy to achieve a cost advantage within the industry.

“We would not have been able to grow as quickly as we did if we didn't go down that path,” says Settel. “It became a pretty exciting project. Early on, when we built out our full web quote-bind-issue capability, we were first in the industry for homeowners insurance.”

Being able to start out without a legacy system was a huge advantage for Homesite and the company placed its bets on the Internet becoming a significant part of the insurance business.

“In 2001 we started writing through that system and by 2005-07 as the Internet exploded for personal lines, we were positioned to have the basic capabilities to grow in that channel,” says Settel. “All the time we are improving, but the basic logical architecture hasn't changed in the decade-plus since we laid it out.”

Settel believes legacy systems have held back many insurance carriers from doing some of the things modern technology has made possible.

“In personal lines, companies are in unison saying they have to have the technology to support the requirements of the consumer in that channel, they have to be multi-channel, they have to have time to market, and they have to have great customer experience imbedded in their systems,” he says. “If you want to get all of the advantages of multi-channel distribution and direct to consumer, you have to be willing to make the investments.”

Settel also believes the personnel talent in the industry is great, whether it be in marketing, actuarial departments, or analytics.

“That environment has translated into pretty good technology,” he says. “I'm pretty bullish on insurance being seen not as a technology laggard compared to other industries, but as an industry hitting its stride and starting to see the need for seamless integration between the user experience and marketing as a competitive advantage. When you look at the auto insurance industry you can see the dividing line between companies that embraced that and companies that have not.”

One of the most exciting thing about the future for Settel is creating customer experience that is substantially better than anything the industry has seen in the past.

“Customers are going to judge us not based on who is the best insurance company or who creates the best experience, but if customers are working with Google products, or Apple products, or Amazon products. They are going to look at which companies are creating the best customer experience overall,” he says.

Settel believes the power is shifting to the consumer, but he also acknowledges the industry is in a position to create fantastic customer experiences, whether it is in sales, how customers pay their bill or how a claim is settled.

“As that power shifts to the consumer and their ability to select the companies they want to work with, I think [insurers] will benefit,” he says. “As you take the intermediary out and work directly with the consumer, you have to imbed into the technology, not just a fantastic customer experience, but the pricing sophistication and granularity in your pricing plan and the controls in place to put that out directly to the consumer and expect to get the result that you want.”

Settel is particularly mindful of the importance of enterprise architecture to support business agility, and the need to view mobile as a new channel—not a replacement to an existing channel and not as a copy-and-paste opportunity to simply re-use technology and business processes with some new requirements. 

“In our view, the copy-and-paste approach is often tempting but not a path to success,” he says. “It was not a path to success as companies moved (and still move) to online sales and service. The challenges related to ensuring data accuracy, maximizing pricing sophistication, optimizing expense advantage while meeting extremely complicated customer expectations as so much power shifts to the consumer are magnified with mobile.  We're excited by the opportunity to be leaders in creating mobile solutions, but we also fully recognize the need for significantly new investments not only within IT but also broadly within the organization.” 

David Lawless

In all the jobs that David Lawless has held in his life—from being a contract employee working on IBM systems to his current job as chief administrative officer for Magna Carta Companies—one thing among them all remains in common: He likes to improve efficiency and quality by developing a business and technology strategy with his team.

“I've done a lot of different things, which has been interesting for me, but I most enjoy solving problems,” he says.

For Lawless, problem solving involves understanding the basic nature of each business goal and coming up with the best solution to improve operations. That is what he expects of his employees as well.

“I look for people that are self-motivated and self-directed,” he says. “The last thing I want to do with an IT staff is to tell them, 'This is what you need to do and this is how you need to do it.' We work in a collaborative way and if you are coming to me with a problem and have no answers, you are just delegating up. If you want to work for me you should come to me with an array of possible solutions, so together we can work to reach the best result. We enjoy very little turnover here at Magna Carta. I believe one of the reasons is that my people feel very independent and they have the ability to operate within their sphere of influence.”

Lawless feels this management style brings out the best of his IT team.

“I've had the opportunity to work with some of the same people for about 20 years and we are a pretty tight group,” he says. “We support each other. Two people that I was with at IBM are still with me today. They are really terrific guys and I'm glad to know them professionally as well as socially.”

Lawless shares credit for all projects that have been implemented under his supervision with other senior staff who actively work with him to achieve corporate objectives. The projects that have made him the happiest are the ones that are implemented quickly.

“What makes a project successful is how much it positively impacts the organization,” he says. “That's the fun part. Is the organization better off at the end of the day? I like projects that really take the company to the next level of productivity.”

One way that Lawless has helped Magna Carta reach that next level has been through automation. When he arrived at Magna Carta in 1994, there were approximately 600 employees; today there are fewer than 180.

“We have reduced the number of people it takes to run the company,” he says. “We continue to get more efficient as we move along the technology curve because of what I call 'good bosses' and their willingness to not settle for second best. The technology that comes alongside that attitude has helped us to enjoy efficiencies and to better compete within the marketplace.”

He believes the industry is returning to the centralized computing that was the rage in the 1970s and 1980s with mainframe computing.

“The pendulum is swinging back to centralized computing, particularly with sever virtualization, desktop virtualization and now phone-system virtualization,” he says. “We've gotten the opportunity to deploy those technologies here at Magna Carta.”

Lawless explains that if anyone was asking him for his advice on how to structure the base technology for a company, he would tell them to get rid of all paper.

“Imaging accompanying electronic workflow allows management to distribute work to available resources no matter where they are and provides a real-time view of operations,” he says.

Magna Carta is big in what Lawless calls outside resources.

“Take something as simple as print mail,” he says. “Twenty years ago, people outsourcing print mail were ahead of the curve. Today, insurers wouldn't think twice about outsourcing their policy print and mail operations because there is an expertise with vendors who do this all day long, everyday. With virtualization, or cloud-based services, we are, in effect, outsourcing the machines themselves.”

While some are defensive about how the insurance industry is perceived by technologists from the outside, Lawless tends to agree with those that believe insurance was and is behind the times in the use of technology.

“The insurance industry still has [a bad rap] and it deserves it,” he says. “While some of the point-solution software is very good, there are no ideal all-in-one solutions out there, no matter what the vendors say. From a software perspective, it is very difficult and expensive to build a single solution to run an insurance company. Everyone struggles with the technology they have or the technology they are trying to put in.”

Lawless explains he used to worry about how automation was accepted among his employees because technology was a new concept for many of them. Those worries have changed as technology has become ubiquitous in everyday living.

“Ten years ago, the work force was technology-deficient and had no interest in technology,” he says. “With the advent of social media, people are using technology more. Smartphones are a part of our daily lives. This translates to not only a better acceptance of technology in the workplace, but a demand for it.”

Lawless believes over the next 10 years he and his IT staff must work even harder to stay ahead of the technology curve. He maintains the focus of the insurance industry will shift from processing to analytics.

“Insurance companies are going to be drastically more efficient than they are today and that is exciting,” he says. “I think here at Magna Carta we have enjoyed being ahead of the curve and while it is nice to be on the leading edge, other companies are going to start using alternate resources, whether it is outside labor resources or specialized services, where they start picking and choosing aspects of the company and begin outsourcing. I think you will see insurers become more efficient in that way.”

That efficiency is certainly greater than when Lawless joined Magna Carta.

“I thought I was only going to be here for six months for some quick improvements,” he says. “My team and I kid around that we are just finishing up our first assignment after 20 years.”

Tracey Berg

No one, not even an Insurance IT All-Star, gets to where they are without a little help. West Bend Mutual Insurance CIO Tracey Berg spent her college years and her early career in IT shops learning technology, but it was when she switched to the management side that she found the key component that would make her a successful leader.

“It was about nine years ago when I shifted from a technical role into a leadership role,” she says. “About a year into that, I had a boss—Scott Martin of Assurant—who I consider one of my best mentors. He told me that I need to be as excited about seeing somebody else's career grow as I am about seeing a technology effort completed. That was an 'aha moment' for me.”

Berg believes that as a manager of talent the focus should be on coaching and developing others as opposed to strictly delivering results.

“That sticks out in my mind because it is a fairly typical story in the IT career path where people think they want to strive for management, but don't associate that such a switch really changes your job completely,” she says. “I try to coach people now before they make that decision.”

Berg moved into the insurance field in 1999, but still thought of herself as a tech person more than someone with deep insight into the business.

“Over time, I've built up some insurance knowledge and paired it with technology knowledge,” she says. “I don' know when I decided that insurance was where I wanted to stay, but being knowledgeable of the business side and the technology side put me in a good position as the CIO. Having knowledge of both sides is important in this role.”

One thing Berg liked about the insurance industry is there are plenty of educational opportunities available.

“There is so much formalized education available in the insurance industry,” she says. “That isn't necessarily true in other industries. There is so much opportunity to learn. It's really in your own hands if you choose to invest your time.”

As far as selecting those on her IT team, Berg feels the foundational traits—high ethics, integrity, work ethic—are non-negotiable.

Leaders also should have some knowledge of the area they are leading, but she points out that if someone is going to lead an area within IT, they don't need to be a master of that domain, but they need to know enough to understand what direction is neing aimed for in that area.

Beyond those fundamentals, Berg believes good managers have to be problem solvers with the ability to navigate a complex problem, figure out their own way around the possible barriers, and be creative with their solutions. Another important skill is flexibility.

“Our world changes constantly,” she says. “If that's not something a leader can thrive under, that person is not going to be happy.”

The ability to manage multiple tasks simultaneously is also invaluable.

“You are going to have a million balls in the air and you have to figure out which ones you are going to allow to hit the ground,” Berg says.

“Relationships and great customer service are also important,” she adds. “The ability to build strong relationships and deliver great customer service is a must-have. They also have to have the ability to articulate a problem, explain what it is, and what they have on their mind. That's my high-level list.”

Those talents are currently on display as West Bend is in the midst of installing a new policy administration system and enterprise data warehouse.

“We put a lot of thought into this project,” says Berg. “We conducted a formalized business case highlighting the business value we will receive and we performed a lot of upfront planning on how we are going to get that accomplished.”

Berg credits the dedication and commitment of the West Bend team and the leadership of the sponsor team, as well as implementation partner PwC and software partner Accenture with the project's success to date.

“We're not live yet, but we are very much on time and on budget,” she says. “All three groups have done amazing work. It's great to be able to put those things in play that you know are the right way to get things done and stick to it.”

What excites Berg about technology today is the shift to placing tools directly in the hands of the business community. For example, she points to one of the business world's hottest trends, Bring Your Own Device.

“We'll have a day where people can pick what device they want to work on,” says Berg. “The whole tablet world is taking off and what I find interesting is that each person seems to use tablets in a different way.”

In the past, how the technology was used was never an option.

“We would tell people, 'Here is the technology we are rolling out and here is how you will use it.' Today there is more flexibility in the hands of people outside of IT to enable certain capabilities,” she says. “Mobile is changing so much as is the whole Big Data realm. We are shifting quite a bit from IT being a barrier to IT being an enabler. That is exciting for IT associates to see that value.”

Whether the insurance industry deserves its bad rap for lagging behind other fields when it comes to technology depends on your perspective, points out Berg.

In college, she admits she didn't think about career opportunities in insurance, but as technology people begin their careers it becomes more about the opportunity than the industry.

“From a technology perspective, [insurance carriers] are talking about exciting things and the most current trends,” says Berg. “We're looking at mobile, Big Data, SaaS. I think there is a perception that we move slowly, but we are starting to break through the barriers because insurance companies are shifting that reality. Insurers are undergoing some significant technology transformation and I think we are bringing our industry more current as a result.”

Part of the shift, explains Berg, is the newer perspective that technology is more of an exciting enabler than a necessary evil.

“There is so much of the new technology that puts power in the hands of the organization as a whole rather than getting IT to do the work they need,” she says. “When people are excited about the technology coming to bear, it makes it a more exciting organization to be involved with.”

Berg continues to worry about the future, particularly finding the skills needed to meet changing needs.

“It will become increasingly challenging to hire people in some areas. For example, the needs in the data warehouse and analytics areas are growing so fast. I don't know how the industry is going to get enough people trained to accelerate those skills,” she says. “We've had better luck this year, but it is difficult to recruit and I don't see it getting easier.”

Dan Colarusso

Technology is a key element of the insurance enterprise and Dan Colarusso, senior vice president, operations, and CIO for Cypress Insurance, believes it allows carriers to achieve greater efficiencies, greater levels of service, and more customer service.

“We can do a number of things that heretofore were difficult, but technology advancements will give us greater opportunities going forward,” he says.

One area of technology that caught Colarusso by surprise in recent years has been the impact social media has on the business community.

“Clearly, mobility access is no big surprise, but the whole social activity surrounding the business today—whether it be Twitter or Facebook—is becoming quite interesting from my perspective and I'm a little bit surprised by it, to tell you the truth,” he says.

As far as the insurance industry's standing within the technology universe, Colarusso points out that the nature of insurance is risk management, so it should not come as any surprise that insurance IT departments tends to lag behind those of other industries.

“[Insurers] want to make sure the technology they are going to employ gives them the benefits and the stability they are going to need to meet their business objectives,” he says.

One of the things insurers are dealing with now is the number of legacy systems, many of whivch are COBOL-driven.

“There aren't a lot of folks that want to be COBOL programmers today,” says Colarusso. “That is a risk and it is driving companies to adopt new technology for policy ­administration systems. In 2014–15, I believe there will be a large number of ­companies moving from the legacy systems to newer client/server based systems.”

Colarusso maintains insurers need to put our arms around what mobile technology can do for the industry.

“I know there are a lot of mobile apps and lot of potential for their use so that is one area we have to give some real thought as to the type of technology, how it is implemented, and the benefits that will be derived,” he says. “By putting mobile apps in the hands of insurers in claims situations, that will enable us to give them the service they certainly deserve from us.”

Early mobile apps have been built largely by insurance IT departments, but Colarusso hopes that changes to vendor-supplied technology.

“One of the things we really need to make sure of is that we as insurance companies focus on our core—providing policy and claims coverage for our insureds,” he says. “Having to create things distracts us. I'm not sure there is a benefit there for us. I'd rather buy than build.”

In April 2011, Cypress was completely outsourced in its technology operations, thanks to a BPO agreement with CSC. The company was not satisfied with the high costs of maintaining those legacy systems through manual interfaces and duplicate processing among some of the other issues.

“It was difficult to achieve the objective of capturing new business,” said Colarusso. “Platform changes were time consuming.”

Cypress made the decision to insource the technology activities that previously had been performed by CSC, including policy administration, billing, commissions, claims, finances, and data storage and reporting. The insurer went to the vendor market and selected MajescoMastek as its policy administration system provider; Great Plains as the general ledger system; CSC's advanced claims system; and CSSI to access data and put that data out to the individual users' desktop.

“It's been a complete transformation,” says Colarusso. “When we did the breakdown there were approximately 50 people from CSC supporting our account (prior to the insourcing). We've been able to reduce that by 50 percent, so we added 25 new individuals to the company, primarily in the insurance operations space. It's been a large-scale project that has touched everybody in the corporation.”

One of Colarusso's earlier positions was CIO for Mass Mutual's broker/dealer network—MML Investor Services. The CEO there, Ken Rickson, explained to Colarusso that the company had $3 billion in assets under management and Rickson felt they needed to automate the systems as much as possible to maintain the business, provide more service to clients, and to respond to regulators.

“[Rickson's] objective, as substantiated by the chief legal officer, was to put in as much automation as we possibly could,” says Colarusso. “He said this was critical to the success of the business and he gave me the wherewithal and the funding and we were able to create some exciting applications in a short period of time.”

One application allowed MML to onboard the agents and license them. The company had more than 5,200 agents and on average they each carried 10 licenses for the various jurisdictions where their trades took place.

“That was a tremendous amount of licenses that had to be adjudicated from the first of October to the first of January,” says Colarusso.

MML was responsible for the agent licenses so the company would receive an invoice for over $1 million dollars in licenses.

“We would write a check for them, go ahead and license (the agents), and then get the money,” says Colarusso. “It put us in a precarious position because we became bill collectors. We created an e-commerce site that allowed us to issue the license to an agent in less than four hours while the industry average was close to 30 days. We built that application in 13 weeks.”

In building his staff at Cypress, Colarusso looks for people that are creative, innovative, think differently, and “turn the cube from a standard axis.” Team leaders also need excellent communication skills, teamwork, and the ability to focus on objectives, he adds.

“I'm a true believer that IT is here for the business and the business is not here for IT,” he says. “It is our responsibility to enable the business to achieve their objectives. If we do that, we obviously achieve our objectives as well.”

The technology and the advancements Colarusso has witnessed in such a short period of time are going to continue. He feels there is a great opportunity to take those technologies and provide better service and quicker decision-making by corporations.

“Some years ago, if you used the term data warehouse they would wonder what you were talking about,” he says. “Now we are talking about Big Data, BI, and the tools to manage the business,. As we see other tools emerge from that, we will be able to take advantage of them. We see expansion of those technologies all over the place.”