CIO guest lecture Nationale-Nederlanden at Erasmus University Rotterdam
This afternoon the CIO of Nationale-Nederlanden gave a guest lecture to 500 Bachelor students of Business Information Management (BIM). Aart van der Vlist was invited by professor Hans Borgman and Mark Boons to speak about the challenges and complexities of information management at Nationale-Nederlanden in their course. The students enjoyed hearing about the models and concepts they had studied from business practice. With a lot of enthusiasm the CIO took the students to his world of IT.
He started off with some bold statements: “IT’s fun to work in IT within financial Institutions: maximum complexity, maximum budgets, maximum risks, maximum legacy, maximum legislation.”
The IT budgets are nowhere as large as with financial institutions, the CIO goes, so if the students want to do big projects, they should work in information management in financial institutions. IT's happening there. The same goes for complexity. Nationale-Nederlanden has to manage IT systems with lifetime of sometimes 50 or 60 years. In their systems there are pensions from people who joined the funds in the early '70s, whose policies need to be managed now. But also people who will be joining, when they start their job such as the students here and they need to be paid in another 40 years.
Moreover there is the challenge of legacy and complying with legislation that is coming from the Dutch state, European Commission or the United States (e.g. Solvency, SOX, SEPA). It is unbelieveable, says the CIO how big the burden is to take care of this in your company, processes and systems. It is not easy to adapt these old systems, also because the people who really know these systems are already retired or soon will be.
“No financial institution can do anything without IT”
The CIO thinks that in this industry there is no alternative for IT, it is everywhere. You can't change any product, process or distribution channel, it is immediately about IT change or investment. So it is brilliant to be in this field, every part of the business needs you. Especially when the business processes change into straight-through processing. Then IT factories, systems, are running the end-to-end processes. People are buying car insurance for instance at 11 ‘o clock on a Sunday evening and this is fully automated. They receive their policy via e-mail. IT is in essence, the company.
The CIO also focused on innovation in this talk. Next to legacy it is vital to free up resources for innovation and to look for new business models enabled by IT. He stressed the importance of developing an antenna to look at what’s happening in worldwide markets and how to translate the use of these upcoming and very promising technologies to the Dutch market. Here are some of the insurance opportunities he discussed.
Big data and decision making
Such as the use of sensor technologies: in smartphones to warn clients for entering dangerous areas or to monitor driving behavior and adjusting car insurance premiums to actual behavior; or in domotica, if there’s a fire in your house during your holiday, an insurer could already handle the claim with direct repair with a couple of suppliers before you return. Within big data there is a huge sea of data that you can smart-use.
Virtual property insurance
In the online game Entropia Universe with several hundred thousands of players, a man recently bought a Crystal Space Station for 300.000 US dollars. There is a virtual economy and players spend a great deal of money on virtual objects. With thieves and hackers in this game, the next step for an insurance company is to insure these virtual assets. In China there is already an insurance company that offers virtual property insurance
Peer-to-peer insurance
This goes back to the root of insurance: trust. So you with your Facebook friends start a pool for insuring your smartphones. With this you take over the role of insurer. There is trust among friends, you put in money each month and if someone’s phone is broken or stolen you take money out of it.
Web traffic
On banking sites there is a a lot of traffic but for insurance the frequency is low. However, Farmer’s insurance found a way by having their airship appear in the game FarmVille on Facebook through a partnership with Zynga. With the airship Farmer’s offers crop insurance to players so that when they cannot harvest the crops will be protected. It does not create money but traffic to the website and the conversion rate to insurance policies is high. It is a new channel that reaches millions of users.
To conclude his talk, The CIO closed by saying:
"My dilemma is and it will be your dilemma if you join a company like mine, is that you have a huge burden of what's going on today and what happened in the last thirty or forty years. There is a lot of legislation, new systems, old systems all connected together causing massive maintenance challenges but you also want to free up money and do the innovative part as the examples given. I am looking for people to add to my company with the speed and agility to do these types of things. People who really understand business information management with the knowledge and in depth use of these new technologies have a really great opportunity to renew the industry where I am working in."
Text by Sarita Koendjbiharie
Photography by Ellen van Drunen
