Since the onset of the COVID-19 pandemic, consumers have had higher demand for goods fulfilled largely through the trucking industry. This shift in the U.S. economy ran headlong into an industry already feeling a labor pinch before the pandemic as the previous generation of truck drivers started leaving the road. The resulting mismatch was part of the widespread story of supply chain bottlenecks and inflation that marked the economy throughout 2021 and 2022.

The transportation industry and the U.S. government have addressed this aspect of the supply chain, working on getting more drivers into commercial trucking. Due in part to these actions, including higher wages and benefits, the commercial driver labor market expanded, with more than 50,000 commercial driver’s licenses (CDLs) and learner’s permits issued each month in 2021, according to the White House’s Federal Trucking Action Plan. The 2021 numbers are 72% higher than the 2020 volume and 20% higher than the 2019 volume.  

Internal TransUnion data from a few representative states shows younger CDL drivers are increasing faster than older CDL drivers, with the most significant year-over-year increase among drivers less than 30 years old. This shift came before the enactment of the pilot program to lower the federal CDL age limit for interstate commerce, which became operational earlier this year and could further accelerate shifts by age group.

A strong labor market for commercial drivers has created additional growth opportunities for commercial auto insurers. Still, it comes with a tradeoff of the potential for deteriorating profitability as younger and less experienced drivers come with additional risk. 

Increasing Commercial Driver Risk  

In light of macroeconomic pressures on transportation companies, TransUnion studies show that new commercial drivers who entered the labor market post-COVID have displayed signs of higher driver risk. This sudden change in the risk profile of commercial drivers can make it challenging for underwriters to underwrite and price new and existing policies correctly.  

To quantify this change, internal TransUnion data for Ohio shows that, among new CDLs in the state, younger drivers have significantly higher moving violations and accident rates. Some key findings:

• Across all age cohorts, 23% of new CDLs had moving violations, and 16% of new CDLs had accidents.
• The results by age show both moving violations and accident rates correlate very closely with age. As the CDL driver's age decreases, violation and accident rates increase.
• For drivers under 30, the violation rate is almost double the rest of the new CDL population.

Younger commercial drivers — the fastest-growing age group — also represent the highest risk, and new CDLs are becoming riskier based on distributional shifts to younger ages. Additionally, across most ages, TransUnion internal data revealed that new CDL holders have higher-than-average moving violation rates for commercial drivers within their age group. Given the changing risk profile of new CDLs, insurers should review their processes for monitoring driving record history for new and existing commercial auto policies.

See also: 3 Practical Uses for AI in Risk Management

Greater Violation Insight Through Court Records

The state motor vehicle report (MVR) has traditionally been viewed as the gold standard for verifying driving record activity; however, it often comes with high costs and potential blind spots. Some commercial insurers may elect to mitigate MVR costs by underwriting fleet policies based on a random sampling of drivers, which introduces additional risk to the insurer. Traffic court record data offers a powerful alternative to the state MVR that's more affordable and captures further violation insight.  

Based on TransUnion's internal research using its DriverRisk court record database, 34% of CDL moving violations occurred outside the license state, or roughly two times higher than non-CDLs. These out-of-state and prior license state tickets found with court records are often not captured on the state MVR due to reciprocity rules and other DMV challenges with sharing violations across state lines.  

TransUnion took a deeper dive into moving violations identified within its court record database that do not appear on the state MVR. Internal TransUnion research found that more than 10% of CDL drivers had guilty moving violations identified within TransUnion’s court record database and a “clean” state MVR. As an example of additional activity identified by court records, 28% of all guilty DUIs found in TransUnion's court record database were for commercial drivers with a "clean" MVR. This is information that, if it had come to light, could’ve affected policy pricing and eligibility — and likely would have affected the driver’s CDL eligibility in the first place.  

A Safe Drive to Profitability

As the transportation industry works to hire and onboard the next generation of commercial drivers, commercial auto insurers need to deploy a comprehensive driving record strategy to fully evaluate driving risk exposures and more accurately rate and underwrite policies. Such actions will be critical for commercial insurers to achieve their profit and growth targets for 2023 and beyond.

It was 4 o’clock in the morning when a neighbor, a family with kids and dogs, experienced a home loss in a fire during the pandemic. The family lost nearly everything and needed help and a hug. Eventually, they would also need help getting back on their feet, but at that moment they simply needed reassurance that things would be okay and to have their questions answered. Witnessing this experience firsthand shaped how I view the value and importance of technology’s role in insurance. 

There has been no shortage of insurance challenges stemming from the pandemic. Earlier this year, insured losses were projected at $44 billion, and potentially rising. But these numbers do not consider the emotional toll felt by all. People are at the core of insurance — and insurance requires humanized experiences. Insurers remain resilient and are looking for ways to better serve customers. This includes digitally or with the help of automation, machine learning and telematics, for example. This is a critical evolution for our industry as we change how insurance is being built, deployed and serviced.

Humanized experiences. This guiding light is the only way insurance can successfully digitally transform to serve its purpose. Let’s look at our future through this lens.

Empathy, empathy, empathy!

Those of us in the insurance industry must ask ourselves the following fundamental question: How are we being empathetic? Think back to a time when you were stressed out, experienced a state of loss or generally looked for an answer to a pending problem. All routes are viable – phone, web, friends, peers, agencies and more. It can be a scramble to resolve a challenge in a timely manner. This is not an uncommon situation for those going through a loss, particularly when there is a continuing or unresolved insurance claim. And, according to a Duck Creek survey of 2,000 insurance consumers from around the world, 95% would like to hear more about the status of a claim.

From a carrier perspective, empathy means making programs and platforms simple to deploy and use. When carriers or agents are trying to engage with customers in times of need, technology must work, and we must build with this desire for familiar experiences in mind. Innovation almost needs to be silent, stealthy or – dare I say – invisible. Technology platforms need to look and feel right and give the person dealing with a customer the information they need to deliver the right human experience. From a customer perspective, they want to be reached via their preferred method wherever in the world they might be. Do you offer direct phone calls? Does the insured only want text updates? Do they log into their online portal for status notifications? These are the kinds of micro-decisions that lend themselves to empathetic experiences in a digital world. 

New customer experiences (for both workers and insureds)

In that same Duck Creek survey, 50% of all respondents mentioned that customer service was the determining factor in rating their insurance purchasing experience, over the price of insurance. For all that is said about competitive pricing in insurance (and, yes, it is a HUGE factor), we cannot forget the value of the right customer experience. This is an opportunity for both insurers and insureds to thrive. And it opens the door for new talent, new technologies and new ways of thinking in our industry.

We’re seeing this in real time with the growth of embedded insurance. Once a purchase is made, insurance options are bought to the table through a few clicks or taps. This eliminates friction and helps consumers at the point of purchase. Because these processes are embedded (or connected), policy management (and eventually claims processing) can be streamlined. In addition, coverage can be dynamic, getting customers and carriers closer together. From an employee perspective, new sales and service opportunities await to meet customer demand. Insurers also get a way to be there when customers may not know they need them (for example, travel insurance), enhancing a company’s reputation and protecting against potential loss. This is what it means to be human-centric.

See also: 2022 ITL Yearly Wrap Up

Evolving relationships with policyholders

Relationships between solutions providers and carriers, as well as carriers and insureds, are evolving. This is largely being seen with real-time or usage-based insurance (UBI) or through telematics applications where people get discounts or rewards for their actions. This is nothing new in insurance, but we’re playing in a new sandbox now. Insurance is truly connected, and the maturation of cloud ecosystems means that the right architecture is in place to make “evolved insurance” a reality. This will forever change relationships in insurance. Data has always been critical to insurance, but it’s about to take on a whole new importance.

Just as with any human experience, trust becomes the focal point. Why? Because the more data we share and the more visibility we provide into our lives, the more trust we are placing in others to use information to benefit us. Traditionally, UBI has been very surface-level. One or two data points are every so often used as an incentive or selling point. That is changing, fast — thanks to always-on connectivity in our smart tech-enabled lives. For perspective, one carrier predicted that approximately 70% of new business would come in the form of UBI by 2025. That’s why the more we know about a customer or policyholder, the better we can use technology to autofill critical information and provide real-time support. This means less time spent in the weeds and more time dedicated to the personalized interactions that matter. 

Final take

None of this will be easy to implement in 2023 and beyond. But the journey must begin, from the ideation of solutions to their deployment, to the products offered to insureds, to how people are serviced. Insurance is becoming one long value chain permeating more and more areas within our lives. There are so many areas to innovate for the better. Everyone is looking for the right support system.

Those providers and carriers who can overcome turbulent times with the help of technology, and use these tools to deliver humanized, empathetic insurance experiences will win the day. And, consumers will ultimately benefit from this evolution if the industry gets it right.

This guide identifies the cybersecurity risks associated with rapid innovation and the best practices insurers can adopt to continue to innovate securely. Whether developing your technology in-house or working with third-party vendors, this guide offers 14 steps to reach your potential while securing your innovations with the right disciplines, protocols, and partnerships.

A must-read for insurance professionals concerned with and responsible for the security of systems, data, personnel, innovation, and strategic initiatives.

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Sponsored by ITL Partner: OneShield

2022 proved to be a very disappointing year for markets and insurance portfolios despite its promising start. It was the worst bond market ever and one of the worst in history for equities.

Two large surprises were key: the severe economic fallout from COVID lockdowns in China and the war in Ukraine. The non-surprises were U.S. fiscal and regulatory policies, particularly regarding stimulative spending and restrictive energy policy.

We had expected the U.S. economy to muddle through 2022 to a soft landing with modest inflation. However, the collective impact of all these negative factors proved too much, and we find ourselves with skittish markets -- and possibly peering into an economic downturn in 2023.

Growth Outlook Facing Inflation Challenge

International Monetary Fund (IMF) projections continue to show a stark weakening growth trend across all regions. Its projection for 2023 global growth is 2.7%, less than half of the 6% reported in 2021, reflecting barely 5% for Asia (dominated by China), a meager ½ of 1% for Europe and the U.K., and only 1% in the U.S.

Core inflation readings remain stubbornly high, and that is after adjusting for the impact of damaged food and energy supply chains as a result of the Russo-Ukrainian war. Negative real rates persist in markets around the globe, an unsustainable condition if we are to avoid contraction.

U.S. Federal Reserve (Fed) Chair Jerome Powell has said he will tighten monetary policy until it is "sufficiently restrictive" to tame inflation because the central bank's obligation to keep prices stable is "essential" in his view. The all-important terminal rate -- where tightening stops and recovery can begin -- is the level where the fed funds rate exceeds the inflation rate. Our current best guess is that these two rates cross sometime in the first half of 2023, somewhere above 5%.

There is currently a negative 70 basis-point yield difference between the 10-year Treasury note and three-month Treasury bill, the widest inversion in two decades (see Figure 1). While arguments persist as to whether this inversion is a cause or an effect of recession, its historically high correlation to recessions is undeniable.

The fed funds rate rose 425 basis points in 2022, with more increases expected in the next two years. This has provided continuing support for the U.S. dollar, which is good for U.S. consumers as it helps keep import prices low and eases the impact of inflation, but it's not good for U.S. exports and non-U.S. economies with dollar-based liabilities.

The dollar's strength has been a significant factor in the performance of U.S. assets relative to other global markets. Should the dollar cool, some of that support will likely fade.

See also: How to Plug Gaps in the Market

A Quality Bias as Earnings Slip

Spreads moved tighter across most sectors in the second half of November 2022, though we see them as still relatively attractive. We believe high-yield valuations do not currently reflect the risks associated with a global slowdown and still-elevated levels of inflation.

The opportunities where we see potential value for insurance portfolios are consistent with a laddered curve call; asset-backed securities (ABS), collateralized loan obligations (CLOs) and non-agency mortgage-backed securities (MBS) are shorter in duration, while agency MBS and corporate bonds provide good intermediate options, and taxable municipals as well as some corporate names may be able to round out the long end of the curve.

Conning believes we have moved into the latter stages of the credit cycle, which we refer to as the "reach" phase (see Figure 2). We have moved technology into the "decline" phase, an early indicator to be watchful for signs across the corporate universe. Banks are not yet seeing a rise in non-current loans, which suggests stability for the moment. We are seeing credit card delinquencies edging up a bit, and a few banks have modestly tightened standards.

In our view, this suggests investors may want to consider a bias toward quality because eventually we are likely to see more issuers move into the decline phase. The S&P 500 Index constituents are on track to post roughly 2% year-over-year profit growth for the third quarter. That would mark the slowest annual earnings growth since the third quarter of 2020, which was the height of the pandemic, a concerning signal for our 2023 outlook.

A review of consensus forecasts for 2023 suggests expectations of 5% annualized earnings growth. However, further downward revisions are likely as a recession looms and as increases in the fed funds rate, which always work with a lag, come home to roost.

With the average age of insurance agents being 45.9 years old and people retiring between the ages of 62.3 and 64.6, it is vital that insurance recruits Gen Z and Millennials. However, potential new entrants to the industry are less interested in life insurance careers than ever before. 

In part, this is because of a gap between potential employees’ expectations and the realities of how much work remains to be done on digital transformation in the life insurance industry. Younger generations are looking for jobs in which technology reduces frustrations, increases productivity and enables quick successes. For many life insurance companies, too many obstacles still exist: 

• Working on decades-old back-office platforms using out-of-date languages is not a particularly future-focused call to action for new graduates.
• When it takes five or even 30 days to return a decision on a policy application, how motivated would someone be to get into the business of trying to sell those policies?
• At the moment, many stakeholders are unable to share data and quickly pay agent commissions, which doesn’t inspire engagement in a demographic used to one-click financial transactions.
• While digital transformations are underway across the industry, some companies still rely on ad hoc processes that combine aging, siloed data portals, Word docs and homemade Excel macros. Not exactly what a digital-born entrepreneurial employee is looking for when considering whether to try to build their own advisory practice or whether they should embark on a career at a Tier 1 carrier. 

Technology is part of the solution

The reality is the industry is still mired in paper and too reliant on manual processes. There are still too many critical systems that don’t provide the automations, access to data or integrations among systems that enable employees to focus on more strategic tasks. 

The solution is for insurance companies to automate repetitive and laborious processes by updating their legacy technology‒increasing productivity and creating greater employee engagement.  

See also: Life Insurance Requires New Conversations

Accomplishing this means accelerating digital transformation and prioritizing technologies critical to increasing the opportunity employees have to work at the highest level of their potential. 

Consider initiatives such as:

• Modernize policy admin systems so product innovation can be moved into the hands of the business owners and accelerated. Enable underwriters to automate repetitive tasks (like client data collection).
• Develop a robust data strategy and migrate or convert data into accessible, usable formats so it can be shared easily among stakeholders to enhance decision making and improve analytics and BI.
• Provide advisers with integrated tech stacks purpose-built for their role. Provide them with adviser-specific CRMs that enable them to effectively manage their practice, find prospects and develop client relationships. Integrate those tools with financial and insurance planning solutions, quoting and illustration and e-applications to streamline the entire buying journey.

Resolving legacy technology issues will not only accelerate innovation, increase productivity and reduce costs‒it also sends the message to new generations that the life insurance industry is current, interesting and a place to build a future.

Focus on purpose

Great Place To Work found that Gen Z and Millennials want to work for employers that have purpose and special meaning. Life insurers fit the bill. It’s a mission-driven industry that aims to help families when they are going through some of the most difficult times of their life. By advertising life insurance’s mission and purpose, carriers can attract new talent who are looking to improve people’s lives and work at companies with a purpose beyond profit. 

Emphasizing life insurance’s mission can also help refocus agents who may feel like they’ve been left behind by the push to improve customer experience. If employees are happy and feel like they are working toward something beyond raising profits, it will affect how they interact with policyholders and drive organizational success. 

Be open to feedback

Agents have firsthand experience using insurance software and interacting with policyholders. They know what works and what doesn’t. They know what policyholders need and where the gaps in customer experience are. If insurers want to improve customer experience, they need to listen to their agents. 

Life insurance agents are a valuable resource as they can provide suggestions on how to improve organizational processes and can highlight pain points. If life insurance carriers better understand their agents and their needs, they can, in turn, help the policyholders by providing agents with all the tools and technology they need to succeed.

See also: What Is Happening to Life Insurance?

Conclusion

While it is important that life insurers improve the customer experience, they must not forget about their employees — their most essential asset. Carriers need to inject empathy back into the life insurance business by automating processes that don’t need a personal touch and empowering employees with systems that have human-centered design and allow agents to spend more time working one-on-one with clients instead of completing mundane tasks. 

If life insurers want to improve customer experience and inject empathy into the industry, they must improve employee experience first.

Embedded insurance is one of the most frequently explored topics in insurance today, yet its potential remains largely untapped. We are limited so long as we consider the concept purely with an insurance industry lens. Unlocking the potential of embedded insurance involves a mindset shift from "point-of-sale" to "point-of-design."

The embedded insurance model is not at all new. We define "embedded insurance" as any instance in which an insurance product is sold in conjunction with a non-insurance product. Examples include bancassurance, point-of-sale warranty products, life insurance sold prior to an airline trip and, increasingly, insurance products bundled with vehicles or higher-risk pastimes (such as insurance bundled with ski passes). The emergence of application programming interface (API) platforms has made it possible to bring insurance products closer to their non-insurance vehicles. In these cases, insurance is typically positioned as a "bolt-on" at a point-of-sale (either as an "opt in" or "opt out" choice).

When we approach embedded insurance design as adding a point-of-sale complement, we miss the opportunity to create even more meaningful customer experiences. The opportunity lies in exploring the affinity between the insurance solution and the non-insurance product and how we can build unity in a singular value proposition. Doing so requires introducing insurance at the point-of-design, rather than as a bolt-on at the point-of-sale.

See also: Embedded Insurance: The New Hot Topic

We can think about point-of-design-focused embedded insurance as similar to the example of the original screwdriver set that was included with Google Nest thermostats.

The utility set was designed both to add value to the thermostat (providing an easy-to-use kit to install and remove the device) and to reinforce the overall value proposition of a simple, elegant and functional connected home product. It would have been entirely possible to add an off-the-shelf screwdriver along with the thermostat device that would have served a similar purpose -- yet the development of a point-of-design complement reinforces and extends the core value proposition. Embedded insurance has potential to achieve the same outcome if approached as a design opportunity, rather than a bolt-on feature.

The founder of frog Design, Hartmut Esslinger, articulated customer buying behavior in a way that highlights the need for point-of-design thinking: "Customers don't buy a product; they buy value in the form of experience and emotion." We create a singular experience when we design bundles of products that share an intentional and clear affinity. Weaving the value of protection services into the design of non-insurance products has the potential to render insurance products more tangible. Examples may include, for instance:

• Connected home solutions with advanced safety and maintenance features built into the property that detect and automatically manage risk (turning off appliances or mains supplies and automatically contacting emergency services)
• Personal vehicles designed to support wellness-focused internal recreational spaces as an extension of a bundled life, health and vehicle insurance package
• Sports equipment (shoes and clothing) with sensors woven into them that monitor performance and health as an extension of a goal-directed training and wellness package that includes personalized life and health insurance risk mitigation and protection, and that connects to a branded community of similar users.

See also: Embedded Insurance and the Gig Economy

The challenges in creating point-of-design embedded insurance solutions are significant. The first question is where to start. Which industry and which products should we focus on? Secondly, who would be the right partners to engage? Overcoming the obstacle of different industry-focused mental models and practices and ensuring true co-design will not be easy. And thirdly, how can embedded insurance solutions help agents to effectively manage their book of business?

Underwriters spend up to 40% of their time on non-core and administrative activities like re-keying and manual data entry. 

As a result, many underwriters fail to service all the requests for coverage they receive. Time and energy that could be allocated toward more meaningful activities — like improving broker interactions, effectively pricing risks and winning new business — is wasted due to redundant, manual processes and inflexible systems. 

Brokers grow frustrated when they don't hear back from underwriters in a timely manner. Likewise, low-value activities often take time away from more thoughtful risk analysis — ultimately leading to poor risk selection and portfolio management. 

In a business environment where time is one of your organization’s most valuable assets, process efficiency is a top priority. But technology is maturing just in time to respond to common challenges in the underwriting world, allowing underwriters to refocus their time on what they do best. 

A day in the life of an underwriter 

As an underwriter, your first task of the day is to wade through your inbox and identify the risks worth opening — you’re looking for a profitable needle in a haystack of emails. An hour later, you’re 80 pages deep in the first risk you’re analyzing when you realize the broker failed to flag that coverage is needed for something your reinsurance doesn’t handle. 

So, you pass on that risk, meaning a wasted hour on your end. Although you’re frustrated, it’s still early in the day so you shake off the error. Things are looking better as you start reviewing the next risk in the queue, until you discover this broker also made a key oversight — they failed to include the engineering report on the request's most important asset. 

While waiting for a response on that information (which takes another hour), you pull up the rest of the applicant’s information and documents, which includes miscellaneous web forms and Excel spreadsheets. When you enter the applicant’s information into your workbench, you receive a clearance error because you mistyped the name of the cover and misplaced a decimal point when inputting the rebuild value. You contact another broker to resolve these issues and get an out-of-office email in response. 

Before you know it, your day is over — and you’ve failed to move forward even a single risk. Not only is your own work incomplete, but you haven’t had a chance to respond to brokers on other potential business opportunities. 

While this example is a worst-case scenario, it’s not far off from an average day for underwriters. Frankly, underwriters have struggled to service the volume of requests they’ve received over the past few years in a soft market. So how will underwriters cope in today’s hardening market — with submission volumes multiplying — where brokers are searching high and low to find capacity?

Scaling to meet these insurance challenges isn’t achievable via traditional methods like increased headcount and expense bases. You need technology intervention to close the gap. 

See also: 2022 ITL Yearly Wrap Up

Outdated technologies and inflexible systems undermine your underwriters’ success

Inefficiencies are all too common in underwriting. With loads of important information buried in disparate documents and forms — and processes that make it difficult to navigate business needs — underwriters are simply not set up for success. 

If your technologies and processes are weighing you down, consider whether the statements below apply to the underwriters at your organization. If so, it’s time for a tech upgrade. 

1. Disjointed data limits automation and efficiency. Your underwriters manage and extract data from siloed and often complex sources like medical reports, policy documents, applications and survey reports. The lack of standardization makes it difficult to automate data extraction, so you rely on time-consuming and costly manual data processing efforts. 

As a result, underwriters spend too much time sorting through, keying and compiling data. They lack time to respond to brokers in a timely manner, which damages the customer experience and causes underwriters to miss out on new business opportunities. The ability to respond swiftly to brokers is often the key to winning more of the business you actually want to write — and digitizing this process relies on clean and accurate data lifted straight from broker submissions. Support your underwriters with technology that facilitates accurate automation, regardless of inconsistent data formats. 

2. Underwriters can’t access the right data at the right time. Do your underwriters waste time waiting for answers and documents? How much time do they spend analyzing a risk before they identify a red flag or a treaty gap that prevents them from writing the risk? Without the right data at their fingertips, the insurance application drags on, wasting time and resources. 

At the same time, underwriters grow frustrated because they would rather spend time on initiatives that add value to the business instead of waiting for information and answers that may never come. Underwriters require technology that provides access to accurate data so they can maintain efficient processes and reallocate the time they would spend waiting around to more strategic initiatives. 

3. You lack confidence in your risk assessment and pricing. Human error is inevitable if your organization relies on manual processes. An underwriter or actuary can easily miss a key data point hiding in an Excel spreadsheet cell or enter duplicate data — especially when trying to quickly replicate loss runs that are baked into a PDF. With human error likely, it’s important to build additional steps into your process that help check (and then double check) inputs. 

See also: Why Underwriters Don’t Underwrite Much

To more accurately price risks and reduce losses, your underwriters require tools that provide easy access to each piece of relevant information — and that data must be captured accurately. Without a digital repository of information to draw insights from, underwriters are left to rely on experience and gut feelings, with no way to systemize insights, eliminate cognitive biases and pinpoint poorly priced risks in the market. And there's no point in investing in data augmentation if it’s being appended to an inaccurate or incomplete record.

If you aren’t sure where you stand with your current technologies, the most important step is to listen. Survey your underwriters, gather and analyze the results and determine how to proceed from there. To keep conversations aligned on your overarching business needs, center discussions on strategies to achieve scale and automation in an industry that’s filled with deep expertise and built on human relationships. 

You’ll find that the right technology won’t replace or automate the role of the underwriter — it should empower them to focus on bringing more value and revenue to your business.

As carriers, agencies and brokers begin the new year, economic uncertainty is on everyone’s mind, and insurers are looking for ways to increase and maintain wallet share. One thing is certain: Loyalty is earned and not bought. A new year is a great time for a fresh start, and decision-makers are evaluating their organizations’ approach to core functions and workflows, including the role insurance technology plays in creating loyalty and generating revenue.  

They’re taking stock of the customer experience across the board, from quoting to claims and payments to referrals, in the context of the entire insurance ecosystem and its multiple stakeholders. Many are finding they’ve drifted away from the cadence they were striving for, and they’re struggling to support their distribution and partner ecosystem and stay top of mind with customers. 

In 2023, doubling down on loyalty will be key. For insurers, this starts with reflecting on why you’re in the industry in the first place. Insurance company slogans are all about rock-solid steadiness, reliability and protection and caring, and that’s why you’re in the business -- to provide guardrails so individuals, families and businesses can move seamlessly and safely through their lives with the appropriate coverage.   

That mission is shared throughout the digital insurance ecosystem, so now is a great time to get back to this promise by doubling down on loyalty. By building trust in a social environment where we are at a low point and showing up to support your ecosystem, you can defend wallet share. Here’s a look at how you can harness trends to create more loyalty and trust across the board in 2023: 

• Sharing quality data: It’s easy to lose sight of this critical objective because there are so many stakeholders involved, but carriers, agencies, brokers and distribution networks need to share fresh, relevant data across channels and as needed to better serve customers. Sharing data empowers the digital ecosystem with the right information at the right time to leverage the investments you and your partners have made in the cloud. But while collecting data securely and enabling data application at scale is important, it’s time to challenge yourself to make the most of it by using data to create value across the entire customer journey. Start creating loyalty at the first interaction.  
• Refining your ideal customer profile: The current economic situation isn’t the only factor that contributes to a pervasive societal feeling of unease. Weather patterns are changing. Concerns about cybersecurity are on the rise. It’s time to ensure you are growing and adjusting your business to match your ideal customer, while at the same time acknowledging that your ideal customer may not be who you started with. Sometimes your ideal customer will change, and at other times your product will need to change so you can continue to support your ideal customer. It’s integral to the promise you make to customers to be there for them, so help customers by providing the right policies for them.  
• Bringing policyholders and end consumers into the conversation: This isn’t a new trend, but communicating with customers is even more critical in a time of uncertainty and when consumer spending is down. Obtain the appropriate consent from the customer and get the data you need to be part of their life on whatever channels they choose. Help customers understand what’s covered and what’s not. Communicate about policy changes. Remember that policyholders typically don’t shop for insurance until they buy something new that needs to be insured or after filing a claim. That’s when churn happens, but you can prevent it by working to build a long-term relationship with customers at the start and respecting their communication preferences.  
• Delivering convenience by moving seamlessly between channels: The demand for convenience is a persistent trend, and it will continue. So it’s essential to create convenience at every point of contact, from the first quote to claims resolution. Optimize your workflows and offer multiple channels so customers can complete a task from the first time they reach out to you. Allow them to move seamlessly through channels, i.e., from a call to a text to a secure web interface. The old customer service standard used to be “first-call resolution,” but in a multichannel world it’s now first-touch resolution.  
• Providing reassurance on privacy and safety: With trust at a low point, it’s important to assure all stakeholders that you’ll be honest and straightforward and follow through on this promise. That goes for end customers and the partners in your ecosystem. If something goes wrong, get out in front of it and be forthright. Admitting mistakes and working to correct them builds trust and nurtures valuable relationships.  

See also: What's in Store for Us in 2023

Here’s another prediction to keep in mind: Times like these are when bold leaders who believe in trust and value can really shine, so challenge yourself to be that intrapreneur or entrepreneur. If you're honest and upfront with people, offering convenience, sharing data and being a good partner, you’ll be in the best position to fulfill the industry’s promise of stability and safety. And trust, loyalty and success will flow from that, even in an uncertain world.

When the pandemic hit nearly three years ago, the world didn't have a choice: Everyone who could work from home worked from home. And after we all sorted through the many kinks -- figuring out when to mute ourselves so colleagues didn't hear toilets flushing on Zoom calls, how to keep the cat from jumping onto the keyboard and in front of the camera, how to firmly signal to the kiddos that Mommy and Daddy are working, etc. -- work from home seemed to go well. Companies reported increased productivity, and employees appreciated the flexibility, as well as the time and money they saved by not having to commute.

The question was whether the trend would last. Certainly, some major companies indicated it would, by moving out of big chunks of office space. And employees who want to work remotely seem to still have considerable leverage, given the low unemployment rate and number of job openings. But some companies, especially in the tech world and in finance, have initiated returns to the office, and they are often bellwethers. 

So, where do we stand? Well, LinkedIn has weighed in with data based on a study of paid employment ads on their site, and the answer is: Yes, remote work seems to have peaked last summer.

Actually, the study isn't just from LinkedIn and based on 60 million paid job postings. It's from a longtime friend and colleague from my days at the Wall Street Journal, George Anders, who is now senior editor at large there. I trust LinkedIn's data plenty. I trust George implicitly.

Here is the basic finding:

Now, the data don't even show that the percentage of job postings for remote workers has headed back down to where it was at the beginning of 2021, after vaccines had started to become available, let alone to where remote work was during the first, unrelenting wave. But it does show what looks to me like a significant trend. 

George quotes Marc Benioff, the CEO of Salesforce, who was an early enthusiast about remote work, as worrying in December about whether remote work "could undermine the cohesive, get-it-done culture of the physical workplace. 'Are we not building tribal knowledge with new employees without an office culture?' Benioff asked in an internal Slack message at Salesforce. He played coy in his note, saying he was 'asking for a friend.' But Benioff’s message quickly leaked to the media, generating wide debate about whether remote work might not be such a win for employers after all."

That's not to say that a wholesale return to the office is a done deal. George reports that "LinkedIn’s Economic Graph team tracked the intensity of application rates for what’s now a shrinking pool of remote-focused jobs. Candidates’ appetite for such positions is so keen that remote jobs in recent months have been getting as much as 50% of all job applications tracked by LinkedIn — even though such positions are barely 15% of the total jobs pool."

In other words, while employers may want everyone back in the office, that doesn't mean potential employees are ready to head there.

I, for one, am a big fan of remote work. That's pretty much been my work life since I became a reporter at the WSJ in 1986 -- you're expected to be out and about, and you're judged entirely by what you get into the paper, not by whether you're in the office. When I left the WSJ to become a partner at a consulting firm a decade later, I ran an organization of remote workers that was successful enough that our little publication was a finalist for the National Magazine Award for General Excellence. And I've been working remotely ever since. 

I also think that a large percentage of jobs in insurance are amenable to remote work, and that any serious effort to deal with the industry's talent crisis needs to lean into workers' desire for flexible work schedules. 

I just think it's worth noting that the peak for work-from-home appears to have past, at least according to the hopes of employers.

Cheers,

Paul

The New Year is the perfect time to take a moment to show gratitude and thank the people who contribute so much to our businesses -- employees and clients alike. After all, they are two of the most important parts in making a business successful.

I. Employees

Our remarkable team works tirelessly, day in and out; whether it be delivering solutions to customers or creating ground-breaking innovative solutions. With their dedication, entrepreneurial energy and commitment, we are able to capitalize on opportunities that drive success all year round - making them an integral part of realizing any dream.

As leaders, we owe a debt of thanks to our employees for their hard work and dedication in making our businesses successful.

II. Partners

Business success relies on developing positive partnerships with our clients. By listening to their needs and considering their perspectives, we show them that they are valued partners in the process -- not just customers but collaborating partners.

This helps build strong relationships based on mutual trust and respect, where all parties benefit from working together toward shared goals; something that often leads to friendship among employees and clients alike! While there may be challenges along the way, when you treat your clients like true partners it sets everyone up for greater opportunities down the road.

III. Perseverance

Succeeding in any goal requires a combination of both perseverance and luck. It's not enough to just rely on chance; having the inner strength, motivation and courage to bravely tackle whatever challenges stand between you and your goal is equally essential.

I've been fortunate enough to have the right people come into my life at the right time, and their support has been instrumental in helping me reach my goals. I'm grateful for all the help and guidance I've received along the way, and I know that, without it, I wouldn't have achieved as much as I have.

There really is no "i" in team.

IV. Leadership

Leadership is the ability to guide and direct others toward a common goal or vision. It involves inspiring and motivating team members, setting clear expectations, providing support and guidance and making tough decisions when necessary.

It's important for leaders to show appreciation and gratitude to their team members for their hard work and contributions. When team members feel valued and appreciated, they are more likely to be motivated and engaged in their work. This helps foster a positive and collaborative work environment and can lead to better outcomes for the team and organization.

Leadership will have a significant impact on the success of a team or organization. Showing gratitude and being open to feedback are key components of effective leadership that can help to inspire and motivate team members.

See also: 7 Things Sailing Taught Me on Leadership

So what does the sailing photo have to do with gratitude?

That's me on the bow of an Oyster yacht racing at Antigua race week. Sailing is one of my passions. Without success, I'd likely not be able to to sail as much. For that and for all those who have put their trust in me and helped along the way, I am truly grateful.

I hope this year brings all the growth and success you wish for.

Fair Winds and a Happy New Year!