Editor's Note: This is the third in INN's "Day on the Job" series, in which INN editors spend a day with insurance executives to find out how they overcome the challenges they face on a daily basis.
Having taken the train from his home in Logan Square, one of Chicago's historic neighborhoods, Nate Root, SVP of Finance - Shared Services at CNA, has been in the office since 7:30 or so, reading e-mail and returning phone calls. With the train literally just outside the windows of our conference room in the CNA Tower, located in the southeast corner of Chicago's Loop, Root tells me about his tenure with the commercial P&C insurer.
Root has been with CNA since 1994; it has been his only employer since he earned his master's in mathematics from the University of Michigan. He joined the company as an entry-level actuary, concentrating on workers' compensation before he was promoted to lead the commercial auto pricing group. "The experiences I had as an actuary helped shape me," Root says. "The experience I had running large projects has been very eye opening and really amazing."
In 2001, CNA began taking an interest in data warehousing, and though he was in the actuarial department, so did Root. "And I've been on it ever since," he says. Since then, Root has his hand in, and mind on, seemingly every technology project underway at CNA, which puts him in contact with practically everyone. That same year, he was promoted to AVP and led the initial phases of a multi-year management information program that supported actuarial and other business users with their information needs, led a three-year, $100 million IT implementation of Oracle's PeopleSoft financial systems, and began his work on Merlin, CNA's enterprise data warehouse, which is built on an Oracle database.
Now he has an $8 million budget accountability and a staff of 60. Reporting to the CFO, with a matrix-reporting relationship to the chief actuary, Root leads the Shared Services Organization, which is dedicated to quality information throughout the entirety of CNA. He partners with the CIO and IT department for development and infrastructure services and is now responsible for Merlin, business intelligence, data governance and PeopleSoft financials.
Working on that early project gave him an appreciation for business relationships. "And data quality is the same," Root says. "It's about the relationships between actuarial, claims, IT and underwriting. If those relationships are strong, driving data quality is much easier."
Root's first scheduled meeting, his biweekly one-on-one with Larry Haefner, EVP and chief actuary, is on the other side of the building and many stories up. Root and Haefner are clearly comfortable with each other. They have no formal agenda. Rather, each keeps a list of discussion topics and they compare notes about projects, progress and evolving requirements coming out of the actuarial department.
Their first topic for discussion is the analytics project for workers' compensation and the need to formalize the data governance to facilitate the data exchange between the claims system and a new data mart. The goal of data governance is to be as consistent as possible when moving data from one place to another. The challenge, however, is that departments typically have formatted the data for use in their individual roles and applications rather than considering the value of the data to the enterprise.
"What we are doing is formalizing a step that looks across everything from an information perspective," Root says. "That happens informally now. There's peer reviewing and those types of things, but it is not as systematic as it needs to be. So we are taking it to the next level and making it systematic," Root says.
To facilitate good governance, Haefner, Root and SVPs from underwriting and IT developed 12 information principles. One reward for proper data governance, Root explains, is that it eliminates workarounds, making the work simpler, faster and more accurate.
The case in point is umbrella claims, which are coded to describe details such as when the claim came in and the underlying policy number. But the codes did not describe what sort of policy the umbrella was over, such as auto, general liability or some other sort of policy, which was causing workarounds and costing claims people unnecessary time and effort.
The code for the underlying policy wasn't being set up when the claim came in, so the claims professional had to search for the policy and create a new code. "It still got an accurate analysis, but it was more work," Root says. "Now when a claim comes in, that code gets set up immediately and eliminates the workaround. And it goes with one of our key principles: correct errors at the source."
Good data governance also requires good communications skills, Root says, and partnering with the business users early in the process, to better understand their needs and expectations, is necessary to avoid "unbaking" those solutions, Root says.
"We spent a fair amount of time figuring out how we would clearly articulate our expectations for these solutions," Root says. "Like everything else, it started out as 17 pages and we digested it into 12 really short, almost pithy, phrases such as, 'Write the data at the source.' And then we pushed that out across the architecture group and across to actuarial and all the people who were really involved in it, so that they were very clear what the expectations of leadership were going to be. It had a pretty dramatic impact," he says. "We have it in our own heads-the principles that we are going to judge these solutions against-but if we haven't effectively communicated those, the chances our people will design systems that meet those principles without knowing them is pretty low."
Next on the agenda is the Advancing Analytics Roundtable, a weekly meeting with a number of actuarial, data management and architecture SVPs, including Chuck Boucek, VP and Actuary - Pricing.
The mood of the meeting is very upbeat. And, for good reason: They just scored major successes with the launch of the new commercial auto data mart-which brings together premium transactions, claims transactions, relevant third-party information and predictive insights into one database that actuaries and underwriters will access to ascertain how well the commercial auto insurance line is actually performing-and the management liability data mart, which was nearing completion and launched in late January.
The data marts are part of Merlin and can be accessed directly for predictive analytics, but also through SAP Business Objects, a business intelligence application for reporting and analysis. The commercial auto and management liability data mart projects, which ran in parallel, took 11 months and cost $2 million each and will come in on time and under budget, despite Superstorm Sandy sidelining several project-team members for weeks. The nexus of the team consisted of 12 people, but during testing and rollout, there were as many as 40 people on the project.
The hardest part, Root says, was managing data quality. "Once you try to do something with data that you haven't done before, you find that the quality was suitable for the purpose that it was driving, but then you find opportunities where you can drive data quality in the future. That was our biggest challenge, but we also found a lot of promise for down the road."
In addition to the new data marts, CNA ended up with an internal team capable of building more data marts and the company is looking to create 10 or 12 more, each for individual lines of business. But now Boucek is reiterating the need for documentation to facilitate onboarding. At the bottom of every page of the project instructions, Boucek has in bold: "Complete the data dictionary and data documentation."
"He was really driving that home," Root says. "We have a sophisticated data asset that a small number of people are going to use. But there are going to be new people joining: new modelers, new actuaries, new analysts. And when they come in, there needs to be a more formalized path so that they understand the assets of the company, where they can go to find the information they need," he says.
Another recurring theme of the Advancing Analytics conversation is the need to not reinvent. As rate and retention metrics were already part of Merlin, for example, they were able to link to that data rather than replicate it for the commercial auto data mart.
Root contemplates his watch and closes his red spiral notebook, which after two meetings now sports pages of diagrams and doodles. We're done here. They wrap up and the team disperses, clearing the table of tablets and laptops.
As an adherent of David Allen's "Getting Things Done" organizational and productivity philosophy, Root will revisit his notebook at the end of the day to break projects down into manageable pieces, so they are not overwhelming. "Organizing in the moment is not as effective for me as capturing and then dedicating some time to clean it up later," he explains. And laptops and iPads are too distracting. "You can do too many things-check your e-mail, work on other documents-and you end up working on something that is completely unrelated to what the meeting is all about," Root later says.
After the Advancing Analytics Roundtable, Root has an hour and a half blocked off. We walk back to his corner office. There are no personal affects or photographs other than a calendar featuring Wheaton Terriers-he and his wife own two-and a large framed information graphic by Charles Joseph Minard, first published in 1869.
The print, a gift from two team members who worked with him on a management report dashboarding project, shows the number of men in Napoleon's 1812 Russian campaign army, their advancement, as well as the temperatures they encountered as they fought and returned from war. In short, 422,000 men left and just 10,000 returned.
As on most days, he brings lunch from home and eats at his desk while he checks messages and returns calls. Then it's off for a lap around the office to informally check in with his various team members.
As informal as the previous meetings have been, the monthly Finance Portfolio Review meeting, actually an enterprise technology status review, is at the opposite end of the spectrum. In attendance are various IT AVPs and VPs, including Dan McDonnell, VP - IT and Tom Peroulas, IT Program Director.
It's a bigger room, a bigger table, and a formal agenda: a 13-page color-coded spreadsheet in 7-point type, detailing the status and next steps for dozens of technology projects CNA is planning, implementing and maintaining. McDonnell refers to it as "a scorecard."
To create the document, many conversations have had to take place up and down command chains and among providers and internal teams, Peroulas explains. "We go out and meet with our partners, and this allows them to see that we understand what's going on in their business. At first, it's seeing it there that gives them some assurance. But then the bar is raised, the ante is upped, and it allows us to elevate the conversation."
The review is detailed but brisk. They work their way through 13 pages in about 40 minutes. "It's 20 percent looking backward and 80 percent looking forward," McDonnell says. "This is the narrative about what we are going to go do vs. the narrative about what we did do, which doesn't add a lot of value. The other thing we do is go up and down the management chain. We are in a managed services environment; we have multiple managed-services providers. I have bosses and command chains and Nate has bosses and command chains. But we've got one report we put together. This is where we stand, and we are aligned on it, and everyone gets the same information at the same time."
Root nods in agreement. "It's transparent. We're not trying to sugar coat anything. Some organizations put these meeting together to show everything is 'green,' and it's all good. But all that does is allow you to keep kidding yourselves. We take it very seriously. Where do we need to focus; where do we need to improve; what do we need to do about it? Because we want to get better."
As the end of the day rolls around and we prepare for Root's photo session for our cover, I ask what his evening holds. He's usually out of there by 5:30 or 6, he says, but during lunch he saw an issue arise in internal travel and expense reporting, so he has to follow up on that. Plus, there is a 24/7 component to his job, as calls and e-mails from overseas come in throughout the night. "There are always new projects that come up. And that's one of them: How can we do a more improved job around that information?" he says.
Today was lighter on meetings than usual, and there was more good news, Root says. "Typically we would have gone through an issue list, probably six or seven items long and gotten a blow-by-blow. That second meeting would have been more issues/resolution/awareness focused, as opposed to a recapping. It would be more like what we talked about with management liability: 'There were 65 defects and we've corrected 50 of them.' Most days, I would have a work session."
When a group has an information need and the business person doesn't know how or where to find the information, or they do and there are problems with it, they request a work session. In the work session, Root collects people who know the problem and people who know the underlying data, and they share information and then walk away with some to-dos on how to get it resolved. "There's a lot written on a whiteboard and things like that," Root adds.
"One of the hardest parts of the job is that we are undertaking very difficult problems and there are going to be bumps along the road, no matter what you do," Root says. "It's making sure I can keep a positive attitude, and the team can keep a positive attitude, and everybody can maintain focus to get the problem solved."
That challenge, though, can be exacerbated by how important information has become and the need for ever-faster-turnaround times, he says. "If we lose our positive attitude, we are going to slip further and further behind. We spend a lot of time making sure we speak honestly with each other, are transparent and know where we're going. But that takes a lot of discipline."
I ask him, given the opportunity, what he would do differently career-wise.
"I don't know. I'm not sure there's anything I would do differently. The experiences I had as an actuary, whether they contributed directly, helped shape me, to give me a broader perspective. The experience I had running a lot of large projects has been very eye opening and really amazing, but I don't think I would change anything." He pauses.
From the outside, the insurance industry looks very one dimensional, he says. "In reality there are many different facets. There's the analytical, the reporting to the individual states and all the regulations, the underwriting. There's the working with people and businesses that have experienced really substantial losses and helping them through that process."
Having his broad perspective of all of these facets enables Root to take advantage of the opportunities before him, but you have to be willing to take initiative, he says. "You've got to look out for opportunities and don't be afraid to take risks."
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