IT Helps SAFECO Rebound

Although fair weather played a part in delivering a successful second quarter at SAFECO Corp., according to company reports, so did an improved partnership between technology and business in the wake of the firm's sweeping leadership changes in 2001. The insurer reported net income, including realized gains, of $105 million, or $0.82 per share, compared with a net loss of $14.4 million, or $0.11 per share for the April-to-June period last year.

As an example of IT/business collaboration, Mike McGavick, SAFECO's president and CEO since January 2001, attributed a 3.3 percent increase in net written premium over last year's second quarter to higher sales of the firm's new auto product, tied to "positive results of our new business entry model, improved product offering and our new commission structure."

Getting the auto product to market involved a roughly five-month IT deliverable, which began with establishing a partnership with the business customers, according to Joe Dell'Orfano, manager, personal policy systems department, SAFECO Personal Insurance. "This was really our first opportunity as an IT organization to show what we were able to deliver" to the new leadership, he comments. "Now that we have a business team that's willing to put on the table what the goals are, the IT side is now taking ownership to find creative ways and solutions to implement in a more rapid time frame than maybe we've been able to deliver in the past."

That attitude extends beyond SAFECO's P&C IT operations. In the firm's Life & Investments unit, the business team approached IT saying it needed a fixed, deferred annuity on the street to take advantage of a market opportunity, according to Lori Reed, assistant vice president. "They came to us and said, 'Can you do it by May 31?' and we said, 'Of course we can!'" Since the product debuted on that date last year, it has resulted in $1.3 billion in total deposits. A total $350 million was reported for fixed annuities in the second quarter.

In April, SAFECO Business Insurance (SBI) began rollout of an automated underwriting platform as part of its agent-directed ESP strategy, which will include a client service contact center unit and a Web-based new-business entry module. Jeanne Lind, SBI's director of automation, describes ESP as "a technology-based program that we believe changes the way that this insurance is sold, purchased and serviced." The underwriting platform, which began its launch for business owners policy renewals, "allows underwriters to focus more time on mid-sized accounts and allows the agent to write more business profitably," Lind says.

Strategic CIO

The carrier's IT/business nexus is boosted by CIO Yom Senegor's role in directing overall strategic planning. "Since I have an intimate knowledge of our business strategies, I can make sure IT is positioned to partner with the business lines and help them achieve profitable results," Senegor says. "We've aligned ourselves tightly with the company's business goals, so that our work directly supports the bottom line."

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