As the global property/casualty market softens and underwriting expertise becomes more critical than ever before, Axel P. Lehmann is confident that technology prowess will help his organization come out on top. "The environment is changing rather dramatically," observes the CEO of the Schaumburg, Ill.-based North America Commercial division of Zurich Financial Services. "We prepared well over the past two to three years in redefining our core processes in terms of maintaining underwriting integrity in response to changes in the marketplace."
The increasingly intensive regulatory environment, including sharper scrutiny of distribution practices, raises the stakes even higher, Lehmann notes. "My task is to help the organization develop a stable business model in a challenging environment, making sure we execute in terms of underwriting integrity while delivering excellent customer service," he says.
These are core market trends, Lehmann emphasizes: "I think there will be some real fundamental changes, and it is not clear what the final end state will be. But [the industry] will be much more transparent, and more transparency means more competition. This will be good for our customers, but also good for companies that are well managed and well positioned."
Technology helps make Zurich one of those companies, according to Lehmann. He describes IT as "one of the most important resources you have to deploy in the organization and one of the most competitive weapons you have." The restructuring that took place several years ago to create the North America Commercial operation has only underscored IT's importance, the CEO adds. "Technology integration was absolutely key," Lehmann reports, pointing to subsequent cost reductions. "We had a cost ratio that was 32 percent. Now we have an industry-leading ratio of about 20 percent to 21 percent. In part, that is due to the integration efforts and the IT efforts that took place."
Think Local and Global
IT's impact on performance will become even more pronounced as the North American operations - which account for roughly half of Zurich Financial Services' general insurance gross written premium - are further integrated with the new global organization, which was created in 2003. According to Lehmann, a Swiss citizen who assumed his current position in 2004 after nine years in various executive positions with Zurich Financial Services (2004 gross written premiums and policy fees worldwide of $49.3 billion), the scale and flexibility benefits of operating on a global basis are tremendous.
"We are starting to look at technology from both a global and local perspective," he says. This means David Saul, executive vice president and CIO for North America Commercial, reports to the head of global services management for Zurich Financial Services Group IT and also is linked to the EVP of services for Zurich in North America (who reports directly to Lehmann) via a matrix reporting relationship.
"This provides us with greater flexibility and efficiency than we had before," Lehmann says. "We are in a position to launch major projects, which would not have been possible several years ago," he adds. "IT will have a much more powerful impact when we take a global perspective and start to implement state-of-the-art solutions by bringing together global resources."
Managing integration and consolidation has been a theme in Lehmann's assignments with Zurich. In 2004, he oversaw consolidation of the former Continental Europe and UKISA (United Kingdom, Ireland and Southern Africa) business divisions and also assumed responsibility for the creation of the integrated Europe General Insurance division. When asked what he has learned from these experiences, Lehmann, an economist by training, responds: "Do not compromise."
When consolidating, he stresses, it's critical to "do what you have to do and do it right. At the end of day, IT integration is paramount to every consolidation process. It's sometimes a painful process, but every successful merger has one key component: successful integration of the IT landscape."
Axel P. Lehmann
Zurich North America Commercial
"My task is to help the organization develop a stable business model in a challenging environment, making sure we execute in terms of underwriting integrity while delivering excellent customer service."
"You have to make IT decisions in a triangle, considering the ultimate return on investment; the strategic fit (Does the technology support and drive the business models?); and the risk."
Lehmann, a Swiss citizen, enjoys travel with his family and outdoor activity. "I am a fanatic skier," he says. He also is an honorary professor and senior lecturer for business administration and service management at University of St. Gallen (Switzerland).
Tech-savvy CEOs leverage technology to balance cost, communications and regulatory demands.
In good times and bad times, Clark Manning keeps Jackson National Life on track with a commitment to core IT ideals.
Zurich North America Commercial depends on IT to weather P&C market turmoil, according to CEO Axel Lehmann.
AFLAC's Dan Amos drives long-term market leadership through continuous technology investment and innovation.
AutoOne's Carey Benson brought a sense of the proper alignment of business and IT to the challenge of building a start-up on a short timetable.
To keep Genworth Financial on top of the competition, Mike Fraizer fights commoditization by emphasizing innovation.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio