Giving Technology Assurance to the Insurance Business
Date: Sunday , March 06, 2011
Guru Vasudeva, is the SVP and CIO of Nationwide. As the CIO, Vasudeva provides IT leadership and support for a number of property and casualty (P&C) businesses including Nationwide Direct, Allied Insurance, Scottsdale Insurance, Titan Insurance, and Nationwide AgriBusiness at Nationwide Enterprises, a $20 billion revenue financial services and insurance company.
Nationwide is one of the largest insurance and financial services companies in the world, focusing on domestic property and casualty insurance, life insurance and retirement savings, asset management and strategic investments. Vasudeva has about 17 years of experience in the IT industry. He holds an MBA from the University of Cincinnati and an Engineering degree in Computer Science from the University of Mysore, India. He is also co-author of the book, Patterns for e-Business – A Strategy for Reuse.
In an industry like ours, the role of technology is critical because it is driven by rich information. Everything is automated and our products come with a promise that we will deliver/ take care of the customer, be it an auto accident case or a home insurance or so. At the end of the day, our customers look at our website, our service, bill, call centre response to evaluate us. Here technology plays a critical role and today any project or initiative we undertake has a strong technology element to it and the company recognizes and appreciates this fact.
In this type of industry, the kind of trends that I see emerging are more towards packaged applications. Financial services industry traditionally worked on custom package development applications, but now the inclination is towards package applications, cloud offerings, software as a service and similar new trends. In fact these technologies are maturing and becoming more feasible for even large companies like ours. Today instead of managing servers and applications, oneneeds to manage the SLAs (Service level agreements) with the SaaS and cloud services providers.
Another shift is in some of the technologies that we use in the Internet, intranet or call centres. These technologies are increasingly componentized and are becoming available in hosted way. Not only industry specific applications are becoming available as SaaS but components like web metrics and search capabilities are also available in small packages. Even applications used to correlate call between internet, call centre and IVR systems are becoming available on hosted web.
The third emerging area is mobility. Today people want everything on their fingertips so a mobile phone is the ideal option. We were the first to launch, in the insurance industry, an app for iphone. Mobile capability is becoming more important as people can access internet on their phones,do the claim, know the status of the investments and more. This in turn points to the changing needs of our workforce as well. As we hire more and more workforce especially the younger generation the need and expectation of mobile capabilities like accessing their company mails, calendar, intranet apps in their ipad, smartphones are getting increasingly higher. We are currently in the process of driving a big initiative to make this capable while ensuring the information is secure.
Another trend is the role of real time analytics and how it is evolving. The traditional analytics tried to analyze the scenario in a disconnected data warehouse but the new real time analysis can run on real time and make some recommendations.
Technology in marketing – emergence of Social media
We use social media as an integral part of our marketing strategy. When we launched our new set of advertising we not only launched the spokesperson but also a Facebook page for that spokesperson. In fact the ads for traditional media and new media are treated differently. We create multiple versions of ads to be put in Youtube or Facebook or other social media. The other thing what we are noticing is not only as a company we are noticing the social media, but also if you are an insurance agent how do you enable them use social media and we are building capabilities that we can enable our exclusive agents, independent agents and other financial advisors to use this social media to take it to market on behalf of the company.
The CIO’s priorities.
I believe that as an IT shop for the company, our goal is to become a business advisor/consultant/ partner in business strategy. In order to get there you need to move through a mantle of priorities. Thus your first priority is to really take care of the availability of the systems and quality of the systems. So you need to measure your technology priorities. What are the critical application, what is the availability, what is the deadline and if you are observing issues then what are the root causes of that and what actions are you going to take. Similarly on the quality side what are the critical defects, how many there are, what is the treadline, are you introducing more defects than you are closing? Once you really get a handle of such operational metrics, the next set of things I focus is the budget and HR. Do we have enough budget, are we spending the money wisely, from an HR perspective how is the work force, the demographics of the workforce, how are the performance distributed in terms of performance rewards management and so on. This is the next step coz these along with your basic focus on keeping the system up and running really gives you a full hands on the operational need you need to manage.
Once I feel comfortable about the above things, I spend time visiting the end customers who use our systems. Visiting the call centers, agencies, talking to people who use our systems so that we can really get a first hand feedback about what is going well and what is not from a systems perspective. This helps in a big way in ensuring that you are not really connecting to some numbers but rather the real needs in the community. That combined with spending enough time trying to understand the business context and industry trends in that particular industry really prepares you to provide the appropriate advise and strategic direction both with your business partner and inside your own IT organization.
A CIO’s challenge
In this industry you always have to be vigilant about information process management. That means on all aspect of information risk. Do we have the right kind of security pasture, do we have the right kind of access control, what happens if something leaks. That is a big deal because we are in an industry that is very information rich, and we manage customer’s confidential information.
Our access to talent even in a recovering economy is a concern. We are heavily dependent on IT, invest a lot in IT. The market seems to be tightening up from a talent perspective, in particular to deep technical expertise in application development, systems engineering and it is a challenge to find this kind of talent locally. Can you not source it from outside, of course you can. Then the cost in those areas is also rising. It’s an interesting dynamics. How all of these will evolve and will we have access to it is a concern and a challenge.
In case of technology, how the role of the SaaS and cloud is going to evolve. Its not something that keeps me up at night but something I wonder about. And how we as an internal IT shop have to change our skill set to manage those type of arrangement where we are not managing the physical hardware and software. It creates a gap between the end customer, the provider and the agent in between. I see these things changing significantly, but our managers in IT need to learn new techniques to manage those contracts and write out the right clauses.