Imagine you are an enterprise CEO in a business under increasing pressure to address the demands of continued growth, a meaningful ESG strategy, a fickle and more diverse customer base, a changing regulatory environment and fallout from the pandemic. Just for starters.

While the organization is full of talent who are expert at running the business, it’s clear that more is required to transform, adapt to unpredictable change and get much better at anticipating what’s next.

One day, the CEO opens a dialog with a startup whose technology is proven and relevant to their business. This CEO is captivated with the idea of engaging with the startup to help transform the enterprise. The CEO knows the enterprise must break habits that are inhibiting innovation and change. The company must learn new ways of operating.

The CEO imagines that a partnership will be a win/win. Success will mean the enterprise is becoming a stronger 21st century business. And the startup can realize its goal of scale.

Everyone’s investors and customers will be happy.

Right?

It's possible. Success begins with the enterprise and startup leaders anticipating how to:

• Bring together two radically different cultures, ways of working and talent profiles.
• Ensure the machinery of the enterprise does not stifle the startup’s agility.
• Transfer at scale new ways of working and new mindsets.
• Convince stakeholders to buy in that this is a smart strategy that will deliver results.

How does the vision of enterprise/startup partnership move beyond being more than a dream and achieve a happy ending?

Commit to these three steps to head in the right direction.

1. Set a shared North Star by coming to a common understanding of the partnership’s mission, vision, shared ambition and success metrics. The best North Star ambitions complete such statements as:

"As a result of the successful efforts of our partnership, we will have succeeded when customers say ..."

See also: Why Weak Signals of Disruption Are Key

2. Engage in shared governance. Even the most motivated and resourced team tasked with bringing to life an enterprise/startup partnership will fail if the right governance is not in place. This means:

• The CEOs hold both executive teams accountable for the success of the partnership, and
• A routine is in place and adhered to for communications, agenda-setting and decision making. 

3. Resource and implement disciplined, agile experiments. Big new growth stories do not emerge as overnight miracles. They come about through cycles of testing, failing, learning, iterating and improving. As the capability for agile experimentation is created, consider:

• How to operate outside the annual budgeting process.
• Whether the talent exists internally that can be dedicated to the testing efforts.
• Why it is critical for experiments to have established metrics from Day One.

As talented as the cross-business partnership team may be, they may benefit from external facilitation by a third party who has no stake in either entity’s pre-existing norms and who is only focused on helping the partnership succeed by bringing objectivity and operating knowledge. Their role is to keep the team focused on the North Star, through the many challenges, doubts and execution choices they will face, while pursuing proven practices to achieve their ambition.

You can read the complete article from which this post is adapted at Fast Company.

For insurance agents, deciding to implement a new tool is no easy feat. It requires research and demos. But the real work starts post-sign-up.

Digital solutions can help agents give customers a better experience and, most importantly, enable them to compete with industry disruptors. But agents drag their feet on implementing the solutions. Why?

For some, the reason has to do with workflow, education of the team, capabilities they wish the new solution had or issues with integration.

No matter the issues, they can all be overcome with time, a focus on the right solutions and the passion to drive innovation within the agency.

Here’s a list of four of the top hurdles and how agents have overcome them.

1. Lack of time

This may sound simple, but it is really a big deal for most agencies. Agents are busy, and most of the ones I know are usually in customer service or selling mode. Finding time to not only select a new solution but to set it up and understand its capabilities is just not on the radar. For those who do take the leap, it can often become a self-fulfilling prophecy when they don’t take the time to understand the solution’s full capabilities. Without that understanding, the solution can fail. 

There are some important tips I’ve found that can help. First, make a list of the problems your agency wants to solve with technology. This can eliminate many solutions that look cool but that you don’t really need. Once you have a pain point identified, do homework on the tools you’re considering. Find agent testimonials and reviews to see if a tool has helped others in the past. If so, it’s worth a trial at least. 

Then block off 20 minutes a day to test and explore new tools. Actually work with them. I’ve seen many agents get a significantly better understanding within just a week. With that newfound understanding, they make better decisions. 

2. Workflow disruption

Any disruption in a workflow, even to improve processes, is not always well-received. Change management is hard—for every company, including for most agencies, which are small businesses with limited personnel to devote to big changes. 

This is where communication helps. The new solution’s champion — who could be the agency principal -- must convince the team that, if adopting a tool can save time for one agent, it can save time for most. With this simple message, the champion can help establish the value of the tool and give the team the resources they need to understand the new process.

Make the change clear to all agents and provide training resources so they can successfully adapt. Also, encourage agents to use the tool's customer success team, who are likely focused on engaging with and providing training for customers. 

See also: How Technology Drives a ‘New Normal’

3. New tools that are not fully established

You’ve got that right — technology rarely does all the things you want. It may not integrate with existing systems, including agency management systems, and some (or most) carriers may not yet be on the platform. But these are not reasons to stop moving forward. In some cases, there are workarounds. In others, a solution may just be a matter of time and making your voice heard.

It’s important to get to know your agency management system and to understand  if the vendor has an open application programming interface (API). If they do, they can more easily integrate with other systems. You should also understand your carriers’ perspectives, to make the best-informed decision about new solutions. This is where a dialogue — especially with your top carriers — to understand their innovation plans can be very helpful.

4. Lack of understanding

A common issue is user error from not understanding how the solution functions. SaaS solutions are becoming more and more clever with integrations and functionality that add a degree of complexity. A lot of information is thrown at agents all at once, and it can be difficult to digest and prioritize the most important elements. 

It helps a lot to try before you buy. Agents are often afraid to jump into a new tool if they aren't confident in their understanding. Actually working with the tool is a big deal — not once or twice, but multiple times. Asking questions is also important. It’s one of the best ways to familiarize yourself with a tool. Lastly, getting the right materials from the supplier is key. Cheat sheets, one-pagers and post-demo materials can be very helpful. 

Despite the hurdles, implementing new technology is critical to advance every agency. It’s usually not as difficult as they think it will be. At Semsee, we’ve noticed a trend in agencies that sit through a demo, get onboarded and then immediately start using the platform to start quoting -- they often end up with few follow-up questions because they really understand the solution and how it can work within their agencies. For those that are most hesitant, it ends up taking more time. They have more questions and tend to want to go back over things we’ve covered. Their teams are less engaged. 

Technology works. It’s usually not perfect, it doesn’t have all the bells and whistles the agency might want on day one, and it definitely will require analysis, education and changes to workflow. But none of those are reasons not to innovate. Agencies need to invest their time in understanding tools to get the most out of them. In return, they’ll change hearts and minds and move their agencies forward.

Earlier this year, we commissioned an independent global benchmark survey exploring the new standard in insurance – what it should look like and how it is affecting business. Coupled with a digitally enabled architecture, the new standard enables insurers to bring new product to market with greater speed, scale and agility and drive profitable growth through reducing expenses, creating differentiation and improving customer engagement. 

As we head into 2022, we’re hearing from companies that digitization will continue to be on top of the priority list, allowing for the delivery of customized products to better serve customers with speed and agility. While undergoing digital transformation, carriers are asking how technologies such as artificial intelligence (AI) and machine learning (ML) can be leveraged to create better digital experiences, not just for customers but for workers, too.

Paving the Way for Parametric

Over 45% of respondents said new consumer preferences and behaviors are the leading trend affecting the global industry. Second was 31% selecting the viability of technologies like artificial intelligence (AI), the Internet of Things (IOT) and blockchain.

Over the past year, I’ve heard quite a lot about parametric insurance – the concept of a smart policy that knows how and when claims occur against it based on data. We are starting to see uptake of parametric and the ability to intelligently pay out claims. For example, if you are a commercial shipping line and you have a cargo ship en route from A to B, you can automatically monitor the weather to determine what conditions the ship will be encountering. Crop insurance is similar, with the ability to monitor rainfall, hail and other weather-related damages and gauge shortages of production. This ability can support a claim in being automatically adjudicated. 

We might see an uptick here in personal lines, as well, especially with people working from home and “daily” routines becoming increasingly individualized. For example, pay-as-you-go is here to stay. As data catalogues and algorithms become tested and more mature, pay-as-you-go is changing the way drivers are insured. With “miles driven” still so unpredictable, and hybrid work and the migration of employees in-and-out of cities continuing to be the norm, usage-based insurance will see an uptick. With all these changes, carriers are catering to the needs of emerging younger drivers who prefer digital products.

An Opportunity to Never Upgrade Again

Nearly 35% (over one-third) of respondents identified high operating costs as the biggest obstacle to insurance businesses achieving profitable growth. 

A return to profitability and a return to high top-line premium growth makes way for a lot of projects. This presents an opportunity for the industry to move away from the need to upgrade or overhaul systems – insurers can leverage evergreen systems to stay up to date and take advantage of the latest software and security features. 

Carriers are looking to minimize both IT expense and burden. In fact, one in three carriers is experiencing this challenge that affects their growth trajectory. This has to change. Startups are known for their nimbleness and ability to react quickly to market conditions – we’re seeing this mindset now being adopted by all sizes of carriers. If the technology is keeping up, carriers can take advantage of its benefits. 

Moving to an evergreen system allows carriers to run an efficient, nimble product factory. With this comes speed, and the ability to better allocate dollars and resources that directly affect a company’s bottom line. 

See also: Achieving Digital Balance in an Agency

Deliver at Scale

Nearly 70% of respondents felt that delivering big ideas at scale across a business is the biggest obstacle to creating value.

To me, this reads as follows: the importance of aligning all stakeholders on a cultural level to the process of running a product factory. I interpret a big idea to be launching an innovative product, bringing a new capability to the marketplace, creating a better business model or scaling at speed. I think the idea of being nimble rings true here as well.

Overcoming this obstacle begins with eliminating unnecessary IT burden and aligning resources with driving business, not bogging them down with upgrades or upkeep of software. 

There are carriers whose programs have blossomed running on evergreen systems with emerging technologies. This gives them the ability to innovate with speed and deliver at scale. Ten years ago, this agility was unheard of in insurance – it was uncommon to see carriers truly push the boundaries on maximizing technology capabilities. We are seeing dollars shift in real time, and the insurance industry continues to progress as a true innovator.

Competition Breeds Innovation

Over 90% of respondents felt there was scope for the insurance industry to increase its relevance and growth above and beyond inflation and general economic growth. 

This is the finding that has me most excited about working in insurance – and the bright future the industry has ahead of it. Competition always drives the biggest and brightest to achieve more. Historically, in insurance, larger players are known for selling products to the same customer base. So, competition was traditionally about better price and better coverage. 

Fast forward to today, and we’re at a level of maturity where we now focus on offering new capabilities, new ways to service customers and policies and more tailored coverage options. What this does is drive innovation, and the industry elevates itself from within. Yes, external pressures from industries that have forced the issue on what true customer service is have had a similar effect on insurance, but we’re now pushing each other to be more competitive. 

Looking back at the statistic, when I hear relevance I don’t necessarily think “more” product – I think that insurance will take a different place in the world and can reimagine its perception. Insurance companies have always been seen as recovery mechanisms. Technology is helping the industry delivery more for the economy and its people – it is taking control and helping people avoid problems from the outset. 

Preventative rather than recovery: Simple examples include detectors and sensors in homes or telematics in cars – examples that have shown promise early on but have never been truly delivered at scale, nor for a broader market. Preventive measures are now being monetized to avoid the pain and hassle with losses, particularly in lines like automotive, where dollars are going toward helping customers mitigate loss versus dealing with challenging recovery. 

See also: The ‘Race to Zero’ in Insurance SaaS

I believe we will see an explosion of growth in insurance as more companies take chances and accelerate what I believe will be a new standard in insurance -- freeing resources to solve more challenging problems, finding ways to mesh capabilities together to improve product offering and partnering with more innovative third parties to elevate services. 

This is an exciting time in insurance – creating a responsibility I know we don’t take lightly.

When it comes to thinking about how to secure data assets, deploy analytics and deliver intelligent automation, the question of "why are we doing this?" is well worth thinking through carefully. What is right for your business, and where do you strike the balance between people-focused and automated processes?

Those questions are the challenge underlying intelligent intervention. While the specifics of the answers will obviously vary by company, we believe they involve a common objective – to deploy the right resources to the situation at hand, whether that be full automation without underwriter or claims handler involvement, or a subject matter expert making the call based on insightful decision support.

The importance of data strategy

Any aspirations for achieving that objective will rely on granular data, and a culture that recognizes the power of data to both fully automate where it makes sense and provide critical decision support for underwriters and claims experts where it doesn’t.

Consequently, a data strategy will need to deliver a single, complete, consistent enterprise-wide source of facts relating to risk and non-risk activities. The strategy will also have to serve functional requirements for reporting, interactive dashboarding and data visualization to enable frictionless consumption of facts by key stakeholders/systems.

A suitable environment in terms of infrastructure, architecture, culture and tools will allow testing of new data sources and enable analytics and business teams to test hypotheses. Companies will also have to ensure that roles and responsibilities are clear and that there are internal control, governance and communication structures in place to leverage this data resource in pursuit of a single version of the truth.

Figure 1: A data strategy framework for breaking the cycle of poor data

As for the data itself, our view has long been that big data starts at home, so a lot of the gains can come from a company’s underlying data assets. There is undoubtedly a very large and growing source of invaluable third-party data available, but, without a core data asset to connect to, the value is diminished.

Insurers also have huge volumes of unstructured data, which is an area that will continue to offer significant potential competitive advantage. Improving loss cost analytics with claims reports, creating reusable insights from surveys and adapting claims strategies following court or medical reports are all possible. 

See also: COVID-19 and Need for Analytical Insurers

Automation and AI – a broad church

Moving on to how to apply that data, when companies think today of more automated approaches to underwriting, pricing and claims, either artificial intelligence (AI) or machine learning are often seen as the default solutions.  

To some extent, this stems from the overuse of the term AI or the broad use of the term. In fact, AI can encompass a huge breadth of technology, from very deep predictive models through to cognitive learning. Most of the industry spending to date has been at the predictive modeling end, and, while investment will expand through to the cognitive area as the technology matures, there are still very large gains to be made in claims and underwriting analytics using existing methods and approaches.

Deployment challenges

For companies needing motivation to act in this space, the huge range of challenges and uncertainty in the market - geopolitical and technological uncertainty, given the pace of change, as well as legal and regulation uncertainty – should be more than sufficient. The aim of pricing, underwriting and claims technology investment should be to create the capabilities to navigate this uncertainty.

Deployment challenges vary across insurers, but often manifest as lack of pace and agility. Insurers need an environment that enables technology and data to be used at pace to make great decisions at both product and portfolio level and link their technical and business communities. This will help ensure a rich seam of insight running backward and forward between internal communities.

Some companies were able to use technology and data to respond quickly to changes in the market. A recent example is the FSA announcements on new and renewal pricing. Leading insurers have been able to resolve their strategy and deploy adjusted rates inside a matter of days. Others have taken months. Equally, companies in the first group could be far more surgical in their approach and achieve better outcomes. 

COVID-19 only reinforces these challenges, but on a very large scale, presenting competitive opportunity for companies that are able to quickly adapt their underwriting rules or perhaps change their automated footprint.

Business-wide approach

An important point to recognize in intelligent intervention is that, important as it is, the technology itself is not the be all and end all. Intelligent use of automation and analytics is not a siloed activity and still, most certainly, involves people.

Some high-level challenges will need the time and attention of the business as a whole.

How will new technologies integrate with existing systems? Legacy systems are a fact of life for most (re)insurers and will often represent years of investment. Careful thought needs to be given to how to promote connectivity when implementing automation and decision support, including the benefits of capturing both structured and unstructured data, so that people within the business and customers who need information have it, when they want it.

Also, do we have the people and skills to make automation work for us? Not only will you probably need to tap in to a new and different talent stream, but you may be asking your existing people, such as underwriters and claims handlers, to work in new ways. Business culture, training, skills and career development, working practices and reward structures will all possibly need reviewing. 

Connected specialisms

The point is that automation in (re)insurance, or the use of automation for intelligent intervention at least, needs a connected, business-wide approach, albeit with a technological flavor. 

For example, some insurers already recognize that being highly effective at claims estimating opens up opportunities for their portfolio management, underwriting and actuarial teams. Reliable claims estimating provides these functions with a sound basis on which they can confidently make day-to-day business decisions, enabling them to be first movers in a market or agile in changing circumstances, both vital attributes in a highly competitive environment. The digitization of data assets delivers improved sophistication but also reduces frictional costs.  

See also: 7 ‘Laws of Zero’ Will Shape Future

Asking the right questions

Albert Einstein said, “The measure of intelligence is the ability to change.” It’s no coincidence that, in our experience, companies that do analytics and automation well and with a clear strategy linking pricing, underwriting and claims are best placed to use them to initiate intelligent interventions. The flexibility, agility, speed to market and cost savings that typically come with them naturally deliver benefits from both effectiveness and operational efficiency. 

That’s why, when it comes to analytics and automation technology, asking the right questions and addressing the right challenges and issues is critical. Pursuing loss ratio benefits, essentially a measure of effectiveness, will deliver efficiency savings, too.

Most people still think in terms of returning to work and life as we knew it once the pandemic is over. Meanwhile, return-to-office plans continue to be disrupted, impeding any real chance to test out hybrid models, which many have held out hope for as a longer-term solution. Return to work and life as we once knew it is increasingly improbable for two main reasons: Work in the future will never again resemble what it did in the past, and there will be no “all clear” sounded to signal the end of the pandemic. It will likely linger until herd immunity is reached, and the virus will continue to mutate until then. 

But there is good reason for optimism – great news, in fact – about these two new realities. Ever since man discovered fire and invented the wheel, when we need to evolve we leverage human ingenuity and technology to make work and life less stressful, more productive and safer than it ever has been. Although chaotic, most companies and organizations passed the test of shifting to and sustaining remote working. And much of this happened on an emergency basis with little planning or design. Imagine how much more effective could be more thoughtful and deliberate strategies for future-forward work environments.

Because we work in the broad insurance ecosystem, we will make references to how the future of work may affect these segments with a focus on inside work, but there will be no industry or business segment unaffected by these changes.

Short-Term Impact

Workers and their employers have learned that working from home is not only possible but preferable whether permanent, complete or partial. Corporations, including insurance companies that have relied on a “brick and mortar” infrastructure for over a century, are subletting and selling off headquarters and regional properties, cutting overhead and preparing for a work-from-home model for a majority of their workforce. Additionally, office space is shrinking, and work spaces are being redesigned in “hoteling” models in which full-time and hybrid employees reserve available fully equipped work areas for their time and meetings in office. Corner and window offices are becoming fewer; relics of the past. 

Several factors have conspired to drive unprecedented migration from cities to suburbs and beyond. This is a consequence of the combination of health-based fear of living in the close quarters of an urban lifestyle and reluctance to use public transportation, as well as fear of violent crime. People who have migrated to suburbs are not likely to return to the city or their workplaces anytime soon. 

Working from home, setting aside its many attractions to workers, also has its challenges.

See also: Tomorrow’s Insurance Is Connected

Screen fatigue has set in, not only from the endless series of video chat meetings but also from the lack of physical contact and camaraderie – the “watercooler” chats. Leaders are challenged with onboarding new employees remotely and are concerned with everything from gauging productivity to visibility, spontaneous innovation and sustaining organizational culture. In response, some companies are beginning to offer mental health and wellness support services to staff who appear to need it or want it. 

On top of these downsides, companies are experiencing worker shortages as some have moved to the unemployment sidelines and others are resigning in ever greater numbers as they find new careers from the freedom of their home office desks with companies that offer more appealing opportunities, including new digital approaches to workforce management and collaboration.

The New Workforce

Millennials are the largest generation in the workforce, and Gen Z is the only other generation whose representation in the workforce is growing. According to research from Aon, Gen Z makes up 20% of the U.S. population, while millennials account for 50%. Businesses need to understand these changes, tailor business models and focus their attention toward understanding the employment preferences of younger generations mixed in with an aging insurance workforce. 

In 10 years, Gen Z will make up 20% to 30% of the workforce – if our industry hopes to attract these future workers, digitization and transparent communication will be essential. Younger generations are less reluctant to voice their opinions or to be vocal agents for change, and working in a distributed model can make opinion and idea sharing even more difficult.

ACORD, the non-profit, insurance industry-owned organization, has done research showing that the insurance industry ranks below mining and manufacturing when it comes to attracting, developing and retaining young talent, even though insurance value systems align with those of millennials and Gen Z. 

“Gen Z is more comfortable in an online ecosystem than other generations, millennials included. Being digitally native is a unique characteristic of this group and something that is really going to mold the experiences companies will create for them,” said Dave Zeornes, sales leader at Aon Programs.

Recent graduates don’t want to work with obsolete technology or deal with paper anymore. “Gen Z is more open to change than any other generation,” Zeornes added. “They have the opportunity to build on what previous generations have done, revolutionize and change the world of insurance. It’s the responsibility of the current people in the industry to recruit new talent with fresh ideas -- the future of insurance lies on the shoulders of Gen Z.”

In addition, upskilling of the older segment of the workforce is becoming imperative as new technologies are performing lower-level, repetitive tasks, leaving employers to capitalize on the experience and judgment of displaced workers through retraining. The demand for, and value of, collaboration among work teams is paramount during these changing conditions.

Collaboration to the Rescue

Virtual collaboration tools and platforms are quickly emerging as one of the key solutions to these challenges.  

We first learned about the Balloon collaboration platform when a colleague sent us an article titled "Dartmouth Transforms Its Candidate Evaluation Process With Balloon." You can read the whole piece here. But what really grabbed our attention was this statement – “Balloon reduces meeting time by 70%.” Can you imagine the value of that savings multiplied across all meetings in all industries? 

This led to a discussion with Balloon’s founder Amanda Greenberg to learn more. Balloon is a platform that unlocks ideas, feedback and insights by eliminating groupthink from collaboration and amplifying unheard voices in the workplace. The platform is used by teams and companies of all sizes, including Amazon, MasterClass, VMware and Google. Balloon’s workflow helps facilitate frictionless cross-team collaboration, boosts productivity and makes synthesizing information and identifying top priorities easier — so they can make better decisions, faster, ultimately resulting in more revenue-generating actions. Increasing meeting efficiency alone is crucial to forward-looking work strategies.

See also: Big Opportunities in Insurance Ecosystems

The following recent quote nicely summarizes Balloon’s design concept. It is from Betty Liu, the noted author and journalist who also partners with Balloon as a template author: “Arguing your point starts a debate. Asking questions starts a dialogue.”     

As organizations embark on the largest social experiment in human history, our new normal — or normal of now — requires a focus on culture, purpose, trust and psychological safety. While the pandemic’s effects continue to accelerate our future of work and expedite our human transformation to digital creation, they impose even greater burdens on digital leaders to inspire, motivate and adapt human potential. Employers are implementing flexible organizational structures, virtual and asynchronous collaboration tools, and empathetic leadership to create effective hybrid workplaces.

We will continue to identify and share with our readers and clients new and emerging technologies such as Balloon that will enable companies of all sizes and types to transform, adapt to the new future of work and leverage the people they employ in very new and more effective ways.

The theory goes that, in time, every industry becomes a technology industry. Well, what if we thought of insurance as akin to an electronic device and gave it an operating system, like what we've seen in recent decades with computers and smartphones?

The power of operating systems is undeniable. IBM surged to the forefront of the computer industry in the 1960s when it developed an operating system that ran on all its mainframes, meaning that software written for one model could run on any other model in the family. Digital Equipment opened the market for minicomputers in the 1970s with the operating system that tied together its VAX line. The Microsoft operating system that ran on the original IBM PC and compatibles ushered in the personal computer revolution in the 1980s by creating a large enough, unified market that it attracted software developers in droves. The Apple and Google operating systems for smartphones have likewise provided a platform for vast arrays of apps and services, making the devices so valuable that we rarely leave them out of arm's reach.

Along the way, those operating systems created tens of trillions of dollars of value for shareholders, customers and the developers of apps and services. (Microsoft, Apple and Google, alone, have a combined market value of some $6.5 trillion, and the operating systems have played a key role.)

What could an operating system look like in the insurance industry?

When you look at, say, the historical development of Microsoft's operating system, you can see where an OS begins, how long it takes to develop and what the potential is.

Back in 1981, when the IBM PC was introduced, the OS was as rudimentary as could be. When you turned on the computer, you were greeted with a screen that, in its entirety, showed: "C:\_" -- you had to have the relevant commands memorized to actually do anything. Widgets that we have long taken for granted, such as a calculator or a clock, had to be installed as separate pieces of software. Connecting to another computer via modem was even more complicated.

But MS/DOS was enough to get the PC revolution going. Windows 3.0 added a graphical user interface in 1990, and the operating system has steadily increased in power since then -- not so much from its own merits as from the ecosystem it allowed. Graphics programs, communication software, etc. all plugged into Windows and enhanced it, eventually getting absorbed into it. The advent of the internet browser took the PC to a whole new level in the mid-1990s and attracted its own enhancements -- e.g., Wikipedia, which gave us all encyclopedic knowledge in moments.

Insurance is in the very early days. It's still digitizing many processes that have been analog for forever. Think of how many applications still happen on paper and how many checks are mailed. But the digitizing means that pieces of the insurance process can be pulled together without respect to physical location, in a trend called "open insurance" that is taking us toward that powerful goal of an industrywide operating system.

The result will be an industrywide ability to easily share information and cooperate across corporate and even industry boundaries, along the lines of the sharing of data and work across files and programs within a personal computer that mean even something as technologically complex as a Zoom call can be treated as a single task rather than as a long series of discrete steps.

While insurers have traditionally taken a go-it-alone approach that has meant relying on proprietary data and having all aspects of the insurance process take place within the insurers' four walls, those constraints will disappear in a world of open insurance. Insurers will be able to take in more data and price risk more accurately -- while offering new products and services. Insurers will augment distribution channels by incorporating nontraditional outlets, such as car dealers, which can offer insurance when someone buys a vehicle. And insurers will be able to cut costs, because efficient services from third parties will more easily be incorporated into their processes.

There is risk, as well as opportunity. When products, services and processes can plug into an operating system, they become interchangeable parts -- often creating a winner-takes-all competition. We didn't wind up with a whole bunch of spreadsheets on PCs; we pretty much all wound up with Excel. If you're fortunate enough to have the best claims processing system or distribution or underwriting, then you're in great shape, because you'll be able to sell them as services to others. But if you aren't the best, then you'll likely need to purchase the most efficient system from someone else and may eventually find your company hollowed out.

If you're interested in reading more on the issue -- and I think it's perhaps the most profound technological change the industry faces -- we've published any number of articles on parts of the phenomenon. Here is something I wrote at the beginning of the year on the importance of the ecosystems that will form once corporate barriers break down. Here is a link to a webinar I hosted at the Future of Risk conference in May on application programming interfaces (APIs), the technical standards that allow for collaboration. And here is a piece we published earlier this month on how embedded insurance -- those car insurance sales via the car dealer -- has reached a tipping point.

I'd point you to two other recent pieces, as well. Here is a smart piece via Medium that explores the implications of sharing data and capabilities. And here is a full-on report from Accenture, which explores what insurers can learn from the banking industry and details areas where open insurance can drastically improve what the industry offers.

In the end, the industry may not be able to go as far as the personal computer industry did. That's because there won't be one company that controls the operating system as completely as Microsoft did with PCs and as Apple did with the Mac. The industry will operate more as the looser amalgam of apps and services that mostly self-organize on Google's Android OS.

Still, the industry is clearly moving toward some sort of operating system that builds on all the individual corporate efforts at digitizing, and it's never too soon to start contemplating how to best take advantage.

Cheers,

Paul

On March 2, the California Future of Work Commission released its final report. It includes the key findings and its recommendation for a new social compact for work and workers in California by 2030. When the commission began its work in 2019, the focus was on technological disruption of traditional employment. But, as the report notes, “The pandemic has amplified and accelerated existing trends and challenges, bringing many aspects of the future of work forward.” 

The report is must reading for all in the workers’ compensation community — even if the words “workers’ compensation” do not appear in it.

In its broadest sense, the report calls for specific steps to create a comprehensive, secure environment for workers. This environment includes material and physical security both at work and in society in general. As such, in the report’s 15 recommendations there are familiar themes of wage adequacy and, acknowledging the intervening COVID-19 pandemic, the need for a safe workplace. For example:

“Essential and front-line workers face both economic vulnerabilities and health and safety risks, and are disproportionately female and workers of color.”

“Front-line workers and workers who must be physically present to work must have support to enable them to stay home when sick, have access to appropriate protective equipment, and be ensured safe and sanitary workplaces.”

These, and the other recommendations in the report, are a catalogue of issues that have been confronting policymakers in city halls, state capitals and Washington, D.C., for the past decade. California is at the forefront of this debate, from local jurisdictions adopting hazard pay ordinances and challenging the “gig” economy, to the OSHA Standards Board implementing their COVID-19 Prevention Emergency Temporary Standard, to the many new employment-related state laws, including Assembly Bill 5 adopting the “ABC Test” for worker classification disputes. Much of what the commission identifies as a new social contract would seem to be resting on an existing – and expanding – foundation made in California.

We remain in the midst of the pandemic. While states and the federal government have eased many  restrictions on activities due to vaccinations and corresponding decreasing infection rates, the laws, regulations and executive orders emerging from this crisis create public policy issues extending well beyond reopening. One of the many challenges facing America in general, and California in particular, is defining what “normal” is to become. 

The infusion of massive amounts of public funds into businesses and to individuals makes a return to the status quo ante COVID virtually impossible. State and federal budgets contain trillions of dollars of expenditures to support economic recovery. It is unrealistic to expect individuals in low-paying essential critical infrastructure jobs to continue to participate fully in a “recovered” economy after losing supplemental paid sick leave and, in some cases, higher wages associated with working in a hazardous vocation. 

For employers and employees, the exigent circumstances that caused the creation of supplemental paid sick leave and hazard pay for essential workers should not be looked at in isolation. This is part of a bigger picture that began years ago with efforts to make a $15-per-hour minimum wage the law in all states and for the federal government and implicates the still highly unsettled world of worker classification. Yes, the long reach of the Dynamex decision extends to the post-COVID future of work. So, too, does the equally unsettled world of co-employment. And not just in California.

Whether Congress will pass the Protecting the Right to Organize (PRO) Act is certainly in doubt, at least as long as the filibuster exists in the Senate. But the president has said he will sign it if it gets to his desk. Among its many provisions is bringing the “ABC Test” of Dynamex to the entire country. 

What does this have to do with assessing the workers’ compensation long-term public policy effects of COVID-19? Quite a lot, actually. 

Policymakers cannot meet the objectives of the commission’s report, or the PRO Act, or any of  hundreds of other laws, regulations and ordinances if they reduce the discussion of workers’ compensation to a debate over what is presumed to be a work-related injury. Policymakers must identify how to integrate workers’ compensation programs into an overall commitment to worker security implicit in the commission’s work and similar endeavors across the country. While currently focused on COVID, this effort must extend well beyond the pandemic.

See also: Pandemic Reshapes Personal Lines Plans

Consider this excerpt from the pre-pandemic directive of the Obama administration, the Presidential Policy Directive -- Critical Infrastructure Security and Resilience (PPD-21), released Feb. 12, 2013:

“Critical infrastructure must be secure and able to withstand and rapidly recover from all hazards. Achieving this will require integration with the national preparedness system across prevention, protection, mitigation, response and recovery.…The term ‘all hazards’ means a threat or an incident, natural or manmade, that warrants action to protect life, property, the environment and public health or safety, and to minimize disruptions of government, social or economic activities. It includes natural disasters, cyber incidents, industrial accidents, pandemics, acts of terrorism, sabotage and destructive criminal activity targeting critical infrastructure.”

For large businesses – including insurers – this process of prevention, protection, mitigation, response and recovery is the basis for enterprise risk management. For small businesses and entrepreneurs, developing a risk awareness and response program is more difficult. As COVID-19 has shown, when there is a threat to critical infrastructure, the risk to employees is not limited to the workplace. The commission report underscores that the scope of risk to workers during the pandemic is also more than to health, as employees in businesses, such as hospitality or restaurants, can attest given the high level of unemployment caused by stay-home orders and travel restrictions.

As we move forward, there needs to be a comprehensive effort to integrate the public and private institutional response to the next event placing critical infrastructure at risk. That effort involves all who will be expected to contribute to the resiliency and recovery of not only our essential critical infrastructure, but of the essential workers without whom no recovery can happen.

Insurance company demand for survey data has increased dramatically. It’s easy to understand why. Carriers and agencies know the pandemic and its social and economic fallout have changed customer habits and altered the marketplace. They want to understand how those changes will affect them, and they need data to map out a strategy to meet evolving customer expectations. That’s smart business. 

Insurers use surveys like net promoter scores (NPS) and customer satisfaction scores (CSAT) to gain insight into how customers view their company and the services they provide. But it’s important to keep in mind that it’s a continuing project because customer attitudes change in response to events and evolve over time, especially when market shifts are occurring as rapidly as they are now.   

NPS surveys ask customers to rate the likelihood of recommending your company or service to a friend, and, when you monitor NPS trends over time, you can get early warning if trouble is brewing or stay informed when customer perceptions remain steady or improve. This business intelligence can help you respond to trends quickly so you can keep customers on board.  

Carriers and agencies use CSAT surveys to gauge satisfaction on a range of products, services and processes. Customer satisfaction is always important, but more companies than ever are interested in collecting customer satisfaction data now because of what a recent McKinsey report calls a “loyalty shakeup” that has up to 30% to 40% of customers looking to switch brands.  

Gathering Survey Data Beyond the Basics 

Customer attitudes toward the carrier or agency are important, but it makes sense for insurance agencies to survey policyholder attitudes toward claims adjusters, too. Contact with an adjuster is the moment of truth for customers, who rely on their insurer for support under challenging circumstances. They expect to be contacted quickly and to receive information and compensation rapidly, too.   

Leading carriers are already conducting surveys on adjusters to stay in touch with what’s happening in the field. A customer survey following an interaction with a claims adjuster can also give agencies important insight into how customers perceive the relationship and the service they received. That can give agency leaders more data for making decisions on carriers and adjuster relationships.  

Gauging employee sentiment is also critical now because staff turnover is sky high. “The Great Resignation” cuts across industries — millions of workers are quitting their jobs and searching for work that gives them more purpose, time, flexibility or money. The current labor shortage makes it harder for insurers to replace departing employees, so it’s better to keep current talent onboard when possible. 

These are all excellent reasons to expand survey activities beyond gathering basic intelligence on customer attitudes toward the carrier or agency and products and services. With more insight on customer encounters with adjusters, agencies can improve service quality. With more information on employee satisfaction, carriers and agencies can ensure service quality  

See also: Collective Response to Data Resiliency

Getting the Right Data — And Following Up 

Surveys can improve insurer operations on a number of fronts, but, first, it’s critical to get the right data. That means creating surveys that elicit higher response rates by wording them in a way that encourages customer engagement. It also requires sending surveys across different channels to meet customers where they are, whether via automated calls, texts or emails.  

It’s also important to have the right processes and workflows in place and analytics and tools that can deliver actionable data in real time. To take decisive action, insurers need reports that are relevant to the industry and easy to interpret. These capabilities enable the insurer to collect feedback — and act on it quickly. 

At the end of the day, what the agency or carrier does with the insights the survey data reveals is what matters the most. Companies that survey customers and employees signal that they care, just by asking for feedback. Companies that follow up on the insights customers and employees provide with action and improvements earn loyalty. That’s how to stay competitive in an evolving economy.  

Before the pandemic, HR administrators often relied on personal relationships with brokers to find the right benefits packages. Coffee meetings, lunches and happy hours were typically how both groups shared information about pricing and plans.

Then came the shift to remote work, and many were introduced to the digital benefits marketplace for the first time. 

This nudge turned out to be a good thing for the benefits world: Brokers and employee benefits managers quickly realized how seamless the quoting and purchase process can be with insurance providers that leverage technology. By embracing digital tools, they now have better means to discover and compare packages than they would offline.

Here’s a look at how the digital-first benefits shopping experience works – and why it works so well.

Digital Platforms Enable Self-Service for Brokers and Employers

It’s a lot easier to make informed decisions about benefits packages when all the details you need are at your fingertips online. 

Benefits shopping used to revolve around presentations, normally involving a broker showing up with coffee and donuts to talk to HR teams or other decision makers about a benefits package for the coming plan year. It takes a while to communicate a complex benefits package, and the presentation may not cover all the criteria benefits managers and brokers need to evaluate the package. 

To compare multiple carriers and multiple benefits (like health, dental, vision, life and disability) simultaneously, brokers often put together a spreadsheet with the high-level view of each option, with a recommendation. Details and deeper comparison factors are not easy to surface, and real-time customization of plan design and price is nearly impossible.  

Instead, digital platforms from insurance providers via websites and apps give brokers and employee benefits managers a self-service option. They can get all the package information they need up-front, any time, anywhere. They can also refer back to the platform at any point in the decision-making process as they compare with other packages.

For HR folks and brokers who want more intimate customer service, many digital platforms still provide options to speak with someone over the phone or email for personalized support. But for those who just want to get in and out of a website to find what they need without talking to a salesperson, a digital platform is a much smoother experience.

Automated Underwriting Eliminates Back-and-Forth in Quoting

Getting a quote for a benefits package can be slow and frustrating. If an employer has custom product needs, it may take more time for an insurance representative to relay back and forth with the broker.

An automated underwriting process, on the other hand, streamlines the quoting process to provide self-service pricing information in real time. 

One example of simplified pricing online is our digital quoting tool. It enables brokers to input employer information, receive a quote and complete underwriting in seconds. Automation handles all the data analysis. The broker can iterate on the quote on their own with the tool, no need to contact a rep.

Automated underwriting also decreases the odds of human error in putting together a quote. Brokers can be confident that the quotes they receive promptly through digital platforms are accurate and dynamic enough to reflect the employer’s insurance needs and risk profile.

See also: Achieving Digital Balance in an Agency

Digital-First Insurance Providers Have Innovation Baked In

Another advantage of shopping for benefits online is that, when a provider prioritizes digital channels for sales, it’s usually a good indicator that the provider leverages technology to improve its product, especially if it’s an insurtech keen on disrupting the market.

Automated underwriting doesn’t just accelerate the sales cycle and create a better shopping experience for brokers and benefits managers – it can more accurately predict a company’s or individual’s risk profile to provide fair pricing.

And it can also be less biased. A number of insurance providers base underwriting on factors like race and gender that can lead to discrimination in package pricing. Underwriting with tools like artificial intelligence and machine learning can easily filter through the risk factors that matter most to identify the level of coverage needed.

Online Benefits Shopping Is Here to Stay

There’s no need to mourn the old-school method of benefits shopping for employee benefits managers and brokers.

Digital benefits platforms make the process easier for everyone. There may be no donuts involved, but they’ll give everyone in the benefit ecosystem so much time back that they can go buy some themselves.