Liberty Mutual is one of the most experienced and advanced cloud adopters in the country. And that’s in large part thanks to the vision of James McGlennon, who, in his role as CIO of Liberty Mutual for the past 17 years, has led the charge for cloud, analytics and AI with a budget of over $2 billion.
Eight years ago, McGlennon held an offsite think tank with his staff and came up with a “technology manifesto document” that defined at the time the importance of leveraging cloud-based services, becoming more agile and to introduce cultural changes to drive the digital transformation of the company.
Today, Liberty Mutual, which has 45,000 employees in 29 countries, has a robust hybrid cloud infrastructure built primarily on Amazon Web Services, but with specific uses of Microsoft Azure and, to a lesser extent, Google Cloud. Platform. Liberty Mutual’s cloud infrastructure runs a range of business applications and analytics dashboards that provide real-time insights and forecasts, as well as machine learning models that streamline claims handling.
As the Boston-based insurance company’s journey to the cloud unfolded, it also maintained a select set of data centers from which to run legacy applications more cost-effectively than they were. wouldn’t on the cloud, as well as software from vendors that license on the cloud. less attractive.
And while McGlennon thinks that will change over time, he’s much more focused on the technologies that will define the next generation of apps.
“We’re really trying to understand the metaverse and what it might mean to us,” says McGlennon, whose sweet Irish brogue lays bare his upbringing in Galway, Ireland. “We focus on augmented reality and virtual reality. We do a lot on AI, machine learning and robotics. We have already built a blockchain and we will continue with all this.
And this ability to push boundaries, especially around machine learning and AI, is rooted in Liberty Mutual’s rich cloud capabilities.
Benefits of a strong cloud foundation
Despite his focus on adopting emerging technologies, McGlennon remains very enthusiastic about Liberty Mutual’s use and expertise in the cloud. Sixty percent of the insurer’s global workloads run in the cloud, providing significant savings on hardware and software purchases, but the big payoff comes in the form of insights immeasurable business insights from cloud analytics, he says.
“The cloud has had a huge positive impact on us economically and you surely hear this story all the time, but it didn’t necessarily start out that way,” he says. “It tended to be added to our legacy platforms when we started building our cloud, but more recently we have become much more mature in our use of the cloud and our ability to optimize it to ensure that every cycle of a processor we use in the cloud adds value.”
Here, McGlennon says governance controls, instrumentation, and observability metrics are critical. The CIO did not specify how much the multinational has saved by deploying workloads in the cloud, but estimated that it has saved around 5% over the past two and a half years. “That’s a big number,” he said.
Implementing cloud-native architectures for autoscaling and instrumenting Liberty Mutual’s applications to monitor their performance has been critical to realizing these savings, McGlennon says.
Like many other cloud early adopters, Liberty Mutual deploys out-of-the-box tools like Apptio to monitor costs and automate scaling based on workloads, he says.
“We’ve worked with our cloud partners to better instrument our applications and better understand their performance,” says McGlennon, who was a 2022 MIT Sloan CIO Leadership Award finalist. potentially resources and where we can optimize, such as moving workloads to smaller cloud platforms.”
McGlennon is proud of his team’s use of Apptio, for example, to leverage its consumption-centric model, not only for its cloud data, but also for its internal services, software, and SaaS offerings. , which, when linked to Liberty Mutual’s portfolio of activities, essentially provides the insurer’s partners with a nomenclature of all the means used.
AI’s Reward
Over the past eight years, Liberty Mutual’s IT team, which consists of 5,000 internal IT employees and approximately 5,000 external contractors, has used a variety of development platforms and analytical tools as part of its journey to the cloud, spanning from IBM Rational to .NET to the early days of Java and tools such as New Relic, Datadog, and Splunk.
Liberty Mutual data scientists use Tableau and Python extensively to deploy models in production. To speed this up, the insurer’s tech team built an API pipeline, called Runway, that bundles models and deploys them as Python, instead of requiring the company’s data scientists to come back to back and rebuild them in Java or another language, says McGlennon.
“It’s really critical that we can deploy models quickly without having to rebuild them in another platform or another language,” he adds. “And to be able to track the effectiveness of these machine learning models so that we can retrain them if the datasets change, as they often do.”
The insurer also uses Amazon Sage Maker to build machine learning models, but the basic models are Python-based.
Liberty Mutual’s IT team has also created a set of components called Cortex to allow its data scientists to instantiate the workstations they need to build a new model “so the data scientist doesn’t have to worry about how to build the infrastructure to start the modeling process,” says McGlennon.
With Cortex, Liberty Mutual data scientists can simply define their technical and dataset requirements, and a modeling workstation will be created on AWS with the right data and tools in an appropriately sized GPU environment, explains McGlennon.
The insurer is also deploying software bots in its claims model to allow customers to initiate a claim, email a scanned photo of their damaged vehicle, answer a few questions and quickly arrange a rental. car. At the rear, a machine learning model analyzes the photograph of the damaged vehicle to detect whether its airbag has been deployed, for example, and to immediately determine whether a vehicle is totaled or if the damage is limited to a fender bender. .
The insurer’s computer vision models can also leverage externally deployed IoT devices and sensors to generate more data for the claim.
Liberty Mutual has come a long way from its technology manifesto to its advanced use of cloud and AI, and the adoption of next-generation technologies such as augmented reality and blockchain will drive further advancements, McGlennon notes.
But this CIO is pretty happy with today’s cloud and AI platform.
“We have already seen significant ROI through the ability to use machine learning models to refine quotes and pricing, in fraud detection and our coding process to facilitate business relationships with our customers” , says McGlennon, pointing to the benefits of advanced cloud applications in its core claims handling business. “We use it everywhere.”
Although it’s a P&C insurance company, McGlennon thinks CIOs need to drive innovation and take risks “to create a culture where people feel there’s leeway to try something. thing”.
“Risk is our business,” McGlennon said during a panel at the MIT Sloan CIO Symposium this week, adding that CIOs need to show that when things go wrong, and sometimes they will, no one will be made to feel that the risk was not worth it.
“You have to incubate something, nurture it, give it support,” he said.