Sept. 11, 2000

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Driving Costs Out Of IT Infrastructure

By George V. Hulme

hen it comes to aligning IT with core business objectives, plenty of insurance companies talk a good game. But Nationwide Insurance Cos. is executing. "One of the things we've really focused on is to put into place a solid IT strategy that is totally linked to our business strategy," says George McKinnon, CIO of Nationwide's insurance business. "When we did that, a lot of things fell into place for us."

What that means at Nationwide: Regardless of how customers contact the company, they will be serviced at the highest quality level possible, McKinnon says. Nationwide's getting there by following through on its BHAGs: Big Hairy Audacious Goals, he says.

Nationwide typically has hundreds of concurrent initiatives under way, but six initiatives--the BHAGs--are chosen as prime objectives every six months by the president's cabinet, which consists of senior VPs from various business units. "Technology is almost always a key component to our BHAGs," McKinnon says.

Most recently, these goals have revolved around building an IT platform that will make information broadly accessible. Nationwide is moving its technology to a Web-centric environment and an advanced centralized data warehousing capability--instead of each business unit, such as sales and claims, having its own database, Nationwide is implementing a centralized data warehouse. This will ensure that customers searching for information over the Web at www.nationwide.com will be given access to all appropriate claim, policy, and sales data, while insurance agents and call-center representatives also will have that data at their fingertips to service those who visit their offices or call the company.

"If they call the agent, they should be able to get the same information just as quickly as if they called our service center," McKinnon says. Under the new system, which is in testing, the way customers buy insurance won't affect how they can access information about their policies. "We may have a customer who purchased insurance from us through an exclusive agent, but they want to be able to view their bill online," he says.

Nationwide plans to have all states connected to the centralized data warehouse within the next 18 months. "We feel good about it now; it's just a matter of implementation," McKinnon says. "We are a large insurance carrier and it takes time to handle the deployment and training needed to change the business process and technology."

Other arms of the company are also moving forward with intriguing IT initiatives. Earlier this year, Nationwide Financial Services Inc., a member of the Nationwide group of insurance and financial-services companies, was named one of only three insurance companies to achieve a "very good" rating for Web sites that support life insurance and annuity financial professionals by Dalbar Inc., an annuity industry rating and research company.

The recognition is starting to pay off: The company expects to service online roughly 500,000 consumers as well as producers--independent reps, independent agents, or exclusive agents. The site averages more than 1.5 million transactions each month.

On the site (http://www.bestofamerica.com). producers are authorized to sell through their broker and can access information such as variable life pending reports, 1035 exchange status reports, and account statements. Nationwide is one of the few companies offering producers access to all products, such as individual annuities, pensions, and variable life, through a single security log-on, 24 hours a day, seven days a week.

As for McKinnon, he won't be done with his BHAGs anytime soon. "They're always setting more, and they're always more challenging," he says. Although next year's BHAGs have yet to be established, McKinnon is sure that part of those efforts will involve expanding the self-service capabilities of the company's Web site.

Return to main story, "Premium Put On Web Initiatives."

Illustration by Jeffrey Fisher

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