Fast Life on the Farm
And while Claudio changes in her role as a CIO, she expects the insurance industry will be changing, as well. ""There will not be just insurance companies. There will be financial services companies,"" she says. ""I expect insurers will have more insurance products, banking products and asset management products. The typical insurance company will not exist because of either mergers and acquisitions or partnerships.""
Another trend Claudio and Feinstein are already preparing for is the move to using alternate distribution channels and expanding the services offered to policyholders through partnerships with non-financial companies. ""We are moving to strong alliances with disparate types of partners,"" says Claudio. She suggests insurance companies will be partnering with retailers for products and services. ""Although this is just an example, Farmers could have a relationship with Home Depot. We could achieve better pricing for our customers when they have a claim. We could establish a relationship with a retailer where we could buy all the products for customers they need to repair their home.
""Currently, we have relationships with auto repair shops, towing companies, hotels and rental car companies,"" for customers who have claims on their policies, says Claudio. ""Why couldn't we do it for home products and building materials?""
In fact, Claudio says implementing new technology to handle policyholders' claims has been one the greatest technological initiatives Farmers has accomplished over the past year. ""A lot of our projects are focused on delivering quality and timely information to improve efficiency and achieve higher productivity,"" she says. ""The real big project has been the reengineering of the claim—the ability to complete the way we handle claims for our customers. When you report the claim to us, we take over the handling of the claim,"" adds Claudio. ""Our goal is to restore your life to order in a very short time with minimal disruption to the individual. If you call the 800 number for an auto claim, we will dispatch a rental car andtow truck and send the car to be repaired at one of our partners' repair shops. The same is true for the home. We will provide hotels and do everything to rebuild your house.""
Members of Insurance & Technology's Elite 8 Consultants Advisory Board nominated Claudio because ""she is leading truly innovative work in imaging and document management for claims."" But making the claim an easier process for the policyholder ""requires a ton of technology,"" says Claudio. ""We put in new call centers with enhanced technology. It required having claims adjusters in the field with technology. It required changing the way we do business.""
In order to prepare Farmers' IT staff to develop the new technology needed to change the claims process, Claudio has been instrumental in outsourcing all of Farmers' back-office systems. ""We have reallocated for a different strategy,"" she says. ""The strategy is to simply allow the inside resources to be retooled to be able to focus on new projects. The day-to-day support for legacy systems that run policy processing has been outsourced.""
After outsourcing for approximately one year, Claudio is getting some unexpected results. ""We are outsourcing to a company in India Wipro Infotech and we are seeing some financial benefit,"" she says. ""It actually costs us less to do that,"" than to run the back-end systems internally. ""For the same budget, we can do more.""
Another byproduct of the outsourcing plan has been 24/7 IT service for the outsourced systems. ""Although it wasn't a driving force behind the strategy to outsource to India, we now have the ability to follow the sun if we have a problem,"" says Claudio. ""We can turn the problem over to India at the end of the day so there is a constant attention. We knew it would be a benefit, but following the sun was a byproduct of the plan.""
Claudio says the next wave of technology that will drastically change the way all industries operate will be advances in telecommunications. ""The telecommunications industry will revolutionize the way we do everything,"" notes Claudio. ""The ability to connect people in different ways, in different environments, will create an infrastructure that will go above and beyond what the Internet is today. We will conduct business while driving, at home and even watching TV.""
One reason why technology for conducting business, and especially insurance transactions, will invade media previously reserved for relaxation, such as TV, is because ""the consumer is bankrupt for time,"" says Claudio. ""How do we, as an insurance company, become top of mind for them? How do we insert ourselves into their lives, in the available time they have?""
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Cecilia Claudio, Senior Vice President and CIO Farmers Group, Inc.
SIZE OF IT STAFF: 1,400
SIZE OF IT BUDGET: $250 million.
EDUCATION: BA and MA in Philosophy, University of Lisbon, Portugal.
HOBBIES/Leisure: Gardening, dancing (Claudio was an aspiring ballet dancer and performed in national events in Portugal).
KEY QUOTE: ""A CIO also has to have the ability to see trends, to look to the future and make those trends a reality.""
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio
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