Mark Popolano compares the difference between being CIO and being chief technology officer at American International Group this way: As CTO, he was the navigator of technology; now he is the technology pilot."As CTO, you have to be very savvy to understand the nuances of technology," he explains. "The CIO has a greater responsibility across the organization to help steer the direction of technical processes."
Popolano, who joined the New York-based insurer in 1995 as senior systems officer for AIG's international property/casualty operation, says the importance of technology to support business initiatives has changed dramatically throughout the organization.
"The cooperative partnership between our business leadership and the IT group has grown tremendously during this time," he explains. "IT has become an added value to the business sector because it not only provides technology and deliverables, but also helps develop potential products within the organization."
Riding the Web wave
The cooperative, synergistic relationship between IT and senior business leadership has propelled AIG to the forefront of e-commerce with a variety of Web-based products and services, industry observers say.
"AIG is among the most aggressive in the way they approach e-commerce, and it's among the most progressive companies in terms of the functionality the company offers consumers via the Web," says Richard Roby, director of insurance and commercial banking for TowerGroup, Needham, Mass.
In the late 1990s, AIG began developing a series of e-business initiatives designed to meet the product distribution, customer service and informational needs of the wide range of businesses, consumers, brokers, agents and other key audiences served by the member companies of AIG. The core e-business Web sites of AIG can be accessed through the AIG Internet gateway page at www.aig.com.
Popolano and his team helped establish and orchestrate the Internet IT development strategies, architectural platforms, integration methodologies and software vendor relationships for these e-business initiatives.
"The platforms for the AIG Web sites were developed using the same tools, development processes and software templates to ensure quick and cost-effective deployments," he explains. "This strategy has helped transform many of the legacy platforms while enabling AIG to harvest and leverage those key business components that benefit the company's business directives."
In 1997, AIG launched AccessAIG, an extranet for brokers, agents, registered representatives and broker/dealers. It is specifically designed for property/casualty brokers and agents working with AIG's Domestic Brokerage Group, life insurance producers of the AIG Life Cos. and SunAmerica broker/dealers and licensed representatives.
Each destination within Access-AIG.com provides detailed product and industry information and enables the user to maintain account information, conduct transactions and communicate with local AIG-member companies.
In October 1999, AIG rolled out AIGdirect.com, the carrier's Internet initiative to provide consumers and business owners with personal lines and small-business commercial insurance products underwritten by AIG member companies.
With AIGdirect.com, auto, homeowner, rental, term life, travel and business owner policies can be quoted and bound online.
"AIGdirect.com is one of the top two or three insurance consumer Web sites because of the amount of functionality it is able to deliver to the consumer," TowerGroup's Roby says.
Popolano also was involved in developing other company Web sites including AIGonline.com for risk managers, AIG International Operations for information on international market products and services, and AIGcorporate.com, an information site for the investment community, the media, and employees.
Global IT issues
In addition to overcoming the technical hurdles of linking back-end systems to AIG's Web sites, Popolano is in charge of addressing the IT challenges associated with AIG's worldwide member companies in 130 countries and jurisdictions.
One of the most complicated challenges he addressed was the development of across-the-board IT standards, processes and methodologies.
"We have approximately 350 standards that stem from call center technology, to Web development, application development tools, security servers and hardware platforms," Popolano explains.
In addition, sound project management and internal financial management reporting structures also were established to track projects and resources. With 14 direct reports including the divisional CIOs and members of his office, Popolano says global IT priorities are set and reviewed through regular meetings between the senior IT executive team and the senior business executive team including AIG Chairman and CEO Maurice Greenberg.
Managing IT Projects
The global project management and the global financial management offices help facilitate controls and institute processes for reporting projects and financial management worldwide. These management offices also operate on a divisional level, so that Popolano can review project risks and reports with divisional CIOs as well.
AIG's IT budget for 2001 is $434 million, ranking fourth among property/casualty carriers, according to TowerGroup estimates.
To simplify the approval process for all IT projects, AIG's IT community and business owners have set limits, controls, methodologies and a hierarchy of approvers. This model provides a quicker response to member companies' needs while ensuring that projects of specific value and complexity are discussed and reviewed by both business and IT leadership, Popolano says.
"By managing through compromise and by allowing selective choices, these groups are invited to influence change by integrating their best ideas and practices into AIG's IT management and developer fabric," he explains.
Popolano's office provides a conduit that allows feedback and communication while setting standards and guidelines that guide the IT community to use the best practices and avoid redundant operations. This approach provides a structure to facilitate business delivery by ensuring interoperability between components and software packages, and across organizational borders.
AIG's general IT guidelines center on the philosophies of buy-versus-build, integration, and build only what is strategic. He is a firm supporter in the belief that components and services developed in the industry should be leveraged and examined first to expedite business delivery and pressing market demands.
"It becomes increasingly more important to achieve an integrator mentality and avoid the ills of a 'not invented here' philosophy," he says. "It's imperative to find and capitalize on 'the best in its class.'"
Despite this disciplined IT approach, Roby says that, like most large carriers, AIG's legacy and core systems are extremely customized and surrounded by proprietary codes.
"The biggest challenge that lies ahead of AIG is taking these legacy systems that support their traditional businesses and attaching them to a user-friendly front end," he explains. "AIG will most probably meet this challenge because it is a technology leader in the insurance industry and has the resident IT expertise on staff."
Cyber insurance and more
AIG intends to continue its development of products and services in the increasingly important realm of cyber insurance. Last November, the organization announced the formation of eBusiness Risk Solutions, a new division of the American International Cos. that analyzes e-commerce risks and designs and delivers insurance solutions for the business-to-business market.
This division provides insurance products that address risks such as network and Web-hosting security, virus protection, identity loss, credit, payment and transit-all inherent risks when conducting business on the Internet.
"These cyber insurance products have helped extend the channels of AIG to a much larger customer base," Roby says.
The desire to improve customer care is what's driving AIG's implementation of new call center technologies. Working with business partners, numerous products were examined and implemented to support IP telephony, workforce management, data scrubbing and other services. Based on the level of market sophistication, call center units also have been provided with Web-based chat, LAN-based routing and improved customer service functions via the Web.
Popolano says he believes financial institutions can reap many benefits from incorporating more sophisticated technology such as the Web and wireless communication in the way they conduct business.
"As we examine new technologies, they must provide added value to our business," Popolano says. "Everything we do in IT is tied to our strategic business goals of improved revenue, reduced expenses and better customer service."
Tina D. Tapas is a freelance writer based in Prospect Heights, Ill.
Mark Popolano
Age: 44
Education:
Bachelor of Science, Brooklyn College
Experience:
July 2000 to present
Senior vice president, CIO, American
International Group, New York.
January 1998 to 2000
Senior vice president, chief technology officer, AIG.
January 1995 to 1998
Senior vice president, CIO, American International Underwriters (AIG), New York.
July 1993 to 1995
Vice president, systems executive, Chase Manhattan Bank North American Trade, New York.
July 1990 to 1993
Vice president, systems executive, Chase Manhattan Bank
Global Risk Management, New York.
May 1988 to 1990
Vice president, group program manager, Chase Manhattan Bank Global Risk Management, Asia, Hong Kong.
