Yom Senegor believes information technology is not some business department that you keep locked up in the basement of an organization and manage solely as a cost center."IT plays an extremely critical role in the long-term success of an insurance company and is an integral part of the business," says Senegor, senior vice president, CIO and chief corporate strategist of Seattle-based Safeco Corp., a $7-billion insurance and financial services company.
"When you combine strategy and technology into a single leadership position, it puts an exclamation point on the importance of both in the organization," he says.
Combining what are commonly two separate leadership roles into one executive position creates a natural synergy between strategic direction and technology implementation.
Because he knows Safeco's business strategy, Senegor can direct his IT organization to build infrastructures and sales platforms that are flexible enough to satisfy long-term-not short-term-corporate needs. "This way we can deliver IT capabilities to enable the full-blown vision of the corporate strategy," Senegor says.
When the former Accenture insurance industry consultant officially started as CIO in October 2001, he initiated Safeco's first IT governance system.
"The alignment was broken," he says. "There were a lot of business silos that were optimized to do their own things that weren't necessarily in the best interests of Safeco as a whole."
The governance process is very simple, he says. "We keep track of projects, timetables, work loads and how we are executing. The top executive from each major business unit sits at the table and we openly collaborate and resolve issues involving the business organization and the IT organization."
Senegor has introduced cost-benefit analyses, an executive sign-off system for IT projects, accountability standards, and established project priority procedures. "Now people see the value that properly prioritized IT projects bring to the organization," he says.
The IT governance process is managed based on a return on investment. "We have created models and broken down initiatives to make sure they have some level of ROI," he explains. "Some projects won't have an immediate return, but we must have the discipline to estimate the cost."
An unusual aspect of Safeco's IT governance process goes beyond the typical business case. Senegor, much to the chagrin of his IT staff, wants to show a 3% to 5% increase in the operational efficiency of his IT unit each year.
"Sometimes people question the cost of IT," he explains. "I want to be able to show an improvement in efficiency in real dollar figures."
This focused IT governance process has helped Safeco quickly automate products, reduce the time for closing a sale and expand distribution channels by leveraging the Internet.
For example, Safeco launched a new auto product last year designed to improve preferred business, while expanding the insurer's reach from 40% to 95% of the entire auto market. The change has boosted sales by 50% to 75%.
"We used information technology to automate the underwriting procedure. We now can capture all third-party information (credit reports, department of motor vehicle information, etc.) at the point of sale and can close a piece of business almost immediately," Senegor says.
Another 2002 initiative, called "Safeco Now," enables life insurance agents and advisers to take their clients from online quote to online sale with binding coverage in 15 minutes or less.
In January, Safeco introduced a technology that enables agents to quote and issue small-commercial insurance policies online in minutes. Called ESP (efficient service and pricing system), the technology cuts days and weeks from the sales process by automating the underwriting process. The system improves the way Safeco creates, prices, sells and services its products in a line known for razor-thin margins.
"Information technology is fast becoming synonymous with 'ease of use' for the marketplace-especially for our distributors," Senegor says.
Eye on the Future
How does Senegor plan on using information technology at Safeco during the next three years?
"In our business, we are selling a commodity, and price is extremely critical," he says. "Yet when we sell our products, we don't know exactly the true cost of our product because we don't know how many claims will be filed against a policy."
Therefore, Senegor wants to more broadly use fact-based decision-making in creating, pricing and assessing product risk. "We want to present Safeco's collective knowledge base in such a way that our product managers, our sales professionals and our claims adjusters can make better decisions that significantly improve profitability," he says.
"I want to create some fact-based predictive models for our product managers so they can differentiate risk profiles and price their risk more appropriately," he says. "We want to be more scientific about assessing risk. And we want to do it without violating privacy laws."
Brian Moskal is a Chicago-based business and financial writer.
Name: Yom Senegor
company: Safeco Corp.
Years with company: 17 months
IT mission: To bring governance to IT and align it with the company's long-term corporate strategy.
Revenues: $7.07 billion (2002)
Sales Force: 17,000 independent agents, brokers, and financial advisors and wholesalers
Major Business Lines: Property and casualty insurance, surety, life insurance and asset management
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