Editors' Cuts

An Insurance Technology Paradigm Shift

Pat Speer
Insurance Experts' Forum, February 17, 2011


How do insurers compete? How will they grow top-line revenue and market share? And where will their growth come from in 2011? The nature of these questions may elicit familiar discussion among insurance business line executives, yet three insurance technology executives lent their views to these subjects and more at the Celent 2011 Insurance CIO Roundtable last week in New York.

The trio's responses point to a changing world for insurance technology leaders. Their roles are evolving to encompass more than just a services model and they are increasingly being called upon to help set enterprise-wide strategic direction for long-term company results. Is there a little pressure that goes along with being considered a business expert? You bet.

The three panelists were asked to respond to survey results and statistics presented earlier by Celent senior analyst Donald Light, who moderated the panel.

Donna Nelson-Duey, VP, Technology Services, Sun Life Financial, opened the discussion by saying her company can no longer compete with just products, especially in the guaranteed benefits space.

“We also need to compete with customer service and distribution excellence,” she said. “From an IT perspective our focus is not just on new products, we are investing in Web-based automation and distribution, CRM, reporting, mobile computing. From an IT perspective this makes for ‘interesting times.’”

For Chubb Commercial Insurance, notes SVP CIO Mark Berthiaume, products had always been looked at as the new opportunity for growth. Chubb recognized this issue two years ago and launched a “Project Catalyst” initiative that includes SWAT analysis.

“We looked at our strengths and weaknesses, as well as our competitive set, and came up with a plan that addresses our operating model, operating efficiencies and customer service levels,” he said. “The Project Catalyst was the business side’s response to the new normal,” he added. “IT is gong through structural processes, shared people, and evaluation of our services as part of this.”

Bob Ingram, VP, CIO of The Hartford’s Commercial Consumer Markets Technology area, reflected on The Hartford Financial Services’ tenuous year, alluding to upper management turnover, and its efforts to rebound after accepting and repaying $3.4 billion in U.S. Troubled Asset Relief Program funds.

Ingram told attendees that The Hartford has responded with broad ownership in improvement in costs and time to market. “I think we got away from investing in people,” he said. “But we are changing the focus from external to internal – we had heavy investment in coordinating communication, training, but got away from this. We will make training and skills investments this year.”

To understand IT’s growing role in the insurance organization’s overall success in the market is to understand the CIOs attitude about leading the way.

Reflecting on Chubb’s change in structure, leadership and growth, Berthiaume acknowledged that 2011 will be the toughest year they have had in IT.

“Growth is enabled by what we do in IT,” he said. “To date, almost all the opportunities we’ve seen have been around speed to market. And because we are going into new places with a different operating model, change management is more front and center. IT will have to fuel this.”

Berthiaume offered the example of Chubb’s buy/build strategy, the benefits of which has made believers out of both business and IT. He says product line-of-business managers are especially enthused. "They are actually excited about product development—the whole ideation to migration issue – pulling IT and business together.”

Nelson-Duey took that discussion a step further, stating that Sun Life Financial began its path to transformation before the recession, looking at ways to wring costs out of the organization.

“Productivity is a focus in both IT and the business,” she said. “We are actually ahead of the business in terms of measuring product and continuous improvements. Business is looking at IT as more of a partner now.”

Of course, it’s no surprise that no one on the panel mentioned recognition for these efforts. The long-held attitude that the IT department was there to service the business may still ring true at many insurance organizations, for the Nelson-Duey, Berthiaume and Ingram, I have the feeling that there is enough satisfaction in quietly knowing that their efforts are leading a new paradigm.


Pat Speer is editor-in-cheif of Insurance Networking News.

Readers are encouraged to respond to Pat by using the “Add Your Comments” box below. She also can be reached at patricia.speer@sourcemedia.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

The Pitfalls of Using Assembly Line Methods to Create Software

Most of the time, when the business needs IT, it is for custom software development, just like creating a concept car.

Wearables and Gamification in Life Insurance Goes Mainstream?

With so many U.S. households still uninsured, insurers are going have to try new things to re-position their product, focusing on consumer needs.

Will John Hancock Vitality Transform Insurance?

The Vitality program integrates this information directly into the rewards, giving you credit for the exercise, just by virtue of reporting it.

Why Customers Should Want Innovative Insurers

At a time when confidence in the insurance industry has been compromised, innovative companies can break the mold.

Five Ways to a Positive User Experience

The user experience can make or break an application. Here are five ways to measure whether itís positive or negative.

Innovation & Insight Day Recap

The Insurance Team recognized fifteen model banks across five categories: Digital; Data Mastery; Legacy and Ecosystem Transformation; Innovation and Emerging Technologies; and Operational Excellence.