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Farmers Insurance eyes drones, Internet of Things

Clint Boulton | Jan. 5, 2016
Led by a new CIO, fresh from Toyota, the insurance carrier is looking to revamp internal IT and tap emerging technologies to better support its 19 million policy holders.

Guerrier says Farmers' IT could help formalize what have been, to this date, largely informal skunkworks innovation projects. It would also put Farmers in league with Progressive, which has created a "business innovation garage" to test new technologies to determine whether they are viable for the market.

IT modernization on tap

To drive such innovation at Farmers, Guerrier is planning several back-of-the-house improvements. He will replace mainframes and other 15-to-20-year-old systems with new “best-of-breed” servers and software that enable Farmers to be more responsive to customers who can't wait a whole day for legacy systems to complete their batch processing. "A customer does not want to wait [until] the next day for something," Guerrier says. "When they're paying their bills in their pajamas at 2 a.m., they want to know by 2:02 a.m. that it went through -- not the next day."

Following a practice he embraced at Toyota, Guerrier says he prefers to work with partners, including cloud providers, application service providers or consultants, who know the insurance industry's regulatory requirements well and can provide technology that is 80 percent "plug-and-play right out of the box." The remaining 20 percent would include Farmers "special sauce," including technology modifications to best serve customers. He says much of the industry is practicing this 80/20 rule because building technologies from scratch, while typically effective, tends to be cost-prohibitive and resource-intensive. "It's just unwieldy," he says.

Guerrier will adopt cloud technology when and where it makes sense, but he says it isn't the answer in every scenario, particularly for regulated industries that require that businesses have mechanisms for auditing the data. "The business drives the need," Guerrier says. "My job as the CIO to explain the risks and rewards of those decisions and then we move forward with them together." He’s evaluating both on-premises and cloud-based email software that would support better access via smartphones and tablets than the current system.

Farmers brand legacy won Guerrier over with its solid reputation and commitment to customers. He cited the organization's work in helping rebuild towns racked by natural disasters over the last few years. "We tend to go above and beyond to meet the customers' needs and that's very important to me," he says.

 

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