Although many insurance companies profess an appreciation for technology's role in supporting business strategy, Farmers Alliance Mutual Insurance is unusual in stating it specifically in its corporate mission: "At Farmers Alliance Companies we combine the best of rural American culture with advanced technology to provide excellent products and services to our policyholders and independent agents." This isn't just rhetoric, according to Andy Edwardson, VP of IT at the McPherson, Kan.-based P&C carrier (more than $130 million of premium written across a nine-state region).
"Our business leaders have a very clear vision of what they want to accomplish," he says. "The fact that advanced technology is mentioned in our mission illustrates that. They also view technology as a means to realize their goals. At end of the day they're trying to provide better products and services. It's very good that we can assist them and enable them to provide that."
That assistance, Edwardson elaborates, involves "looking to use technology appropriately so we can respond with quality solutions -- in other words, leverage technology that supports the true business needs and addresses those problems." However, the commitment to advanced technology doesn't mean experimenting with unproven solutions just for the heck of it, he adds. "We want to find technology solutions that truly fit and will add value," Edwardson says.
Still, that hasn't kept Edwardson from thinking big when it comes to IT's contribution to Farmers Alliance's success. He has spearheaded iFAMI, an end-to-end system replacement program that is taking a best-of-breed approach to implement new billing, policy and claim systems, among other improvements -- and which earned Farmers Alliance the Celent Model Carrier of the year award in 2009. The foundation of iFAMI is development of a service-oriented architecture intended to enable Farmers Alliance to implement new solutions and strategies in a faster, simpler and more cost-effective manner, Edwardson relates.
"We believe long term it will provide a better environment [and allow] the organization to be much more nimble," Edwardson says of the investment in SOA. "We can respond to market conditions much more quickly. The business leaders bought into the idea; they understand that it's a good investment to allow us to take this approach and provide a foundation so they can grow and meet their business needs."
While acknowledging that the SOA concept still means different things to different organizations, Edwardson says that for Farmers Alliance it has proved to be an effective way to address the limitations of legacy systems. "We knew we had to make a shift and move away from legacy, [which] was hurting our ability to implement things the business wanted to do, such as [improving] underwriting decisions or core systems," he says. Too often the company was rebuilding functionality it already had created and, Edwardson says, he decided, "It would be nice if we could just go back and reuse [what was] built once. We're trying to reel some of that in, to keep a close eye on that and make some of the core competencies we're building [reusable]and ultimately land in this SOA world."
This also has been the foundation of Farmers Alliance's in-house development of a new policy administration system, called Compass, to support all lines of business except BOP, Edwardson reports. "SOA is why we were able to quickly assemble Java-based frameworks to complete much of a policy admin system within a short time frame," he says, adding that he expects to roll out Compass before the end of the year.
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