Going Global
The day-to-day responsibilities of Paul Rix, senior vice president and chief information officer of New York-based AIG's Life Division, often make it seem as though he would be as comfortable working for the United Nations as he is for an insurer. As the head of technology operations for AIG's life insurance business in 80 countries, Rix has succeeded in bringing together a range of operations that are geographically diverse and, in many cases, the result of acquisitions and partnerships.
Since early in his career, when he joined U.K. life insurer National Provident Institution (NPI; now part of Peterborough, U.K.-based Pearl Group), Rix has developed and maintained a broad understanding of the life insurance business. "NPI's approach to training was to place people in different departments for three months at a time," explains Rix. "It was kind of fun getting an insider view of functions like actuarial, accounting, underwriting." After he completed an 18-month training period at NPI, Rix began focusing on IT.
According to Rix, U.S. insurance companies recognized the value of the National Provident approach and were eager to recruit from its talent pool. So, in the early 1980s, when he decided to make the move to New York City, Rix caught on first with The Equitable (now part of Paris-based AXA Group; $1.05 trillion in total 2004 assets) and later at Home Life (now part of Hartford-based The Phoenix Companies; $86.4 million net 2004 income).
Since joining AIG in 1990, Rix's responsibilities have had an ever-widening international scope. He was first named chief information officer for AIG's Life Companies in Asia, then global chief information officer responsible for managing operations and strategy for nine regions, and finally CIO for worldwide life operations.
Local Flair
Overseas markets generate 65 percent of AIG's Life Division's ($28 billion in total 2004 premium) revenue, and Asia alone accounts for a significant percentage of that revenue, Rix relates. As a result, he often finds himself managing operations in markets as diverse as Indonesia, Russia, Japan, Brazil, India, China and Vietnam.
"The U.S. is a mature market and highly competitive," explains Rix. "Whereas in many emerging markets, people are not even familiar with life insurance. Countries like these present huge growth opportunities but with very different sales cycles, product needs, distribution opportunities and service expectations."
Adapting AIG's global resources to local needs - from both a market and technology perspective - has become Rix's specialty. "One fascinating part of my job is to plot the evolution curve of countries just beginning the life insurance adoption stage," he reflects.
Whether meeting growth targets in emerging markets or reducing costs in more mature markets, Rix has established a unique strategic and operational approach to managing resources. "We're seeing triple-digit growth in India, China and Vietnam - clearly solutions that are practical there are not appropriate for a more mature market like the U.S.," he says. "You can think of it as customized timing for projects in various markets using standard solutions," Rix continues.
In India, for example, Rix currently is implementing an imaging and workflow system to maintain operational excellence in the midst of an estimated 10-fold growth in product sales. By contrast, Vietnam, a market also experiencing hypergrowth, is not yet at a point where such a solution is necessary - though it certainly will be, Rix notes. "We don't reinvent the wheel with every project," he adds. "We have standards and a consistent set of vendors and technologies. We can also reuse people and, if we're really fortunate, even reuse code."
Money Saver
AIG's aggressive acquisition strategy both in the U.S. and abroad has been, in part, fueled by the unique capabilities of Rix's IT organization to cut costs and integrate diverse platforms and systems. In 2001, AIG acquired American General and Japan's Chiyoda Mutual Life Insurance Co., followed later by acquisitions in Argentina and Indonesia, as well as a joint venture in India.
With the American General acquisition, Rix was asked to cut the existing IT budget in half, from 4 percent to 2 percent of premiums. The challenge, he explains, was "to take tens of millions of dollars off cost while still growing the business." And he accomplished this "by taking a long, hard look at the number of projects going on and red-lining several of them, being more aggressive from a head-count perspective, and consolidating vendor contracts and staffing," he says.
To successfully complete such wide-ranging projects, "You need to have a set of metrics you can believe in," Rix explains. "The first thing is to have a goal, then you can begin the process of achieving it." And that process often involves many concurrent projects. "There has to be a list of tasks that are ongoing," Rix adds.
Among his current projects, Rix is overseeing an enterprisewide deployment of SAP's (Newtown Square, Pa.) enterprise resource planning software for AIG's U.S. operations. According to Rix, the initiative - which he expects will be completed next year - will allow tighter controls and reviews of financial systems and provide more-timely and detailed records. And, in another project that combines both technical and strategic objectives, Rix's team is developing systems for improving time to market for new products.
Moving forward, Rix identifies worldwide infrastructure issues - including how to begin to resolve complexity and high costs, as well as to improve security and restorability - as a key challenge. "Over the next five years, the extent [to which] we can simplify infrastructure issues will be key," he asserts. "We've learned a lot from the past in terms of what total cost of ownership means. And in replacing legacy systems in China, for instance, we will be able to make technology decisions that are more concerned with long-term, as opposed to short-term, goals and objectives."
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Fact Sheet
Paul Rix
Senior Vice President and Chief Information Officer
AIG's Life Division (New York; $28 billion in total 2004 premium)
Education: B.S. in Statistics and Mathematics from Nottingham (U.K.) University; M.S.C. from New York University.
Work History: AIG (New York), 1990-present
The Equitable (New York), 1985-1990
Home Life (New York), 1982-1985
National Provident Institution (NPI), 1979-1982.
IT Philosophy: "We don't reinvent the wheel with every project," Rix says. "We have standards and a consistent set of vendors and technologies. We can also reuse people and, if we're really fortunate, even reuse code."
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