Safeco's Roger Eigisti isn't a technology guru, but like many CEOs, he understands the importance of technology.Like most insurance company CEOs, Safeco Corp.'s Roger H. Eigsti doesn't possess a background in technology, nor was it something he necessarily became an expert at while moving up the Safeco executive ladder.
But Eigsti, an accountant by trade, realizes executives don't have to be IT experts to understand the importance of technology. The 28-year Safeco veteran, who in 1996 became chairman and CEO of the Seattle-based insurer and diversified financial services company, has an appreciation and understanding for what technology can achieve.
"You don't have to be an expert in the nitty-gritty of technology," Eigsti says. "But you do have to have a sense of what's important to the company and determine what impact technology will have."
Zeroing in on which technology path the company should travel is definitely a high priority for a CEO, Eigsti believes.
"The CEO has the same role for all disciplines," Eigsti says. "And that definitely includes technology when there are so many different directions you can go."
The challenge is to sift through technology hype and determine what's appropriate for a company's strategic vision, he adds. "There's a lot sizzle out there. We need to find what the steak is."
Committing to e-commerce
It's evident that Safeco has a strong commitment to technology. In its most recent annual report, Safeco executives highlight four crucial goals for the organization: expanding e-commerce initiatives; maintaining its independent agency distribution system; developing an effective cross-selling strategy; and building a strong brand identity.
For all of these goals, the Internet has an important role.
"We are rapidly expanding our Internet site to provide new information and self-service convenience to our customers," the report states. These include adding more proprietary Safeco Internet and intranet sites for delivering sales, marketing and informational resources to agents and employees.
Safeco is making a determined effort not to exclude its agents as its business moves to the Internet, Eigsti emphasizes.
"We can do things directly online with the agent," he says. "There is a strong emphasis to get agents very involved."
Individuals can, for example, visit an agent's Web site and buy term insurance online. By the end of the year, this service should also be available for automobile insurance, Eigsti adds.
To keep agents involved in Safeco's Internet strategy, the insurer is helping build agent Web sites that hyperlink to Safeco's Web site. There also is a strong push to get agents to cross-sell products using the Internet and other technology tools.
Safeco's push toward the Internet has required forming partnerships with online entities-again with the agent as an integral part.
Recently, the company became the exclusive provider of insurance for Business Advantage, an electronic marketplace that is accessible on an extranet developed by Concur Technologies Inc., Redmond, Wash.
Safeco will offer a range of commercial insurance products at the site beginning this fall, including automotive, worker' compensation, standard fire, farm coverage and product liability.
Safeco will become part-owner of Concur and is investing $25 million in the project (see April issue, page 8).
Shortly after its agreement with Business Advantage, Safeco also announced it would market Netstock Direct Corp.'s ShareBuilder, an automatic stock buying service in which individual investors can make automatic dollar-based investments in more than 2,000 publicly traded stocks.
Safeco will market the service through company and agent Web sites under the brand name "Safeco Sharebuilder."
Safeco hopes to continue launching online products to be sold with agent involvement that will serve as relationship building blocks and improve customer retention. "The more contact the agent has with the customer, retention goes up dramatically," Eigsti says.
Although the urge to build an innovative company is paramount, Eigsti believes there are several obstacles that insurers, including Safeco, face.
One is "people resources," or getting enough qualified IT people to fill all the insurer's needs. A problem unique to Safeco is that the company happens to share the same street in Redmond, Wash., with Microsoft Corp.-something that can interfere with the competition for skilled IT talent.
Other obstacles facing insurers include the need to sort out technological priorities, to allocate IT resources among various business units and the fast pace of technological change.
In the past, it may have taken up to three years to develop, test and launch a new information system, Eigsti says.
In today's environment, the technology may become obsolete by the time a project of that duration is completed. As a result, there is the need to build systems in increments in order to take advantage of changing technology, he adds.
Although Eigsti's enthusiasm for technology is clear, that doesn't mean he involves himself in day-to-day IT operations at Safeco, nor is he personally a "technology junkie," he says.
Each of Safeco's business operations has dedicated information systems and the insurer's business leaders meet with Chuck Stone, Safeco's vice president and CIO, on their particular IT projects.
By the time major technology initatives are sent to Eigsti for a decision, less important projects have been weeded out. An executive committee also meets monthly to review and discuss IT projects, and Eigsti meets with Stone on an as-needed basis.
"Roger understands the value that technology adds to our organization and how technology helps achieve our business goals," Stone says. "He is aware and supports what we are doing and provides value both to myself and IT."
For example, Eigsti was involved in the Concur Technologies and NetStock projects, Stone adds.
And, although he doesn't consider himself a hands-on IT guru, Eigsti brings his laptop on vacations and responds to e-mail every day, whether in the office or not. His computer is on all day and he does a lot of research from home.
Eigsti keeps tabs on the latest technology trends through discussions with his son, an executive at Microsoft. However, Eigsti has not become a part of the growing American culture that's using the Internet to purchase products.
"I haven't bought very much on it," he says. "Mainly, it's my wife who does that."
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