by Mark Chillingworth

Andrew Turner of Hiscox on enabling growth through a component architecture

Jun 22, 201110 mins
Financial Services IndustryGovernmentIT Leadership

“The last five years have been ambitious and bold, but at the same time the organisation has evolved what we have done,” says Andrew Turner, CIO at London-based specialist insurance firm ­Hiscox.

Bold and ambitious are not words that have been associated with the financial sector in recent years, but Hiscox has always bucked the trends.

Turner met CIO having not long completed some major application rationalisation, the launch of a new online-only business in the US and is completing a series of gruelling marathons.

“We target markets where we know we have expertise,” he explains.

“Over the years we’ve developed some important niches such as an insurer of fine art and business insurance. We pride ourselves on covering these specialist needs that the more commodity players don’t understand. We do a lot of liability insurance for IT contractors and SMEs.”

These niche markets have enabled Hiscox to offset itself from the risks associated with the Lloyd’s and Bermuda insurance markets, which it is also a player in, with “smaller, more granular” business.

“We play to our knowledge and strengths in ­areas where we can provide our clients with cover on a profitable basis,” he says. “Our business is about the management of risk, both for ourselves and our clients.”

Insuring art isn’t just a strategic business approach for Hiscox, it is endemic in the culture of the organisation. Chairman Robert Hiscox is a keen art collector and displays his artworks around the office a stone’s throw from the famous Gherkin building in the City of London.

“Art is an important part of our strategy and philosophy and we want people to challenge convention and the art is part of that. It tries to stimulate ideas. They are not paintings of an Italian village, it’s quirky,” he says.

The wide range of art in every corridor and on every wall is staggering and does tone down the corporate ­atmosphere of what is, after all, an insurance firm in the heart of the City.

“We have a distinct culture, it is a very driven organisation; people have to work hard. We have high expectations and an entrepreneurial culture. If you are bright, have a good idea and sensible, you can get things done,” says Turner.

The CIO clearly enjoys this thrusting city culture, but not without a human touch. Hiscox employs a thousand people: “so you can touch the four walls of the organisation”, Turner says of the intimacy of the insurer.

“We have grown internationally in the last four years in new markets for Hiscox, most notably the US and Bermuda and even through the traditional Lloyd’s base,” he says of how Hiscox was bold and ambitious during a period of economic turmoil.

“It was exciting, we introduced an auto­matic ratings system which went live at the end of 2010. The direct business we launched has been a key element, and now most people have heard of us.” Turner says of the deep involvement IT has with the organisation and with the recent programme sponsorship campaigns on Channel 4.

“Every year I have secured more investment for IT, and this year it remained stable. We have to work the business to secure the benefits from the business units, so it is a very collaborative atmosphere.”

One of the company’s boldest moves has been to launch its Hiscox USA direct online business which offers commercial insurance directly over the web.

“For the US that is ground-breaking. The direct online business has not taken off in the US because of the broker network and the federal nature of the country. It was fascinating to see the challenges of a new business line,” Turner says of the dir­ect business that has hogged a great deal of his time of late.

Rational thoughts As Hiscox moves increasingly towards transacting directly with customers over the internet, Turner has also been managing a rationalisation and transformation of the IT infrastructure within Hiscox.

“The key element is what I call compon­ent architecture, a system strategy for claims, accounting and finance using service oriented architecture to integrate these components and where possible to re-use them.

“We have some degree of duplication like most organisations. We are committed to a standardised strategy, with fewer components.”

Turner has a long-term vision­ that this will allow Hiscox to replace components with ease, not only for the technology team, but also the business.

“Eight to nine years ago we were doing­ large ERP projects. That was exciting and valuable, but they were traumatic for the business. Now we are trying to get to a place where we replace systems over time. This allows us to keep some of the legacy systems — they are fine — but with a component architecture we have replaced some of the ugliness of those,” he says of the benefits Hiscox is seeing as it extends the life of its legacy systems.

The component architecture is also designed to be modular to enable the continued expansion of the organisation. When Hiscox launched its US business, the IT foundations of the internet insurance service were those that underpin the UK business.

Thus Hiscox has just one credit care module, which reduces maintenance workloads.

“We are looking at the US, UK and Euro­pean retail experience and looking at how we can use these components so that our business units in these markets can be blended with what IT we have,” he says.

This view comes from Turner’s 22 years of IT experience that he says demonstrates how today’s CIOs are technologists with a business view.

“Now it is about what the business is trying to do, whether it is on the web or being more efficient. IT has to demonstrate value and must be more responsive. Devel­oping large applications might be the right thing to do but if it takes two or three years you must have patient customers. Incremental delivery and building on that is more scalable,” he says.

Turner has been with Hiscox for over four years and believes that CIOs should commit to long tenures at organisations.

“There’s a lot to be said for longevity. If you are constantly changing CIO the continuity is not there. If you are making big bets every year it is unhealthy. I’ve seen the paratrooper CIOs, sometimes they are valuable, but how do you make those changes enduring? The paratrooper CIO will want to move or they will be sacked.

“My role is to have a real ability to drive the business. I sit on a number of committees, so I feel the heartbeat of the organisation. I love the day-to-day stuff and still enjoy talking with the infrastructure guys and technology is still of great interest, but my knowledge of the intricacies is very different,” he says.

“The challenge is to be at the heart of the business while not being afraid of your heritage. I’m able to bring my experience­ elsewhere in the organisation now. CIOs shouldn’t be afraid to use their technology background.

Setting the tempo “The role of the CIO is like the conductor of an orchestra. You have an embedded knowledge of every instrument, but cannot play them all – you have to pull them together. Hiring smart people is a mantra of mine, as long as you can lead and inspire them. Being the leader of an orchestra is about setting the tempo and tone; and inspiring people to give their best. When you have a wood or brass section that is struggling, you get involved with helping them. What really matters is what IT does overall for the customer.

“I’ve learnt from meetings that we need to make IT exciting, not in a glib sense, but as a way of unlocking potential. So I try to mix it up a little bit and talk about the hotspots and highlights. We spend too much time in meetings. And to get an open dialogue you need to get the concerns out on the table and resolve them.”

At Hiscox, Turner has 100 IT staff and uses outsourced services for additional capacity and capabilities, he says.

“A core team of IT insurance professionals and to have people that are smart and can lead the various aspects of IT for me,” he says is the key to the team’s success.

“I’m not religious about offshoring. At Hiscox we are increasingly looking at on-shoring because of the success rates. We use offshore for heavy lifting of well specified needs. For more business-specific ­requirements that need a lot of business support we use the local team.”

Turner’s main suppliers are infrastructure and BPO specialists Cognizant and Logicalis and Datasolve for application support. With a virtualised estate and adoption of SOA, it is unsurprising that Turner is a believer in the business benefits of cloud computing.

“Cloud is going to become very significant. For me components and SOA means I can consider parts of cloud and bring them in. We have created a mini-cloud in Hiscox, when there was the heavy snow last year we had very good access to the systems from home.

“When we have a new office opening we can be up and running using voice over IP (VoIP) and Wyse Terminals for all the offices and its very quick. I do think this era of IT is about tailored views for clients,” he says.

Users are used to this in their personal lives, he explains, which means that corporations and CIOs need to be more flexible.

“People are less in awe of applications; they are more interested in the information. One day we will be like the iTunes store, where users come to the technology division to download what they need.

“It takes time to put in monolithic systems and business doesn’t have the pati­ence for them anymore. Vendors will have to offer off-the-shelf solutions. My job will be to set expectations and what cloud can achieve and what IT departments can develop, within the constraints of the budget of course. These will be the things that bring cloud to the fore.”

Flying start Turner started his career at British Airways, looking after transport operations at Heathrow airport.

“I was 23 or 24 managing some large teams and we were turning around 747s very rapidly,” he says.

He enjoyed his time with the UK flag carrier and learnt a lot, and in return BA saw his potential, sponsoring his MBA which in turn meant he met a lot of IT people while study­ing.

At the time Turner was also developing some spreadsheet applications which IT and others in the organisation liked and his development continued.

With this taste for IT established his journey to the top flight of IT leadership went via telecommunications at Cable & Wireless and utilities before he wound up in the financial sector with Royal Sun ­Alliance (RSA).

At RSA he was instrumental at putting in the major outsourcing relationships the mainstream insurer has with Accenture and IBM, much of which still ­exists today under current UK CIO James de Watteville.

“We put a lot of work into that deal. We did a lot around how we manage the relationship,” Turner says.

Having launched Hiscox in the US and completed an infrastructure rationalisation, Turner isn’t slowing up. Far from it, as he’s running into his next big challenge: completing the marathon world series.