Even by the standards of an industry known to be cautious about change, Indiana Farm Bureau Insurance (IFBI) was behind the times when Greg Clancy joined the writer of farm, personal lines and life insurance as senior vice president and CIO in 2003. "It was like stepping back into time, technology-wise," recalls Clancy, who came to IFBI from the student loan industry.
It wasn't just that core systems and key infrastructure such as phone systems were seriously out of date, according to Clancy, who notes that where there had been investment in new systems, the implementations were not going well. Clancy's mandate was to transform the role and performance of IT at Indianapolis-based IFBI, whose life company has $2 billion in total assets and whose P&C company has $900 million in assets. "The vision was to enable the company to do business the way it wanted to do business, because systems and technology were not enabling and were holding back how they wanted to do business," Clancy says. "A longer-term goal was to somehow get close to what the Geicos and Progressives were doing as the real technology differentiators in our business."
Clancy says his immediate challenge was to resolve an implementation-gone-wrong of CSC's S3+ solution, an effort that took almost two years. "It was a pretty red-alert-type of situation," he recalls. "A lot of it just had to do with promoting the wrong people into leadership positions, not providing appropriate leadership, not being able to execute in general."
It was apparent to Clancy that, despite the problems with the S3+ deployment, IFBI had to replace its hodge-podge of home-grown systems with packaged solutions, and ultimately the decision was made to partner with Falls Church, Va.-based CSC for the modernization initiative. "It looks like it's paying off," he says. "But it was a leap of faith at the time."
In fact, over the past six years, Indiana Farm Bureau has replaced the policy management systems (including client, policy, billing and claims modules) for five of its core lines of business. IFBI now runs its personal lines auto and home products on CSC's Exceed system, its commercial and farm products on CSC's POINT IN system, and its life products on CSC's CyberLife system, according to Clancy. Rather than implementing each component of homeowners separately, he relates, IFBI pursued a "vertical" slice implementation of its client, billing, homeowners and claims components simultaneously. This occurred in a "big bang" effort that took place over Thanksgiving weekend in 2007.
Governance and Accountability
Clancy also created a governance process that not only facilitated the core systems modernization but also transformed the way IT worked at IFBI. "Governance needed to be fixed as well," he says. "IFBI always had run projects by committee. In my thinking, that's a problem. When you have a committee running things, then no one is responsible. So one of the things I told the other executives was that we wouldn't start any project until they made one person on the business side responsible for a project."
Clancy encountered some pushback, as people were reluctant to give up control, but, "My boss backed me up," he relates. "That was a huge change, and looking back it was one of the big wins."
With modern technology and improved governance in place, it didn't take long for IFBI to start reaping benefits. To start, complexity has been reduced -- for example, seven billing systems have been consolidated down to one, Clancy reports. This also has enabled more-customized billing.
Additionally, the company now can tier its rates, which it could not do on the old systems. "We had a single rate, whether great customer or bad customer," Clancy says. "We also put other variables in place for customers, so prices and premiums are much more geared to whether the experience has been good than we were ever able to do before. We also are able to make changes more quickly than we ever dreamed." Updating forms and contracts is also much easier now that IFBI is able to use ISO contracts, he adds.
But it wasn't just IFBI's core systems that needed to be overhauled; Clancy also has overseen implementation of a corporatewide imaging system from Vertafore's ImageRight (Bothell, Wash.), a new document creation system from Thunderhead (London), and implementation of a Cisco (San Jose, Calif.) unified communication system in 140 field offices and the home office that replaced a phone system dating back to 1985. Prioritizing all these projects -- and maintaining focus -- has been essential to their success, Clancy emphasizes.
Not surprisingly, once things started to change in IT, there was tremendous pent-up demand for new solutions. "People wanted 100 things done at same time because we were behind on everything," Clancy says. But he knew the IT group simply didn't have the bandwidth to take on multiple critical projects at the same time. "We prioritized what we would address first, which [projects] were more foundational and which ones could wait until later."
The next areas of focus for Clancy include developing IFBI's online presence, enabling mobility and improving data management through implementation of datamarts and a bigger data warehouse. "We're catching up on business practices, now that the technology is in place to support them," he explains. "We had made a decision not to do lot on the Internet channel -- that was part of the prioritization process, since we didn't have the foundational systems there. Now we have business decisions to make there [and around] support of remote workers and remote devices."
IFBI's captive agency force is "much more mobile now," Clancy says. "Technology is enabling them to do their jobs in a more efficient manner." Initiatives planned for 2013 include a tablet-based electronic app for life insurance, based on technology from Planetsoft (now part of Atlanta-based Ebix), incorporating e-signatures.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio