Sainsbury: What are your priorities for the next 12-18 months?

McPhail: Some of our key priorities for 2012 – 2013 include continuing to grow our digital presence around our products and services, extending our Affiliated Provider programme, and improving our business intelligence capability.

Sainsbury: What technology innovations do you see having the greatest impact on the insurance industry?

McPhail: Growth of digital as a channel preference – online, social media, and mobile. The challenge will be to continue to support the traditional channels while managing customers over multi-channels, while also meeting the expectations of customers who need you to respond in real time as they switch channels. For insurers, technology that shifts back office processes from paper to electronic will create opportunities for efficiency that will transform core processes like claiming. It will also challenge the way we have operated, by inherently creating less opportunity for manual checks and balances in the process as we move to straight-through processing. So new ways to manage this will have to be developed.

Sainsbury: Your electronic claiming service is currently available at around 250 pharmacies. What feedback have you received on the initiative so far, and how do you plan on expanding it further?

McPhail: We have two electronic claiming strategies underway at present. Firstly, an expansion of our Affiliated Provider programme. Affiliated Providers are surgeons, specialists and facilities that provide healthcare services for Southern Cross members at an agreed contract price. This accounts for 25 per cent of all Health Society claims. We have a dedicated system which enables Affiliated Providers to submit requests for Southern Cross to approve members’ procedures and pay claims directly to the provider via a web portal. Secondly, for high-volume, low-dollar value claims we have our Easy Claim service. We have successfully rolled this out to pharmacies, and are in the early stages of a pilot with dental, optical, physiotherapy, audiology providers, and some GP practices.

Feedback from Southern Cross members and health providers has been very positive, and as we continue to learn more we will evolve the service.

Sainsbury: What have been some of the challenges in making the electronic claims process user-friendly?

McPhail: You have to try and understand the environment the health provider operates in – a pharmacy is different from a dental practice or an optometrist, so what will work in one may not work so well in another. That is why we partnered with specific health providers in these areas to pilot the solution and get their input. You then have to understand what the customers’ needs at that provider are, and make sure the service you offer adds value to their experience. One of the challenges for us was speeding the claiming transaction up to real time, and then finding the balance between the need to put a small number of transactions ‘on hold’ due to the need for these to be reviewed versus getting a high percentage of transactions processed immediately to deliver a great service.

Sainsbury: As a vertical player, how do you balance the need for technology investment to compete with the broad-based insurance organisations, while maintaining efficient spending?

McPhail: As a mutual organisation, we are disciplined about spending prioritisation and keeping the focus on our core strategies. One advantage is that we don’t have the issue of having to spread our attention across a broad product set like some other insurers. Our scale and market share (61 per cent) in our core product of health insurance gives us an advantage as well. We focus on good governance of projects to ensure we achieve a high success rate in terms of time, budget, and meeting the business need.

Sainsbury:: What value do you see in Cloud technology investment for the insurance industry?

McPhail: For Southern Cross our interest is on a “fit for purpose” basis. Our core systems are customised for our business and therefore don’t lend themselves to utilising this approach. However in our IT environment it does have some application where software and services are more commoditised. We will continue to evaluate use of this technology in the future.

Sainsbury: What opportunities to you see to leverage data analytics in insurance?

McPhail: I think data analytics are a core part of any insurance business. We have a project underway to look at how we better leverage the information we already hold today, and how we can open up access to that data to a wider group within the business to speed up information flow. There may be an opportunity to collect more data in the future which is not just focused on the claims transaction to influence customer engagement. The question is how we capture, interpret, and present back this data – while constantly adhering to the highest privacy standards surrounding information.

Sainsbury: What technology leaders inspire you, and why?

McPhail: Steve Jobs – I respect how he resurrected the Apple brand and put so many Apple devices in the hands of the consumer. From a creative perspective drawing on the Kiwi can-do attitude I also have great respect for Weta Workshop.

Sainsbury: What advice would you give to a manager looking to step into an IT executive role?

McPhail: Be great at managing relationships within the whole organisation, make sure you drive a positive culture starting in your own team, and always keep in mind the external customer – don’t get too inward looking. I think in an IT leadership role you also have to be very transparent about decision making and ensure the senior executive team are sponsoring and driving the key priorities in the business.

Sainsbury: Every leader, particularly at your level, has a legacy they wish to be remembered for. What is yours?

McPhail: Always being passionate and advocating for the customer experience, helping to drive a really great culture in the organisation, and being committed to long term gains that will sustain Southern Cross into the future.