Liberty Mutual Aspires to Be 'Software Company That Sells Insurance'

It's a familiar problem: Developing solutions with proprietary technology just takes too long, and IT faces pressure from customers and users to get more agile. Liberty Mutual turned to Cloud Foundry for results.

Mitch Wagner, Executive Editor, Light Reading

June 21, 2017

4 Min Read
Liberty Mutual Aspires to Be 'Software Company That Sells Insurance'

Liberty Mutual, a 100-year-old insurance company, is jumping into the cloud, leveraging Cloud Foundry and agile methodologies to transform the technology it uses to deliver software and services to customers and employees.

The problem Liberty Mutual faces is familiar to any enterprise: Developing solutions took too long. Prior to making the transition to the cloud, the company needed months to spec a solution, then a year or more to develop it and bring it back. By that time, the solution wasn't what the users needed, Mojgan Lefebvre, Liberty Mutual senior vice president and CIO for global speciality, said. Lefebvre delivered a keynote presentation at Cloud Foundry Summit in Santa Clara, Calif., last week.

"Most of the time [development] took longer, was more expensive and didn't really do what they thought they were getting," Lefebvre said.

Figure 1: Liberty Mutual's Mojgan Lefebvre Liberty Mutual's Mojgan Lefebvre

Customers and users demand more. They're also doing business with Amazon, Airbnb and other cloud businesses, and expect that standard of ease of use and responsiveness from enterprise IT, Lefebvre said.

She echoed a statement by tech investor and Internet pioneer Marc Andreessen, who said, "Software is eating the world." That's certainly true in the insurance market, where competitors such as Lemonade let consumers transact business on their phone in minutes, she said.

"We know that we, too, have to become a software company that sells insurance," Lefebvre said.

As part of transforming IT to meet business needs, Liberty Mutual has several aspirational goals: 60% of workload operating in public cloud, 50% of apps releasing code to production daily and 75% of staff writing code, she said.

As of now, only 5% to 10% of the workload is in the cloud, and at most 50% of the staff writes code, with others doing documentation, requirements gathering, project management and operations, Lefebvre said.

To achieve change, Liberty Mutual adopted a "transform by doing" strategy, she said. Building on the cloud became the default, she said.

For example, Liberty Mutual's Australian business wanted to launch into the Australian accident and health market, a potential $240 million opportunity. That business looked to IT to build an end-to-end underwriting portal for independent brokers, with only six months to spec out the problem and build it, Lefebvre said.

First, Liberty Mutual looked at vendor solutions. "The brokers hated everything that's out there," she said. Vendor solutions would have required longer than six months and too much expense.

Building on legacy wasn't practical either, Lefebvre said.

Liberty Mutual worked with Cloud Foundry vendors Pivotal Software in Sydney, Australia, to coordinate with brokers on their needs. "This was the first time our developers were directly talking to end customers. I can tell the energy they got from that is phenomenal," she said.

Working with Pivotal, Liberty Mutual had a working prototype in four months, working with feedback from internal underwriters and friendly brokers, Lefebvre said. Within six months, the portal was ready to go to brokers.

The portal proved successful, receiving 200 quotes and added 60 policies to the system within its first month of operations, she said.

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"With every opportunity that came our way, we would build it on the cloud unless we proved somehow we could not do that. And we have yet to encounter that situation, Lefebvre said.

Liberty Mutual previously used a private cloud running VMware to cut costs and increase agility for developers. (See Liberty Mutual: Cloud Reins in Costs of 'Exponential' Growth.)

Cloud is making inroads into the insurance industry. IBM and AIG recently completed a "smart contract" pilot using blockchain technology in the cloud. (See IBM, AIG Bringing Blockchain to Insurance Industry.)

And IBM worked with insurer Chubb to move its mainframe development and testing to IBM Cloud. (See Mainframe Cloud? That's Nuts!)

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About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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