Large insurance IT organizations typically enjoy either the cost-efficiencies of a shared-services model or the business alignment advantages of line-of-business orientation. Chubb (Warren, N.J.; over $13 billion in annual revenue) manages to combine the best of both worlds to an enviable degree, through its federated IT organizational model, according to Mark Berthiaume, CIO, Specialty and Commercial. "We have a model that I have not seen duplicated at any company," he comments.
While Chubb's IT is not organized on a centralized pattern, an increasing amount of responsibility has been centered on Berthiaume personally. In the first quarter of 2009 he took on responsibility for Chubb's Surety IT organization (which resides within Specialty); and in May, following the retirement of Todd Ellis, he took on the CIO role for Chubb Commercial Insurance. Berthiaume also has responsibility for global IT strategy for the carrier, and earlier this year he took on the role of responsibility for Chubb Specialty Insurance's field operations — a business rather than an IT role.
Berthiaume acknowledges that there are advantages to having one CIO for both commercial and Specialty lines. "We recently had a joint meeting of my Specialty operations and IT organizations and we have carved out a number of opportunities where we're going to bring the groups closer together," he relates. "One specific area is that as we are developing opportunities, we have now added steps to our development lifecycle methodology to specifically detail out workflow and process design, whereas in the past these things would have been done separately by different groups."
There is precedent for the spread of Berthiaume's influence beyond his immediate sphere of authority. Shortly after joining Chubb Specialty Insurance in 2001, he pioneered the development of a governance model for the division's IT organization. As the model has matured, it is being adopted for the entire division. In 2006, Berthiaume was given the task of building an enterprise IT governance framework, which went on to win a Celent Model Carrier Award. "We use that framework now to drive how we share IT systems, support structures, guidelines and principles for IT across Chubb's IT organization," he says.
The framework will come in handy as Berthiaume pursues major initiatives across the groups within his bailiwick. While he declines to share specifics, he acknowledges that Chubb is on the verge of significant policy administration platform investments, in addition to consolidation and standardization efforts directed toward enhanced service delivery and operational efficiency. "We're doing a portfolio rationalization, looking at the investments and ensuring that we're getting to a smart place with shared systems and platforms," he remarks. "But as much or more of my work right now is looking at a functional review and practice discipline review of the organizations I'm responsible for."
"These are organizations that were built separately over time by different people," Berthiaume continues. "So we are looking at ways we might be able to bring them closer together within a common organization structure or a common practice discipline approach to delivering services in areas such as business analysis, quality assurance, technology coring, architecture, sourcing IT processes, and governance."
As the work moves forward, Berthiaume insists, he will continue to leverage the complementary benefits of federation and an enterprise-oriented view. "We've got a built-in concern about the dangers of redundancy, and so we have built out enterprise architecture in a big way," he explains. "We use competency centers and centers of excellence to ensure that when there are capabilities that we want to spread across the groups, that we focus on that and charge individuals with that responsibility. There's a lot of focus on ensuring that we're doing things smartly across the groups but keeping strong business alignment."
Optimizing three separate IT organizations is a big job, but given Chubb's scale, the organization needs to be attentive to cost, Berthiaume notes. As the executive at the fulcrum of those organizations, he characterizes his job in terms of his dual focus on commonality and specificity: "I have two business bosses who are each running a business and delivering products and services to the marketplace. The curtain falls at some point behind the market-facing capabilities of each division — their product development, their marketing and their niche distribution approach. We're trying to drop that curtain in a different place, where those business units and their market-facing capabilities are not compromised by having a more efficient back office."
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