Social media can be a rewarding place for insurance agencies – it provides a platform to build relationships with customers and prospects and, ultimately, grow revenue. The benefits have never been greater. In fact, a recent study from Sprout Social indicates that, after consumers follow a brand on social media, 91% will visit its website or app, 89% will make a purchase from the brand and 85% will recommend the brand to a family member or friend.  

But social media can also be an unforgiving place. Over the last year, we’ve seen an uptick in social media fails as businesses tried to join conversations about trending headlines and serious issues – from pandemic developments and racial justice to election validity – sometimes causing irreparable reputation damage and business impact.

As consumers increasingly turn to social media to inform decision-making, it’s critical for agency owners to build their social media skills to navigate the risks and reap the rewards. Here are six tips to get you started:

1. Establish the ground rules.

Creating general social media guidelines for your agency will help you make faster and smarter decisions in any situation. The guidelines can be as simple as a one-page document that outlines:

• Your social media objectives 
• Your target social media audience
• Your social media “voice”
• Topics you will/will not address on your channels 
• Frequency of posting
• Engagement approach 
• Who has access to post on your social media accounts
• When and when not to respond to conversations

These guidelines can and should evolve along with your agency. Revisit them regularly to ensure they still complement your overall business strategy. 

2. Be a good listener.

While you shouldn’t make posting decisions based on what everyone else is doing, you also shouldn’t make decisions in a vacuum. It’s important to truly understand a trending situation as well as the mood on social media and in traditional media before making a decision about whether to post. 

As you evaluate the situation, look at the conversation that’s already happening. Are other agencies jumping in? If so, what’s driving that? How are people responding to that content? Are the media stories about agency response positive or negative? Are your customers and prospects joining the conversation? Are they asking you to join? Why? Understanding the landscape can help make a decision that feels right for your business and the moment.  

See also: Personal Connections Via Social Media

3. Walk the walk.

When the racial and social justice movement gained momentum last summer, businesses were eager to show their support on social media. Those with a track record for actively discussing and addressing these issues were greeted with positive feedback. Those that issued hollow statements about support and solidarity without action were savaged. For example, Ben and Jerry’s statements were viewed as appropriate because the brand and its founders have a long history of social activism, while the NFL’s statement that included the phrase “we need urgent action” was blasted. 

4. Pause when appropriate. 

Sometimes, you just need to hold off on any kind of social media posting – either because everyone’s attention is elsewhere or out of respect for the situation at hand. For example, many insurance agencies we work with paused on posting around the presidential election because that event dominated the social media conversation. And we’ve advised them to pause during moments of national and world crisis because of the gravity of those situations. Continuing to post promotional content at these moments can imply your agency is disconnected from the world around you – or simply doesn’t care. Pay attention to what is happening in the world and pause posting during times of crisis.

5. Engage with care.

Treat the content you like and share with the same care you treat your own social media content. Before you deem something worthy of engagement, review it carefully. Verify the content’s accuracy, check for hot-button language, know your source and review the current comments to avoid an inadvertent issue. For example, a controversial news figure might post something completely neutral on Twitter that you think is relevant to your customers. However, your customers might view a retweet of that post as an endorsement of the controversial figure.

6. Live the brand. 

As an agency owner, you are the brand, and anything you post on your social media accounts becomes a reflection of that brand. In a recent New York Times story, journalist and digital communication expert Sree Sreenivasan summed it up well: “The fact is that it’s impossible to separate the personal use of social from the professional, and everything you say online can and will be used against you. There are ways in which you can try to safeguard your privacy and control who sees particular content, but the onus is on you to be vigilant. So, the more seriously you can take your social media activities, the better.” You can mitigate your risks by embracing the same social media guidelines for your business and personal accounts. 

Every day on social media, agencies of all sizes are judged by what they say and what they don’t say. Understanding the risks that come with a social media presence – and how to mitigate them – is just as important as understanding how to use these platforms to connect with customers.

It has been a year since the first cases of COVID became known, beginning an upending of the world as we knew it. As COVID hit, our strategies, priorities and plans all took on a new view, a new focus and in many cases a new urgency – through the eyes of digital engagement, for customers, employees and channels. The good news: Many initiatives were still relevant. The bad news: Many initiatives needed to accelerate because market assumptions and strategies changed substantially overnight. 

COVID affected all industries, but some were better prepared than others because they were well down the path of digital transformation. McKinsey, in a multi-year, multi-industry research initiative, assessed economic profit by industry and identified what they term an “economic profit gap,” which became evident in 2010 and has been widening ever since. Within the industries tracked, insurance is in the bottom six, showing a gap that was growing even before COVID. This is no surprise, given the influx of capital to insurtech focused on transforming the centuries-old industry.

Figure 1:

A Growing Gap Between Leaders, Follower and Laggards

Today, COVID has widened the gap between the top, the middle and the bottom – aligning to our Strategic Priorities research tracking Leaders, Followers and Laggards the past six years. The COVID crisis has exposed and heightened the power of future-ready, digital business models that proved more resilient, which in many cases accelerated dramatic growth. Consider these examples: 

• Streaming media vs. traditional cable
• At-home cooking vs. eating out
• Curbside pickup or delivery vs. eating out
• Digital e-commerce vs. in-store buying
• Home delivery vs. in-store buying

A recent report by Andreessen Horowitz found that, in the first six months of 2020, e-commerce in North America as a percentage of overall commerce increased more than in the entire previous decade – going from 16% in January 2020 to 27% in July 2020, after starting 2010 at only 6%!

Parts of the insurance industry also experienced this surge. AccuQuote, a national online life insurance agency, saw a 20% to 30% uptick in life insurance applications. This aligns with a Forbes report that said that online life insurance sales increased 30% to 50% for companies with speedy apps that used data/algorithm-driven underwriting, particularly for people 45 and under, the prime growth market of millennials and Gen Z. Another Forbes article reported that P&C usage-based insurance (UBI) accelerated in North America as people reevaluated traditional auto insurance. Prodigy, a provider of software for auto dealers that lets customers compare and buy insurance when they purchase a vehicle, said that online insurance sales grew 300% in 2020 and that millennial buyers tended to gravitate toward UBI.

Redefining the Future Out of a Crisis

History tells a great story of opportunity and innovation for those who embrace disruption. Looking back at other crises and catastrophes, there is a strong relationship between disruption and opportunity – driven by innovation in business and technology.

Think about the Spanish flu. It increased interest in epidemiology and established the national disease reporting system; World War II brought radar and computers; and the 2008 financial crisis gave rise to the sharing and gig economies and insurtech. Out of every one of those catastrophic or major events arose fascinating and world-shifting new businesses and technologies that helped us adapt to a rapidly changing world.

Now, a year after the emergence of COVID, companies – both insurers and those who are insurer customers – realize we will never go back to “normal.” Companies with resilient, future-ready digital business models were better-positioned to ride the trends, embrace disruption and thrive during the crisis, increasing their competitive advantage and establishing them as a next-gen leader. 

Leaders Hit Hyper-Acceleration

Our new Strategic Priorities 2021 report, based on post-COVID insurer survey results, shows a dramatically widening gap when looking at insurers focus on key strategic initiatives the last year between Leaders and Laggards of 64% – representing a 20% growth in the gap from last year. Followers were “treading water” to keep even with the previous year – with a 12% gap.

Even more concerning is the widening gap with Leaders in the next three years of 102% for Laggards and 28% for Followers, reflecting a 40% and nearly 10% gap growth for each! These gaps do not bode well for insurers’ ability to grow and remain relevant with the ever-increasing pace of change and disruption. 

Insurance companies have a unique opportunity to re-envision their future of insurance today and redefine their strategies and priorities for 2021 and beyond.

See also: Time to Try Being an Entrepreneur?

The COVID crisis along with other customer, demographic, technology and market boundary shifts are changing risk, customer behaviors and expectations – creating the demand for new risk products, value-added services and customer experiences that the insurance industry must respond and adapt to. These shifts create opportunities to make insurance better and more relevant through the innovative application of technology. Most importantly, we have the opportunity to make the change happen if we break down the silos and long-held business assumptions, embrace next-generation technology and ecosystems, and more!

Look at the accomplishments of Operation Warp Speed in the face of an “impossible” challenge! The approach delivered the first approved vaccine in less than nine months as compared to the “traditional” process, which could take 10 to 15 years!

Think what insurance could deliver – new products, customer experiences, services and much more. Instead of taking years … what can we do in weeks or months? The impossible is possible!

So how do you position yourself as a Leader, climb the economic power curve and become strong innovators? 

Know where you are in the Knowing-Doing Gaps from our Strategic Priorities research that define Leaders that are accelerating digital transformation with resilient digital business models. Then rethink and reprioritize your strategies and priorities to take advantage of the shift and opportunities unfolding. Most importantly, execute on these priorities with focus and urgency. 

This year’s Strategic Priorities report is more important than ever for insurers to assess where they stand and how they will respond, because “business as usual” is no longer a strategy in this time of dramatic change and pressure.

It is time for bold moves. 

Finding the right balance between optimizing today’s business and boldly creating tomorrow’s business is more important than ever. Are you ready to strike that balance and rise as one of the post-crisis leaders?

To gain further insight on the report, view the webinar, Strategic Priorities 2021: The Insurance Industry Shift Hits Hyper-Acceleration for Digital Business Models, that shared details from the report. 

A recent conversation crystallized a thought that has been rattling around in my brain for a while: that, despite the industry orthodoxy, insurance is no longer "sold, not bought."

The reverse isn't yet true, either. It isn't correct to say that insurance is bought, not sold. Instead, we're in a middle ground, where insurance is both sold and bought. People certainly still rely on advice about insurance, and a good agent can spot a need and fill it with a policy, but a huge percentage of people now begin their searches online. They also do more and more research on their own, out of reach of brochures and PowerPoint presentations. With COVID accelerating the move to digital, customers often won't even sit down in person with an agent before buying a policy.

Yes, "sold AND bought" is confusing -- but this situation also creates opportunities for those who are first to adapt to the new reality.

The conversation that pulled the thought together for me was with Amy Radin, a longtime senior executive at Fortune 500 companies in financial services, including American Express, Citi and, most recently, Axa, where she was chief marketing officer. Amy has added "author" to her resume, publishing a book on how to produce disruptive change in big organizations, and now consults to both big corporations and insurance startups. She spoke with me for a webinar as part of this month's ITL Focus on strategic innovation and brought up agents' "Uncle Joe" issue.

Uncle Joe?

"Even with someone who has bought an extremely high-end policy, they're investigating their options. They're talking to neighbors. They're talking to their Uncle Joe, who is very successful, so they respect his opinion. They're talking to people who lead lives like theirs," Amy said, based on customer journey research she has done or commissioned over the years. "Customers will tell you they went through an investigative process that has nothing to do with anybody who's licensed by the regulators to sell insurance."

She added: "Most policy holders would be offended to hear that the industry views them as being sold to. I doubt any of them will tell you, I just called my agent and said, Tell me what to do."

The "sold, not bought" notion will, I believe, increasingly limit innovation, because it will keep executives focused on the products and on tools for agents rather than on how people's needs are changing in these turbulent times.

Her recommendation: "Go out and listen to your customers. Don't hire a market research firm. Don't rely on surveys. Sit down with a handful of people who are giving you their money and understand what's changed in their lives."

She cite a Harvard Business Review article by Michael Porter that said only 3% of executives actually go out to interview customers -- even as the executives preach the need to be "customer-centric."

"Ask: How am I to do business with? Tell me about that policy you bought? How did you decide what to buy? Who did you consult?

"Don't do this in the context of trying to sell the product. And don't just ask about rational needs. Ask about emotional needs. How are they feeling -- not just what are they doing? Insurance is a product that's pretty fraught with emotions."

She cites an experience she had understanding an emotional need while at Citi, where she was an EVP and chief innovation officer in the U.S. credit card business from 2000 to 2009. During the Great Recession, all sorts of people fell behind on payments, which traditionally would have meant launching a barrage of calls to browbeat delinquent customers. But Amy suspected that many would appreciate a digital experience, so they could negotiate terms and make payments without being shamed by another person.

"It's very emotional to be in collections," she said.

She eventually got to run a test, which found both that customers appreciated the digital option and that Citi profited financially.

"The digital experience is now standard practice in that business globally," Amy said.

Insurance sales are unusually complex because, as Amy put it, "Nobody is getting out of bed in the morning saying, I'm dying to get another insurance policy."

But a challenge creates an opportunity. Some companies are responding by embedding insurance into other sales, to make an offer to people in a time of need -- auto insurance when they buy a car, renters insurance when they sign a lease, etc. Other insurers are trying to fit into the new buying process and make sure that prospects will come across them while doing their research online. Many are trying to clean up their interactions with customers, using chatbots to speed routine inquiries, implementing omni-channel approaches so that someone who begins a conversation with an agent or company via a website can easily pick it up via text message, etc.

Yet those moves feel like just the beginning. Whoever first figures out the new "insurance is sold and bought and sold and bought..." paradigm will create a more collaborative model that will delight customers -- and bring a lot of them into that company's fold.

Stay safe.

Paul

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

Does Pandemic Signal the End of Agents?

There will always be a need for intermediaries who deeply understand customer needs and can create that right combination of coverages.

Claims Development for COVID (Part 2)

One study found that 50% of those infected were unable to work full-time six months after recovering.

What’s Wrong With Commercial Auto?

If we can reduce, standardize or eliminate costs associated with litigation, the industry would be in a much better position. AI offers an answer.

The Key to Agency Management Systems

Insurers must be flexible, to understand what kinds of integrations would be most valuable to agents.

False Dilemma Facing Life Insurers

Selling life insurance to digital native consumers requires an omnichannel approach, regardless of what you consider your primary sales channel.

Arrogance and Nature’s Deadly Hand

Four years ago, almost no large companies were thinking about the impact of climate change on their businesses. Finally, many are.

With the pace of digitization increasing, people talk a lot about new business models, new products and new technologies that can transform sales and customer service, claims, underwriting and more -- but seldom about how the approach to formulating strategy must evolve.

In this webinar, Amy Radin makes a strong case for starting by reassessing what the customer needs in these changing times, both from a rational and from an emotional standpoint. 

In this webinar, we'll cover:

• Recognizing opportunity in times of crisis
• Embracing digital transformation
• Approaching customer experience from a position of empathy

---

Speakers:

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.

Commercial auto is one of the biggest, most problematic cost centers in the insurance industry. Its loss ratios are incredibly high — and growing — particularly in comparison with other P&C lines. Carriers struggle to make money on the line, and they frequently incur fairly substantial losses.

With fewer claims than most other lines, why is commercial auto such a problem? Because claims are much larger; carriers may be looking at paying out $200,000 vs. $20,000 on different types.

Let’s examine the issues and see how we can turn commercial auto into a revenue generator instead of a black hole.

Commercial Auto by the Numbers

According to the National Association of Insurance Commissioners, commercial auto represents $39 billion in earned premiums. Yet, it pays out approximately $28 billion in losses, which excludes all of the internal administrative costs. Some folks in the industry thought that losses might go down this year due to fewer cars on the road, given COVID-19, but this has not been the case. One large carrier recently shared with me that they’ve seen a similar level of claims (both in terms of frequency and severity) because many commercial trucking organizations are working nonstop to keep the supply chain going.

If even a pandemic won’t lower the loss ratio, are we doomed? Let’s break this down a bit further.

Of the $28 billion in losses, roughly 60% went to medical costs associated with bodily injury. There is not much that can be done here from a carrier standpoint, short of offering slightly lower premiums for companies that incorporate the strictest safety standards and tools like electronic logging devices. Even this technology can be a double-edged sword given that the more advanced vehicles tend to be more expensive to fix in the event of an accident. While measures can sometimes minimize the severity of injury, accidents still happen.

Carriers have seen an uptick in accident rates involving bodily injury or death over the past 10 years, in part because more commercial vehicles are on the road traveling more miles each year. Then there is the role of drivers themselves. The trucking industry has a remarkably high turnover rate. For example, in the third quarter of 2019, large truckload carriers’ turnover rate increased to an annualized rate of 96%, according to Trucker.com. As companies basically overhaul their entire workforce each year, many don’t invest the resources into in-depth training programs, leading to less experienced, more accident-prone commercial drivers on the road.

Driver issues withstanding, the non-medical costs still leave $11.6 billion in losses. Where does it go? Very simple: Legal costs account for 40% of losses; the system is broken.

Losing Battle

Litigation tends to happen when claims are not resolved quickly or when something is perceived as unfair. While such concern is perhaps understandable, in practice it is not so innocent. A growing body of attorneys are ready to sign on to “help” plaintiffs, initiating cases that should never be filed, and they have become quite proficient at securing huge settlements.

The lawyers who specialize in auto claims know exactly what to look for and can be quite convincing in wooing potential clients and later in threatening the carriers with which they are attempting to negotiate. For example, the lawyers might spot something not related to the specific incident but that could be tied to the company. A savvy attorney would tack on additional charges, such as negligence, on top of bodily injury, pain and suffering. Tactics like these drive settlements higher. Complicating matters, states have very different statutes on bad faith suits filed by attorneys. Some states are more prone to settling cases early, and, as a result, lawyers in these areas increase the number of suits they file — which increases the cost for carriers.

One thing that many insurance firms and self-insured enterprises are just realizing is that plaintiff attorneys are rapidly becoming data-aware and using that awareness in a highly sophisticated and strategic way. Once upon a time, plaintiff attorneys were good at qualifying clients that they had a high degree of confidence could return them a large settlement. While that’s still the case, in the last half decade or so, even moderately sophisticated plaintiff firms have compiled significant datasets on enterprises and insurance companies, in many cases down to the general actions taken at an adjuster level. They use this data to plan their litigation strategies, select the most effective partner and manage each step of the process in an intelligent way. The result is that carriers and self-insured enterprises that do not have similar data-savvy practices are essentially being bled dry because they have nothing to counter this advantage.

See also: The Digital Journey in Commercial Lines

Attorneys are more than willing to try their hand in court, and juries can be quite sympathetic to plaintiffs they feel were wronged by a big company. As a result, there has been a certain degree of social inflation, as jury awards can rise astronomically if for no other reason than a desire to help the little guy fight back against the “evil” corporation — and winning verdicts keep going up. According to Shaub, Ahmuty, Citrin & Spratt, the median of the top 50 single-plaintiff bodily injury verdicts in the U.S. nearly doubled from 2014 to 2018 (moving from $27.7 million to $54.3 million).

As it stands today, there is tremendous variability in jury awards, just as there is with out-of-court settlements. Looking across claims, there might be very little difference in the facts of the case, yet one plaintiff walks away with millions while another receives a much smaller verdict. Carriers are often unwilling to risk the chance of coming out on the wrong side, hence agreeing to a settlement that may be uncalled for.

It is clear that litigation is the most significant hurdle to better loss ratios across the commercial auto line. If we can reduce, standardize or eliminate costs associated with litigation, the industry would be in a much better position.

A Process Evolved

New technologies, artificial intelligence (AI) and machine learning, in particular, can help. For example, you may want to know the likelihood of attorney involvement based on several claim factors, or you want to know which attorney is involved and what kind of settlements he or she negotiates for similar claims. But most importantly, you want to know what actions to take to prevent attorney involvement. AI and machine learning applications are emerging that can identify claims early in their life cycle that need the most attention.

Imagine how powerful it would be if you had an application that inherently understood the intricacies of commercial claims — one that would warn you of claims that were in danger of slipping to an attorney. Solutions are hitting the market that leverage capabilities like natural language processing and deep learning techniques to analyze hundreds of data points hidden within claims. They now can tap into structured data as well as the really interesting unstructured data, like notes or police reports, as well as decoding the sentiment of claimants. This collection of data provides pretty telling clues as to how a claim might progress.

An adjuster could get an alert about aspects of the claim that are troublesome, access to detailed attorney scores and ratings in case the claim escalates and, if need be, the optimal time to settle for a favorable outcome. With this information, the adjuster could take immediate action to head off the problem.

As applications get smarter, they will be able to determine what a claim settlement should look like and why with a much higher degree of certainty based on similar claims. This can be instrumental in the adjuster’s or defense counsel’s ability to negotiate with the claimant’s counsel. Armed with this kind of hard data, the organization could walk into settlement negotiations in a much stronger position and begin to counter the formattable data advantages that plaintiff attorneys have been amassing.

AI and machine learning systems also help organizations close claims faster, and, in doing so, relieve some of claims management teams’ administrative burdens. Additionally, by closing claims quickly and fairly, claimants receive settlements faster, return to their everyday lives sooner and thus generally wind up in a better financial position without ever involving an attorney.

Considering the high loss ratios of commercial auto insurance today and the propensity for them to increase further, emergent AI-based applications are our best hope for improving profit margins and repairing the commercial auto line.

As first published in Claims Journal.

The “alley-oop” can electrify a basketball game if the passing and timing are precise enough and the dunk thunderous.

The possible disintermediation of incumbent insurers via technology has been a favorite topic of discussion in the industry. But the COVID era has created a distinct advantage for incumbents, has changed customers’ attitudes on privacy and has heightened interest in insurance, while there has been a hiccup for insurtech. For the traditional carriers, that's an alley-oop!

In fact, I believe that the post-COVID era -- 2021 forth -- will let these incumbents Benjamin Button their way to a new look via a technology-based overhaul of products, services, distribution and operating models.

Big Tech, insurtech, managing general agencies and excess and surplus carriers that have been bubbling along for years will now witness a different outlook from their traditional insurance counterparts, which are gearing to strategize and execute at DEFCON 1 level. 

This article is the first of three parts analyzing the posture of the incumbents vis-à-vis new-age competition in the face of COVID-induced global economic slowdown and liquidity strains (in addition to the persistent issues of high cost base, complex underwriting practices and opaque pricing). The overarching view encapsulates commercial and personal lines – property/casualty, life and accident and health. 

For the longest time, the insurance industry operated on three maxims:

1. Insurance is purely a risk transfer mechanism
2. Insurance is sold and not bought
3. Insurance incumbents’ grasp on massive data cannot be matched

Big Tech, neo insurers and insurtech have been creating a ripple in the $6 trillion insurance market solely by turning the three maxims on their head.

Apple, Google and Amazon have already charted sophisticated territories in fintech (most notably in payments, banking and lending) and have stirred the insurance sector lately, while the likes of Lemonade, Root and Metromile have attempted to erase the incumbents’ raisons d’être.

The appetite is no surprise given the companies' access to customer data, prowess in analytics and ease of distribution via popular platforms, which are elite in customer experience and provide real-time customer care while offering pay-as-you-use models. 

Some notable actions:

• Amazon: Alexa-focused partnerships (Cigna, Allstate and Geico), Pillpack digital pact (BCBS)
• Google: CapitalG’s investment in Applied Systems, a core insurance agency management software provider; Alphabet’s Verily partnership with Swiss Re
• Apple: John Hancock's Vitality and UnitedHealthcare’s Motion, a national wearable device program
• Lemonade: powered by machine-learning underwriters and settles claims online within minutes
• Tesla: zooming in on individualized risk pricing and selling insurance directly to its drivers (underwritten by its partner, Markel) 

The concept of asymmetries propelling disruptive market entrants (such as the ones listed above) is based on the notion that disruptors aren’t challenged by motivated-enough incumbents because the two do not see the market opportunity the same way. What if, however, the market opportunity itself goes through a sudden seismic shift demanding both the disruptor and incumbent see the landscape through the same lens?  

In this post-apocalyptic year, it is easy to miss the quantum leaps that the large carriers took, such as:

• Chubb’s new "digital insurance in a box" -- Chubb Studio gave a new meaning to embedded insurance as it extended its products to retail, travel, telecom and banking
• State Farm’s Cape Analytics, which assisted focus on AI-powered geospatial property data
• Travelers’ Qualtrics digital experience manager for experience analytics and real-time detection
• A record-breaking telematics upswing that needs a full article dedicated just to it: Nationwide (frankly a first mover since 2011, boasting mostly OEM partnerships) USAA’s SafePilot, Berkshire Hathaway's TrackMRI
• Operational excellence/[rocess redesign examples such as Prudential’s PruFast Track; AIG’s use of ServicePower; or John Hancock’s ExpressTrack

So what gives? A combination of the "slow incumbent" myth’s bursting, along with a change of pace for customers.

Behind the scenes, large carriers have been preparing for the journey to customer advocacy, going from being primarily a claims payment business to engaging with consumers for reduction or prevention of claims and to becoming the byproduct of the services that customers buy -- telematics for UBI (usage-based insurance) or IoT to prevent machinery failure or aerial surveillance for risk monitoring or health wearables or use of artificial intelligence and machine learning for loss anticipation. 

See also: How AI Can Vanquish Bias

Data was always king for carriers. They are strengthening their prowess via partnerships with social media giants, OEMs and retail and travel companies.

The seemingly stiff carriers were on a path to digital transformation pre-COVID anyway. Powered by “everything as a service,” their move from rigid systems such as agency management system, claims system, etc. to modularized core claims, underwriting, products and pricing are giving them nimbleness now that the world has become ultra-dynamic.

Finally, my personal favorites: the insurtechs! Their potential for turning headwinds into tailwinds when joining hands with carriers is a force to reckon with. Whether as partners or acquisition targets, insurtechs have been a focal point of carriers’ corporate venture capital arms -- both for investment and for ingenuity. The courtship has resulted in several wins, such as turbo-charging customer experience and finding pockets of innovation such as in risk selection and in fraud detection. Zurich’s partnership with Snapsheet to simplify the customer claims experience or Travelers’ InsuraMatch acquisition for real-time quoting are notable collaborations.

Carrier-insurtech collaboration is the fastest and most robust way for carriers to become specialists at scale. On the other hand, carriers foresee a bigger realm serving as insurtech’s right hand (e.g., AXA served as a reinsurer for Lemonade, Oscar and Pure).

I won’t spend time expanding on the historic muscle of incumbents, that of capital, access to distribution access, brand, appreciation of the regulatory landscape, etc.

In the parallel universe, customers’ preferences have changed dramatically. They are now ready to relinquish savings in favor of investing in policies. Health and safety undoubtedly take precedence over personal privacy. Customers' willingness to share data both in personal lines and in commercial space has given a new meaning to the so-far-experimental UBI models.

Of course, the large incumbent carriers should see this new setting as a transient competitive advantage. For the longest time, they have used technology to do more of the same, just faster or cheaper. It's not easy for large organizations to rethink the proverbial question of, “What do we want to be when we grow up?”

They still much spent a lot of time practicing pick-and-rolls and give-and-goes if they want to score on that alley-oop!

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.