During MetLife Inc.'s arduous process last year of converting to a public company, CEO Robert Benmosche told Wall Street investors that the New York-based company would increase its use of technology to reduce expenses and its non-agent workforce by 5%.
Benmosche, a self-described technology maven, put William J. Toppeta, a 27-year Met veteran, in charge of overhauling the 138-year old company's amalgamation of legacy information systems. Equally important, Toppeta is working to instill a greater emphasis on employee performance.
Benmosche's decision to entrust Toppeta with a high-priority IT position is interesting, given that Toppeta's professional background is in law, rather than technology.
Since joining the insurance giant as an attorney in 1973, he steadily has risen through the corporate ranks. In addition to several stints in the legal department, Toppeta has been in charge of a Korean joint venture, Met's Canadian operations, and the company's agency field force.
But Toppeta argues that his lack of technical expertise is an asset. "I'm not a technologist, but rather a user of technology," he explains.
His professional experience has provided him with a broad perspective not only on the company, but on the insurance industry overall, he says. That should be beneficial, as he and his team try to identify those IT projects that are most likely to help MetLife achieve its strategic business objectives.
Substantial growth
MetLife has set an ambitious goal of increasing its number of policyholders from 43 million to 100 million during the next 10 years. At the same time, the company is striving to be an industry leader in establishing closer business relationships with its policyholders. "Technology clearly is a way to be more connected to customers, and enable customers to contact MetLife when he or she needs to," Toppeta says.
Industry analysts agree that technology will be critical to MetLife's future performance. "In this industry, you need to be up the curve in terms of technology," says Joan Zief, insurance analyst with The Goldman Sachs Group, Inc., New York.
However, some industry experts question whether MetLife is committed to devoting the technical resources to achieve its business goals. "The technology is there to do what they're talking about," says Richard Roby, director of insurance research with TowerGroup, a Needham, Mass.-based consulting firm specializing in financial services technology. "The question that remains is of corporate willingness."
Tech-spending plans
MetLife executives say the company will have invested nearly $2 billion on technology in 2000 and this year. The company currently has about 20 enterprise-wide information technology initiatives underway.
For example, MetLife has implemented a system that enables it to electronically adjudicate dental claims. Currently, about 70% of all dental claims make it through the system without human intervention, saving the company $15 million annually, Toppeta says.
MetLife also has incorporated computer-telephony integration within its five call centers, which are expected to field 42 million calls this year. The system automatically routes policyholders' calls to available employees. In addition, the system prompts customers to provide their policy number when they call in.
When a customer service representative picks up the phone, the policyholder's information appears on the screen. The system has enabled MetLife to reduce its customer service staff by approximately 100 representatives, Toppeta says.
MetLife's annuities processing center in Denver recently received technical upgrades. Previously, as tax time rolled around, paper applications would be stacked in piles several feet high on employees' desks. In addition to the clutter, only one person could handle one application at a time. What's more, when a policyholder called to check the status of his or her application, that information wasn't readily available.
Now, applications are electronically scanned as soon as they're received, and routed to the next available employee. They also are electronically tracked throughout the process. As a result, employees are able to answer customers' questions on the first phone call 90% of the time. Previously, the "once-and-done" ratio was 50%. Annual savings, including labor and file storage costs, are about $2 million, Toppeta says.
Web plans on hold
MetLife isn't planning to sell products directly to consumers over the Web, Toppeta says. The company's Web site offers product information, then directs visitors to Met's 11,000 agents. "We're certainly committed to the agency system," he says.
That strategy could backfire if the company loses revenue because of its reluctance to support selling policies via the Internet, says Jennifer Blackmore, senior research analyst with consulting group IDC, Framingham, Mass. "I'm more aggressive about making the consumer experience online better," she says.
However, Toppeta questions just how likely consumers are to purchase life insurance online. At least some analysts agree. "The underlying contract is 15 to 20 pages, and is written in arcane legalese," says TowerGroup's Roby. "Consumers are going to pick up the phone and call."
Similarly, most consumers would balk at filing a life insurance claim online, Roby says. "A mortality is not a routine event. People want to talk to someone."
Thorough review
All technology investments that now are earning a green light at MetLife have made it through a new, comprehensive weeding-out process.
"In the past, sometimes systems were built because they were thought to be a good idea, but there wasn't a lot of rigor in terms of financial analysis." Today, projects must achieve the ability to generate a 15% return on investment to be considered for funding. MetLife's capital investments in information technology aren't the only entities undergoing more rigorous reviews.
The company also is expecting more of its employees. "In the past, the culture was a little too forgiving of people that didn't achieve their goals," Toppeta says.
Now, employees are graded on a five-point scale based on how well they've met their performance goals. Management has determined that about 30% of its employees have exceeded their objectives.
Over the past five years, the company has been able to retain 95% of its top performers, while turnover among the lower ranks has been about 20%, Toppeta says. "It's definitely a performance-based culture," he says.
Although MetLife can point to recent accomplishments in implementing new technologies, Toppeta says the company understands the challenges it still must face.
Tough challenges ahead
In the past, the company often neglected to invest in new technologies, Toppeta says. Therefore, Met needs to increase its technology investments to catch up with other carriers.
And due to MetLife's recent acquisitions, the company is saddled with a plethora of disparate systems and processes. Those systems will need to be streamlined to improve operational efficiencies.
Toppeta believes that technology will enable MetLife to meet the challenges ahead. He calls Met's IT department the company's "factory," given the role that technology is playing in servicing its policyholders. "Our IT strategy is integral to everything we do," he says.
Although his responsibility of making sure that the factory keeps on humming doesn't leave much free time, Toppeta likes to hit the roads when he can. He is an avid runner, and regularly pounds out 25 miles each week at a crisp pace. That energy will come in handy as he leads MetLife's charge to use technology to meet its goals.
Karen Kroll is a business writer based in Minnetonka, Minn.
William J. Toppeta
Age: 52
Education:
Bachelor of Arts, Fordham College, New York; Master of Laws, New York University School of Law; Doctor of Laws, New York University School of Law.
Experience:
May 1999 to present
President, client services and chief administrative officer, MetLife,
New York.
February 1998 to May 1999
Senior executive vice president, head of individual business, MetLife.
December 1996 to February 1998
Executive vice president, career agency field force, MetLife.
November 1995 to December 1996
Senior vice president, corporate reengineering, MetLife.
June 1993 to November 1995
President, CEO, MetLife's Canadian operations.
January 1993 to June 1993
Vice president, deputy general manager, MetLife's Canadian
operations.
July 1983 to January 1993
Vice president, law department, in charge of the litigation section,
and employee and union relations section, MetLife.
April 1979 to July 1983
Assistant vice president, office of the president, MetLife.
