Defying Gravity

One of the most important influences in Genworth Financial CEO Mike Fraizer's career was his involvement in Jack Welch's cultural transformation at GE during the '80s. From that experience, Fraizer says he learned to look outside of his company and the insurance industry at other business models to drive continual improvement internally. "That forces the leadership and the individuals within an organization to be good learners," he remarks. "That was a clear formative influence that you see showing up in our technology philosophy" at Genworth.

Fraizer started in the insurance industry in 1996, after having held a variety of senior management and financial management positions within GE since 1983. Upon his arrival at Richmond, Va.-based Genworth's predecessor company (called GE Financial Assurance Holdings from October 1996 until Genworth's spin-off from GE in 2003), Fraizer was struck by the lack of technology focus in insurance as compared to other financial services verticals.

Subsequently, Fraizer sought to combine GE's deep insurance roots - which date back to 1871 and the Life Insurance Company of Virginia - with the productivity optimization focus developed by Welch. "We were able to create a blended culture from our GE heritage and involvement with many industries," he explains.

Under Fraizer's leadership, Genworth (more than $103 billion in assets) also has blended business and IT culture to an unusual degree by uniting operations and technology under one officer - Scott McKay, SVP, operations and quality, and CIO. "We'd always had these [offices] as distinct functions, but we now link them because it fosters more strategic decision making and avoids a siloed mentality," Fraizer says. "We do retain heads of operations and technology down in the business units, but unification at the top changes the whole way you think about technology and integrate it into your strategic approach to business."

Of course, the way Fraizer thinks about technology's utility to the insurance industry strongly influenced the role it has been accorded within the company. "When we arrived on the scene in the mid-90s as GE Financial, we immediately saw a clear opportunity to use [technology] as a real differentiator," he acknowledges. "In fact, we were the first insurance company to deliver pending case downloads in ACORD XML - now a standard for the industry."

Fraizer believes that the rest of the insurance industry has begun to catch up, and that technology is currently reshaping the industry's competitive landscape. He describes a process whereby manual processes are being supplanted by faster, more accurate and more efficient electronic applications. "What used to be long processes will become immediate transactions," he predicts. "And in our case, smart investments are also providing a better return on equity."

As an example, Fraizer cites Genworth's GENIUS end-to-end system, which digitalizes the life insurance new business process. "It fundamentally changes what was a lengthy process and brings it much closer to being a transaction," he explains.

Fraizer also points to the company's deployment of grid computing and advanced modeling in its actuarial department. "Grid has helped us reduce expenses by retiring servers, while at the same time increasing the computer power," he says.

Fraizer emphasizes that Genworth's commitment to technology investment - which he says held sway despite the economic downturn - is part of a broader philosophy promoting innovation. Unless technology investment creates competitive advantage, "It's just a hobby," he says. However, he insists, failure to innovate will cost a company dearly. "A business fights against commoditization every day. You have to fight with product innovation, distribution innovation, process innovation, technology innovation and people innovation," he says. "If you're not fighting on those five fronts, the gravity of commoditization will get to you - it's only a matter of time."

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Michael D. Fraizer

CEO

Genworth Financial

"We saw a clear opportunity to use technology as a real differentiator."

Technology Philosophy:

"Technology exists in a context that includes customers and their needs, business process and how people learn and work. When considering next-generation technology, think 'market backwards' but don't be afraid to drive innovation forward - people don't always know what they need and you may have to push it toward them."

Hobbies/Pastimes:

"I'm a big skier and running/fitness buff. But given all the travel I do, I love to spend time with my wife, two kids and the golden retriever when I get the chance."

Affiliations:

Fraizer helped launch Lobs and Lessons, an after-school program that combines mentoring and tennis, in partnership with Virginia Commonwealth University and the William Byrd Community House.

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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