Success Depends on IT/Business Link

"If you don't align IT and business strategies you will die," warns Walter Bateman, chairman and CEO of Harleysville Insurance (Harleysville, PA, $2.7 billion in assets). "And Harleysville is not going to die. As a matter of fact, we do very well."

Bateman-a Vietnam war veteran who has spent 29 years in the insurance industry (having held positions at Utica National Insurance Co. and General Accident Insurance Co. before joining Harleysville in 1988)—is practicing what he preaches as he guides the 14-company organization through a long-term growth strategy with the ultimate objective of becoming the premier provider of insurance to the small P&C markets.

Thanks in large part to a number of acquisitions, Harleysville has experienced growth in the past 15 years in a segment of the business that, according to Bateman, can get "heavy" from a transactional perspective. Scalable technology solutions are crucial to the carrier's successful expansion, especially with smaller commercial accounts and small- to medium-size personal accounts. Because of Harleysville's dependence upon IT, both technology and business planning groups at the carrier are inextricable from each other, according to Bateman, who sits on the carrier's strategy committee. This body plans business models and sets objectives for both short- and long-term initiatives.

But while Bateman is a key player in the process of identifying IT's role in carrying out business strategies, he doesn't hog the game. After passing the business "ball" off to the IT steering committee, he plays a consultative role in determining which IT projects will get funded. "Our IT guy is our point guard," says Bateman of the carrier's CIO, Wayne Ratz (Editor's Note: See related article in March 2003 I&T, www.insurancetech.com/story/onTheRecord/IST20030211S0004). "He has the ball with the five-year strategic growth plan and heads the IT steering committee." As the two groups work together toward common objectives, both business and IT are "making sure that Harleysville is not just growing for growth's sake, but making sure that there is a return on that growth," Bateman explains.

Flexible Underwriting

Because its underwriting needs are increasing along with its size, Harleysville has undergone a risk assessment expansion plan. The company sought the inclusion of third-party data that has added value to the underwriting process. "In order to deliver financially we need to know something about you compared to your environment and peers," says Bateman. "That requires access to data."

The IT steering and strategy committees are also setting their collective sights on preparation for Sarbanes-Oxley compliance, reports Bateman, who comments that Harleysville's corporate governance practices are "fairly pristine." Regarding compliance with the new legislation, IT is still in an investigative phase and must look at various control processes and certify that they meet compliance standards, says Bateman.

Currently the carrier's corporate governance practices are so transparent that they have been recognized in a Sibson Consulting and Spencer Stuart study that links companies with more transparent corporate governance strategies to higher shareholder returns. In the study, a company's transparency measure was dependent upon how many of the 52 non-mandated disclosures they made. Out of 385 companies Harleysville was ranked number two, according to the report's governance transparency metric.

----------------------------

Head Coach

"If you don't align IT and business strategies you will die," warns Harleysville's Walter Bateman, chairman/CEO.

Background: Began career in 1974 at Utica National Insurancer. Joined Harleysville in 1988 as SVP, fieldoperations, and since then has held numerous positions, including COO. Named chairman and CEO in 1998.

Recent Wins: - Acquisition of Penn Mutual Insurance.

- Risk assessment expansion plan.

- Harleysville recieved recognition for its transparent governance.

Hobbies: "Golf, although I am bad at it. I also enjoy working on my house in South Carolina and cleaning my basement."