For these former Elite 8 honorees, staying retired is almost as challenging as staying on top - the allure of the insurance business just keeps pulling them back in. I&T caught up with The Hartford's property and casualty company's (Hartford) former EVP, e-business, Joe Gauches (an Elite 8 2003 honoree), who currently is a part-time consultant; former AXA Financial (New York) EVP and CIO Bill Levine (Elite 8 2002), who now is a grandfather and avid golfer; and former Northwestern Mutual (Milwaukee) CIO Walt Wojcik (Elite 8 1999), who currently serves as a consultant and outsourcing adviser. They discuss how the role of the insurance CIO is evolving and the challenges that lie ahead for today's insurance IT executives with Associate Editor Maria Woehr.
"Executives of today will have to figure out how they move from yesterday to tomorrow in a cost-effective manner." -Joe Gauches
Q: What is the role of today's insurance CIO?
A: Walt Wojcik: Ten years ago the role of the CIO was still emerging with a focus more on technology knowledge and less broad-based industry experience. I was one of a few CIOs at the time of my appointment whose experience was heavily skewed to the business side. Today, the role of the CIO demands more of a marriage of both technology and business. To be able to sell your thoughts and ideas, the CIO needs to be viewed as someone who truly understands the business needs and the capabilities offered through the effective use of technology.
A: Bill Levine: We talk about CIOs in general, but they are not all the same. One of the myths of the world is that size doesn't matter - but, from a business perspective, it does. A big CIO has more business relationship responsibilities and fewer technology-focused responsibilities. The big CIO relies on senior executives - they are the enablers that make things happen as quickly and painlessly as possible, leaving the CIO to relationship building. Today, the CIO needs to make sure the people in IT have the trust, confidence and morale they need to get the job done.
A: Joe Gauches: The role of the CIO has changed radically over the last five to 10 years. In the past, CIOs managed the completion of a project; they managed large budgets and large numbers of people. I envision that CIOs of today have challenges keeping up with the technology and really manage platforms. Their responsibilities are getting together a host of different providers and getting technology initiatives implemented in a cost-efficient way.
Q: What are the challenges currently facing senior insurance technology executives?
A: Gauches: The biggest challenge facing senior executives will be updating legacy systems. Legacy systems had huge success in the '80s and '90s, but they are not built to current technology standards. Senior executives of today will have to figure out how they move from yesterday to tomorrow in a cost-effective manner.
A: Wojcik: Everybody seems to be talking about how to use technology to grow the business and less about squeezing cost. But it's a real challenge to be able to increase distribution and vital customer service as the number of ways to interact with the customer is growing - particularly given some of the limitations of legacy systems. For a business, there is clearly a challenge to maintain and build lifetime or long-term relationships with best customers.
A: Levine: Getting new products and new services turned around quickly enough will be a challenge. As a result, many executives will turn to outsourcing. But that also will create a challenge because outsourcing will continue to grow, not only on the IT side and service side, but also to update legacy systems. Outsourcing will challenge relationships, so the senior executive has to be aware of morale - keeping IT people productive and loyal.
Q: What opportunities and/or challenges do recent technologies present to insurance companies?
A: Levine: More and more, consumers are going to want to do things over the Web, so insurance technology executives are going to have to be more Web-savvy. As companies become more dependent on technology, it will be harder and harder to work without it, so CIOs have to provide that technology in a manner that's easy to use with high response time.
A: Gauches: The mind-set in the past was to build operating systems. I don't think we have enough time or money to build anymore, so CIOs and companies are going to have to buy commodity systems or platforms to answer business problems.
A: Wojcik: Being able to respond quickly and effectively is still an important issue. Strategic sourcing options - whether onshore, offshore or nearshore - are increasingly important considerations today given the cost, availability and capability of foreign resources.
Q: What business issues do you anticipate will be most important in driving insurance CIOs' decisions in the near future?
A: Gauches: Flexibility and time to market will be the main issues of business. The CEOs are just demanding things faster and with a user-friendly capacity and capability. Technology has jumped forward, and embedding it in products and offerings with a renewed diligence to making customers happy will bring the product into the marketplace more quickly.
A: Levine: With the cost of technology going down, CIOs finally will be able to fully integrate technology into the field. You'll see more wireless technologies coming into play and more direct delivery to clients. For a client, waiting 3 seconds for a transaction feels like forever. The more technology we have and the less time it takes for a customer to invest in the transaction, the more business there is to gain.
A: Wojcik: The emphasis on growth will continue, with particular emphasis on new sales, increasing the size and effectiveness of distribution systems, and, as always, keeping up with compliance and regulatory issues. Lacking the ability to grow organically, particularly with new and more aggressive competition, we're likely to see an increase in the number and size of mergers and acquisitions as well. If you can't grow internally and don't have adequate scale, consolidation is likely.
Q: Now that you have stepped out of the saddle, what do you miss the most? What do you miss the least?
A: Levine: After being in the business for 40 years, I miss the people the most. I don't miss getting up early in the morning. I was on the treadmill at 5:30 a.m. and then I would head to work. Now I can sleep in and tee off at 9:30 a.m.
A: Gauches: Most of all, I miss the completion of a charge. You were given something to do and you produced. When you consult, you give ideas and theories, but you don't have the same sense of achievement. I don't miss the bureaucratic red tape, the meetings or memos. No, I don't miss that at all.
A: Wojcik: I miss the daily interactions with the people. I have been fortunate to have worked with some great companies over the years and alongside some wonderful, bright and committed individuals. I really miss the interaction day to day - the relationship that isn't easily maintained by phone or e-mail, but the ability to communicate face to face and read someone's body language to get a sense of the real issues. I can't think of what I miss the least - even on my worst days, I didn't regret going to the office.
Elite 8 Alumni
Former EVP and CIO, AXA Financial (New York)
Former EVP, e-Business, The Hartford's P&C Company(Hartford)
Former CIO, Northwestern Mutual (Milwaukee)