When three insurance companies from Sweden, Norway and Finland merged around the turn of the millennium to form the biggest property and casualty insurance company in the Nordics, Kjell Rune Tveita was appointed to manage the IT integration, becoming CIO of the new company, If Skadeförsäkringar.
Tveita spent 18 months working on the IT integration of the unified organisation. “Some parts of merging three companies are easy, for example choosing one of three different financial systems, because companies report financial matters in pretty much the same way,” he says.
But other parts are more challenging, such as handling the enterprise resource planning (ERP) systems. “Different companies conduct their businesses in different ways,” Tveita adds. “So we had to start by defining our business, how we meet our customers' needs, how we build our products and what processes we are going to use.”
When it came to building the new IT set-up, Tveita focused on making sure IT became a natural part of the business. “One of the first things I did was to appoint an IT manager for each business area, who understood the business and also had a place on the board in that business area,” he says. “That turned out to be a very successful strategy, since it gave us a really good connection between IT and business.”
This strategy also gives one person 100% responsibility for IT, which Tveita thinks is very important. “IT boards, forums and steering groups can be useful for some clearly defined and limited projects, but when it comes to making sure IT activities function, you need people that are responsible,” he says. “They should not have IT as a sideline.”
If Skadeförsäkringar has 550 IT staff spread across Stockholm, Copenhagen, Turku, Helsinki, Riga and Oslo. “If we also count the employees of our partners, a total of 750 people are working with IT at If Skadeförsäkringar every day,” says Tveita. “IT is a big part of our business. Everything we do is digital; we do not have a physical product.”
The company’s core IT systems calculate its products and pricing. “We have built new systems for big parts of our business, but we are not finished yet – it will probably take another four to six years,” says Tveita. “It is very important for us to be able to construct a single Nordic ERP system, covering all our business areas, since that will enable us to conduct our business even better. There are no reasons why you should sell car insurance in a different manner in Norway than in Sweden.”
If Skadeförsäkringar still runs different ERP systems in some of the countries in which it operates. “This means we have to integrate with different ERP systems when we, for example, build a new internet sales solution, which makes the process more complex and demanding,” says Tveita. “But the main reason we want a single ERP system is that we are going to make product changes to make us more competitive.”
The company chose to build the new ERP system itself, since its core competency is to calculate and price risk, says Tveita. “There are off-the-shelf solutions for these kinds of task, and they have their benefits, too. But one of the arguments against off-the-shelf solutions is that they often include processes and ways of conducting the business.”
Other important IT systems for If Skadeförsäkringar are those used in its customer and claims centres. “We have a lot of development going on here, and that will never stop,” says Tveita. “Customers are always making new demands, and we want to keep coming up with new offers.”
If Skadeförsäkringar has decided to outsource all its IT operations, says Tveita. “Today we buy this primarily from Telenor, Tieto and Cisco, because IT operations are not our core competence. And when you can buy this as a service or in the cloud, you cannot compete on price or quality internally. Outsourcing IT operations was one of the first decisions I made.”
At first, IBM was the company's only outsourcing partner, but later it decided to divide the tasks between different suppliers. “No provider can be an expert on everything, so they work with subcontractors,” says Tveita. “It is better that we take responsibility and manage the different suppliers by compiling our own package of services.”
Today, If Skadeförsäkringar has 50 people working in its client organisation, ranging from purchasers and lawyers to technical experts. “The client organisation is very important – you have to have people who look at things strategically and point out a direction, for example that cloud is interesting,” says Tveita. “Then the suppliers can choose how to implement our needs.”
The most important cornerstone of the company's IT strategy is the stability of its IT systems, says Tveita. “Stability is the foundation for everything we do. There should never be any IT hassles for our workers or customers. Other cornerstones are cost-effective solutions, end-customer orientation in everything we do, and innovation, which drives excellence.”
Tveita puts a lot of effort into cultivating the culture of IT. “We call the culture: ’We make it possible’,” he says. “An important part of it is to get everybody to feel involved and assume ownership. The company also emphasises how important it is for everybody to keep themselves updated on what is happening out there in technology.”
One of the biggest challenges Tveita has faced as CIO is to attract and retain the right expertise in IT. “There is still a lack of competent IT people who also understand insurance,” he says. “We can easily buy IT knowledge from our partners, so in-house we do not want people who are 100% IT nerds – we want people with common sense, who can question the way we operate.”
