Living up to the hype: insurance CEOs see significant competitive advantages--and a new role for CIOs--as technology aligns with business.(Information Systems: Technology)

Technology has come a long way from its primary role of storing data. It's burgeoned into nearly every corner of insurance companies--all while building a critical bridge with customers and agents. Now chief executive officers have one more thing to be excited about as technology extends its reach even farther by aligning with the business side of many organizations' operations.

Robert Senkler, CEO of Securian Financial Group, based in St. Paul, Minn., knows the changes in technology first-hand. He's seen numerous technological advances over his 32 years in the industry. While technology has always been a critical function to Securian, he said it's now becoming much more integrated at both the business and customer levels. "Thirty years ago, customers really didn't touch our technology, but today in some of our business units, more than 90% of service transactions are customer-initiated," he said.

Much of that customer inter action has been revolutionized with the Internet. Senkler said companies that do the best job of using and energizing personal computing devices via the Internet excel. "Companies literally get in and out of business based on their ability to manage customer interface via the Web."

The Web revitalizes companies' connections both internally and externally. Many CEOs are recognizing significant return on investment from their company Web sites. "One of the things we acknowledged early on when the Web was becoming a powerful tool was that it gives all companies very cost-effective access to [it]. That almost worked in the favor of companies of all sizes; they had to be big enough but didn't have to be too huge to effectively use the tool," said Senkler.

Technology--along with the Web--has opened the door to enhancing the customer experience. For Assurant Health, technology's role is an essential part of its value proposition to both customers and agents, said President and CEO Don Hamm. "And every year that role gets even bigger" he said. Historically, technology was used primarily for processing parts of the Milwaukee-based company's business, such as paying claims and collecting premiums, but now technology is progressing into an even larger part of the company's business. For instance, he said, many of Assurant Health's technology dollars recently were spent to improve the issue and application process.

A Vital Role

Reinsurance is also reaping technology's rewards. Because the group reinsurance business is unique, said Mike Emerson, …