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Q&A: Hastings Mutual CIO Paul Ayoub Discusses Recent Analytics and Cloud Projects

Ayoub took over as VP and CIO of multiline P&C carrier Hastings Mutual this past June after a stint as CIO of Employers Holdings.

Paul Ayoub took over as VP and CIO of multiline P&C carrier Hastings Mutual this past June after nearly six years in the top tech post at workers' comp insurer Employers Holdings (Reno, Nev.). Ayoub discusses recent analytics and cloud initiatives at Hastings, Mich.-based Hastings Mutual ($647 million in assets) and tells Insurance & Technology that midsize carriers don't have to be left out of the big-name technology party.

I&T: What are the benefits of working at a midsize company like Hastings Mutual?

Ayoub: As a midsize company, IT is in a position to really make a difference and have a positive impact on the success of the company. ... From a technology standpoint, we deal with all the same big technology vendors -- such as Cisco, EMC, HP and IBM -- that bigger insurance companies deal with. We don't have the deep pockets, but we need the same technologies. The challenge for us is being able to effectively negotiate with these vendors and prioritize internally what we can afford to take on in any given year.

How does working for a midsize carrier inform your approach as a CIO?

Ayoub: I've always stressed with my organizations that we're business people first and that we bring our technology skills to the table. Our goal is to truly be insurance IT professionals. We're certainly not going to be experts like underwriters or claims people, but we can become knowledgeable, and this improves our effectiveness in delivering the systems capabilities the company needs. We in IT recognize the crucial role we play toward helping the company succeed. This is a very competitive business, and, for example, developing more front-end agency-facing capabilities, which is our focus this year, can help us differentiate ourselves from our competitors. Internally, we're implementing new processes and procedures in IT to become a more effective and high-performing organization.

What are some of the IT projects you've been working on since joining Hastings?

Ayoub: We're continuing to build out our portal capability for our agents to make ourselves easy to do business with. We have legacy technology on the back end in both the policy and claims areas. We're not planning to do a policy administration system replacement at this moment, but we realize that at some point we have to consider our options there. For claims, we are using a product that requires periodic upgrades, which we plan for and manage in conjunction with other claims initiatives. We're also evaluating different predictive analytics and business intelligence opportunities.

What are your current analytics capabilities?

Ayoub: We just deployed multivariate rating capabilities for personal lines with effective dates over the next couple of months. This is our method for evaluating characteristics or factors that, when viewed together, provide a score that we incorporate into the rating process. The next natural step for us is to work on the commercial side, where we refer to this process as predictive analytics. We're working with our actuaries to analyze the data and identify characteristics we think can be predictive in coming up with a score to help with pricing these risks. It's similar to the personal lines side, but more factors are involved due to the nature of commercial lines risks.

Can you describe that process?

Ayoub: We've just recently met to begin the process of analyzing our data with the actuaries to determine what risk characteristics we capture currently. What is likely, however, is that there will be characteristics that can be useful in predicting potential profitability that we currently don't capture. We'll have to begin capturing these factors as part of our submission process to be able to incorporate them into the analytical process. Predictive analytics is very exciting due to the possibilities it can provide for how to price our business.

Are there other technology trends you're following besides analytics?

Ayoub: Most definitely mobile and cloud. We're doing some private cloud computing ourselves through server virtualization. As far as external cloud computing, we're keeping our eyes open and seeing where it makes sense. I've got some concerns about information security and availability. With mobile computing, we're also exploring the possibilities and thinking them through. We know it's going to become much more prevalent in our industry, and we want to be ready.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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