by Mark Chillingworth

Changing the landscape at NFU Mutual

Sep 23, 20139 mins
Financial Services IndustryIT LeadershipIT Strategy

A key attribute of leadership is to understand your organisation, its customer base and workforce. No business change project will succeed unless these practices are followed. So as CIO of an insurance firm specialising in farming and rural customers, Tim Mann has learned to adopt a pace of change and a set of suppliers that the community can readily accept. NFU Mutual – the commercial financial services business to the National Farmers Union – was founded in 1910 and is in good shape, so change has had to be careful.

“We are a composite insurance firm, 95 per cent of our business is general insurance, cover for cars, businesses and people,” Mann says of NFU Mutual, or to give it its full name the National Farmers Union Insurance Society Limited. Being part of a union means NFU Mutual has an unusual sales network in that the union secretaries are also the agents for insurance services. Mann explains these agents are on 95 per cent commission. “Our persistence rate is also at 95 per cent,” he says of the organisation’s customer loyalty.

Although this article was written on a sun-dappled day out in England’s Downs, recent years have been challenging for the rural subsidiary of Great Britain plc. Mann and the leadership team at NFU Mutual have had to adapt their business to be supportive, yet remain profitable.

“Weather events have hurt, but yield prices are good in the market. We are seeing pressure on costs, but also increasing rural crime such as livestock theft,” he says.

“Farmers have asked us for support on the premiums and we have done that and we have also seen claims go up. But our balance sheet is strong after 103 years.”

NFU Mutual has opted to use its strong balance sheet to support rural communities by getting involved in some of the issues that are putting pressure on its customer base and therefore on the insurer. Farming, for example, is the most dangerous occupation in the UK in terms of fatalities.

“Rather than focus on the curative, focus on the prevention – it’s better not to pay claims,” Mann says of the high focus on farm safety you see in rural communities and also on the organisation’s website.

In the office, Mann has to grow a new crop of technologies that will enable NFU Mutual to remain supportive of both its customers and community.

“Brilliant basics was the first phase and then we moved on to Ariadne, our project for transformation to a new data centre environment, Citrix thin clients and Windows 7 with Office 10,” he says of the two recent change programmes.

“I joined three years ago and the first challenge was to repair our outsourcing agreement, which was dysfunctional. So I took the board on a journey on how we would change the business – changing the game – with automation and collaboration. That we could change the rules of how we rate risk and how we underwrite.

“The plan was to modernise all parts of IT because it didn’t have a great reputation within the organisation.

“We started scoping Ariadne six months after I started. I bought in some new talent and there were a number of internal promotions. Part of the challenge was to take us as an IT department on a journey. So we have moved away from IT functions to a solutions architecture.

“NFU Mutual is a really strong business that could be even better with some really good automation, so we are really investing in these areas,” he says.

A challenge for Mann and NFU Mutual is to take stock of how the insurance world has changed to become an online commodity that consumers simply buy in minutes over the web or through an aggregator site. NFU Mutual has a website that enables potential customers to enter their requirements and request a callback.

Although insuring a fleet of actual tractors is quite different from insuring a Chelsea tractor, Mann has already pointed out that 75 per cent of its business is in traditional insurance services and as the rural Generation Y enters the farmyard workforce, their online habits will change the way in which NFU Mutual harvests business.

“We are talking to our agents about how to bring more of the internet into the business, but the challenge is that it can disintermediate the business,” he says of the challenge of losing the relationship between the business and its customers, explaining why he didn’t simply launch into a wholesale ‘let’s go online’ strategy.

“Could we remove some of the routine parts of our business model? I can see a push to remove paper and other touchpoints so that our agents are literally in the field,” he explains of how the subtle tilling of new ideas has led to improved practices without the agents feeling like a wave of internet-led clearing is taking place behind their backs.

“Most of our agents are self-employed and the more time they spend with customers the more they can do,” he says. Mann and his team are already assessing how they can put more business solutions such as underwriting into the field.

“This has switched the IT brand so that it is not an order-taker and we are working better at working with our partners,” he explains.

To replant IT at NFU Mutual, Mann had to change the breed of suppliers the organisation relied upon. “We have capital for the right investments and the company has started to reinvest in the estate and there has been a lot of support from the board. I went to the board with IBM and Tibco and the board was supportive.

“None of it is ground-breaking,” he admits when countered on the vendor selection, but technologically the company was being held back by aging networks and other legacy systems and Mann had to be culturally sensitive.

“We have chosen partners that have a track record of reliability, and they are well established, like farming itself.

“Computacenter is responsible for workplace computing and the datacentre, and is visiting the regions to revive the existing equipment.” Mann also counts Cisco and CSC among his suppliers.

Flood resistant

Tibco has been the drill sowing the seeds of this new way of operating. The Nimbus system is in use for process modelling and case management in personal and household insurance, while the Spotfire system is being used for customer service analysis and claims processing.

“Spotfire means we can route information to a different region in the business in the case of a weather event and resulting increased demand on our agents and regional offices,” he says of how NFU Mutual can react more effectively should flooding or snowstorms occur, in order to improve the service it offers its customers.

Although actively analysing its business with these tools, Mann is loathed to talk about ‘Big Data’.

“I have done my best not to use buzzwords, we have invested in information management. But we are on a journey from hindsight to insight and on towards foresight. And we use these terms in the boardroom.

“When you start on this type of information management journey you have to be careful not invest too much in the data, otherwise you end up being a data tourist,” he says of the myriad fields of data NFU Mutual and other organisations can now collate.

“We are trying not to overfeed ourselves and to focus on the business outcomes trying to be achieved.

A voice for IT

As Mann and his team change the IT landscape, NFU Mutual has focused on communicating the change that it is delivering and the intended outcomes of that change. Sources at NFU Mutual have told CIO that they are impressed with the level of communication coming from the IT function.

“My rule of five says you must tell people five times what you are planning,” says Mann. IT was loaned staff from the corporate communications team and when major changes are taking place there are floor walkers ensuring staff understand the changes taking place.

“I want people to think it was a lot of fuss,” he says of the need to over-communicate while delivering stable outcomes. “A mutual believes in relationships, so it is our way of working.”

As well as bringing corporate communications into the IT team, Mann has been “trying to drill my organisation that we are always part of the business”.

“My leadership style is more logic than emotion, but I compensate with the people around me. I like to hire really good people and give them direction rather than management.

“I try to create a story that you, as an IT person, can make this business better.” Mann admits the location of the HQ in Stratford-upon-Avon can be a challenge as some potential recruits may see it as a “code word for old fashioned”.

“However, we are on our way and it feels like technology is part of a lot more conversations than it used to be,” he adds.

One of those conversations is the user demand for personal devices, a scheme which Mann is piloting. He’s also assessing the use of cloud-based telephony to help workers in remote areas, but as any CIO that has to serve a rural workforce knows, the challenge is the quality of the networks.

“The WAN connection to our agents at times is below 2meg, so email is fine, but not a lot else.” Mann adds his voice to the demand for better rural broadband connectivity, calling the current standard a “real hindrance”.

Prior to NFU Mutual, Mann was with Skandia, the investments financial services provider.

“There was a change in focus in moving from a FTSE company to a mutual, and a change in focus from shareholders as our members are looking for a longer-term return on their investment.”

Away from the role, Mann has four kids who, like him, play, train and watch hockey. As the rural community continues to use technology to increase the benefits of rural life and agriculture continues to feed the nation while remaining at the mercy of the British weather, it will be interesting to see how NFU Mutual grows into a 21st-century organisation.

Tim Mann CV

May 2010-present:CIO, NFU Mutual 2008-2010: Platform Development Director, Skandia 2006-2008: Customer Services and Technology Director, Skandia 2000-2006: Group IT Director, Skandia 1997-2000: Head of IT, Skandia 1992-1997: Principal Associate, Coopers & Lybrand 1989-1992: Managing Consultant, Aran Limited March-Sept 1989: Consultant, Strategic Systems International 1987-1989: Manufacturing Analyst, Copeland Europe