The Innovators: The E-Broker

Internet technologies are utterly transforming the insurance business, and Ian Marshall of Zurich Insurance believes the IT...

Internet technologies are utterly transforming the insurance business, and Ian Marshall of Zurich Insurance believes the IT department has to change with it. Interview by Candice Goodwin

What are your top priorities at the moment?

Insurance is on the cusp of major changes in terms of pressure on the product set, customer demands, and competition between the big insurance companies and brokers. A lot of these changes have been brought about by developments in e-commerce, which has affected insurance much more than banking. Whereas the banks are still bound to some extent to physical service delivery via branches, insurance is ideally suited to e-commerce and delivery across the Web, via digital TV or handheld devices. The question for us is, how do you apply technology to let the business really take advantage of these market changes?

And how do you?

We have to try and achieve that stickiness. The key is providing the best customer experience, but as to how you do that, I don't have the answers - I don't think anybody does. Banks can still rely on customer laziness to keep business - most people still find it just too much trouble to switch banks. But in the insurance sector, customers are now almost promiscuous about changing their insurance company from year to year, having a different provider for car insurance, contents insurance and so on. It's much harder to convince people there's a value in getting everything from one source.

You've got the priorities sorted, so what's the next step?

We're aware that speed is of the essence. A lot of business areas have taken note of the speed with which existing competitors and new players have moved into the market via the Web and concluded that the company can't take two or three years to develop new systems. We have to bring new functionality on board quickly, even if it means compromising to some extent.

What has helped you with this strategy?

The Zurich Group as a whole is very big on collaboration and communication. We've been able to apply ideas from Switzerland, the US, Australia and New Zealand. The group has a range of initiatives for business development across various areas such as CRM, back-office processing and legacy system integration, which provide us with some guidance about the way to develop a systems infrastructure. We've identified and are evaluating a range of software already in use within the group that would fit our needs enterprise-wide.

This is while you're still dealing with mergers with Eagle Star and the Municipal?

Yes. It's been a big challenge for us to bring together three quite different operating models, and rationalise all their different hardware and software components. And it remains a challenge, on top of and in parallel with dealing with the emergence of e-commerce and its impact on how we deliver products and services.

Which approach have you adopted for merger: integration or fresh start?

The track record for merged companies that have tried to rebuild their infrastructure from scratch is very poor, with failure rates of around 75% across all industry sectors. So we've opted for a gradual migration. We want to move towards a new approach but in a very planned way. There's a huge amount of intellectual content in those legacy systems and a lot of business processes aligned to them, so it's not easy for us move quickly.

How do you balance the need to move carefully with the need for speed?

We're looking at an almost plug-and-play approach, using off-the-shelf components to build an infrastructure from which we can develop as a business. We've been impressed by how sophisticated, accessible and easily implemented many of the software components on the market appear to be - the range and choice has taken both us and the business by surprise.

If you're moving towards greater use of off-the-shelf components, how does that affect the role of IT?

I take the view we should be acting almost as brokers, very much more up the business end. The skills we bring are our knowledge of the technical solutions that are out there in the market, our ability to ensure that the business is getting the most cost-effective solution, and our ability to bring projects in on time and to budget. You need to ask yourself questions like do you need a large in-house team to build the next generation of systems? Personally I don't think IT departments need to do that. The market is well stocked with highly professional third parties with skills we either can't afford to carry in-house or can't get hold of. The whole outsourcing area has become much more sophisticated and complex - there's a credible alternative out there for business now.

What does that mean in terms of your existing skill base?

We're in the process of retraining our people in e-commerce. For the past three months we've had a programme in place to start building up our Web skills. As people get trained up, we're moving them on to Web-based developments. They're becoming productive very quickly. The basic IT skills are already there, it's just a question of honing them for e-business.

How has that gone down with the staff?

We've got people queuing up to be trained, to be honest! We haven't encountered any resistance at all. People have already built up experience of Web technologies by using the Web on a personal level. That's generated a powerful business and personal change message; they feel they want to be a part of that.

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