Texas Life's ($1 billion in assets) technology strategy is to remain self-sufficient and virtually vendor independent. But, contrary to its CIO's sentiment, the paradigm probably has little to do with the Waco, Texas-based carrier's geographic location. "We're far away from things out here," jokes Michael Steward, the universal life insurance underwriter's senior vice president and CIO.
Despite Texas Life's location, John Johnsen, managing director of TCi Consulting & Research (Cresskill, N.J.), managed to brave the wilds of central Texas and visit the carrier after Steward and his colleague Brad Kendrick, director of systems development, implored the consultant for help with a straight through processing initiative that they'd been working on. "We brought him here in 1996 so that he could review our systems and let us know which vendor products we should buy," Steward notes of Johnsen's assistance. "Instead, impressed with the work we'd done, he encouraged us to build and develop the system on our own." Johnsen's suggestion was remarkable, especially since the carrier is limited to the resources provided by its small IT staff, which employs just 22 people.
Perhaps the little-carrier-that-could's inspiration is based upon an innovative spirit established during its beginnings in 1901. The insurer, which boasts the distinction of being the oldest legal reserve life insurance company based in the Lone Star State, actually holds Charter Number One, which was issued by Texas' banking commission, since Texas Life predates the establishment of the state's insurance commission.
But a lot has changed since the early days of Texas Life. In 1988, the carrier, which had previously marketed its products to policyholders in Texas and Oklahoma, became a MetLife (New York) subsidiary and, as a result, expanded its business. It currently underwrites policies in 47 states. Part of that expansion involved a switch from its focus on low-volume, high-dollar universal life (UL) products to a worksite-marketed high-volume/low-dollar UL product. In order to support the growing number of policies that were sure to follow, Texas Life began enhancing its systems to reflect and support its new business focus.
"In the late '90s, we began work on revamping our systems in order to get policies out faster," Steward explains. "The entire company and processes are focused on a high volume of applications moving through the company quickly." How else would a carrier that once supported 5,000 policies a year be able to support 57,000 policies in 2004, with a goal of doubling the number of policies in 2005 without adding staff?
Today, the fruits of the carrier's labor have ripened, and Texas Life's homegrown client/server policy issuance and administrative system - which was built from converted legacy systems - is helping the underwriter to support straight through processing. "As applications come in electronically, they can be processed all the way through to the underwriting process," Steward relates. "We are in a phase now where we're still monitoring the system as it does this. Although we sometimes have to add data [to move the process along], we are definitely getting closer" to a fully automated system, he says. Steward explains that, with the enhanced system, some functions at Texas Life are completed in real-time and others are completed in an overnight cycle so that there will be no interference from other transactions.