Commercial lines insurers are moving forward on their digital journeys, spurred by customer demands and the acceleration of digital capabilities in the world at large. In earlier phases of the industry’s digital journey, all the attention was on personal lines. Commercial lines, especially those covering the more complex risks, were left behind in the wave of digital, mobile and insurtech activity that was sweeping other parts of the industry. That is no longer true.

The tremendous potential of digitizing assets and digitizing the customer experience is now well-recognized, and transformation is well underway.

However, there have been some significant shifts in digital project priorities over the past year due to the pandemic. The move to the lockdown/work-from-home environment that occurred practically overnight exposed key gaps in insurers’ capabilities. Throughout 2020, commercial lines companies prioritized projects to support agents, policyholders and employees seeking digital, remote capabilities. These new priorities have carried over into 2021, although the projects for insurers are at different stages of maturity for those focused on small commercial and mid-market/large commercial.

A new SMA research report, Digital Transformation in Commercial Lines: Project Priorities for 2021, identifies specific plans for small and mid/large commercial lines insurers related to a variety of digital projects. There are some commonalities across lines. For example, the foundation for digital transformation is deemed to be modern core systems and continuing to digitize assets. Although these projects may not, by themselves, drive transformation, they are vital enablers for a whole range of more transformative digital projects. More information must be in digital formats, and the systems of record that manage key transaction flows and data must be built on modern architectures that provide the flexibility and adaptability needed in the digital age. Some key focus areas for small and mid/large commercial are as follows:

Small Commercial:

Increasing the percentage of business that can be handled via straight-through processing (STP) is a top priority. In conjunction with that goal, upgrading to next-generation portals is high on the project list for many insurers. STP starts with being able to capture more data in structured data formats, which is where portals can aid. Next-gen portals are also designed to meet the expectations of agents and policyholders for digital interactions. Insurers focused on small commercial are generally further along regarding digital platforms and implementing transformational technologies.

Mid/Large Commercial:

Insurers serving these segments focus on foundational elements such as implementing modern policy, billing and claims systems. There is also significant project activity for policyholder self-service capabilities, chiefly because other lines in P&C have already implemented those capabilities, and mid/large is catching up. One interesting area of focus is in using AI technologies such as natural language processing and machine learning for unstructured data. In this area, the insurers focused on mid/large business are forging ahead of the rest of the industry. The complexity of the business and the vast volume and variety of forms, letters, documents and other unstructured data result in major opportunities for automation and insight.

The plans for 2021 signal another year of advancement in the digital journeys of commercial lines insurers, in spite of the pandemic. As the decade progresses, insurers will be moving beyond the earlier phases of digitizing assets and enabling digital interactions as they position themselves for true digital transformation – resulting in more innovative products, new partnerships and new business models. Those that successfully transform will distance their companies from the competition.

A false dilemma assumes an either/or choice: You are either with me, or you are against me. This kind of thinking typifies life insurance sales, with many insurers looking to digitally transform either their adviser or their direct-to-consumer channel. But does that thinking match the reality of how policies are sold today?

Consider the purchasing journey: research, quote comparison, application, purchase, processing, underwriting, issuance and continuing service. Some parts of the modern journey are almost entirely done online, e.g. research and quoting, while others are primarily handled by advisers, e.g. purchase and processing. Both the direct and adviser channels are engaged.

If that’s the case, can your digital transformation strategy afford to promote one sales channel at the expense of the other? 

Empowering Advisers Requires Empowering Consumers (and Vice Versa)

Advisers typically sell products that are easy. So, insurers must provide the adviser a great experience via intuitive, easy-to-use digital tools for turning prospects into clients. This includes automated lead capture, data analytics for lead routing and management and a dynamic e-application. It also encompasses streamlined application processing, underwriting, approvals and payment to ensure policies are issued and claims are processed in a timely manner. 

Now compare that to the traditional life insurance sales process. First, find a hot prospect and send a generic PDF quoter or application that the person needs to fill out and send back to you. Then manually confirm that all the information needed is provided and send it off to the insurance carrier. Finally, days or weeks later, the carrier approves the application or requests more information. Either way, the process is so manually cumbersome and time-consuming that it’s probably only worth the effort for really big, complex policies – i.e., expensive. 

But what about everybody else? We already know that millennials, the generation of 20- to 45-year-olds our industry desperately needs to attract, has much less buying power than their Baby Boomer peers did at the same age. Can you afford to help millennials? Can you afford not to?

We know that consumers gravitate toward great experiences. It’s your job to offer them one, including dynamic, engaging and easy-to-use content on your website as prospective clients self-educate. You also must make it easy for prospective clients to ask questions and get more information from an adviser in real time, or to convert them directly when no additional help is needed. From there, consumers expect to have policies issued and claims processed in a timely manner.

See also: COVID-19 and Need for Analytical Insurers

Imagine going to the Walmart website, finding exactly the product you are looking for, then not being able to purchase it directly. Maybe you are researching products on the Walmart website and have questions, but no one is available to answer them. How long will you continue to rely on Walmart for your purchases, especially when you can buy from Amazon and receive your product the next day? 

Today, you can have your cake and eat it, too, with an omnichannel approach – enabled by both people and technology -- that provides a great experience to each “user” at every point in the buying process.

Getting to Omnichannel 

The key to going omnichannel is NOT blowing up your existing business model. Quite simply, it just means focusing on both processes AND experiences when you are applying technology to distribution challenges. Omnichannel must be part of your plan – really, your endgame -- even if you choose to focus on a single channel to start. Here are some ideas for how to get there:

1. Start small — you don’t need to commit millions of dollars to get started. Pick a couple of products rather than digitizing the distribution of your entire portfolio. Or, start with a single process with a relatively quick time to value.
2. Establish a few, reasonable key performance indicators (KPIs) — focus on quantifiables besides revenue to start, e.g. an increase in traffic, number of leads generated, number of policies sold, etc.
3. Test and adjust as needed — this worked; let’s do more of it. This didn’t work; let’s not make the same mistake. 
4. Evaluate the experience — how does your project improve the experience for all stakeholders (present and future) who engage with it? Is there more you can do to improve?
5. Add on — for example, you’ve successfully enabled D2C sales of T10 and T20 products. What’s next? Identify another product or process to tackle, establish KPIs and go for it. Do more of what works and learn as you go... just keep going. 

In the past, insurance companies had to assume the full cost and risk associated with technology projects, but this is no longer the case. Subscription-based pricing and modular software platforms provide new levels of flexibility and shift the implementation risk to the technology vendors. They implement, integrate and deliver. You pay a reasonable, agreed-upon monthly fee

Don’t fall into the false dilemma trap. Life insurance, like just about everything else involving digital-native consumers, is a “both/and” world. You can do omnichannel, and frankly you have to to stay competitive. There has never been a better time to get started! 

Omnichannel Life Insurance Policy Sales

For millennia, humans have struggled to survive and thrive on a sometimes deadly planet. Earthquakes, plagues, crop failures, floods, fires all periodically wipe out enormous numbers of lives. In the late 20th century, the combination of prosperity, the end of the Cold War and dramatic advances in science and technology bred a widespread arrogance that we were at the “end of history” -- that the combination of the moment’s geopolitical status quo and continuing advances meant we had reached an end state, immune to both humanity’s and nature’s volatility. 

This was clearly the height of arrogance. The pandemic and the return of deeply challenging geopolitical rivalries have already destroyed the complacency born of this arrogance. The growing global concern about the impact of climate change is another example of a tectonic shift in gestalt. 

In our four years at Jupiter, we’ve witnessed significant changes in thinking about climate change. When we started the company, almost no large companies on the planet were thinking about the impact of climate change on their businesses =- and a few still openly questioned whether climate change was occurring. Today, nearly every large company on the planet is at least thinking about the impact of climate change on their business, a few are taking meaningful action and questioning the existence of climate change is almost as humiliating in the business community as endorsing the violent occupation of the U.S. Capitol. 

And yet, the widespread power outages in Texas and the erosion of grid reliability in California are dramatic examples that an enormous amount of very hard work remains to be done. Jupiter works with power companies all over the planet on issues like how much risks have already changed -- and how soon critical thresholds will be exceeded. We work across the global economy in insurance, banking, asset management, real estate, power, vaccine production, minerals and mining, chemicals, emergency management, national security, big cities and, yes, even oil and gas. Our customers are in places as wide-ranging as Texas, Florida, the Netherlands, Tokyo, China and Australia. I know with total certainty the world is grossly unprepared for the changes that have already occurred and are on the near horizon. Recently, a senior executive at one of the world’s largest companies said, “We get hit with billion-dollar-plus impacts, rebuild looking backward, ignoring the science, and get hit again. It’s just crazy.”

In many ways, Texas is the epicenter. Three years ago, Houston was hit by Hurricane Harvey, shutting down the region. What are less well-known are the multiple toxic chemical spills caused by the flooding, which simultaneously breached flood protection and caused loss of power for other containment. The U.S. Chemical Safety Board looked at this issue and concluded that companies’ investments were based on now-out-of-date planning assumptions. And, of course, it’s not just Texas; California’s power reliability is an embarrassment because of failure to adequately plan for ever-worsening risk from fire. 

Now, Texans shivered in the dark because a predictable event was not planned for.  

Some will choose this moment to debate what we really know about climate change or choices of renewables vs. fossil fuels. While those are important questions, they miss the larger issue. Risk is all around us -- and the world’s planning assumptions for that risk are egregiously out of date. Whether extreme cold, flood, fire or pandemic and war, risks are at levels we currently don’t plan for in our businesses, with power at the very center of this issue. 

We live in a world designed for an environment that no longer exists.

It’s time to get real.

COVID-19 has been a rollercoaster. Across the country, the virus has accelerated and then subsided several times over the past year, causing major ups and downs in many industries. Some companies have remained open to conduct essential business, while others have closed, then opened with modifications and then closed again. With a vaccine now being rolled out, the outlook is beginning to improve. However, employers still face the burden of how to keep employees healthy and get them back to work safely during this transitional period. 

As states begin to allow businesses to reopen, there's a tendency to rush to get back to business as usual. While it's important to resume normal operations as quickly as possible, we need to be thoughtful as we move toward this goal. It’s a delicate balancing act between the need to maintain essential economic activities and maintaining workplace safety.

Here are some best practices for navigating the return to work process:

1. Be Informed

It is critical to determine whether any state and local mandates will affect the reopening of your business or facilities. Policies, legislation and guidelines have changed rapidly during the pandemic. Make sure that you are following CDC and OSHA guidance and understand what's required in your jurisdiction, because it can vary greatly from state to state and county to county.

2. Make Fair Choices

As business reopens, you may have to decide who will return to the workplace first. Use neutral selection criteria to determine which employees will return to work. Criteria such as seniority, performance or job classification and what roles the company needs filled should be considered. Depending on the size of the group of employees that are returning to work, you may want to consider conducting a disparate impact analysis to ensure that there aren’t any factors affecting one group more than another. 

Be careful not to assume someone cannot return based on childcare needs or caregiving responsibilities or because they fall under the government label of vulnerable population. Higher risk for developing serious illness as a result of this virus is primarily based on age, disability or pregnancy. As a result, making any decisions because someone might fall into those groups can lead to discrimination claims. 

3. Reinforce Guidelines and Protocols

Many employees have worked in more casual remote environments for the past months, so  consider a refresher on respect in the workplace, harassment and professionalism policies. It is also important to provide education or training on any new safety guidelines, social distancing requirements and other protocols. A simple one-page document to instruct and educate employees on COVID-19 symptoms, social distancing, face mask use and other protocols that promote a safe workspace will help get employees up to speed quickly.

See also: Access to Care, Return to Work in a Pandemic

4. Implement Employee Screening

Businesses that have eased restrictions without putting safeguards in place have seen spikes in cases. This is because people have a false sense of safety when restrictions are eased. A quick screening of employees, based on CDC guidelines and recommendations, can be administered by a nurse or employee. Clinical confirmation includes temperature checks and a review of any symptoms to ensure the employee is healthy to return to work.

5. Leverage Telehealth

Telehealth and other virtual services can be a great option for a multitude of reasons. Telehealth offers more efficient and convenient care, resulting in increased employee engagement and satisfaction. This does not need to be limited to workers' compensation, as most health plans and health systems now offer this option for care. Take advantage of the convenience and the ability to mitigate potential exposure to COVID or any other contagious virus that might be in your provider's office.   

6. Provide Testing Options

It is critical that employees have access to accurate testing whose results are easily and quickly reported. One way to ease the process is by providing access to self-administered COVID-19 test kits for periodic testing or for when an employee has been exposed to the virus. (CorVel, a national provider of risk management solutions, provides clients with a test kit from 1health, which requires a simple saliva collection to detect the virus with nearly 100% accuracy. A lab-certified report is delivered within 36 hours, allowing employers to make informed decisions about whether employees can safely return to work. The test kit can also be used as part of the initial virtual triage process—an employee who is having symptoms or who may have been exposed to the virus can receive a test kit to self-administer from the safety of their home.)

7. Support Employees

The effects of COVID-19 often go beyond the illness itself. Some issues that may prevent an employee from fully returning to work include delayed care or treatment for injured workers, prolonged COVID-related symptoms and COVID-19-related stress. Consider implementing services to support employees as they navigate the unexpected consequences of the pandemic. This could include critical event debriefing to help employees deal with the loss of a team member, routine wellness checks for injured workers and virtual mental health services. For injured workers awaiting surgery, provide tools to help them prepare for surgery, maintain optimum physical condition and rehabilitate post-op. Patients who are required to wait for surgery often become deconditioned, which will lengthen recovery time and increase cost. (CorVel offers a mobile app that measures, monitors and guides injured workers before and after surgery to speed recovery and reduce costs.) It is important that employees feel supported no matter what they are experiencing as a result of COVID-19.

See also: 4 Business-Boosting Tips for Social Media

Despite the vaccine outlook, COVID-19 isn't going to disappear tomorrow or next week or in the next month. Businesses will reopen, and employees will return to work, but procedures, protocols and support services need to be in place to ensure a smooth return-to-work.

Whether your business has been open throughout the pandemic or you are in the process of reopening, it is important to implement best practices that provide employee education on COVID-19, communicate clear expectations regarding health policies and expectations and assess employee health on a continuing basis. In this new normal, the goal is to return to business and get employees back to work as quickly as possible and as safely as possible.

Demand for cryptocurrencies is booming, as more than 40 million people worldwide use some type of them, according to SaaS Scout Research Group. 

As with any financial asset with value, cryptocurrency owners need protection with their investments, and that’s where cryptocurrency insurance enters the picture – at least on a limited basis in early 2021.

“There’s only a handful of insurers either currently offering cryptocurrency coverage, with insurance broker Aon claiming to own 50% of the business-to-business market,” said Virginia Hamill, senior insurance analyst at FitSmallBusiness.com “Approximate estimates for cryptocurrency insurance capacity stands at between $1 billion and $6 billion, for a market that’s valued at around $1 billion.”

The complicated nature of a decentralized trading environment also gives insurers pause, especially in a global trading platform that operates in a wild west environment. 

“The cryptocurrency insurance sector is relatively small but complex,” said Savanna Bilbo, a consultant at Pelicoin, a Bitcoin ATM service. “Bitcoin and other cryptocurrencies are unregulated by the government, which means there are no rules for insuring. The price of cryptocurrency fluctuates day-to-day, which makes it difficult and expensive to insure.”

It’s tough to pinpoint exactly what to expect in a highly volatile cryptocurrency market, but industry experts seem to agree on a few key themes in early 2021.

Prices could rise, and demand, too.

By the end of 2021, Bilbo said Bitcoin, the largest cryptocurrency, could be priced as high as $100,000 (it traded today at about $49,000). 

“Large mainstream companies will likely start purchasing Bitcoin and other cryptocurrencies and accepting them as forms of payment,” Bilbo said. “When this happens, the world of crypto will see a significant change, with demand for financial protection rising.”

Crime and fraud are up-front insurance issues.

Currently, the cryptocurrency crime and fraud sector are seeing the highest insurance costs. 

“Millions of dollars of cryptocurrency have been lost every year due to corruption and fraud,” Bilbo said. “There are many ways to hack or defraud cryptocurrency owners, and many feel the need to insure their cryptocurrency any way they can. Thus, insurance interest is up in these sectors.”

Exchange insurance is gathering steam.

Currently, the largest insurance market in the crypto industry is with exchanges that insure against theft from cryptocurrency hackers. 

“In the past, there have been hacks which took down entire crypto exchanges, and stole every coin in their wallet. The customers had no recourse, and their funds were permanently lost,” said Rob Zel, founder of bitni.com, a crypto exchange focusing on user privacy. “To prevent this from happening again, exchanges have begun insuring their customer's assets, so, if there is a hack, the customers can at least recover their funds.”

See also: Where Blockchain Shines Right Now

Exchanges are creating their own insurance programs.

One trend in the cryptocurrency insurance sector is large exchanges creating their own insurance funds when such insurance is unavailable anywhere else. 

“A small percentage of each transaction is added to a collective fund, which covers losses by hackers,” Zel said. “We will see more self-insurance by exchanges, although as commercial insurance products are developed, some exchanges may prefer to outsource, instead of dealing with the overhead of managing their own self-insurance funds.”

Currently, the larger exchanges are offering the most insurance to crypto consumers.

For example, Gatehub offers wallets to investors, which they can use to purchase individual insurance for the entire value of their crypto wallets. Other crypto exchanges like Coinbase provide supplementary insurance (backed by Nexus) that covers exchange users who lose 10% or more of their cryptocurrency assets.

Cryptocurrency users are self-insuring.

Insurance providers still largely see cryptocurrency as a risky investment. That’s led to “sky high” premiums for Bitcoin, Ethereum and other crypto investors. 

In that scenario, industry investors are taking matters into their own hands.

“There are a few other ways to protect your crypto investments,” said Chris Abrams, founder of Abrams Insurance Solutions. “I recommend sharing private keys with trusted, independent custodians. This can safeguard your wallet against theft.”

Abrams also believes it’s a good idea for cryptocurrency investors to spread their investments into multiple wallets. “That way, you avoid keeping all your eggs in one basket,” he added. “This can minimize your risk in case one wallet goes belly up.

Cryptos will soon be regulated, which may attract insurers.

Cryptocurrency may soon be mainstream, and, with the stamp of normalcy on the industry, regulators would begin to police it.

“With companies like Tesla making large purchases of it, others are soon to follow,” Bilbo said. “This scenario attention will cause the government to step in and attempt to regulate it, which will make cryptocurrencies more compelling for insurers.”

See also: Breakthrough Technologies for 2021

What can the crypto industry expect from insurers?

In an often-chaotic trading environment, insurance companies may be taking a “wait and see” stance on cryptocurrency coverage, but the financial payoff may be too lucrative to ignore.

“I can definitely see insurers’ appetites for cryptocurrency coverage increasing because the market is clearly there, but I think the growth is going to be slow,” Hamill said. “The possibility for extreme volatility is going to keep most insurers from jumping in too quickly.

“That said, they’re most likely going to be investigating the opportunity.”

Digital capabilities are more important than ever across all parts of the insurance ecosystem. That includes the world of principals and producers, who rely on agency management systems (AMS) to serve as a workbench for their main activities: selling insurance, managing clients and managing themselves. 

While some vendors have slowly expanded the capabilities of their core offering, others have integrated with larger, agency-focused suites of stand-alone software solutions that offer a broader range of capabilities to speed up transactions, automate processes and create a better overall experience for agents. Insurance carriers that consider agents’ ease of doing business one of their differentiators will likely have to integrate with these platforms at a minimum. 

Insurers may use AMS solutions for internal MGAs or agencies, but the primary overall users of these platforms are independent insurance agents. Modern AMS platforms are designed with these agencies in mind. Originally, these solutions began as enterprise resource planning platforms, but now they act as day-to-day workbenches. Carriers that want to improve overall agent relationships, which ultimately leads to better policyholder relationships and retention, need to consider how their products, processes and policy information will be part of these AMS ecosystems.

General Functionality of an AMS

While smaller agencies usually turn to an AMS that offers capabilities like advanced lead management and carrier connectivity, larger agencies are more likely to take a component-based approach and select a software suite with a broader range of solutions. These differences are not unlike the differences in core systems approaches taken by larger and smaller insurers. 

The difference in AMS purchasing approaches can cause some confusion about what functionality an AMS should offer, but there are three general categories of functionality that any solution, whether stand-alone or suite component, should cover: selling insurance, servicing customers and managing the agency itself.

AMS platforms help with selling insurance policies by tracking prospects, managing leads, understanding appetite, automating communications and generating quotes, among other capabilities. They can help service customers through capabilities like serving as a central record of customer activity (e.g., changes in policy, billing, claims, etc.). AMS solutions can also help improve operational efficiency by facilitating agent workflow, tracking calendars and deadlines, managing alerts or tracking individual and aggregate agent activity. 

Selling Insurance

Sales capabilities in an AMS include functions like managing leads, generating quotes, reporting underwriting appetite, automating emails, creating and storing templates for communications, managing the pipeline, marketing integration and integration capabilities (or APIs) with insurers’ portals. 

Quoting and underwriting appetite has become an area of focus for agents because omni-channel approaches are becoming the norm. Agents are also relying on AMS platforms to manage mobile messaging and social media posts, not just email and phone. In some cases, this might require insurers pre-approving templates or implementing software that can monitor compliance through a direct integration with the AMS or through workflow steps. AMS platforms are also commonly offering “next-best action” recommendations built on analysis of touchpoints and customer responses to marketing initiatives. 

Servicing Customers

When it comes to servicing insurance customers, AMS platforms typically offer download from/upload to insurers, execution and recording of endorsements, document management, ACORD forms, policy information updates, contact information maintenance, the storage of billing information, bill pay, monitoring of claims and record of payments. The platforms can also automatically alert agents when there are any service concerns that need their attention. 

Agents prefer platforms that make it easy to conduct all of their business through one interface, so allowing integration between agent portals and AMS platforms is a wise option for insurers. Agents and insurers alike are focused on the customer experience, meaning that AMS platforms should keep track of all policyholder interactions across the insurance life cycle. 

Ease of upload to insurance carrier systems can also be a differentiator; a recent Novarica study showed that 38% of young agents’ AMS platforms did not include upload ability, but they would like to have that capability. Consistent data across insurers and agents can improve customer service for inquiries as simple as updating contact information to more complex interactions like filing a claim.

See also: How Carrier Tech Drives Agency Change

Managing Agents

Agency management is a basic tenet of an AMS, and each platform should include some form of workflow management; monitoring of compliance, credentials and license; commissions tracking; general ledger and accounting; dashboards that show agent performance; data and analytics functionality; and sales and technology training. As AMS platforms have evolved to keep up with platform and industry trends, so have these capabilities. 

Regulation is top of mind for most insurers, and AMS solutions can help maintain compliance through monitoring and managing agent credentials and licensure. An AMS can produce reports and send alerts to ensure that agents are staying up to date with their licenses. AMS platforms can also help agents with their workflow management, including laying out process steps, milestones, dependencies and approvals. 

These components are becoming increasingly sophisticated; insurers looking to simplify agents’ day-to-day work should be clear about which steps require touchpoints with the carrier so the AMS can be configured properly. Some AMS platforms offer analytics capabilities to help improve sales and retention for agents and their overall agencies, routing particular opportunities to the agent who is best equipped for that specific lead. 

The marketplace for AMS platforms is broad, and agencies have plenty of options to choose from. Insurers therefore cannot routinely predict which AMS platforms the majority of their independent agents are using. Instead, insurers have to stand ready to be flexible — with data APIs, integration with connectivity platforms, easy download capabilities, readily available digital assets and, above all, a willingness to listen to their agents and understand what kinds of integrations would be most valuable and helpful to them.

Breakthrough Technologies for 2021 Paul Carroll, Editor-in-Chief of ITL The MIT Technology Review’s list of technologies to watch is always intriguing, and this year it’s even more portentous than normal. The list begins with developments in messenger RNA, which has not only delivered vaccines against COVID-19 but which may allow for other breakthrough vaccines, including against malaria and HIV, and may even create novel treatments for such killers as heart attacks and cancer. The Review also describes two developments in AI that will greatly broaden its capabilities, plus a potentially much more precise version of GPS, among several other things. Many, if they pan out, would ripple through society and, thus, through the world of insurance. Let’s have a look... continue reading > Strategic Priorities 2021   Majesco research highlights that despite impacts of pandemic, leaders widen lead over followers and laggards. Read More SIX THINGS Pressure to Innovate Shifts Priorities by Denise Garth Strategic planning needs to be bold enough to match the velocity and magnitude of the changes the industry faces. Read More How AI Will Define Insurance Workforce by Dustin Oxborrow If data analytics and AI become staples in modern business, how do they solve the human resource problem? The answer is threefold. Read More Claims Development for COVID (Part 1) by Mark Walls and Kimberly George This first article will cover COVID-19 claims data. Part 2 will provide more details on long-term medical effects. Read More The Insurer’s Customer Acquisition Playbook sponsored by Data Axle The right approach to data analytics can cut wasteful spending in customer-acquisition programs while attracting high-value clients. Read More 7 Ways to Innovate With Purpose by Amy Radin Now is the time to ask the basic question — "what is our purpose?" The answer will align strategy, people, capital and other resources. Read More 5 Things to Know When Integrating AI by Jimmy Spears It can be challenging to see which provider actually has a functioning solution, versus one that aspires to do the work in time. Read More Insurance Outlook for 2021 by Michael Giusti It may feel like the end of the pandemic is in sight, but the shock waves created by 2020 will reverberate for years. Read More MORE FROM ITL How AI Can Transform Insurance Correspondence Sponsored by Messagepoint Join Kaspar Roos, CEO and founder of Aspire, and Patrick Kehoe, EVP Product Management at Messagepoint, to learn how organizations can overcome the challenge of transforming communications by combining best practices and AI-powered approaches. Watch Now March's Topic: Strategic Innovation Strategy is what you don’t do. That was the dictum of the late, great Mel Bergstein, who way back in 1994 founded the pioneering digital strategy firm Diamond Management & Technology Consultants. (It became part of PwC in 2010.) I heard Mel’s line a lot, as a partner with Diamond from 1996 through 2003, and I think his are words to live by in the insurance industry these days. Everyone seems to have gotten the memo about the need to digitize insurance and to explore innovative ideas, but the present typically creates a real drag that slows movement toward the future. Take Me There GET INVOLVED Write for Us Our authors are what set Insurance Thought Leadership apart. Get Started Partner with Us We’d love to talk to you about how we can improve your marketing ROI. Learn More SPREAD THE WORD Share Share Tweet SUBSCRIBE TO SIX THINGS

The latest Out Front Ideas with Kimberly and Mark webinar brought together a panel of industry experts to explore trends being seen in COVID-19 claims, as well as long-term medical complications and what risk managers should monitor in the future.

Our guests were:

• Teresa Bartlett, MD – senior medical officer, Sedgwick
• Max Koonce – chief claims officer, Sedgwick
• Tim Stanger – vice president, partner relations, Safety National
• Alex Swedlow – president, California Workers’ Compensation Institute

Long-Term Effects of COVID-19

There may not be a crystal ball to determine the impact COVID-19 has on a patient years from now, but current trends in symptoms can provide a better picture. These trends in long-term side effects range from fatigue and brain fog to more severe symptoms like blood clots and pneumonia. 

One study performed by the National Institutes of Health (NIH) followed over 4,000 people who tested positive for COVID-19 in the U.S. 50% of those people were unable to work full-time six months after recovering. With only 8% hospitalized, most cases were mild but resulted in long-term side effects, regardless. In another study, over 80% of the COVID-19 patients developed at least one long-term side effect. 

COVID-19 Variants

There have been over seven unique variants of COVID-19 found in the U.S. alone in recent days. While variants are common in viruses, much like with the flu, there is a difference in these mutations. However, understanding the difference between shift and drift is important. 

The U.K., South Africa and Brazil variants are drifts, meaning that the virus’s protein structure has warped, but that testing still recognizes this variant, and that the vaccine works against these strains. However, these variants are still more contagious, and there is uncertainty regarding how long the vaccine will work on these.

The medical community is watching closely for a shift in the virus. When a shift occurs, testing will not recognize the virus, and the vaccine will likely not work. 

Vaccine Developments

The Moderna and Pfizer vaccines are both taken in two doses, with Pfizer’s doses administered 21 days apart and Moderna’s administered 28 days apart. Pfizer’s option allows for anyone age 16 and above to receive the vaccine, while Moderna’s is a higher dosage and allows for anyone age 18 and above to receive it. Only those with an allergy to polyethylene glycol or those who have experienced severe reaction to vaccines are advised against receiving either vaccine.

Johnson & Johnson’s viral vector vaccine, which was just approved for use, varies considerably from the mRNA vaccines currently being administered by Pfizer and Moderna. Like the flu vaccine, Johnson & Johnson’s vaccine uses the cells in a body to target the virus’s spike protein, triggering an immune response. The Johnson & Johnson option is only one dose but is currently only citing 66% efficacy. However, because Moderna and Pfizer’s trials ended before the variants were spreading, all three may have similar efficacy.

See also: Pressure to Innovate Shifts Priorities

Vaccine Myths

There are plenty of myths surrounding the COVID-19 vaccines. One of the common myths states that they could alter your DNA, but they cannot. The vaccine instead penetrates the virus’ genetic code and provides a map to break up the virus and kill it. 

Another common myth concerns sterility in those of child-bearing age. The vaccine contains syncytin-1, a spike protein that is also found in the body and that is used to grow and attach a placenta during pregnancy. However, these two spike proteins are completely different. The syncytin-1 used in the vaccine is only used to penetrate the virus and does not live on inside the body. Therefore, it cannot affect pregnancy. 

There is also a general fear surrounding the potential side effects of the vaccine. While side effects are possible, most are mild and short-lived, occurring for one to three days after the vaccine is administered. These side effects are inconsequential compared with the potential impacts of the virus itself.

To listen to the archive of our complete COVID Claims Development: Workers’ Compensation & Beyond webinar and view a full list of FAQs from this session, please visit https://www.outfrontideas.com/.Follow @outfrontideas on Twitter and Out Front Ideas with Kimberly and Mark on LinkedIn for more information about coming events and webinars.

With each new wave of technology over the past few decades, there have been many predictions that this is the end of agent distribution. You know the drill: “Technology can be so much more efficient and remove all that expense related to those human distributors.” I can remember back to the dawn of the internet, when there was all the discussion about disintermediation. I heard that term in all kinds of insurers’ strategy discussions. I never believed agents and brokers were going to be displaced then, and they certainly have not been displaced. In fact, as digital technologies have advanced in the intervening decades, agents and brokers are still dominant. 

Now, we are in a pandemic. It has been world-changing. And it has accelerated the digital transformation of businesses, society and our industry. The inability to meet in person and the rapid shift to everything online has put pressure on the agent distribution model. So: Has the pandemic finally put the nail in the coffin of agent distribution (for all those folks out there who don't like agents or don't think they add value)?

The answer is a resounding “no.” I think this idea is a myth. For complex lines of insurance, mid- to large commercial line specialty insurance, high-net-worth on the personal side and other segments, agents will be necessary. There will always be a need for expert advice on risk management. And there will always be a need for intermediaries who deeply understand customer needs and can create that right combination of coverages linked to the right underwriters. These areas will benefit more and more from technology over time. But the agents and brokers are likely to be around for a very, very long time. 

It could be a bit different for simpler lines like personal auto, homeowners, pet, travel, etc. and some of the new, on-demand or gig economy types of insurance. There are strong arguments that those lines will migrate more rapidly to direct digital distribution. But even then it's not going to happen overnight. There will be a slow evolution. My prediction is that there will still be agents selling all of those lines in 2030.  

See also: 4 Predictions for Independent Agents

Are there people out there who think you should be able to just press a button and get your insurance, so why have human intermediaries? Yes, but they are oversimplifying, and I believe it's a myth to assume that agents are superfluous. 

In that vein, this is your call to action: Strengthen the relationships you have with various distribution partners and with the technology companies that support you in the distribution space. Agent-carrier connectivity solutions, portals and self-service capabilities all enhance that connectivity. You must form strong bonds and leverage those technologies as much as possible to improve relationships and to provide more value. And, finally, we live in an omnichannel world with many different options. Customer journeys often involve the use of multiple channels, so agents need to be incorporated into the overall omni-channel strategy.  

MARCH 2021 FOCUS OF THE MONTH
Strategic Innovation

 

FROM THE EDITOR

 

Strategy is what you don't do.

That was the dictum of the late, great Mel Bergstein, who way back in 1994 founded the pioneering digital strategy firm Diamond Management & Technology Consultants. (It became part of PwC in 2010.) I heard Mel's line a lot, as a partner with Diamond from 1996 through 2003, and I think his are words to live by in the insurance industry these days.

Everyone seems to have gotten the memo about the need to digitize insurance and to explore innovative ideas, but the present typically creates a real drag that slows movement toward the future. Some McKinsey partners told me a few years ago about working with a major U.S. insurer that saw itself as being paperless within a decade. When they looked at the budget for the coming year, though... spending on paper was projected to be up 6%. The last I checked, annual increases in a budget item won't get it to zero any time soon.

As you can see from the articles I've selected for this month and from my soon-to-be-shared conversation with Amy Radin, I believe strongly that insurers need to take out a clean sheet of paper and imagine an ideal form of the future five or 10 years out, then work backward to what they should be doing now to create that future. That approach to strategy will mean taking any number of actions -- and stopping many of today's practices, no matter how long they've been "business as usual."

My short form of Mel's line for the insurance industry is: Burn the fax machines.

 

- Paul Carroll, ITL's Editor-in-Chief

 

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WHY STRATEGIC INNOVATION

2020 Global Concerns Survey

The International Insurance Society, in collaboration with the Pacific Insurance Conference and Insurance Thought Leadership, conducted its annual survey to understand the concerns of global executives in the insurance industry. This survey found that innovation was a very high priority in 2020, but less than half of respondents have a plan in place.

View the Results

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WHAT TO WATCH

A Conversation on Corporate Strategy, with Amy Radin Join ITL’s editor-in-chief Paul Carroll as he sits down to discuss corporate strategy with director, advisor, author and thought leader Amy Radin. Watch Now

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WHAT TO READ

	2021: The Great Reset in Insurance A shift toward greater corporate and social responsibility and empathy in general is underway, and 2021 will bring a great global reset. Read More
	How to Think Better by Using 6 Hats Although Edward de Bono's Six Thinking Hats technique has fallen out of use, it's worth another look at what can be a powerful tool for creativity. Read More
	The Intersection of IoT and Ecosystems Insurers can build a sort of digital twin of the customer, then tailor their offerings and improve the customer experience. Read More
	Rise of ‘Product-ism,’ Fall of ‘Project-ism’ Firms struggle because they view AI initiatives as small projects rather than a product requiring continuing maintenance and investment. Read More
	The Next Wave of Insurtech With automated claims processing, the turnaround time for settlement will be measured in minutes rather than days or weeks. Read More
	How Low-Code Accelerates Change Here are three tangible ways that low-code programming lets carriers accelerate change and provide new benefits to customers. Read More

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WHO TO KNOW

Get to know this month's FOCUS article authors:

Stephen Applebaum	Richard Barbarino	Matteo Carbone
Marty Ellingsworth	Paul Laughlin	Colleen Wells

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