Open Doors to Growth

At the end of the 1990s, MetLife was still a mutual company—and a very successful one—with a style that reflected the past rather than the future of the insurance business. But by April 2000 "Mother Met" had gone public, and management had set in motion business and technology initiatives that would carry its offline success into cyberspace.

On the eve of Y2K, MetLife's Web presence was negligible at a time when the channel was coming alive as a way of reaching—and competing for—customers, according to Sachin Shah, vice president of institutional e-business. "We had our MetLife. com site, which provided basic information about the company and marketing information, but we had very little capability across MetLife—and very specifically for institutional business—that provided our customers with capabilities to transact with us online," he says.

Eyeing Industry Trends

MetLife's institutional business division provides a suite of products, from group life to 401(k) and dental insurance, and had enjoyed leadership status. But research suggested to Shah and his colleagues that in order to hold onto that status, some important moves were needed. They noted "broad trends around self-service and the Internet in particular, and an increasing need to provide more holistic, and aggregated, advice so that employees can better leverage their benefit programs," Shah says. In the fall of 1999 Shah and Georgette Pilgian, then-vice president, e-business application development (now CIO, corporate systems), led a cross-functional institutional business team to formulate a proposal regarding how the division should proceed, for presentation to the carrier'sexecutive management team. KPMG Consulting (now BearingPoint, New York) "provided us with very good consultative work helping us shape our strategies and recommendations," according to Shah.

"The proposal was essentially approved 'as-is' by the executive group, because there was a general feeling that we needed to do this."

Being good at the online channel would be "a key basis of competitive distinction," and "a key component in driving shareholder value, not only customer value," says Mark Hammersmith, CIO, institutional business.

But the right approach to customer-facing portals meant regarding prevailing Internet wisdom with skepticism, according to Hammersmith, and that implied that what the carrier didn't do was as important as what it did. "We didn't march out and start slapping around HTML just to put up our content, or to mock-up and make it appear that there were transactions going on on the Web," he asserts. "The second thing we didn't do was fall victim to the dot-com craze, where eyeballs or clicks were enough to justify investment."

At a time when many e-commerce players emphasized making portals as "sticky" as possible, MetLife took a different course, according to Shah.

"As we started to develop our capabilities and did research, one thing that kept coming out was, 'Make it easy, make it once-and-done,'" he says.

The portal strategy was organized according to the division's customers, and led to the planning and development of three separate gateways: MetLink, for employers; MyBenefits for employees; and MetDental for dentists and their office managers. Portal functionality was broken out into four categories: Content/Education, consisting of product marketing information; Decision Support, including calculators and quote engines; Enrollment Capability, supporting purchase of product; and Self-Service.

New Value Set

While IT moved forward in preparing the portal environment for execution, its business partners worked across the sales and marketing functions to extend MetLife's traditional product-service matrix, Hammersmith relates. A paradigm shift was required, toward regarding the firm as "a little bit of a software company, because we were now offering software-enabled service and, in some contexts product, to our customers," he says. "A different set of values had to be inculcated into our sales force and operational forces, and there were some dramatic changes to our business processes."

By fall 2001, the three portals were up-and-running, albeit with different elements of the four categories of functionality implemented according to the varying priorities of each portal. "We were really looking at, 'How do we drive business benefit as quickly as possible based on where the product is, both in its life cycle and in its cost dynamic?'" says Shah.

Building on MetLife's reputation for institutional products, and effectively making the case on the e-business initiative, sales and marketing were able to convince customers to be patient with the functionality rollout. "More customers have begun to place more products with us, because they see that we're committed to moving our whole portfolio online, and through an integrated strategy," Shah adds.

Usage of the portals reflects that customer confidence, according to Shah. The MetLink employers portal has grown from 2,000 customers and 2.5 million transactions in 2001 to 4,000 customers and about 3.2 million transactions, and is being used by 65 percent of Fortune 1000 employers. The MyBenefits employee portal surged from 55 large customers and 1.2 million employees in 2001 to 800 customers and 6 million employees, representing 40 percent of Fortune 1000 employers. MetDental is now used by 23,000 dentists, meaning 20 percent of dental practices across the country.

Noting that the number of employee end-users using MyBenefits exceeded expectations by about a million, Shah notes that "our targets for 2003 are two to three times those we had last year, in terms of penetration of the marketplace and online transactional growth." MetLife institutional business covers about 33 million employees in total, and all of these are e-business prospects, according to Shah.

"We were a leading product provider offline, and now we are a leading product provider online as well," he boasts. "Customers now have more reasons to do business with us because Internet technology enables us to deliver our capabilities in a much more personalized and integrated way."

Hammersmith points to the distinction in MetLife's Web application framework as a foundation for those capabilities. "These aren't only Web services doing a little editing and then storing the data in an interim database; these flow all the way through, directly against systems," he says. Explaining how his organization has linked its life proprietary systems directly to practice management software in dentists' offices, he describes what he calls "the practical deployment of Web services, or units of computing functionality, from MetLife, running in MetLife, via the Web to our partner providers, right into the applications they're running on their desktops."

Tech-Driven Results

The result is the opportunity to bring better service, while taking expense out of the value chain, Hammersmith argues. In turn, the business/technology partnership has delivered on the promise of driving shareholder value. "We've gone from very low double-digit return on equity in 2000, to publicly shooting to a 20 percent return on equity in a three-year time frame," he says. "Obviously, a lot is attributable to good old-fashioned hard-working people. But a lot is technology-enabled investment automating our business processes and other aspects of our application portfolio."

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Group Benefits

"IT has energized the business in terms of the realm of the possible. And the business has turned IT on in terms of the positive impact on customer service and earnings we can have," says Mark Hammersmith, MetLife.

COMPANY: MetLife (New York, $290.1 billion assets under management) Institutional Business.

LINES OF BUSINESS: Group life, auto and home; disability, LTC and dental.

KEY EXECUTIVES: Mark Hammersmith, CIO, institutional business; Sachin Shah, vice president, institutional e-business; Georgette Pilgian, CIO, corporate systems (formerly vice president, e-business application development), Brad Bodell, vice president, IT, institutional business.

IT BUDGET: $900 million.

IT STAFF: About 3,700 enterprise-wide; 150-200 business and IT staff for the institutional e-business initiative.

IT ARCHITECTURE: Sun Microsystems (Santa Clara, CA) Solaris 2.7; Microsoft (Redmond, WA) Windows NT 4.0; IBM (Armonk, NY) WebSphere; IBM UDB relational database; Sun Microsystems' iPlanet Directory Server and iPlanet Web server; IBM MQ Series and proprietary middleware; Windows NT Server 4.0 with built-in Web server Internet Information Server (IIS) 4.0; Concord (Marlborough, MA) Sysedge Agent 4.0 and IBM Tivoli Endpoint 51 Framework version 3.6.2; Netegrity (Waltham, MA) SiteMinder.

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