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Culture of Discipline

At Genworth Financial, CIO Scott McKay is transforming perceptions of IT, improving consistency of the customer experience and leveraging the culture of former parent General Electric.

If Scott McKay has his way, people will think about Genworth Financial's IT organization as "a technology company focused exclusively on our insurance company." That transformation will reflect not only a dramatic internal change, but also will signify a step forward in addressing what McKay, Genworth's CIO and SVP of operations and quality, describes as his biggest challenge. "I spend a huge amount of time focusing on the technology team," says McKay, who assumed the CIO role at Richmond, Va.-based Genworth Financial in 2004 after 11 years with the company in various IT-related management roles.

"As we've evolved our technology vision, we've shifted from largely maintenance programmers to teams of people with titles like developer, architect, designers and inventor," McKay says. "Building that team is my greatest challenge - it takes constant focus. I spend more time on that than any other individual activity." It's not getting any easier, McKay concedes, pointing to "realities" such as the declining rate of U.S. graduates with technology degrees, and the dramatic growth in demand for tech workers in both India and China. "It's getting harder to get the best."

Further complicating the task is that even though new development utilizes network-friendly technologies, maintenance and legacy-related requirements haven't gone away. This means he must focus on developing technology professionals skilled in a variety of technologies and who also can apply those tools effectively within an insurance enterprise. Currently, Genworth's IT organization consists of about 500 full-time employees, "plus a lot of contractors and outsourcers," McKay says.

Part of the team-building effort involves various internal training and development programs. Some of these offerings have their origins at General Electric, Genworth Financial's former parent (the $103 billion-asset holding company was spun off from GE last year). "But we have made them more insurance specific," McKay reports.

But while developing the IT team may be McKay's biggest challenge, it is far from his only assignment. McKay identifies three main areas of responsibility: "developing the technology strategy - what we do to drive competitive advantage - building those competitive advantage capabilities and running the shop every day."

The first of these requirements is simple, according to McKay, who oversees an IT budget of $250 million. "Technology's role is to drive competitive advantage," he asserts. However, what constitutes competitive advantage is always a moving target, he adds. "Prior to 2000, our growth was driven primarily by acquisitions, so the technology strategy was driven by the need to maximize the value of acquisitions via creation of an extremely cost-effective platform," McKay says. But since 2000, he adds, the focus has shifted toward "organic growth - creating the great customer experiences, designing and introducing innovative products, refining risk management practices."

Achieving Consistency

Accordingly, Genworth is one year into a multiyear program to upgrade all customer touch points in order to provide a more reliable and consistent experience, McKay reports. "The execution approach is low-risk with short-term deliverables. For each deliverable, our customers will feel our progress," he says. "The focus on touch points is critical to deal with our multichannel structure and standardize some of the touch points where appropriate," but not to the detriment of the unique approaches of partners and distributors.

McKay emphasizes that this requires "maintaining diligence and focus over time and being very consistent. This also allows us to get direct feedback from our customers as we're going through the process, rather than building an end solution and seeing if it works. I think providing for tactical adjustments within a strategy is a good way to design a program."

Among the tools that are being deployed as part of this ongoing effort are voice, decision engines and rules systems, simulation, and analytics technologies. It all boils down to "automation and transactionalization - technology that can simplify insurance processes," McKay explains.

Another technology that has helped Genworth make better use of IT resources has been grid computing. The insurer deployed GridServer Virtual Enterprise Edition from DataSynapse (New York) to improve performance, processing times and analytical capabilities in areas such as actuarial analysis and asset/liability management. While McKay is happy with the results, he suggests that some in the industry may be missing the point about grid.

"Now, I think of grid as nothing more than a faster, cheaper operating system," he says. "It allows us to do better risk [management], analytics and batch processing. What I'd hope in the future is to see grid embedded in operating infrastructures, and not a buzzword technology."

McKay brings this perspective to the entire IT investment process at Genworth, where projects are defined by and matched to the annual strategic goals of the holding company's lines of business. One of the unique tools Genworth uses is an approach called Project 360, which assembles an independent team from a specific business unit "to dive into that project, interview all the people involved and come up with independent audits and assessments," McKay says. "The process addresses the planning stages, project execution, as well as benefit reviews when projects are complete."

Created by the IT organization in 2000 prior to the Genworth spin-off, Project 360 was subsequently exported to other GE business units. In fact, the GE heritage remains a key factor in Genworth's successful distribution of lifestyle protection, retirement income, investment and mortgage insurance products, McKay emphasizes. "What we got from GE was the concept of disciplined execution in everything we do," he says. "Now that we are focused on the insurance industry, we can tailor tools to exactly what we need."


Fact Sheet

Scott McKay

CIO and SVP of Operations & Quality, Genworth Financial (Richmond, Va.; more than $103 billion in assets).

Size of IT Staff: 500.

IT Budget: $250 million.

Education: McKay received a B.S. in Computer Science from West Chester University.

Work History: McKay has served in various information technology-related leadership roles at General Electric/Genworth since 1993, assuming the chief information officer role in 2004. Previously, McKay was an officer and director of applications for United Pacific Life Insurance, and he also worked as an IT consultant for Sycomm Systems and Data Executives.

Management Philosophy: There are six precepts that comprise McKay's management philosophy, and he summarizes them as follows: "Put people first; understand and embrace paradox; be forever learning; know that the odds always favor the competition; always deliver on personal accountabilities; and be very clear about 'right' and 'wrong.'"

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

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