After determining that his plans to teach theology at the university level were not likely to work out, Dan Carmichael turned to a career in the insurance industry. When asked what religion and insurance might have in common, Carmichael quips: "Maybe a heavy dependence on prayer." That strategy may have occurred to Ohio Casualty's board at the end of the 1990s when the company was suffering serious financial difficulties. If indeed they sought divine guidance when searching for a new CEO in 2000, Carmichael could be seen as an answer to their prayers.
Not that confidence in Carmichael required blind faith on the part of the leadership of the Fairfield-Ohio based carrier, which markets auto, home and business insurance through an independent agency distribution channel. Carmichael already had been CEO not only of another P&C company, but also of agent/carrier communications network provider IVANS (Old Greenwich, Conn.). His first brush with agent/carrier technology came early in his career when, as the administrative manager of a Crum & Forster (Morristown, N.J.) office, he was associated with an Insurance Institute for Research and IIAA (Independent Insurance Agents & Brokers of America) initiative. "[I] did a test of how agency interface could work with multiple companies," he relates.
Where It All Began
Later, as vice president of administration at Crum & Forster, Carmichael was witness to the genesis of IVANS. "I had a chance to sit through a lot of the meetings with telecommunications companies looking at the issue of how to build a platform, network or both for agency interface," he recollects. "That was the beginning of my interest in this area." Through his association with IVANS and attending ACORD sessions, he adds, "I developed the conviction that our industry needed technology standards."
Upon joining Ohio Casualty, Carmichael applied his convictions to a turnaround effort and hired CTO John Kellington to develop and implement a technology strategy. "From the first day I started, Dan has advocated the value of real-time communication between the agents' management systems and our systems," he says. Ohio Casualty was one of the first companies to introduce both quoting and issuance from a management system in real time, Kellington adds, supporting that functionality for both personal auto and home with Applied Systems' (University Park, Ill.) Transformation Station and AMS Services' (Bothell, Wash.) TransactNOW.
Ohio Casualty paid equal attention to its internal systems. In 2001, the carrier began rollout of its PARIS (Policy Administration, Rating and Issuance System) system, which replaced three systems with a single solution built in-house on Java technology. It also began implementing service-oriented architecture supporting ACORD transactions. PARIS will replace two more legacy systems with rollout for auto and umbrella policies in the third quarter of 2006.
This year the carrier will also launch an online, real-time system for bond forms used by external agents. That will be followed by a new claims system, according to Carmichael. "We're already into the architecting of that." In the nearer term, he adds, "we're in the process of finishing work on a personal lines policy processing system."
With the success of its initiatives, Ohio Casualty has "leapfrogged companies and we are shoulder-to-shoulder with the nationals, even though our budget is probably some small percentage of theirs," Carmichael says. "It's all been about project management, setting priorities, doing what you can, but not trying to do everything at once."
Carmichael places credit for technology success at Kellington's door, but the latter insists that the CEO "understands that a solid technology foundation is critical for a corporation's ability to compete." Ohio Casualty's performance attests to the quality of Carmichael's leadership: In 2000 the carrier logged $1.5 billion written premium and a net loss of $79.2 million. In 2005, with $1.45 billion in written premium, the company reported net income of $212 million.
Dan R. Carmichael
"I developed the conviction that our industry needed technology standards."
Career: Before joining Ohio Casualty as president and CEO, Carmichael was president and CEO of IVANS from 1995 to 2000. He also served as CEO of Anthem Casualty Insurance Group (Indianapolis) for nine years. Prior to that, Carmichael was SVP of field operations at Crum & Forster, where he began his insurance career as a claims representative.
Education: A Florida State undergraduate, Carmichael earned a master's degree in divinity from Emory University. He has a CPCU designation and attended Stanford University's Executive Program.
Last Book Read: "Team of Rivals," by Doris Kearns Goodwin.
To hear more from the 2006 Tech-Savvy CEOs, go to: www.insurancetech.com/podcast
Leadership, Vision and Collaboration: Insurance & Technology's Tech-Savvy CEOs 2006
It's fair to say that behind every successful insurance CEO you'll find an effective CIO; no business leader who dismisses the importance of technology will fare well against competitors in the long run, and those not trained in technology must collaborate effectively with those who are.
Dan Carmichael's career-long interest in technology standards culminated in a successful corporate turnaround at Ohio Casualty.
Crossing the Bridge
Elizabeth Haar's technology-driven business strategy led to Accident Fund Insurance's e-business model solution and national expansion.
Running a Tight Ship
Mark Schwarzmann's up-front discipline improves the technology process and drives the use of standards at Ameriprise Financial.
Information Is Power
Ronald Williams champions technology to support the creation of a high-performance culture as Aetna innovates consumer-directed healthcare.
Making Things Easier
By keeping it simple, Kent Cannon drives IT to facilitate business growth at Beneficial Financial Group.
Insurance company CEOs might not yet know as much about technology as their technology officers might hope, but they know they need to be informed -- and so do the boards that evaluate their performance.
Changing the Game Through Technology Leadership
Michael D. Fraizer, CEO, Genworth Financial, one of Insurance & Technology's Tech-Savvy CEOs of 2005, shares his thoughts on the centrality of technology and the disciplines of innovation in shaping the insurance enterprise of the future.
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