Best of Both Worlds

Greg Tranter, SVP/CIO, The Hanover Insurance Group As the head of technology for Worcester, Mass.-based The Hanover Insurance Group, SVP and CIO Greg Tranter believes his business background provides advantages for the insurer.

Greg Tranter, SVP/CIO, The Hanover Insurance Group As the head of technology for Worcester, Mass.-based The Hanover Insurance Group ($2.6 billion in revenue), SVP and CIO Greg Tranter believes his business background provides advantages for the insurer. For example, Tranter relates, he is quite comfortable strategizing with the rest of the business leadership at the carrier. And the results of the close alignment between IT and the business are obvious, he says, including a reduction in infrastructure costs and an increase in new business from implementing a single-sign-on portal for The Hanover's independent agents.

I&T: What is your technology background?

Tranter: I came out of the business and this is my first job in IT -- that's not as unique for a CIO as it was a few years ago, but it's still somewhat unique.

I&T: What is the technology group's role at The Hanover?

Tranter: Our technology group is designed around a consulting model so it looks different than a typical insurance technology organization. We assign employees to one of five major practice centers: development and delivery; software engineering; quality assurance; architecture; and project management. We've had these practice centers in place for several years, and they allow us to be extremely responsive to the business.

I&T: What are the practice centers' responsibilities?

Tranter: Each practice center is responsible for ensuring that we have world-class practices as well as for developing and making sure that our people have the right skills.

I&T: How does the technology group support the company's business strategy?

Tranter: As a super-regional insurer, we work to provide our agent-partners with the same capabilities that the national companies provide while building agency relationships typical of those that the smaller regional companies cultivate. That's our message to the marketplace. Our business objective, then, is to build strong relationships with winning agents by using technology to make it easier for our agents to do business with us. To do that, we partner and have tremendous alignment with the business.

One of the biggest challenges many CIOs have is getting a seat at the table with the business leadership. I don't have that problem, partly because I have a business background, so it's really easy for me to talk the business language, but also because our president and CEO, Fred Eppinger, has created an environment where we are all working together for the best of the company. We don't have the organizational lines that you see in traditional insurance companies -- we define the business strategy, figure out what the technology solutions are, and quickly go build and deliver them.

I&T: How does The Hanover handle the IT work of "keeping the lights on"?

Tranter: In addition to our practice centers, which focus on building new technologies, we also have a service organization that focuses on maintaining our existing applications and infrastructure. By splitting the organization in this way we are able to focus on service issues and provide service at optimum cost. Over the past three to four years we've reduced our infrastructure costs by 40 percent.

I&T: What qualities do you look for in your IT staff?

Tranter: We require that our technology people learn the insurance business so they can consult with the business, and provide perspectives and advice on how to use technology. If we don't know the business, we don't have any credibility. We hire people who have insurance experience when we can, but we also hire a lot of people who don't, so we put them through business training classes. We also look for people with consulting backgrounds because those folks are able to come in and be consultative right from the beginning. We also send our technology folks out in the field so they can spend a day in the life of an agent.

I&T: What recent technology initiatives have had a positive impact on your independent agents?

Tranter: We're making significant investments in technology to make it easier for our agents to get quotes, issue policies and interact with us. In the past 18 months we've introduced The Agency Place (TAP) portal as a destination with a single sign-on for agents to access all our capabilities, including processing transactions. We also rolled out a new personal auto rating and underwriting product called Connections Auto a little more than a year ago. We've deployed it in 10 states so far, and it has increased our flow of new business by more than 150 percent by expanding our appetite for what we'll write and allowing us to hit a broader segment of the market. Agents are really happy with the product; we don't ask for as much information as we used to and we've cut quote time by 67 percent.

Later this year we'll deliver significant enhancements to our commercial auto product that will cut quoting time down by at least one-third. And we will deliver a new homeowner point-of-sale front end that will cut quoting time in half.

I&T: What about your legacy systems? What role do they play as you push technologies out to the agents?

Tranter: Our strategy is a surround strategy -- we're surrounding the back-end systems with new technologies rather than replacing them. We use Pegasystems' [Cambridge, Mass.] SmartBPM to take the rules and ratings out of the legacy systems. That gives us the capabilities of new technologies without having to make the investment of millions and millions of dollars to replace the legacy systems.

I&T: Does The Hanover continue to outsource?

Tranter: We do. We partner with Keane [Boston] for baseline application maintenance and Cognizant Technology Solutions [Teaneck, N.J.] for quality assurance. When I first became CIO [in 2000], we sat down and defined the core competencies for our technology organization. We believe that architecture, tactical design, business analysis and project management are core competencies, and that our employees should do that work. Other, more commodity-driven activities, such as some quality assurance and software development functions, we source externally.

We've kept the best jobs for our employees, and the jobs that are more mundane we outsource. By doing so we also get a better economic model. That's why we require our employees to know the business -- so they can interact with the business folks in a consultative way. We don't build what the business wants but what the business needs. That requires a lot of collaboration with the business.

I&T: Are there any technologies you think hold great promise for the insurance industry?

Tranter: Wireless technologies will play a major role in the insurance industry going forward, especially in the claims-handling and settlement process. Other remote technologies such as RFID also will play a role.

I&T: What about voice over IP?

Tranter: We are in the process of a three-year project to upgrade our network, and VoIP will be part of that upgrade. But we'll roll it out later in the deployment. We feel the technology is still evolving.

I&T: What's your greatest challenge as CIO?

Tranter: Continuously looking for opportunities to best use technology, make the business better and drive more innovation. We have to continue to provide capabilities as good as or better than the national companies, yet we don't have the deep pockets they do. We need to be really good at picking technologies and executing flawlessly. Our large competitors can afford to miss on projects -- they can flush $10 million down the drain and start over. We can't afford to do that.