CIOs are meant to challenge their companies to do things differently, and every now and then they challenge the editorial team at CIO to think differently too.
Unless you’ve been trapped in a server room for the first half of this year you cannot help but be aware of the latest gadget from Apple, the iPad. Here at CIO, even though we’re big fans of the iPhone, we initally considered the iPad a dubious offering. After all, wasn’t it just an oversized iPhone?
“Being a big iPhone is a good thing, it is on a scale that I can actually read without going blind,” says Jeff Smith, group CIO for specialists insurance specialists Torus in the City of London. Smith is one of a select number of CIOs around the world who has unearthed the business case for the iPhone and his infectious enthusiasm for reinventing the business using technology is engaging.
“Torus is a specialist global insurance company, underwriting a diverse range of insurance and reinsurance products,” Smith explains in the modern Cool Britainia-inspired office just down from Leadenhall’s famous markets. “Torus specialises in insuring things that are heterogeneous; with oil refineries one is not the same as the next.”
Founded by First Reserve, a private equity company that specialises in investments in the energy industry, Torus was originally an energy insurer that has since vastly diversified and can boast a heritage in obtaining deep levels of information. It saw that a similar information-led approach could work for other insurance lines. The company was put to the test during the recent US Gulf oil spill debacle. Smith explained that Torus was one of the first companies to pay out following the Deepwater Horizon disaster: “We wrote the cheque the next day”.
Torus analyses risk at a granular level (a ‘risk’ being the subject of the insurance policy, such as an oil rig for example) and assesses each risk on its individual merits.
Torus has a capital base of £1bn behind it, which is backed up by what Smith calls “a very analytical approach”.
“Having a deep analytical approach means everything is information-efficient. I call it friction-free. We are running risk analyses of 10,000 buildings through a catastrophe model and using that model to ask: ‘if a hurricane hits, what will it do to our business?’ In this world you are putting real money onto these buildings and you have to pay out fast if something happens. So you have to be a lot more sure that you are putting your money on the right thing.
“In this business you need an awful lot more information than most. We are collecting terabytes of data all the time. We need to know the inner workings of a refinery, a field of rigs, or perhaps a set of directors and officers in minute detail if we are going to insure that company at the right price, or insure it at all,” Smith says of the varied insurance services Torus offers.
“A risk can be the entire package. For example, for a tyre manufacturer, we would cover the tyres, workers, manufacturing, chemicals, supply chain and the fleet of vehicles,” he says.
Although not a publically listed company, Torus set out to act like a Financial Services Authority (FSA) regulated organisation, with a high degree of transparency.
“We took an early decision to act as if we are already a public company and we submit documents to the...