Peter Hambling, CIO of Lloyd's of London, tells a story about himself that reveals one aspect of his character.

"I've always had this passion for taking things apart, been curious about what makes things tick," he says. "My father knew this was the case when he came home [shortly] after he had been presented with his 20 years' service carriage clock and guess who had removed it and had taken it back to its component parts and carefully reassembled it by pressing the parts into this ornate candlestick we had in the fireplace to create this new version of the clock."

Ah, but did it work better? "Well, I think I was about six at the time...," he says, sheepishly.

Fortunately, this innate curiosity has had more successful times, leading to Hambling running the IT needs of the more than 300-year-old specialist insurance market. And in opting for the world of risk management a few years ago after more than 20 years at various parts of what is now HSBC he perhaps demonstrated the flipside of this nature: an appreciation of order and rigour and respect for the X factor of what might come next.

Hambling confesses to be "pushing 50", but is boyish looking. "It must be all these years in technology," he laughs.

"I started off as a serial entrepreneur - ‘small businesses, small ideas' in the days when micro-computing was just starting so we had 8-bit computers, computer games and Pong. The great thing for me was that there really weren't any qualifications because the courses hadn't been invented, so most of the people who were successful had an entrepreneurial flair to them.

"I've always been very curious about what makes things work: people, practices, processes, systems, technologies. And it's that curiosity that's often driven me to try and understand something and make it better, new different, quicker, sleeker, faster."

Hambling's IT career began in the lighting entertainment business ("We moved lights round with an element of robotics which made it exciting") before he embraced small software start-ups.
"From early on in my career I had this piece where I always immersed myself into whatever business it was, and then I would bring elements of technology to the solution set through my curiosity, which later in life I discovered was quite a useful thing," he says.

"So I started off immersing myself in the entertainment industry, understanding what was needed in moving lights, how the industry worked and how people worked and then engineering a set of tools to match the people and the industry rather than trying to change the industry."

His most successful startup created pricing products for investment banking by "turning PCs into super calculators" to accelerate trades. A client liked the product so much it bought out the owners to get exclusivity on it, and on Hambling.

"I got to work very, very closely with people in trading environments and sat on the desk with them," he recalls. "Our challenge was to bring great things that made them better, swifter and more effective."
However, it was while working alongside traders that Hambling had another carriage-clock moment. "One of the early learning things I had was that actually, sometimes, you can do really dumb things," he concedes with a wry smile.

"We had a tool for pricing FX trades [where foreign currencies are purchased to take advantage of market liquidity] based on a very old piece of technology. It had half a dozen boxes and a green-screen touchscreen."

However, a trip to the US in the 1980s had turned Hambling's head. "They were talking about graphical user interfaces and I came back enthused - ‘I've seen the -future! I'll put a new interface on the FX pricing tool'."

Hambling set out on a stealth project, swapping out the terminals for the new configuration of colour monitors, GUIs and mice. The work complete, he sat back and awaited the plaudits that were sure to follow from his boss.

"The head of the trading desk came in on Monday morning and at about 10am I heard this intercom announcement. ‘Hambling! My office now!' I walk into the office with him holding the mouse and saying ‘What's this rat? Why doesn't my screen work?' That was the most valuable lesson I had: that you should always engineer the product for the person, not try and re-engineer the person for the product."

Still, at an age considerably older than the time of the original fateful carriage clock incident, Hambling was old enough to absorb that lesson.

"The thing I'd overlooked was that with the touchscreen traders could hold the phone with one hand and tap the screen with their index finger. You couldn't do that with a mouse. I'd gone away and fallen in love with a piece of technology, implemented it without taking into account what my customers needed, and then had to explain why all these ‘rats' had infested the computer system. I was fortunate that I had that lesson early in my career. It keeps me honest and I always ask: ‘Are we making things easier? Is it quicker, cheaper, faster?' If not, then why are we doing it?"

Another mantra for Hambling, learned from his time in banking, has been to design with simplicity in mind. "Always build for a self-service model," he says. "If you went into a bank branch 10 years ago and sat down with the customer service agent and said ‘I want a loan' they would be keying into the screen for some time and asking you lots of questions. If you took the same bank and tried their online loan application it would probably ask you four or five questions and come up with a decision. So the challenge I put down was: why are these different, because surely for sales staff it's more interesting having a discussion about other products that might be interesting. So instead of having two or three systems, you have one, which then ripples into cost savings - and I found this to be a really useful principle."

Talking shop

Another north star for Hambling is to speak the language the business understands.

"At the end of day I'm in the business of spending other people's money," he says. "IT is a service and you pay for it. If you can articulate back to your business partners and colleagues where the cost manifests itself and what materially shifts it in a manner that is useful to them, they can help you bring your cost base down.

"With an IT hat on, if you ask me how much IT costs I'll go into all sorts of minuscule details of what servers cost, what datacentres cost, what's outsourced - but my customers are not interested in that. They're interested in how much it costs to send an email, process a policy, to put a PC on my desk. They're not interested in power charges on Goswell Road.

"If you can find a way to articulate how much things cost [it will] enable your business colleagues to make value assessments against that. If you can spot things that don't cost a lot that are yielding great value, it's probably a good idea to do more of that, and for things that are costing a lot but aren't yielding great value, it might be worth rethinking policy and strategy around that."

Of course, there are "scams or presentation techniques" that some unscrupulous individuals manipulate to depict a desirable outcome.

"[Correct valuation] is actually very difficult to do in a clear and transparent, honest and consistent manner," he says. "You have to understand the total cost and that's actually quite tricky to drill out. We know what we spend every year but what proportion of that is attributable to one activity is actually quite tricky."

However, by establishing a cost base model and analysing value opportunities such as market penetration or access to new locations, it is possible to apply mathematics with risk loading to create stop/go scenarios. Banks, for example, do this every time they analyse whether to invest in high-street locations and then what functions and services - such as ATM, high-end broker or number of cashiers - should be available.
By applying this sort of business intelligence analysis, Hambling argues that the classic IT function suddenly brings management information that can change a business. "All of a sudden you're no longer having a technology conversation but a business value conversation, and that's a lot more interesting," he says.
Surely every modern CIO should be having business conversations and innovating rather than holding technology conversations? Up to a point, Hambling insists.

"I think our industry has many flavours of CIO," he says. "At one extreme you have the ‘steady state' operations person who is very able and very disciplined, runs a highly ordered, regulated process that is the same day in, day out - extremely predictable and low risk. At the other end you have the CIO who is supporting massive change and innovating through rapidly moving markets, and the two are completely different skill sets.

"Inevitably, the answer for many firms is some sort of halfway house. You may be in a steady, consolidation mode, in which case you want to lock down and sweat assets. Or you may be in major market change - and some analysts would suggest current conditions are some of the most significant [for change] we've ever seen."

Hambling himself has had a broad range of experiences, with major job changes every few years at HSBC, often caused by mergers and acquisitions or geographical expansion.

"I had the fortunate privilege of working with some really great people and every couple of years they had a look at where I was going to develop mentally and put me in the next incremental position which might have been more business-focused or sometimes more IT-focused, but because I moved every couple of years it meant I could never get too comfortable in one place. You had to learn how to learn and you had to do it very quickly and apply it within a strategic framework."

Part of that learning was by osmosis, for example when Kevin Newman, CEO of telephone banking arm First Direct, sanctioned higher salaries for call centre staff, crèches for children (and even dogs) and a good canteen to give staff "a sense of purpose and pride", helping create the environment for a low attrition rate, superior brand and reduced training costs.

Hambling learned that "the value of engaging with people when they're in a happy place rather than a sad place is quite amazing".

Open planning

He tries to apply that same lesson at Lloyd's. "Different cultures and places need different approaches so the first bit is all about listening," he says, and at Lloyd's he hosts weekly informal lunches with randomly selected staff and no agenda.

"If you keep things open, people will tell you what makes them happy or unhappy," he says. "The simple adage is ‘just ask' - but then you have to be prepared to act or else all sorts of implications are created, and not many of them are positive."

At Lloyd's and in the wider world of risk and reinsurance, he sees a familiar pattern re-emerging.

"If we rewind 20 years to when we were really just starting to deploy technology [in banking management information] there were some early, baby statistics and then we saw data collected on quite large aggregated levels and then over time we refined the collection of data and the models and services. Now I find myself in the insurance world that's going through a not dissimilar transition - we're starting to collect a more granular-level look and creating performance and benchmarking information at a much lower level and starting to automate all that. We're depending on technology for our day-to-day business."

The sector has come a long way in a short time. "Twenty years ago the technology could not be available for a couple of days and the underwriting floor would carry on and the market would carry on. People would exchange information on pieces of paper, keep manual records and had sufficient information stored in a traditional analogue medium to make decisions. They wrote everything down on a blotter and at the end of the day they handed it to a clerk who keyed it into the back-end systems - the real business was done on the phone. That's shifted. The underwriter will look at lots of pieces of information for their appetite for that type of risk, risk modelling, pricing modelling, their own position, their current exposure. They'll probably do analytical research, check money-laundering risks - in fact, he can't make a decision without interacting with the computer systems.

"Our primary players all depend on technology. Their interface is still face-to-face and paper-based but the workflows and processes are all evolving quickly."

That is leading to storage, networking and processing resources rising 50 per cent per year but at least this is "a pattern we've seen before, so I can apply a lot of best practices to improve what we've got".
The safety of the insurance sector is even attracting job candidates from banking. Perhaps they share Hambling's attitude to risk.

"I like my excitement rigidly defined because excitement can be too exciting," he says. "Jumping out of an aeroplane without a safety parachute in reserve is exciting. Jumping without the second parachute is a bit iffy. Jumping without a parachute? Don't really want to go there."

Hambling has plenty to be getting on with, consolidating datacentres from five to two locations, putting more information on BlackBerries and exploring new horizons on flexible working, video-conferencing and collaboration tools.

He is not gung-ho about any of these, viewing IP voice and video as "the cholesterol of the modern network". But then you wouldn't want a risk-loving Utopian running the information needs of Lloyd's of London, would you?

Peter Hamblin: CV

1983-87: Founding director of Inner Product, using microcomputers in financial services

1987-92: Project manager, Midland Montague bank

1992-97: Project manager roles at Midland Bank

1997-2000: Chief architect, HSBC Global Investment Banking & Markets IT

2000-04: Head of architecture, hsbc.com

2005-07: Head of sales delivery, HSBC UK retail

2007: CIO, Lloyd's

About Lloyd's of London

Lloyd's began in the 17th century as part of a coffee house providing insurance to the shipping trade.
It is not a company but a marketplace where members join together to insure and reinsure risks.
Today, the Lloyd's market insures complex and specialist risks across industries, helping to insure against common challenges as well as terrorism, climate change and geopolitical instability.

The CIO Questionnaire - Peter Hambling

Q. Who have been the most influential people in your career?
A. Initially my parents, and over the years a numbers of captains of industry - typically people who have come from a technical ‘geek' background and have grown out to become leaders in their field.

Q. What has been your biggest mistake?
A. I have very few regrets, only a lifetime of experiences. It's the future that really excites me with the opportunity to go further, tackle new challenges, meet new people and experience new situations.

Q. And your greatest success?
A. The answer changes depending on when you ask it, as I see my most recent successes as the greatest.

Q. What is your greatest strength?
A. Pragmatic strategic thinking combined with team building and customer-centric deliveries.

Q. And your greatest weakness?
A. Needing to sleep occasionally.

Q. How do you keep up to date with the march of technology?
A. Networking, focused conferences and vendor visits.

Q. How do you deal with stress?
A. Spending time with my family, sailing, flying helicopters, photography and theatre.

Q. What profession would you most/least like to attempt?
MP (least). Producer or director (most).

Q. Which word or phrase do you most use/overuse?
A. ‘Engineer the tool for the situation not the situation for the tool' or ‘Changing technology is easy, changing people takes a little longer'.

Q. Do you have a sport you practise or sportsperson or team that you follow?
A. Red Bull air racing and Formula 1.