Learning From Experience
Sometimes it takes an unfortunate incident for actuaries and information
technology to permanently come together.
Such was the case at Grange Insurance, when lack of communication
between the two disciplines created budget stress and a missed
opportunity that management couldn’t ignore, said Glenn Watson, assistant
vice president and applications development manager for the Ohio-based
Unbeknownst to the company’s IT staff, the actuarial department was
pursuing a new pricing approach and needed data on a timeline. “All of a
sudden, we had three to four months of work that IT hadn’t accounted for,”
The resulting delay of an important strategic opportunity “was a
defining aha moment,” Watson said. It became clear to everyone that both
sides needed to revisit how they worked together. The sides were called
together to identify what went wrong.
When events like this happen in organizations, the tendency is for
people to go into self-protective mode, point fingers, and throw others
under the bus. According to Watson, however, Grange has a corporate
culture that inspires honesty and accountability. One of the insurer’s core
values is to do “the right thing,” Watson said. To reinforce these and the
other values, every employee is evaluated on his or her commitment to the
core values, he added.
Besides, he said, both sides were motivated to discuss what wasn’t
working. “I think by then there was enough heat and pain on both sides that
they both opened up,” Watson said.
After all parties owned their actions, they identified how their processes
affect each other, including nuances and overlapping responsibilities. Then
they rolled up their sleeves and designed a document that headed off
The joint document outlines a process for approaching projects, which
includes clear documentation, regular meetings, identification of joint
deliverables, and involving each other sooner in the process. “Actuaries
now have a good understanding of what is going to impact IT,” Watson said.
This approach has successfully helped both professionals work in
sync for nearly four years. “We actually do a lot of prototyping earlier on
compared to before,” Watson said. “We are always thinking of how do we
get [a product] to market as fast as possible. It is always about speed to