Deb Smallwood is widely recognized as an industry thought leader who is known for her expertise in helping companies rethink the traditional business of insurance and position for success in the changing insurance world. For over 30 years, she has helped customers understand how to leverage technologies, shift strategies and make informed strategic investment decisions. She has worked with hundreds of insurers and vendors, enabling them to advance strategies enabled by technologies.  Prior to launching Strategy Meets Action, Smallwood held a variety of leadership roles developing strategic road maps and executing and deploying transformational projects. Her roles included VP of the insurance practice at CEB TowerGroup, chief transformation officer at Insurance Company of the West, partner at KPMG’s information risk management practice, and head of commercial lines application development and maintenance at Liberty Mutual.

Paul Carroll

Perhaps you could start us off by describing your personal story arc, to set us up for a discussion of where the industry can go from here in terms of attracting, nurturing and promoting diverse talent.

Deb Smallwood

For the past 45 years in the industry, I held a variety of leadership positions; CIO, chief transformation officer, partner at KPMG and my last roles as the CEO and founder of Strategy Meets Action, always in ground-breaking roles as a woman executive at the intersection of business and technology transformation. Today, I have launched a book project and platform to empower women to unlock their infinite potential. My initial focus is partnering and collaborating with the women leaders and companies in insurance.

So my focus on where and how the industry can propel forward is a continuation of the past 45 years’ evolution, but at an accelerated pace.

I can still picture that first day at an insurance company in 1978, I was 23 years old. As I walked into the office, all I saw were rows of desks with women, while the offices were filled with men. I had never seen anything like that. There were no women in C-Suite roles and a few women leaders in the operations, back office and HR. 

If you fast forward to today, women have made visible and significant progress. Across our industry, women have elevated to every single C-suite, leadership and executive role within an insurance company: CEO, CFO, COO, CIO, heads of underwriting, claims and legal and in the new roles of data, innovation, strategy, customer experience and digital transformation. Women have proven they are both strategic and operational, with the ability to execute and deliver.

The glass ceiling has been broken in our industry. This is inviting women to join insurance. But the numbers of women in these positions are relatively small. Over 60% of the professionals in insurance are women. But only 18% of C-suite roles in the industry are filled by women, and only 3% by women of color.  So we hire plenty of women, but they are either leaving or not advancing in their careers.

One may suggest that the culture and the rules of engagement are traditional and have not evolved in line or at pace with changes in society that could support greater diversity in the C-suite.

Insurance industry is financially strong and continues to grow and expand. There is a healthy ecosystem. So there isn’t a compelling economic or financial reason to change culture, or even to innovate. But I think insurance companies will have to change, given the world we live in today.  Many external factors and mega trends are forcing diversity, equity and inclusion [DEI] and innovation.

I also believe AI will take the industry by storm and require radical innovation that we haven’t seen since the shift away from paper at the turn of the century and the shift to predictive model pricing once Progressive showed the way.  I believe AI will be a new gateway to attract and retain talent, especially women.

Paul Carroll

People were telling me all the way back in the 1980s that AI was going to change everything, and I knew it wouldn’t, and it didn't. Lately, I've become much more optimistic. I’m curious to hear more about how you think AI is going to be the next paradigm shift.

Deb Smallwood

AI capabilities has been evolving and expanding for some time and used across insurance in pockets, but as you state – with slow adoption and not transformative. What has taken the world and insurance by storm is generative AI. This AI offers maybe the first time since the telephone that everyone can play with a breakthrough technology. People are playing with it, using it, and it is elevating people’s thinking and generating new capabilities. It’s open source. It’s free. Everyone can explore it and experience it.   

Many insurers are buckling down, just like they did with new opportunities with social media, mobile technology and even the cloud. They are saying, let’s take this slowly so we can understand the risk and understand the potential impact to us, our policyholders and our ecosystem. Many are creating labs with a small, controlled group to test different use cases. Many are focused on the risks, not the opportunity to innovate and transform all dimensions of the business of insurance. I would suggest we need both lenses.

But the power of this AI technology is astounding. Let’s take a call center use case. Reps need to use and access multiple systems, from call center tech, to policy admin systems and multiple billing systems just to handle a query. They also need to access in real time scripts, procedures and rules. For the past 20 years, we've been unsuccessfully trying to resolve this complexity by integrating and moving data and so forth.

What AI and the suite of technologies can offer is a new, intelligent layer that can not only script talk tracks in real time based on the conversation but can document the conversation in real time and retrieve and interpret structured and unstructured data, images and videos from the various systems, as needed. Generative AI is going to go into those masses of data stores and pull out what the call center rep needs at that moment. Sure, this will require a different type of integration but, to me, is a quantum leap with intelligence augmenting and assisting the rep to new levels of customer experience and operational excellence.

Paul Carroll

Oh, agreed.

Deb Smallwood

Yeah, seeing and hearing what AI could do in call centers made me go, “Oh, wow!”

Paul Carroll

So how does AI disrupt things enough that it feeds into this diversity issue and creates an opportunity?

Deb Smallwood

I am very excited about the suite of AI technologies, as it creates new roles and new jobs. We can see this is already happening. What we have to do is inspire all, especially women, to stand up and raise their hands for these new types of projects. This is a new pathway to leadership and technical positions.

As I talk, interview and collaborate with women leaders for my book project, the conversations have renewed focus on how we can elevate the number of women in leadership positions. Current practices on hiring, promoting, merit increases and new opportunities are still out of balance and not working effectively in our industry. There is no transparency and accountability for really making a difference through DEI programs. Women deciding not to pursue C-suite positions or leaving insurance because of the all-male leadership layer is real. This should not be a surprise to anyone. 

So this tells me that the culture is still rooted in generational traditions. Board of director levels are at 80% male, and 70% of board positions are filled through networking, which perpetuates the lack of DEI at the most senior level of companies.

Insurance companies all have DEI programs, and I would challenge that it is a check-the-box activity.  There is little movement and few positive outcomes from these programs. The needle is not moving at the pace we need it to. I believe if there is a cultural change for true diversity, inclusion and equity, it needs to start at the board and C-suite levels, with compensation tied to DEI outcomes.

This is where my book comes in. As I open up the conversations with women executives, I am learning more about the true state of the industry as it relates to women in leadership beyond the numbers.  From the years when I was pushing up and through the glass ceiling, things are different. As one female CEO told me, the baby boomer generation did not have a choice to leave companies, for a variety of reasons. Today, as this executive was moving up the career ladder, she always felt empowered to make a choice to leave if she felt the company wasn’t the right fit culturally for her or wasn’t providing the right opportunities. With the younger generations moving between companies every three to five years, hybrid work environments and the expanding insurance ecosystem, there are many options. Right?

Insurance companies really have to embrace this diversity and inclusive cultural change, and I believe linking it to AI is an option. I just read that IBM is going to train 2 million people from diverse backgrounds over the next two years on AI. They're going to train 2 million people! Is insurance doing mass training? Is the insurance industry going into local communities and schools or going after women's groups and teaching them about insurance and AI?  

Paul Carroll

You spark a thought about AI and diversity. People will do these AI models and realize, oh, we trained them all using the perspective of white men. That doesn't work so well. When IBM had this great line about how they were sending Watson to medical school, after beating the greatest Jeopardy! champions, it turned out IBM was sending it to medical school on the Upper East Side of Manhattan, through a deal with Sloan Kettering. But people who are very well off don't have the same health issues or resources as others not so well off. You can't exactly take a model based on rich New Yorkers and use it in India or some other developing economy.

But if you have a successful industry like insurance, how do you say, you have to change a lot of things about how you're recruiting and promoting?

Deb Smallwood

Great question. Change is hard when you’re successful. But I think insurance companies will have to change, given the world we live in today. Executives need to acknowledge the current recruiting and promoting practices are not yielding the results expected from society’s expectations for diversity, equity and inclusion. As I talk to women leaders in insurance, and hear stories and experiences, there are words not being spoken and actions not being taken. Therefore, there is a reality that many executives are not even aware of. They don’t believe there are pockets of discrimination within their companies.

Paul Carroll

I'm sure they don't.

I went through some family records recently because my 93-year-old mother died in June, and I was reminded that my father's mother was the executive assistant to the CEO of Quaker Oats back in the early 1920s. That was basically the highest role a woman could have in a corporation in those days. When she married my grandfather, she had to quit because the thinking was that a married woman didn’t need to have a job and should make way for a single woman. That seems crazy.

Deb Smallwood

This is an amazing family story. That was so true. I remind myself that women have only been allowed to vote for a little over 100 years, right?  So yes, progress is being made from when I started in 1978, but not fast enough for today’s world.

Paul Carroll

Projecting out a bit, where do you see hope?

Deb Smallwood

My hope is more women will continue to fill board level/C-Suite roles and stay in our industry.  However, change will be required to keep the pipeline of young talent from shrinking. I don’t know if our industry will change fast enough. Fingers crossed. And as I partner and collaborate with the women in insurance and beyond with my book and platform, I hope I can continue to be a positive influence for women leadership and diversity in insurance.

Paul Carroll

Thanks, Deb. This was a great conversation.

KEY TAKEAWAY:

--Insurance products that are embedded through design facilitate adaptive systems by being a part of the network as opposed to a bolt-on feature. For instance, smart hot water systems that include tailored insurance protection may also include “over the air” software adjustments, informed by data shared across all other units, and thereby mitigate risk directly or by triggering on-site maintenance requests.

----------

P&C insurance is an extension of our desire to overcome nature. Our experience is defined by randomness and chance, and P&C insurance helps to mitigate the effects of (select) adverse random events. It facilitates a return to a pre-loss state or supports resilience understood as a “return to the same.” In this article, we argue that there are other forms of insurance fulfilment that may support adaptation rather than resilience alone – and that these are made possible by what we call Embedded Insurance at the Point of Design. 

Most of us are familiar by now with the concept of embedded insurance. Often, this is framed as a traditional insurance product that is offered when an insurable product is sold. Embedded Insurance at the Point of Design is different and is based on the premise that we can better tailor insurance products by co-designing them with assets and offering them as a bundled package with a single value proposition rather than offering a standardized “bolt on” coverage. The benefit of including insurance product development within the asset design process is that it allows for the development of a single value proposition and increases transparency and affinity between the insurer, designer and manufacturer. It may also create opportunity for new insurance product features focused on adaptation and risk mitigation. 

Consumers have a need for insurance to protect against unexpected and strongly negative events and are prepared to pay a premium now to avoid possible (and perceived greater) pain of loss later. Traditional P&C insurance products respond to this need by pricing risk and replacing the asset or settling to its fair value as determined at the time of loss. P&C Insurance products place the consumer back where they were pre-loss but do little to position the consumer to mitigate future losses. That is, these products focus on resilience, which we define here as a "return to the same."

See also: Time to Raise Your Embedded Insurance Game

When we think about resilience as a "return to the same," we might think of an analogy such as stretching a rubber band and releasing it. When we do this, the rubber band returns to its pre-stretched state. This synthetic resilience is a positive feature if we wish to re-use it as it was, and the same may be true for many insured assets. In other cases, there is value, both for the consumer and for the insurer, to repair or replace assets with updated features that improve their longevity or mitigate the risk of future loss or damage. When we think in these terms, we consider a shift from resilience to adaptation. Muscle damage and repair provides an analogy.

The process of human muscle strengthening involves a cycle of damage, inflammation, repair and adaptation. After a workout, our nervous system responds through inflammation and the activation of satellite cells around the muscles that fuse with the damaged tissue and support the repair process. As we continue with intervals of exercise and rest, a process of muscle strengthening occurs (called hypertrophy) alongside iterative improvements in the nervous system's ability to co-ordinate and synchronize muscle fibers in aid of repair. This is a learning system that adapts to events and becomes more proficient over time. Our muscles become stronger as a result.

Insurance products embedded in the asset design process may serve a similar function to the body's nervous system in this example if they are complemented by connected product systems.

In this diagram, we highlight both the proposition to explore insurance embedded at the point of design (X-axis) and complementary connected product systems (Y-axis). The two concepts together make possible assets with built-in and tailored protection plus a means of updating the asset (either through software update or re-release and replacement through an insurance claim process) to adapt to environmental conditions and risks.

The key to thinking differently about the role that P&C insurance can play is the concept of connected and articulated systems that incorporate feedback loops. These systems may make meaningful adaptation possible. Assets that are connected and provide data to the manufacturer and insurer allow for a deeper understanding of the conditions in which the asset exists and how it is used and create a basis for understanding how the asset may be improved to be more effective in these environments.

When we say these systems ought to be "articulated," we mean that the connectivity ought to also extend to other assets of the same class such that data may be shared not only with manufacturer and insurer but also with other products at the same time. Articulated and connected systems make possible meaningful feedback loops. Tesla's "over the air" updates are one example of a system like this that can facilitate product adaptation and evolution. If not live, updates may be delivered release by release.

See also: Is Embedded Insurance the Wrong Idea?

Insurance products that are embedded through design facilitate adaptive systems by being a part of the network as opposed to a bolt-on feature. The participation of insurers in product and system design allows for risk management-specific updates to inform either real-time or per-release modifications. The participation of manufacturers allows for transparency around timing of updates, of new releases and importantly of changes to cost that will inform insurance premiums. The relationship between parties highlights the strategic nature of designing connected and articulated systems.

An example of how an adaptive system supported by Embedded Insurance at the Point of Design may be realized is connected vehicles. Vehicles that are co-designed between auto manufacturers and insurers may offer tailored insurance solutions specific to the car and its target market. They may allow for data-sharing and a learning system across the network of vehicles. Feedback from the system may inform design enhancements to mitigate risk for subsequent models, and the replacement cost (or repair upgrade) may be factored into existing premium renewals in the case that the vehicle is damaged or destroyed and is repaired or replaced with an upgrade. 

An alternative example for property could include the manufacture and maintenance of residential hot water systems. Hot water system bursts represent a relatively infrequent but high-cost insurance claim category. Smart hot water systems that include tailored insurance protection may also include “over the air” software adjustments, informed by data shared across all other units, and thereby mitigate risk directly or by triggering on-site maintenance requests. The insurance premium may be priced to allow for replacement with updated models should the existing unit burst.  

Embedded Insurance at the Point of Design makes possible innovative forms of insurance by, firstly, allowing insurers to establish clear and close alignment with asset designers and manufacturers and, secondly, by supporting the development of connected and articulated product systems that may help to mitigate risk.

Whereas traditionally conceived insurance models seek to overcome nature, a truly embedded insurance model coupled with a connected system design may help consumers to better adapt and evolve in response to adverse events.

The insurance industry prides itself on the data it has. Carriers, historically, have had access to a wealth of data — and data sources — everything from disaster models to historic perils, real-time weather feeds, and current policy information to publicly available government data such as criminal records, bankruptcies, and foreclosures. But having access to data does not mean you have access to valuable insights. For data to be useful, you must first ensure the data you have is the data you want — clean, accurate, and reliable. Then, turn this data into information and that information into action. Good data leads to better decisions. And bad data? According to a recent MIT Sloan study, it costs carriers 20% of their revenue.

The Hidden Costs of Bad Data

The costs of bad data add up quickly. In fact, poor data quality can cost as much as 15-25% of total revenue, according to a study conducted by MIT Sloan. Poor data quality increases costs associated with the re-execution of a process due to data errors, correction efforts, and accruing out of lost or missed revenues. Conversely, according to the Sirius Group, quality data can lead to a 70% increase in revenue. With the right tools, carriers can turn the mountain of data they possess into a goldmine of opportunity.

But first, what do we mean by data quality?

According to IBM, data quality is the measure of how well a dataset meets the criteria for accuracy, completeness, validity, and consistency — crucial to data governance within an organization.

Good data helps organizations make better decisions. If data issues such as duplicate data, missing values, and outliers aren’t properly addressed, carriers increase their risk leading to less-than-optimal outcomes.

Is the Data You Have the Data You Want?

In the insurance industry, data accuracy is everything. The efficiency of the claims process is contingent upon the adjuster’s ability to verify a claim, which is based on having accurate data. The foundation of claims automation is also accurate data, both structured data from the system and unstructured data from the filing, to determine the appropriate course of action for each claim. The automation system continually reassesses its previous decisions as new information is added. Attempting this process with inconsistent or “dirty” data can lead to erroneous decisions and a poor customer experience.

Carriers wrestle with poor data quality because of the vast amounts of unstructured data that are stored in disparate systems. Many of these are legacy systems, while others are desktop-based actuarial applications. The problem is compounded by newer applications that have been added to the legacy systems, creating multi-layered, redundant IT architectures.

The Pitfalls of Bad Data

• Insurance underwriters depend on accurate data for risk assessment, which can influence premiums, policy terms, and profitability.
• Poor data quality increases costs associated with the re-execution of a process due to data errors, correction efforts, and lost or missed revenues. In a recent conversation on the “Slaying Your Data Dragons” webinar, OZ Senior Vice President Data Analytics & AI, Sal Cardozo, discussed the issues around data management.  
• Inaccurate, inconsistent data leads to less-than-optimal decisions. For instance, when underwriting and pricing property insurance, carriers often rely on the insured or their agent to provide the Construction, Occupancy, Protection, and Exposure (COPE) details about the property. These details enable the carrier to evaluate the potential loss associated with the property and price it accordingly. However, the insured may not always provide accurate information, leading to policy underpricing and increased losses.
• Lack of trust in data prevents insurance leaders from making the right decisions — sometimes leading to regulatory non-compliance.
• Carriers must comply with strict regulations around data accuracy, completeness, and appropriateness; failure to do so may result in huge fines and penalties.
• Many carriers grapple with inaccurate underwriting data, necessitating requests for additional information from agents and customers, leading to longer underwriting turnaround times and lost business.

How to Avoid the Big Bad Data Trap

1. Automate Repetitive Tasks

Data collection and processing is a repetitive, tedious task prone to human error. These errors could range from incorrectly understood instructions, typos, mismatched names and emails, duplicate records, or simply overlooking certain entries. These errors and an overwhelming amount of incorrect and incomplete data can accumulate and become significant inconsistencies over time. Through intelligent automation, carriers can reduce errors, cut costs, and provide a better customer experience while freeing up employee time for higher-value work.

Watch this joint NAMIC webinar to learn more about creating the right automation strategy and roadmap for your business.

2. Standardize Processes

In lieu of standardized protocols for data collection, different teams might adopt different methodologies for the same data. This inconsistency can cause discrepancies when data is combined or compared.

3. Integrate Your Data and Systems

Insurance carriers operate in different regions around the world. With a large global footprint, local and overseas business units tend to have various systems to manage policy and claims data, financial information, and marketing and sales data. However, if this data is not integrated into a common platform and view, it could hamper decision making over time.

Here’s how a global P&C carrier consolidated its data sources with intelligent automation and reaped the benefits of a standardized platform. Read the full story.

4. Modernize Legacy Systems

Legacy systems are not equipped to handle newer data types and large volumes or share data across departments, leading to delays and lost opportunities. Compare the standard insurance approval process to a digital model, which allows customers to lodge a claim from anywhere, upload photographs or details of the damage from their smartphone, and where automated underwriting processes can approve the claim almost immediately. The latter is faster, more efficient, and provides a seamless experience for the policyholder. Besides, older systems might lack the safeguards or validation checks in more modern solutions.

5. Perform Data Quality Checks:

Carriers must perform periodic reviews and cleaning of databases to maintain data quality. If these checks are not carried out regularly, inaccuracies can persist and compound, leading to a deterioration in data quality.

Bad data in all its forms costs the insurance industry more than you realize, from the more obvious financial and productivity effects to impacts on customer experience. While investing in comprehensive data integration may seem costly, what carriers truly cannot afford is bad data. 

To learn more about how you can achieve business success by leveraging the right data, get in touch with us. Read our e-book — Under the Hood: Unlocking the Hidden Value in Insurance Data, for all the ways you can reach your digital transformation goals with stronger data.

Murray Izenwasser, Senior Vice President, Digital Strategy

At OZ, Murray plays a pivotal role in understanding our clients’ businesses and then determining the best strategies and customer experiences to drive their business forward using real-world digital, marketing, and technology tools. Prior to OZ, Murray held senior positions at some of the world’s largest digital agencies, including Razorfish and Sapient, and co-founded and ran a successful digital engagement and technology agency for 7 years.

Sponsored by ITL Partner: OZ Digital Consulting

View original article on invoicecloud.com.

It’s become increasingly difficult to ignore: the insurance industry is facing a major talent shortage that is only just beginning. A confluence of factors has ushered us into this gap in the insurance workforce, including the Great Resignation — a trend in which nearly 57 million Americans quit their jobs in search of more fulfilling work and a better work-life balance – and minimal interest reported among younger generations in more traditional industries, like insurance (a recent PwC report found that 21% of millennials would rather not work in the financial services sector).

Not to mention what’s on the horizon: a wave of mass retirement is threatening to crash on the industry within the next few years, in which the U.S. Bureau of Labor Statistics projects nearly 400,000 employees will retire from the insurance and insurtech spaces.

Altogether, it seems likely that today’s insurance talent shortage isn’t going away any time soon. If anything, carriers may be feeling increased pressure from reduced staffing in the coming years, in a few critical ways.

Let’s explore how this workforce gap has and will continue to impact the day-to-day operations of insurance organizations and, critically, what can be done to bridge the gap.

1. Increased workloads disrupting internal processes

The most obvious impact of a reduced staff is increased workloads for the remaining team. With fewer folks to share the load, the slack is distributed among an insurer’s pared-down staff, and existing internal processes are likely to be disrupted.

Increased workloads are especially tedious and time-consuming if manual work is involved. Sending out bills and processing premium payments, for instance, can take hours out of a work week and cannot be ignored without risking revenue streams. However, spending excessive time on billing and payment-related tasks – despite the organizational importance of these processes – can distract staff from other critical aspects of their roles.

2. Retention risks from poor policyholder experience

One particularly detrimental example is the impact an overwhelmed staff can have on policyholder retention. Fewer hands on deck could mean fewer customer service representatives to field policyholder questions, concerns, and complaints, resulting in a poor customer experience. Plus, increased workloads (especially those that involve manual work) could mean an increase in errors, which tends to breed policyholder dissatisfaction. This is especially true when finances are involved.

Manually processing payments, for instance, can cause delays resulting in late payments, duplicate bills, and costly cancellations for non-payment. These inefficiencies create a rise in policyholder frustration and confusion, which could lead to their seeking new insurers. Finances are critical to policyholders, and any issues with payment processing can lead to a loss of trust in the insurer. Policyholders are not likely to remain with an insurer that mishandles their finances, whether it’s not processing premiums on time or delaying claims payments.

3. Difficulties hiring and retaining talent

We know finding talent has become a major challenge in the insurance space, but the workforce gap also takes a significant mental and physical toll on an organization’s remaining staff. Team members are stretching themselves thin to cover the cracks, fielding frustrated customer calls, and burning themselves out as a result.

Burnout is a state of physical, emotional, and mental exhaustion caused by prolonged stress and frustration in the workplace, and is often the result of excessive job demands, such as long work hours, intense pressure to meet deadlines, and inadequate support from colleagues or supervisors. The last thing insurance organizations need is to lose additional talent to burnout, but without a strategy to alleviate mounting, manual workloads, there’s not much insurers can do to escape this vicious cycle.

Addressing the Insurance Talent Shortage

During a time when policyholder expectations are at an all-time high and staffing is at an all-time low, carriers must do more with less while continuing to provide excellent service – otherwise, retention is at risk.

And it’s not just short-staffed insurers that are struggling: even carriers with full teams can become overwhelmed by the number of daily manual tasks. More manual work often means more room for error. It also means less time to dedicate to high-priority projects and cultivating relationships with policyholders.

To do all this, insurance companies must optimize their valuable human resources by automating manual tasks and processes, especially those processes where policyholder satisfaction is most at risk. Learn more by downloading InvoiceCloud’s ebook, The Digital Bridge: Closing the Insurance Talent Gap by Digitizing Billing and Payments.

Sponsored by ITL Partner: InvoiceCloud

When I moved my older daughter to Washington, DC, a year ago, we piled all her worldly possessions into a 16-foot truck and made the 2,982-mile trip from northern California in 72 hours. While we weren't exactly a Formula 1 pit crew when we refueled, we could fill up the tank and get on the road again for the next 400 miles in 10 minutes. 

Now imagine how this might look in 25 years in an all-electric future if she returns the favor and moves me into a retirement home. It could take an hour or more to recharge a battery big enough to move a truck hundreds of miles. My daughter is great company, and all, but we were already getting plenty of together time and didn't need to be sitting across from each other at a recharging station. 

And trucks don't really lend themselves to electrification, anyway. Those using internal combustion engines (ICEs) are already plenty heavy -- even without my daughter's 20 boxes of books -- and the huge batteries needed to move all that weight make EVs far heavier. That means less range, which means more frequent recharging, which means even more time on a plastic chair at the recharging station, drinking bad coffee. 

While many people have assumed that EVs would steadily take market share, more and more rapidly, until ICE vehicles disappeared, that thinking was based on the idea that EVs could be a one-for-one replacement for ICEs. But mulling the before and after versions of a cross-country moving trip made me realize that the path to the future may not be as straightforward as I thought, and recent trends support that new thinking -- sales of hybrids are surging, while the growth for EVs is slowing.

The realization comes as two electric scooter companies have filed for bankruptcy and in the wake of the problems at Cruise that have set back the move toward autonomous vehicles, so this seems like a good time to take a broad look at the future of transportation. Auto insurers, among many others, need to get the transition to the electric future right. 

To be clear, I still think the future of vehicles is electric, and I hope we get there as quickly as feasible for the sake of the climate. The next car I buy will be electric. But it's worth taking a look at a very smart piece in Business Insider that carries the headline, "What Happened to EVs? The sudden slowdown in electric car sales is a symptom of a much uglier problem." 

The article says: "Industry analysts have pointed to several reasons for the slowdown, including insufficient charging infrastructure and a lack of affordable EV options. But they're a symptom of the larger problem: America's EV plan was flawed from the start.... 'The entire myth at the heart of this whole transition is that the battery car seamlessly fits right into the gas car's position,' Edward Niedermeyer, the author of 'Ludicrous: The Unvarnished Story of Tesla Motors,' told me. 'It doesn't, and that's the problem.'"

The piece continues: "When automakers pivoted to EVs, they focused on the kinds of cars that were already popular — which meant a flood of big electrified SUVs and trucks. But massive-bodied EVs don't make much sense.... While bigger batteries allow drivers to travel farther between charges, they also make the cars heavier, more dangerous, more expensive and worse for the planet."

The average U.S. driver traveled only some 40 miles a day in 2023, the article says, and 93% of trips were under 30 miles -- but car buyers still think about the days when they'll drive more than 40 miles, perhaps much more, and about those longer trips. Their "range anxiety" makes them disinclined to switch fully to an EV. The article says Norway has been touted as the model for moving to EVs, yet more than 20 years after it began offering incentives for buying EVs, only 20% of the cars on its roads are electric.

The author concludes: "America's EV plan needs to lean into what these cars do well: short daily trips that can be taken in small, affordable cars. People who frequently take long trips can take advantage of hybrid cars. And better public transit and faster intercity trains could make a huge difference for people and the planet. While it may be a sexy and industry-friendly approach to the climate crisis, an EV-first plan isn't the most effective way to tackle the enormous challenge we face."

Scooters have also taken a hit recently -- Superpedestrian announced it was going out of business; Hellbiz was delisted from Nasdaq because its share price has settled below $1; and, biggest of all, Bird filed for bankruptcy. While scooters aren't yet much of a factor for insurers, it's worth thinking about them as part of the changing mix of transportation, especially within cities. 

I've long thought scooters have a neither-fish-nor-fowl problem. They're too fast for sidewalks, where they endanger both the riders (who seldom wear helmets) and unsuspecting pedestrians. Yet they're too slow for streets and, of course, don't wrap riders in the thousands of pounds of protective metal that cars provide. Scooters can work in some environments but not in enough, at least soon enough, to justify scooter companies' flooding of markets in recent years. 

An article in Fast Company makes the case that cities need to adapt by marking off special "protected" lanes for scooters, because they provide a useful form of transportation for many and reduce the number of car trips. That makes sense in the abstract but is hardly a solution everywhere. Many cities, especially older ones, have streets too narrow for special lanes to be carved out. And you can "protect" lanes all you want, but car drivers and passengers have well-engrained habits. Back in the 1980s, New York City made a big todo about establishing a bike lane on Sixth Avenue, so I decided to ride my bike from my apartment in Greenwich Village up to Central Park and almost died three times in three miles as cars pulled into my lane right in front of me or as a passenger opened the door to a cab just ahead of me. I never used the bike lane again.

An article in TechCrunch also faults cities, though for a different reason. Perhaps feeling burned by Uber and Lyft, which had run roughshod over regulators in the early days of ride-sharing, cities quickly decided to maintain tight control over scooter companies, including by offering only short-term operating permits. Cities also charged scooter companies for those permits, rather than seeing them as offering an amenity to citizens. The article does blame the companies for accepting the terms that cities set, even though the companies could see that there was no hope of being profitable under those conditions. An article in Wired details loads of mismanagement at Bird, once valued at $2.5 billion.

Where do the confusing indicators about EVs and the disappearance of some scooter companies leave us? I'd say we're left in the middle of a transition that will be messy at least for several years.

EVs will still march forward, but maybe in fits and starts, depending on government incentives for purchases, on the buildout of charging infrastructure to allay range anxiety, on changes in consumer perceptions and so on.

I can imagine some sort of new model emerging, where maybe I use my (soon-to-be) EV for driving around town and for short trips but someone patches together for me some combination of public transportation and car rental if a trip would require more than one charging stop en route. 

In any case, the effect of the EV trend on auto insurers may not happen as fast as some of the pledges about ending ICE sales by 2035 would suggest. 

The problems with scooters suggest that cities are going to have to adapt their basic design if they want to be more people-friendly and less focused on being car-friendly. That process, too, will happen in fits and starts, subject to the push and pull of local politics and lobbying by companies and citizens. 

My hope is that autonomous cars will recover from their recent black eye and improve to the point that cities can do away with on-street parking -- who needs parking if cars just keep moving? Just think about how much room that would create in cities for scooters, bikes and anything else city designers could want. 

That won't happen soon -- but something will. An awful lot of pieces of our transportation model are in flux at the moment.

Cheers,

Paul 

KEY TAKEAWAYS:

--How do you get better at retaining customers? Through a consistent, personalized omnichannel experience. When all customer access systems align — the IVR, web portal, mobile experience and customer service representatives — the customer experience is fluid, agile and modern.

--An omnichannel experience is within reach, even for small and mid-sized carriers, including those with multiple systems or legacy systems. Flexible SaaS options allow even the smallest insurers to give their customers a sleek, modern, digital experience without expensive systems overhauls. 

----------

Insurance carriers, like other businesses, prioritize growth for several reasons. As insurance carriers grow, they can spread their fixed costs (such as administrative expenses or technology investments) over a more extensive customer base. This can lead to cost savings and improved operational efficiency, resulting in higher profits or more competitive customer pricing. 

Insurance relies on the principle of spreading risk. With a more extensive customer base and a more diversified portfolio of policies, insurance carriers can better manage their exposure to risk. This reduces the impact of large claims or catastrophic events on their financial stability. Growth can lead to increased revenue and, ideally, greater profitability. 

Growth is the key to survival in today’s insurance landscape, but it requires strategy and planning, especially as competition gets tighter. Mid-sized insurance carriers seeking to hit their growth goals are squeezed on all sides. They’re facing pressure from large incumbent carriers with deep pockets, as well as agile, digital-first startups. 

Most insurers’ growth strategies revolve around customer acquisition and adding new risk products. These are wise initiatives, but they won’t be enough. Here are 10 reasons why customer retention must be part of a carrier’s growth strategy.

1. Stable Revenue: Retained customers provide a steady stream of premium payments, ensuring a stable and predictable source of revenue for insurance companies.
2. Cost-Effectiveness: Acquiring customers can be significantly more expensive than retaining existing ones. The insurance industry has one of the highest customer acquisition cost (CAC) ratios. It costs an average of seven to nine times more for an insurance agency to acquire a new customer than to retain one. Building and maintaining customer relationships can save on marketing and acquisition costs.
3. Long-Term Profitability: Loyal customers tend to stay with their insurance provider for the long term, leading to increased profitability as they continue to pay premiums.
4. Cross-Selling Opportunities: Satisfied and loyal customers are more likely to purchase additional insurance products from the same provider, leading to increased cross-selling and upselling opportunities.
5. Referral Business: Happy customers are more likely to refer friends and family to their insurance provider, creating a valuable source of new business.
6. Reduced Policy Churn: Customer retention efforts can reduce churn, which is the rate at which customers leave an insurance provider. Lower churn rates mean less business lost to competitors.
7. Customer Data and Insights: Customer data is a gold mine for carriers in today's data-driven insurance industry. Retained customers provide valuable data and insights that can be used for personalized marketing, product development and risk assessment. Quality, reliable data from a long-term customer is more valuable to you than a newly acquired customer.
8. Captive Audience: If customers are happy with your products and services, they’re less likely to shop around to other carriers when a new insurance need pops up.
9. Robust Claims Experience: Satisfied, loyal customers are more likely to have a positive claims experience.
10. Regulatory and Compliance Benefits: In some cases, regulatory requirements may be easier to fulfill with a stable customer base. Retained customers also tend to have lower cancellation rates, which can improve compliance records.

Customer retention is essential for insurance carriers to maintain profitability, reduce costs and thrive in a competitive industry. It's not just about retaining customers for the sake of it but also providing superior customer service, value and personalized solutions that build long-lasting relationships. 

Omnichannel Engagement Leads to Retention

Now that we’ve established the value of customer retention, the question is, how? How can carriers invest more in retaining the great customers they already have? 

Creating a consistent, personalized omnichannel customer experience leads to higher customer satisfaction, increased loyalty and improved business performance. In other words, growth.

We have some strong evidence to back this up. In a recent study my company commissioned with independent data scientists, we analyzed the behavioral data of 250,000 property and casualty insureds over two years and saw that a consistent omnichannel experience can boost policy retention by 21%. Having a single channel, such as a customer portal, also saw a lift to retention of 12%. Data shows that an integrated, multichannel experience provided the most significant boost to customer loyalty.

One of the study's most significant findings is that using multiple self-service channels significantly increases customer retention. For example, customers using an insurance portal are 12% less likely to cancel their policies compared with those who do not engage with a portal. Those who use multiple channels, such as phone, email and SMS, are 21% less likely to cancel their policies, and those who repeatedly use multiple channels show a 25% higher retention rate. Customers who use advanced features like policy document retrieval and ID card access exhibit even higher retention rates. Repeated interaction with the portal solidifies customer trust and commitment. 

Building an omnichannel experience requires carriers to better understand their target audience, including their preferences, behaviors and needs. This will help you tailor your engagement and retention strategy to meet their expectations. For example, how often should you contact your customers? Using data about your customers can help inform you when and how often to send messages and on which channels. The time of day, day of the week and timing during the month are critical factors to consider when planning messages. Decisions all depend on who they are and what they need at any time in the relationship.

See also: Here’s Why Insurance Customer Engagement Needs an Extreme Makeover

Legacy Tech Can Be a Barrier 

Providing multiple, tailored channels for your customers is a great start, but more is needed. These channels must be relevant to how customers prefer to communicate with you. The channels must suit their specific needs. At the same time, your communications channels should natively work together to create a unified ecosystem of success for the customer. That means consistency in your data, messaging and behavior across each channel. 

For example, a saved payment method in the insured portal should be available when paying via SMS or IVR. Activity in any channel should reflect in any other channels in real time. Carriers will maintain the customer's trust when everything feels and acts consistently. 

Legacy insurance systems often struggle to provide a consistent omnichannel experience. Because these systems can be disconnected and create data silos, the result is a lag time between the insured’s digital updates and the CSR system update. 

For example, a customer who calls a carrier right after making a digital change online may need help being serviced immediately. If a CSR doesn't have the change in their system, this increases customer frustration and possibly causes them to shop for another insurer. It also costs the insurer more to make a second phone call to help the customer once its systems catch up. CSRs must have updated, synchronous systems to rely on when fielding customer calls to provide an outstanding customer experience, regardless of contact channel.

When all customer access systems align — the IVR, web portal, mobile experience and customer service representatives — the customer experience is fluid, agile and modern. Current, accurate data that is easily accessible by the customer changes everything. Customers can answer their questions, make payments and access policy information whenever possible. This self-service design gives control back to customers and saves time for insurers. 

See also: Low Insurance Premiums Aren't Enough

A Great Customer Experience is Within Reach

When executed well, an omnichannel experience means an insurer's different tools and systems are connected. It means that whether customers interact over the phone or in a portal or respond to a text message, they enjoy the same consistent experience. 

The good news is that the omnichannel experience is within reach, even for small and mid-sized carriers, including those with multiple systems or legacy systems. It used to be that the large incumbent carriers built their own omnichannel engagement solutions in-house, but that has changed dramatically as cloud-based customer engagement software has matured. Flexible SaaS options allow even the smallest insurers to give their customers a sleek, modern, digital experience without expensive systems overhauls. 

All of this adds up to a stronger relationship with your customers, who, in turn, will reward you with their loyalty and long-term business. Growth may be the name of the game, but customer retention is crucial to helping you meet those growth goals.

Fraud is a significant concern for group and employee benefits insurers. In Canada alone, workplace benefits fraud is costing insurers and employers hundreds of millions of dollars every year, according to the Canadian Life and Health Insurance Association.

Advances in technology are increasing the frequency of fraudulent activity in insurance. A study by Deloitte says remote work, increased digitalization and weakened controls are the top three reasons for the recent uptick.

While today's digital environment allows new fraudulent behaviors to evolve, it's also making identifying and stopping fraudulent activity easier than ever before.

1. Real-Time Monitoring With AI

Manual detection of group insurance fraud is next to impossible because of its high costs, and the sheer volume of claims is too high for any group insurer to handle.

As a result, McKinsey predicts that AI-driven technology will be a prevailing method for spotting fraud by 2030. This is because AI and predictive analytic systems can spot copious amounts of fraudulent activity in real time significantly better than humans.

AI can monitor customer interactions, track behavior and language and leverage machine learning algorithms to detect suspicious activity early and minimize potential losses.

Let's say a plan member tries to file a fraudulent health insurance claim through an AI chatbot or systems. However, the AI's algorithms analyze the user's claims history and find that they frequently submit an unusual amount of claims.

AI could detect this suspicious activity and other inconsistencies in real time, probe the customer for additional proof and alert the appropriate manager.

Fraud prevention in insurance is critical to maintaining customer trust in security practices. Integrating AI into security infrastructure is a great way to reduce the probability of such incidents, resulting in significant savings for providers.

See also: Data Breaches' Impact on Consumers

2. Machine Vision and OCR Image Assessments

Identity theft is the root of the group insurance industry’s fraud issues. Fraudsters who compromise a plan member's identity can use their information to make fraudulent claims. This harms the policyholder, the insurer and the providers.

Machine vision refers to the AI-powered analysis of images from sources such as smartphones or satellites. Insurers integrating machine vision-powered technology into their core claims systems or self-service portals can spot identity theft with greater proficiency.

For example, by making the user upload a live “selfie” and ID, the machine vision system can determine if the photo and ID provided are legitimate and ensure the person listed on the ID or group benefits card is the same person submitting a claim.

Insurers must also have accurate data for claims processing, as incorrect information and data can facilitate fraud. Optical character recognition (OCR)-enabled claims processing software can help improve claims processing data accuracy without human intervention.

For instance, plan members can use their phone to take a picture of the receipt from their dentist, eye doctor, etc., and send it to their insurer. Then, OCR systems can structure data from the image of the receipt, confirming if the transaction is legitimate and if the plan member is entitled to coverage.

3. Industry-Wide Data Sharing on Fraud

As organized fraud groups become more sophisticated, the insurance industry has been increasingly willing to share data and insights to stay ahead of fraudsters and develop more effective countermeasures.

Industry-wide data analysis can be facilitated through data-sharing platforms or industry associations that promote information exchange on fraud trends, techniques and prevention strategies.

For example, in 2022, the Canada Life and Health Association (CLHIA) launched an industrywide initiative to pool anonymized claims data and use advanced artificial intelligence tools to analyze and enhance the detection and investigation of employee benefits fraud. By identifying patterns across millions of records, the program improved the effectiveness of benefits fraud investigations across the industry.

Fraudsters often target organizations within the same industry. Therefore, analyzing industrywide data can help identify fraudulent activities that may go unnoticed within a single organization. 

For example, predictive modeling uses analytics, machine learning and large amounts of data to build digital models that gauge the likelihood of whether new applications and claims have the potential to be fraudulent. Insurers that train their predictive models with the plethora of shared data and patterns about fraudulent activity can scale and improve the accuracy of their models.

See also: How Technology Is Changing Fraud Detection

4. Blockchain Security

Blockchain's potential for securing transactions from fraudsters and providing trustworthy information has made it an effective and popular method for eliminating many vulnerabilities.

In fact, blockchain deployments can save banks and insurance companies $27 billion annually by 2030, with much of the saving opportunities stemming from fraud reduction.

Blockchain is a type of database that can create immutable and dependable records and validate transactions. It does this through distributed transactions that are shared among a decentralized network of computers. The records shared among these systems are encrypted and can't be erased.

For example, suppose a business buys a healthcare-focused employee benefits insurance package through a blockchain smart contract. In that case, the blockchain smart contract will create immutable data based on the client's records that can accept or refute any insurance claims made by the company.

So, suppose a policyholder makes a fraudulent claim or the carrier no longer agrees to provide coverage for a previously agreed-upon condition. In that case, a blockchain-based smart contract can dissolve and immediately pay the premium back to the plan member or client.

With blockchain, no record can be changed without changing all other records within the same block, meaning there's only a single version of the truth. As a result, fraudsters can't manipulate information to their advantage. This helps build trust between parties, facilitate transactions and maintain accurate claims information and data.

Protecting Tomorrow's Group Insurance Industry

The group benefits insurance industry will never fully eliminate fraud. However, using cutting-edge fraud-prevention technology and industry resources to fight fraud can help make headway against the operational goals of increased efficiency, reduced losses and cost savings for insurers and policyholders.

Fraudulent threats are constantly evolving – insurers and their partners need to use the latest fraud-prevention technologies to monitor new threats and work together to prevent the risks associated with group and employee benefits fraud.

The insurance industry is undergoing a transformation, driven by technological advancements that promise to enhance efficiency, security and transparency. At the forefront of this revolution is blockchain technology, a decentralized and secure system that has the potential to reshape the way insurance processes are conducted. In this article, we will delve into the impact of blockchain in the insurance sector, exploring its benefits, challenges and the emergence of future-ready insurers that are not only leveraging blockchain but also embracing mobility tech and trends.

Understanding Blockchain in Insurance

Blockchain, the distributed ledger technology that underlies cryptocurrencies like Bitcoin, has several features that make it particularly well-suited for the insurance industry. Its decentralized nature eliminates the need for intermediaries, reducing administrative costs and increasing efficiency. The immutability of blockchain ensures that once data is recorded, it cannot be altered, providing a transparent and tamper-proof record of transactions.

1. Enhanced Security and Fraud Prevention: Blockchain's cryptographic features ensure secure data transmission and storage. In the insurance industry, this translates to a significant reduction in fraud. Through the use of  smart contracts, which automatically execute and enforce the terms of an agreement, the risk of fraudulent claims is minimized. Insurers can verify the authenticity of claims in real time, streamlining the claims process and reducing the overall cost of fraud detection.

2. Improved Transparency and Trust: Transparency is a cornerstone of blockchain technology. In insurance, this translates to a transparent and accessible record of policy details, premiums and claims. This increased transparency fosters trust among stakeholders, including policyholders, insurers and regulators. By providing a shared view of transactions, blockchain reduces disputes and enhances the credibility of the insurance industry.

3. Streamlined and Efficient Processes: Traditional insurance processes are often marred by cumbersome paperwork, delays and manual errors. Blockchain's decentralized ledger simplifies and automates these processes. Smart contracts can automate underwriting, policy issuance and claims processing, reducing the time and resources required for these tasks. This streamlined approach not only enhances efficiency but also improves the customer experience.

See also: Blockchain's Future in Surety Industry

Challenges and Considerations

While the potential benefits of blockchain in insurance are substantial, the technology is not without its challenges. Integration with existing systems, regulatory concerns and the need for industry-wide collaboration are among the hurdles that insurers must clear. However, as the technology matures and regulatory frameworks evolve, these challenges are increasingly being addressed.

Future-Ready Insurers – Embracing Mobility Tech and Trends

In addition to blockchain, future-ready insurers are embracing mobility tech and trends to stay ahead in a rapidly evolving landscape. The integration of mobile technology, data analytics and emerging trends such as IoT (Internet of Things) is reshaping the way insurance is underwritten, sold and serviced.

1. Mobile Apps and Customer Engagement: Mobile apps have become a powerful tool for insurers to engage with their customers. Insurers are developing user-friendly apps that enable policyholders to manage their policies, submit claims and access important information seamlessly. The convenience offered by mobile apps enhances customer satisfaction and loyalty.

2. Data Analytics for Risk Assessment: The abundance of data in today's digital age is a goldmine for insurers. Advanced data analytics tools allow insurers to analyze vast amounts of data to assess risks more accurately. Machine learning algorithms can identify patterns and predict potential risks, enabling insurers to make informed underwriting decisions and set more precise premiums.

3. IoT Integration: The proliferation of IoT devices is transforming risk assessment and claims processing. Insurers can leverage data from connected devices such as smart home sensors, wearable devices and telematics in vehicles to gather real-time information. This not only enables personalized pricing based on individual behavior but also facilitates risk mitigation.

4. Artificial Intelligence (AI) in Underwriting and Claims Processing: AI is playing a pivotal role in automating underwriting and claims processing. Machine learning algorithms can analyze vast datasets to assess risks, while natural language processing facilitates faster and more accurate claims adjudication. This not only improves efficiency but also reduces the likelihood of errors.

See also: How Blockchain Enhances Reliability, Speed

Conclusion

Blockchain technology is a game-changer for the insurance industry, offering enhanced security, transparency and efficiency. As insurers navigate the challenges of integration, those that successfully implement blockchain stand to gain a competitive edge.

Moreover, the synergy between blockchain and mobility tech is propelling insurers into a future where customer-centricity, data-driven insights and automation are paramount. The future-ready insurer is not merely an adopter of technology but an innovator, embracing the transformative power of blockchain and mobility tech to redefine the insurance landscape.

As we move forward, the collaboration among insurtech, regulators and industry stakeholders will be crucial in shaping a future where insurance is not just a protective measure but a seamless and intelligent part of our daily lives.

Have you ever gotten frustrated filling out a paper form? It’s a slow, painful and error-prone process. Despite the ubiquity of digital interactions today, many forms-based interactions remain antiquated. 

Think back to the last time you were at your doctor’s office or local bank: To obtain service, you likely had to fill out a multi-page paper form. This problem is exacerbated in certain industries, such as insurance, where a claimant may be required to fill out numerous claim forms. 

Advances in technology stacks across artificial intelligence and process automation are changing things for the better, and it's about time. In this era of digital transformation, a streamlined and convenient forms-driven communication experience isn’t just a “nice to have” — it’s a must.

Complex industries need automation

The process of filling out forms is often overwhelming and redundant. Take disability insurance claims. For every form a customer fills out, they are repeatedly asked for the same basic information: name, address, date of birth, date of injury and more. This redundancy is commonplace across many forms, making the process cumbersome for the injured policyholder from the start.

In almost every case, insurance companies have this information, yet policyholders are required to provide it repeatedly. This leads to dissatisfaction at best and abandonment at worst. When policyholders abandon forms, insurance company employees must manually follow up with them through emails, phone calls or duplicate paper mailings — leading to increased costs for the insurer.

Even when the forms are completed, there’s still the issue of opaqueness. Policyholders (not to mention agents) have little insight into the process. There’s usually the lingering feeling that something fell through the cracks, or that some error will send the policyholder back to square one to start the process anew. Stakeholders don’t often have insights as to the status of a claim after requisite documents have been distributed or completed. 

Streamlining and digitalizing this traditionally paperwork-intensive process is crucial. Doing so reduces the burden for both policyholders and insurance companies. The industry is rife with automation opportunities that support a more efficient and transparent communication channel between policyholders and insurers, ultimately fostering trust and satisfaction. 

See also: Why Are We Still Talking About Digital Transformation?

Obstacles create opportunities 

The disability claims space offers another example of the industry’s complexity. There are claims forms that need to be signed by multiple stakeholders, such as lawyers, doctors and injured claimants. If just one of these individuals overlooks a necessary signature, the entire process stalls. 

Another potential landmine is filling out wage statement forms, which are critical in compensation claims. Traditional wage forms make it difficult for policyholders to know if they’re filling them out correctly. For example, a form might ask how much an injured claimant earns on a daily or weekly basis, but many claimants aren’t used to thinking about their wages at these frequencies. They are often more familiar with their bi-weekly or annual salary and need to calculate their wages to align to the form’s formats.

Barriers like these led to the development of our forms-driven communications solution. It auto-populates information, making it easier for the policyholder to complete forms. It also offers a multitude of pay frequency options and calculates the correct wages for the time period of the injury.

This solution embodies best customer experience practices because it’s more conversational and less cumbersome. We term these automated interactions as “conversational entries” because these digital experiences simulate the efficiency of an in-person interaction. If a recipient answers “yes” to a question, the workflow could then ask for additional information. Answering “no” to a question would prompt the workflow to move on, which is what we would expect when conversing with a human.

Similarly, in dynamic forms platforms, information already known about the customer is not redundantly solicited, thus avoiding frustration on the customer side. Digital forms are built to dynamically react to the individual customer’s payload, presenting a user interface that only asks for net-new information. This approach results in fewer errors, less redundancy, improved accuracy and faster processing speeds. 

See also: Digital Self-Service Is Transforming Insurance

A better experience for insurers

Claimants are not the only stakeholders who benefit from automation opportunities — insurance companies can also reap efficiencies. Insurers have to maintain libraries of documents, making sure every change to a form is stored and reflected as a new version. As a result, the library of forms an insurance company maintains is well into the thousands. Insurance employees have the arduous task of determining which are pertinent to a particular claimant or stakeholder. 

Translating forms can also create inefficiencies. In many cases, documents filled out by claimants are manually translated to state-specific forms per local regulation. Because disability coverage varies by state, it’s critical that claims agents present policyholders with the appropriate state-specific form. Existing composition processes often require an agent to manually select the state from a library of state-specific forms. 

Automated form processing eliminates the issues of translation and sprawling forms libraries entirely. With “document rationalization,” insurers can review their existing documents and consolidate hundreds of state-specific forms variants into a single document driven by business rules. These business rules can use an automated data payload to determine the appropriate state-specific form to distribute, saving the claims agent time and freeing them for more complex tasks. Similarly, modernized data intake processes can embed customer-provided data onto their state-specific form equivalents, eliminating the need for them to get involved.

Additionally, stakeholder follow-ups can be completed seamlessly through business-driven logic, which also enhances the user experience by reducing the number of manual steps in the process. For example, automated follow-up email reminders can be sent to an insured individual if they have not responded within a certain number of days. Decreasing reliance on manual data processes can lead to significant cost savings in terms of personnel and administrative overhead. 

See also: Digital Underwriting Now a No-Brainer

Harnessing the power of automation

The benefits of forms-driven communications go well beyond mere convenience. They indicate a pivotal shift toward a more customer-centric and efficient industry that recognizes customers’ need for personalized experiences. Automation opportunities in print and digital composition suites provide a level of customization not possible with paper-centric systems. This gives customers the confidence of knowing that their claim is being processed accurately. 

The days of insurance customers wading through mountains of redundant paperwork, feeling lost in a sea of irrelevant forms and experiencing uncertainty about the status of their claims are becoming a thing of the past. Thanks to cutting-edge technology and automation, insurers are on the brink of a transformative era of efficiency and improved customer experience. As artificial intelligence continues to permeate through the industry, we will continue to see significant enhancements with forms-based experiences. 

This transformation is about more than insurance forms. Ultimately, it’s about creating connections and building a communications ecosystem that leads to a positive customer, user and brand experience. 

By applying artificial intelligence (AI) to analyze client camera footage, we are seeing the beginning of a revolution in workplace safety.

The Traditional Approach and Its Limitations

Traditionally, workers' compensation has been a straightforward transaction: Employers buy insurance, and in return, injured employees receive compensation without having to sue their employer. Loss control measures, such as safety training and ergonomic assessments, are helpful but often fail to address all potential risks, primarily because they rely on human observation, which has limitations due to time and inability to objectively measure improvement.

AI-Powered Risk Detection: A Paradigm Shift

Applying AI, specifically computer vision, to camera footage marks a significant shift. AI algorithms, equipped with computer vision capabilities, can analyze video feeds to detect risky behaviors, such as forklift safety hazards or too-frequent overhead lifts. This technology goes beyond passive surveillance, actively identifying patterns and anomalies that might precede workers’ comp claims. Unlike traditional methods, AI-driven analysis is exhaustive and unbiased and can examine hundreds of hours of video instead of relying on a short visit by a loss control professional.

Superiority Over Traditional Loss Control

Using AI for risk assessment is superior to only using traditional loss control measures for multiple reasons. AI provides a constant and consistent level of vigilance that is humanly impossible to achieve. For instance, AI can monitor ergonomic practices across an entire factory floor simultaneously, flagging risky postures or movements that could lead to musculoskeletal issues. This level of detailed, continuous monitoring can pinpoint risks that would typically go unnoticed until an injury occurs.

See also: How Wearables Can Improve Worker Safety

The Role of Data Science: Making Sense of the Data

Data science translates the vast amounts of data collected by AI into actionable insights. Techniques like heat mapping can visually represent areas of high-risk activities, helping safety managers understand the frequency and severity of potentially dangerous behaviors. By converting raw data into a comprehensible format, data science enables organizations to focus their preventive measures more effectively.

Empowering Safety and Risk Managers

The insights garnered from AI analysis equip safety managers with a more profound understanding of workplace hazards. This understanding is grounded in tangible data, reflecting actual employee behaviors and environmental conditions. Managers can use this information to devise targeted strategies to mitigate identified risks, such as redesigning workstations, adjusting workflows or providing specific training.

Impact on Premiums

With a comprehensive report on risks, employers can take steps to lower these risks. Adjustments in the workplace based on AI-driven data not only enhance employee safety but significantly reduce the likelihood of workers' comp claims. As the frequency and severity of claims decrease, insurance providers may reassess the company's risk profile, leading to lower insurance premiums. This direct correlation between improved safety measures and reduced insurance costs underscores the financial benefits of leveraging AI in conjunction with cameras.

See also: How to Stop Claims Leakage

Conclusion

The confluence of AI and security cameras at CompScience represents a transformative development in the realm of workers' compensation and workplace safety. By enabling an aggressive, data-driven approach to risk management, this technology is helping businesses to significantly reduce the frequency and severity of workplace injuries. The resulting decline in workers' comp claims not only enhances employee well-being but also provides substantial financial benefits to employers in the form of lower insurance premiums.

As AI technology continues to evolve, its role in shaping a safer, more efficient workplace becomes increasingly important, heralding a new era in occupational health and safety management.