Shortly after Dan Amos became president of AFLAC in 1982, he asked to be briefed on some aspects of the business. Among other things, he was told that the insurer had the best manual system in the United States - nobody could process manually faster than AFLAC. "My mouth fell open and I just about died," recalls Amos. "If that was the way we were going to judge this company, we were in deep trouble."
Amos understood then, as he does now in the CEO role, that technology plays a critical part in the success of insurance companies. Since then he has put technology investment high on the list of Columbus, Ga.-based AFLAC's priorities.
That commitment has contributed to the company's leadership position in the supplementary insurance/voluntary benefits marketplace, and has led to some significant technological accomplishments. For example, the carrier's SmartApp laptop enrollment system, first rolled out in the early '90s, set a standard for the work site marketing-focused industry, and in 1999, the system was named one of the top 10 business technologies of the decade by the Smithsonian Institution. Owing to Smart-App, AFLAC ($15.3 billion in assets) has achieved a high degree of paperlessness - currently 88 percent of its policies originate through the system, and 58 percent of those are "jet-issued," requiring no further human intervention. "That lowers our operating expense ratio while at the same time improving our service," Amos observes.
Amos' championing of technology innovation at AFLAC can be seen in his sponsorship of a $60 million strategic IT plan over the past three years, according to AFLAC CIO Jim Lester. "The primary result has been greatly improved technology infrastructure - networks, communications, legacy systems - improved IT organizational capacity and greater benefits to the business by modernizing our technology," Lester says.
The IT group demonstrated its improved capacity last September when it was examined for CMM proficiency. Having aimed at CMM Level 2, it was certified at Level 3. "We were expecting about a 30 percent reduction in defect rates and were able to achieve over 50 percent," Amos boasts.
Conspicuous achievements such as SmartApp and the CMM certification are relatively easy to communicate, Amos opines. But Amos faces the challenge of making sure IT staff understands the importance of less glamorous work. "Keeping good people in IT is a challenge since there are so many opportunities for them elsewhere," he says. "We have to make sure people in IT understand that we appreciate them."
Still Work to Be Done
Their contribution is vital to achieving two more objectives on Amos' priority list. One is an electronic agent licensing system that he likens to SmartApp in its functionality. AFLAC currently is working with insurance departments across the country to build the system, which, through electronic filing of licensing applications directly to the insurance departments, will eliminate the one- to two-week delay typically associated with such applications. "Just as we have better data now from a processing standpoint, we'd like to have it from a licensing standpoint," Amos says. "We hire about 25,000 agents a year, so the impact would be considerable."
AFLAC also has launched an initiative to deliver online billing functionality to employer accounts with less than 1,000 employees. "In the state where we've tested it we had hoped for up to 30 percent participation, but it ended up that 56 percent of our accounts signed up," Amos relates.
Amos' strategy has been to reinvest profits back into the company to improve performance. What is driving this policy? Apparently, AFLAC's notorious duck as much as anything else. Amos notes that the company enjoys 90 percent name recognition nationwide, which creates a burden of expectations. "People expect you to be better at what you do," he says. And that includes other insurance companies. "When you're the leader, you've got to be the innovator," Amos relates. "Competitors look to see how they can beat us; we have to fund ways to improve our own business and beat ourselves."
Daniel P. Amos
"When you're the leader, you've got to be the innovator."
"I'm not a technology guru myself, but I understand that technology empowers our people to serve the customers and agents better and faster. The companies that are on the cutting edge of technology are going to be the winners in this decade."
"I enjoy fly fishing, as well as quail hunting and other sports associated with the South. I'm a snow skier, though I'm getting a little old for that."
Last Book Read:
"Conspiracy of Fools," by Kurt Eichenwald.
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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