The life insurance industry hasn’t adequately supported the beneficiary largely because the industry has focused on supporting the sales channel and the insured.

In general, life insurance companies haven’t considered beneficiaries as key stakeholders. If companies don’t offer the proper experience to this group, carriers risk disappointing potential customers, damaging their brand’s reputation and, ultimately, hurting sales.

The beneficiaries of a life insurance policy require a dramatically different experience than that provided to the insured. The claims experience in life insurance is very different than for any other type of policy. Instead of the insured filing the claim, it might be their children or caregivers doing so. And the person filing the claim will be grieving, in addition to dealing with financial and logistical challenges. Many beneficiaries need emotional support, so it is essential for carriers to provide an optimal experience by using a variety of different contact and support options that offer the right combination of choice, guidance and advice. 

Provide Varied and Personalized Capabilities

Today, it’s important that life insurers offer automated self-service capabilities. However, life insurers can’t eliminate the human element, which is sometimes just as important as quickly delivering the claims check.

To expedite the claims process, one insurer that also owned a bank set up an account for the beneficiary and provided an account number and instructions on how to get the settlement funds. But this approach, while efficient, didn’t create the right experience for the beneficiary, who may have needed guidance in a time of need. The approach also eliminated the most important touchpoint for the salesperson, who wants to be involved in delivering the promise he sold long ago. Life insurers need to offer the right advice and hand-holding at the right moments. When there’s a death in the family, the survivors typically aren’t in the right state of mind to make important financial decisions.

See also: Reigniting Growth in U.S. Life Insurance

On the other hand, neglecting to offer digital capabilities can also be a mistake. Many long-term-care insurance companies, for instance, make the mistake of thinking that their customers will not use online and digital capabilities, given their age. However, the insured is not always the one making the claims. It’s usually their caregivers, who tend to be the insured's digitally savvy children and who prefer to take a picture with their phone to submit a claim rather than stay on the phone with a claims contact-center representative.

Therefore, life insurers need to provide multi-channel access, because each channel can suit different needs of their customers. Limiting services or focusing on one to the exclusion of others can create a customer experience that simply does not work in all situations and for all people.  

Starting the claims process

To kick off the claims process, a life insurer should reach out to the beneficiary with a call from a contact center representative. A salesperson might not be the best fit to make the call, but a trained representative can provide comfort, offer help and support or even just serve as a sympathetic listener. The representative can ask how he or she can help, outline the multiple choices the beneficiary has in terms of next steps to the claims process and stress that all actions will happen on the beneficiary’s timeline. You want to make the customer feel special, that you’re taking care of him or her. That’s why the industry exists.

By offering a great claimant experience, insurers may even see beneficiaries turn into lifetime customers. Life insurance, as an industry, is seeing growth that is flat to low, at best, having traditionally been restricted to the upper-middle class and affluent groups, while the lower and middle-income groups have proven to be a challenge for the industry to reach. By offering the right experience and educating beneficiaries of the value of life and annuities products early in their lives, insurers can better position themselves to deliver their products and service to those groups. 

Stay in Touch

Life insurers can engage with the insured and the beneficiaries well before a claim to foster a relationship. Insurers can leverage an engagement platform like Life.io, a digital platform that educates, engages and rewards policyholders throughout their customer journey. Combined with the right experience and the right digital capabilities, such an approach to staying in touch could be a game-changer for the industry.

See also: Will COVID-19 Spur Life Insurance Sales?

Life carriers must connect with beneficiaries as often as possible. It’s important to capture beneficiary email addresses and phone numbers early, updating the information continually and using tools and technologies to keep in touch. The data will be very valuable for insurers in creating their products as well as evolving service models.

Improving the beneficiary experience with an omni-channel approach, fostering a relationship and focusing on this key stakeholder can not only help facilitate the claims process but also provide life insurers with opportunities for growth.

Digital transformation has been a strategic goal across the insurance industry for years, and, thanks to  recent events, there’s never been a better time to make it an urgent priority. With both customers and agents shifting toward digital tools for nearly every need over the last few months, independent agencies are starting to fully recognize the potential of modernization to improve efficiency, service and profitability. 

In fact, new evidence shows agencies that adopt a suite of best-practice technologies in four key areas of modernization see up to 3X higher revenue growth compared with the industry average. That represents a huge potential for even the smallest independent agencies to increase profitability, expand to new markets and services and re-invest in agency growth.

See also: The Rules of Digital Transformation

For agencies that are ready to make the move but are unsure where to start, here are four areas of agency modernization that should be your first priorities:

1. Delivering a modern digital experience for clients. There’s an app for everything these days, and consumers have come to expect the convenience, 24/7 access and self-service capabilities that digital options provide. Agencies that offer online and mobile app access to policy data, transactions, documents and more can give their customers the timely, streamlined experience they expect when it fits their schedule—without having to wait until business hours or playing phone tag with the agent. 

Even better, aside from making your customers’ life easier with digital access, you can make your job easier, too. Providing a DIY service eliminates the time your agents have to spend mailing policy ID cards, processing payments and performing other routine tasks. This gives them more time to spend working directly with clients providing consultation and risk advisory services. 

2. Efficient agency management. Most agencies have an agency management system (AMS), but are you fully taking advantage of it? Many don’t keep up with training on new features or get new agents formally trained on their platform of record, instead taking a learn-while-doing approach. That means you could be missing out on some of the most valuable efficiency and productivity tools available. 

Meanwhile, there are also some great workflow automation and document management systems that can help to further streamline processes and improve client service. Tools like automated carrier downloads and multi-carrier submissions processes can substantially improve agent productivity, once again freeing them to spend more time working directly with clients.

3. Streamlined market connectivity. One of the challenges agencies face in delivering the best service to clients is a lack of real-time data on carrier appetite, pricing and efficient submissions. As the market shows signs of hardening and prices start inching up, your clients may begin shopping around. Agencies that can reach out to more markets faster to get the best coverage options for the best price will win their business.

Tools like comparative rating and electronic submissions platforms allow agencies to streamline the process of gathering client information and get that data to underwriters faster. For example, instead of separate individual submissions, an agent could input all the data about a new client once and get results back from multiple carriers at once. And with more efficient systems for submitting risks, agents can quickly identify which carriers have an appetite for that business and secure the best protection for their clients.

4. Unlock the power of data. Individually, many agencies are likely sitting on an untapped treasure trove of data, and the industry as a whole has been slow to leverage data analytics to drive business growth. There have been a number of hurdles to bringing data and analytics into daily agency business practices, including:

• Unstructured data trapped in PDF documents,
• The lack of a standardized data model for the industry,
• Little investment in analytics resources, and 
• A fear that “data science” will get in the way of the personal touch the insurance industry is built around

But recently we’ve seen substantial progress in overcoming these challenges, including technologies that put cross-sell and upsell opportunities directly in front of agents within the tools they already use every day. By incorporating user-friendly data analytics into your agency workflows, agents can quickly act on opportunities to grow sales, prevent churn and deliver better, more insightful service to clients.

See also: Strategic Planning in the COVID-19 Era

With agency consolidation, market evolution and increasing client and employee expectations, independent agencies are feeling the pressure to change. But an ever-broadening field of technology options can make the process feel daunting and overwhelming. Starting with these four key areas of modernization and focusing on integrated solutions that work together, you can chart a course to a more service-oriented, productive and profitable agency.

Most P&C insurers have gradually expanded their options for digitally communicating with prospects, policyholders, producers and employees. As the industry moves beyond the web, portals and email, there is a growing recognition that a whole new world of digital communications options can be applied in insurance. Messaging and collaboration platforms, business texting, chatbots, voice, personalized interactive video and even augmented/virtual reality are now on the palette. Add these communication options to the zillion different ways to make or receive a payment, and a great thing happens. These options often simultaneously improve the customer experience while reducing expenses!

Technology options and solution providers are plentiful, but the big question for insurers is how to leverage the right mix of these across the enterprise. There are three really important components for successfully leveraging the new communications options: 1) a digital communications strategy, 2) digital content capture and creation and 3) content management and e-delivery.

Digital Communications Strategy: The methods of communications have often been driven by the requirements of specific areas of the business. Marketing uses a variety of tools and approaches to reach prospects and customers. Distribution uses another set to interact with agents and other partners. Claims has many types of external participants to communicate with during the claims life cycle. Underwriting and other areas of the business have their own needs and favorite technologies. But, now that digital transformation is accelerating, a comprehensive digital communications strategy is needed to determine how and where to best leverage capabilities like chatbots, messaging platforms and other tools. The capabilities for delivering customer documents and communications via email, portals and other traditional methods will continue to be equally vital.

See also: Will COVID-19 Be Digital Tipping Point?

Digital Content Capture and Creation: Inbound communications, such as submissions or first notice of loss, benefit from intelligent capture solutions that can efficiently gather and organize the information sent to insurers. Also, the ability to create and manage forms, documents and customer correspondence is essential. Communications that are created must adhere to branding guidelines, enable regulatory compliance, provide a modern customer experience and have the flexibility to support today’s array of outbound channels (including print and digital channels).

Digital Content Management and E-Delivery: Managing the digital content used for customer communications is an important capability. Insurers must be able to efficiently create, store and (re)use content objects such as visual branding elements, signatures, text blocks and the templates that they support. Moreover, in a world of many digital delivery options, the digital communications platform must support the delivery to the recipient through any technology option or channel, including messaging platforms, business texting solutions and chatbots, as well as traditional print, email, the web or mobile.  

Traditional options for communicating (such as portals, email and even print/mail) are not going away. But establishing a digital communications strategy and implementing a platform solution for creating and managing those communications is even more important in an era where the world is more rapidly shifting to digital due to the pandemic and work-from-home environments.

The expert panel explains how AI can:

• let you identify the right provider for a case and steer the injured worker to that provider
• help busy adjusters easily spot potentially troublesome cases and manage them better, from start to finish
• continuously optimize your network of providers, so you can be sure to have the right provider working with the right worker at the right time.

This panel consists of: Gary Hagmueller, CEO of CLARA analytics; veteran adjuster Nicole Corey; and CLARA analytics Chief Medical Officer Paul Kim. The panel is moderated by Paul Carroll, Editor-in-Chief of Insurance Thought Leadership.

Don't miss this free on demand panel discussion. Space is limited, so register today!

Presenters:

Gary Hagmueller

CEO, CLARA analytics

Dr. Paul Kim

Chief Medical Officer, CLARA analytics

Nicole Corey

Owner, California Work Comp Advocacy

Paul Carroll

Editor-in-Chief, Insurance Thought Leadership

Construction never stopped in some cities and states during the height of the COVID-19 outbreak — and some airport and public works projects, in fact, gained some efficiencies because of fewer travelers and passers-by on the periphery of job sites.

Where work continued, contractors adjusted on the fly to help reduce coronavirus health risks to their crews. Now, as more construction projects are permitted to resume, contractors can incorporate lessons learned so far and factor in new variables to help manage risks and rebuild momentum in a world transformed by COVID-19.

Contractors deal with unexpected challenges frequently, often weather-related. That experience will serve the industry well as it adjusts to new safety requirements along with complexities of returning to sites where work perhaps started but then was halted.

Costs may increase, and schedules may stretch to compensate for additional steps that must be taken each day before hammer meets nail. Simply doing what’s compulsory shouldn’t be the focus.

See also: How Risk Managers Must Adapt to COVID

Contractors should develop and refine a comprehensive COVID-19 exposure control plan, which may include:

• Appointing a COVID-19 officer at every job site, even if it’s not mandatory.
• Integrating COVID protocols into a virtual or online training program for workers.
• Adjusting management procedures to avoid communication gaps, given that project managers and other personnel may continue to work remotely.

Two key issues: Temperature screening and face coverings

You will need a high level of detail in COVID-related operating procedures. Take temperature screening at job site gates:

• How will you take temperatures so as to avoid breaching the six feet of social distance?
• Will workers be trained to take temperatures using no-contact thermometers, or will a third-party medical service or portable testing centers be brought in?
• What temperature threshold will send a worker away?
• What documentation, if any, will be kept of workers’ test results, and how will confidentiality be preserved?
• Do workers need to arrive earlier than in the past, and does that have ramifications for overtime?

There are lots of decisions — and that’s just for temperature screening.

The protocols for face coverings require similarly detailed decision making as well as awareness of state and local mandates. Are face coverings required at all times, or only when it’s not possible to keep six feet of social distance? Are cloth face coverings sufficient, or are respirators approved by the National Institute for Occupational Safety and Health (NIOSH) mandated in certain circumstances?

Note that these new protocols may lead to new risks, such as fogging of eye protection and creation of blind spots. Consider applying anti-fog solution to the lenses, or use helmets with face shields, if appropriate.

This planning may seem daunting, but establishing protocols and communications materials now will make it much less onerous to enforce going forward.

Review financial and supply chain status

Contractors who complete a post-shutdown risk register or hazard analysis should expand their focus beyond health issues. It’s wise to ensure financing, permits and insurance policies have not expired. Consider requalifying subcontractors to check financial status. If there are red flags, consider using joint checks to ensure that lower-tier subcontractors and suppliers receive payment. And is your own cash flow sufficient to make payroll, or have you made other arrangements?

Note that some supply chain and labor issues resulting from the shutdown have not yet been resolved. Make sure you have the materials and crew you need to keep the sequence of work on target.

New reasons to adopt emerging technology

In the hierarchy of technology adoption, many contractors are starting by converting to virtual training and orientation to enable social distancing. Make sure you adequately test your technology and distribute clear instructions to help your workers adjust to using it.

Next, consider the use of technology such as wearables that allow contact tracing, which could help ensure that workers are complying with social distancing guidelines. Wearables for construction are being modified so that, for example, a worker could receive an alert when less than six feet from another worker. Some systems also allow you to identify what workers may have come in contact with an infected worker, should someone later test positive.

There also are opportunities to increase your use of offsite and onsite prefabrication, in part to reduce the number of people on a site at one time and possibly to contribute to efficiency.

Finally, this may be a great time to experiment with emerging technology, such as using robots to do floor layout, which has the potential to improve accuracy as well as reduce the number of people on a job site at one time.

There are some silver linings

No one would have invited coronavirus into the world, but new protocols to reduce health hazards may produce additional benefits.

Limiting the use of elevators to materials and creating one-way pathways for personnel may not only assist in social distancing but also contribute to increased productivity.

See also: 4 Post-COVID-19 Trends for Insurers

These steps could become a best practice worth keeping, along with many other new procedures.

It’s too soon to gauge the net impact of the coronavirus pandemic. But in terms of the business outlook, potential positive developments could include:

• Construction opportunities increasing in sectors such as healthcare, infrastructure, warehousing (which was already going strong) and manufacturing.
• Growth in modular, off-site construction, in part because it can help reduce the number of people on a job site at one time.
• More U.S. manufacturing of construction materials, in response to coronavirus-related supply chain delays associated with offshore providers.
• Regional population shifts in response to the hardships endured during the pandemic. These may result in increased residential construction in areas of growth, followed by additional commercial and infrastructure development.

In the near term, some projects will be under pressure to accelerate to get back on schedule. But COVID-related mandates may force a slowing of the process, which could enhance overall site safety and quality of work.

Vigilance, as always, is key — and not just about coronavirus. We need to remain attentive to typical construction-related injuries and issues such as heat-related illnesses. Caring for people will help us take care of business now and during the months of recovery ahead.

Visit Zurich’s COVID-19 Resource Hub for more information.

Early adopters of artificial intelligence (AI) and machine learning (ML) are able to sift through massive amounts of data and use it to enable various capabilities. These range from making decisions about how to triage a claim using algorithms to improving a customer’s overall claims experience using more data and sources automatically pulled in from AI and ML methodologies. 

But where does the rest of the industry stand with these new capabilities? We released a study around how the top 100 U.S. carriers are benefiting from AI and ML and the challenges and opportunities for an AI-driven future. We found that 75% believe proper implementation of AI can provide carriers with a competitive advantage through better decision-making. 

While only 62% say the carrier they work for is already applying, piloting or planning AI and ML initiatives, these early adopters are already seeing significant AI and ML benefits. In terms of improving the experience for existing customers, insurers are experiencing advantages with faster claims settlements (88%), improved fraud detection (87%) and better risk scoring (85%). On the prospecting side, AI and ML are enabling early adopting insurers more customized and targeted opportunities for cross- and upselling (88%). 

Of the survey respondents representing insurers that are early adopters, most come from the 20 largest U.S. carriers, but adoption across the remaining top 100 U.S. carriers is also rapidly increasing.

While carriers are generally positive about their use of AI and ML, implementation does come with its own set of challenges surrounding staffing, data and compliance. 

The challenges around AI and ML adoption 

Insurance carriers are largely positive about the value of their AI and ML initiatives, but the study identified the challenges they will need to overcome. Staffing challenges are a major concern. According to the study, nearly half of the respondents (49%) said that AI and ML implementation has already affected their staffing plans today. Insurers need people who can understand the inputs and outputs of the applications, and who can explain them to the business. They need knowledge managers who can speak in both technical and non-technical languages and link the dialogue between parties.

See also: Stop Being Scared of Artificial Intelligence

Another major concern is the ability to access high-quality, trustworthy data. The three main issues with data that survey respondents mentioned include their ability to manage the volume and security of the data; linking and normalizing data across different data sources; and ensuring access to the data. Adopters clearly see the value of third-party data, as a majority of the adopters (82%) say their organizations have or will buy external data for their AI and ML initiatives. 

The third concern we found is around compliance and regulatory challenges with insurers’ use of AI and ML. Adopters worry that regulators and legal bodies may not understand AI and ML applications and could possibly block or limit them. Nearly three-quarters (74%) of adopters also have concerns about data privacy, security and ownership issues, anticipating increased regulatory scrutiny as more data sources are accessed and modeled.

Although the COVID-19 pandemic has slowed things, 95% of personal lines insurers are moving forward with their overall technology plans and investments, with only 5% retrenching, according to Strategy Meets Action (SMA). Meanwhile, 75% of commercial lines insurers are moving forward with their overall technology plans and investments, with only 25% retrenching or pausing. 

See also: Step 1 to Your After-COVID Future

Despite these challenges, the early adopters of AI and ML are already seeing benefits. Faster claims settlement, more targeted cross-selling and upselling, improvement in fraud detection and better risk scoring are just a few advantages that insurers are leveraging. As insurance carriers look to implement emerging technology, they should find a technology partner that has a deep understanding of the data, analytics and insurance industry to help them maximize their AI and ML initiatives. In particular, they should look to find a partner with a demonstrated expertise in building models that leverage advanced analytics and that have extensive experience in managing, normalizing and analyzing increasing volumes of data. By this time next year, only those insurance carriers that are fully embracing and implementing AI and ML capabilities now will have that competitive advantage.

For additional insights and data from our study, you can turn to our white paper, The State of Artificial Intelligence and Machine Learning in the Insurance Industry.

There have been multiple attempts to profile managers and make an ultimate classification. As an international company with 2,200-plus people on board, Itransition employs a range of managers of different levels of seniority, so we have created our own manager taxonomy. 

From our point of view, the biggest difference between managers is in their attitude toward their duties. A management style is also often shaped by the person’s priorities: whether to focus more on task assignment or enforce strict adherence to job obligations and schedule. So we put these factors at the core of our classification to distinguish among four manager types. 

Let’s explore how each of them approaches their responsibilities and builds relationships with the subordinate teams.  

The Warden: good at discipline, weak at sustainable relationships

When we think about managers, many of us immediately imagine the Warden type. They are strict and don’t hesitate to raise their voice. Wardens make sure their workflows run like a Swiss watch and closely watch completion of every task, even the smallest ones. They stun people around them with their ability to keep everything under control and establish their management style on dominance and authoritarianism. 

A Warden often hovers over employees and controls every step they take, ensuring team members clock in and out according to their schedule. Asking them for time off or a much-deserved holiday inspires awe and fear in the one who dares. There is an element of craziness to the whole character: Even being five minutes late can invoke serious penalties.

People who love their job and genuinely want to learn feel overly restricted by Wardens and tend to leave for other jobs where there is a laxer management style. People who prefer to obey without questioning and prioritize discipline more often than not get along with Wardens.

This type of management is well-suited in times of crisis or for businesses with low employee retention, where employees are paid by hours and don’t form long-term relationships with their employers. Wardens make good supervisors for drivers, cashiers and those in similar occupations.

The Counselor: careless about goal-setting and discipline

The Counselor type is the complete opposite of the Warden. They give off an aura of peace, tranquility and positive energy and prefer to be at the same level as their team, not above it. As long as everyone is happy, everything is peachy.

Counselors easily allow their subordinates to run personal errands in the middle of the day. They never torment their staff with questions about what they are doing, who gave them tasks and what the reasons were. A Counselor tends to be on friendly terms with each team member and is eager to spend time together with them even after hours.

Goal-setting is Counselors’ weakest point, so they rarely establish clear KPIs or a yearly plan. Instead, most of their energy goes into creating a welcoming atmosphere within the team. 

This management style perfectly suits creative teams: artists, designers, musicians and such. Because they love what they do, they do not require overbearing guidance and micromanagement to complete the project. However, if engaged in the projects with specific time constraints, creative specialists do need managerial drive, motivation and guidance to steer them on the right course.

The Leader: good at task assignment, weak at discipline

Leaders are mostly concerned with properly assigned tasks and optimized business processes, and they stay unmoved when someone comes to work 30 minutes late. They interfere only to a degree that ensures KPIs are successfully met. A Leader can establish personal relationships with each team member yet only for the sake of enhancing efficiency.

Such managers can achieve amazing results with almost any team. They can organize the workflow to fit everyone’s schedule and agenda, assign tasks intelligently, follow through with their completion and resolve any complications before they turn into result-threatening problems.

The relationships between Leaders and their subordinates are based on mutual respect. What they care about most is results, and if a GP appointment or remote work once a week doesn’t get in the way of achieving them, Leaders are all for it. At the same time, arriving late to a meeting with a client or failing to meet deadlines is likely to undermine trust in the employee.

Appointing Leaders to teams with low staff retention or independence-seeking creative specialists will be just a waste of their potential. Instead, they should be designated for projects of special importance or performance-critical functions, like guiding a team of other managers.

The Good Manager: a cross between Wardens, Counselors and Leaders

As nothing in life is black and white, these manager types describe extremes rather than people in flesh and blood. A Good Manager, however, is a pretty feasible concept. This is a professional who knows when to put on a hat of a Leader, when to crack a Warden’s whip and when to bond with the team like a Counselor.

Good Managers stand out from the crowd and effectively lead teams of any size or expertise because of:

• The ability to resolve issues before they disrupt the working process.
• Self-possession, or communicating confidence and positivity to the team members.
• Healthy self-esteem, or a sound estimation of their competence and ability to put it to proper use.

However, as practice shows, the ultimate quality of a Good Manager is the ability to make everyone happy. Some managers focus solely on the well-being of their team and are constantly trying to improve working and payment conditions. Others concentrate their efforts on making the board of directors content, ensuring that goals are achieved and profits are growing. The best managers, however, balance their efforts to equally cater to the needs of both groups.

We hope this article will give managers food for thought and inspire them to look at their management style from a new perspective. The article should also prove useful to business owners, providing guidance for finding managers they can trust with their enterprise and human resources.

I recently wrote about the disruption the insurance industry faced in the late 1990s and early 2000s as the internet became an increasingly regular part of business. The theme of disruption in that period was one of changing how we did business. The main target was distribution via agents and brokers, which was wrongly predicted to go the way of the dodo.

While disruption has not stopped, it has changed dramatically from what it was back then.

As discussed in my new book, The Future of Insurance: From Disruption to Evolution, the current disruption the industry faces is not just about enabling technologies and new approaches to how insurance products and services are delivered.

While there have continued to be new approaches to the existing industry being created by tech-enabled startups, technology is enabling something else – direct threats to carriers themselves, not just their partners and providers.

There have always been new carriers starting up, either with their own capital or via the MGA model with backing from existing players. Historically, though, these startup carriers looked and felt like traditional carriers, but were just newer.

A New Breed of Startup Carrier

Today, while we still have these traditional startup carriers, we also have a new breed of carrier that is built from the ground up to be fully digital, often started by people from outside the insurance industry. These founders generally have tech backgrounds and are often engineers.

Engineers like to solve problems and figure out better ways of doing things.

That is exactly what these startups are born out of – a view of the insurance industry and desire to find a better way to protect people using the flexibility, intelligence and customer-experience-friendly digital tools that abound today.

This is a very different kind of threat to incumbent or legacy carriers.

See also: Insurance Disruption? Evolution Is Better

The Implicit Disruptive Threat

The disruptive threat these new carriers pose is not necessarily existential for legacy carriers. The chance that any existing P&C player will go out of business because of a startup carrier is extremely small. That is not quite what’s at stake.

Instead, the threat is that the startups will respond to customer demands in a way the industry has struggled to do and capture market share.

Increasingly, insurance buyers are demanding a more modern experience of their carriers because they’re getting this in most other aspects of their lives (both personally and professionally). Buyers get help with flight reservations from airlines via Twitter, text to pay municipal taxes, watch their packages get delivered to their home from far away, have their schedule automatically adjusted based on traffic and more.

Then a carrier needs a document faxed or mailed to it. Or sends the insured some communication in all caps because the company can’t produce varied-capitalization in communications, and ends up seeming to yell at customers while looking dated. Or requires you to go get your car inspected at some certified inspection facility after binding coverage, or get canceled.

Enter the startup carriers. They sell a policy in minutes (at most), employing AI, third-party data, self-service tools and more to make being a customer easy, if not delightful.

Disruption, Destruction or Evolution?

So what does the future look like in the face of rapidly changing customer expectations and a new generation of carriers that are free from many of the constraints you face?

The key is to take the disruptive players as an impetus to evolve.

What does that mean?

It means holding your core ability to manage capital, transfer risk and deliver insurance service in a way that gets people’s lives back together again after a loss.

What needs to change, though, is how we do that. The tools we use, our willingness to kill sacred cows that tend to be identified by the phrase, “…because we’ve always done it that way.”

See also: The 5 Charts on Insurance Disruption

There are many areas where we as an industry can embrace the new approaches identified by the disruptors. Embracing digital distribution with simpler, faster application processes. Using self-service tools like those that allow self-inspection of property for underwriting or loss adjusting. Relying on the flexibility and extensibility of the new cloud-based solutions on the scene, which can facilitate experimenting on new approaches to how you deliver insurance products and services.

There are many specific answers to how to evolve that will depend greatly on your particular situation. One overarching piece of advice is not to ignore or write off new players simply because they’re new or because their underwriting results may not be attractive (few new carriers ever do have enviable combined ratios as they lack the scale to smooth losses and spread expense loads).

Look at the tools they’re using and where in the process they’re focusing their efforts, then ask what you can do in that area (or beyond). Ask your customers directly, empower your staff to make change and focus on making meaningful change, not just on being good enough.

Over the weekend, two articles made a compelling case that we need to better vet academic studies before they become set in the public consciousness on controversial topics like possible systemic racism and the coronavirus. Both recommended a solution that has been a focus of my career -- devil's advocates -- and that we all should use as we formulate personal and corporate strategies in these turbulent times.

Let's spend a minute on why they're so important and how you can use them -- rather easily, in fact.

The article related to the coronavirus argues that a serious attempt at research wasn't vetted quickly enough and, when published in April, had obvious shortcomings that allowed many to believe that the virus wasn't as dangerous as it has turned out to be. The one concerning a paper on possible systemic racism by police went through peer review, but the authors say the process isn't designed to catch fraud and is vulnerable to rigging. In the case of the paper they discuss, a reader caught a major error shortly after publication, and the paper was withdrawn -- but not before many used it to dismiss the notion of racism in policing.

Both articles obviously touch on hot buttons, and the specifics of the arguments about the research they discuss could distract from the point I want to make, so I won't go into more detail. You can read the articles and reach your own conclusions. I'll just note that both say problems would have been avoided if the virus and racism research had been put in front of devil's advocates -- people whose task is solely to identify potentially bad assumptions, in time to do something about them.

That need for devil's advocates is a theme I've been sounding with corporate America for a dozen years and is especially important now. The New York Times and the Wall Street Journal ran articles recently saying that corporations are starting to believe both that the economic crisis caused by the pandemic will last longer than they had hoped and that the new normal will look quite different. So, a strategic rethink is happening all at once in a whole lot of C-suites, which creates opportunities both for progress and for mischief caused by bad assumptions -- that devil's advocates could head off.

My belief in the power of devil's advocates dates back to a book, "Billion Dollar Lessons," that Chunka Mui and I published in 2008, on the lessons to be learned from corporate failures. Out of the 750 major writeoffs that we spent two years investigating in detail, with the help of 20 researchers, we found that 46% stemmed from strategies that should have been identified ahead of time as brain-dead. Think Avon deciding that its main asset wasn't its door-to-door sales force but was its "culture of caring," which led the company to buy a medical equipment manufacturer and operator of retirement homes -- then quickly selling them at a loss because the cosmetics company had no idea what to do with them. Or, think Blue Circle Cement, one of the world's biggest cement companies, deciding that it was really a home products company and should make and sell lawn mowers, among many other things -- then filing for bankruptcy protection and being acquired.

We posited in the book that loads of people internally must have seen the problems coming but couldn't stop the strategies because of internal dynamics -- for instance, the CEO is often the one championing a new strategy, so the tendency is to want to confirm the idea, not to challenge it. Our subsequent research and consulting, as devil's advocates, has confirmed our thesis. (We're not alone, either. Much has been written in recent years about the value of a devil's advocate, sometimes referred to as a red team/blue team exercise.)

The key issue is: How do you identify problems in a way that's acceptable within the complex culture of a C-suite? How do you help the company win without making some powerful individual lose -- or see the devil's advocate process quashed if it looks like the CEO will be the loser?

The main answer is to turn the devil's advocate process into a bloodless exercise. You don't give the devil's advocate the power to rule on whether a strategy is right or even to hazard an opinion. The decision needs to stay with the CEO. You simply have the devil's advocate interview senior executives to probe for vulnerabilities, then use the concerns to identify the assumptions that have to be true for a strategy to succeed. Because the CEO has authorized the process, he or she can face the evidence and kill the strategy without losing face. If the decision is to proceed, the CEO will have a better idea about the pitfalls that may lie ahead.

Choosing a devil's advocate can be tricky. You can hire an outsider, who will bring objectivity but may take time to get up to speed. You can ask for a volunteer among senior insiders, but few want to be known as the naysayer, at least on more than a one-time basis. It seems to work best to designate an insider, so the whole team knows that the person is simply playing a role. (Irving Janis, in his pioneering 1982 book "Groupthink," described how President Kennedy designated his brother Bobby to be the devil's advocate after the administration had botched the Bay of Pigs invasion; Bobby then routinely challenged claims by military leaders during the Cuban missile crisis and may well have saved the world from nuclear war. Quite the endorsement for a designated devil's advocate....)

As insurers reformulate strategies to prepare for what could be an extended economic crisis and for a rather different world on the other side of it, they should build a devil's advocate into the process. Companies are making a lot of assumptions, many of which they don't even know they're making or made long enough ago that the assumptions have been forgotten. Some of those assumptions are wrong -- and many senior executives either know or suspect which ones should be challenged and rethought. (If I had to bet, the biggest mistake that companies in general will make in this go-'round is to underestimate what competitors are doing. The tendency is to see competitors as static, but they're working just as hard and perhaps as creatively in their strategy rooms as you are in yours.)

By the way, a devil's advocate approach can help you get better feedback on personal issues, just by having you rephrase questions. Don't ask a friend or family member if some plan of yours is a good idea. They'll know you want affirmation and give it to you. Instead, present a plan neutrally, say you're looking for holes in the idea and ask your friend or relative to help you identify the potential problems. Then, on your own, you can weigh those concerns against the benefits that you've already seen.

Knowing about pitfalls won't always matter. I consistently underestimate how long it will take me to write something, even though I allow for the fact that I always underestimate. But at least a devil's advocate process will open your eyes to many of the problems that lie in wait out there.

So, challenge those assumptions.

And stay safe.

Paul

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

Why Traditional Insurance Won’t Work

With the sudden shift to remote-only interactions, insurers can no longer dictate the speed of their transformations.

Tipping Point for Claims Automation

While virtual estimating for auto claims—using photos in place of a physical inspection—is not new, the pandemic has made it the preferred method.

Time to Focus on Cyber Resilience

Here are five ways that businesses should be shoring up potential weak spots in their cyber security program’s incident response plan.

Increased Threats for Manufacturers

Manufacturers must understand that the digital push to run more efficiently creates a security gap that must be addressed.

Blockchain: Golden Opportunity in LatAm

Blockchain provides a golden opportunity for real, tangible operating efficiencies in Latin America and for transforming the region's image.

How to Recruit Claims Adjusters

One of the most promising solutions to recruiting and retaining workers lies with artificial intelligence—and not in the way that you might think.