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Get Ready for a Slugfest
Four C-level insurance execs agree: The economic crisis changed the competitive
landscape. What they intend to do about it is another matter. By Pat Speer
When Celent released its “2010
CIO Survey: Pressures, Priorities
and Strategies” survey results, it
did so with an end in mind:
Release the information to a room packed with 100
insurance executives and let them relate the findings
to their own business initiatives.
The “room packing” occasion was Celent’s annual
Model Insurer Award presentations, and many execu-
tives in attendance had already been recognized for
their best practices by the Boston-based insurance
consultancy.
So it’s not surprising that an ensuing panel discus-
sion would be dynamic and compelling, and the exec-
utives, John Campbell, CIO, American Modern
Insurance Group, Mike Foerst, CIO, Missouri
Employers Mutual (and Celent’s Model Insurer of the
Year), Mark Esposito, SVP & CIO, Hartford Life, and Bill
Pieroni, operations VP, State Farm Insurance Co., did
not disappoint.
Moderated by Craig Weber, SVP of Celent’s insur-
ance practice, the panelists were asked to respond to
the survey results, which had been presented by
Celent senior analyst Donald Light, and frame their
responses against how they are facing the challenges
of an evolving industry.
GAME PLANS FOR SUCCESS
Results of the survey, which focused on 2010 IT
budget and staffing priorities, technology strategies
and emerging technologies, revealed a modest total
year-over-year growth in IT spend (with significant
multi-year core systems projects), a strong emphasis
on IT outsourcing remaining, and the desire for
emerging technologies, such as high performance UIs
and enterprise SaaS.
Weber asked the panel to react to the results,
Mike Foerst (left), CIO, Missouri Employers Mutual,
and Mark Esposito, SVP & CIO, Hartford Life, discuss
the challenges they face in this evolving industry.
(namely that 2010 business priorities will be growth-
driven) and describe their organizations’ 2010 game
plan for success.
Pieroni was surprised at the number organizations
in the survey reporting they had scaled back IT oper-
ations. “Given the long-term nature of these projects,
funding cycles, etc., I was surprised,” he said. “We are
incredibly tied to the economy, and we know how
hard it is to attract talent, yet the results point to a hir-
ing freeze? I was shocked.”
Esposito confirmed the Hartford’s plan to take mar-
ket share with new, innovative products, stating, “Our
investments will grow in that direction.”
Mapping survey results against his company’s own
strategy, Esposito told the audience, “If you look at the
levers being pulled with infrastructure and look at
investments in 2010, our growth agenda plays forward
with underwriting, distribution and value derived
from fixed costs,” he said.
Foerst told the group that his company was
focused on growing the top line. “We’ve been dis-
cussing what terms we need in place to make this
happen.”
Campbell countered that the emphasis at his compa-
ny was on profit. “I realize that you need growth to
drive profit, but I was still a bit surprised seeing growth
as the No. 1 driver.”
Esposito admitted the focus was on competing in
the future, and reflecting back on 2009 was less
pleasant, (The Hartford accepted Troubled Asset
Relief Program funds). “I was done with 2009 in
June of 2009,” he said. “We have had some course
corrections, and we will be aggressive because con-
sumers are looking for this, and it’s our job to create
innovative products for them.”
Pieroni told the group that State Farm is not look-
ing to make any fundamental changes in its long-term
vision. “We’ve been realistic about our business goals.
But we know that 2010 is going to be a zero-sum
market—a true slugfest.”
Foerst told the audience that the key to competing
successfully goes back to planning. “You have a plan
and you are executing to that plan. But you need to
periodically review whether the plan still makes
sense,” he said.
If Campbell’s plans for growth seem less aggres-
sive, think again. American Modern was acquired by
Munich Re last year, and the company experienced
double-digit growth. “That’s not to say we don’t sit
with corporate leadership to evaluate what’s working
and what’s not.” INN