November 15, 2000

At 26 years old, Max Drucker is the youngest winner in the history of the Elite Eight (OK, the award is only two years old)—and probably the youngest chief information officer in the insurance industry, for that matter.

As a gen-Xer, a self-proclaimed techie, a "gadget technophile," and CIO of the San Francisco-based, 1999 dot-com start-up eCoverage, Drucker may be the first of the new generation of IT leaders in the insurance industry. In three years or so, says Drucker, "the typical CIO will be of a younger breed and will have a strong background in technology and not just skills for managing technology."

In fact, Insurance & Technology's Elite 8 Consultants Advisory Board selected Drucker because of his technology-since-diapers background. "Drucker is one of the 'new breed' of future CIOs who literally grew up with computers and the Web/e-commerce environment," says one Advisory Board member.

Being a modern CIO "is more than just managing a budget," adds Drucker. "Having a business foundation and managing a budget is important—but those traits are a given. There are many great managers out there, butthere are not many managers that can also make technical decisions."

However, even though Drucker says a technical background is "important," even "critical," he has no formal technical training. "I have grown up with technology and it has always been a big part of my life," he says. "I grew up in a technology household. My brother worked for Apple. It has always been around me. I have tons of gadgets. My house is filled with toys—all technology.

"But there is a lot of irony that I got my degree in political science and economics," from The Colorado College (Colorado Springs), Drucker adds. "I don't have any formal technology background at all." Despite a lack of technical training, Drucker has compiled a very "new media" resume—partner in the boutique Web development firm Steel Card; CTO and product manager of Riker Networks, Inc; technical lead for Cox Interactive Media; and Internet engineer for Apple Computer, where he was responsible for the daily production tasks for www.apple.com.

And like many of his contemporaries, Drucker has adopted some new-media work habits. "Even as CIO I still pull all-nighters," he boasts. "I am a big part of server configuration and I prefer to be a hands-on doer of big projects. When I really want things done correctly, I will sit down and do the install myself."

One reason why Drucker is closer to his company's technology than many brick-and-mortar CIOs are to theirs, is because of the dot-com's size and structure. "We have a staff of 10 IT people," Drucker points out. "Other CIOs manage budgets with separate maintenance and development budgets. Because they have to deal with up-keep of current systems, they infrequently get the opportunity to develop new technology. Very little of my job is allocated to the maintenance of systems. I can roll out technology very quickly and push the limits of the insurance industry."

Between pulling all-nighters, Drucker spends his time making strategic technology decisions for eCoverage. The biggest thing that separates eCoverage from other dot-coms and brick-and-mortar carriers is its technology, he says. "There are certain risks you have to take if you want to have a competitive advantage," Drucker says. "We built technology from scratch. We invented all the technology at eCoverage—the rating engine, the customer contact center, underwriting tools, policy administration. Many companies would say we are crazy. I counter by saying it is a risk to do things the way things have always been done—there is no advantage there."

Although Drucker enjoys extreme sports like snow boarding and surfing, he doesn't carry his extreme tendencies into eCoverage. "It is important that I don't come across as a big risk taker," he says. "For me, the greatest challenge is moving fast enough to help all the groups and their demands, to improve the CRM and supply the technology—not only for customers but for the employees. We have 99.99 percent up-time on the Web site. In the dot-com space, being ultra-conservative and moving slowly is a death sentence."

For example, Drucker and his staff constantly monitor the workings of the Web site and customer contact center. "If we find everyone is calling because they are looking for the fax number, we will put it on the home page," he says. "When we put it on the Web site, we can watch the call volume drop immediately. We are seeing things change instantly and that is exciting."

And since Drucker has been around computers and technology all his life, he is "better poised to make decisions quickly," than a business-focused CIO, he says. "I have a broad base of technology understanding. You have to understand what is going on underneath the hood—do you want Oracle or SQL Server? You have to know about the core technology. As a CIO the wrong decision could have major consequences," adds Drucker.

So far, Drucker's and CTO Michael Degusta's—Drucker's technology "partner in crime"—decisions are paying off. Since eCoverage is a "greenfield" company—a company that started from scratch—Drucker says the company's plan has had an advantage over traditional insurance companies with complex back-end policy processing systems. Drucker considers the speed with which eCoverage got its systems online his greatest accomplishment. "We brought it up in eight weeks," he says. "The efficiency of the contact center is pretty awesome. Now we have 25 customer service reps available 24/7."

To power the rapid roll-out of eCoverage's systems, Drucker says his technology strategy was fairly aggressive. "It is critical that we are far more efficient in all portions of the process," he says. "The contact center is one area. We went with a semi-high-risk phone server implementation from Interactive Intelligence on a Windows NT server. We wanted to create a place where the CSRs have great tools to support the customer." eCoverage's customer service representatives can chat online, email, or talk to policyholders with Interactive Intelligence's (Indianapolis) Enterprise Interaction Center.