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CIO Leadership: Secura's Jeff Bemis tackles tough economy

Appleton, Wis. - Secura Insurance has been around for 108 years, long enough to have survived a number of sluggish and downright frightening economies. This one is no different in terms of the belt-tightening that is being done across departments at SECURA and elsewhere, including information technology.

The Appleton-based, property-casualty firm reported $336 million in written premium in 2007, but does business in several states - including Iowa and Wisconsin - that were impacted by the June 2008 flooding. As a result, its loss results aren't up to its usual standards, and the tanking stock market can't be helping its investment portfolio.

Jeff Bemis
Jeff Bemis, vice president of information technology for Secura, is part of the economizing. At the direction of management, he already has released 12 employees from his IT staff, which means both strategic and non-strategic IT projects will be impacted to varying degrees, and the IT budget has been reduced by 13 percent.

Secura still is moving ahead with key implementations like a company-wide document imaging project, a legacy platform modernization, and a business analytics program, but the IT department is not immune from the worst part of any manager's job. “We released 12 of our 92 people, good people that we liked, enjoyed, that had worked here for a long time, and that were doing a good job,” he said. “They were let go because of current economic conditions and our forecast for a continued soft market in the property-casualty insurance business.”

There is no one blueprint for dealing with a recession, but Bemis has spent more than 30 years in the property-casualty industry, including a 10-year stint with Sentry Insurance in Stevens Point. He has had opportunities to move back and forth between the business and IT environments, and his blended background in personal lines underwriting and computer software development gives him a keener sense of how to set IT priorities in an insurance company.
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Secura compartmentalizes its application development budget into three buckets - one for action (strategic) plans, usually the larger, longer projects; an area that Bemis calls “below clip,” which aren't necessarily big projects but still require time and effort that is under the control of the local business user; and the production support areas that can't be cut because of the need to keep the lights on.

“As we made a budget cut like we did, we had to change our allocation of people, and we were forced to reduce the amount of time we have available for handling the below-clip, day-to-day issues, the shorter-term quicker hitters,” Bemis said.

Major projects that already were in the hopper - document imaging is of particular strategic value to Secura's service processes and to its independent agents - are proceeding as robustly as before, but the company has reduced the number of projects and is stretching out the timetable of others.

Time is a precious commodity with the document-imaging project, which has featured a painstaking workflow creation process. Although Secura is using the IT expertise of a company called ImageRight, which has a method to develop workflows, the business units still need IT's help to develop the workflows.

At Secura, the majority of the savings attributable to IT comes in optimizing current business processes; getting business users on same page is a big part of process transformation. “I wouldn't say it's technically difficult,” Bemis said. “I like to say that it's really not an IT project. We have some programmers working on it, but most of our work on the imaging piece is to put tasks into the workflows. The business users need to define their own workflows.”

Data analytics

In terms of planning and innovation, the other big strategic push is in the area of analytics. Property-casualty insurance companies have tons of data. They collect a lot of information about their clients, some of which is legally required, and they capture demographic information to help key executives make better decisions on matters like underwriting risk selection, pricing, and claims management.

Secura has had early success with its data warehouse project, which has thus far paid dividends for business management, retention, and premium modeling. While those pieces are in place, Bemis would like to make more progress in terms of analyzing the loss area, particularly for the key performance indicator (KPI) of loss ratio.

“The term our industry uses is predictive modeling,” Bemis explained. “We use that in the personal lines area for rating auto and home insurance, and for using additional new variables. That was used before in our personal lines area, and we're starting in our commercial lines area.”

Bemis chose Business Objects for the data extraction piece, but also for the dash boarding options. For data to become actionable information, it has to be presented in a way that makes sense to individual business units, and they are indeed a big part of the decision-making process for metrics, dashboard design, and graphics. The company chose the traditional speedometer dashboard where red is stop and green is go, allowing users to see in one glance whether the metrics are “in tolerance or out of tolerance,” Bemis said.

Decisions were made collaboratively for a very important reason. As IT develops the analytics function, it's important to meet with the business units to figure out which metrics, or KPIs, are important to them, and then determine how to present actionable data on a dashboard, whether it's graphically rich or it's presents pure numbers.

“The most important piece of an analytics or business intelligence project is to make sure you agree on what the metrics are,” Bemis asserted. “If you can get the key business analysts, or whoever the decision makers are, to agree on the top three or four things they want to see at a glance, then you can experiment with how best to present it.”

While the company has gotten some mileage out of it, Bemis acknowledged that IT is struggling to complete its data warehouse project, primarily because the creation of the operational data storage, or ODS component, has been challenging and fairly costly. The ODS systems, which enable an organization to share smaller amounts of data from multiple sources, has a different purpose than the larger-volume data warehouse.

Secura is planning to use a custom-built ODS piece to bring together disparate processing systems. Personal, commercial, and farm lines underwriting, claims, and finance systems all bring different information into the warehouse from those disparate systems.

“Our legacy system is not just one system, it's several,” Bemis explained. “We have server-based software, we have mainframe-based software, and we need to bring that together. The creation of the ODS is probably the longest-running, most complicated part of that, but our data warehouse will spring from there.”

Business evaluation

Following IT implementations, Bemis employs a unique method of evaluation. Since an embedded practice is to have a business user and a member of the IT team establish the business context for each process change or IT implementation, whether it's an action plan or a below-clip project, the IT department asks business users to rank the department on whether it was on time, on plan, and on budget, and whether the business objective was met.

During the past five years, Bemis said IT had made the grade more than 90 percent of the time, in part because of its its insistence on meticulous pre-planning. “We have to have the business success to create the value and appreciation for what IT does,” Bemis explained. “If we don't have value, we're just a commodity.”

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