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 and may even create novel treatments for 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.

The MIT Technology Review article begins with the startling array of possible applications for the mRNA technology that allowed for the Pfizer-BioNTech, Moderna and other vaccines for COVID-19. While the technology had never been used in humans before, the success of the vaccines shows that it can be used in highly precise, targeted ways.

There is now hope for developing vaccines for HIV and malaria, each of which kills about a million people a year worldwide and which have resisted previous attempts at producing a vaccine. The fatty nanoparticles that protect the mRNA as the vaccine is injected into a person may also be able to deliver other microscopic "tools," such as those used for gene-editing, which might be able to cure genetic diseases such as sickle-cell anemia and remove conditions that can cause cancer and heart attacks.

The medical breakthroughs may not come for some time, so they may not be of urgent concern to health and life insurers, but it's hard to know. Moderna designed its mRNA-based vaccine within two days of getting the full genome of COVID-19 -- before the U.S. even had its first diagnosed case -- and had actual vaccines ready for testing in animals within six weeks.

(Amid today's discussions about what value will come from having people return to offices, I find it intriguing that Katalin Kariko and Drew Weissman, the two researchers who developed the basic technology for mRNA-based vaccines, began their collaboration after they met while standing in line to use a copy machine at a lab at the University of Pennsylvania in the late 1990s.)

The two developments that the Review singled out in AI likely won't find their way into the world of insurance quickly, but they're still fascinating.

First is OpenAI's GPT-3, which can mimic human writing. It has its issues but can also be scary good. For instance, a Review article says that a human provided this to the AI as a prompt:

"In a shocking finding, scientists discovered a herd of unicorns living in a remote, previously unexplored valley in the Andes Mountains. Even more surprising to the researchers was the fact that the unicorns spoke perfect English."

The AI was asked to continue the story, and it added: 

"They also were found to have perfectly coiffed hair, and wore what appeared to be Dior makeup. 

"'We were shocked to discover the unicorns,' said anthropologist Daniel St. Maurice. 'They were like nothing we had ever seen before. We had heard legends of the unicorns, but never thought they actually existed.'

"When the scientists first arrived in the valley, the unicorns were surprised and startled by the presence of humans, but were also excited. The unicorns welcomed the researchers and explained that they had been waiting for them for a very long time."

Whoa, right?

The second AI development is progress in combining language capabilities, like those provided by GPT-3, with sensing capabilities like machine vision to give AI a more natural understanding of the world. A Review sidebar says a "multimodal" AI drew a picture based just on the words in a caption. In time, the new approach could lead to devices that would take a far wider variety of verbal directions than is possible now.

That would mean everything from nice-to-haves like new forms of Alexa in the home, to more sophisticated robots in factories and other workplaces that would reduce workers comp claims. A more aware form of AI would also help in areas where AI is currently being applied, including claims and underwriting.

As for the developments in GPS, a more precise version is already being deployed via new satellites and will take us from today's accuracy (generally within five to 10 yards) to accuracy of within one to three yards by 2023, but that's just the beginning. Already, a Chinese system based on satellites, ground stations and a network of sensors can detect movement of ground at the millimeter level -- roughly the size of the tip of a sharp pencil -- from 13,000 miles up in space.

I tend to think of better GPS as improving the directions I'm given or, in the intermediate term, allowing drones, robots or automated vehicles to deliver things to me more easily, but the new GPS systems will tackle far more important problems than whether a drone delivers my pizza while it's still hot. For instance, a Review sidebar described how the Chinese system spotted surface sliding following days of heavy rain last summer and evacuated 33 villagers days before a massive mud slide wiped out their homes. Such warning systems could greatly reduce the losses in many natural disasters.

The Review also describes a new type of battery that may accelerate the adoption of electric cars, plus a move toward "data trusts" that could blunt the control that Facebook and other social media platforms have over users.

If you're a tenth as interested in the future of technology as I am, the list of breakthroughs is worth a look. It'll broaden your horizons -- and maybe scare you a little.

Stay safe.

Paul

P.S. Here are articles I'd like to highlight from the past week:

Pressure to Innovate Shifts Priorities

Strategic planning needs to be bold enough to match the velocity and magnitude of the changes the industry faces.

How AI Will Define Insurance Workforce

If data analytics and AI become staples in modern business, how do they solve the human resource problem? The answer is threefold.

Claims Development for COVID (Part 1)

This first article will cover COVID-19 claims data. Part 2 will provide more details on long-term medical effects.

7 Ways to Innovate With Purpose

Now is the time to ask the basic question — "what is our purpose?" The answer will align strategy, people, capital and other resources.

5 Things to Know When Integrating AI

It can be challenging to see which provider actu

Insurance Outlook for 2021

It may feel like the end of the pandemic is in sight, but the shock waves created by 2020 will reverberate for years.

According to a recent Aon Programs survey, insurance agents are betting on social media to give them the biggest marketing lift this year. Of the 33% of agents expecting a boost from social media, 41% expect Facebook and 33% expect LinkedIn to be their top-performing platforms.

As agents increase their reliance on social media to build their brands and connect with customers, there are four social strategies that they should tap to gain the best ROI. 

First, agents should take a less-is-more approach. While agents should be active on social media platforms, it is equally important to focus on quality content over quantity. No one likes an over-poster who is just cranking out content for the sake of it without a clear message. Agents should make sure that every post is relevant to their audience. Along the same lines, agents should concentrate posting on their top-performing platforms. You don’t want to bite off more than you can chew. And why would you need a YouTube channel if your clients and prospects aren’t on YouTube? Being targeted in your social strategy is the way to go to drive the best results. 

Second, agents ought to consider creating snackable content. Would you read a 10-sentence social media post? How about a five-sentence social media post? We are living in an era overloaded with digital media, and it can be overwhelming. How do agents combat digital fatigue on their business platforms? Keep posts snackable! Delivering a short but impactful message will up your chances of your post being read – and well-received. Remember, the bite-sized rule applies to all formats -- from visuals and motion graphics to text. If you want to give your followers the option to dig deeper on a topic, provide them with a link to a longer-form piece.

Third, agents must let video take center stage. If you haven’t already jumped on the video bandwagon, start making your plans! Whether it be on Facebook, LinkedIn or Twitter, videos are the format of choice these days.  In fact, according to HubSpot, 72% of customers would rather learn about a product or service by way of video. Oftentimes, when we see a face and hear a voice delivering a message, it feels more personal and can be more appealing than one-dimensional visuals or text. The best part is that video is so easy to create today – put together a few talking points, find a professional backdrop and hit record on your smartphone or tablet. Just remember to keep it short. For the most part, social media videos should remain in the safe range of 30 to 90 seconds.

See also: Want to See Social Media Genius?

Finally, agents need to be authentic. If there has ever been a time for authenticity, it is now. Professionals need to be able to trust the brands they work with and even those they merely like and follow. If agents commit to transparency in their social media strategy, they’ll build deeper relationships with their network – and they’ll even build their business. According to Cohn & Wolfe’s most recent Authentic 100, “91% of consumers are willing to reward a brand for its authenticity with a purchase, investment, endorsement or something similar.”

How do you maintain an authentic voice on social media? Social media started out, well, social! Personalizing your content with showing your team’s personality helps to boost authenticity. One way you can do this is by using authentic photos with your posts. Another way is by pairing self-promotion with expressing gratitude to others. People want to know that there are real people behind the like button. On that note, it is sometimes better not to comment on a sensitive matter if you can’t confidently back yourself on the positive side of the issue.

Social media is ever-changing but these four tips for better ROI never go out of style. By merging these foundational basics with trending topics and tactics, you’ll be on the right path to building social relationships that garner real business results.

In my 30 years in the industry, I have seen several great advances in claims processing, but nothing as exciting as AI. 

The benefits of applying AI can be transformational, not only when it comes to cost control and claims acceleration, but also in providing an exceptional customer experience. 

Several players are promoting AI technologies now — whether it’s for auto or property, underwriting or claims – which means it’s important for claims professionals to be able to see past the AI buzzwords and evaluate solutions against solid criteria. 

According to MIT Technology Review, 40% of AI companies don’t actually have operational AI to apply. As a result, it can be challenging to see which provider actually has a functioning solution, versus one that aspires to do the work in time. 

Here’s my recommendations of what to look for when evaluating an AI platform for claims processing — is the AI making predictions that drive business value or are they just nice-to-haves?

1. When the AI processes photos it has never seen before, does it make accurate predictions? 

An effective AI system can provide a recommendation in real time on a photo it’s never seen before. A quick way to weed out potential providers is to ask for a live demo and submit your own pictures. Grab random pictures from Google or from your own historical claims to really test the waters. Did the AI accept the image? How long did it take to process? What was the confidence of the recommendation? Most importantly, is the vendor comfortable with the approach or coming up with an excuse to dodge this particular exercise? These results will separate a seasoned AI platform from ones that are closer to beta. 

2. How accurate are the results against my existing data? 

Now that you have seen if the AI works – you have to grade it against your historical figures. Ask for a calibration period where you send past photos from your own operations and ask for the AI’s recommendations. Use this as a “report card” to grade the accuracy of the technology. 

3. Do you have an open platform in which to deploy your AI? 

An open platform is more advantageous now and in the future. It allows for flexibility and will make scaling easy by adding, upgrading or swapping in the best vendors and their software for your organization. An open ecosystem also helps in reducing cost by avoiding vendor lock-in and increasing competition to get the best technology out there. The ability to integrate technology with your existing stack and processes will enable each system to “speak” to each other and give a greater picture of your claims operations. Examples of open claims platforms include Mitchell, Guidewire and Duck Creek. If your claims management system is home-grown, it is also an open platform. 

See also: How AI Can Tackle Claims Staffing Gap

4. Will the AI be adopted by the end-user? 

While the concept of AI can sound daunting to those on the ground, they should see the value that will enable them to focus on other duties and be much more efficient. A good AI provider should be easy to use, with a seamless implementation process across regions. 

5. How will my customers benefit? 

Submitting a claim is already stressful for your policyholders – not including the possibility of being without a car for weeks, or even months. A core key performance indicator (KPI) when evaluating an AI solution is, "How soon can my customer submit a claim?" Be sure to ask how an AI can benefit the customer experience. The concept of generating an instant claim shouldn’t be far-fetched – insurers are already doing it.

It may feel like the end of the pandemic is in sight, but for the insurance industry the shock waves created by 2020 will be reverberating for years. From premiums to policy language, and from underwriting to governmental action, changes are coming in 2021. 

In addition to the obvious influence of the pandemic, 2020 was also a monumental year in terms of insurance losses. It is easy to forget the historic hurricane season with its 30 named storms, the hellscape of wildfires that ripped through much of the West, the tornados and derecho that ripped through the Midwest and the civil unrest that caused huge losses for businesses in city centers throughout the nation. 

All of that loss will likely add up to higher premiums. 

Even still, the elephant in the room was COVID-19. While much of the industry already had policy language excluding communicable diseases, pandemic exclusions are a certainty in nearly every new policy. And even without pandemics, underwriters will likely be taking closer looks at nearly every risk for a while. 

But, just as risk isn’t going away, neither is insurance. Here are a few specific ways the industry is likely to change in the next 12 months. 

Business

Perhaps the biggest disappointment for business owners during the pandemic was realizing that business interruption insurance policies excluded pandemics. But that didn’t stop them from suing.  

Barring legislative mandates or judicial intervention, pandemic exclusions won’t be changing any time soon. 

Instead, business owners are turning to practical ways to limit their liability while reopening as safely as possible. Still, liability is a concern. 

Some states have issued liability waivers for businesses that follow safety best practices, but no federal protections have yet come down. Absent that, businesses are going to have to rely on their business owners’ policies if an employee or a customer claims they caught the virus in their place of business. 

Liability may also bleed over into workers' compensation. 

One place the federal government has stepped in is unemployment insurance. While the federal supplement has softened the blow for employees, the open question that isn’t being widely discussed is the fate of state unemployment trust funds. 

State-based unemployment insurance was never designed for an event of this scale, and many state funds are nearly empty. It will be interesting to see if federal money will top off those funds or if state statutes will kick in, passing the responsibility on to employers in the form of higher taxes. 

Travel insurance 

The two traditional components of travel insurance were trip cancellation and supplementary health. 

The health component was essential in overseas trips where a U.S.-based policy may not carry over. But with overseas travel all but shut down, that element also largely fizzled. 

The cancellation portion is continuing for now, with a huge caveat. Pandemics in general, and COVID-19 in particular, will not be covered. 

As overseas travel begins to open up later in the year, the health portion may return, but, because COVID-19 is a known event, chances of finding a policy willing to cover its risk are slim to none.  

See also: 2020 Catastrophes; Preview for 2021

Event cancellation and contingency  

Like trip cancellation, event cancellation policies can also be found, but they, too, are all but certain to exclude COVID-19, much less any communicable disease. The policies that are available now tend to only cover small-scale events.  

Before any event will be covered, though, it has to be held in a locality where that event is allowed and legal. Presuming it is allowed, the next step is going to be increased scrutiny by underwriters, who most likely won’t sign off on any event unless it’s incredibly aboveboard. 

Underwriters will be looking at event size as well as logistics. An outdoor concert will be more likely to get a policy than an indoor electronic dance music show. 

Film/TV production 

Cameras are rolling again, and, in many cases, producers have secured insurance policies protecting their productions. That said, many of those policies are requiring massive self-insured components and monstrous deductibles. 

Even with the tighter pandemic protocols, some of those productions have still suffered COVID-19 outbreaks, in many cases causing the productions to shut back down. 

For the time being, the entertainment industry will likely continue that stuttered start-stop pattern, but the profit motive of new content will make that struggle worth it. 

Health/life

COVID-19 has thrown a wrench in the normal operations of health and life insurance policies. 

In terms of health insurance, paying for pandemic costs is the least of the worries. The bigger issue is that patients have foregone normal preventative care. That is reverberating in three major ways. 

First, because premiums are set according to prior-year payouts, setting rates for 2021 was challenging. Second, insurers are worried that the backlog of procedures will come flooding into the system in 2021, prompting corresponding payouts. Finally, with people not taking care of chronic conditions, industry watchers worry that health will worsen in the long run. 

In terms of life insurance, the biggest question is the paramedical exams. While many of the hard lockdowns have been lifted, people are still reluctant to invite nurses into their homes to get the data needed for proper underwriting. 

Some companies have responded by offering no-exam policies, but how that will play out is the biggest question mark. 

See also: 11 Keys to Predictive Analytics in 2021

Big picture

The biggest intermediate impact is going to be defined by Washington and the courts. 

The courts are going to have to weigh in on whether business interruption policies and event cancellation policies will be forced to pay out despite contractual pandemic exclusions. 

Lawmakers may also step in with a liability shield for businesses. 

But the biggest issue industry insiders are watching is a potential federally backed pooled risk system for pandemics similar to the Terrorism Risk Insurance Act. Without that kind of intervention, pandemics won’t likely ever be covered. There are a few pending bills that might do just that.

The global pandemic has brought forward an unprecedented rise in remote working worldwide. What was once considered a luxury offered to only a handful of employees has become an obligation for hundreds of millions of people. 

Yet, with this abrupt shift to working from home, are companies leaving themselves more exposed to online cybercrime threats? It seems so, as a massive 71% of business owners are expecting the increase in remote working to result in some sort of a cyber breach. To say the data privacy lawyers have got their hands full would be somewhat of an understatement!

With that said, here are some quick tips you can implement into your business so you can better protect both your company and employee data. 

Provide employees with basic security knowledge

Employee negligence remains the most significant threat of company data breaches, with 20% of all registered attacks occurring due to an employee mishap. Here are some of the main ways employees expose company data:

• Phishing attacks — one in every eight employees shares information on a phishing site.
• Unprotected personal devices — 45% of business owners are concerned about a potential data breach occurring due to a security issue on an employee’s personal device. 
• Poor password management — 73% of businesses are now running additional training for employees on how to remain safe when working remotely, with training focused on implementing better password management.
• Using public Wi-Fi — 63% of employees admitted to using public Wi-Fi to access company emails and files, and a staggering 21% admitted to leaving a work device unattended in public while working remotely.

So what can you do to better protect your company data?

• Amp up training on cybersecurity 
• Make cybersecurity a priority for employees
• Restrict the use of personal devices when accessing company data 
• Encourage the use of proper password management
• Forbid employees from accessing company data while using public Wi-Fi

See also: Navigating Security in the Remote Paradigm

Provide your people with VPN access

In the wake of the current global situation, 79% of business owners have decided to increase their cybersecurity procedures to manage high volumes of remote access. One of the leading ways of doing this was by giving employees access to a highly encrypted VPN.

If you aren’t already with what a VPN is, it’s basically a service that allows you to create a secure and encrypted connection between any of your devices and the internet server. It creates an encrypted tunnel for all of the data transmissions to be sent and received through, and thus it makes it extremely difficult for hackers to intercept. These days, running a VPN is becoming a necessity as cybercrime rates continue to increase, especially as they are relatively cheap and easy to use. Companies that use a VPN provider will likely continue to do so even after the pandemic is over. 

Run a password audit

A password security audit is an excellent way for you to test the strength of your employees' passwords and how they would fare against an attack. A thorough audit should help uncover weak passwords and also provides an excellent opportunity to further educate staff on “password hygiene,” especially when working remotely.

You should also consider investing in a password manager for your employees, which will massively reduce the risk of a successful password attack. 

Password managers work by creating a unique password for each site that your employee visits. The passwords they generate are highly secure and typically consist of an extremely long alphanumeric sequence that is next to impossible to guess. 

Use an MDM/EMM solution

Mobile device management (MDM) or enterprise mobility management (EMM) is a set of technology, processes and policies that help to bolster the security of corporate and employee-owned devices within your organization. 

In short, an MDM solution manages the features on the mobile device, whereas an EMM solution manages the entire device. Both are great ways to fortify company data security when employees are working remotely, regardless of whether they are company devices or employee-owned. These solutions allow you to do things such as:

• Enforce the use of security policies on devices
• Remotely control devices
• Track the device location in real time
• Wipe the device when reported lost or stolen

Foster community and care for employees

It’s important to remember that company data is not the only data at risk during a breach. Most companies are required to hold sensitive information about their employees, such as their date of birth, address and Social Security number. This information is a prime target for hackers looking to commit identity fraud, and you must protect your employees' data to the best of your ability. 

After all, employees are putting their faith in you the same way you put your faith and trust in them. This is why it’s a great idea to foster a sense of community and care for employees to create an atmosphere where everyone is committed to taking care of each other’s online security. 

As always, the best way to do this is through education, so make sure you take the time to set up training sessions and encourage participation where possible.

Provide clear guidance and encourage communication

Last but not least, you must make cybersecurity a part of your company policy. Given that employee negligence is still one of the biggest causes of breaches, you must put steps in place to limit the likelihood of such an event.

If possible, lay out clear company guidelines on what is expected of your employees, including best practices such as:

• Avoid opening pop-ups and unknown emails
• Use a strong password (preferably a unique one for each site)
• Only connect to secure Wi-Fi 
• Use a VPN where possible
• Enable firewall protection at home and at work
• Keep antivirus and system software up to date
• Back up data regularly

See also: Time to Focus on Cyber Resilience

Finally, it’s important to encourage communication around cybersecurity incidents. If an employee suspects there has been a breach or has located a potential threat/weakness, make sure the employee has a clear channel to communicate concerns.

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

One of the most significant challenges in analyzing workers’ compensation data is that a single data source that collects and analyzes all the data does not exist. Data is currently provided through multiple sources such as the National Council on Compensation Insurance (NCCI), independent bureaus, monopolistic jurisdictions and self-insured employers. The California Workers’ Compensation Institute (CWCI) and the Workers’ Compensation Research Institute (WCRI) also provide analyses around workers’ compensation data.

To fill in some of the major gaps in data, panelists from CWCI, Sedgwick and Safety National break down their individual data sources to provide a clearer picture of COVID-19’s impact on workers’ compensation.

CWCI Claims’ Data Trends

In tracking the various components of COVID-19, CWCI has developed studies and on-demand webinars that cover the history of presumption laws, early adjudication decisions and how the industry leveraged telemedicine as a response to shelter-in-place initiatives. In addition, webinars are now available regarding legislation. When developing early COVID-19 models, essential elements were considered, including:

• Infection rate
• Symptomatic/asymptomatic rates
• Hospital admissions
• Intensive care admissions
• Mortality rate
• Cost per claim

Early projections related to COVID-19 claims were skewed based on a lack of stability in data modeling. The earliest data contained areas like China, Iceland and Greenland, with infection rates that were much different than other parts of the world. Once data became available regarding COVID-19 in the U.S., it was clear that the U.S. held a disproportionately large percentage of worldwide infection rates and deaths. 

California alone currently accounts for 13% of U.S. infections and 9.6% of U.S. deaths. When studying workers ages 18 to 65 in California, they account for 78% of the state’s infections and 26% of the deaths. However, when looking at the number of workers’ compensation claims in the state, only 4.7% of infections and 5.6% of deaths have an accompanying claim.

As of January 2021, there have been 123,674 COVID-19 workers’ compensation claims reported. Projections show about 143,432 claims expected through the end of January 2021. Reported claims from March 2020 to January 2021 show a 12% drop in all non-COVID-19-related claims. However, projections show that by the end of January the overall decrease in claims frequency will be around 4%, with almost 20% of all claims being COVID-19-related.

See also: 9 Months on: COVID and Workers’ Comp

The occupational characteristics of COVID-19 claims have changed with the fall wave of the virus. From October 2020 to January 2021, the healthcare industry share of claims dropped around 10%, accounting for around 29% of all COVID-19 claims. First responders have seen minimal change over the year in terms of their percentage of the total claims. Claims for the transportation sector doubled in the fall, now accounting for 8% of COVID-19 claims. Skilled nursing facilities still share a significantly higher percentage of COVID-19 claims in health care. 

Safety National Claims’ Data Trends

As a leading provider of excess workers’ compensation for self-insured entities, Safety National has seen that around 50% of its accounts consist of three industries: public entities, health care networks and education. Self-insured data is missing from bureau analysis, making Safety National’s data unique.

Consistent with CWCI’s data, overall workers compensation claims for Safety National clients dropped around 26% in 2020 compared with 2019, excluding COVID-19 claims. When including COVID-19 claims, the drop is around 10%. There were roughly three peaks throughout the waves of COVID-19, including early April, early July and early December, with the December peak being the highest number of claims seen all year. 

By age, the 20-55 bracket accounted for 84% of Safety National claims, with the average claim cost being $4,300. When looking at workers over age 55, the average claim cost was more than three times higher at just under $15,000. 

63% of death claims were age 56 or older, 43% were between the ages of 56 and 66. 61% of deaths were male. 51% of death claims were in healthcare, and 22% were from municipalities (mostly first responders).

Among the COVID-19 claims with an incurred cost of over $100,000, 15% have incurred more than $1 million. Some claims have over $2 million incurred, including organ transplants, long intensive care stays and even paraplegia caused by renal failure. 

Sedgwick Claims’ Data Trends 

Sedgwick also carries many self-insured accounts, with 24% of its business being in the retail sector. Like the rest of the industry, Sedgwick’s claims also saw high volume during the three peaks of infection rates. Although healthcare only represents 11% of all of the company's accounts, most COVID-19 claims were reported from that sector, accounting for just over 50% of all reported COVID-19 claims. The retail industry and the public sector round out the top three industries reporting COVID-19 claims. The top five states reporting COVID-19 claims are California, Texas, Michigan, Florida and Illinois. 

When it comes to the severity of the claims, Sedgwick created a model to project where claims would fall, grouping claims into buckets, including:

• Cases that only required quarantine 
• Cases that required nominal medical treatment
• Complex moderate cases 
• Complex severe cases, requiring ICU
• Fatalities

These severity groupings have closely trended with original predictions, with fatalities, for example, accounting for just over .5% of all claims. Approximately 1.5% are severe cases involving ICU stays, 8% are moderate cases involving several medical treatment visits and 90% are mild cases involving very little medical treatment. When reviewing these claims’ value, 73% are valued under $5,000, and 85% are valued under $10,000. 

See also: 20 Issues to Watch in 2021

There has been a fairly even distribution of claims among the age groups due to various industries’ claims. However, the more severe claims that include ICU stays are trending in the over-60 age group. The healthcare industry is accounting for a higher rate of hospitalizations than the other industries, trending 3% to 4% higher than the rest.

Overall, Sedgwick saw a decrease in workers’ compensation and liability claims across the country due to economic shutdowns and various employers not operating at full capacity. Even retail clients deemed essential saw a decrease in overall claims, which could be due to a lower customer count within the stores and an overall increase in safety measures. There has been a slight increase in work-from-home claims due to ergonomic-related issues.

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.

President Kennedy is quoted as having said, "The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger, the other for opportunity. In a crisis, be aware of the danger -- but recognize the opportunity."

As I write this, the news coming out of Texas regarding the week's extreme weather is today's reminder that we face continued crises. (Hoping that everyone there reaches the end of this ordeal soon.)

Innovators can contribute to harnessing crises as opportunities, ensuring that collectively we focus beyond directing efforts to reverting to the way things were.

Now is the time to ask the basic question — "what is our purpose?" — because the answer will provide the means to align strategy, people, capital and other resources to innovate under remarkably different circumstances than most of us imagined a year ago.

Why should innovators focus on purpose?

Evidence suggests that purpose-led brands:

• Always know where they are heading
• Use their defined purpose to guide them through uncertainties
• Sustain a workforce that brings their best selves to the organization
• Increase their ability to overcome challenges and achieve results.

What more useful and practical tool could there be to drive innovation?

What is the path to create a purpose-driven organization?

1. Believe it is possible to inspire a purpose-led workforce.
2. Sponsor and empower a diverse team to lead a collaborative, iterative and disciplined process to define the business' purpose.
3. Commit to constant communication.
4. Know that the organization must, to paraphrase the late author, futurist and businessman Alvin Toffler, "Learn, Unlearn and Relearn." This is transformative.
5. Avoid a top-down approach.
6. Connect the organization's purpose to execution -- to individual actions and decisions.
7. Identify and enlist change makers and influencers on the team and from outside who can be role models, helping peers build the confidence to embrace the change.

Two examples

Patagonia was well ahead of the times on being purpose-driven. The brand's purpose: "To build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis."

On Black Friday 2011, Patagonia ran this now famous ad in the New York Times.

This ad is one example of what being authentic to a purpose means. Business priorities are supported by Patagonia's purpose: reinforcing brand values and product durability, justifying premium pricing and differentiating in a busy category.

Consider CVS' commitment to purpose, beginning with its name change in 2014, from CVS Caremark to CVS Health. The change aligns with the company's purpose: "Helping people on their path to better health. Whether in our pharmacies or through our health services and plans, we are pioneering a bold new approach to total health. Making quality care more affordable, accessible, simple and seamless."

CVS decided to halt selling any tobacco products as part of a deliberate realignment, including establishing new health partnerships and in-store services and merging with Aetna. CVS gave up a reported $2 billion in annual tobacco sales and then saw overall growth. A further stakeholder impact has been that the move out of tobacco created public health benefits as studies have linked overall declines in tobacco purchasing with CVS' decision -- and the decline also includes other tobacco sellers.

Ways to test the strength of purpose

Look to these execution indicators as a starting point:

• Is the purpose evident in the organization's daily behaviors, or is it stuck inside presentation decks?
• Is the purpose equally relevant to internal and external stakeholders?
• Does the purpose inspire employees, vendors and partners and guide their daily actions with respect to the brand?

See also: Pressure to Innovate Shifts Priorities

Three Ways to Learn More and Take Action

1. In The Change Maker’s Playbook: How to Seek, Seed and Scale Innovation In Any Company, the Seek phase of the methodology is packed with practical stories and advice on how to embed purpose in the innovation effort, and why it matters to create business results from these investments.
2. I’ve also launched a prototype of a workshop engaging leadership teams to experience the Playbook in a compact, action-oriented session.  Reach out if you would like to learn more; you can shape the content and make it your own. 
3. In the current issue of Carrier Management ,you can find an expanded version of this letter, specific to the insurance sector. 

 

In business, change is constant. After spending years (or even decades) building your company, common sense tells you that future success relies on change as new organizations enter the market. For an industry to grow, expand and move forward, companies that have already achieved success should look for ways to give back to the industry that helped them flourish.

When leaders view their industry counterparts as collaborators, this attitude has a way of infiltrating the entire organization. Employees within a company can begin to take on a mentality where success and opportunities are unlimited, affecting everything from teamwork to innovation. Over time, employees feel even more confident about sharing ideas, making mistakes and taking chances.

Not investing in your counterparts only squelches the potential of innovation in your industry. Besides, industry dedication can inspire others in your company to do the same — creating a work environment of collaboration, self-development and creative thought. It’s like reinvesting in your business.

Take Doug Conant. The former CEO of Campbell Soup did many things to improve the business, but one of his most significant moves was weaving “abundance” into its DNA. While this abundance took the form of corporate social responsibility by focusing on sustainability in the agricultural supply chain, the notion that people want to work for aspirational organizations is universal.

Giving back to the business community provides a similar effect. People become more engaged, creating a better workplace and positioning their businesses to succeed in the marketplace. Even in the more competitive “niches” of the insurance industry, there is room for more than a handful of players.

Investing in the Community Is an Investment in Yourself

Engaging with industry colleagues builds connections that create more promising opportunities for success for everyone involved. This is certainly true in insurance and financial services.

“The rising tide of a strong marketplace with continuing growth lifts all boats,” said Scott Berlin, senior vice president at New York Life and a member of the board at PIMA, a trade association that brings companies throughout the insurance and financial services ecosystem together to learn from each other and improve the industry.

Instead of competing for a larger share of the same pie, Berlin said companies are better off working together to grow the size of that pie. These partnerships also provide insights into shared industry challenges, offering an opportunity to develop new approaches. These actions don’t just ensure a healthier marketplace — they also deliver new perspectives to all participants.

“Working together within one’s business community provides the opportunity to grow personally as a leader,” Berlin said. “Sometimes, the best lessons are learned when not doing your day job.”

See also: Navigating Confusing Insurance Regulations

Aside from obtaining growth or insights, sharing expertise can differentiate an individual as an industry thought leader while also inspiring others — cementing your reputation as a leader. This does more than give you added clout. It provides an opportunity to enact real change, helping your industry raise awareness and better serve consumers.

All it takes is for you to raise your hand and share the wins, challenges and insights you’ve gained through years of experience. This level of collaboration can help the entire industry grow.

“In the insurance industry, we have an opportunity to better position ourselves with consumers,” Berlin explains. “We sell valuable products and services, yet we’re hindered by a general lack of awareness. Working together, we can better educate consumers on potential solutions to their needs and highlight the benefits and guarantees we provide.”

One way to start is with “co-opetition.” Partnering with a competitor ends up benefiting both parties and providing stronger value to consumers. For example, Australian-based financial services company Suncorp often partners with innovative, tech-focused startups to offer on-demand services to its customers.

One easy way to practice coopetition is through peer groups. PIMA members, for instance, can join peer advisory forums, interest groups and a private online community. We’ve also formed an agency CEO forum that enables CEOs to meet with competitors throughout the year, to learn from one another and share insights on ways to improve the industry. It can be difficult to start conversations with people we perceive as competitors, but peer groups make it simple. And don’t be afraid to include new entrants or people outside the industry in your peer groups — inspiration can come from anywhere.

New York Life, for example, has its own venture capital arm that has tapped into startups that address the challenges experienced by many life insurance companies. The startups receive the invaluable backing of an established organization, and New York Life gains important insight into the future of life insurance.

To elevate the industry as a whole, be open to collaborating with industry peers while creating opportunities for mutually beneficial connections. You have the power, the capacity and the resources to support collective industry success.

Are you interested in sharing your perspectives with industry peers? Learn more about the PIMA community at www.pimainsights.org.

Prior to COVID-19, the U.S. boasted historically low unemployment and a roaring economy. Nearly every industry was expected to face a severe talent shortage within the next 10 to 20 years. But then March hit, and the world turned upside-down.

Since then, the pendulum has swung in the other direction. The current unemployment figures are reporting as many as 10.7 million people are out of work, and, despite this sudden abundance of available workers, staffing issues remain — they’ve just become more complex.

To navigate this wildly fluctuating environment, companies will rely on data for decision-making about hiring, training and countless other matters that affect the bottom line. This will require tools, like artificial intelligence (AI), to make sense of data and to adjust quickly amid uncertainty.

The best way to examine AI’s value in today’s uncertain world is to look at how it can work within a specific industry. Doing so makes it possible to show practical applications from which lessons can then be applied to other industries.

Commercial Insurance: A Case Study

Like other industries, commercial insurance faced a significant hiring crisis pre-COVID-19. The average claims adjuster remained in the industry for just four years — about the time it takes to gain full expertise — and those workers who stuck with claims have inched closer to retirement. So, this multibillion-dollar market is at risk of losing much of the human brain trust that enables current systems to run, as new workers cannot be hired, trained and retained fast enough to balance the scales.

Fast forward to today. Commercial insurance looks markedly different. The types and volumes of claims are changing. For example, claims related to COVID-19 contact or work-from-home circumstances are rising quickly, as are post-termination claims, while traditional claims have dropped.

At the same time, access to traditional healthcare has been in flux. To combat the limitations on available providers, telehealth solutions have exploded, opening up a whole new set of providers that claims reps need to become somewhat familiar with to facilitate claims accordingly — claims that bear a greater potential for fraud and litigation, which cost companies millions of dollars each year.

In short, almost everything about claims operations has changed — and, like many other industries that have been traditionally slow to adapt to new challenges, commercial insurance faces real hurdles.

The Importance of Data and Intelligence

Data is the key to overcoming dramatic changes within a relatively static industry. Maintaining a pulse on what’s happening across a business, or with a specific claim, and how it relates to things experienced previously is important; spotting trends early is vital. Organizations require data to determine if their plans and practices are working — and, if they are not, data should be used to drive intervention and adaptation.

But thousands to millions of data points alone won’t save the day if an organization doesn’t have the capability to understand what the data is telling them. What is the context? How are points connected? If a trend continues, what will be the effects six months or two years from now?

AI systems unlock the meaning of data to make it useful, pinpointing where organizations need to make adjustments. In commercial insurance, AI could allow for expanding provider networks to offer better, faster access to care. To actually expand networks using quality providers, systems need to tap into more data to learn which providers have achieved the best outcomes on which types of cases.

What is particularly exciting about implementing AI in this rapidly changing environment is that interpretations of data are not fixed. Machine learning capabilities are constantly refining and updating insights so that organizations — and their people — can respond accordingly.

See also: How AI Transforms Risk Engineering

Designing the Future Workforce

So, if data analytics and AI become staples in modern business, how do they solve the human resource problem? What do they mean for the future workforce? The answer is threefold.

Data determines what your hiring needs actually are: In a world that is changing so quickly, your business might not need as many people specialized in a certain area, whereas new opportunities or divisions may emerge. Your business may be forced to alter its offerings to match customer needs. Data is the guide; it lets you home in on exactly what skills are required.

AI guides training: Because AI is able to analyze so much data so quickly, new hires are able to access the information and prompts they need to do their jobs well as soon as they need it. There is not as much feeling around or dependency on senior colleagues. This is not to discount the value of experience, but it means that workers can reach a competent level much faster; what they lack in experience and intuition is replaced by data-driven insights and standardized practices.

AI augments jobs: AI solutions take care of many of the rote tasks workers are routinely bogged down with today. As a result, employees can focus on making more efficient, informed decisions; they can actually use their brains more. AI flags potential errors or problems so that they can be addressed before they escalate. Reps can focus on delivering compassion at a time when people need it most.

While COVID-19 has fundamentally altered the future workforce, tools like AI help get it back on track. In leveraging it effectively, organizations will become nimbler and more responsive to conditions while employees are more knowledgeable and effective.

Moving Forward by Looking Back Paul Carroll, Editor-in-Chief of ITL How old do you think Martin Luther King Jr. was when he was assassinated? That question has been used to help gauge how good people are at making predictions and to help them get better. I’m going to try to build on it here to make a point about the need to look rigorously at past forecasts and decisions to calibrate how good we are (or, often, aren’t), so we can continually improve. The question about MLK is deliberately unfair. How can we be expected to know his exact age? So, pick an age, then give yourself a range, expanding in both directions until you figure you have a 90% chance of having his actual age fall within that range. (Go ahead and write it down. I’ll wait.) ... continue reading > How AI Can Transform Insurance Correspondence sponsored by Messagepoint Focusing on customer experience is a winning strategy as digital transformation efforts accelerate into 2021. Learn how AI-based tools are helping industries modernize their systems, optimize their content, and manage customer communications intelligently. Watch Now SIX THINGS 11 Keys to Predictive Analytics in 2021 by Andy Yohn Using the plethora of data now available, here are 11 ways predictive analytics in P&C insurance will change the game in 2021. Read More New Tool: Cognitive Process Automation by Chaz Perera With low interest rates putting pressure on expenses, CPA goes beyond robotic process automation, cutting costs while maintaining service. Read More Beware the Dark Side of AI by Nick Frank and Wei Ke Apple Card's algorithm sparked an investigation soon after it launched when it appeared to offer wives lower credit lines than their husbands. Read More Trusted Adviser? No, Be a Go-To Adviser by Kevin Trokey Is earning trust brag-worthy? Isn't trust the minimum for an adviser-client relationship? The real goal should be achieving "go-to" status. Read More Does Remote Work Halt Innovation? by Megan Bock Zarnoch We must make up for the gap in organic connection through a tried-and-true method of driving innovation – Networked Improvement Communities. Read More Making Inroads With Open APIs by Maarten Bakker Insurers must allow third parties to access their data and products and be present – and relevant – in customers’ digital ecosystems. Read More MORE FROM ITL The Future of Blockchain Series Episode 3 Usage in Life & Annuities Having explored the possibilities for blockchain in personal lines and commercial lines in P&C, we conclude our webinar series on the technology by taking a look at two use cases in life and annuities that are close to moving into production.  Watch Now February's Topic: Blockchain While the pandemic has greatly accelerated the digitization of the insurance industry — turning years into months — it has also shown us how very far we still have to go. As a rule of thumb, I’ve heard consultants say that 50% of the operating costs need to be driven out of the industry in the next five years. Blockchain has held out this promise for some time now. It’s lost a bit of its shine because it’s been identified as a hot technology of the year for so many years in a row. But it may be coming into its own, with some uses starting to move into production. 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