The pinnacle of the real estate market, of any market, is hard to predict, just as the precipice of a collapse in prices is real but unpredictable. About the sea below, red with debt and white with foam, about the flotsam from those houses underwater and too deep to raise, a reminder: We must sail to port, for we cannot afford to drift or drop anchor; we must sail toward safety, in safety, with the safety insurance provides; we must sail with the tide, allowing it to lift us without having it crash against us, so we may convert a rise in valuations into a plan that delivers everlasting value.

By using life insurance to create an estate plan, and funding the plan with cash from a home equity conversion mortgage (HECM), qualified borrowers (ages 62 and older) can turn rising house prices into tax-free income. Because the appraised value of a house determines the size of a loan, and because prices have risen at the fastest rate in more than 30 years, borrowers have more money to invest. How they choose to invest this money, whether they choose to guarantee a legacy for their loved ones or better themselves without relying on their loved ones, is their choice. 

More important is the fact that borrowers are free to choose, that they have the freedom to secure paper wealth with paper as secure as property. Because of what the law says, that life insurance is a form of property, and because of what life insurance offers, liquidity, borrowers are free to make real the promises of HECM: bestowing upon themselves, or bequeathing to posterity, the blessings of financial freedom.

Take, for instance, a 62-year-old woman with an average life expectancy of 84. If the appraised value of this woman’s house is $500,000, or 25% higher than a year ago, she can transfer the money from a HECM loan into a life insurance policy, safeguarding the principal while earning tax-free income from a diversified portfolio of investments. Or the beneficiaries of her estate can receive a cash payout, minus the balance and interest of the HECM loan, thanks to a life insurance policy.

See also: Where Does Life Insurance Go Now?

Thanks to the fact that life insurance is a lifeline, this woman has the power to avoid the shallows and miseries of the sea. Whether her voyage is long or short, whether her vessel is a sloop or a schooner, the sea—mysterious, wild and unrestrained—endures. To weather its storms and withstand its moods, to be like a rock of strength and prudence, able to rise from awful stirrings and right the course, to stir the course with apparent wind, requires the assurance of a wise captain.

The captain deserves insurance, too, so she may sail in peace, despite the conditions of the sea. Mindful of the direction, and peaceful because of her directives, life insurance guides this captain home. Life insurance guides her travels.

Ever since a college statistics class in which I learned about the polling debacle in the 1936 U.S. presidential election, I've cast a wary eye at surveys. The respected Literary Digest got fully 2.4 million people to respond to a poll on their preferences that year and reported that Alf Landon would easily defeat incumbent Franklin D. Roosevelt. Or maybe not. While the poll found Landon leading 57% to 43%, in fact, FDR won 61% of the popular vote. He pitched a near shutout in the Electoral College, winning 523 to eight.

It's not that consumer surveys don't have value. They do, especially as long as we've all learned to avoid pitfalls such as the wild sampling bias that led Literary Digest so far astray. The surveys can be especially valuable when they track changes in attitudes over many years or even decades.

But customer surveys have always been rather crude. They're highly sensitive to how questions are phrased, and they've always operated at a remove from what we really care about: Surveys tell us what customers say they'll do, not necessarily what they'll actually do.

There's now a better way. And it's especially important at a time when so many insurers are trying to reinvent the customer experience -- they need to know what really matters and what doesn't, in fact, affect customer behavior.

This article from McKinsey provides a smart look at that better way: using the increased digitization of customers and of the industry to monitor in a detailed way how customers behavior in the wild.

The article points to three steps:

--Starting with a "data lake" that pulls together all the digital data possible both on aggregate behavior in a market and on individual customers. That massive amount of data provides the raw material for understanding what determines customer journeys.

--Bringing machine learning and other forms of analytics to bear, to sort through all that data and detect what specific events matter in customer journeys. That information will let companies assess investments in customer experience and tie CX initiatives to business outcomes.

--Sharing the insights with front-line employees so they know how to personalize customer experiences in ways that improve business outcomes. Timely insights can spur swift action.

As the article says, it's "possible for CX leaders to create an accurate and quantified view of the factors that are propelling customer experience and business performance, and [that view becomes] the foundation to link CX to value and to build clear business cases for CX improvement.... Leaders who have built such systems are creating substantial value through a wide array of applications across performance management, strategic planning and real-time customer engagement."

Again, traditional approaches have value. I recall vividly the insight that the team that developed the original Apple Macintosh got from a video of a focus group. One of the original developers once told me that that they had decided to take a hip approach and put the words "Do It" on what had to that point been an "Enter" key on a personal computer. But as they watched people in a focus group, they saw a woman going through all the steps in a process, and then, right before hitting the "Do It" button, she hesitated and then unwound all her work. When they turned up the volume, they heard the woman saying "Dolt? I'm no dolt." And that was the end of the "Do It" button.

But all our digital interactions with customers have created a better way, so it's time to deemphasize customer surveys, focus groups and other traditional means and start taking advantage of the extraordinary insights that customers are increasingly willing to provide us.

Cheers,

Paul

Let's say you've appointed a head of customer experience, who is part of your senior management team. You have a customer experience practice. This might be a small team of a few people, or it might be a larger division or department within your organization. And you've implemented practices and procedures driven by customer experience. You're doing research. You're creating and using personas and journey maps. Maybe you're even doing a service blueprint. And, of course, you have metrics and measurements. From thoseat, you get analytics and intelligence. You know what your customers need. You know how they feel; you know what they're saying. And you are acting based on what you learn. You're changing priorities, decisions and investments. So, you've established the discipline, and you're doing everything right.

But are you really? Don't get me wrong. Everything you're doing in that scenario is essential to your organization. But if your customer experience discipline is siloed, if it is simply aligned but not embedded and woven throughout your organization into everything you do, and if it is not a key driver for almost everything you do, the notion that you're truly driven by customer experience is more myth than reality.

Creating the reality of being driven by customer experience requires education, understanding and implementation of the discipline throughout your entire organization. It calls for the knowledge of how customer experience differentiates from customer service and the need to share, apply and nurture practices and assets, not simply develop and document them. This is not about creating personas and journey maps and then putting them on a shelf or implementing them within a siloed discipline. CX assets and practices need to be top of mind and referenced frequently by everyone – in thoughts, conversations, planning, practices and absolutely decision-making. And, just as your customers’ journeys continually evolve, so must your CX practices and assets. 

I cannot stress enough that the associated knowledge or practice of customer experience affects almost everyone in your organization and just about everything in your organization in the same way that everyone and everything in your organization affects your customers, whether you realize it or not. Customer experience should become an inextricable part of your culture. This is not accomplished top down, and it's not accomplished bottom up. It needs to be woven throughout all of your strategies, plans, projects, workflows, conversations, decisions and how you apply technology.

To achieve this organic customer experience culture, all of these components need to be designed and orchestrated to enable the desired customer experience. It is not just going to happen. Done right, this transformation is a journey much like innovation or digital transformation, and it's one that gets to the real heart of your organization and affects every aspect of what you do and why you do it. It's a big journey. But like all big journeys, it begins with small steps and is about gaining momentum. Over time, customer experience will no longer be a thing you do, but rather will become a natural part of how you think, how you behave, and what drives your conversations, priorities, investments, and decisions. To move from the myth to the reality and become truly driven by customer experience, it is key to educate and involve everybody. Do not align, but rather embed. And go beyond the customer's view and journey and look at your internal journey.

See also: 3 Ways to Improve Customer Experience

Is customer experience a discipline unto itself? I hope you would agree that customer experience is certainly a discipline, but that the last thing you want is to keep it unto itself.

For more than six decades, innovators have attempted to unlock the full potential of artificial intelligence (AI). It wasn’t until the past decade that the science finally caught up to expectations. Today, the AI market is on track to reach $500 billion by 2024. COVID-19 has fast-tracked AI adoption and acceptance.

McKinsey & Company says that "insurance will shift from its current state of ‘detect and repair’ to ‘predict and prevent,’ transforming every aspect of the industry in the process.”

See also: Key to Transformation for Auto Claims

AI-enabled solutions have opened up new possibilities for auto insurers and collision repairers. From detecting a car accident with IoT technology, to instantly processing a payment for completed repairs, the opportunities are endless. First on the list for most carriers, however, is using AI to automate the appraisal process and produce a “touchless” estimate. This can improve efficiency, shorten cycle time and meet policyholder expectations for a streamlined, digital claims experience. Now, thanks to these four trends, creating that experience is within reach.

1. Shifting Methods of Inspection

Prior to COVID-19, virtual estimating was reserved for low-severity claims. However, the need for social distancing during the pandemic and changing consumer demands spurred the adoption of virtual inspection methods. In April 2020, Mitchell data shows that the use of virtual, or photo-based, estimating more than doubled from earlier in the year. Just one year later, LexisNexis Risk Solutions reported that virtual claims handling has now “settled to a level of a little over 60%.”

This shift opened the door to the long-term aspiration of “touchless” claims and leveraging AI in the appraisal process. Over the last year, virtualization—considered the first level of automation—has resulted in estimate efficiency and consistency gains. From images, appraisers can complete approximately 15 to 20 estimates per day versus three to four out in the field. This has prompted more carriers—nearly 70%, according to LexisNexis Risk Solutions—to embark on the claims automation journey.

2. The Prevalence of Big Data

According to the Center for Insurance Policy and Research, “The successes of AI are also being facilitated by the massive amounts of data we have today. The wealth of data we now create is astonishing, and the speed at which data is generated has only made data management tools like AI even more important.”

The property and casualty industry has always thrived on capturing, analyzing and interpreting data. Whether it’s from mobile devices, automobile IoT sensors or other sources, this data gives decision makers the information necessary to personalize customer interactions and address issues. When it comes to touchless estimating, though, data alone isn’t enough. Access to a comprehensive library of vehicle, repair and historical claims information is needed—along with the ability to quickly interpret that information using AI. In the case of Mitchell Intelligent Estimating, claim details and images are collected. AI then analyzes the data, comparing it with Mitchell’s comprehensive library of vehicle and repair information that spans more than 30 years. From there, the machine-learning algorithms translate the output into component-level estimate lines for appraiser review and approval.

3. Human-Machine Collaboration

Just as humans continually learn and improve, so do machines. As highlighted in Insurance Thought Leadership, “good machine learning systems involve feedback loops…. By letting the machine know what happens on the ‘real world’ side of things, machines learn and improve”—no different from claims adjusters!

Support for a human-machine feedback loop is critical to automating the claims process and can lead to vast improvements in speed and accuracy. An appraiser’s feedback helps teach the machine to make better decisions. As AI-powered solutions remove repeatable tasks, employees have more time to focus on complex claims that may require extra scrutiny.

4. The Growth of Cloud Computing and Open Ecosystems

AI’s dependence on data increases the need for cloud-based systems that can access and aggregate vast amounts of information, making it available from anywhere. These systems help organizations reduce development and maintenance costs, enhance security and accessibility and improve speed, reliability and scalability.

Like cloud computing, open ecosystems are also vital to AI and touchless estimating. Open ecosystems allow AI to easily access data, analytics and software across platforms and providers, giving carriers the ability to create a cohesive, end-to-end claims experience. They also introduce flexibility and choice, PropertyCasualty360 reported.

See also: Designing a Digital Insurance Ecosystem

For instance, through Mitchell Intelligent Open Platform, carriers can select the AI that best meets their needs. That includes AI algorithms developed internally, provided by Mitchell or delivered through third parties such as Tractable or Claim Genius. The AI output is used to produce a partial or complete appraisal.

The Future of AI-Enabled Claims

By 2030, McKinsey & Company predicts that more than half of current claims activities will be replaced by AI-enabled automation. “Claims for personal lines and small-business insurance are largely automated, enabling carriers to achieve straight-through processing rates of more than 90% and dramatically reducing claims processing times from days to hours or minutes.”

With the science now ready to deliver on its decades-old promises, the auto insurance industry has reached a turning point. Carriers can either invest in AI or run the risk of being stranded by the side of the road. Ultimately, organizations that embrace this “new” technology to deliver a digitally driven claims experience will be best-positioned to gain market share and consumer loyalty.

With more business being conducted online than ever, carriers, brokers and agents are discovering new strategies and tactics to better reach their customers. Traditional distribution methods are becoming less viable as insurance buyers have greater visibility into alternatives, expect personalized digital experiences, and can compare policies online with a few clicks. 

It’s an opportunity for insurers to connect with their audiences and produce positive digital experiences in uncertain times. 

Segment Audiences with Big Data

It is estimated that people worldwide generate 1.7 MB of data every second. This provides near-infinite ways for sales and marketing teams to segment audiences based on online behavior, demographic traits, shared interests, and purchasing habits. 

Companies often struggle with interpreting this data. One survey shows 95% of organizations say managing unstructured data is a problem for their business. Our brains were never meant to process this amount of detail! Fortunately, there are online tools that can support you:

• APIs and web services: Big data is useless if it can’t be leveraged across systems, fully synchronized. When your sales and marketing systems fail to talk to each other, the results can appear cumbersome, or downright embarrassing. If your CRM has a contact listed as a client but your email system thinks they’re new business, their experience will be anything but personalized. Look for solutions that offer a robust API with a strong library of native integrations.
• Artificial intelligence: When segmenting audiences and personalizing messaging at scale, there is a level of granularity that can only be reached via artificial intelligence. Many solutions providers are launching AI layers to their tech stacks to enhance personalization for email outreach, email list segmentation, personalized digital advertising, and more. 
• Your CRM: A flexible customer relationship management tool with configurable fields is essential to your segmentation strategy. Automate as much as possible, pulling all key information from your marketing stack into a single source of truth--your CRM--via APIs. One word of caution: over-engineering your CRM with custom fields can produce confusion and a poor user experience for your insurance sales team, leading to misuse and neglect. Keep it as simple as possible and make sure every member of your team understands what they are responsible for. Once established, APIs can be configured to push customer data into your quoting engine, eliminating redundant data entry and reducing quote turnaround time. 

Personalization can pay off big: according to Netflix, 75% of their users’ viewing activity comes from recommended content. Insurance providers should take inspiration.

See also: Designing a Digital Insurance Ecosystem

Deploy Chatbots and Conversational AI

With customer-experience-focused insurtechs gaining market share, insureds now demand friendlier, more personalized, and simplified digital experiences.

The traditional role of a broker or an adviser is to educate clients and prospects on their coverage options. However, accomplishing this at scale while delivering an excellent customer experience in a digital-first landscape is a challenge. Moreover, insurance is already tough to grasp for insureds who don’t live in our world. A recent survey revealed that more than half of Americans are confused by their health insurance coverage. This is a serious problem.

Chatbots provide an opportunity for brokers and carriers to transform the digital insurance experience.  Savvy insurers can use chatbots to save brokers an enormous amount of routine work.   Chatbots can

• Provide quick answers to common questions, such as “What’s the difference between an HSA and an FSA?”
• Provide “how-to” advice:  “How do I submit a claim online?”
• Outline coverage options and provide quick quotes 

Chatbot scripts can be designed based on most-visited web pages, common search engine queries (Google Search Console can be helpful here), or notes from real-life conversations your salespeople are already having with customers. 

You can even layer artificial intelligence on chatbots, which uses natural language processing to better guess what a user is requesting and automatically return the most useful information. 

Deploy Predictive Analytics in Quoting

Customers expect to buy insurance to be fast. To remain competitive, brokers and agents must be able to rapidly generate quotes, amendments and renewals that continuously meet a prospect’s needs. Seamless integrations with various data sources are essential for feeding up-to-date claims experience, demographic information, and wearables/telematics data into a powerful quoting and rating engine.

Predictive analytics can take quoting and rating capabilities even further by identifying the most successful plan designs for a customer based on historical success data for a particular carrier. Furthermore, predictive analytics can be deployed to help brokers and carriers upsell and cross-sell additional coverage based on the data collected during initial quoting. Artificial intelligence is crucial here because it can calculate these recommendations based on disparate connections that would be impossible for our brains to process.

Don’t miss opportunities to maximize profitability during quoting with AI! 

Get Social

One approach that is differentiating emerging insurtechs from large incumbents is a modern, friendly, and sometimes humorous presence on social media. These new entrants are answering one of the world’s most difficult questions: How can we get people excited about buying insurance?

While it can be fun and set your brand apart, it isn’t necessary to produce viral, humorous content to be successful on social media. Smaller brokerages and insurance companies targeted to younger generations may want to experiment with humor or even memes, while larger, more established brokerages might want to consider the kind of thought leadership their audience will find authoritative and engaging.

Whatever brand direction you choose, your sales team must be completely aligned on the brand “voice” and visual identity to ensure consistency across channels and online interactions. Social selling is about engagement.

See also: Benefits of Deploying a Hybrid Cloud

Let’s Get Personal

Customers today expect providers to reach them at the right time, on the right device, with the right solution. While it is important to remain cautious of over-personalization and perceived creepiness (or regulatory trouble, if you’re using data improperly), under-personalization is vastly more common. 

Insurance customers who are shopping online to purchase coverage just want to get it over with. As great as a cordial onsite visit from an agent or broker is, the model is not quick, nor is it scalable. In a world where customers are shopping around for options and prices all the time, retention itself becomes a valuable commodity. To differentiate themselves, brokers, agents, and carrier sales teams must be willing to adapt their tech stack to offer digital experiences focused on the individual - not just the price tag.

Big data, AI, CRM, chatbots, predictive analytics, social-media messaging, and personalization can combine to produce the customized experience today’s insurance customers expect.

In the popular Terminator movies, a relentless super-robot played by Arnold Schwarzenegger tracks and attempts to kill human targets. It was pure science fiction in the 1980s. Today, killer robots hunting down targets have not only become reality, but are sold and deployed on the field of battle. These robots aren’t cyborgs, like in the movies, but autonomously operating killer drones. The new Turkish-made Kargu-2 quadcopter drone can allegedly autonomously track and kill human targets on the basis of facial recognition and artificial intelligence—a big technological leap from the drone fleets requiring remote control by human operators. A United Nations Security Council report claims the Kargu-2 was used in Libya to mount autonomous attacks on human targets. According to the report, the Kargu-2 hunted down retreating logistics and military convoys, “attack[ing] targets without requiring data connectivity between the operator and the munition.”

The burgeoning availability and rapidly expanding capabilities of drones pose urgent challenges to all of humanity. First, unless we agree to halt their development and distribution, autonomous killer drones like the Kargu-2 will soon be affordable and operable by anyone—from rogue states all the way down to minor criminal gangs and individual psychopaths. Second, swarms of killer drones may, through sheer numbers, render irrelevant the defenses against terrorist threats deployed by technologically advanced nations. Third, in creating a challenging new asymmetry in warfare, autonomous killer drones threaten to upset the balance of power that otherwise keeps the peace in various regions. The increasing ubiquity of affordable drones is an open invitation to one power and another to turn stable regions into battle zones.

The arrival and rapid proliferation of robot-like killer drones comes as no surprise. For decades, consumer technology has been outpacing military adoption of advanced technologies. Because a drone is essentially a smartphone with rotors, today’s affordable consumer drones are largely a byproduct of the rapid development of smartphone technology. They are making access to the third dimension essentially free and creating new commercial opportunities: Drones can already deliver groceries and medical supplies directly to your doorstep. But in endowing drones with human-like cognitive abilities—for instance, by combining rapidly improving facial recognition with artificial intelligence—will make powerful targeted weapons available to tin-pot despots, terrorists, and rampaging teenagers at a fraction of the cost of the fancy drones flown by the U.S. military. And unless we take concrete steps now to oppose such developments, instructions to turn cheap off-the-shelf drones into automated killers will be posted on the Internet in the very near future.

To date, artificial intelligence has struggled to provide accurate identification of objects and faces in the field. Its algorithms are easily confused when an image is slightly modified by adding text. An image-recognition system trained to identify an apple as a fruit was tricked into identifying an apple as an iPod, simply by taping to the apple a little strip of paper with the word “iPod” printed on it. Protesters in Hong Kong have used sparkly paint on their faces to confound government facial-recognition efforts.

See also: Wake-Up Call on Ransomware

Environmental factors, such as fog, rain, snow, and bright light, can dramatically reduce the accuracy of recognition systems employing artificial intelligence. This may allow a defense against drones using relatively simple countermeasures to confound recognition systems at their present level of development. But to actors who already place a low value on collateral damage and innocent victims, accuracy is not much of a concern. Their drones might be programmed to kill anyway.

What’s more, any defense against the drones zeroing in on individual targets does not prevent their deployment as new weapons of mass destruction. A swarm of drones bearing explosives and dive-bombing a sports event or populated urban area could kill numerous people and would be hard to stop. Various companies are now selling drone countermeasure systems with different strategies to stop rogue flying objects, and advanced militaries have already deployed electronic countermeasures to interrupt the drones’ control systems. But so far, shooting down even one drone remains a challenge. Although Israel recently demonstrated an impressive flying laser that can vaporize drones, shooting down an entire swarm of them is still well beyond our capabilities. And with the new generation of autonomous drones, simply blocking communication to the drones is not enough. It may be critical to develop ways to safely bring them back to Earth in order to avert random chaos and harm.

To a group intent on causing significant damage, autonomous drones open an entire new field of possibilities. Imagine attacks on 100 different locations in a single day—the effects of the 9-11 terrorist attacks on the United States could pale in comparison.

Though all countries are at risk of killer-drone attacks, the most likely victims of the first wave of these weapons are poorer countries with porous borders and weak law enforcement. The same gap between rich and poor states in the effects of COVID-19 is likely apply to the vulnerability to autonomous drones. The first such battles are more likely to play out in Africa rather than America—and with heavier tolls.

The companies producing the new wave of autonomous flying weapons are heavily marketing their wares. Meanwhile, the United States and China have thus far refused to back calls for a ban on the development and production of fully autonomous weapons. Washington and Beijing are thereby providing a cover of tacit legitimacy for weapons makers and governments deploying the new killer drones in the field.

Admittedly, the drone threat cuts both ways. Autonomous or semi-autonomous drones have been used to tip the battlefield balance against rogue states; in Syria, rebel groups have used drones as an asymmetrical weapon against Russian-made armor, destroying multimillion-dollar tanks with cheap drones.

But the risk of drones ending up in the hands of malevolent actors and being deployed as weapons of highly inaccurate mass destruction far outweighs their possible military benefits in guerilla warfare. Asymmetrical warfare disproportionately benefits forces of chaos rather than forces of liberty. It is not too late to place a global moratorium on killer robots of all kinds, including unmanned aerial vehicles. This would require a change of strategy on the part of the great powers. But any such moratorium should confine itself to offensive systems only, while all manner of anti-drone defense should be allowed. As part of a ban, the wealthy governments should consider subsidizing the purchase of drone-defense systems by poorer countries and teaching them how to defeat drone swarms. Drone technology is a global problem that humanity should address together.

See also: 6 Cybersecurity Threats for Insurers

In the Terminator series, the killer robot is eventually destroyed. In reality, the battle to confine artificial intelligence to constructive uses will be constant and never-ending. Its application to killer drones is merely the first, short chapter in a long book of artificial intelligence as an agent of chaos. Whether we choose to act to close that book will determine the type of future we want to hand to our children. It will be either a world of Terminator chaos with the specter of death in every corner—or a world like Star Trek, where humanity’s cohesive efforts channel technology to prioritize social good and prosperity over conflict and violence.

Ransomware is on the rise and posing significant challenges for the insurance industry. Ransomware attacks soared by 485% last year compared with 2019, according to Bitdefender. Cybercriminals and state-sponsored hackers alike are employing ransomware to line their pockets and cause mayhem. The Colonial Pipeline, the Harris Federation, CNA Financial and Acer are just a few of the high-profile victims so far this year. 

Without proper planning and protection, a ransomware attack can sink a company. The average ransom cost is now $154,108, according to Coveware, and the average downtime caused is 21 days. 

As more and more victims pay up, cybersecurity insurance carriers are changing their products, increasing premiums, and limiting coverage. 

Attackers Targeting Insurance Providers

While cybersecurity policies covering ransomware used to be relatively easy to find and offer generous potential payouts, that’s no longer the case. Ransomware gangs have been doing their homework. They gain access to insurance company client lists and hack into networks to study individual policies for the purpose of uncovering maximum policy limits of targeted companies.

An anonymous spokesperson for the REvil ransomware gang was recently asked about targeting insurers in an interview for The Record, and said, “Yes, this is one of the tastiest morsels. Especially to hack the insurers first—to get their customer base and work in a targeted way from there. And after you go through the list, then hit the insurer themselves.”

Any insurer that responds to this onslaught with a blanket policy of not paying ransoms is soon under siege. Cybercriminals unleash coordinated attacks designed to make examples of these carriers and warn off other insurers that may be considering a similar no-pay policy. Inevitably this has impacted the coverage carriers offer. 

Insurers Building Experience

The silver lining here is that the cyber insurance industry has a vested interest in keeping costs, risk and recovery time down. To that end, insurers engage the very best incident responders with a proven track record. For a victim seeking a ransomware recovery specialist, a cybersecurity carrier might be the fastest and easiest route to the top talent. 

As insurers build a knowledge base and deal with the aftermath of more and more ransomware incidents, they are also gaining a deeper understanding of how to guard against such attacks. 

Organizations seeking consultation on what they might do to prevent ransomware infiltrating their networks, how to cope during an attack, and the fastest path to recovery can get solid advice from carriers. But all this experience comes at a price.

See also: 6 Cybersecurity Threats for Insurers

More Stringent Requirements and Fewer Options 

Any organization shopping for cyber insurance will find the market very different than it was just a few years ago. Many carriers are now refusing to insure for ransomware and those that do require solid proof that strong security controls are in place before they will issue any policy. Coverage scope and optional add-ons have been drastically reduced across the board, but particularly in industries with high exposure and susceptibility.

Even with every box ticked, the amounts that insurers are offering now are relatively limited. Premiums in general are higher, but for organizations considered to be high-risk with large limit requirements, policies may be prohibitively expensive. It’s important to remember that even with the climbing costs, cybersecurity insurance will still be cheaper than a breach for most organizations. A third-party assessment and strict requirement for strong controls can also prove invaluable in strengthening your security posture.

No Substitute for Proper Cybersecurity Planning

Ultimately, cybersecurity insurance is a complementary product that can help reduce business risk. It’s crucial to take appropriate steps to guard against ransomware and to fully plan and practice how to deal with an incident. Consider that the most likely way for ransomware to break in is through social engineering. Train your staff to spot phishing attacks and build response plans to investigate and deal with them.

Other smart protective actions include a regular patching procedure to ensure software is kept up to date, a comprehensive asset list that gives you a complete picture of company hardware, and properly protected off-site backups from a variety of points in time. Craft incident response and recovery plans to clearly delineate correct procedures and responsibilities and then test them in a mock attack to ensure you’re ready for the real thing.

If you are operating without coverage or your policy is coming up for renewal soon, make sure you dig into the details and fully assess your options. You may find that the budget you have allocated based on previous policies is no longer suitable. Just remember, the stronger your defenses are, the easier and cheaper it will be to secure a cybersecurity insurance policy that gives you the cover you need.

The COVID-19 pandemic had a devastating impact on businesses and workers worldwide. Companies had to adopt online business models to survive, which forced an unprecedented workforce migration as employees left their offices to work from their homes.  As the world starts to emerge from the pandemic, we’re beginning to understand the many effects of this economic and social upheaval on workers. New research shows that gender inequality, long a problem in the American workplace, worsened during COVID-19, and the insurance industry is no exception.

In March, Accenture surveyed 176 U.S. women in insurance to understand how the pandemic and the sudden shift to remote work affected them. We looked at the professional and personal effects this had on work-life balance and caregiving roles. At the same time, we surveyed 134 C-level insurance executives in North America to discover what the future of work looks like for their organizations. The results were both surprising and concerning and confirmed that the pandemic has had a significant impact on the well-being and productivity of women.

Key observations

The survey reiterated the long-standing conflict between women as workers and women as caregivers, but the numbers were still striking. Most of our respondents are working mothers, with six in ten (59%) having school-aged children at home, and 68% saying they are the main caregiver for children or elders in their households. More than half (56%) say they face increased pressure as the primary caregiver as they juggle childcare responsibilities due to school closures, while working longer hours because of record business activities.

Our results revealed that almost one in three (32%) women working in insurance left their jobs temporarily or permanently during the pandemic – a sobering statistic. When asked why they left, 21% said childcare/eldercare priorities were the main reason. Meanwhile, 30% of women who remained at their jobs during the pandemic are considering leaving.

Additionally, 45% of women in insurance feel they have lost opportunities to grow their careers during the pandemic. Similarly, 44% say the pandemic has adversely affected their career progression while 39% feel disconnected from or forgotten by their companies.

Employees vs employers

We uncovered a stark disconnect between employer and employee attitudes on a number of issues. This includes the level of support women receive from their companies, the expectations for their return to the office, and the post-COVID changes they expect before returning to work. These disconnects must be addressed, because COVID added even more caretaking responsibilities to women, and they are not going away.

See also: State of Diversity, Inclusion in Insurance

Consider the disconnect between corporate leadership and female employees in the number of days they are expected to work from the office. Nearly half (47%) of women surveyed believe they would lose advancement opportunities if not present in the office five days a week post-COVID, but only a quarter (26%) want to work in the office that much. More than a third (34%) want to work remotely full time, with the rest preferring a hybrid approach. By contrast, almost all (91%) executives would prefer employees to spend four to five days in the office post-COVID, and more than half (54%) believe their employees share that desire.

When women were asked how their employers can help, more than a third (39%) cited flexible scheduling, followed by increased paid leave (24%). This appears to be an area of progress for insurance firms, with 43% of women surveyed saying their employer is trying to offer more flexible scheduling. 

A permanent culture shift

So, what does this information tell us, and what should insurers take note of, as many look to return their workforces to offices in the coming months?

First, remote working is here to stay, so companies must embrace this new model to support women and their needs, or risk losing them along with their years of experience, institutional knowledge, and dedication.

Next, in order to accommodate the remote or hybrid workforce of the future, companies will need to engage in a deliberate cultural change, one that ensures “remote” does not mean “less effective,” and that remote workers are not penalized for missing out on traditional in-person interactions, like the conversation over a cup of coffee or the face-to-face mentoring session. They will need to create return-to-office strategies that promote flexibility for women who need to juggle additional responsibilities outside of the workplace.

Finally, if firms incorporate flexibility in their return-to-office strategies, it may help prevent women from leaving the workforce in the future and persuade women who did leave to return.

What insurers and other financial institutions do next will have a major impact on the future of women in insurance, from entry-level workers all the way to the C-suite.

The FDA approved the first new drug to treat Alzheimer’s in nearly 20 years in recent weeks, and it is a prime example of why our spending on healthcare is so unnecessarily high and not slowing down anytime soon. The new drug is Aduhelm, an infusion therapy developed by Biogen.

A panel of 11 scientists reviewed the research and science for the FDA, and 10 voted against approval of the new treatment, while one was undecided. In fact, three of the scientists have resigned over the approval. The FDA moved to approve Aduhelm despite the lack of evidence that it either cures or slows the progression of the Alzheimer’s and has given the company nine years to conduct a confirmatory trial.

What is the actual cost of this treatment? The drug price is set at a whopping $56,000/year, and the overall costs will be much higher. According to the Kaiser Family Foundation, when related costs are included (the testing to monitor for brain bleeds and other possible side effects, outpatient facilities and staff, etc.) the real price tag will be more like $100,000/year. 

What is the cost to the individual? Copays will be as much as $11,500 – nearly 40% of the average income for a Medicare, enrollee according to the Kaiser Family Foundation.

How will this affect Medicare Part B premiums? As an infusion given in a provider’s office, administering Aduhelm will be covered by Medicare Part B. The current average premium for this coverage is just under $150/month. This will almost certainly have to be increased, so the impact will be widespread across Medicare enrollees.

See also: Are Your Healthcare Vendor’s Claims Valid?

What are the potential impacts to our overall healthcare spending? Biogen estimates that 1 million to 2 million Alzheimer’s patients match the patients studied in the clinical trials. Overall, we have approximately 6 million people who have Alzheimer’s in the U.S., and most are enrolled in Medicare. Interestingly, the FDA has approved the medication widely not just for those who are in the early stages of the disease with mild symptoms like those in the trial. If 1 million people are given this treatment, it could cost Medicare $56 billion annually. Medicare Part B spent $37 billion in total on drugs in 2019. Total outpatient Medicare drug spending with pharmacy prescriptions was $136 billion for 2019.

Biogen’s estimates of future sales are seemingly conservative. The company and other analysts are expecting $103 million in sales this year, about $1 billion in 2022 and $5 billion-plus in 2023. 

When you factor in the incentives paid to prescribing physicians by Medicare ($3,360 for each prescription in this case), it seems we have a real problem on our hands.  

The Centers for Medicare and Medicaid Services could decide not to cover Aduhelm, but if the past is any indicator this is not likely. Private insurers that provide Part B benefits could also place some limitations on the drug’s use. But, all things considered, It is clearly time for us to take a serious look at how we have allowed a fifth of our economy to get to this point.