AXA Equitable CIO Discusses How Tech Helped Carrier Weather Economic Storm

As part of a global insurance organization, Kevin Murray, EVP and CIO of New York-based AXA Equitable (a unit of Paris-based AXA Group, 2009 revenues of 90.1 billion euros) has an unobstructed view of the challenges facing the financial services industry today. Recently, Insurance & Technology editorial director Kathy Burger spoke with Murray, a 2009 I&T Elite 8 honoree, about technology innovation at his company, the kinds of strategic technology investments that are helping keep AXA Equitable competitive in the current challenging business environment, and how insurers are faring in the global market for IT talent.

I&T: What is your take on the state of information technology innovation in the United States? Is it meeting the needs of your business?

Murray: Those of us who have focused on innovation and IT strategy -- and on IT strategy meeting business architecture and business strategy -- were able to weather one of the worst economic meltdowns in the history of the U.S. and the world. If you truly focused on those strategic areas, ... then the reward was the capacity to weather the storm a bit more easily and be more competitive as we experience the recovery.

I have many peers -- other CIOs -- who felt they could live longer with legacy technology, or couldn't figure out a way to implement strategic architecture and systems strategy and just stuck it out with legacy systems. A lot of this was business driven, [but] without some of the new enabling technology we have concentrated on, such as rules engines and fuzzy logic in our customer data systems, SOA and standard middleware, I believe we would have had much more difficult times.

I&T: In terms of AXA Equitable's technology investments, are you typically able to find the types of technologies that you're looking for, whether insurance industry-specific or horizontal solutions?

Murray: The rules engines we've purchased are certainly horizontal. In fact many of them came from the manufacturing world, where they really began. ...

You come to the point where you have to make a decision -- you've got a business case, you've got capital, you have governance, you have business requirements, and you have to make a decision whether to buy or build. For the most part I think the insurance industry has many successful vendors out there, and solutions, where you can save a year or two on development/integration time and testing by buying a product. But you come to that decision point where sometimes, if the solution is not meeting at least 80 percent of the business needs and requirements, ... you're forced to build it on your own, which has a lot more risk associated with it, usually takes longer and usually is a bit more expensive. If there is a gap, then you need to either look outside the industry or possibly build it yourself.

We have three rules engines implemented here, from three different vendors -- a product rules engine, a distribution rules engine and the customer service rules engine -- for a couple of different reasons. But they were all business-driven as far as what the rules needed to accomplish to enable our business needs and operations.

I&T: One aspect of U.S. IT innovation and competitiveness has to do with the technology workforce. Is the country's educational system developing workers with the skills your organization needs? Where do you go to find IT talent?

Murray: I continue to be impressed with the American university system. One of our acquisitions was Mutual of New York [whose IT organization was based in Syracuse, N.Y.]; with its proximity to Syracuse University, we've developed a good relationship there. They have a great IT department, and we have acquired a lot of talent. Stevens Institute in Hoboken, N.J., is a great school, as is The Cooper Union. There are some great technology programs out there, [such as] Penn State and University of North Carolina. I continue to be impressed with the kids we find for both our technology associate and intern programs here at AXA Equitable.

I&T: What types of backgrounds do you look for? Is it computer science or more interdisciplinary?

Murray: It's a mix. It used to be all computer science. Now one thing the colleges have done successfully is extend those programs so they are much more business-like. We do look for schools that have a good business analysis concentration, because for me that's the future. We do offshoring really just for code construction, but business analysis and systems analysis are going to be the heart of what we're able to accomplish. A lot of the schools have many different names for [this, such as] Management Information Systems, Information Systems Design. ... But when they do focus on business analysis, that's great for us, because it's business analysis, systems analysis, project management and quality assurance that we're keeping close to the vest here. The systems analyst can often come from that computer science degree, and usually it's the mix of computer science and business analytics that we find most attractive.

I&T: Is it a challenge to attract people to careers in insurance IT as opposed to other financial segments?

Murray: The insurance sector was seen as a second choice for a lot of the kids because the financial services companies and investment banks seemed more sexy. But I think, with what happened with the economy and the risks some financial institutions took, graduates now look more positively at the insurance world. Insurance companies that stayed focused on prudent risk management and their core businesses navigated through the storm and proved their resiliency.

I&T: Understanding that everything you do is business-driven, are there any initiatives focused on driving innovation at AXA Equitable? Do you focus on creating an innovative culture?

Murray: There's been a global effort at AXA to focus and encourage innovation. Barbara Goodstein is the chief innovation officer, and she works closely with the group innovation officer in Paris, and I work very closely with her. In terms of innovation programs, we have a Chairman's Innovation Challenge, which promotes innovation and selects winners of innovation for implementation [among several areas].

There is a global innovation program, as well. We have a corporate meeting of the top 300 in the company, and we actually get together and vote on the best innovation across the company globally.

It's the power of the organization as a whole that can really generate innovation. So we'll do things like innovation jams on the Web, where you can go and throw up ideas for discussion. We also look at other companies that are really good at innovation, such as Apple or IBM, to see who's best in class and some of the things they do [to drive innovation].

I&T: As a New York-based firm, what do you think about New York's position as a global financial services center? Considering issues such as regulation, education and capital, do you think New York can maintain its position as a dominant financial services market?

Murray: Historically, the financial capital of the world has moved around a bit. It was London, it moved to New York; it usually moved based on who had access to capital or who best managed capital. So it's probably premature [to conclude] that New York is not going to be able to get this back. The recession started in the U.S., and we'll recover first. As capital returns, who knows exactly where the power managers and firms will be? Maybe I'm optimistic -- certainly there are some big players no longer in New York City, but there is certainly a stronghold here. Goldman Sachs, Morgan Stanley and J.P. Morgan Chase are still here. The New York area remains a strong insurance capital.

I&T: Do you think there are actions the government at the federal, state or local levels should be taking to drive technology and financial services competitiveness?

Murray: Certainly, making education accessible is always a must, and additional education funding, whether state or federal, is always important. I'm a big believer in pure competition. We need to rely on our universities and their systems, if they want to remain competitive -- not only in the U.S. but across the world. To compete with university systems in China and India, they had to revamp their curricula and programs. I see that happening. We still have the world's best universities in the U.S. We've always been innovative. I can tell from speaking to the deans of business schools that there's been a big push to do that and make sure our education system in the U.S. [is competitive].

Sidebar: Making Innovation Part of the Culture

AXA Equitable formalized the role of chief innovation officer in 2007 with the appointment of Barbara Goodstein to this role. The intention was to formalize and strengthen the organization's commitment to change. As chief innovation officer, Goodstein facilitates creating the "entrepreneur inside" of the company. The Office of Innovation has helped AXA Equitable become more competitive by developing new product ideas and new product and marketing delivery methods.

In support of innovation, the parent company, AXA Group, created the annual Global Innovation Awards to reinforce the importance and priority of acknowledging creativity. AXA's Innovation Awards are intended to:

* Recognize implemented innovation initiatives that are delivering real results today.

* Reward innovative employees and financial professionals.

* Promote the sharing and leveraging of innovations across business areas through re-use.

* Support AXA's brand attitudes -- available, reliable and attentive.

A new awards category -- "Re-use" -- has been created this year. This award is in recognition of AXA companies around the world that have replicated an innovative idea pioneered by an AXA company in another country.

AXA Equitable also offers ongoing innovation skill training to all employees through its e-learning curriculum, including courses on "Generating Creative & Innovative Ideas" and "Evaluating Creative & Innovative Ideas."

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio