In the 1993 movie Groundhog Day, Bill Murray plays a Pittsburgh broadcaster stuck in a loop, replaying the same day, Feb. 2, over and over. The screenplay, written by Danny Rubin and Harold Ramis, was ingenious in its ability to make us consider what we would change in a day if we had an unlimited number of do-overs. Would we repeat the same mistakes? Would we suffer through irritation at replaying the same scenes again and again? Or would we choose to get better at what we do, adapt to fix the issues around us and maybe even try to improve the lives of others.

Though every day in a distributor’s world is different — different people, different coverages, different issues to solve — current distribution tools and methodologies may look the same way they have looked for years, even when both insurers and distributors know that there is a better way.

Distributors and insurers wake up each day to accomplish their goals within the context of the insurer’s present level of distribution maturity. Every day, both sides see the positives and negatives of processes that could be better. Are they following a path that will take them to real distribution maturity?

It’s an important question because insurers and distributors rely so heavily on one another. What insurers need, in many cases, is an understanding of what will happen tomorrow if they are willing to make some changes today. Can insurers envision the opportunities clearly enough that they are motivated to switch gears and change something right now, and tomorrow, and the next day? What will their efforts mean to courting and keeping the best distributors?

Majesco and PwC recently released a report that examines this very issue; Distribution Management: A Path to Maturity. The report outlines in detail five distinct levels of distribution maturity. What are the inherent characteristics of Level 1? What improves at each level? How does the learning from one level transfer into the business wisdom at the next? Is there a perfect ending?

The end goal is for distribution management transformation to deliver value across three key dimensions:

• Improve productivity and next-gen distributor experience.
• Increase operational efficiency and effectiveness.
• Improve insurer ability to adapt to change.

Climbing the Maturity Curve (The 5 Stages of DM Maturity)

Stage 1. Current State Chaos

Stage 2: Developing Operational Efficiency

Stage 3: Operational Efficiency Achieved

Stage 4: Anticipating Customer Needs

Stage 5: Predictive Analytics & AI

A Day in the Life — Challenges, Hurdles and Efficiencies

For each of the stages, we’ve envisioned what it is like to live each day from the insurer and distributor perspectives. Is technology hurting or helping? What hurdles need to be dealt with before moving to the next step? As you read the list below, consider where your organization might be placed along the curve, then keep reading for a glimpse at the capabilities and efficiencies you might gain at the next step.

1. Current State Chaos

The earliest stage of the maturity curve is characterized by an enormous amount of manual effort just to stay a step behind. Fundamental tasks like research or triaging of issues are extensive and time-consuming for business users.

On the technology side, users must have a keen awareness of where different data lies across a multitude of offline documents or tables due to the abundance of siloed spreadsheets. As a result, carriers see centralization of knowledge in a few highly experienced resources. They experience long replacement cycles, inconsistent service quality and data management challenges. There is an inherent risk of this tacit knowledge being held by a small group of employees, many of whom may be quickly approaching retirement age. What happens when they leave and take this knowledge with them? All of this means that the organization must focus on survival rather than thriving.

From a distributor perspective, “ease of doing business” is nonexistent. Changes are time-consuming. Call volume skyrockets due to a lack of transparency and access to information. Lots of time is spent troubleshooting or researching what happened, when and why. Issues can’t be addressed quickly and result in a lot of incorrect transactions. Growth, let alone retention of top distributors, is a challenge, at best. It is hard to get the benefits from any technical investments without integrations to other core systems or the availability of digital information.

2. Developing Operational Efficiency

At the second stage of the maturity curve, carriers start to develop simple, yet fractured automations that break up the monotony of manual heroics. While this is a relatively improved stage, there will still be a high degree of manual effort.

Many carriers reach this phase and get discouraged with the results. Historically, this is an awkward period that should be viewed as a “practice phase” based on early results, rather than the endpoint of a transformation for the organization. Triaging issues remains a complicated and time-consuming process for business users.

On the technical side, legacy data issues are common, and, while they remain costly, the majority of data is starting to be passed from application to application via automated jobs. There will still be some lingering instances of legacy operational data living offline for accepted, fringe business cases only.

Operational efficiencies are still being created at this stage, but a day in the user’s life still starts and ends with operational inefficiencies. Business users will still spend considerable time triaging issues, a process that requires navigating multiple applications to find the most useful data. Distributors might be able to view select statements through a basic online portal at this stage, but little else is available online, and they are often still dealing with the inefficiencies of paper mail. To move from the first to the second stage, it is important carriers start optimizing various processes via automations, as well as implement a basic portal with at least foundational capabilities. Carriers will still need to add automations to adapt in real time.

3. Operational Efficiency Achieved

Once a carrier reaches the third stage of the maturity curve, enough automation has been implemented that the carrier can notice the operational efficiency that has been achieved. At this stage, critical business processes are automated, freeing up the bandwidth of business users. Without having to invest as much time and energy into firefighting, users can prioritize research that drives continuous improvement. Technology efficiencies are driven by batch and real-time integrations, allowing data to flow across applications without manual manipulation.

The introduction of siloed but now digitally enabled self-service tasks is the hallmark of the Stage 3 producer experience, laying a foundation for “ease of doing business” going forward. Many core platforms have made investments to allow for easier deployment of digital experiences. Producer portals allow distributors to view and filter all statements online and download the latest available product information.

One holistic benefit of achieving these operational efficiencies is that carriers will be able to increasingly tie their distribution strategy to operational priorities. Newfound abilities such as expansion into new channels or the piloting of next-gen technologies will offer tangible proof that progress is being made toward a true distribution management transformation.

4. Anticipating Customer Needs

At the fourth stage of the maturity curve, all users at a carrier are increasingly able to select how and where they want to make improvements to the business. Here, automated reporting and business processes allow users to proactively service distributors; all core operations require very little effort from users. Business users can more readily identify new distribution channels or groups, and they are able to capitalize when market opportunities present themselves. Users are further aided by the fact that customer, policy, claims and commissions data has been well-organized in a logical and physical model; it is both efficient and intuitive to get access to essential information.

The producer portal moves beyond siloed transactions to a holistic experience from onboarding, to servicing, commission statements, lead generation and more, redefining “ease of doing business.”

Business users invest little to no effort to access the information they need, and portal capabilities are fully self-servicing with human interaction being almost a luxury upgrade. Leadership at the enterprise level will be able to start tying measurable outcomes to the distribution strategies implemented during the transformation. At the channel level, incentives will be based on target markets, and business will be driven to those channels that are most productive.

5. Predictive Analytics & AI

Very few carriers, if any, have made it to Step 5. It’s the right vision to aim for, though, because it encapsulates what is currently possible.

Once carriers reach this stage, data-driven predictive alerts for business users will enhance the timing, speed and quality of decisions related to managing their distribution channels. Core processes will be conducted via automated data-driven decision making, rather than highly manual intervention by business users. Technology will inform these automations given the presence of event-based triggers and real-time integrations.

Manual effort is limited to fringe exceptions. Distribution capabilities should be mature enough that carriers can have a comprehensive understanding of their customers. They will only develop services or strategies that tap into ecosystems when it clearly makes sense for what their partners want. Distribution strategy will be fully informed and tuned to what their data is saying. Carrier technologies will be nimble enough to consistently and effectively meet the needs of customers.

You Can Get There From Here!

Carriers and distributors can escape that groundhog feeling with incremental improvements and a vision of a transformed experience for everyone. In fact, the vision is a great place to begin. What will a successful transformation look like? What are key metrics to track throughout the journey? Is this something we can do alone, or should we seek a partner?

Every organization is different, but all insurers should be working within a growth strategy that includes next-gen customer and distributor experiences. The capabilities needed will be found in next-gen distribution management technologies.

For an expanded look at transforming distribution management, be sure to download the Majesco/PwC report, Distribution Management: A Path to Maturity. For a closer look at how to achieve the right mix of technology and flexibility in your operating model, tune in the latest Majesco/PwC podcast on Adapting and Growing.

At one time, life seemed to be compartmentalized. Work was work. Home was home. You commuted to work or business. Your work stayed at work. You slept and ate at home. You might drive back out to a movie or a restaurant on the weekend. With the exception of agricultural jobs, where home and farm were often the same, most of us lived and operated within these compartments. Insurers understood the compartments and insured them appropriately. Insurers and their agent channels knew how to catch us where we would be most likely to sign up for insurance. They were adept at selling.

Convenience and technology, however, kept creeping into the picture. We had our newspapers and mail delivered to our homes but now receive them digitally. We watched movies at the mail but now download or stream them. We had pizza delivered and now can have nearly any restaurant food or groceries delivered. We ordered books online with a click and now can download them to read on tablets.

This trickle of ease and use of technology gave us a taste of how convenience could improve our lives. Aspects of our compartments were seeping into the other compartments. This made selling a more difficult process. All industries had to rethink their products and services from the standpoint of the customer – their desire for convenience and use of technology. If you couldn’t get people to go to their entertainment, you had to bring it directly to their homes. If you couldn’t get people to walk into your bank, you needed to place your bank on their phones.

We are now evolving beyond convenience. Life is no longer compartmentalized. It has gotten complicated.  Customers want simplification and a holistic view to manage their lives across many different areas. And insurers have to pay attention to the changes. What happens when a large portion of the population begins to drive their cars for work instead of to work or many people shift to work at home instead of working “at work”? What if people want value-added services to manage risk – from their homes and autos to their health and more? These are radical shifts that are rewriting the stories of insurance. The nature of home, work, business and family are erasing the conceptual lines that kept insurance “traditional.”

In this blog, we are going to give you a high-level peek at some of the trends we found in our annual consumer survey. Some of them will make you want to press fast-forward on your strategic plans. Others may cause you to rethink how your organization fits within other ecosystems that customers want and are willing to buy insurance from. No matter what you find, you’ll be better-informed as you grapple with important decisions and future plans.

The Gen Z and Millennial Lens

Though Majesco’s report covers all age groups, insurers that are concerned about the near future will be most interested in the shifts and interests among Gen Z and Millennials. They are now the dominant buyers for both life and non-life insurance products, with a focus on five segments: life/health/accident, employee/voluntary benefits, auto, mobility and homeowners/renters insurance.  

Millennial and Gen Z life journeys have not followed the traditional path set by older generations, with high percentages remaining single and not married but with partners. They have made other significant lifestyle shifts from older generations that result in different risk needs that require different insurance needs.

Over the next three years, Gen Z and Millennials plan to accelerate their life journeys through rapid change, outpacing the older generation in all aspects, including twice the average rate of changes in the home, work and mobility aspects of their lives.

These shifts align with a shift in expectations regarding the types of insurance products they need, the necessity for value-added services and the demand for personalized underwriting. This will pressure insurers to accelerate and improve IoT and data strategies.  

The Millennial and Gen Z populations desire a holistic customer experience – where digital offerings bring together other products and services to help customers manage their lives. This necessitates a full view for customers across their insurance products, value-added services and non-insurance products. When insurers can’t deliver that view, a gap arises between customer expectations and what insurers are delivering. This gap opens the door for new competitors to meet that expectation – either directly or through partnerships with insurers. Just consider what companies like Toyota, Sofi, Ford, Petco and Outdoorsy are doing by offering insurance products through embedding or partnering on channel options with various insurers. This year’s research adds clarity to the market areas where insurers are currently missing opportunities.   

CAUTION: Opportunities Ahead

If change brings opportunity, then insurers are right now staring at an ocean of real opportunities. Let’s look at the changes that are most prominent.

Millennials’ life journeys have not followed a traditional path, largely due to the severe economic stress of the 2007-2009 Great Recession as they entered the workforce. Since then, many have achieved a firm foothold in their life journeys, with a growing majority owning their homes and having children. Yet, high percentages of Gen Z and Millennials are single (42%) and not married but with partner (11%), reflecting a significant lifestyle shift from older generations, which likewise reflects different insurance needs as seen in Figure 1.

Figure 1: Life stage characteristics of today's insurance customers

Over the next three years, Gen Z and Millennials will outpace Gen X and Boomers in lifestyle changes in all aspects, including twice the average rate in home and work categories, as seen in Figure 2.  Each of these aspects is assessed in detail in the report over the seven-year window.

Figure 2: Expected life stage changes in the next three years

Every area that directly affects the need for and use of insurance is prime for growth. The only question is whether insurers are prepared to capitalize on that growth. In many cases, the growth won’t be through traditional methods of selling or even through traditional products. Digital plays a HUGE role in their expectations. And holistic lifestyles and the desire for convenience will push insurers to digitize and innovate their channel and ecosystem partners to place their products at the point of life events and important larger purchases.

COVID-19 Hastens Market Shifts by Making Insurance Top-of-Mind

A connected facet of insurance’s potential growth and change is a new protective mindset. A crucial factor influencing all generations is COVID-19 and customers’ views on insurance. Nearly half of Gen Z and Millennials and 40% of Gen X and Boomers in this year’s research felt that insurance has become more important due to the pandemic. (See Figure 3.)

Figure 3: COVID's impact on the importance of insurance

Is “the COVID Effect” a fad? Possibly, but unlikely. Even if COVID were to evaporate overnight, general uncertainty over new weather patterns, social and political unrest and property investments means that insurers need to respond quickly with new or modified products, value-added services and customer experiences that meet rapidly changing customer needs and expectations. The work and home trends that were accelerated by COVID have been around long enough to have made a lasting impression on both the economy and consumer sentiment.

Opportunities in the Widening World of Work

During 2020, 42% of Americans worked from home, nearly double the rate from 2019. Gen Z and Millennials reflected higher rates of gig work as both independent contractors and rideshare drivers in 2021, likely reflecting job losses, resignations from jobs and seeking new job options. (See Figure 4.) This means that geographic distribution of “the workplace” is now wider than ever before. This segment anticipates a steady continuation of independent contractor work but a decrease in rideshare work back to pre- and early-COVID levels as their employment and personal financial situations stabilize.

Figure 4: Gig economy work trends

True to this generation, Gen Z & Millennials expect to be in different jobs (45%) and working remotely (40%), continuing the transient aspects of this generation that will put new demands on employee benefits to be flexible and portable. Nearly 25% indicate they will start a business, highlighting an opportunity for insurers to develop relationships with employees directly to keep them as customers as their lifestyle changes.   

These changes reflect growing opportunities for insurers to cover the shifting worker and employer needs. From on-demand benefits for gig/independent contractor work to work-from-home setups – employee and employer needs are dramatically changing. Innovative options like Nationwide’s work-from-home insurance, which bundles home/renters, usage-based auto and identify theft insurance, is an example at the forefront of this change.

Figure 5: Expected changes in work in the next three years

Opportunities in the Financial Sphere

Gen Z and Millennials have consistently trailed the older generation in banking and investing by an average of 10% to 15%. This offers an excellent opportunity to engage them now to address a broader financial well-being approach by developing a partner ecosystem that brings together other financial offerings and value-added services. Insurers can take advantage of Gen Z and Millennials’ high levels of interest for both planning (money management, financial planning, debt management) and financial loss prevention and recovery services (identity theft insurance, credit monitoring) as first areas of focus for partnerships (Figure 6). 

While Gen X and Boomers don’t feel the same need for planning tools or services, they are still interested in financial loss prevention and recovery services to protect their financial assets as they enter or are in retirement.

Figure 6: Interest in financial wellness value-added services

Product Placement: An Opportunity for Ecosystem and Partnership Development

For every opportunity, however, insurers will need to ascertain the best route into the market. Majesco’s research into digital shopping trends highlights the need to not just be online but to think innovatively around online positioning with partnerships in areas where people are already shopping.

The last year has accelerated the use of digital and online options across all industries. The level of impact is substantial with 66%, of Gen Z and Millennials and 54% of Gen X and Boomers changing their views of the importance of digital and online capabilities due to COVID as seen in Figure 7. McKinsey research found that online purchases increased 30% since the beginning of COVID and have remained at this level.

Figure 7: COVID's impact on the importance of digital capabilities

And expectations continue to rise for digital and online.  Both generational groups expect to do more shopping and buying online, outpacing in-store or in-person shopping by 10%. Once again, positioning is best where life happens. Carvana, for example, offers both gap insurance and mechanical protection "at the point of sale" for any car in its inventory. Are insurers prepared with the technologies and digital connectivity that will help them fill the growing gaps in online placement?

Mining the market

Just as Bitcoin was an industry to be “mined,” consumer and business trends are also filled with value for those who read the research. The viability of the insurance industry is connected to demographic trends, market trends, customer expectations and adoption of new technologies. If we lose touch with our customers, both current and future, we lose business.

Don’t miss out! You can access Majesco’s latest mine of valuable consumer information by downloading our 2021 Consumer Survey Report. And be sure to watch our recent webinar, Your Insurance Customers: A Crystal Ball of Big Changes in a Small Window of Time.

The tech industry is growing and evolving at an exponential pace. New opportunities and innovations are appearing every day.  The majority of college degrees earned are in STEM fields. U.S. tech budgets will expand by 6.7% in 2022. And competitive compensation, flexible hours and worldly culture are attracting a young, dynamic workforce. But for all this change and development in the industry, one aspect remains unfortunately static — lack of gender diversity.

Despite the industry being based on the notion of innovation and disruption to the “old ways”, the perception of women’s capabilities and contributions to the industry is unfortunately still rooted in the heavily biased past. Women are underrepresented in technology leadership, presenting fewer role models and possible allies for others entering the industry. 

This often starts at the ground level, where few women choose to be in STEM roles. According to the National Girls Collaborative Project, women received more than half of the bachelor’s degrees awarded in the biological sciences in 2015. However, women received far fewer degrees in the computer sciences (18%) and engineering (20%) that same year. 

This gap is societally based, and change needs to happen at a core level. Not just with how men see women in the industry, but with how women see themselves and their potential for success. There are needs that go beyond formal education. Mentoring programs can be vital first steps to encouraging young women to enter the tech industry. 

When I started this company, I knew I wanted gender diversity to be at the heart of our workforce strategy, and that has enabled us to follow through on the promise. Currently, 50% of the executive roles are filled by women, and 46% of the entire company are women. Gender representation in the tech industry needs to be balanced because diverse thinking is imperative both for innovation and for agile execution. We have made it a core initiative to be more inclusive of women in hiring, promotional and cultural strategies. We founded the Planckademy, an internal training course for inexperienced college graduates, which helps train developers — a field with very low female representation. In the class of 2021-2022, 57% of participants were women. 

Donating to and volunteeing with numerous nonprofits that address this agenda is a beneficial exercise, as well. One organization we like to support is SheCodes, a non-profit organization that offers free training in coding for women (by women). Our executives have refereed hack-a-thons and recruited female developers who have gone on to make amazing contributions to our organization. 

To address gender disparity, organizations of all sizes must first understand why representation of women is beneficial. At a tech company, situations evolve quickly, and there’s not a lot of time available for research and decision-making. A diverse team includes different backgrounds and brings new ideas to the table. Taking in these viewpoints allows you to broaden your perspective as a leader. Being better-equipped to react and adapt leads to a better organization and a healthier bottom line.

The evidence shows overwhelmingly that diverse companies have stronger employee engagement, talent retention and operational success. When an employee feels seen, appreciated and represented, she or he is inspired to deliver better work, contributing to the financial health of the organization. 

Planck also gives higher ranking to investors with female partners and women in key roles. The board of directors manages the CEO, and, thus far, I have selected three female directors. My objective for Planck is to achieve 51% female representation overall, reflecting the makeup of the globe. 

See also: How Women Can Cut Through the Tangles

While this shift in mentality needs to come from the core, change begins at the top. CEOs and founders have the responsibility to choose wisely and consciously. Be mindful of hiring in a balanced fashion. Take a hard look at your own personal biases, acknowledge them and consider them when decisions are made. Make sure that women’s voices are heard in all discussions regarding the work environment and culture; that diversity, equity and inclusion are core components of your employee experience and brand; set the bar higher in the industry by speaking out about gender disparity in tech and contributing to gender equity conversations and initiatives. It can pay dividends to provide internal education opportunities and career paths to create opportunities for women to gain experience and excel.

Organizations must frame diversity as a competitive advantage and build hiring strategies around that goal. You can start making a difference at your company by considering the concerns of women in the workforce. A few standards we follow include:

• Promote an inclusive, clean and respectful workplace
• Provide flexible work schedules and fully remote options
• Perform formal annual salary reviews to maintain a zero gap in gender pay equity
• Practice role-modeling by promoting women from within and scheduling internal presentations by successful women from the tech industry 

COVID-19 shifted the landscape of business worldwide, and the enduring lessons of the pandemic have the potential to further the role of women in tech. In 2020, millions of women left the workforce due to the caregiver crisis – sacrificing their jobs to take care of children and loved ones. Since that time, extended lockdown measures have completely changed the way the world does business, normalizing the concept of a fully remote workforce. In 2021, according to the U.S. Bureau of Labor Statistics, the tech industry saw a significant increase in resignations over the previous year. In a tight labor market where all employers are competing for talent, tech companies should consider reaching out to talented female candidates with offers of flexible work options and a better employee experience.

Sponsoring women’s communities with meetups and nonprofits, creating a supportive environment for all employees to thrive and building varied routes to success illuminates the pathways for tomorrow’s leaders — men and women — and fosters a stronger tech industry. A vision we all aim to achieve.

The world generates 2.5 quintillion bytes of computer data per day. That’s 25 followed by 16 zeros. What’s more, 90% of today’s data was created in the past two years, meaning that big data’s role is massive and growing.

In the insurance industry, all this data positions companies to provide their clients with unsurpassed coverage and service if they can access the information on-demand in practical formats, making it work for everyone’s benefit.

Applying this intelligence can affect business in multiple ways, to:

• Target customers more efficiently
• Improve decision-making
• Lower exposure
• Discover and implement ways to add tangible value to operations
• Reduce costs

What’s necessary is on-demand access to data that provides insight and context to business intelligence, information that should not take an advanced degree in technology or systems analysis to interpret results. Analytics designed to thrive in a user experience environment and empower analysts to conceptualize data will serve data-intensive industries like insurance the best.

Addressing complexity

Insurers have at their disposal incredible amounts of data: Intelligence on their customers; demographics by geography, age and gender; market trends; and historical information are just a few of the numerous categories. Promptly gathering this information in helpful formats for employees with varying levels of responsibility and analytic skills is the challenge that insurers and many other organizations face. Powerful analytics can deliver this business intelligence better than traditional tools.

Users need to understand the data and apply it to their tasks. Staff swiveling in and out of different business intelligence tools to perform their assignments is less efficient than using well-designed analytics that allow them to stay within the workstream when gathering, assessing or reporting information.

For example, some auto customer data can be stored on one platform within a property and casualty insurer while claims history is accessible on different software. Vehicle features and values may be drawn from other databases, while driving records need to be pulled from one or many public safety departments from across the country. Such a puzzle is rich in data but complex in a traditional workflow. Having well-designed analytics built into the system simplifies the process of quoting customers, especially in a 24/7 environment.

See also: 3 Digital Customer Service Strategies for 2022

Engaging applied intelligence

Merely providing intelligence is not all that analytics can do.  

Engaging dashboards, visualizations and other delivery methods create a vibrant workspace for the user, offering context to otherwise jumbled or contradictory information. Users adopt attractive tools more extensively, use them more frequently and instinctively ask more of the instrument and the data it delivers. 

Embedding predictive analytics to intelligence gathering strengthens the usefulness of the data for timely decision-making. All these actions increase productivity. 

Analytics allow professionals to apply their individual business talents to tasks without needing a high degree of technical expertise to gather or interpret the data, serving entry-level professionals through senior executives. 

Inexperienced underwriters can more quickly assess customer applications, rejecting or connecting them to favorable coverage options at an appropriate premium, and claims analysts can identify fraud more effectively. The same analytics tool in the hands of veteran executives can give them other valuable insights such as data that readily demonstrate to regulators that products are appropriately priced and reflect exposure, that they meet acceptable loss ratio and combined ratio norms and that the insurer is a trusted partner in protecting the market.

These are simple examples of well-designed analytics directly affecting business success at multiple levels.

Intuitive self-service

There are valid reasons to compartmentalize intelligence in today's business environment, but the versatility of built-in analytics allows a wide variety of access levels to personas or individuals. Access is based on roles and need-to-know, not how well a person understands code or software. 

As people's business roles, responsibilities and talents change, the tool serves intuitive self-service. Access to intelligence is acquired by applying amassed business acumen, not technological know-how about obsolete software.

Customizing analytic tools allows people to dedicate themselves to productivity rather than repetitive problem-solving and troubleshooting. Actuaries can spend the workday assessing market risks and exposure, creating innovative product offerings or adjusting investment strategy on the book of business instead of figuring out new software updates on old business intelligence platforms.

See also: Improving Customer Experience In 2022

Expect more and deliver

Employees will use the tools at their disposal, whether those tools are adequate or outstanding. However, those that enrich the user experience and directly drive business value get the best adoption rates and results. 

The more comfortable people at an enterprise-wide feel with their tools, the better they’ll perform. Powerful analytics, including predictive analytics, streamline assessment, planning, forecasting and overall decision-making experiences. They allow insurers to effectively connect the benefits of business intelligence to the customer and the organization’s goals.

The sooner insurers adopt analytics to leverage big data, the more quickly they will improve efficiency, reduce costs, meet and exceed customer expectations and boost expectations in an increasingly competitive marketplace.

As cyber criminals’ methods become increasingly sophisticated and their ability to launch attacks with seeming impunity continues, the repercussions for businesses, from the smallest to the Fortune 50, cannot be overstated. Potential targets are not limited to those that have personally identifiable information, personal health information or customer credit card data. In fact, some of the largest cyberattacks over the last two years have not involved the mining of such information at all. Rather, these attacks have either shut down or materially interrupted vital infrastructure, health systems, financial companies and all means of the manufacturing process, including construction, supply chains, distribution and sales.  

The FBI and Department of Homeland Security’s Feb. 17 warning of anticipated cyberattacks against U.S. (and Ukrainian) governmental and commercial networks in the wake of Russia’s invasion of Ukraine, which has now come to pass, highlights the dire circumstances being faced worldwide. Any business that interacts with or depends on the internet for its existence is a target, regardless of size.  

The impacts of such attacks take any number of forms, including: malware, including ransomware (which disables the ability to access IT systems until a ransom is paid); business interruption (income lost because of the inability to access systems); data restoration (reconstructing “lost” company and customer data); social engineering/phishing (loss of money based on the impersonation of a colleague, client or vendor); regulatory fines and penalties; liability to third parties if their information is compromised; and reputational harm. Estimates for losses for these events runs anywhere from $20 billion in ransomware costs alone for 2021 up to trillions of dollars being spent by 2025 to respond to and fight all manner of these attacks.

The Tools to Mitigate Cyber-Related Events 

Despite (or perhaps because of) these grim predictions, it is vitally important to remember that myriad tools can protect businesses against and mitigate the impact of cyber-related events.

Internal Controls

Due to the sheer number of attacks, cybersecurity experts have been able to identify many of the key vulnerabilities that criminals manipulate to gain entry into computer systems, and how to fix them. That list includes:

• Multi-factor authentication tools to safely access internal computer systems
• Robust desktop security protocols, including: virtual private networks, data encryption, complex passwords, firewalls and restricted access to admin rights
• Active management of systems and configurations
• A continuous hunt for network intrusions and third-party exposure threats
• Immediate updating and upgrading of software
• Development and use of a system recovery plan, including regular testing of backups for data integrity and restorability and preparation and annual testing of incident response/ business continuity plan

As this list indicates, system and information security is the key to avoiding (or at least mitigating) cyber-related risks. Whether through dedicated in-house personnel, engaging with an outsourced cybersecurity firm or having those groups work in tandem, companies can see many vulnerabilities and address them as an enterprise-wide project. While there is no “one size fits all” approach, and it is a true investment of both capital and manpower, companies must at least do an initial assessment of their cybersecurity policies and procedures. The biggest mistake companies make is believing that they are not a target because of their industry, their size, their revenue or their footprint. Everyone is a target, so these issues simply cannot be ignored.  

See also: Tips for the Hybrid Work World

Insurance

Another key mitigation tool is purchasing a cyber insurance policy, which allows businesses to transfer risks associated with cyber-related security breaches to first-party reimbursement (e.g., loss to the company itself) and third-party indemnity (e.g., liability claims against the company and regulatory proceedings). A robust cyber policy is structured around helping the company recover and handling the costs that are associated with an attack.

The purchase of insurance will often also act as a catalyst for implementing the tools and processes described above. Cyber insurance carriers are increasingly demanding that many of the items described above be in place or be on track to be put in place before they will even issue a quote outlining the costs and coverages potentially available. Carriers will assess: possible risks pertaining to the company; the strength of cybersecurity controls; and compliance with legal and industry standards. Companies must be transparent during this application and review process, so issues do not arise in the event of a claim.  

No insurance policy is worth the premium paid if it is not available in the event of a loss. As ransomware emerges as one of the more profound financial and operational interruptions affecting businesses and insurance companies worldwide, it’s imperative to seek an independent risk advisor who can serve as a sounding board and help navigate through the various and sudden risks facing enterprises globally.

With Vladimir Putin denied the quick victory he hoped to achieve with his invasion of Ukraine, the Russian military is reevaluating its strategy -- which may now include cyber attacks that could broaden far beyond those that the Russians have been waging against Ukraine for months.

Obviously, no one knows for sure what Putin will do next. But Russia has a history of hacking, even against major powers. According to the Mueller report, Russian government hackers stole emails from the Democratic National Committee in 2016 as part of Putin's effort to help elect Donald Trump president. In 2021, a gang of Russian hackers launched a ransomware attack that shut down the Colonial Pipeline and cut off its supplies of gasoline in the U.S. East and Southeast. And Putin has said that even nuclear weapons are on the table if other countries intervene in his war on Ukraine, while listing 13 countries that have been "unfriendly" to Russia, so it's hard to imagine that cyber warfare isn't somewhere in the cards.

Insurers would do well to prepare themselves and their clients for the possibility of cyber attacks, to the fullest extent possible.

Electric grids have been shown to be especially vulnerable to being shut down by cyber attacks. The same is true for pipelines, such as Colonial, and other infrastructure. But the range of targets could be broad. Perhaps banks would be hit because the U.S. and European allies have imposed sanctions that have hobbled the Russian financial system. Perhaps hospitals would be targeted, too, just to impose some misery on countries that have stood up to Russia. Perhaps oil and gas companies, which have announced that they're pulling out of ventures in Russia, would be hit.

Something doesn't even have to be a direct target to potentially be hurt. Cyber attacks that shut down the electric grid, a major oil or gas pipeline, banks or hospitals could have severe ripple effects if they are broad or lengthy. This is my big fear for the insurance industry: I see no reason why insurers should be a primary target, but they will have to deal with any effects from business shutdowns, homes without heat and electricity, etc.

And cyberattacks have a way of hitting more targets than intended. My time covering such attacks goes all the way back to 1988, when a graduate student at Cornell wrote a "worm" that was designed to show vulnerabilities in a commonly used operating system and, because of an error in his coding, pretty much shut the internet down for days. And Russian government hackers aren't immune to such errors: In 2017, they unleashed the NotPetya worm that attacked Ukraine and did billions of dollars of damage -- including to Rosneft, the Russian oil company. 

As this article in the Wall Street Journal explains in detail, "Russia, in particular, has a history of unleashing cyber weapons that wreak havoc far beyond the computers and networks that were their original targets." And the reckless collateral damage could be even more extensive if Russia turns vigilantes loose on foreign governments and countries.

The article says that "cybersecurity experts are broadly surprised that Russia’s cyberattacks haven’t up to this point been more effective or devastating," and I dearly hope the low impact continues. But I worry about what will happen if Putin becomes desperate.

Let's hope this column looks silly in a couple of months, a wimpy false alarm. But, as I've seen many people note since this Russian craziness began, "Hope is not a strategy."

Stay safe.

Paul

The pandemic has created new cyber vulnerabilities, heightened existing risk factors and accelerated the pace at which cybercriminals wreaked havoc on even the most secure systems. Undoubtedly, 2022 will see more of the same. 

Many large organizations responded to heightened cyber threats by ramping up their security budgets and deploying state-of-the art security technology. Small and mid-size businesses with less sophistication and smaller budgets are not defenseless, however. By staying aware of the changing risk landscape and implementing basic countermeasures, business owners and their IT professionals can deter cyber attacks and be better prepared to respond if they nonetheless happen. Organizations with a strong focus on cybersecurity also can make a case for more favorable terms from the cyber insurance market, which has seen rates increase and coverage shrink as claims accelerated over the past several years.

A quick tour of the cyber risk and insurance landscape in 2021

Cybercriminals had a banner year in 2021. According to Check Point Research, cyberattacks increased 50% in 2021 as compared with 2020, with each organization facing an average of 925 attacks per week.

With large numbers of employees working from home and using their personal devices for business purposes, corporate networks were left vulnerable to the often-inadequate security practices of individual employees. According to security company CrowdStrike in their 2021 Global Treat Report, this created a “feeding frenzy for cyber predators spurred on by the windfall of easy access to sensitive data and networks.”

Phishing and ransomware were far and away the primary attack vectors, affecting both large and small businesses. Phishing attacks increased in number and sophistication as “fear, concern and curiosity surrounding COVID-19 provided the perfect cover for a record-setting increase in social engineering attacks,” according to CrowdStrike. The Human Hacking report published by SlashNext Threat Labs data shows phishing attacks rose 51% in 2021 as compared with 2020. 

Successful phishing campaigns often resulted in ransomware attacks. Ransomware is not a new cybersecurity threat, but it is one that cybercriminals have learned to use with far more devastating effect in recent years. Since the beginning of the pandemic, ransomware claims have increased four-fold. The average ransom demand increased about 900% as cybercriminals employed increasingly sophisticated and damaging tactics, techniques and procedures. One notable 2021 ransomware attack targeting pipeline operator Colonial Pipeline resulted in $4.4 million being paid to a Russian cyber gang. 

In addition to the cost of paying the criminals, ransomware attacks also can cause downtime and business interruption losses. A 2020 attack on the University of Vermont Medical Center, for example, cost the hospital an estimated $50 million, mostly from lost revenue. 

Many ransomware attacks are directed at supply chains. A single supply chain attack can hit numerous organizations, providing cybercriminals the ability to use a single intrusion to attack multiple targets. Cybercriminals often use smaller, more vulnerable companies in a supply chain to gain access to larger, better-defended companies.

One of the most widespread and sophisticated supply chain attacks targeted SolarWinds, a major information technology firm. SolarWinds unknowingly sent software updates to its customers including U.S. government agencies such as the Department of Homeland Security, the State Department, the Department of Energy, the National Nuclear Security Administration and the Treasury that was tainted with code that left them vulnerable to hackers. More than 18,000 organizations—both public and private—were affected.

Increased losses sparked higher prices and more restrictive underwriting criteria in the cyber insurance market. Prior to 2020, rates were held in check by competition as the cyber insurance market grew and matured. Additionally, underwriting results were generally favorable, which attracted capacity to the line of business. 

See also: ITL FOCUS: Cyber

Loss ratios began to deteriorate in 2018 and 2019. In 2020, according to S&P Global, they shot up 25 points, or more than 72%, due substantially to a surge in ransomware events. In response, insurance premiums began to creep up in 2019 and increased more sharply in 2020 and 2021. “Market pricing” disappeared, with quotes for the same piece of business varying wildly from underwriter to underwriter, all of whom are underwriting from the same submission.

In addition to raising premiums, underwriters tightened criteria and increased their scrutiny of network security protocols. Carriers also reduced capacity on individual risks and on their aggregate portfolio exposures.

Cyber risk management and insurance in 2022 and beyond

Many of the risk and insurance trends seen in 2021 are likely to continue through 2022. Network security at many organizations will continue to be under stress as employees continue to work from home, often using their own devices and security software. More than 50% of corporate executives surveyed by PwC for its 2022 Global Digital Trust Insights Survey expect a sharp increase in cyber incidents in 2022.

Determined cybercriminals can defeat even the most advanced network security. However, business owners and their IT professionals can take simple and effective steps to deter criminals. Hackers look for poorly secured systems and often pass by better-guarded networks. According to PwC, “many of the breaches we’re seeing are still preventable with sound cyber practices and strong controls.”

Foremost to effective cybersecurity is an organization-wide security culture. Cybersecurity is not strictly an IT function—people, more than technology, make an organization secure. Cybersecurity culture must be driven from the C-suite and reinforced by communication, training and incentives for good cyber hygiene. Awareness and education help instill good cyber safety habits and reinforce what employees should and shouldn’t click on, download or explore.

From a technology perspective, multi-factor authentication on all business-critical systems is an effective, inexpensive way to boost security. In addition to the conventional username and password, other identifying information is required such as a personal identification number (PIN) or a specific keystroke pattern. Some experts are advocating password-less authentication—dispensing with passwords altogether in favor of alternatives such as requiring users to input a code that is either emailed or sent via text message. 

Ransomware attacks—which are low-risk but high-return for cybercriminals—will continue to be one of the most common types of malicious cyber events. Organizations need to increasingly focus on backing up data and keeping those backups as secure as possible. Good cyber hygiene may deter attacks, but, once an attack occurs, secure backups are essential. 

An information security architecture known as Zero Trust has grown in popularity in recent years. A Zero Trust approach uses security protocols and technologies designed to limit an attacker’s ability to move within or between systems to reach critical parts of the network. Commercial Zero Trust security solutions may be out of reach of many smaller companies and government entities. But even a very small organization can achieve satisfactory results by implementing policies and procedures to assure that only people who need certain data or applications—whether employees, contractors or vendors—can access them. 

Cyber underwriters are increasingly focused on security issues, so organizations that can demonstrate attention to security best practices may fare better when shopping for cyber insurance. Cyber brokers are rarely network security experts themselves, but the best brokers are immersed in the cyber risk environment and are attuned to underwriter cybersecurity preferences and demands. They thoroughly understand their clients' cyber exposures and security posture and can find the best fit in a market where coverage terms and prices can vary wildly from underwriter to underwriter and even from day to day.

See also: Quest for Reliable Cyber Security

The “next normal” of cyber risk and insurance

The future cyber risk landscape will be shaped by post-pandemic social, political, economic and technological forces and informed by the lessons learned by both attackers and defenders during the present unsettled environment. The cyber risk landscape has always been in motion, but the rate of change has accelerated during the pandemic and will likely remain volatile even as the COVID-19 threat recedes.

The cyber insurance market will continue to respond to a changing threat landscape, but also will be shaped by business, economic and regulatory forces. It also will respond to the internal demands of a still-young line of business as it matures. Working with knowledgeable and creative brokers who can navigate a chaotic marketplace, even comparatively small organizations will be able to deploy a risk management and insurance strategy that will contribute to growth and stability in a changed—and changing—environment.

Two million people work in the U.S. insurance industry. According to the U.S. Census Bureau, 300,000 of these workers will retire in the next three years, and 50% will retire by the end of this decade. 

As it is, there are 200,000 unfilled positions in insurance, and, according to a recent study from the Hartford, only 4% of Millennials and Generation Z are considering insurance as a career option. They want work that’s more creative, expressive, meaningful.     

Throw in COVID and the highest inflation rate the U.S. has experienced in over 40 years and we’re already seeing signs of what this means as last week American Family Insurance, based in modestly priced Madison, WI, raised their minimum wage to $23 an hour. Though we wholeheartedly support claim processors and contact center workers earning fifty grand a year, we also know insurance is a price-driven business, and those same workers will likely scour the market for the best-priced coverage they can find in response to relentless advertising from GEICO, Progressive and State Farm urging them to click and save.   

The time to start automating knowledge work at scale is now. Results are not immediate. The transition to automation - and an automation-first mindset and culture - takes time. 

Work automation is not about technology. It’s about process. A process that is best led by the line of business (LOB) or function head and not corporate IT. The LOB/function knows their business best, they’re closest to the action as things change, and they’ll want to "own" the automation as it rolls out. Thinking of bots as human workers, you want them rolling up to the LOB/function and not the IT organization. Corporate IT does play a vital role in work automation, but it’s a support role, like finance.  

See also: Insurers Turn to Automation

We use a five-step process that’s remarkably low-tech. The five steps are as follows:

1. Map workflows from standard operating procedure (SOP) documents. The only tools required are MS Excel and Vizio (which you already own).
2. Identify and quantify specific activities, work products and work product volumes. In the world of knowledge work, there are only 20 possible activities in five categories: receive, review, perform, attend, send. You’ll also want to capture the IT systems required per activity. 
3. Eliminate waste and wasteful variability exposed by step 2. Workers tend to add their own spin to rote tasks, claiming their approach is unique. Force-fitting work processes into the 20 activities in step 2 exposes this fallacy. You want hard standardization of the best practices within each process/capability.
4. Identify automation use cases and pilots. Look vertically within specific capabilities, e.g., claims, for enthusiastic stakeholders. Horizontal automation across capabilities (e.g., claims and policy administration) is more technically (and politically) fraught and comes later. Useful guiding metrics include: automation potential percentage and labor-intensive score. That said, be mindful that the ultimate goal is not to automate work per se but to increase operational efficiency and reduce digital customer friction toward higher revenues and retention rates. You’re looking for cost-out, yes, but also "customer-in."  
5. Build a directional automation business case. Include structure and strategy for scale, security and compliance, disaster recovery and risk management, change management and, last but certainly not least: the recruitment, upskilling and compensation of humans. It’s a truism that the more automation you have the more your humans matter. 

Three observations about the five steps as they apply to most situations.

The first three steps function as a LEAN-like exercise, and as such unearth opportunities for productivity gains and cost-out. This is intentional, as the goal is to find self-funding, budget-neutral automation opportunities especially early on as automation resistance and skepticism are high. Think big, start small, success on a shoestring.   

No major software investments are required. Though software will be necessarily tapped to build bots and string them together, most such tools are available for rent in the cloud and reasonably priced with license costs trending down. There is indeed a lot of large-scale digital transformation going on in insurance, by which we mean multi-year, capital-intensive, platform replacements. The approach outlined above is about rapid evolution over the T-word, working with legacy as-is, data where-at. 

See also: How to Automate Your Automation 

It’s natural to insist on a grand strategy up front, in step 1, before doing anything, but strategy is generated here at the end, in step 5. Work automation starts with the people and culture and internal systems that get work done today. Best to get started, working gradually, organically and, yes, aggressively (you can work through the five steps in as little as eight weeks). The resulting strategy document will feel more rock-solid and informed, with successful pilots to prove the concept. 

Where to start? A recent analysis by McKinsey, with which we agree, says the most "automatable" lines of business in P&C are, in descending order: 1) workers comp, 2) auto, 3) fire, 4) property, 5) inland marine, 6) crop, and 7) general liability. Taking it by function, per the ACORD capability model, we recommend customer service, channel management, claims, contract administration and sales. 

Wherever you choose to start, just break out the SOPs, dust them off and get mapping. Good luck.

A global pandemic, supply chain challenges, climate change leading to CAT events and cyber risk have come together to increase claims and raise insurance prices across industries. Not only are these risks not evaporating any time soon, but they’re also likely to increase risk in 2022 for many businesses. 

As a result, the insurance market is moving away from transactional coverage and more toward co-management of risk.  

Understanding these trends — and, more importantly, the risk management solutions that position business owners in the face of underwriters — will be key to securing the optimal insurance coverage in 2022. 

Here are four “mega-risks” we will see play out in 2022 — and how they are already affecting the P&C market:

1. Increased reliance on tech has led to massive improvements across industries. It’s also increased cyber risk for all. 

Attempted online fraud in the hospitality sector is rising 156% year-over-year. In an industry in which 60% of businesses say they’re not ready for cybercrime, cannabis businesses are a major target for bad actors. And, cyberattacks against large food manufacturers halted production at several processing facilities last year. As cyberattacks become more common, cyber insurance rates will rise 20% to 30% this year. 

What can you do? Brokers are partnering with vendors and insurance carriers to address this through risk management solutions, including improved network defenses, multi-factor authentication, employee training and third-party vendor security audits. 

See also: Cognitive Biases and Risk Management

2. Natural catastrophes are raising the stakes. CAT modeling may be the answer. 

In 2021, the U.S. had 19 weather disasters that costs $1 billion or more. 

From wildfires to floods, tornadoes and hurricanes, farms and food manufacturers saw reduced yields from damaged crops. Real estate owners say it’s nearly impossible to find locations that aren’t exposed to flood, fire or storms. Hospitality is losing business as weather disrupts operations. As a result, P&C rates for both restaurants and lodging establishments will rise as much as 20% in 2022. Property rates for other types of commercial real estate will rise 10% or more, as well. 

What can you do? Consider enhanced warning and predictive systems such as catastrophe (CAT) modeling and fire- and water-resistant construction materials when possible. While storms are more foreseeable, they are still out of human control; therefore, a strong risk management solution includes a thorough post-loss response plan for recovery and resuming operations.

3. Attracting and retaining quality employees is a key challenge in 2022. A strong stock market + an aging population is pushing intellectual capital into retirement. 

Vaccine hesitancy is also squeezing labor markets, while leading to a rise of workers’ compensation claims in the healthcare sector. Although WC premiums are expected to remain flat in 2022, the challenge will be at the worker level, as remaining staff will have to work longer hours to make up for their fellow employees. 

What can you do? Brokers can offer employers improved pay and expand extended benefits programs with perks such as paid apprenticeship training programs, vocational skills training programs and mental health services. 

4. Supply chain disruptions are commonplace. Labor shortages and consumer habits have made it hard for businesses to deliver goods and materials. 

In the construction industry, material shortages interrupted cash flow, leading to cost spikes, ruined schedules for projects and busted budgets. Expect construction coverage costs to rise between 5% and 35%, with large, risk-prone projects at the higher end. 

For short-haul drivers, simply leaving port with cargo is an administrative and bureaucratic nightmare. Coverage for courier and delivery fleet will increase by 25% or more.  

What can you do? Resilience is the key to mitigation, as businesses that can should build up materials reserves and develop new relationships with potential backup suppliers domestically. Think both local and regional suppliers. 

See also: 20 Insurance Issues to Watch in 2022

Securing the right partner is critical to reducing risk in 2022

The COVID-19 pandemic has exploded risks and insurance coverage costs, creating a complex environment for business owners and employers of all types.

These conditions make it essential to partner with a broker that specializes in your market, understands your risk level and knows the market inside and out. In doing so, you can build a strong risk management and insurance program that positions your business for a successful year.

We are in a new era of workplace models, and the freedom and flexibility of remote work is incredible in many ways. But there is a second side to this coin. Daily, I interact with organizations that provide in-person services for their communities – services that cannot be performed remotely. Service-based jobs require people to be present to provide those services and include jobs in city government, hospitals, schools and grocery stores, as well as positions in all the trades. Even when there is a way to supplement those roles with remote work, the bulk of it must be performed in person. 

The fact is that physical workspaces are still – and will always be – important, and, at the moment, many organizations are concluding that both on-site and remote work environments will be necessary indefinitely. 

The following tips will help you reduce corporate risk and support employees in both remote and on-site environments. 

For remote workers

Establish work and break guidelines: To maintain productivity and prevent burnout, establish employee guidelines for working hours and breaks. Some remote employees will overwork while others are prone to underwork. Guidelines set clear expectations and help everyone to find balance.

Establish ergonomic guidelines: To reduce physical risk, including the risk of carpal tunnel and repetitive action injuries, put ergonomic guidelines in place for at-home workstations and offer ergonomic training to employees. Dining room tables are often at a different heights than desks and are not appropriate workspaces. Provide guidance on the right height for monitors, desks and surface areas, as well as proper posture. 

See also: Smart Home Devices: the Security Risks

Develop communication standards: To ensure connection during emergencies, put an adequate communications system in place, such as Microsoft Teams or a Slack. Provide employees steps on what to do if they have daily technology challenges and explain how and on what channels the company will communicate in case of an emergency. 

Build teams and trust: To encourage fluid communication throughout the year and a unified direction, focus on team building. AP Keenan puts a significant amount of effort into team building, which allows quality communication and opens the doors to educate and coach employees. In addition, with strong team camaraderie, we can more easily check in with our employees and make sure their mental health is good. We’ve hired people over the past year, and the feedback we get is: “Wow! You really keep in contact.”  

Foster a work-life balance: Help employees create a work-life balance by encouraging them to take time off, just as they did when they were in an office – even if their laptop is within five feet of them. You can especially help employees who are “workaholics” or those who feel guilty not working 24/7 to set boundaries. In addition, make sure your remote employees are not isolating themselves excessively. Happy, balanced employees who interact with others and have a network of support have more to offer at work.

Consider workers' compensation claims: With hybrid models, today’s employers must consider what the workers' compensation situation is in an employee’s home and the liability to the employer versus the employee in that space. As an employer, what is your control over the work environment and your ability to affect safety? Is there enough room for your employee to get around, or are they tripping over drawers or cabinets when they are getting up to go to the restroom?  

Consider your financial liability: To ensure you maintain connection with your employees, consider providing compensation for your remote employees’ phone and internet access. At AP Keenan, across the board, we add a dollar amount to all hourly employees’ paychecks to assist with their phone and utility bills. 

In addition, make conscious decisions about the physical supplies your employees need. When the pandemic began, many companies were able to quickly switch to remote work. They had emergency response plans that allowed them to know where there data centers where, how they were going to provide employees continued connection and how they would get supplies to their people. The reality is that most employees don’t stock office paper or light bulbs at home, and their internet might not support all the work functions or provide the right security. As you decide what employees must provide versus what you will provide, have clear conversations about shifting costs to employees. In particular, consider if you are shifting costs to those who already experience a wage gap.

For in-person employees, you’ll need to provide adequate resources to support the spaces in which they work to reduce your risk and increase their health and productivity. These tips apply: 

Reassess the budget: As employers aim to accommodate the hybrid concept, they risk spreading dollars thin over new costs. Have clear budgeting discussions that highlight the transfer of funds to support remote work as well as the risks of defunding the physical workspace. Will you be removing resources that avoid the severity and frequency of claims? 

Invest in safe work environments: Look around -- does your brick-and-mortar workspace look like a storage unit or a moving facility since the pandemic started?  Are boxes stacked in the hallway?  Are you still ADA-compliant? As the corporate physical space is reduced in favor of remote work, there is often an uptick in claims, such as “slip, trip and fall” scenarios. It’s important for in-person facilities staff to remove obstacles and keep the physical space up to standard. 

Continue safety trainings: Keep employees’ physical safety at the top of the priority list. Dedicate a healthy portion of your budget to maintaining in-person safety and prevention programs to avoid problems. Whether you have one or 10,000 employees in the office, it only takes one injury to result in a claim.  

See also: Cyber Tips for Work From Home

Stay on top of workers' compensation laws: One of the most complex factors employers face when deciding on a hybrid work model is workers' compensation. In California, it’s one of the largest drivers in the workplace and often an incredibly complex expense. Laws change regularly and are bound to change as a result of the shifting workforce. Work with a consultant to stay up-to-date on evolving workers' compensation laws – especially those in your particular state.

Work with your insurer: One of the best ways to control costs and keep people safe is to avoid claims in the first place. To reduce the severity and frequently of claims, make sure your insurer is not just managing claims and providing coverage, but helping you think through these important issues. In the end, your insurer can help you improve your rates, improve your experience, retain your employees and realize a successful future.