A Changing Vision for Driverless Vehicles Paul Carroll, Editor-in-Chief of ITL As plans for fully autonomous vehicles continue to get pushed back, the near future is beginning to look like it will revolve around a different acronym: more ADAS, less AV. Autonomous vehicles, or AVs, will provide many of the technology breakthroughs that allow for advances in ADAS, or advanced driver-assistance systems, which will use a host of new sensors and AI to reduce accidents. But the vision of driverless robotaxis carrying us everywhere and making deliveries looks like it will have to wait a bit, except in carefully circumscribed areas — and maybe even there for a while yet. The shift to ADAS from full AVs should soften the near-term effects on auto insurers, which have feared a loss of business in a world where individuals aren’t responsible for driving. At the same time, the shift may increase the cost of repairing expensive electronics when accidents occur. continue reading > KPMG and Majesco Webinar Join this webinar to better understand the evolving shift in underwriting, keys to the next-gen underwriting workbench, and why insurers need this to stay competitive in the commercial lines market.  Register Now SIX THINGS Digital Is the Assistant We Always Wanted by Troy Korsgaden So why do many companies and advisers in our industry resist digital advances like customer self-service and apps? Read More Personal Lines Channel Plans by Mark Breading Carriers are moving toward complex channel strategies, offering prospects, producers and policyholders a variety of ways to interact. Read More Biggest Risks to an Economic Recovery by Alexis Garatti There are many positive trends but also potential cracks in the armor that every business should be aware of during the world’s grand re-opening. Read More COVID-19 Boosts Cyber Risks in U.S. by Mary Parsons The good news is individuals can protect themselves by changing passwords regularly, keeping software up-to-date and using a private VPN. Read More Managing Challenges of Civil Unrest by Kimberly George and Mark Walls An organization’s planning and response can minimize losses and, most importantly, keep people safe. Read More Construction Workers’ Mental Well-Being by Calvin E. Beyer Contractors need to challenge the status quo and the cultural acceptance of fatigue as a necessary evil of a demanding industry. Read More MORE FROM ITL JULY FOCUS: Customer Experience This month sponsored by Statflo Insurance companies are finding that they have to reinvent chunks of their businesses to really get the customer experience right. Yes, they have to focus on the ways that they touch customers, through agents and brokers, through call centers, through adjusters and through an increasingly broad array of electronic means. But a customer doesn’t just experience a company through a direct communication. Customers also experience, for instance, how long and painful an underwriting process or a claim is. And here’s the thing: This emphasis on customer experience requires a revolution for companies. Keep Reading A Conversation on Corporate Strategy, with Amy Radin With the pace of digitization increasing, people talk a lot about new business models, new products and new technologies that can transform sales and customer service, claims, underwriting and more — but seldom about how the approach to formulating strategy must evolve. In this webinar, Amy Radin makes a strong case for starting by reassessing what the customer needs in these changing times, both from a rational and from an emotional standpoint.  Watch Now Partner with ITL to create expert thought leadership content. Custom Content Promoted Content Display Advertising Custom Webinars Monthly Topic Sponsorships ITL Partner Packages and more Learn more and get the 2021 Media Kit GET INVOLVED Write for Us Our authors are what set Insurance Thought Leadership apart. Get Started SPREAD THE WORD Share Share Tweet Forward SUBSCRIBE TO SIX THINGS

Sometimes it’s difficult to see the trees of opportunity amid the forest of competition. This is especially true for carriers looking at commercial markets as the U.S. emerges from the grip of the COVID-19 pandemic.

Despite the insurance industry’s overall surge toward digital transformation, technology also has the ability to substantially influence the competitive landscape. Carriers have huge opportunities to harness the power of data, optimize distribution management and advance the agent experience in commercial lines. Those firms that do will likely open a gap that will last months, if not years, and potentially create a significant boost in share-of-market.

Comparative rating

The biggest immediate insurtech opportunity lies in comparative rating for commercial insurance. On the consumer side, comparative rating has revolutionized insurance by enabling agents to generate rates from multiple carriers in minutes, with a few clicks of a mouse. This game-changing capability, however, is only beginning to reach the commercial segment. 

For independent agents, no third-party rating platform has yet scaled to provide the broad carrier access needed. As a result, most agents are forced to visit multiple carrier websites individually to generate competitive quotes. Each time an agent is presented with a policy opportunity, data must be entered and re-entered into each carrier’s quoting system. This one-by-one, manual data entry not only is inefficient and repetitive but also circumvents the agency’s internal Agency Management System (AMS). Agents can spend hours, even days, preparing customer quotes for coverage.

See also: State of Commercial Insurance Market

These inefficiencies affect carriers, as well. Industry research shows that, due to time constraints, agents typically present just three to four quotes to customers. Many carriers lose out. Some don’t enjoy top-of-mind awareness among agents for a particular risk; in other cases, agents consider a particular carrier’s website too difficult to navigate or, conversely, prefer other sites offering tools that make quoting easier. Where carriers land amid these issues can make the difference in millions of dollars in aggregate business each year.

Efficiency through automation

Solutions, however, are emerging from insurtech providers. Real-time, automated quoting platforms are simplifying the submissions process with systems that enable agents to auto-populate forms in seconds, directly from their AMS. Up to 80% of the typical commercial submission form is pre-filled, allowing agents to quickly generate quotes from multiple carriers.

Commercial quoting solutions can reduce the time needed to prepare small commercial submissions by up to 60%, with similar reductions in errors. Quoting time for mid-to-large commercial submissions are typically reduced by 25%, with overall quote times that are 50% faster—a major improvement in efficiency for agents and carriers alike.

Carriers can position themselves for success in this environment by engaging with comparative rating solutions from multiple insurtech providers and by investing in appetite, quote and bind APIs. This will position them for success when a market leader emerges because agents will no longer have to visit multiple carrier websites for a quote, and the probability that more carriers will get a look at every submission will increase.

Quoting solutions also offer new opportunities for wholesale business among managing general agents (MGAs). The world is changing, and lines of business are opening up for new risks, such as data loss and privacy. Carriers often turn to MGA wholesalers for these niche markets, and adding connectivity via rating platforms will create a more complete, self-contained, digital ecosystem that supports more lines of business while delivering greater value to all stakeholders.

Comparative rating for specialty lines will likely follow the initial success of rating for standard lines. Insurtech leaders will likely be the ones to drive this emerging opportunity between carriers and MGAs, especially in the early stages of development. Carriers that solidify partnerships with distribution insurtechs now will have a leg up as the industry slowly but surely evolves. 

Leveraging data

Distribution is another prime area of competitive opportunity. Especially in commercial lines, carriers can use distribution data to benchmark their pricing and commissions, be more strategic about selecting distribution partners and identify new markets and products. 

Through data analytics, for example, a carrier may find it can price up and still be competitive. Of course, the success of data analytics depends on multiple factors, including applying data in the right cases and creating an infrastructure that properly collects, stores, analyzes and applies digital information.

It’s time to evolve

To take advantage of the power of competitive technology, carriers should accelerate their investments in APIs for automated quoting. They should also solidify their partnership with insurtech providers that offer distribution solutions. 

The primary goal of insurtech is to improve efficiency in all its forms, from reducing time-consuming manual tasks to increasing knowledge of the customer and anticipating change. A major benefit for carriers, however, is the ability to get a leg up on the competition. Marketplace changes demand that the industry become increasingly nimble and flexible. Agility is a key competitive advantage.

Few, if any, carriers have pulled ahead of the pack in easing the process of quoting and selling commercial insurance. It’s time to seize the moment. A few trees may be obscuring the business view, but a good, insightful look will reveal a profitable path through the woods.

From delay born of pandemic to decisiveness borne by leaders with a plan, from anger born of isolation to action borne by people’s refusal to isolate themselves from the world, the authors of the first chapter of post-pandemic life—the writers of this history—are the underwriters of life insurance. The men and women responsible for the expansion of accelerated underwriting deserve their place in history. 

The public has a right to know, and the insurance industry has a duty to promote, what accelerated underwriting is: that new technologies make it fast and affordable to review life insurance applications; that insurers can check prescriptions, driving records and all relevant records in minutes; that this process is safe and noninvasive, free of undergoing a physical or having someone enter a physical premise.

Because of a combination of timing and technology, accelerated underwriting is no longer an option for the few. Because of the times in which we live, accelerated underwriting may become a preference of the many. Because of these things and more, including the need to slow or stop the spread of COVID-19, accelerated underwriting may save lives while increasing sales of life insurance. But people cannot buy what they do not know exists.

People need to know that eligibility does not depend on electability, that they do not have to elect to put themselves at risk so as to have insurers assess the risks of issuing life insurance. What is available online avails insurers the opportunity to earn the trust of consumers. What sustains this trust is what accelerates the means by which consumers can create trusts or tax-free income, thanks to owning life insurance. What makes this trust possible in the first place is accelerated underwriting.

The terms may differ, the terms do differ, but the conditions are the same; that is to say, accelerated underwriting is not conditioned on strangers visiting applicants’ homes. 

Matters of personal health are a matter of public health, such that people of a certain age or condition do not want to increase their vulnerability or lower their immunity to illness. Put another way, no one wants to die from life insurance, though many want to die with life insurance.

Accelerated underwriting is true to its name, using technology to collect and analyze data. From there, insurers can determine specific costs for specific consumers. The process is efficient and economical for everyone, allowing insurers to write more policies while enabling consumers to compare prices. But again, the information that furthers accelerated underwriting begins with the information insurers give consumers.

See also: Digital Revolution Reaches Underwriting

Accelerated underwriting is a universal good, based on the good of intelligence, for the purchase of goods in the form of life insurance. The result serves the common good, strengthening individuals and families. For this good to flourish, acts of goodness demand swift and secure action. 

Now is the time to accelerate the use of accelerated underwriting, so we may speed up the day when all who want life insurance can have it.

As plans for fully autonomous vehicles continue to get pushed back, the near future is beginning to look like it will revolve around a different acronym: more ADAS, less AV.

Autonomous vehicles, or AVs, will provide many of the technology breakthroughs that allow for advances in ADAS, or advanced driver-assistance systems, which will use a host of new sensors and AI to reduce accidents. But the vision of driverless robotaxis carrying us everywhere and making deliveries looks like it will have to wait a bit, except in carefully circumscribed areas -- and maybe even there for a while yet.

The shift to ADAS from full AVs should soften the near-term effects on auto insurers, which have feared a loss of business in a world where individuals aren't responsible for driving. At the same time, the shift may increase the cost of repairing expensive electronics when accidents occur.

The new focus on ADAS is by no means a statement that the full AV revolution won't happen. The progress by AVs has been nothing short of astounding since DARPA, a research arm of the Department of Defense, offered a $1 million prize in 2004 in a contest among autonomous vehicles on a 150-mile course in the Mojave Desert. Most of the 15 vehicles chosen to participate were basically golf carts with sensors and computers strapped on to them, and more than half didn't even make it out of sight of the starting line. The farthest any vehicle went was 7.4 miles. Just 17 years later, we have fleets of sleek-looking vehicles traveling city streets using AI and sensors -- albeit still with a safety driver behind the wheel in just about all of them.

Progress will continue, too. A Brookings Institution study found that $80 billion flowed into AV technology investments between 2014 and 2017. That’s just the investments announced publicly and, of course, doesn’t count the prior investments or the money that has flooded into the field since 2017.

The issue hasn't been that the AV technology doesn't work -- in any given situation, an AV will perform better than the vast majority of human drivers. It's just that the world around AVs has turned out to be more complex than initial plans allowed for. In particular, we humans do lots of unpredictable things as pedestrians and as drivers -- and AVs aren't allowed to make mistakes.

While we wait for full autonomy, though, plenty of opportunities have opened up to make driving safer, a notion underscored by some recent multibillion-dollar price tags on acquisitions of ADAS companies.

Lidar sensors, governed by always-learning AI, can enhance automatic braking systems -- and studies have found that cars are already more than 50% less likely to have a rear-end collision if equipped with such a system. Systems that keep cars centered in lanes will also improve as technology designed for full autonomy is deployed.

Increased communications capabilities designed for AVs will allow for better connections with roads and other infrastructure. When I rented a car last week while on vacation at the Jersey shore, I wasn't sure what the speed limit was at one point, then realized that it was displayed on my dashboard based on some sort of radio signal from a speed limit sign I'd missed. Cars will also be able to better communicate with each other. If a car slams on its brakes, it will be able to alert the stream of cars behind it so they can instantaneously begin braking, too. Further out, AV technology will even let cars communicate with each other in ways that let them essentially see around corners -- even if you can't see that a car is speeding through a red light and might broadside you, many other cars on the road can, and they'll be able to alert yours to brake and avoid the danger.

Technology developed for autonomous cars may also find earlier uses in autonomous trucks. Many are looking at having them operate in fully driverless mode on freeways, where vehicle traffic is far more predictable than on city roads and where pedestrians aren't an issue. Human drivers would be staged at freeway exits, to ferry trucks to and from their final destinations and within cities. Makers of self-driving trucks say they can cut freight costs in half by removing the need for drivers on the freeway portion of long-haul routes.

I remain as optimistic as ever about the outlook for AVs. Since Chunka Mui and I wrote a book on driverless cars in 2013, progress was faster than we expected for a time and now is somewhat slower. As often happens with fundamental innovations like AVs, the development isn't happening in a straight line. We're winding up with hybrid forms of the technology in both cars and trucks before we get to the full effects. But we'll get there.

Cheers,

Paul

When insurance industry observers think of the channel strategies for personal lines, the picture can appear to be fairly simple. More of the business is moving to direct distribution, whether that is through call centers or the web. Furthermore, there is a clear movement to digital, straight-through processing. Comparative raters continue to exert significant influence on submissions flow. And, finally, the rich get richer – with tier one direct carriers continuing to gain share. These have been the trends for the last few years. But a closer look reveals that the evolution of distribution in personal lines is more complicated.

New research by SMA reveals several developments that must be added into the channel evolution picture.

1. Relationships with affinity groups are a growing distribution choice: A significant percentage of personal lines insurers plan to increase their emphasis on business with affinity groups or establish partnerships with new affinity groups or companies outside of insurance.
2. Insurtech distribution partnerships are vital: There is already substantial partnership activity underway between carriers and insurtech digital agents or distribution platforms. The new distribution platforms are more than comparative raters, providing increased capabilities to support fully digital, straight-through processing operations. 
3. MGAs are a growing part of the landscape: MGAs play a major role for commercial lines distribution but are not always considered to be a significant channel for personal lines. That may be changing as insurers create more new/customized products for consumers and seek access to preferred segments.

Last, but definitely not least, independent agent distribution continues to flourish. The IA market landscape is shifting dramatically through M&A and the role of platform agencies. Insurers are adjusting to the new realities of partnering with sophisticated distribution partners that have scale and advanced tech. At the same time, many insurers are deploying very focused appointment strategies. Rather than scaling back on appointing new IA partners, in many cases, the opposite is occurring. Couple that with the enhanced tech capabilities being provided to distribution partners and the increased connections with intermediary distribution platforms, and it is clear that the independent channel will still be a critical part of personal lines distribution for years to come.

See also: The Digital Journey in Personal Lines

The result of all this activity in channel strategies is a move toward more omni-channel capabilities, with carriers offering prospects, producers and policyholders a variety of ways to interact. And in five years, the channel environment is likely to be even more complicated than it is today. But it is unlikely that any one channel will dominate.

For more information on commercial lines distribution expansion strategies, see our recent research report, “Channel Strategies and Plans for P&C Personal Lines: A View of Today’s Environment and What’s to Come.”

From the 1980s through the early 2000s, many advisers and brokers dreamed of having more help with critical yet time-consuming tasks like proof of insurance and minor claims processing. We mused, “If only I had help with those tasks, I could spend more time focusing on high-touch customer service and sales.”

Today, digital innovations are streamlining much of the way carriers and their representatives conduct and generate business. These innovations are precisely the help we wished for.

So, why do many in our industry resist digital advances like customer self-service and apps?

Digital enables us to create deeper customer relationships

Digital technology is not going to replace us. The tech advances we have access to today are simply encouraging us to reposition our No. 1 asset—our people—to do the high-dollar, deeper-dive work with clients that we only dreamed about years ago.

Our industry is gaining exponential efficiency from the digitization of many of its processes and systems. Greater efficiency in other areas enables advisers to spend more time focusing on high-return activities like conducting annual reviews, offering comprehensive financial advice, handling complex service issues and increasing product sales and density.

Technology enables us to serve our customers more fully. It has created model distribution—an ecosystem of connected offerings from a variety of participating providers that makes it easier to fulfill multiple needs for our customers and provide an integrated user experience.

When we leverage this enhanced distribution model, we build deeper customer relationships, which, in turn, lead to increased product density and customer and adviser retention.

Technology is facilitating the evolution of distribution at all levels

The COVID-19 pandemic accelerated many carriers’ tech efforts. Unable to serve customers face to face, they found other ways to reach out to prospects and customers. But there is so much more we can do. 

According to a May 2021 report by DAIS, a platform focused on making modern technological advances in the insurance industry, artificial intelligence (AI) is the future of insurance. AI enhances our ability to hyper-personalize the customer experience, drive product innovation and automate routine tasks.

A 2021 Deloitte study echoes that claim. The study predicts that AI will evolve underwriters into customer portfolio managers and strategic analysts, advisers into specialized customer experts and ecosystem integrators, actuaries into strategic planners and cross-functional collaborators and claims officers into customer loyalty drivers and customer liability experts.

This is nirvana, isn’t it?

See also: Building Your Digital Sales Arsenal

Savvy companies use digital to drive leads and grow faster

A Liberty Mutual/Safeco Insurance study conducted in October 2020 introduced the inaugural Agent for the Future Index—a quantitative assessment of the state of digital transformation in the independent agent channel. Researchers divided the survey respondents into three groups: low, medium and high digital adopters.

The study revealed that high digital adopters improve the digital tools they have in place and use those tools to drive leads. Their top priorities are educating their customers about new ways of working with them and extending their online presence for marketing. 

The study finds that 47% of high digital adopters invested in digital capabilities in the past year, while only 18% of low adopters did so. And high digital adopters had a 60% greater increase in revenue than their less digitally savvy peers.

During the pandemic, all levels of the distribution chain were tasked with finding innovative ways to connect with their communities online. Leveraging digital technology simply requires expanding those efforts.

Digital enhancements don’t have to be complex

The concept of AI can seem complex and intimidating. Most of us have no idea how to implement machine learning or data cleansing into our systems. That’s OK; plenty of experts out there specialize in AI implementation. We can hire them once we make digital enhancement a priority for our companies.

Making your company easier to find online and easier to do business with doesn’t have to be complicated. During the pandemic, many carriers and agencies increased their outreach and customer engagement simply by enhancing their websites and stepping up their social media activity.

Three strategies to begin leveraging technology

A technology CEO and member of the Forbes Technology Council says that delivering an excellent experience is now a matter of survival. He writes, “From your website and your mobile app to your social media profiles and your email campaigns, insurers must always deliver the best customer experience. To build deeper relationships with customers throughout the entire customer journey from application to cross-selling, insurers must build engaging, personalized journeys at every step of the way. We are entering a new era of innovation and giant technological leaps in the insurance industry. These are the exciting times we are living in.”

So how can carriers and their advisers boost their digital capabilities? Here are three simple strategies to begin implementing immediately.

1. Leverage technology to gain new prospects and retain current customers

For decades, customers have remained loyal to their carriers and their advisers. Today, that loyalty is at risk of being replaced by a thirst for more options, faster access and better experiences. Customers are in complete control, and that’s the way it should be. The silver lining is that, when we differentiate ourselves by providing an exceptional customer experience, we can get prospects to at least consider us. Providing an exceptional experience will also strengthen our current customers’ loyalty.

How do we accomplish that? By changing the distribution model. This means allowing technology—an app, for example—to handle the low-return tasks like making ID cards available and processing transactions such as tow claims.

Don’t fight it; embrace it. Free of doing those routine tasks, your company and your advisers can focus on deepening customer relationships and personalizing solutions. They can discover novel ways to exceed their clients’ expectations and focus more on providing advice and guidance.

2. Make it easy for customers to find you, then engage them in other ways

Today’s consumers are accustomed to exploring their options online. Make your company easy to find and your offerings appealing, and people will seek more information. For example, we know that auto insurance is the product that will get most customers to consider us. Creating an engaging, easy-to-access auto insurance page on your website will draw customers in. Once they engage with you, then you can differentiate your company and your service.

Although many customers initially approach companies by seeking quotes for their basic protection needs, most also want expert advice on their overall financial health. Make it easy for them to discover that you offer a full array of insurance and financial services solutions.

For example, an advice relationship might begin with guidance about liability coverage. Customers might not realize that $500,000 limit in liability coverage isn’t sufficient if they cause an auto accident that results in several million dollars worth of injuries to a family. Advisers deliver exceptional value when they educate their customers about critical issues like this.

3. Continually improve your products and delivery mechanisms 

As commoditization in our industry continues to be the norm, carriers must continually improve their products and delivery mechanisms. Make sure your offerings provide not just perceived value but real value.

Product pricing is one example of the difference between perceived and real value. Years ago, advisers perceived some carriers as “the cheap companies.” Over time, as those companies attracted and retained more clients, advisers realized the companies aren’t cheap. They are serving the segment of the population shopping for affordable insurance. These companies offer good-quality products, make it easy to do business and deliver their products seamlessly. 

Avoid focusing only on price, but recognize that some clients are sensitive to pricing on certain types of insurance. Provide options for all price points and levels of service desired.

See also: Digital Future of Insurance Emerges

Build digital innovation into your budget

Remember when the internet first came on the scene? Many resisted the innovation, thinking it was just a fad. When they realized it was the way of the future, they had to prioritize establishing a presence on the web.

Our customers demand ease of use through digital and online technology. We must prioritize it, budget for it and implement it. Our survival depends on it, and our customers expect it.

A culture of worker well-being hinges on the understanding that a “whole worker” shows up at the jobsite each day. Fatigue in construction is not new. However, with fast-tracking, schedule compression and the growing complexity of projects, fatigue is becoming an increasingly big issue affecting the workforce. 

Fatigue doesn’t just affect workers from a physical standpoint, it also affects their mental well-being. As part of a sound risk management and safety strategy to prevent worker injury and mental health concerns, contractors need to develop a plan around managing worker fatigue and burnout.

Growing Risk of Fatigue

In 2019, Construction Executive shared information from the National Safety Council’s research-based, three-part special report on fatigue. This report continues to be a reliable resource for employers concerned about fatigue and considering how to counter the effects of fatigue. Part III of the NSC report highlighted some of the risks associated with employee fatigue, which affects the “ability to think clearly, slows reaction time, decreases attention and vigilance, and impacts short-term memory, judgment and other functions.” 

Consequences of Fatigue

The consequences of worker fatigue affect construction operations by increasing incidents and issues in key performance areas, including:

• “near hits”;
• minor/first-aid injuries, serious/debilitating injuries and fatalities;
• quality defects leading to rework, cost impacts and schedule delays;
• equipment and property damage resulting in increased operating costs; and
• increased overtime and reduced productivity resulting in profit fade.

The Job Site Is Only One Factor That Contributes to Fatigue

One of the issues that contractors need to understand is that the workers’ total time spent on work does not start when the worker arrives at the job site. The total workday includes the worker’s roundtrip commute and needs to be an integral part of assessing worker fatigue. Many construction workers commute more than an hour each way. Why is this important? Commuting can add as much as 10 to 15 hours per workweek. Not only do the workers’ hours and commute time need to be understood, but contractors also need to understand that workers have personal and family lives. If a worker works 12-hour days, commutes two hours and takes three to four hours of personal/family life, that leaves six to seven hours or less of sleep each night. This daily pattern compounds the “total worker fatigue impact.”

The Risk of "Presenteeism"

There is a growing challenge with worker fatigue and burnout. “Presenteeism” is when a worker is on the job site but is not fully engaged due to a lack of focus or concentration. There can be many possible causes of presenteeism and sources of distraction, including:

• stressors at home, including relationship issues, caregiving for children or relatives, unexpected expenses and financial pressures and legal concerns;
• physical illness or underlying mental health condition;
• sleep deprivation;
• working through an injury or the nagging effects of chronic pain; and
• a known or suspected impairment from recent or continuing alcohol or substance misuse. 

See also: Long-Haul COVID-19 Claims and WC

Cultural Change for Contractors to Counter Fatigue

Construction company owners, executives and project leaders need to recognize the hidden costs that worker fatigue can have on the overall profitability of a project. Construction leaders need to understand that worker fatigue doesn’t just happen and that, through their actions or inactions, fatigue becomes a growing, unmeasured worker health problem. Contractors need to take a close look at how projects are staffed, supervised, scheduled and resourced to reduce the potential impact of fatigue on productivity, quality, risk management and safety performance. 

The starting point for meaningful and lasting change is recognition that a challenge exists and confirmation that it needs to be addressed. Contractors need to challenge the status quo and the cultural acceptance of fatigue as a necessary evil of a demanding industry. Company leaders need to reject the notion that there is little that can be done to reduce the competing demands that lead to worker fatigue. Fatigue should not be viewed as a badge of honor but as a sign that the system needs to be modified. The adage of “making hay while the sun is shining” is being replaced with a longer-term perspective of building a sustainable workforce for tomorrow. 

Strategies to Combat Fatigue

Strategies to combat fatigue include:

1. Have honest conversations with project owners about the industry’s existing shortage of skilled workers and the impact of aggressive schedules on the well-being of the workforce. 
2. Embrace lean construction methods to adjust schedules and sequences based on realistic availability of all trades.
3. Improve management reporting to capture real-time field data showing a true picture of labor hours and costs vs. construction progress schedules. To shed light on a company’s potential for worker and crew fatigue, contractors should develop reports that analyze:
   • consecutive days worked. Look at trends of workers who routinely work consecutive days without time off from the job site.
   • total weekly hours worked. Analyze trends of workers who work high numbers of hours each week.
4. Reduce the frequency of unscheduled overtime and the overall maximum amount of overtime required of crews. Alternatively, evaluate if there is flexibility in the schedule to provide a weekend free from work to provide for adequate rest.
5. Analyze the amount of night work that is scheduled and the impact this has on scheduling the remaining projects. Does the night work require the company to schedule workers for back-to-back work shifts without allowing for a proper rest period? 

The May 2021 National Construction Safety Week focused on the theme of “Committed to Holistic Safety” with an emphasis on worker mental health, well-being and fatigue. The industry knows the impact on job-site culture, teamwork, safety, quality and productivity when a crew is saddled with chronic tardiness or absenteeism. It is a noteworthy cultural shift that the industry is responding to the rising concern about physical and mental well-being of the workforce. 

This article was written by Cal Beyer and Scott Staffon.

Over the last year, many communities have faced large riots and protests that destroyed public and private property and resulted in hundreds of injuries. While these events carry a certain amount of unpredictability, an organization’s planning and response to these events can minimize losses and, most importantly, keep people safe. 

The latest Out Front Ideas with Kimberly and Mark webinar included a panel discussing the risk management challenges associated with civil unrest. Our guests were:

• Anas Al-Hamwi – senior director, occupational health and injury management, Walgreens
• Renata Elias – senior vice president, consulting solutions, Marsh
• Barry Scott – deputy director of finance, risk manager, city of Philadelphia
• Thomas Simoncic – president, Property Americas, Sedgwick

Protect, Prepare and Partner

No response is effective without proper planning and preparedness measures. Employers should consider their situational readiness by identifying tools that exist within their infrastructure, particularly their partnerships. Engaging industry peers, local community leaders and municipalities creates a network of advisers to assist with early communications to all stakeholders. If there are multiple operations locations, empower your leaders at each site to make the right decisions by giving them the tools they need to execute proper procedures. 

In planning, public entities need to adapt to allow and protect First Amendment activities while also ensuring lives are protected. While the balance can be tricky, partnering with federal, state and local governments can forecast any potential issues. First responders and police units need to be in constant communication to respond to any event rapidly. Including everyone from fire units to public transit employees ensures a collaborative effort. Keeping communities informed with timely messages keeps both the public and employees safe.

Having a crisis management capability within your organization helps senior leadership respond both quickly and appropriately. Formalize your crisis management plan with reporting incidents, escalation to senior leadership, defining the criteria for an escalation, incident screening and notification and activation of the senior leadership. Once you have buy-in and collaboration, you can align and integrate with all stakeholders to ensure the process is trained and exercised for capabilities.

Property Loss 

While civil unrest is not a natural disaster, like hurricanes, these events carry similar characteristics in that they are widespread, occur over different dates and cause varying levels of damage and business interruption. Understanding what your policy covers and does not cover is critical to preparation. Reach out to your partners within your carrier and broker relationships to fully assess your needs. Understanding the definition of occurrence in a policy can determine whether multiple days of civil unrest are considered one deductible. Establishing a timeline is necessary so your partners can scale and meet your needs while finding escalation and remediation points.

While protecting property is critical to restoring business activity, protecting people and their livelihood should always be a priority. Does your business continuity plan include details directing employees where to go if a specific location cannot operate? Will your vendors or suppliers know where to make deliveries? Where will your critical processes take place? All of these items should be addressed to ensure all stakeholders are prepared for a crisis. Mobilization with partners and vendors before an occurrence can affect response time, enabling an organization to get back to business faster.

See also: Did You Use the COVID Down Time?

Prioritize Your People

As you strategize for potential events and develop a continuity plan, people should be your priority. In keeping your employees and the community safe, communication and preparedness are key. Internal communications should be aligned with your strategies to ensure a coordinated response, and making appropriate connections with media partners can assist with disseminating external communications to the community. 

Civil unrest training, developed specifically for regions, can help employers establish preparedness measures for their workers. It forms a basic knowledge of staying safe in a crisis while also keeping people informed of the business continuity plan. Communicate with federal agencies and local municipalities to make sure your protocols meet their standards. Make sure your workers have resources like an employee assistance program to address their mental health throughout a crisis. Property can always be replaced, but human lives cannot, so people should always be the starting point when developing your plan.

Lessons Learned

The last year has served as a lesson in crisis for many organizations, especially those experiencing the aftermath of civil unrest for the first time. Responding to the next event requires careful consideration of what was missing in your initial response. Perform internal debriefs and post-incident reviews to highlight any gaps and bridge the silos. And when determining risks, consider all the external factors currently, like labor shortages, logistical supply chain and inventory issues and rising inflation. These can all add to the costs associated with property repairs. Lastly, this past year has taught us that truly anything can happen, so go forward humbly and be prepared for what you do not expect.

With much of the world beginning to reopen and global economies beginning to recover, there are many reasons to feel confident in the direction that the global economy is heading, including successful immunization campaigns in advanced economies and promising projections for global GDP and trade, which our latest research predicts will see global 5.5% and 7.7%  growth respectively. Despite these positive trends, there are potential cracks in the armor that every business leader should be aware of as we continue to grapple with the world’s grand re-opening. 

Vaccine Security 

The first and perhaps most obvious risk factor the economic research team at Euler Hermes has identified is vaccine security. While advanced economies delivered on immunization campaigns, under-vaccination in Asia and other emerging markets may cause desynchronized growth paths. Avoiding the vaccination fatigue trap will be key for a sustainable reopening as demand side hurdles (such as vaccine hesitancy) are now following the supply-side ones. In the meantime, under-vaccination in Asia and in emerging markets may desync growth paths. Stop-and-go government strategies to cope with the increase in new cases – albeit more moderate than previous waves -- are likely to continue and could hinder economic recoveries in these markets. 

Inflation 

Every economy’s biggest boogie man is inflation. While it’s often spoken about as a risk factor, we are seeing signs that, this time around, it could pose a real threat. Bottlenecks in terms of supply (raw materials, transportation capacity and workers) will likely keep inflation above normal until the end of 2021. Global inflationary pressures are indeed at record highs, but the good news is that they are mainly driven by energy prices and temporary disruptions of global supply chains. In 2022, pressures from labor shortages should reduce along with the rise in input prices, but businesses should exercise caution and watch inflation closely in the interim. 

See also: 4 Stages to Recovery and ‘Future of Work’

Also contributing to inflation fears is the average household’s pent-up demand. We estimate pent-up consumption at 3% of GDP in the U.S. and U.K. in 2021 and at around 1.5% in most European countries. Consumption will lead the recovery, but hoarding behaviors (such as putting stimulus money directly into savings accounts) remain, and that could complicate policy choices down the road. Still, we expect around 40% of the excess cash from households and companies (currently at more than 10% of GDP in both the U.S. and Europe) will morph into spending by year-end, thanks to high pent-up demand.

Business Insolvency

Massive state interventions helped suppress a significant wave of insolvencies in 2020, with the year ending with a 12% drop globally rather than a 40% surge, which we predict would have been seen without government assistance. What now becomes tricky is how global governments can phase out these assistance programs without causing a renewed fiscal crisis.

U.S. Politics 

This one won’t come as a shock to most economic observers. The U.S. has launched a wave of global and multilateral initiatives for climate change and tax policies. Such a revival in international engagement does not necessarily mean unselective multilateralism: so far in 2021, the U.S. has been the most active with trade protectionist measures, which could complicate the recovery of a global supply chain.

The economic picture is improving, but business leaders must remain vigilant and consider all possible risk prevention solutions to best mitigate downturns and protect their balance sheets.

In the past 18 months, COVID-19 has affected nearly every aspect of our lives, with the most severe impact having been the tragic death and sickness of so many. COVID-19 also has affected where we work, who we see and when we go out. Yet, one of the most understated but outsized effects of the pandemic has been on individuals’ cyber risks.  

According to Chubb’s 2021 Personal Cyber Risk Survey, which examines Americans’ new cyber concerns and their overall behavior, most individuals have not taken the necessary action needed to protect themselves against cyber-attacks. 

For a copy of the full Executive Summary, click here. Survey key findings and further details are below.

Staying Connected

To stay connected during the quarantine, individuals quickly shifted to life online, often with a new electronic device. According to the survey, 86% of Americans have either purchased or been given a new device in the past year. Regardless of the device, those who did not properly secure their devices within a timely manner could have exposed themselves to cyber risks.  

Furthermore, 83% of respondents say they access the internet several times a day, with 30% of individuals estimating they share their data at least 10 times a day. Being “plugged in” means understanding what data we are sharing and how we are protecting our information. For example, sharing personal information, (e.g., birthdate, pet names, favorite TV shows) and then using that information to build passwords, can allow bad actors to “guess” log-in credentials to access accounts. 

Cyber Vulnerabilities at Home

During the COVID-19 pandemic, many individuals were able to work from home. Forty-four percent of respondents chose to relocate to work at a remote location. However, the ease of remote work often comes with cyber vulnerabilities. For example, connecting to an unsecure, public network or with out-of-date software while changing locations due to remote working can put individuals at risk. 

Small Businesses and Entrepreneurs

With many Americans expecting to work remotely throughout the rest of 2021, it’s important for businesses and entrepreneurs to implement best practices for employee and company security against bad actors. 

In fact, small businesses are frequently targeted, as they have fewer resources to protect themselves against a cyber-attack. According to the Chubb Cyber Claims Index, global cyber incidents have grown by 981% for small businesses with revenues under $25 million. 

See also: Cyber Risk Impact of Working From Home

Cyber Vulnerability of Medical Data

Nowadays, one’s COVID-19 vaccination status has been top-of-mind for many individuals. Most individuals (63%) feel as though people should share their vaccination status, while a similar majority (57%) are concerned with having to share their vaccination status with others.

Although survey respondents show apprehension about the privacy of their vaccination status, only 24% of them are concerned with the cyber vulnerability of other medical data, which is alarming because medical records often contain extremely sensitive information. 

Protecting Data

Despite broad cyber exposure, just 12% of Americans have purchased a personal cyber insurance policy. The good news is that there are ways for individuals to protect themselves from cyber threats such as changing passwords regularly, keeping software up-to-date, using a private VPN, and purchasing cyber insurance.