In January of 2023, Monica Caldas took the reigns as Chief Information Officer of Liberty Mutual, a $50 billion revenue insurance company founded in 1912 that has 50,000 employees and operates in 29 countries. She has been with the company for more than five years, and she had spent the prior 17 years at General Electric, leading two different business units of GE as CIO. Since taking her current post, Caldas has led a remarkable transformation of the company, continuing work begun by her predecessor as CIO James McGlennon. As such, she is on the path to pushing the 111-year-old company to become a tech-forward insurance company.
Caldas acknowledges that many companies are on comparable journeys to digitize their businesses, but her definition of “tech-forward” is “wing-to-wing digital transformation.” She noted, “A tech-forward insurance company is not about automating everything and removing humans from the loop. It’s about understanding the customer journeys, whether it’s an individual consumer, or an agent or a broker. It’s understanding the journeys, understanding where automation and digitization can help remove friction and can provide a better experience, a better product, and a better service…Also, I think the other piece that companies sometimes don’t spend a lot of energy on is the employee experience. How do we provide tools and capabilities behind the scenes to make employees’ experience faster, smoother and give information more at the fingertips, to help them be more productive in their day-to-day?”
Caldas has worked with her colleagues to map customer journeys, the employee, the agent, and the broker experience, mapping those through the value chain of how insurance works. She has also helped establish feedback loops back to those different stakeholders, engaging them in different ways. She notes that there is a risk of attempting to do everything for everyone. “You have to understand what differentiates the service or the interaction, and try to home in on what really matters,” Caldas noted with emphasis. “If you’re mapping the customer journey or the broker experience journey, and all steps matter…But is it step six, seven and eight where there’s a lot of friction? If we solve for that and home in on that, that will make a material difference in our interaction together.” She suggested that the key is having the processes documented appropriately and engaging the various constituent groups openly, honestly and often.
Data is another element that will determine the pace of value realization, according to Caldas. “I believe that in everything we do, data is the fundamental piece that will enable us to be successful, and so [we must understand] what data sets are the most critical to what decisions,” she said. “We operate in a regulated environment, and being careful and protective of our customers’ data to make sure that we have the right sets of capabilities, policies, governance mechanisms to make sure our customers’ data is safe and secure is very important for us.” She noted that data is important on many levels. This starts with the sense of stewardship that she and her colleagues feel about our customers and partners’ data. Next is a desire to understand the data better to derive better insights, which enables Liberty Mutual to offer better products and services at greater speed.
She also recommends asking six questions as further guideposts along the path to data success:
- Do we have the fundamentals in place?
- Do we have the right governance mechanics?
- Do we understand the data domains across our business units?
- How are they set up?
- How are they governed?
- How do we apply stewardship to them?
Caldas is quick to note that a CIO does him or herself a disservice by thinking of themselves as the sole owners of the data. “Data is owned by every function in our operation,” she noted. “What that means is there is a sense of accountability that every function, whether you’re in Claims or in Finance or in Technology, has to have a sense of data literacy. We have data offices that are set up in our business units, in our corporate functions. We have an executive education program and additional training programs that go throughout the entire organization to elevate what it means when we talk about data. It can be abstract in some sense, and so increasing the data literacy, not so much just for understanding how data flows and moves or to create a better report, but also the responsibility and accountability that each one of us has in being good stewards of the data that we do have access to.”
Caldas has introduced a program called Executech, which offers technology training tailored to different constituent groups across the company. CEO Timothy Sweeney and his reports, including Caldas, have committed together to ensure that the top 2,400 employees across the company understand important basics of technology. These include:
- What is an API?
- What is artificial intelligence?
- How does Liberty Mutual use data models?
- How does the company think about technical debt and modernization of legacy systems?
- What is data?
- What is data engineering?
- How does data flow?
By creating knowledge and clarity on these topics and others, the level of the conversation between the technology team members and the rest of the organization is at a higher plane of value. The technology organization still has an important role in being stewards and champions of change in employing technology to solve a problem, but everyone that sits around the table needs to be informed. This is representative of the growing importance of technology everywhere, but it is also emblematic of the pace of change. Therefore, she anticipates the curriculum evolving to reflect that pace of change.
All of the above have helped Caldas and team think about how best to leverage generative AI. The data strategy is an important ingredient to ensure that solid data is used. Executech ensures there are training modules to help educate employees on what generative AI is and how best to leverage it. She has also established a Responsible AI Committee that brings together a variety of different subject-matter experts to think about the use cases that the company experiments with. “We have an experimentation track that has our own Liberty Mutual instance of GPT, in partnership with Microsoft currently,” she said. “Within that context, we have full control of the data set, if you will, and within that, running experiments. We’re actively running experiments around use cases, and we’re looking at it in terms of internal employee productivity. How do we improve the time our employees spend on reading documents? How do we summarize [the documents] for them and accelerate them to a 5% improvement in their day where they’re spending less time doing that work. We’re looking at that, working with our Legal teams, working with all sorts of functions, so it’s not just one area.”
Those experiments continue, and Caldas notes the criticality of remaining close to one’s network to learn and to teach in equal measure. The technology is so new, the vendors are evolving so quickly and the risks are evolving, as well. Learning from others’ experience while offering some of one’s own is a best means of taking full advantage generative AI.
Caldas’ vision of the tech-forward insurance company appears to be on the path to becoming a reality.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written three bestselling books, including his latest Getting to Nimble. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
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