Farmers formed a task force to make a risk analysis of those choices and came up with four factors that had to be dealt with: time to market, the ability to handle two products simultaneously, the quality and stableness of the system, and (obviously) cost. But Mortensen said the key factor was speedbuying a system would take time that the company didnt want to waste.

So the company determined that outsourcing would be the quickest way to go. It identified three vendors that could handle their needs, but not all of them were in as big a hurry as Farmers. One company was going to make us wait for a year because of commitments it had with other customers, Mortensen said.

Farmers settled on McCamish Systems, signed an agreement in early 1999, and the race was on to bring the company to market. Implementation was begun in August 1999; Mortensen said he promised the agents the system would be ready to go by the first quarter of 2000, and I wasnt going to go back on that promise.

Amazingly, the two sides were able to complete the project in six months, but not without a lot of time and energy. It was painful, Mortensen admitted of the installation. I qualify that with the fact that we met our target date. In this case, I think the ends justified the means.

Mortensen said that one of the problems was that McCamish was new to the retail market. Their perspective was different, but we were not experienced with outsourcing. This was the first big outsourcing initiative in the 90-year history of our company, he said. The project was bigger than we had identified, but we werent going to give in on the target date, Mortensen said. There was a lot of overtime, a lot of extra work.”

The thrill of getting the product delivered on time was tempered by the fact that a lot of work still had to be done. The day two stuff took us about a year, he said.

Four years ago, when Farmers Life first contemplated the move to the variable market, none of its agents were licensed by the SEC. Today, 4,000 have their license. Everyone told us that getting into the market would be painful, Mortensen said. We underestimated the effort, but we got to market when we wanted and were creating volume to cover our costs. The only thing that would make our agents happier is a better market.

But as much as he would like to, Mortensen is not going to guarantee thats going to happen in the next six months.

Robert Regis Hyle

The Problem: Entering the variable annuities market in a very short period of time.

The Company: Farmers New World Life
Lines: P&C, life, annuities
Net Income: $169.6 million
Web site: www.farmersinsurance.com

The Solution: McCamish Systems VPAS Life
Web site: www.mccamish.com