Mike Anselmo has been called "The Overhauler" for his penchant for visionary technology turnarounds. The latest of these is, appropriately, APEX, a massive technology transformation intended to modernize Narragansett Bay Insurance Co.'s legacy systems.
Crafted to support the Pawtucket, R.I.-based specialty underwriter's strategic focus on homeowners insurance on the Eastern seaboard, the plan has helped Narragansett Bay expand from a $12 million company when Anselmo joined in February 2009 to a $113 million (and growing) company today.
Anselmo believes technology should focus exclusively on driving business value and should work to reduce both the business and the IT footprint. The only way to do that, he insists, is through the use of leading-edge technologies.
"A pet peeve of mine is that insurance companies have neglected technology. They say they innovate, but many really don't," Anselmo says. "I understand it can take time to move very large companies, but there are also smaller companies that get trapped in their old ways of doing things when there are so many things they can do with technology to bring in the customer, reduce expenses and adopt leading-edge business processes."
According to Anselmo, he has been involved in start-up or overhaul projects since he left college. He was involved in building Fuji Film USA's technology department when the Japanese film company opened for business in America and later spent four years with American Alternative Insurance Co. (AAIC), a venture by American Reinsurance (now Munich Reinsurance America) to create a primary P&C insurer; when Anselmo left AAIC after 12 years, it was a $600 million company.
Anselmo eventually went on to serve as chief technology officer at Primex Trading, where he led the creation of the Nasdaq stock market's first open-cry auction system. As SVP and CIO of Clarendon Insurance Group, Anselmo redesigned the company's technology enterprise architecture and systems to support the rebranding of the company as the Praetorian Financial Group. "We built the company up from $800 million to $2.2 billion and then managed its sale to QBE Americas," Anselmo says.
While entertaining one job offer from a consulting firm and another from a large insurance software vendor to run a global BPO operation, Anselmo was approached by the leadership of Narragansett Bay. "They came in and said, 'We're a small company with ambitious growth aspirations,'" he recalls. "Their offer was for me to come on board and transform technology to enable the company to grow from $12 million in premium to $300 million in three years."
Anselmo says Narragansett Bay's strategy of applying more-granular underwriting in a traditional market intrigued him, and after the company shared details of its strategy with him, he signed on in February 2009 as CIO. "There was proof that we could realize their ambitious goals and reach even greater success in time," Anselmo says. "But there was no way we could have done it with the existing legacy systems."
After evaluating the company's "very old-school and boring" technology, Anselmo says, he designed a soup-to-nuts transformation, APEX. "This was not just putting a new policy administration system in," he relates. "We did everything -- and while the company was running."
At the heart of APEX were modern, open-standards-based, highly configurable core systems for policy administration, billing and claims, Anselmo reports. Exigen Insurance Solutions (San Francisco) supplied its PolicyCore and BillingCore systems through a software-as-a-service deployment that was among the first core insurance systems applications of the delivery method, Anselmo says. APEX also leveraged BlueWave Technology's (Honolulu) PipelineClaims system and included the internal development of a fully functional agent web portal, data warehouse and integrated web services providing real-time quote data to agents.
As a whole, according to Anselmo, the APEX project comprised new core systems and new and existing secondary systems to create a fully integrated architecture and a modernized, "clean slate" technology environment; to establish a flexible and scalable web-based platform; to operate on a light, efficient IT footprint; to achieve deployment in a short timeframe; to accelerate speed to market and market agility; and to maximize agent self-service and automated underwriting.
Narragansett Bay employed an Agile development methodology over a 12-month period, averaging one sprint per month, Anselmo explains. In March 2010, agents began using the new web portal, featuring single-sign-on access to legacy systems and "one-stop shopping" for all their Narragansett Bay-related activities, he says, adding that PipelineClaims went live in August 2010 and the Exigen core applications went online in October 2010.
Among the benefits of the APEX transformation are improved business operations, Anselmo says. "Agents can now write business in a third of the time it took on the legacy system," he insists.
And Narragansett Bay has enjoyed a significant reduction in the time it takes new agencies to "ramp up," from about six months before achieving the expected run rate on the legacy systems to immediate ramp-up for quoting and issuing with the new systems, Anselmo reports. The insurer also has seen a substantial increase in production quoting and issuing on the new platform; the speed-of-doing-business enhancements have led to an increase in business steered to the insurer, he offers.
In addition, Narragansett Bay has introduced straight-through processing for the first time, achieving STP levels of 80 percent and growing. "Underwriters used to have to fulfill every policy," Anselmo indicates. "Now we're down to 20 percent; but we're confident that will be down to 5 percent before long."
Lead, Don't Bleed
Anselmo credits these successes in part to a willingness to take prudent risks with emerging technologies. "While I was at American Re my SVP always advised, 'Leading-edge is good, but avoid bleeding-edge,'" Anselmo recalls. "Although I do tinker with bleeding-edge -- because R&D is important and today's bleeding-edge is tomorrow's leading-edge technology -- I would never use it in a core business application."
In addition to his "reduced footprint" mantra, Anselmo says his philosophy of technology transformation is to build a strong team, and buy rather than build solutions, using a best-of-breed approach. "That's a challenge because of the different interfaces, the difficulties of bringing everyone together, the schema and database changes," he acknowledges. "But I still think the benefits outweigh the risks."
Anselmo also believes in a "hands-on" approach. "One of our requirements for the Exigen and BlueWave rollouts was that we needed to be intimately involved," he explains. "Some [vendors] take a hands-off approach to their clients and do kind of a shrink-wrapped software solution delivery on their terms. But we pick these solutions and they're leading-edge, so we need to be involved."
Anselmo describes himself as somewhat aggressive and demanding as a leader, which he sees as necessary when in the "overhaul" mode. "I try to find people who have the right qualifications and a similar attitude to mine," he says. "To work for a start-up company, you have to wear many hats. Some technology professionals like to come in, get their work done and leave, but that often doesn't work in an entrepreneurial environment where you're trying to fill a lot of goals into a short window of opportunity."
In such an environment, it's helpful when the CIO can demonstrate his or her own technology acumen, Anselmo points out. "I stay up on the latest technology, and when I sit down with my engineers, the feedback they give me is, 'Wow, he actually knows what he's talking about!'" he jokes.
"While it's not easy to keep up with changing technology, that's something I've committed to doing," Anselmo adds. "I'm fortunate enough to have technology as my hobby as well as my career."