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Policy Administration

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Navigating Competitive Direction

To advance Highmark Life's strategic direction and position, CIO Matt Piroch constantly must adjust.

Although he concedes that it keeps him up at night, the constant need to adapt Highmark Life & Casualty Group's strategic direction is what Matt Piroch, chief information officer, enjoys most about his position at the carrier's information technology helm. And through strategic investments-such as a major consolidation project-Piroch is helping build the agility necessary to improve Highmark Life's competitive positioning.

"In a changing environment, we constantly need to think about where to shift resources and what to do to stay ahead," contends Piroch, who advises newcomers to be ready for change. Part of the insurer's navigational direction is determined as a result of the close watch it keeps on competitors.

Highmark Life's (Pittsburgh, $540 million in assets) IT department has developed metrics "to make sure that the value Highmark Life's IT delivers is in line with other insurance company IT departments," relates Piroch. Aside from comparing its $14 million budget with IT budgets of similarly sized insurers, listed in research produced by analyst groups such as Stamford, Conn.-based META Group and Gartner, the carrier makes sure that the technical complexity of its own infrastructure is appropriate.

In an additional attempt to advance Highmark Life's strategic positioning, Piroch actively fosters strategic thinking. IT employees are tasked with learning about Highmark Life's products "in detail. Also, they must understand what the competition is doing so they will be capable of making suggestions about the direction of products," Piroch says. Such research helps members of the IT organization to recommend technology "that will improve our ability to service the customer, make processes more efficient and reduce costs."

Ninety-Nine Percent Tech

Although Piroch's strategic focus might lead one to believe that he comes from a strictly business background, the insurance technologist relates that "99 percent" of his career has been technology based. Piroch-who received his BS in computer science from Slippery Rock University (Slippery Rock, Pa.)-has spent parts of his career with Westinghouse Electric Co. and PNC Bank. He joined Highmark Life's development organization six years ago, and in his current role he is charged with responsibility for all facets of Highmark Life's IT organization.

A major project that Piroch has undertaken during his tenure with the insurer has been a consolidation effort that began in 2000. "Our organization has focused on replacing our back-office infrastructure rather than 'Band-Aiding' multiple legacy systems together," Piroch explains. He is currently in the midst of the project aimed at consolidating Highmark's back-office infrastructure-including disparate claims, underwriting and billing applications, as well as siloed databases-into a single browser-based data source.

Although his sentiments at the start of the project were along the lines of "What have I gotten myself into?", with the help of the carrier's in-house development staff and several vendors-including Emeryville, Calif.-based WorldGroup Consulting and its InsureWorx J2EE claims, underwriting, policy administration and billing solution-Piroch has since began to realize the fruits of his labor. After the establishment of a common application services and facility base, individual business functionality was rolled out on the platform. The claims pieces of the system went live in the second quarter of 2002. Additionally, in late May of this year, the underwriting and sales pieces for workers' compensation were rolled out.

Although the full benefits of the single data source will not be realized until the project's completion, the initiative is already creating efficiency. "The RFP, sale, contract generation and claims payments are now all on one system," Piroch says. "This reduces information being entered into multiple systems, and subsequently the chances of error are reduced."

The remainder of the underwriting and sales pieces of the project are scheduled for completion in 2004, Piroch explains. And although Highmark Life has yet to plan the billing portion of the implementation, planning for that piece is scheduled to take place next year, he relates. When the project is complete, Piroch and his IT team will help to determine the single data source's soft benefits through use of customer satisfaction surveys.

"Annually, we use an outside vendor to survey clients of our services. The results are benchmarked against various competitors." Once the consolidation implementation is complete, Highmark Life will add questions to the annual survey that address the capability of the consolidated system.

In addition to determining a project's success, these surveys help to point the carrier's IT department in the direction of initiatives that will benefit the organization's business. At Highmark Life, business concerns are also related through channels such as the help desk. Additionally, each functional area of the business is assigned one member of IT who acts as a liaison to the business. After projects are selected, Highmark Life "lays out expectations in project plans so that timelines are understood," Piroch explains. "We have constant dialogue and checkpoints with the vendors."



Matt Piroch

Chief Information Officer, Highmark Life & Casualty Group ($540 million in assets).

EDUCATION: Piroch holds a BS in computer science from Slippery Rock University (Slippery Rock, PA).


70, including contractors.


Cooking and gardening.


Highmark Life's IT department donates technology equipment to local charities.

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