As the holder of an ever-changing role at Southfield, MI-based Mead-owbrook Insurance Group, Ken Branham is a lotof things, but a stranger to change is not one of them. The senior vice president of business processing and technology has spent the past year and a half changing everything from his address to internal business processes at Meadowbrook, thus affecting the role of the company's IS department.
Meadowbrook started as a small retail agency in 1955, specializing in property and casualty, and personal insurance. Today, Meadowbrook has grown into the largest independent insurance company in Michigan, owning four domestic insurance carriers, four retail insurance agencies, and two wholesale brokerage operations. A pioneer in alternative risk management insurance, Meadowbrook started a group association captive in Bermuda in 1976, after deciding that it could no longer rely on insurance companies for long-term support after many of them faced financial instability in the mid-'70s.
Today, Meadowbrook is also active in public management services. The company manages five large-scale state public entity programs for approximately 2,500 clients.
Branham came to Meadowbrook in October 1999 from PMSC (Columbia, SC), where he headed the vendor's outsourcing division. Ironically, now that he works on the other side of the desk, Branham finds managing vendors to be one of his big challenges, especially when it comes to Internet applications. "In the Internet world today there is a tremendously large number of vendors trying to sell you an undefined product," he says. "The difficulty that comes along with the Internet is defining what your product and your strategy is going to be. As a result, many companies will not necessarily be accomplishing what they need to. Vendors are not the best people in the world to help you to do this. They are more technology than business oriented when it comes to the Internet."
To get over the obstacle of vendors lacking a business focus, Branham has changed Meadowbrook's whole development process for projects involving the Internet. "We've had to rebuild our process away from a traditional model and recognize that the process with the vendor should be almost instantaneous," he explains. "We are breaking our projects down into daily, weekly and worst-case scenario, monthly projects, so we can see if the vendor has hit the target, and if we are going to benefit from their efforts, right away."
Although Meadowbrook creates structured timelines for carrying out projects, according to Branham, its strategy for technical investments is not a well-defined process.
"We are looking for a return on investment," he says of the IS buying process, which is carried out by Branham and an IS steering committee, composed of executives from policyholder services, claims, accounting and the company's chairman and president. "But at the same point in time, there are a lot of investments where it is hard to find what the return is. The things that we choose to do, however, make sense to do, and so we move forward on them."
A formal RFP stage is absent from Meadowbrook's buying process. "We usually just go with the leaders in the industry," says Branham. "We try to stay with proven companies that we know are going to stay around. We look for companies that have financial stability, many years in existence, as well as how their products have been received by other carriers."
Meadowbrook's most recent IT project has been a phased roll-out of Advantage, a new system that provides its distribution channel with access to the company's systems for quoting, policy issuance, underwriting, inquiry and endorsement processing. It is currently available with Meadowbrook's workers' compensation programs in 28 states. "We've embarked on a plan that moves our technology and our business applications out to a point of need," says Branham. "We are giving our distribution channel the opportunity to both sell and service their business at their desktop, without the need for intervention from anyone else. We've utilized the Internet as the mechanism to allow low-cost interaction direct from the distribution channel with our systems and with our people."
Meadowbrook utilized CSC's (Austin, TX) Point System 4 to give its back-end system the ability to support computer issuance of policies. Meadowbrook also outsources its workers' compensation policy processing print, bureau reporting, billing and collection and audit application and billing to CSC. Meadowbrook added an Internet front-end to the Point System 4, enabling agents to log in and service policies. "From a service standpoint, we've taken a process running a little greater than 60 days and turned it into a process of three days, start to finish," says Branham. "The major change with this is the internal processing system."
According to Branham, a major difficulty with rolling out the system was the actual transition of business processes. "It was very difficult to figure out how to roll this system out into an existing operation that would enable us to go smoothly from doing business yesterday to doing business today," he says. "While this system was rolled out, we provided our distribution channel with access to the old way of doing things for a period of time, to make the transition run more smoothly.
"We now have the ability to go direct from the distribution channel to the underwriter, bypassing all of the internal checks and balances that were previously in place, and get direct communications between the agent and the underwriter," continues Branham. "That cuts out dozens of people who in the past were touching the issuance of policies."
The processing changes that have resulted from the implementation of Advantage are numerous. "We've literally eliminated the duplication of work or rework," he says. "Our service model has improved by thousands of percents. The quality of what we output goes immediately to what the agent is writing. We don't have the opportunity to mess up or add error ratios here," Branham continues.
"The technology of the Internet is more than just a toy or an at-home information center; it changes business transactions immediately. Service this immediate takes getting used to and requires a new way of thinking."
The service models that have resulted from the new systems have changed Meadowbrook's IS focus. "I would not recommend this type of project to any carrier that has technical people that do not understand the business center of a process like this," advises Branham. "Because we are removing all of the buffers between the distribution channel and the underwriter, we are having to turn our IS people into business people. We've started this transition by putting our technical people right into the business unit. We are also putting our IS people out into the field, so they can actually meet and work with the agent."
The transformation has not come without a cost to IS. "I can't overemphasize what a major shift this is for some of our IS groups," says Branham. "It's taken a real toll on some of our members. There are a lot of people involved in IT just to play with technology. But we've moved from not playing with technology to literally delivering capability with it."
The launch of Advantage has also transformed Branham's own IS focus. "My job has been changed from a focus on IS to a focus on business processes," says Branham. "I find myself focusing now on internal selling, internal education, business improvement, profitability and return on investment."
He believes his new responsibilities are different from those of his counterparts. "My job as an IS manager, compared to some of our competitors, is probably totally different. I worry very little about programming and spend my time wondering about how I am going to solve the next business problem."
Looking back, Branham thinks his job today is much more meaningful than it was a year ago. "The business focus of my position has changed from how to automate the traditional functions to finding new and improved ways to do business," he says. "I am now focused on things like changing the traditional workflow model, implementing, monitoring and assisting in the transition to new workflows and transitions of technology."
COMPANY NAME: Meadowbrook Insurance Group
HEADQUARTERS: Southfield, MI
ASSETS: More than $550 million in assets
KEY EXECUTIVES: Ken Branham, senior vice president, business processing and technology; Mert Segal, chairman and CEO; Bob Cubbon, president
BACKGROUND: Before joining Meadowbrook in 1999, Branham was senior vice president at PMSC.
IT STAFF: 50
IT BUDGET: $8 million
IT ARCHITECTURE: Meadowbrook's AS/400 computers utilize CSC's (El Segundo, CA) iSolutions, Microsoft (Redmond, WA) FrontPage and ActiveX, and Sun Microsystems'. (Palo Alto, CA) Java to connect to its Internet front end, and Pyramid middleware to connect to its claims system. Meadowbrook utilizes CSC's Point System 4. The insurer uses Dell (Round Rock, TX) desktops, Citrix (Fort Lauderdale, FL) and Ethernet networks to connect to Compaq (Houston) servers that run on Citrix, as well as Microsoft Windows NT platforms, and Oracle (Redwood Shores, CA) and ADMS data storage for its SQL server databases.
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