Workflow First, Technology Second
I&T: What is ACUITY's growth strategy?
Ruffalo: We have a two-pronged approach to growth, and industry market cycles determine which strategy we deploy. In a hard market we focus on expanding into new territories. For example, we recently entered Tennessee and Kansas, and have plans to enter Arizona. We also tap into more regions of the states we already are in. If the market goes soft, we'll pull back on entering new territories. But even in a soft market we've been able to sustain 30 percent growth.
I&T: How does IT support these growth strategies?
Ruffalo: Each year we define our key corporate strategic initiatives, and that becomes our blueprint or road map for determining where to focus our energies. IT marries its initiatives with the business initiatives and they move lockstep with each other.
Part of supporting growth is to improve our efficiency, and we've already automated most of our low- and even mid-hanging fruit. Going forward the efficiency gains aren't going to be quite as visible or as easy to attain. To continue to improve we've assigned a group of three officers, myself included, who are charged with creating an enterprise technology model. We are interviewing each company area to pinpoint manual or outdated processes. We're part way through the interviewing, and when we're done we'll have a blueprint for focusing our IT resources.
I&T: Can you provide an example of some of the efficiency plays you've already implemented?
Ruffalo: ASIST -- Automated Servicing of Insurance using Superior Technology -- is our next-generation policy processing system that exposes our back-end processes to our previously built Web-based front-end systems. In other words, we are reshaping and reenergizing our legacy systems by connecting them to the front-end systems to give agents true real-time processing. We've transformed a system that traditionally captured data all day long, processed it at night and spit something out the next day into something that is dynamic and real-time.
We've also taken policy processing to a whole new level by incorporating artificial intelligence (AI) throughout the data-collection process. The system can fill in missing information while the agent is still connected to us, process that piece of business, and give the policyholder declaration and bill back within one minute. It truly is once-and-done. We've implemented this system for our personal lines of business and some key commercial lines and will work on building it out for the rest of our commercial lines.
Another initiative that generates a ton of attraction and business are the real-time inquiry capabilities we've given to our policyholders and agents. For example, a commercial customer can view up-to-the-minute loss run information by entering a date range. This is not precanned information for the week or month-end, but dynamic information.
I&T: How do agents connect to your internal systems?
Ruffalo: Because our agents are independent, we can't control what systems they use. What we do is build the pathways or bridges and require that they follow the ACORD standards to electronically connect with ACUITY. We then map the data into our Web-based front-end systems and are able to run artificial intelligence and reports, and book that business instantaneously.
I&T: Do you do your own development in-house?
Ruffalo: Yes, and we pride ourselves on the fact that we custom build our internal systems. The only systems we haven't built ourselves are general ledger and payroll. We don't use contract programmers or consultants; our model is to rely on our internal staff. However, we did embark on a project several years ago to build this front-end process and brought in an outside firm to help us make the transition to the new technology. But we were clear that we didn't want them to just build it for us -- we wanted significant knowledge transfer.
I&T: But doesn't in-house development take longer than buying a system?
Ruffalo: I would agree with you to some extent, but while you may be able to get a packaged solution running in short order, it may only give you 80 percent of what you need. Now you have to find a way to turn on the other 20 percent. Since you may not be able to get what you want, you then try to match your workflow to the package. That's the wrong approach. You should design the workflow that you want and then design your solution to match that.
I&T: How does IT help ACUITY build strong relationships with its independent agents?
Ruffalo: By making our systems easy to use with a consistent look and feel, and making sure that they are available when agents need them. Systems can't be up one minute and down the next. If you have the ratings, your pricing is competitive, your service is top-notch and agents can count on you, they will come and they will stay.
Our goal is not necessarily to be the low-cost leader. We want to be priced competitively, and back that up with service and ease of doing business. In the event of loss, we want to have the systems and personnel inside our organization that will help people quickly and fairly.
We're also not beneath using agent incentives. For example, we'll pay a bonus to agents that do business with us electronically rather than faxing or e-mailing, or even mailing documents. Whenever we roll out this sort of incentive program, we get a marked increase in the percentage of business coming in the door in an electronic format, which helps both agent and carrier alike.
I&T: On what areas will you focus your IT efforts in the next year?
Ruffalo: Over the last decade we've focused on paperless processing and business continuity, and we'll continue that focus. We also are going to continue to focus heavily on real-time processing for all of our transaction types.
I&T: Do you have plans in the business continuity area?
Ruffalo: Our challenge is that we are not large enough to own a fully functional hot site, but [still need to] store a lot of information since we are essentially paperless. All this data puts a huge strain on business continuity needs. You can't afford to just use backup tapes to restore your systems because the amount of data is so enormous that it would take days to rebuild the files. We've got a large initiative to build components of a hot site, and we're putting pressure on our business continuity group to do a better job of replicating or mirroring in a real-time mode.
I&T: As a mutual company, do you face any challenges not faced by CIOs in public companies?
Ruffalo: Being a mutual company doesn't impose additional technology demands and actually gives us more freedom. Since we're not tied down to worrying about shareholder response on a quarterly basis, we can invest in technology projects that will push us ahead but may span several years. In some respects we have greater short- and long-term flexibility.
I&T: What is the most challenging aspect of your job?
Ruffalo: Trying to wear the hat of an officer, a CIO, a CTO and CSO at the same time is a challenge. All of a sudden you are juggling three balls and then out of the blue your boss throws in a fourth ball. What happens to the other three? That's a challenge many CIOs are facing: how to juggle the changing landscape and additional initiatives.
Executive Resume:
Name: Neal Ruffalo
Title: Vice President, Enterprise Technology
Age: 47
Years in Current Position: 7
Education: Bachelors Degree, University of Wisconsin.
First Job: Programmer/trainee for Heritage Insurance (now ACUITY).
Hobbies: In the winter, Ruffalo enjoys snowmobiling and skiing. In the summer, he turns his attention to golf and cars.
Tweet This