8 Insurance Technology Leaders Who Are Changing the Game Insurance Technologys Elite CIO

1 Part Preparation, 2 Parts Innovation: CIOsare driving growth strategies with innovative,real-time solutions. .....................................................2

The Executives:

Kathy Owen, Unum ...........................................................4

Ron Boyd, Midwest Family Mutual.................................6

Jay Levine, BCBS of Minnesota .....................................8

Peter Atwater, Guardian Life.........................................10

Richard Connell, Selective Insurance.........................12

Mark Showers, RGA Reinsurance ...............................14

Kelly Hall, Kentucky Farm Bureau ...............................16

Greg Schwartz, USAA ....................................................18

December 2010

I&T’s 2010 Elite 8 insurancetechnology leaders are improv-ing the customer experienceand driving technology strate-gies that support growth — allwhile keeping costs in check.

With growth back on the agenda, CIOs increasingly are beingcharged with driving technology strategies that prepare theirfirms for the future and with developing innovative solutions toimprove the customer experience. Insurance & Technology’s2010 Elite 8 honorees are some of the most effective and innovative senior technology executives in the insurance industry. Developments that might frustrate or discouragesome executives — including the new emphasis on a personalized, interactive and real-time customer experience;the expansion of distribution channels; new security threats;and more complex regulation — clearly are inspiring our Classof 2010. Whether they are engaged in testing new ways to sup-port complex transactions, developing innovative yet reliablechannels for driving growth, or simply getting more out of ITbudget dollars, the executives profiled in this report represent apositive and encouraging trend in insurance IT management.

IN THIS REPORT

8 INSURANCETECHNOLOGYLEADERS WHOARE CHANGINGTHE GAME:INSURANCE &TECHNOLOGY’SELITE CIOSREPORT 2010

powered by

“Most companies have a sense of having gottenthrough the worst of it,” says Matthew Josefowicz,director of insurance at consultancy Novarica.“[Companies] know where the bottom is — it’s notgoing to get any worse — and [are planning to] go outand steal share from people who are not as prepared.”

According to Josefowicz, various industry sectorsface different realities as the dust settles. The P&Cside, he says, is being “hammered” by price pressureand competition. Meanwhile, life companies face apublic that is more averse to investing than everbefore. “Some life companies are seeing this as anopportunity to take share from older companies thatcan’t adapt,” Josefowicz notes.

Catalyst for ChangeIn this recovering market, insurance carriers increas-ingly are looking to their CIOs to provide more strategic leadership and keep costs down while

encouraging growth, asserts Jamie Yoder, managingdirector of the insurance practice at DiamondManagement & Technology Consultants. “There’smore of an emphasis on the CIO as the innovativedriver. Carriers are looking for people who can get alot out of IT efficiency and effectiveness — and drivemore growth of the business,” he says, adding thatinsurers are looking for CIOs who understand con-sumers’ service expectations and preferences.

“Customers are using information and technolo-gy very differently,” Yoder explains. “There are dif-ferences in buying behavior and delivery, as well ashow products and services are found. The CIO ...[has] to see across the organization and balancethose things.”

Balancing the need to evolve carriers’ existinginfrastructures to meet these new demands with theneed to develop innovative solutions, however, canbe difficult for CIOs, according to Yoder. “They’re

1 Part Preparation,

2 Parts InnovationAfter two years wandering the desert of financial malaise,insurance carriers are looking to their CIOs to drive strategiesthat prepare them to grow in a consumer environment thatincreasingly demands innovative, real-time solutions.

� By Nathan Golia �

FTER NEARLY TWO YEARS, prognosticators are beginning to declare that the economicclouds that have covered the insurance business — and just about every other industryvertical — are clearing. Despite the fact that the country continues to struggle with per-sistent unemployment, most observers believe a tepid economic recovery is under way.

ELITE 8 2010

A

Copyright 2010 United Business Media. Please note: This PDF is provided solely as a reader service. It is not intended for reproduction or public distribution. For article reprints, e-prints and permissions please contact: Wright’s Media, 1-877-652-5295, [email protected].

trying to build out of a very sizable legacy environ-ment. If they’re having to spend so much time build-ing the efficiency and getting the tech environmentsup to pace, they’ll lose out on being a key agent interms of driving the business design changes that arehappening,” he explains.

“You can’t be seen as a barrier to the innovation;you have to be a catalyst,” Yoder continues. “Howhave you helped move it more quickly?”

One way effective CIOs are promoting innovation isby applying emerging channels to foster enterprise col-laboration, according to Karen Pauli, research directorfor insurance at TowerGroup. By leveraging social mediaand mobility strategies, workers can quickly spread bestpractices across lines of business and office locationsto improve all aspects of the enterprise, she indicates.

“When I worked for carriers, I led IT developmentprojects by putting together a task force, and it was athree-week process just to get that together. You can’tconduct business that way anymore,” Pauli explains.“It’s got to be real time. When you have a great idea at3 a.m. and you want to share it, you can put that outthere to whatever communities you’ve developed, andby morning you’ve got people giving you ideas on howto deal with it.”

Next-Generation CollaborationAnd by getting out ahead of the curve with collabora-tion technologies, Pauli adds, CIOs can preventheadaches down the road — after all, generationalturnover is only going to encourage more collaborationin this way, she says. “If you’re going to bring in work-ers under the age of 30, that’s how they think,” Pauliexplains. “It’s better to set it up internally versus lettingeverybody create offline, unsanctioned communities— which they will naturally do.”

The growing use of collaborative technologies in theenterprise represents a larger trend, according to Pauli:Good CIOs increasingly are taking their cues from theconsumer world, which is influencing the insurance busi-ness in more ways than just marketing, she contends.

“That’s very uncomfortable for carriers,” Pauli admits. “Carriers have got to start employing analytics to

assess what’s happening out there in the consumerworld so you’re able to sift through multiple sites andareas of information and aggregate it so you canchange your business processes,” she continues. “It’snot just marketing; it’s about product and price.”

Silver Lining at the CoreWhile insurance carriers finally are looking toward thefuture as they emerge from the recession, many vendorsalready were looking forward during the difficult times.An underreported consequence of the economic down-turn, according to Craig Weber, SVP of the insurancepractice at Celent, is that vendors were able to focusinward on research and development of new solutions.

Tech providers have had the time to respond to con-cerns from CIOs, especially in terms of out-of-the-boxfunctionality, Weber relates. As a result, CIOs now aremore confident that they can update their core systemsand are increasing spending in those areas.

“There was definitely, overall, a slight hesitation inthe market” to upgrade core systems, Weber says. “Wespent a couple years in a holding pattern, and thatwasn’t such a bad thing, actually. Now that insurersare back in the spending mode, the amount of choiceout there is very good, and that bodes well for the suc-cess of these projects.”

But it’s not just about being armed with a budgetincrease and grabbing solutions off the shelf, Webercautions. Effective CIOs need to blend vision witheffective delivery, he notes, stressing that it’s not justabout having a single, huge idea — as long as you arevery effective at implementing your small ideas. In agrowth environment, especially after a major down-turn, companies and employees are looking to theirCIOs to demonstrate leadership above all else.

“When you walk into someplace where an Elite 8 CIOis doing their thing, there’s a level of excitement and pas-sion for effective use of technology,” Weber acknowl-edges. “That’s how you recognize a job well done.” �

Dueling RolesIs the CIO’s job to wring efficiencies out of processes or to drive business innovation? Both, according

to Jamie Yoder, managing director of Diamond Management & Technology Consultants’ insurance practice.At first glance, Diamond’s third annual Digital IQ study (which surveyed 724 senior business and IT exec-

utives, including 47 from the insurance industry) might be troubling to senior IT executives. Seventy-fivepercent of survey respondents said they believe the CIO’s primary role is to “improve business processes”or “improve IT,” rather than “create new products and services,” “reach customers” or “improve customerservice.” The study also found that a significant portion of the IT budget — 30 percent or more — was notunder the CIO’s control at more than half of the surveyed companies.

But that doesn’t tell the whole story, insists Yoder, who points to another survey finding: More than halfof the respondents said they look to their CIOs to be innovative thinkers who can apply creative solutions.“It’s not so much that companies aren’t looking to their CIO to manage some of the basic value of IT; theyalso expect them to be more of a futurist and a strategist,” Yoder explains.

“The role can shift between being a strategist to being an operator,” he adds. “But people are looking forleadership right now to drive through the changes that are coming.” —N.G.

December 2010 © 2010 Insurance & Technology, Reproduction Prohibited Page 3

Managing ThroughChangeEn route to becoming Unum’s Global CIO, Kathy

Owen has overseen game-changing technologyimprovements through several M&As.

� By Anthony O’Donnell �

EFLECTING ON A CAREER that began when she joined Unum(Chattanooga, Tenn.) predecessor Provident Companies in 1975 right outof college, Kathy Owen concludes that the best preparation for seniorleadership has been the opportunity to manage large-scale change. Ifthat’s true, she was fortunate in her choice of employer.

During the course of Owen’s career, the company has gone through many mergers andacquisitions. M&A activity peaked in the 1990s, during which Provident acquired the groupmedical and dental business of Healthsource, only to sell it to CIGNA (Philadelphia) twoyears later; purchased independent subsidiary GENEX; and completed the acquisition ofPaul Revere Life Insurance Co. in Worcester, Mass. Then, in 1999, Provident Companiesmerged with Portland, Maine-based Unum to form Unum Provident. After the company’srebranding as Unum Group (more than $10 billion in 2009 revenue) in 2007, Owen wasnamed CIO of U.S. operations. She became CIO of the carrier’s newly minted Global BusinessTechnology (GBT) organization in August 2010, making Owen IT head not only of UnumU.S. but of the carrier’s enterprise operations, including Colonial Life and Unum U.K. Owen says her early days as a programmer at Provident were characterized by incredulity

that someone would pay her for having so much fun. “Of course, that appeal wears off andsomething has to really draw you in,” she admits. For Owen that hook was a large fieldautomation project that, when it was undertaken in the early 1980s, was one of the first of itskind. “It was new technology and gave me a chance to see first-hand how technology couldtransform a particular business operation,” she relates. “It was an opportunity to be directlyengaged at the point of sale and to understand what went into bringing business in-house.” A few years later Owen faced the challenge of taking responsibility for a legacy policy

administration replacement initiative. “That taught me ... how important it is to havealignment with all the stakeholders and how actively change has to be planned and man-aged,” she says. “It was a defining moment for me.” Owen also points to her M&A experience as shaping her managerial acumen. “With a

stroke of a pen, you have lost all your organizational presence; you ... have to requalify yourself,”she says. “Information is scarce, ambiguity is abundant and there are extremely high expecta-tions. Such times show the importance of personal resilience and decisive leadership.”Owen gleans another big lesson from the dot-com era, during which demand for IT pro-

fessionals was high. “We had had very low attrition rates, and they increased exponentially,”Owen recalls. “That taught me that you can never take anything for granted, and it reinforced

ELITE 8 2010

R


that technology leaders have to make an investment inworkforce strategies to ensure that we have the rightlevel of employee engagement.”

Strength in DiversityCommunication and collaboration characterize Owen’sapproach to leadership and engaging IT professionals.She is a proponent of teamwork that emphasizesstrength in diversity of talent and opinion. “You haveto know your own limitations and tap into others’ abil-ities to compensate for weakness in any area,” shecounsels. “It’s also exciting ... where team memberscan see and make use of each other’s strengths.”That kind of teamwork came together on a grand

scale with the development of Simply Unum, the com-pany’s integrated product and service platform, whichlaunched in August 2007. “It was an example of unitinglarge numbers of people around one very specific goaland blending new technology with existing technologyto accomplish something we’d never done before,” Owensays. “This was the initiative where I saw all of the com-ponent parts come together in the most successful way.” The success of Simply Unum has led to its expand-

ed use across the enterprise, Owen reports. “We havecontinued to build on the platform and added otherproducts, including an enhanced disability offeringthat will enable more flexible funding mechanisms foremployers,” she says. Next for Simply Unum is what Owen calls the signif-

icant extension of the platform to the U.K. market. Inthis respect, Unum’s new GBT is aligned with the com-pany’s growth trajectory. “It’s a logical evolution, and onevery much aligned with corporate objectives to leveragethe intellectual capital and technology capabilities as best

we can to help the entire corporation,” Owen explains.The GBT provides a tight organizational context for

uniting aspects of Unum’s enterprise technology capa-bilities, according to Owen. “It brought together all ofthe business functions that supported delivery and gaveus a great deal more business knowledge,” she says. “Ithas helped us think about how best to deliver what weneed to from a more global perspective.” Unum has isolated all of its production and main-

tenance activities within one group, resulting in a 50percent increase in system availability in summer 2010,Owen reports. A decline in production issues in turnled to an increase in productivity of more than 10 per-cent. Owen says the IT organization now operates ona ratio of 60/40 development to maintenance. “Theresulting reduction of spend on maintenance allowsus to reinvest into capability development,” she notes. That reinvestment is reflected in work undertaken

at Unum’s Carlow, Ireland, development facility, whichwas established in February 2008. “We opened up thatfacility as a contingency to workforce challenges wesee down the road,” Owen explains, adding that Unumplans to grow the facility, which now has 60 employ-ees, over the next five years.The Carlow development center also has a leading

role in Unum’s new Innovation Center. Formallylaunched in 2010, the Innovation Center serves as acatalyst for transformational opportunities, helpinglink business planning and development to IT strate-gies, according to Owen. “It’s another way we’re pro-viding a path for innovation that aligns with wherethe business is trying to go,” she says. �

Size Of iT ORgAnizATiOn: 1,500 full-timeequivalents.iT BuDgeT: Approximately $300 million.CAReeR: Owen Joined Unum predecessorProvident Companies in 1975 as a programmer.She has held numerous leadership positions in theorganization, including SVP of IT BusinessApplications, and became SVP and CIO in 2007.Owen also was named head of Unum’s GlobalBusiness Technology organization in August 2010.eDuCATiOn: B.S. in Biology from TennesseeTech University.HOBBieS/PASTimeS: Travel, reading, cross-word puzzles, home improvement and knitting.

KATHY OWENUnumSVP and Global CIO

“You have to know your own limitationsand tap into others’ abilities to compen-sate for weakness in any area.”


Elite 8 2010

Where the Buck StopsMidwest Family Mutual CEO Ron Boyd has grabbed the reinsof the P&C carrier’s IT strategy, creating a future-focused,innovative organization with a heavy cloud presence.

S CEO OF REGIONAL P&C insurer Midwest Family Mutual, Ron Boydtakes a hands-on approach to developing the company’s technologystrategy. According to Boyd, this demands adept management of thecompany’s resources, which in turn requires a view of the broader insur-ance and technology markets.“We have to wear a lot of hats,” Boyd says. “I’m a good [technology] user and a good

listener. I know what can work and what can’t work in an organization, and we’re largeenough risk takers that we’re willing to try stuff.”In fact, Boyd, a longtime client of Montreal-based CGI, recently led Plymouth, Minn.-

based Midwest Family Mutual ($80 million in 2009 revenue) through the implementationof the IT services firm’s Edge product, a web-based policy and claims suite, as a betaclient. Noting that the carrier went live on Edge in December 2009, Boyd stresses thatthe new system has vastly enhanced the carrier’s relationship with its agents. “We’re strictly an independent agency company; we don’t do any marketing directly

to customers,” he explains, acknowledging that the company’s agents probably didn’thave a high opinion of Midwest Family Mutual’s website before the Edge implementation.For example, the insurer could not endorse new business online, according to Boyd.“The key to the technology that we have right now is that our agents and our employeesare on the same system,” he adds. “There’s no different view.”Given the economic crisis that

raged during the time MidwestFamily was conducting the imple-mentation, Boyd says, he is par-ticularly proud to have rolled outthe new system, and he expectsthe company to reap rewardsfrom the deployment soon. “We knew we needed to do this — it’s for the long term,” hecomments. “If we hadn’t gone through this downturn in the past two years, I’m convincedwe’d be up $7 million or $8 million more in premium rather than flat or no growth.”But Boyd shares credit for the decision to pursue the new platform. He says he often

consults with department heads, including those for underwriting, marketing and account-ing, for decisions both related and not related to technology. Technology decisions arehanded over to an IT director, who works with a staff of six, for implementation.

“I’m a buy-versus-build-type guy,” Boyd notes. “We’re not large enough that we candevelop the software we bought from CGI off the shelf. [Buying] provides much more valueon a much faster timetable than we could develop on our own.” (continued on next page)


“I’m a good [technology] user and agood listener. I know what can work andwhat can’t work in an organization.”

A


Midwest Family had previously leveraged the CGIrelationship from an earlier implementation to deploythe vendor’s INSideOUT policy and claims system in2001, using Ft. Lauderdale, Fla.-based Citrix Systemsto access the platform remotely, Boyd relates. (Thenew CGI platform eliminates the need to log in viaCitrix, he notes.) The goal of the initial INSideOUTdeployment was to move the carrier to a more cloud-based environment, with less staff located at a smallerheadquarters. The move earned Midwest Family acco-lades — and Boyd a slot as one of Insurance &Technology’s Tech-Savvy CEOs in 2008 — and contin-ues to pay dividends, both in terms of environmentalfriendliness and employee productivity.“We see our office as located more in the cloud

rather than in Plymouth,” Boyd says. “There are somepluses of collaboration that you get in that office envi-ronment, and you can miss that. But you have to beintentional about using the tools that are out there, like

GoToMeeting [Citrix], VOIP and instant messaging.”Robust collaboration enabled by technology, there-

fore, is a hallmark of Midwest Family, adds Boyd, whonotes that Edge features instant messaging capabilities.In addition, Boyd says, social networking tools havehelped the company keep its agents up to date on newproduct developments. “We’re doing much more withour agents so they know what the hot deals are, wherethe product development is coming from, where thenext opportunity is from a sales perspective,” he says.“But with the ultimate customer, we’re not doing enoughof that, and that’s probably where we’re heading next.”

In the meantime, as Midwest Family moves furtherinto the cloud with the web-based Edge system, Boydagain is reevaluating the firm’s physical facilities strategy.When the company moved its headquarters from itsoriginal 20,000-square-foot office in Minnetonka to thecurrent 4,000-square-foot facility in Plymouth, it decidedto make Plymouth its location for backup servers, Boydrelates. The carrier’s primary servers continued to belocated at web hosting services provider US Internet’sMinnetonka facility. But if a catastrophe were to affectthe area, both Minnetonka (which is well backed up,according to Boyd) and Plymouth, due to their proximityto one another, are likely to be affected, he concedes.

As a result, “We’re thinking seriously about movingour Plymouth location to other US Internet sites inKansas City, Des Moines or Milwaukee,” Boyd reports.“We’re always looking at ways to improve our disasterrecovery strategy, though we’re quite happy with whatwe have now.”

Technology Is as Technology DoesBoyd has been in the insurance business for more than25 years, and he is well aware of how the marketchanges with technological advances. He notes withpride that he’s been able to guide Midwest Familythrough three different CGI implementations thatmake the company more efficient and lean.“Our expense ratio as a company is down in the 25

range,” he says. “That rivals a lot of the largest insurancecarriers in the nation. We stay close to our customer,and technology’s been a big piece of that action.”True to that tradition of technology innovation, and

like many property and casualty insurers, Boyd seesthe potential in mobile to help Midwest Family acquirenew customers and retain existing ones with improvedspeed to market. “We’ve had discussions about howwe could implement mobile with our employees inthe field,” he explains.“Speed sells insurance, and not much is done across

the kitchen table these days,” Boyd continues.“[Consumers] can go to the Internet and buy [insur-ance]. Making sales at the other opportune times issomething we’re always looking at.” �

Size of iT oRGANizATioN: 6 employees.iT BUDGeT: $2.5 million.CAReeR: Boyd is a long-time veteran of the insur-ance industry. He joined Midwest Family Mutualas COO in 1991 and was made CEO in 2000.Previously, he served as president of NorwestInsurance Minnesota (Minneapolis) from 1988 to1991, and as VP of Continental Western Insurancein Des Moines, Iowa, from 1974 to 1988.eDUCATioN: B.S. from Drake University (DesMoines) with a dual major in insurance and management.HoBBieS/PASTimeS: Boyd has been an instru-ment-rated pilot since 1994. “I fly some businessand some pleasure,” he notes.

RON BOYDMidwest Family MutualCEO


T

Elite 8 2010

HE PHRASE “May you live in interesting times” is intended as a curse, but that’snot how Jay Levine sees it. As SVP and CIO of Blue Cross and Blue Shield ofMinnesota, the state’s largest health insurer with 2.7 million members, Levine isthriving in what are probably the most “interesting” times the health insuranceindustry ever has experienced. And to help the Eagan, Minn.-based companytake advantage of the changes wrought by healthcare reform, he is leading acomplete transformation of BCBS of Minnesota’s IT organization that affectseverything from its core systems to its sourcing models to its culture.

“It’s a fairly intense job,” Levine concedes. “Any time you’re in a market so thoroughly undergoingchange, it’s a great place to be if you love change — and I do. It’s a very exciting time, in spite of, orbecause of, the challenges.” When Blue Cross and Blue Shield of Minnesota ($2.8 billion in assetsas of Dec. 31, 2009) CEO Patrick Geraghty hired Levine in November 2008, however, it was obviousto both executives that the company would need to evolve dramatically in order to respond to thelooming changes in the healthcare business,and the IT organization was where much ofthat change would have to occur.“Historically, CIO jobs were back-office

jobs. The vision for this job was to be muchmore of a strategic partner,” recalls Levine,who previously oversaw compliance andanalytic solutions for financial services firms as EVP of product development/CTO of WoltersKluwer (Minneapolis). “I was hired [by Geraghty] with the expectation that … I would be a fullmember of the executive team setting the strategy for the company, making sure our technologystrategy was … part and parcel of how we deliver services and products to our customers.”This mandate meant not only addressing ongoing demands to reduce the costs of health insurance

administration and IT operations, but also transforming BCBS of Minnesota into a more responsive,customer-focused organization. The result has been a multimillion-dollar legacy transformation effort“to make us more nimble and to bring us closer to a more real-time B2C [business-to-consumer] envi-ronment from what historically was a B2B, large group, batch environment,” Levine reports.“We reallywant to make sure any investments in IT … focus on the member and provider experience. Our goalis to make all transactions frictionless and really get to a world-class e-commerce environment.”According to Levine, his organization is focused on two main areas: customer-facing systems, or

portals; and transactional systems, including claims. BCBS of Minnesota partnered with Atlanta-based Connecture on its portal modernization initiative, which started in 2009 with the carrier’s bro-ker/distribution and individual channels and is now about 50 percent complete. “We’ve had greatuptake on the consumer side,” Levine says. “Between 25 and 30 percent of individual transactions

� By Katherine Burger �

Up to the ChallengeHired to be a partner to the business, SVP and CIO Jay Levine

is modernizing BCBS of Minnesota’s IT organization andtransforming the carrier into a customer-focused enterprise.

“Stay connected to the business. It is absolutely essential not to buryyourself in the back room.”


are done through the portal.” On the provider side, headds, the carrier is moving off of a set of proprietaryportals. It has taken an equity stake in Availity(Jacksonville, Fla.), “which along with doing our clear-inghouse transactions also provides portal services to… our provider community,” Levine reports. He expects both portal initiatives to be completed

in 2011, while the transactions/claims modernizationprogram is likely to run until 2014. That project includesan infrastructure upgrade to enable compliance withthe HIPAA Version 5010 EDI mandate for electronichealthcare transactions that the government will impose

in 2012. But, according to Levine, “The most importantpiece is migration off our proprietary claim system,which has been in-house about 25 years, to a set ofmanaged application providers.” NASCO (Atlanta), aBlue-owned utility, will take on BCBS of Minnesota’scommercial book of business, and King of Prussia, Pa.-based TMG Health, a BPO-managed applicationprovider, will handle the company’s government bookof business (Medicare, Medicaid and related programs). “That was a build-versus-buy decision,” Levine

relates. “The way to get the best service and to meetthe continuing [government] mandates was to partnerwith someone who does this on a scale basis for a liv-ing.” BCBS of Minnesota will continue to handle claimsadjudication and processing, but, “The systems them-selves are maintained [and] managed by a third party.”Under Levine’s watch BCBS of Minnesota also has

embarked on some “limited” outsourcing of variabledevelopment and maintenance activities related to thelegacy modernization. The company’s two “strategicpartners,” he says, are IBM Global Services (Armonk,N.Y.) and Cognizant (Teaneck, N.J.).The IT organization, which primarily is a Java/IBM

shop, will continue to “run and support … anything thattouches our members or distinguishes us,” Levineemphasizes. This includes analytics and informatics,financial management, customer service, and call centerand health management. According to Levine, the com-pany primarily partners with Cary, N.C.-based SAS asits analytics tool provider and with Teradata (Dayton,Ohio) for the data warehouse infrastructure.

Eye on the BallTwo years into his efforts to modernize IT and transformthe technology leadership and culture at BCBS ofMinnesota, Levine is clear about what it takes to suc-cessfully execute these kinds of initiatives. “These aremassive programs, ... into the hundreds of millions ofdollars. These are game-changing efforts,” he points out.“You can’t take your eye off the ball. I am deeply involvedat a detailed level.” At the same time, Levine advises,“Stay patient. Big change like this takes a long time.” Another requirement, according to Levine, is to “stay

connected to the business. It is absolutely essential notto bury yourself in the back room.” Accordingly, “I’mreally trying to get my [IT] leadership ... to become morebusiness managers with a technology background anda little less pure technology delivery and operationspeople. They really needed to step up their collaborationwith their business partners,” he says.But, “With collaboration comes transparency,” Levine

adds. And this requires another cultural change, he notes:“[giving] people ... the sense of security that it’s OK tobe completely transparent so that we can get the bestcollaboration with our business partners possible.”�

Size of iT STaff: Approximately 500 people.Career: Prior to joining BCBS of Minnesota in November2008, Levine was EVP of product development and CTO forWolters Kluwer Financial Services (Minneapolis). He alsoserved as VP of software development for the Thomson Corp.eduCaTion: B.S. in Computer and Information Sciencesfrom the University of Maryland; Master’s of Science inInformation Systems from George Mason University; M.S. inManagement of Technology from the University of Minnesota.HoBBieS/PaSTimeS: Levine says he is a “stereophilefanatic.” He particularly enjoys listening to jazz vocalists.Levine also owns and rides “a small stable” of motorcycles.

JAY LEVINEBlue Cross and Blue Shield of MinnesotaSenior Vice President and CIO


Elite 8 2010

TheAnalytical

ApproachAs CIO of Group Insurance at Guardian Life, Pete atwater

leads by example in fostering an environment where smartinnovation is rewarded.

ETE ATWATER, CIO – Group Insurance for New York-based GuardianLife Insurance ($7.7 billion in 2009 revenue), initially arrived at the Universityof Tulsa, from where he graduated with a B.S. and M.B.A. in informationsystems, as a psychology major. So it’s not surprising that he understandsthe value of human capital in driving successful IT departments.

“The project workload is typically the priority, and it’s typically very intense. Takingtime out of that is not always a first instinct,” Atwater says. “It’s always a challenge forCIOs and other business leaders to spend enough time to develop their direct reportsand ensure that those direct reports develop the people below them as well. The abilityto put people in the right jobs and ensure that the teams are engaged and have a goodsense of their interaction with the business is important.”

True to his ideals, Atwater has a reputation among the 200 employees in Guardian’sIT department for being a strong, fairleader. A major part of this, he insists, isputting team members in a position to suc-ceed. When Guardian was looking for waysto manage its IT expenses, for example,Atwater challenged his staff to come upwith solutions. As a result, one of the mosteffective solutions came not from the topdown, but from the bottom up, he says.

“One of our developers looked at theway some mainframe systems were work-ing, and by making some changes to just acouple of high-transaction modules in our[custom-built, proprietary] claims system,created some significant headroom in ourmainframe that allowed us to defer addingcapacity and upgrading it,” Atwaterexplains. “That was a really nice win.”

That initiative also demonstrates howattuned Atwater is to the other three areas

Size of iT orGaNizaTioN: 200 employees.iT BudGeT: $25 million.Career: Atwater joined Guardian in June 2007as the CIO for Group Insurance after a 15-year stintat GE. Immediately prior to joining Guardian, Atwaterserved as CIO of the employee benefits group atGenworth, which was part of GE until 2006-2007.eduCaTioN: B.S. and M.B.A. in InformationSystems from the University of Tulsa.HoBBieS/PaSTimeS: An outdoor enthusiast,Atwater enjoys golf, fly fishing and running — butmore often than not, his are dog-day afternoons:“My wife has a soft spot for Labs that need to beadopted,” he says. “I’m trying to hold the line at four.”

PETER ATWATER Guardian LifeCIO – Group Insurance



P

of challenge, beyond human resources, that he says hehas found in all of the IT organizations that he’s been apart of: strategy, level of IT spend and the perceptionof the department. Making sure your objectives as CIOare aligned with the business objectives of the company“sounds trite,” Atwater comments, “but it’s always chal-lenging, particularly in complex businesses.”

He adds, “You need to be agile, flexible and availableto support business needs. A lot of the IT work we dosupports product development. ... The ability to getproducts to market quickly is a key driver for us.”

By keeping the IT department approachable andaligned with the business objectives of the wider organ-ization, Atwater notes, he hopes to prevent too much“shadow” IT work from being done. Today’s non-ITemployees have a higher level of technical acumen thanin the past, and it can be tempting and easy for theseemployees to create workarounds that increase busi-ness risk in the short term, even if in the long term theycan be developed into a workable solution, he asserts.

“In most insurance companies there’s a mixed per-ception of IT,” he says. “One of the CIO’s jobs is towork to create that view of IT as an enabler, one thatcreates competitive advantage, whether it’s throughthat call into the help desk or engagement on a busi-ness problem.”

A Win-Win-WinGuardian has rolled out a number of online tools overthe past year designed to make its offerings clearerand more easily available to its group life clients’employees. Online self-enrollment was kicked off inAugust 2009 as part of the company’s GuardianAnywhere portal. Though originally only renewalscould be processed online, recently the capability wasextended to new customers as well, Atwater reports.

At the same time, he adds, he is leading an initiative toimprove the renewal infrastructure and standardizethe process across regions so that information about arenewing plan is more accessible to underwriters.

“We’re just wrapping up a major period of invest-ment in our platforms to enable a better customerexperience,” Atwater says. “Online enrollment is a realfocus for us. We look at it as a win-win-win for theemployee, employer and ourselves.”

Among the benefits, according to Atwater, onlineenrollment reduces the amount of paper in the carrier’ssystem. It also enables the company to better com-municate its value proposition and helps increase par-ticipation rates, he adds. Smaller companies like itbecause they might have little or no human resourcesdepartment, and larger companies expect that theirinsurance partners will have the capability, Atwatersays, explaining that receiving enrollment data elec-tronically allows the company to pre-populate somefields, reduces cycle times and increases accuracy.

Guardian also launched a website for employers andbrokers, About Employee Benefits, this year. The siteincludes proprietary research reports, legislative updates,case studies, interactive tools, videos and tips on simpli-fying the enrollment process for employees. An extensionof that site for consumers, the Life and DisabilityInsurance Explorer, aims to help employees determinetheir coverage needs in a post-healthcare reform world.

“We’ve put a lot of effort into the content we put infront of the employees to make sure its understandableand clear, and we think we have a very good onlineenrollment offering,” Atwater says.

Balancing ActMany organizations have focused on return on invest-ment recently, and Guardian is no different. Atwatersays he focuses on ensuring that, over time, IT expens-es will grow more slowly than business revenues. Heprefers a patient approach to adopting new systemsand works to balance a desire to innovate and mod-ernize with an eye toward cost control.

“I’m not a fan of platform replacement,” he says. “Iwould prefer to build around and ultimately migrate.The big conversion projects are often hard to justifyfrom an ROI perspective.”

As such, Atwater is taking a cautious path to mov-ing applications to the cloud. He reports that Guardianis using software-as-a-service platforms for HR tick-eting and purchasing. But true to his analytic nature,Atwater still is taking a wait-and-see approach.

“Cloud is a great lever to be able to pull to be able toget that flexibility, speed to market and expense savings,”he acknowledges. “But it’s unrealistic to think that majorportions of a large company’s IT infrastructure will bemigrated to a cloud in a short timeframe.” �

“One of the CIO’s jobs is to work to createthat view of IT as an enabler.”


B

Elite 8 2010

MeaningfulImpactOver the past decade Senior EVP Richard Connell hasdriven the modernization of Selective Insurance Companyof America’s systems, from infrastructure and core systemsto agent-facing technology and underwriting capabilities.

EFORE JOINING BRANCHVILLE, N.J.-based Selective InsuranceCompany of America in 2000, Richard Connell had held multiple seniortechnology positions at Aetna (Hartford), where his titles included VP ofinformation systems and divisional CIO; and Liberty Mutual (Boston),where he last served as chief technology officer. Connell says he tookinterest in the rural Northern New Jersey-based P&C insurer in partbecause of its strong management team. But, he adds, he was especiallyattracted by the opportunity to achieve discernible, meaningful results.

“The IT problems had both scale and complexity, and the size of the company wassuch that there were resources to actually solve those problems — and yet it wasn’t sobig that you couldn’t see the direct impact,” Connell explains. “It was a good balance, asopposed to a very small company or a very large company, like the two I’d worked in formost of my career.”

Currently Selective’s (more than $1.4 billion in 2009 net written premium) senior EVPand chief administrative officer — and still responsible for IT — Connell was brought ininitially as SVP and CIO to review Selective’s systems and chart a course for transformation.In the intervening decade, herelates, his technology team hasmet every objective it has set andhas rebuilt the company’s IT capa-bilities within a functional hierar-chy, ranging from infrastructure,core applications and agent-facingtechnology to information management and analytics for decision-support.

Connell believes that the successes his technology organization has contributed aredue largely to tight alignment to business strategy. “My job was to influence businessstrategy to a certain degree, but more to understand it and then look to see how technol-ogy could impact the success of that strategy by working with the business areas imple-menting it,” he says. “I looked at it as a partnership role.”

The other critical factor, Connell insists, is a great team. “The key to success is to get greatpeople and build a great organization. You then set a direction and let them go at it,” he says.

“All of our accomplishments are because we have a great organization that we builtover time,” Connell continues. “There were some great people already here; we brought


“Always figure out what technology isright for your business problem at thetime, rather than the other way around.”


some great people in, matched our objectives to thebusiness strategy, implemented best practices that fitour size and type of organization, and then expectedresults to follow — and that is, in fact, what happened.”

Among the initiatives driven by Connell in his firstfew years at Selective were infrastructure and corpo-rate systems improvements. In 2001 Selective imple-mented Microsoft Exchange to replace a legacy e-mailplatform, and by the end of 2003 the carrier had imple-mented Microsoft B2B infrastructure and replaced itsHR, general ledger and other corporate applications.

The main focus of Connell’s team during the firsthalf of the 2000s, however, was the creation of systemsto better support the carrier’s exclusively independentagent distribution force. “Our strategy was aroundbuilding great relationships with agents and using tech-nology to make it easy for them to do business withus,” Connell recalls. “It was about agent servicing, pol-icy administration and billing, as well as integratingour policy administration technology with our distrib-utors’ agency management systems.”

Selective hit its first major milestone in 2004 withthe in-house-developed rebuild of its policy adminis-tration system for commercial lines — which repre-sents about 85 percent of the carrier’s business,

according to Connell. By early 2006 IT had completeda similar rebuild of the insurer’s personal lines andsurety business policy admin systems.

“We built the front ends and all of the web-basedlogic and integration with agency systems,” Connell elab-orates. “The rating engines themselves were commer-cially available applications that were already in place.”

Following the web-enablement of its policy admin-istration systems for agents, in 2006 Selective launchedits xSELerate agency integration platform for agentsfor distribution partners that prefer to work throughtheir own agency management systems, Connellrelates. XSELerate accepts data from agency manage-ment systems, then streams real-time quotes back, han-dling any consequent transactions, he explains.

An Intelligent EnterpriseWhile Selective’s agent-related initiatives were nearingmaturity, Connell’s organization began working on theKnowledge Management Initiative, which sought todevelop an analytics-rich reporting and decision-man-agement environment, he says. The initial phase ofthe project included the build-out of new data ware-houses for the carrier’s commercial, personal and sure-ty business, along with web-based reportingcapabilities. A second phase focused on the imple-mentation of predictive models to support book-of-business analytics. Concluded on time and on budgetin 2008, the initiative has given Selective the ability torefine the profitability of its underwriting by analyzingthe performance of risks over time, Connell asserts.

These advanced capabilities exemplify Connell’s cau-tiously aggressive technology philosophy. “I’ve alwayslooked at being a fast-adopter rather than leading-edge,”he relates. The other maxim he lives by is: “Always figureout what technology is right for your business problemat the time, rather than the other way around.”

The successful CIO, Connell adds, takes threethings into account: “First, you need to understandthe business; second, you need to understand wheretechnology is and how it can be applied to business;and third, you need to determine what constitutes bestpractices for the particular situation that you’re in.”

The IT organization now is sun-setting legacy busi-ness intelligence systems superseded by the KnowledgeManagement Initiative — a process that will be com-pleted in 2011. “This reduces our cost structure and fos-ters smoother operation for the business,” Connell says.

With the Knowledge Management Initiative behindit, Connell’s organization now is turning its attentionto end-customer servicing. “We’re starting to build self-service capabilities so that we can go to the end cus-tomer in the name of the agent,” he relates. “The ideais not to bypass the agent but to reach the customeron the agent’s behalf through co-branded portals.” �

CAReeR: Connell joined Selective in 2000 as CIO.Previously, he served as Liberty Mutual’s VP andchief technology officer, beginning in 1996. Earlierhe was CIO of Seguros Monterrey Aetna in MexicoCity and VP of IT for Aetna Life and Casualty. eDuCAtiOn: B.S. in Business Administrationfrom Central Connecticut State University.HOBBies/PAstimes: Family time, running, biking, skiing and photography.

RICHARD F. CONNELL Selective Insurance GroupSenior EVP & Chief Administrative Officer


Elite 8 2010

ARK SHOWERS, SVP and CIO of RGA Reinsurance, acknowledges the stark differ-ences between his current job and his last, as CIO of agribusiness giant Monsanto.The match between Showers’ experience and the Chesterfield, Mo.-based reinsurer’sneeds, however, was enough to bring him out of retirement in 2009.

“Once you strip off the manufacturing/logistics/supply chain piece, [Monsanto] is a knowledge-worker, technology innovation-driven company,” Showers comments. “Throughout my career I’vebeen associated with R&D in manufacturing; in this case, the innovators are actuaries and under-writers rather than scientists, but there are many analogies and similarities.”At Monsanto, Showers presided over a much larger technology organization — with approxi-

mately 1,500 full-time equivalents and a budget of more than $100 million, as opposed to the approx-imately 200 FTEs and a budget not exceeding 1 percent of the company’s annual revenue that hecurrently oversees at RGA (approximately $7.1 billion in 2009 revenue). But even in this regard,Showers notes, his experience is a plus. RGA’s roots go back to 1973, with the founding of General American’s life reinsurance division.

In 2000 MetLife acquired General American Life Insurance Co., along with its majority ownershipposition in RGA. In the decade since then, RGA has evolved from a single-line, exclusively NorthAmerican company with $55 million in life reinsurance in force to a Fortune 500, multiline companywith operations in 23 countries and $2.3 tril-lion in life reinsurance in force. The compa-ny split off from MetLife in September 2008. In several respects, RGA’s growth has

outpaced its technology capabilities,Showers notes, and his agenda reflects thecompany’s need to transition from small-company to large-company capabilities. The challenge is to reduce complexity globally while retain-ing the freedom enjoyed by RGA’s far-flung operational centers, according to Showers. “Thedecentralized model is what facilitates the entrepreneurial spirit,” he says. “The excitement, to me,is bringing IT together and creating more of a global, cohesive unit.” Though RGA has a relatively small employee footprint, its proliferation of branch offices introduces

a great deal of complexity, Showers explains. “Things that worked when this was a $500 million, $1billion or $3 billion company don’t necessarily work for $7 billion company,” he admits. “Certain processestend to kink, and technology is one of the keys to unkink those processes and make them sustainable.”New infrastructure was fundamental to keeping data and information flowing through the enter-

prise, Showers says. Accordingly, he has undertaken major infrastructure improvements, includingimplementing a third-party data center model that obviates the need for hardware in branch officesthrough reliance on colocation facilities in London, Sydney, Tokyo, Toronto and St. Louis. RGA alsois in the throes of replacing its semi-private wide-area network (WAN), which was deployed early inthe company’s global expansion, with a multiprotocol label-switching (MPLS) approach. “We signed


A Big-CompanyVisionRGA SVP and CIO Mark Showers brings a large-companyperspective to rapidly growing RGA Reinsurance.

“The excitement, to me, is bringingIT together and creating more of a

global, cohesive unit.”

M


a major deal in May with AT&T,” Showers relates. “Interms of simplifying our environment, each branchoffice will go from seven devices to three.” The MPLSnetwork also will deliver a quality-of-service dimensionunavailable in the current WAN, as well as the abilityto prioritize traffic, according to Showers.Showers’ team also is introducing a WAN optimiza-

tion solution from Riverbed Technology (San Francisco)to make it easy for personnel to access large amountsof data quickly, now that their data stores may not bein the same facility. The devices speed delivery of dataand also incorporate artificial intelligence to learn toanticipate what files will be needed, Showers reports.“Actuaries use very big spreadsheets, and it makes itfar less onerous to have those readily available in asecured environment such as a data center,” he explains.

Managing on a Global ScaleTo foster the success of major initiatives such as these,Showers has renovated RGA’s technology leadershipteam, with an emphasis on prior global experience, hesays. He also has introduced a new project manage-ment office (PMO). “The PMO is made of hands-onproject managers and a portfolio project managementoffice with an emphasis on artifacts, frameworks, train-ing the organization to be part of well-structured proj-ects, and also a risk assessment piece,” Showers relates. The new team demonstrated its acumen in its han-

dling of the technology integration of ING’s former groupreinsurance business, which RGA acquired in January2010; the integration concluded according to plan inmid-August. “They were outsourced to IBM GlobalServices, so we had to do a full infrastructure build-out,”Showers recounts. “The initiative had an amazing num-ber of parts, so it showed just how much value the PMOcould add.” RGA enjoys a healthy reduction in ongoingcosts associated with the group compared to when itwas still a part of ING, according to Showers. The benefits of other initiatives — such as a financial

reporting initiative based on Oracle technology, under-taken in partnership with PwC (New York) — are harderto quantify. “We’re embarking on a major initiative toredesign and re-implement our general ledger, accountspayable and associated capabilities, such as master datamanagement, in response to both our global success andthe need to prepare for reporting requirements of IFRS,Solvency II and other changes,” Showers elaborates. Earlier this year Showers’ organization completed

an implementation of Microsoft CRM for its interna-tional and Canada divisions on time and on budget.“It was a move to a single global customer database— a combination of software, infrastructure and greatengagement between the business and IT,” saysShowers. “It’s hard to quantify its impact, but it is cer-tainly a heavily used tool.”Showers emphasizes the importance of a “large-

company model” of project management to the suc-cess of IT initiatives at today’s RGA. “In asmaller-company model, you tend to be unstructuredin many things,” he comments. “But when you get thecomplexity of a global company, all of a sudden youstart leaking oil fast on that unstructured stuff.” �

Size Of iT OrgAnizATiOn: Approximately 200 full-time equivalents.iT BuDgeT: Roughly 1 percent of annual revenue(approximately $7.1 billion in 2009 revenue).CAreer: Showers most recently was CIO at agriculturalbiotechnology company Monsanto (St. Louis), where he spent25 years in various roles until he retired in early 2008. Hebegan his career as a chemist at St. Louis-based CarbolineCo. Showers came out of retirement in June 2009 to join RGA.eDuCATiOn: B.A. in Mathematics and Chemistry fromSouthern Illinois University Edwardsville; Master’s in PhysicalChemistry and M.B.A. from Washington University (St. Louis). PerSOnAl TeChnOlOgy uSe: “Outside of workI’m a bit of an Apple bigot,” Showers says, adding, “I don’tgo over the edge on this stuff, but I make good use of it.”

MARK SHOWERS RGA Reinsurance Co.SVP and CIO


Elite 8 2010

EmbracingModernizationKentucky Farm Bureau VP and CIO Kelly Hall has implemented agile, web-based systems that augment the carrier’s reputation for excellent customer service.

HERE’S BEEN A LOT of change at Kentucky Farm Bureau MutualInsurance Co. ($1.6 billion in 2008 assets) under the stewardship of VPand CIO Kelly Hall. She has guided the Louisville, Ky.-based carrierthrough policy administration and claims system transformation efforts,and developed a new e-business program. Throughout it all, Hall says,she’s made it a priority to ensure that the company is prepared, downthe road, for the next transformation.

“We use the word ‘agility’ every day,” Hall relates. “We’ve introduced SOA, whichallows us to repurpose code. And we’re working on an operational data store so that wedon’t have multiple puddles of data all over the place. Those technologies will serve uswell going forward. If at some point we have to go through another transformation orselect a different system, we’ll have the foundation and the architecture in place to dothat more readily than it’s taken the past few years.”

A driving force behind the successful implementation of these new systems has been acorporate commitment to IT innovation,according to Hall. “This is ... aligned from theboard level on down,” she notes. “All the vicepresidents as well as the CEO are engaged on,at minimum, a weekly basis with all these ini-tiatives. ... There’s a willingness to reinvest andacknowledgement that it is necessary to do so.”

Hall reports that she came to Kentucky Farm Bureau with a mandate to modernize.She’s been at the company for three and a half years, a full year of which was spentrolling out the new policy administration system — San Mateo, Calif.-based Guidewire’sClaimCenter. (It was launched with a pilot agency in July 2009, and all 170 agencies werelive by July 2010.) The company was primarily a mainframe shop, but the new policy andclaims systems are web-enabled, Hall notes, adding that the change required her to retrainher staff so that they are in a position to supply needed support during the transition.

“We’ve been very focused on establishing training programs and helping our folksmigrate from the older technologies to the newer technologies. Specifically, for example,migrating from a COBOL programmer to a Java programmer — not just supporting [IBM]DB2, but being able to support [Microsoft] SQL Server,” she says. “In addition, I’ve worked


“I wanted to set the tone thatour focus is going to be onsupporting the business.”


T

with others to help me evolve the department so wehave new disciplines, such as enterprise architectureand e-business skills and quality assurance and testing.Those are areas we didn’t really have expertise inwhen I came in.”

Hall says her management strategies took root aftershe perceived shortcomings at other organizationswhere she’s worked. “Whether it’s a Java programmeror a SQL database support staff person — they needtheir technical focus. But I want them to have involve-ment and understand why they’re there and why theyfit,” she explains. “So many times I’ve seen IT organiza-tions lose perspective on why they’re there. At the endof the day IT is a support organization — it’s not its ownentity. Coming in here, I wanted to set the tone that ourfocus is going to be on supporting the business.”

A New LegacyAs part of the strategic shift in the architecture atKentucky Farm Bureau, Hall also has taken a proactiveapproach to legacy retirement. “I have an obligationto be assertive with the retirement of the legacy sys-tems,” she says. “When you’re supporting multiplehighways over a long term, you can’t be efficient. Yourspeed to market is diminished.”

Kentucky Farm Bureau saw immediate benefits tothe new strategy when Kentucky was buffeted by back-to-back weather events. In fall 2008, Hurricane Ike cameinland and caused major damage, she recalls. A fewmonths later, a devastating ice storm crippled the state.

But because the new claims system was up and run-ning, the insurer was able to process the massive volumeof claims resulting from the disasters, Hall reports.Everyone in the organization (including Hall) was recruit-ed to take claims information over the phone. The com-pany sent out mobile generators to make sure that “evenjust one laptop” could access the new system, Hall notes.

“A majority of our offices were live on the newclaims system,” she says. “We had the ability to have

different offices handle claims for different areas of thestate; you used to be locked into your region. It’s allowedfor ubiquitous service no matter where you’re located.”

The carrier’s new web-based architecture hasimproved more than just core systems, Hall stresses.She credits the desire to migrate core systems withimproving the company’s offerings to its agents as well.Hall has led the development and implementation ofnew corporate, agency and agent websites. This includedthe implementation of a new content management sys-tem (built internally on Emeryville, Calif.-based Lyris’sHot Banana platform) to manage all external-facing web-sites, a quote generator tool and authoring capabilities.

“When I came into the organization we had kind of ashell of a website — it was really just brochureware,”Hall explains. “Our 170 agencies wanted a portal throughwhich they could service the customers. As a result ofour modernization on the claims and policy side, we’vebuilt in parallel a foundation of e-business, and it haslaid the groundwork for other online services.”

A major driver of the effort to modernize its cus-tomer- and agent-facing systems is Kentucky FarmBureau’s desire to advance its reputation for excellentservice. Hall says she and her colleagues understandthat consumer technology has fundamentally alteredthe expectation of service, and they are looking totechnology to further position the company as a leaderand innovator in customer service.

“Our agents really are the conduit to the customer— they have community relationships. Technologycombined with that reputation creates even higherexpectations,” she says. “Our delivery system has beendesigned to be very customer-focused.” �

Size of iT orGaNizaTioN: 145 employees.iT BudGeT: $35 million.Career: The majority of Hall’s 25-year IT careerhas been in healthcare, both on the insurance sideand the provider side. The first several years of hercareer were spent at Humana and AmericanCommercial Barge Lines. Immediately before joiningKFB in March 2007 as VP of IT, she was corporatedirector of IT at Baptist Healthcare System.eduCaTioN: Master of Arts in ComputerResources Management and an M.A. in HumanResources Development from Webster University(1989); Bachelor of Arts in Communications fromthe University of Louisville (1986).HoBBieS/PaSTimeS: Hall is a fan of Kentucky’slocal sports scene: “I enjoy thoroughbred horse rac-ing and cheering on the University of Louisville foot-ball and basketball teams,” she says, adding thatshe also enjoys playing pool.

KELLY HALL KENTUCKY FARM BUREAUVP AND CIO


Building Experience USAA SVP and CIO Greg Schwartz stressesprocess excellence in service of a superior member experience.


SAA CIO GREG SCHWARTZ believes that at no time during his 28-yearcareer has working in IT been more fun than it is today. “New mobiletechnologies are breaking down barriers,” he says. “Devices such asiPads and tablet computers are enabling us to provide rich multimediaexperiences we couldn’t have dreamed of a couple of years ago.”

The fun is only enhanced by USAA’s (United Services Automobile Association) branch-less financial services model. Conceived to accommodate its military customer base, theoperating model might have seemed a competitive disadvantage to more conventionalcompanies. But the necessity of USAA’s far-flung and highly mobile customers has beenthe mother of invention at the San Antonio, Texas-based diversified financial services com-pany, according to Schwartz, who asserts that coping with those unique challenges hashelped make USAA (more than $17 billion in net worth) a leader in customer services bothfrom a systems integration standpoint and in terms of remote and mobile capabilities.

“We have a membership that is comfortable with our model already,” Schwartz com-ments. “They trust our brand, and they know that we’re working very hard to improve themember experience for them, so they eat up the new functionality as we put it out there.”

Among the company’s latest insurance services offerings are its Auto Circle and HomeCircle mobile applications. Thefree Auto Circle app gives USAA’smembers the ability to find,finance and insure a new vehicleon an iPhone. Users get prenego-tiated, guaranteed low pricesthrough more than 3,000 dealersand are offered options for insurance coverage and financing, Schwartz explains. HomeCircle offers analogous services related to financing, renting and insuring a home.

USAA’s IT organization also deployed recently advanced geographic information system(GIS) capabilities for underwriting, allowing more precise risk assessment — and potentiallybetter pricing — than traditional approaches using ZIP codes that may bundle low and highrisks into the same category, Schwartz reports. Additionally, within the past 18 months, USAAdelivered what it calls a Quick Quote Widget pop-up screen that alerts both member servicereps and self-service users to quotes on other risks for which the customer may need coverage.Within five months of launch, the application had delivered 268,000 quotes that resulted in40,000 additional endorsements or policies, according to USAA. (continued on next page)

ELITE 8 2010

“The biggest contribution we make as leaders is to implement processes

that will last long after we leave.”

U


And over the past two years, Schwartz adds,USAA’s IT organization has automated a variety offormerly manual claims processes, including issuingpayments for approved auto estimates and medicalbills; generating correspondence for claimants; noti-fying members of the availability of new informationon claims; notifying service reps when they need toperform critical tasks; performing workload balancingand skill matching to assign tasks to appropriate mem-ber service reps; and storing and filing claims docu-ments in electronic content management systems.

Customers for LifeSchwartz admits that he is excited by how “cool” thefirm’s mobile technology is perceived to be. But heemphasizes that USAA’s development is focused onthe real problems of members, who are prone to relo-cation. “It’s fun, but at the end of the day we really careabout how our members use our technology andwhether we have really simplified their lives,” he says.“And to the extent that you create that compelling mem-ber experience, customers become customers for life.”

One of the keys to ensuring that compelling expe-rience is USAA’s concept of “one company.” In termsof systems, this means that there are no divisionsamong the industry sectors in which USAA operates.“I have a person underneath me who is responsiblefor development for USAA, and in that shop we workon development for all the different lines of business,”Schwartz explains. “In each of those shops there aresubject matter experts and architects knowledgeableabout P&C, for example, but there isn’t a person whois a P&C CIO.”

As a result, rather than having a proliferation ofsystems, the company has a single back-end systemwith services exposed to multiple front ends. “I’m usingthe same application systems to support all these dif-ferent mobile devices, all the different reuses acrossUSAA in the different lines of business,” Schwartzemphasizes. “I don’t have two or three of everything— I have one of everything, for the most part. ... Many

people say, ‘Buy before build’; we start with reuse, webuy second and then, if we absolutely have to, we build.”

Schwartz makes what he calls the “obligatory”statement that USAA doesn’t do technology for tech-nology’s sake. He insists that, as innovative as USAAstrives to be, only a small proportion of the budgetgoes to technology lacking a direct connection to busi-ness enablement. “I have what we call an ‘appliedresearch lab’ because we focus on technology thatcan be applied to the business,” he says.

Schwartz explains that USAA’s wealth of innova-tion is compatible with its parsimonious managementof IT resources because of strict process discipline.“We have worked very hard to engineer our processesover the last decade,” he notes. “The biggest contri-bution we make as leaders is to implement processesthat will last long after we leave here.”

USAA’s IT organization monitors its initiatives close-ly through standardized metrics such as quality, timeto market, project on schedule, project within cost andcustomer satisfaction, Schwartz reports. “We havedeveloped rigorous scorecards and have been trackinghistory religiously for the last 10 years,” he says.

That tracking enables accurate measurement of ITperformance, which in turn enables the organizationto set goals for improvement, Schwartz insists. “I’m abig advocate of a process-disciplined organization withempowered leaders with whom I collaborate ratherthan micromanage,” he says. �

CAreer: Schwartz has spent his entire career atUSAA since joining the company in 1983.eDUCAtiOn:Bachelor of Business Administrationin Management Information Systems from TexasState University – San Marcos; M.B.A. in Financefrom St. Mary’s University (San Antonio).HOBBieS/PAStimeS:Boating, skiing and golf.

GREG SCHWARTZ USAASVP and CIO


8 Insurance Technology Leaders Who Are Changing the Game Insurance Technologys Elite CIO

Documents

insurance business

insurance carriers

insurance industry

director of insurance

insurance technology

selective insurance

innovative solutions

driving technology strategies