Zurich has underscored the increasing importance of risk management and IT by appointing Axel P. Lehmann to the post of chief risk officer and elevating that role to executive committee status. In his new role, the former CEO of Zurich's North American Commercial division will also oversee Group IT. Joining risk and technology in this manner under the direction of an operations-oriented executive reflects Zurich's group-wide strategic focus on profitable growth and operational transformation, according to Lehmann.
"From a business as well as a risk perspective, it is absolutely essential to have state-of-the-art information systems, in place," Lehmann comments. "Also, obviously, when you look at the underlying risk you consider both the upside and downside to the risk and invest your IT dollars where you see the biggest upside."
Examples of that upside include efforts to reduce the complexity of Zurich's IT landscape, according to Lehman, for example by continuing the carrier's legacy systems decommission strategy. Lehmann also sees an opportunity to enhance communications between Zurich's companies and their distributors and end customers, he says, "by investing the incremental dollar to enhance the interface with the outside world rather than just create internally and invest to the back-end of systems."
Lehmann also emphasizes improving the carrier's risk-and-return profile through the development of geographically integrated systems. "We embarked on a journey over two years ago to create a more pan-European business environment that is supported by IT," he says. "We are on exactly the same journey in North America, where we have built very solid business processes around product development, marketing, distribution, claims management and underwriting."
Lehmann also sees his office's opportunity to help IT play an increasingly vital role in the increasingly vital function of enterprise risk management, as demonstrated by the recent volatility in global capital markets "You need to have an integrated, risk-based view in order to have a comprehensive view of the underlying risk, along with the associated financials and the financial implications," he says.
Addressing the shortcomings of more siloed approaches focusing on areas such as underwriting/pricing risk, investment/capital risk, credit risk and operational risk, Zurich is developing an integrated risk platform to quantify the various dimensions of risk, according to Lehmann. "Underpinning this is an IT platform that allows you to allocate capital, and that in turn helps to analyze and drive the respective financials that come out of this platform," he says. "This is something that is in the works and is very high on Zurich's agenda for this year. State-of-the-art risk management requires a state-of-the-art information system.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio