Zurich’s TOM Intiative Takes Aim at Long-Term Profitable Growth
Flexibility and agility have become bywords for insurers' ability to adapt to rapidly changing circumstances amid the current economic crisis. Carriers' longer-term survival, however, will depend on adapting to an evolving marketplace rather than merely reacting quickly to sudden opportunities and challenges. That kind of evolutionary adaptation is behind Zurich Financial Services' ($3.03 billion in 2008 net income) Target Operating Model (TOM) initiative, which the Zurich-based company launched last year.
"Transforming Zurich's operations is the key to profitable growth and the future success of our organization," comments Nancy Mueller, the carrier's EVP of operations and strategic execution, who notes that while other industries, including manufacturing, already have modernized their operations, insurance has made less progress. "The TOM is about understanding what shape Zurich will need to be in in the future to meet the evolving needs of customers and ensure we meet business goals."
According to Mueller, the TOM is being implemented in five key dimensions: configuration, people, processes, platforms and IT, and performance management. "Configuration" refers to facilities, in terms of space and location; "people" focuses on the numbers and skill sets of the associates Zurich will need; "processes" focuses on distributor and customer ease of doing business through standardizing and simplifying processes; "platforms and IT" centers on the evaluation of systems and projection of investment in the technology that will deliver the highest ROI; and "performance management" refers to developing key performance indicators and isolating the data to drive better business performance.
Mueller stresses that while Zurich's TOM is based on a certain vision of future business demands, it has flexibility built in. "We recognize that any time you embark on a large, multiyear program, the world around you will change, so we will continually look 12 to 24 months ahead," she says.
IT Across Dimensions
Although IT appears as one of the five dimensions in the TOM's conceptual construct, Mueller acknowledges that IT crosses all the other dimensions. "IT plays a significant role in defining what you might call 'the art of the possible' and also pulls all the other pieces together," she notes.
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
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