From Core Systems to Agent-Facing Technology, Richard Connell Drives Modernization at Selective

Over the past decade Senior EVP Richard Connell has driven the modernization of Selective Insurance Company of America's systems, from infrastructure and core systems to agent-facing technology and underwriting capabilities.

Before joining Branchville, N.J.-based Selective Insurance Company of America in 2000, Richard Connell had held multiple senior technology positions at Aetna (Hartford), where his titles included VP of information systems and divisional CIO; and Liberty Mutual (Boston), where he last served as chief technology officer. Connell says he took interest in the rural Northern New Jersey-based P&C insurer in part because of its strong management team. But, he adds, he was especially attracted by the opportunity to achieve discernible, meaningful results.

"The IT problems had both scale and complexity, and the size of the company was such that there were resources to actually solve those problems -- and yet it wasn't so big that you couldn't see the direct impact," Connell explains. "It was a good balance, as opposed to a very small company or a very large company, like the two I'd worked in for most of my career."

Currently Selective's (more than $1.4 billion in 2009 net written premium) senior EVP and chief administrative officer -- and still responsible for IT -- Connell was brought in initially as SVP and CIO to review Selective's systems and chart a course for transformation. In the intervening decade, he relates, his technology team has met every objective it has set and has rebuilt the company's IT capabilities within a functional hierarchy, ranging from infrastructure, core applications and agent-facing technology to information management and analytics for decision-support.

Connell believes that the successes his technology organization has contributed are due largely to tight alignment to business strategy. "My job was to influence business strategy to a certain degree, but more to understand it and then look to see how technology could impact the success of that strategy by working with the business areas implementing it," he says. "I looked at it as a partnership role."

The other critical factor, Connell insists, is a great team. "The key to success is to get great people and build a great organization. You then set a direction and let them go at it," he says.

"All of our accomplishments are because we have a great organization that we built over time," Connell continues. "There were some great people already here; we brought some great people in, matched our objectives to the business strategy, implemented best practices that fit our size and type of organization, and then expected results to follow -- and that is, in fact, what happened."

Among the initiatives driven by Connell in his first few years at Selective were infrastructure and corporate systems improvements. In 2001 Selective implemented Microsoft Exchange to replace a legacy e-mail platform, and by the end of 2003 the carrier had implemented Microsoft B2B infrastructure and replaced its HR, general ledger and other corporate applications.

The main focus of Connell's team during the first half of the 2000s, however, was the creation of systems to better support the carrier's exclusively independent agent distribution force. "Our strategy was around building great relationships with agents and using technology to make it easy for them to do business with us," Connell recalls. "It was about agent servicing, policy administration and billing, as well as integrating our policy administration technology with our distributors' agency management systems."

Selective hit its first major milestone in 2004 with the in-house-developed rebuild of its policy administration system for commercial lines -- which represents about 85 percent of the carrier's business, according to Connell. By early 2006 IT had completed a similar rebuild of the insurer's personal lines and surety business policy admin systems.

"We built the front ends and all of the web-based logic and integration with agency systems," Connell elaborates. "The rating engines themselves were commercially available applications that were already in place."

Following the web-enablement of its policy administration systems for agents, in 2006 Selective launched its xSELerate agency integration platform for agents for distribution partners that prefer to work through their own agency management systems, Connell relates. XSELerate accepts data from agency management systems, then streams real-time quotes back, handling any consequent transactions, he explains.

An Intelligent Enterprise

While Selective's agent-related initiatives were nearing maturity, Connell's organization began working on the Knowledge Management Initiative, which sought to develop an analytics-rich reporting and decision-management environment, he says. The initial phase of the project included the build-out of new data warehouses for the carrier's commercial, personal and surety business, along with web-based reporting capabilities. A second phase focused on the implementation of predictive models to support book-of-business analytics. Concluded on time and on budget in 2008, the initiative has given Selective the ability to refine the profitability of its underwriting by analyzing the performance of risks over time, Connell asserts.

These advanced capabilities exemplify Connell's cautiously aggressive technology philosophy. "I've always looked at being a fast-adopter rather than leading-edge," he relates. The other maxim he lives by is: "Always figure out what technology is right for your business problem at the time, rather than the other way around."

The successful CIO, Connell adds, takes three things into account: "First, you need to understand the business; second, you need to understand where technology is and how it can be applied to business; and third, you need to determine what constitutes best practices for the particular situation that you're in."

The IT organization now is sun-setting legacy business intelligence systems superseded by the Knowledge Management Initiative -- a process that will be completed in 2011. "This reduces our cost structure and fosters smoother operation for the business," Connell says.

With the Knowledge Management Initiative behind it, Connell's organization now is turning its attention to end-customer servicing. "We're starting to build self-service capabilities so that we can go to the end customer in the name of the agent," he relates. "The idea is not to bypass the agent but to reach the customer on the agent's behalf through co-branded portals."

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