Zurich Kemper's Russell Bostick exemplifies the new breed of CIOs who areintegrally involved in shaping carriers' strategic business decisions.During his 21-year career, Russell Bostick's ambition has been tobecome more involved in the big picture of running a business. Now, as CIOat Zurich Kemper Life Cos., Bostick ensures that technology is a keycomponent of the company's business strategy.

"For IT to be a partner in strategy, you need employees that can talkin strategic terms," Bostick says. He encourages employees to round outtheir business education, as he did some 20 years ago, studying for hismaster's degree at night.

Bostick also challenges his staff to understand the business goals atZurich Kemper that spur their projects, so they can have greater influencewith their clients.

"That does not just mean being able to use buzzwords, but to actuallylisten and be able to help clients accomplish what they want to achieve,"he says. The objective is to create a staff that has "the ability toconceive of what to do, not just the ability to do it."

Behind Bostick's driving desire to be involved in the bigger picturelies simple, innate curiosity, according to people who have worked withhim.

"Russell never lost his sense of curiosity and that's critical," saysRobert Hamilton, a former colleague and now co-founder of Internet companyProofSpace in Chicago. "That keeps him forward-looking and interested inlearning more."

As a manager, Bostick has a reputation for clear ideas and a clearsense of outcomes but he is also willing to be educated, Hamilton says.

Social call

Although technology has been the sole focus of Bostick's entire career,his early interests almost sent him down a different path.

Bostick studied chemistry as an undergraduate at Wabash College inCrawfordsville, Ind. But in his senior year, he realized that he had nodesire to become a chemist. "It's not very social in the early years,"Bostick says about the life of a chemist. "You monitor other people'sexperiments."

Instead, Bostick turned to information technology, landing his firstjob in 1979 as a sales support engineer for IBM Corp. in Chicago.

Selecting a career in information technology for its social potentialmay not be typical for CIOs, he explains. "A lot of people who come throughIT don't want relationships," Bostick says. But being a manager in IT-andultimately CIO-requires being part of a social community, he explains."It's a group effort."

Searching for strategy

At IBM, Bostick came into contact with many company clients, providingfield technology support, first in minicomputers and then in personalcomputers. Bostick's interest in company strategy quickly surfaced and onlya year into the job, he began studying for his master's degree in businessadministration at the University of Chicago.

"It wasn't required for the job at that time," Bostick recalls."Everything at IBM was very programmed, and you didn't have to have thebusiness school turn-everything-upside-down mentality."

Bostick kept an eye out for more business-oriented job opportunitiesand eventually became an account executive working with Chicago-based CNAInsurance Cos., a career move that introduced him to the insuranceindustry. "I became more involved in systems architecture andorganizational development," Bostick explains.

His interest in insurance technology led to an offer to become CNA'sassistant vice president of systems development, a job he accepted after 15years at IBM. "I knew what kind of an impact I could have with CNA becauseI had worked so closely with them," Bostick says.

Initially, Bostick was involved in implementing some of therecommendations he had made to CNA while at IBM. But within a year, Bostickbecame involved in the integration process as chief of staff to the newCIO.

"My role was to be a trouble-shooter," Bostick explains. "We hadchallenging work in merging two IT departments and bringing togetherdifferent technologies."

Bostick remained chief of staff to the CIO as he took on otherresponsibilities at the company, including running the data center. But hestill was not at a level where he could have a direct impact on how thebusiness as a whole was run. In 1996, when CNA needed staff to join itssubsidiary, the Insurance Information Exchange (iiX) and build products forthe Internet, Bostick was eager for the assignment.

Bostick was quick to see the potential of the Internet for theindustry, says Robert Hamilton, former vice president of e-commerce at CNA,who worked with Bostick on several projects. "Here was an opportunity toevolve from the proprietary closed networks that have always characterizedinsurance," he says.

Hamilton recalls joining forces with Bostick at times "to be annoyingto people" and move technology projects forward in an environment that wasslow to embrace e-commerce. "Russell was a change agent in a major way."

Looking back on it, Bostick says the Insurance Information Exchangeeffort may have been ahead of its time. "It was early and most products, Iadmit, had a short life," Bostick says. "We would have had more successwith current technologies and with the kind of venture capital fundingavailable to Web companies today."

Despite the job's shortcomings, he finally achieved his goal of gettinginvolved in planning and supporting business strategy. "People working onbusiness strategy were wondering what to do with the Internet, so you endedup meeting them and also had interaction with people at other companiesthat were forming (Internet) products like InsWeb," he explains.

Moving on

After three years at CNA, Bostick moved on to become chief technologyofficer at Norwood, Mass.-based Corporate Software & Technology. Bostickliked the idea of working for a technology company, and because the companywas hoping to transition to selling its products over the Web, the workmeshed nicely with Bostick's recent experience at CNA. He also achievedcorporate officer status, reporting directly to the CEO.

Leaving Chicago proved more difficult than Bostick had anticipated,however. "In Boston, I found myself somewhat detached, both professionallyand personally," he says.

When Long Grove, Ill.-based Zurich Kemper Life was searching for a newCIO in 1998, the job seemed tailored for Bostick. Not only could he returnto Chicago and to the familiar terrain of insurance but he also could getinvolved again in international business, an interest he had acquired yearsearlier as a foreign exchange student in London.

"Zurich is a large international company, like IBM," Bostick says."That creates lots of interesting opportunities and business problems."Equally important, the company had a long tradition of running IT throughthe business side, which suited Bostick's strong desire to be involved instrategy.

Striking a balance

When he joined Zurich in April 1998, Bostick's top priority was tooversee the development of an IT infrastructure. At that time, the companywas outsourcing its IT needs to Dallas-based Cybertek, now a division ofMynd Corp., Columbia, S.C.

But the merger of Kemper Life with Zurich in 1996 created an $18.3billion entity and new business opportunities that were beyond thecapability of the outsourcer, Bostick says.

"I'm not a believer that you should do everything internally oroutsource everything," Bostick explains. "You should have employeesrepresented in positions that have long-term implications for the company,establish control and build strategic capability."

Bostick's philosophy has been well received by Zurich's seniorexecutives. In February 1999, he was promoted to senior vice president andbecame a member of senior management. "Russ is a critical link in theintegration of technology into our overall business strategy," says Gale K.Caruso, Zurich Kemper's president and CEO. "We place a strong emphasis onthe power of technology to provide our customers with a superior level ofconvenience, care and choice."

Since his promotion, Bostick has participated in all senior managementmeetings, whether they directly involve IT or not, including a monthly,two-day meeting offsite.

"Technology was always at the highest levels under CEO John Scott, whohad personally directed technology," Bostick explains. "But in elevatingme, the company was bringing an IT person to the discussion rather thanallowing business professionals to represent IT."

Bostick creates and updates strategic plan documents with seniormanagement and also works with his nine direct reports, each overseeing aprofit or cost center within CNA, to develop those plans for technology.About a year ago, he and two other senior managers were assigned to a taskforce to improve new product development.

Bostick also attends meetings with his counterparts from some 75 unitsof parent company Zurich Financial Services Group, which employs around68,000 people worldwide. The CIOs from the different units meet at leastannually at the company's headquarters in Switzerland and participate inleadership training.

"There is some travel and a lot of opportunity to work with peoplearound the world," Bostick says. "Zurich has many good mechanisms fortransferring good ideas, and that's as true in IT as it is on the businessside." He notes that the opportunity for international experience helps himrecruit new staff.

Bostick oversees a budget of approximately $50 million. "It's notgargantuan but it's not small," Bostick says.

One of his first projects as CIO at Zurich was implementing a datawarehouse. When the project began, he explains, there wasn't enough data inone place, relative to the money spent on the project, to make it valuable.Fortunately, CEO John Scott, who has since retired, judged last year thatit was too soon-and costly to give up on the project, Bostick recalls.Scott encouraged IT to broaden the scope of the project.

The company has continued adding data to the point where Bostick nowhas an application backlog. His concerns have shifted to how to improve thedata warehouse as users come up with new ideas. "In the past year, we'veachieved critical mass so that people really want to use it," Bostick says.

The company has spent about $5 million building the warehouse sinceearly 1997. Acknowledging that many data warehouse projects fail, Bosticksays the key to Zurich Kemper's success was focus. "A lot of datawarehouses get lost in the woods because of their scope," he says. "Wefocused our scope in terms of the type of analysis we wanted to do."

The warehouse revolves around sales performance and work-in-processmeasures. It can also summarize and feed data to the company's generalledger system. "It has a lot more financial data than it used to," henotes.

Other projects that Bostick has overseen include Zurich Kemper's newcall center and enhancements to its Web site, at www.zurichkemper.com.Bostick now envisions linking the call center and the Internet site intoone contact center, where phone calls, e-mail responses and Web "chats"with clients can all be conducted. "The same skills are required to deliverthe answers, and you also want to make sure that the answers areconsistent," he explains.

Web strategies

Zurich Kemper is determined to steer its customers to use the company'sWeb site more frequently. Pursuing that strategy raises a number ofintegration issues that the company is trying to tackle.

"Companies in the mutual fund space are showing the way in multichannelor multimodal communications, and vendors are selling these ideas," Bosticknotes. "Thinking of doing it is not rocket science, but doing itsuccessfully is."

The Internet can play a big role in increasing market penetration forlife insurance, which remains relatively low in the U.S., he points out."When you have an under-served market and technology that can lower thecost so people see it as less of a big decision, describing the products tomore people should lead to more sales." That applies especially to complexproducts, such as variable annuities, because the Internet can help bothclients and distributors understand them, he adds. The Internet should alsotake some of the cost out of acquiring new customers, he notes.

While dealing with Internet-related issues occupies a significantamount of his time, another major challenge for Bostick is maintaining andupgrading the company's existing information systems. "You have to operatein the new economy and the old one-this is a tricky job in that regard," hesays.

Planning for the future

Down the road lies one of the biggest challenges for Bostick and forthe life insurance industry as a whole: improving underwriting systems andultimately, reducing the time needed to underwrite new policies.

The existing systems were just not built to handle high volume at highspeed. "It can take 50 days to get a policy and a lot of people changetheir minds during that time," Bostick explains. "If you can shorten thattime and still offer low-cost products, you can sell more."

Improving underwriting systems, like almost all work in informationtechnology, will be an ongoing project. As technology changes, people'sexpectations change, Bostick declares. "It is a very dynamic industry,"Bostick says.

Before a technology project is even finished, there are new ways toimprove it. "You never get a sense of completion."

For that, Bostick turns to his hobbies: antiques and gardening. "Youcollect something or refinish it, or plant a garden and you see the resultsimmediately. Most of information technology doesn't have that same sense ofsatisfaction," he notes.

Because of that, IT professionals need to have an "internal gyroscope"to figure out if they have done a good job, Bostick says. "You can't boilit all down to objective assessment at the end."

Jeanne Burke is a freelance writer based in Brooklyn, N.Y.

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access