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Infusing Best Practices in Insurance IT

By Scott Names, CIO, Church Mutual Insurance Company

Scott Names, CIO, Church Mutual Insurance Company

How has the role of a CIO in the insurance space evolved over the years?

Information Technology is very much at the pulse of the insurance business. There are few core business processes— encompassing claims, underwriting or finance and billing—that do not involve IT. This involvement is not limited to plugging in systems and maintaining them. Insurance CIOs need to find answers for questions such as, ‘How are the systems built? What are the metrics we expect? What platforms are they going to sit on? What type of availability and security is needed?’ More than an administrator of systems, today’s insurance CIO is donning the role of a strategic advisor.

What are the biggest challenges faced by the CIO?

Migrating from traditional on-premise platforms to the newer, more efficient, virtual networks and cloud-based solutions remains a key priority for IT in the insurance industry. Virtualization provides insurance companies with scalable systems that align with evolving business needs. This transition, however, cannot be accomplished with the push of a button— especially when a business is relying on legacy systems to run core applications managing millions of transactions per year. In the face of modernization, this poses a phenomenal challenge, primarily because we are anchored onto core platforms to run the business. Systems have been around in our organization for a while now. We, like many in the insurance space, are in the migration stage.

"The biggest task at the hands of IT in insurance today is migrating from traditional on-premise platforms to the newer, more efficient, virtual networks and cloud-based solutions that bring scalability to the system"

What are the major trends shaping the insurance space and gripping your mind as a CIO?

We were an early adopter of Microsoft Office 365 and SharePoint solutions, apart from other vendor applications that we have implemented on the cloud. Though we are comfortable with the Software-as-a-Service and Infrastructure-as-a-Service, we are still running our core applications and mission critical data on-premise. As we upgrade these systems along that legacy journey, we’re exploring cloud options.

Moreover, there are tremendous opportunities for us, as an insurance company, in leveraging the swell in IoT innovation. We primarily insure religious institutions, somewhere in the excess of 80,000 houses of worship across the U.S., that can benefit from this technology. We face a unique challenge in the risk assessment process of these insured institutions, in that they are vacant most of the time. Temperature drops, for example, leading to frozen pipes is one of the biggest cause of loss. To alleviate such losses, we have partnered with a leading sensor technology company to develop a sensor program for our clients’ properties. The potential for such smart devices to give us real-time insights on the assets we insure has benefited us greatly.

Another technology interest is drone technology, which solves the logistical challenges of inspection and damage assessment. Today, we rely on self-assessment. We place risk control and claims personnel on-site to gauge the damage to the institutions we cover. With the help of drones, we have the ability to survey not only individual churches, but regions and geographies, bringing that data back for damage analysis. If we take it a step further, we can have the drones capture images ahead of a storm and assess the damage after the storm. This is accessible from any of our multiple locations around the country—certainly a key achievement in terms of leveraging drones for damage assessment and claims management. Overall, we see huge potential for state-of-the-art technology in achieving an improved loss scenario, helping us focus more on enriching our customer experience process.

What is your agenda for evaluating the technology vendors’ offer as solutions to the insurance industry?

Our vendor management process gathers a lot of data from advisory firms that we use to assess vendors. This process involves diligence in everything from RFIs to contracts. Forging strategic partnerships with our vendors forms a very crucial component of our journey. We seldom partner with the largest players in the market nor do we scour startup vendors as we are in an industry with stringent security and compliance regulations. We focus in the mid-market section, looking for good, credible players in the insurance technology space, evaluating everything from financial status to the types of products they deliver.

You have a really interesting scholarship program for IT grads…

Hiring people with technical skill sets is definitely a persistent challenge we face, and we employ a number of tactics to overcome this challenge. Our leading-edge IT Scholars Program has helped us find talent at an early stage. We accept a targeted number of recruits in our program and pay their tuition. The program, initiated a year ago, has placed multiple recruits who have completed their high school education and are working for us while they pursue a college degree. They will work in IT at Church Mutual once they earn their bachelor’s degree.

We also are working closely with our HR team to put together advanced benefit packages for certain IT positions. And we are becoming more flexible in terms of where our employees work, shifting away from the traditional brick-and-mortar model.

What is your advice to upcoming and budding IT leaders in the insurance arena?

CIOs must broaden their horizons and understand the business perspective apart from deep technical expertise. Talent needs to be managed in such a way that the CIO need not necessarily concentrate on core IT tasks. IT is among the largest cost centers for insurance companies, consuming roughly 4 percent of the revenue. The insurance business requires its CIO to not only ensure systems are running, access is provisioned and security is provided, but also be able to find new ways to drive more revenue. CIOs must learn the business to fully execute what is now both a technical and advisory role to the business.

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