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Guardian Life’s Callahan Looks Ahead

Dennis S. Callahan, Executive Vice President and CIO, Guardian Life Insurance Co. of America (New York; $39.5 billion in assets), and Insurance & Technology Reader Advisory Board member recently shared with his thoughts with I&T on the future of both Guardian and the insurance industry in general, from a technology point of view.

Dennis S. Callahan, Executive Vice President and CIO, Guardian Life Insurance Co. of America (New York; $39.5 billion in assets), and Insurance & Technology Reader Advisory Board member recently shared with his thoughts with I&T on the future of both Guardian and the insurance industry in general, from a technology point of view.

I&T: Will your technology spending for 2006 increase over that of 2005, decrease or stay about the same?

Callahan: Our total firm-wide IT budget will increase significantly to support a major new business initiative.

I&T: What will you be investing in, especially as this contrasts with 2005?

Callahan: Guardian has two comprehensive initiatives underway -- one focused on business operations and the other on IT infrastructure -- that will have a major impact on the company's IT investment approach in 2006 and future years.

The first initiative will streamline business processes and upgrade systems to significantly improve customer and distribution services. The ambitious scope of this program ranges from a new workflow system and redesigned operational processes to enhancements to our next generation customer-facing Web portal.

The second initiative will reduce the complexity of Guardian's IT infrastructure and operations while delivering higher levels of service. We are currently assessing our capabilities against ITIL best practices and developing short- and long-term plans to implement this framework.

We are continuing to invest in technologies that will migrate and simplify legacy administrative systems and improve workflow. We are investing in IT innovations that will increase product sales and distribution, time to market and customer self-service, such as expanded use of our straight-through processing capabilities and a next-generation extranet redesign. We are focused on business/technology governance through the rollout of a customized version of [Armonk, N.Y.-based IBM's] Rational Suite of development tools, improved resource planning and better project estimation processes to further improve our project delivery capabilities. And we are reducing maintenance spending through prioritization and staff pooling.

I&T: What would be your technology "wish list" -- what would you invest in if you had more resources at your disposal?

Callahan: With additional resources, we would implement workflow more broadly for all lines of business. We would consolidate multiple product lines, when feasible, onto a unified administration system faster than currently planned.

I&T: What industry and operational issues will be of greatest concern for Guardian Life and for the industry as a whole?

Callahan: Industry and operational issues that will drive our agenda for 2006 include migration of legacy administrative systems, expanded straight-through processing capabilities, enhanced customer self-service tools, accelerated product time to market and a continued focus on improved internal controls.

In addition, meeting our growing regulatory and information security requirements remains a top priority for Guardian and the insurance industry as a whole. Federal and state regulations require us to do more formal document and process control, which can be achieved most effectively through the implementation of standardized, automated business process documentation.

I&T: What newer technologies will either emerge or become more prevalent during 2006?

Callahan: The need for faster, lower cost and on-the-spot customer service and product marketing capabilities, including streamlined application processing, will serve as a catalyst for new wireless networks in 2006. In addition, regulatory compliance will drive the increased usage of storage technologies.

I&T: If there were a dominant "technology of the year" -- new or existing -- for 2006, what would it be, and why?

Callahan: Service-oriented architectures will be a dominant force in 2006 because they provide a standardized framework from which to develop innovative IT systems on fast tracks and with reduced operating costs. These architectures enable IT organizations to proactively address the critical issues facing all new IT systems: flexibility for evolving requirements, the integration of legacy systems and third-party packages as well as security and compliance considerations.

Guardian completed its service-oriented architecture in 2004 and has concurrently rolled out many applications that have benefited from the architecture's capabilities. A recent example is the Living Balance Sheet, an innovative client management and servicing tool. The new Web portal enables Guardian agents to create a comprehensive, interactive picture of a client's insurance coverage and investment holdings. It heavily leverages prior investments that Guardian has made in critical technology, including security and privacy capabilities built into the service-oriented architecture. The Living Balance Sheet was launched only six months after the initial concept was developed, and response from the field has been overwhelmingly positive.

I&T: What existing or newer technologies, tools, etc., do you believe are under-appreciated and underutilized?

Callahan: Today, wireless technologies are largely underutilized in the insurance industry. Wireless technologies enable policies to be filled out on a laptop from a customer's living room while also displaying videos and Internet applications that can effectively communicate distinctive policy features.

Autonomic computing also has an important role to play for large, complex IT infrastructures like those in the insurance industry, where automated and self-regulating applications can substantially reduce network complexity and oversight. Because of the size and scope of these infrastructures, cross-vendor standards are also essential to facilitate seamless network upgrades and expansion using the most advanced systems and applications that deliver high levels of interoperability and reduced operational and maintenance costs.

I&T: What emerging or yet-to-emerge technologies might impact the insurance industry in the longer term (10-25 years)?

Callahan: Wireless networks will revolutionize the ways in which insurance companies create and manage relationships with their field reps and customers. This capability, coupled with continued expansion of automation and self-service capabilities, will make insurance providers more accessible, user-friendly and responsive to emerging customer needs in the marketplace.

On The Net

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

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