Specialty insurers face significantly different technological challenges than do their standard-lines industry peers. Underwriting an array of different types of risk in many different locations requires systems that are flexible, powerful and easy to use, according to Ellen Fecteau, who says much of her career as CIO of specialty commercial insurer Liberty International Underwriters has been based around deploying a global IT framework to ensure that the firm is competitive and doesn't have a lot of overhead costs.
Fecteau's strategy has been to keep the major technology infrastructure as simple as possible -- no easy task when the company operates in four different regions based out of four cities: the U.S. and Latin America, headquartered in New York; Canada, out of Toronto; Europe, based in London; and Asia-Pacific, headquartered in Sydney. That's in addition to the firm's global headquarters in Boston. "In a global organization, you really do have to pay attention to regional and cultural differences, what's happening in each marketplace, and your different competitors by marketplace," Fecteau says.
While there are some localized systems -- telecom, for example -- her focus has been on signing global contracts with strong vendors that can handle the currency, language and regulatory differences within each region. "We try to do global contracts so we really manage our expenses, while our competitors may do an implementation or an instance of an application within a region or a country," Fecteau says. "The systems work or the development is more centralized with input from all regional operations. It's, 'How do we cut our expenses where it makes sense by reusing or sharing our base technologies?' All our regions use the same platform and the same instance of that platform, rather than country-specific applications and region-specific data centers."
Three Keys to Quick Implementations
Despite all of these considerations, however, Liberty International Underwriters, part of Boston-based Liberty Mutual ($9.2 billion in revenue Q2 2012), prides itself on rolling out technologies quickly, Fecteau adds. The company has used its combination of Agile and waterfall development strategies to implement new systems from Guidewire (Foster City. Calif.) and SAP (Newtown Square, Pa.) in just 10 months, she reports. Crediting the "caliber and commitment of our people," along with the company's governance and prioritization best practices, for the quick deployments, Fecteau points to three keys to a speedy implementation, starting with discipline. "For us, time to market and right-sizing the cost of initiatives is the crucial piece," she explains. "Most of our projects, even at a strategic level, we try to break into manageable components that you can deliver in nine to 10 months."
Noting that even the largest vendors are used to doing regional implementations rather than distributed global deployments, Fecteau admits that Liberty International Underwriters's (LIU) technology strategy is not a common approach among global insurers. This leads to her second key to streamlined deployments: finding the right strategic partners. Fecteau says enabling collaboration among in-house and outsourced developers, as well as selecting and reusing implementation partners that understand the company's approach, are key parts of making the insurer's approach successful. The company reviews and streamlines business processes before each implementation, leaning on clear metrics to measure success and effectiveness, all with the goal to develop partnerships and governance so there's skin in the game from both vendor and insurer, she adds.
The third key to deploying new technologies quickly, Fecteau says, is ensuring close alignment with business sponsors within LIU to support the implementation. Many times, she relates, teams from the business unit with the technological need and the IT department are colocated at the implementation site. "IT is really closely aligned with the business at LIU. We're very business-case focused so we look at cost-benefit before we start," Fecteau explains. "We implement technologies to support that rather than saying, 'It's a major initiative and we're redoing all of those systems.'"
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio