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Technology as Key Driver for Reduced Insurance Cost

By Paul Brady, VP, CIO, Arbella Insurance Group

Paul Brady, VP, CIO, Arbella Insurance Group

How can technology be used to mitigate rising Insurance costs?

There are many drivers for rising automobile insurance costs. There is the increased risk associated with more cars on the road and greater miles driven. Those increased risks, coupled with distracted driving, have increased the frequency and severity of auto claims. The opportunity here is to assist in reducing these situations by helping the insured. This is not about using technology to simply reduce costs but using technology to make people safer.

Recently, we evaluated technology from Cambridge Mobile Telematics that measures driving behavior and provides feedback via gamification to reward good driving and show where bad behaviors occurred. The use of this technology to provide near instant feedback to drivers has shown a reduction of distracted driving upwards of 35 percent. The ability for technology and insurance carriers to positively influence driving behavior and help people be safer is a great cause. It makes working in technology, within an insurance carrier, very exciting.

On the homeowner front, there are many technology companies competing to control your “smart home” and make your life easier and less risky. The challenge is with the sheer volume of companies - how do you choose the right company as a homeowner? And as a carrier, how do you choose the right partner that is viable and sustainable? I see technology and insurance carrier CIO’s as potential leaders in this space—they have the potential to drive change in the homeowner’s products and services market. In fact, a few weeks back, I attended a Silicon Valley event with more than 20 insurance carrier CIOs. During this trip, we visited established Silicon Valley companies like Salesforce and Amazon as well as startup companies including Roost and the plug-and-play startup incubator. The opportunities to move technology from a back-office function to a business impacting and consumer impacting role is exciting.

"The ability for technology and insurance carriers to positively influence driving behavior and help people be safer is a great cause"

How can the C-Level Executives make their business counterparts think differently about the importance of IT?

Here at Arbella, the C-Level executives and our business are definitely thinking differently about IT. We’ve moved up the value chain to our company and are more than a service provider; we are a business partner and, increasingly, a business enabler. The importance of technology ranges from back-end processing to cutting-edge digital efforts including mobile applications, SmartHomes, telematics and big data.

How would you describe the role of a C-Level Executive today?

I find the role fast paced, highly demanding and incredibly exciting. You do not lose the historical functions of IT where you need to maintain your core systems, provide core business functions, and build a strong and sustainable organization. All of those still persist, but you now also have the opportunity to enable new business capabilities, bring technology ideas to the table that can help the business, and most importantly, have a seat and a voice at the executive table.

What changes have you seen in the IT operating model of your organization during the last five years?

I’ve been in my current role for more than 6 years and during my tenure, we’ve moved from a service provider to a trusted business partner and now a business enabler. Those changes were based upon delivering on commitments, earning trust and respect, having a vision and executing on that vision and building a solid team that can meet demands for today and tomorrow. The pace has increased annually and I’d estimate that we have double dour output from 2013 to 2016. In order to meet that increase in demand, we’ve built a solid partnership with HR to develop and execute a solid HR strategy. We’ve also recruited, developed and retained some incredible employees that are excited about change and appreciate the opportunity to deliver more to our business and help make the company better.

Moving from traditional IT to a service offering model requires a major mindset shift in IT. How did you make that happen?

As stated previously, it is about employee recruiting, development and retention. We built an excellent college recruiting program and our college hires are adding significant value. We have also recruited some exceptional senior talent to bring new ideas to the company. Finally, we’ve continued to invest in and develop our existing talent. Of course, we’ve made tough staffing decisions over the years to ensure the right people are on the team, but overall, we’ve built an exceptional organization with a great mix of experience and skills. I like to refer to my organization as one that is diverse in many ways, including the traditional ways that we define diversity but also through diversity of thinking. Having many different backgrounds, experiences and skills allows us to have diverse ways of addressing problems, building strategies and bringing innovation to the forefront of our company.

What is your advice for the upcoming or budding C-Level Executives?

Patience is a necessity and building a plan is important. You want to fix everything day one. You see many opportunities. Remember to listen first, seek first to understand and then be understood. The decisions that were made by the prior regime were probably not poor decisions. They were likely the right decisions at that time, based upon business/ market demands. That does not mean you simply accept those decisions. But rather understand them and then build a plan to achieve the vision that you set out for your organization. You need to deliver on your financial and project commitments. Those commitments get you the trust you need to then implement and deliver on your vision. Do not forget the people—they are the most important aspect of any executive’s success. You need them to be able to deliver on your tactical needs, your near-term needs and your vision. Show the team where you are going but make the journey achievable by breaking it into smaller, digestible work efforts. You won’t have a college hiring program that represents more than 20 percent of your workforce and have an IT turnover of seven percent, despite a highly competitive market, in the first year. But if you lay the foundation and plan for the future then you will have that success in the sixth year.

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