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11:50 AM
Dan Carmichael, CEO, Ohio Casualty Group
Dan Carmichael, CEO, Ohio Casualty Group
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Ohio Casualty CEO Dan Carmichael Says Company’s Technology Is Just How It Should Be

Ohio Casualty Group CEO Dan Carmichael, one of Insurance & Technology's 2006 Tech-Savvy CEOs, explains how his firm judiciously leverages leading-edge technology to support the needs of the business and its distribution partners.

Typically when I'm asked to comment on our technology achievements I smile and reply, "It's how it should be." Technology advances in an insurance company shouldn't be about award-winning Web sites or handheld gizmos that play interesting ring tones; rather, they should be about providing functionality that 1) streamlines processes for our agents and associates, 2) provides access to information needed to compete effectively, and 3) provides the flexibility that enables change. At Ohio Casualty (Fairfield, Ohio; approx. $5.7 billion in assets) we're committed to evaluating our technology initiatives and investing in projects that will move us toward all three of those goals. Essentially, our technology investments enable us to win.

To effectively compete in the challenging world of property and casualty insurance, you need a winning model. At Ohio Casualty we believe that our winning model is the independent agent channel, which has proven to deliver the highest value to both the policyholder and the insurance carrier.

While the agency distribution model has some inherent complexities, it's our responsibility to put ourselves in the agents' shoes and implement technology functionality that streamlines processing for our agents. We should always be asking ourselves: Is this transaction possible directly from our agent's own system? If it is, then we should be working with the agency management system vendors to either implement or create ACORD standards that facilitate this functionality.

The best results for us and our agents will be to get all independent agency carriers to focus attention on supporting real-time functionality as opposed to focusing primarily on enhancing their Web sites. While Web site development will always have a place, I remain hopeful that our industry will recognize that our agents' ease of access to their customers' data and real-time processing are much more important to the long-term prosperity of the American agency system than the carriers' proprietary Web sites.

Data: Industry Driver

Beyond real-time processing, the Ohio Casualty technology organization is also responsible for ensuring that our data is backed up and recoverable. I can't remember a time when my organization protested that it had too much data. With multivariate rating, predictive modeling and frequent -- and seemingly endless -- calls by the courts, politicians and regulators, data has become a major driver of this industry.

The more we invest in solutions that collect, organize and convert that data into information, the brighter our future becomes. We've been touting our investment in our core processing systems, not just because of the processing improvements that they bring, but because of our new-found abilities to collect better and more-accurate information that facilitates our product development, pricing, claims processing and marketing initiatives. These investments aren't glamorous, but they are critical to our long-term effectiveness. Our ability to collect and manage information is paramount to our success.

As Confucius once said, "The only constant is change." And that has never been truer for technology or the insurance industry. Unfortunately, the industry has struggled with the replacement of old legacy systems, which have become a major inhibitor for innovation. When I have the opportunity to speak with investors or our agents, I enjoy the ability to say that we've had an excellent track record in replacing our systems with modern, leading-edge technology. It's difficult to gauge the benefits of these mammoth projects at the outset, but I can't imagine implementing our vision for our company with old technology.

We believe we can fulfill a very special place in our agents' hearts and minds by developing new services and products. Each underwriting division of our company must be able to package products and services in new and unique ways to meet the constantly changing demands in the marketplace. With our P.A.R.I.S. (Policy Administration, Rating and Issuance System) policy admin system we've been able to introduce products in a fraction of the traditional development time. We also have a platform that will support real-time computing with our agency plant, as well as a very sophisticated pricing mechanism.

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