Not that long ago, people didn’t have information at their fingertips, and businesses were successful in using outbound sales and marketing methods such as cold calling and email blasts to close sales.

Today, the buyer’s journey has changed thanks to the Internet of Things (IoT) and other advancements in technology. Now, 57% of the purchase journey is completed before a customer has contacted a business (according to CEB), and 67% of the buyer’s journey is done digitally (SiriusDecisions).

The rise of social media has encouraged organizations to look into ways that they can use the technology, which has led to the development of social selling. 

What are the benefits that social selling offers? 

1. It appeals to the modern buyer

B2B buyers have 12 to 18 non-human and human interactions along their buyer’s journey (Sirius Decisions), and 68% of buyers prefer to research products and services online (Forrester). It’s essential that you develop and push information and content on social channels that resonate with your target audience and provide the solution to their problems. 

This will enable you to influence their choices and position your business as front of mind. 

2. It allows you to build “real” relationships

How many cold calls do you actually answer, listen to and respond to? 

It’s time for businesses to break down the barriers around selling and get on the same page as their customers. Social selling supports this as, through social media listening tools, you’re able to listen to topics and conversations that are relevant to the insurance and risk management industry.

Added to this, a survey from IBM revealed that only 43% of consumers trust the insurance industry, and the lack of trust in insurance providers has remained above 50% since 2007. Social selling helps you build trust among your audiences by giving you insight into what’s important to your prospects and presenting new opportunities and leads. 

3. Your competitors are already using social selling

71% of all sales professionals are already using social selling tools, so if you aren’t you may be putting yourself at a disadvantage (LinkedIn). A report by ITDS revealed that 100% of insurance firms are active on LinkedIn.

According to a study by Capgemini, 22% of insurance policyholders cite social media conversations and interactions as having the highest impact on their purchasing processes. This ranks above the influence of the advice of friends and family, which only 17% of policyholders indicated as most important.

4. The Mere Exposure Effect 

The Mere Exposure Effect was first spoken about in 1968 by social psychologist Robert Zajonc. This social phenomenon states that the more a person is exposed to something, the more the person will develop a preference toward that thing over time.

Social media lets businesses tap into this theory through regular and consistent posting and updates. When you’ve created and put into action a dedicated strategy, you can begin to use social media channels to your advantage and ensure that you have messages trickling through all the channels that your audiences use, creating multiple touch points with them.

See also: 7 Business Models of the Future for Insurers  

If you fail to prepare, you are preparing to fail…

To successfully leverage social selling, you need to optimize your social channels to showcase your expertise. For example, research from LinkedIn revealed that members with a photo receive 21X more profile views and nine times more connection requests compared with those that don’t.

So, what do you need to do to give a positive first impression on your social channels?

Here are my top tips: 

• Post a professional head and shoulders image of yourself 
• Write your bio/summary to highlight your expertise and what you do on a professional level
• Include links to your website and other social channels to encourage visits 
• Use hashtags that your prospects follow
• Create lists on Twitter to monitor content from specific accounts 
• On LinkedIn, include your job title and keywords in your headline, ask for recommendations to boost your credibility and join LinkedIn groups that are relevant to your industry and begin networking in them 

Social selling best practices

Once your profiles are ready to be rolled out, it’s time to kick off your social selling strategy. 

Dedicate yourself

Start by creating a plan and setting aside time to dedicate yourself to building your social presence. Being present on multiple social channels can be time-consuming, but if you spend 30 minutes every day monitoring your channels, engaging with others and posting content it’ll help ease the pressures and ensure your feeds are always up to date. 

Create and stick to a content plan 

The purpose of a content plan is to create meaningful, cohesive, engaging and sustainable content that engages, resonates and attracts your target audience. In today’s social web environment, getting the right message to the right customer at the right time is crucial. To stay front of mind, build rapport and trust and position yourself as an expert, you’ll need to have a solid content plan in place. 

Take advantage of social listening

Create and use social lists and monitoring streams to collate what people are saying about you, your company, your industry and competitors, and identify what questions they’re asking and topics they are talking about. 

Maintain relationships once you’ve created them 

Once you’ve made connections, it’s important to stay engaged with them. So, comment on and like the content that is posted by your prospects. 

Be sure to offer advice and guidance to them and contribute to their conversations in a meaningful way if they ask questions.

Share testimonials 

Success stories from other customers have a lot of weight, and research from Pretty Links suggests 92% of buyers trust recommendations from peers, and 70% trust recommendations from strangers.

By gaining and sharing third-party testimonials, you’ll start to build your credibility with prospects, and it’s more likely that they’ll begin to trust your business.

See also: Business Models, Moats and Startups  

Track engagement 

Tracking metrics such as likes, comments and shares will allow you to identify the types of content that resonates the most with your audience. And, it’ll enable you to determine if your social selling activities are paying off.

Understand when to take your connections offline 

To land a sale, you’ll need to escalate the connection with a prospect by offering a call to continue the conversation offline and on a deeper level. It’s important not to push a call before prospects are ready. 

Research revealed that the dollar value of the opportunities for insurance companies to drive results through social media is over $15 million a month (Marketing Tech).

There has been a radical change taking place in insurance over the past few years. It revolves around the race to zero – or, the concept of streamlining the end user experience to ask less and less information when it comes time to file and process claims.

Regardless of what stage of the digital transformation journey the industry has been in, meeting and exceeding customer expectations has always been a priority – as has been the journey to find smarter ways to do business. Without either of these things, not many organizations would be successful. 

Asking less and less from consumers is not necessarily a new concept – but that doesn’t mean that it isn’t more important than ever in 2020. 

In 2020, not only is the race to zero more possible than ever (thanks to improvements in software-as-a-service (SaaS), digital technologies and data ecosystems), it’s becoming an expectation. 

This is largely being driven by two things: new generations of digitally native consumers who are used to seamless data integrations and information access across every aspect of their lives; and organizations looking for ways to evolve their processes to work smarter and more efficiently to meet these expectations while also remaining profitable.

Whether every line of insurance or business type can get to these hypothetical zero inputs is irrelevant. What’s important is that the new world of SaaS-based solutions, and a transformation to data-driven ecosystems living in the cloud, are changing the insurance game at speeds we’ve not experienced before.

Whatever that limit is, here are a few ways that any organization can realize its potential:

Enable Continuing Improvements With SaaS

It was really only five years ago that we started seeing early adopters embrace SaaS – and only in the last year or so that there’s been a drastic change wherein the majority are heading toward that model. One of the chief reasons for this is the configurability and malleability of new SaaS systems compared with legacy systems. 

Insurance is driven by data; however, in the past, as insurers would get new data feeds, it was difficult to take advantage of them in a timely fashion – because existing systems and processes were so locked in. Now, with modern SaaS systems, it’s much easier to make changes to processes, workflows and rules, so that as new types of data and analytics tools become available you can use them to your advantage – and to the advantage of insureds.  

See also: Digital Darwinism: Time to Move Faster  

Avoid Limiting the Value of New Data

Data is golden – but pouring new data into an old process often doesn’t get you where you need to go or get your processes any closer to the hypothetical zero. Instead, we must be thinking about new data sets in new ways and imagining how they can actually affect or drive a new process.  

This is no easy feat, and what we’ve seen some carriers do (innovate while understanding the legacy processes within existing organizations) is start companies or build new insurance products. This freedom to innovate, while keeping data outside existing core systems, means the data’s value isn’t limited in a legacy environment where it’s easy to get bogged down. 

This sort of innovation remains one of the more interesting recent developments – and will continue to evolve as insurers look to create data-driven products that change the way insureds engage with insurers. The market has reacted to enable this evolution with highly customizable, out-of-the-box SaaS solutions built around configurability and speed.

Think Agility

When it comes to meeting this hypothetical zero in a new data-driven world, we must also consider IT processes – and the agility that’s required to move to market at speed. Things used to take a long time (new products released on an annual or multi-year basis, for example). However, with new, low-code core systems, insurers can be very agile about when and how products are released – and the types of data sources or third-party integrations that can be leveraged in a way that makes a competitive difference in the market. 

This can be a challenge for IT departments that aren’t used to working in this fashion, so the mindset truly needs to shift toward “agility.” This goes for updates too. If there are opportunities to prefill through partnerships and integrations, or feed in new data sets, insurers leveraging new systems and processes can easily modify an app or existing product.

Use Data to Make Better Decisions

We’ve talked a lot about how to be agile and think about new ways to access data and information – and reimagine your processes around it. But, once you have that information, there’s another half of the equation you must consider – can I make better decisions and use the right information and tools, such as analytics or scores, to route things appropriately and for easy cases? 

From the front end, if I’m using data prefill and getting better data that I might have from older forms, for example, how can this contribute to making better, more informed and faster decisions in the insurance process? Taking this a step further, during times of strain or circumstances where losses pile up, can my organization find opportunities to use data and prefill to offer straight-through processing and enable our workforce to focus its efforts on the more difficult and nuanced cases that require a very hands-on, tailored approach? 

If the outcome isn’t better decisions, the value of more data often isn’t realized.

See also: Challenges Remain on Use of Data, Analytics 

Think Open yet Secure

A final point worth noting is the transition to a more open, API-based ecosystem in insurance. Traditionally, the industry has been highly closed off, but we’re seeing more and more negotiations around how to access and build around APIs. With this transition to “openness” (along with a shift in mindset for the entire industry), innovation can take strides, and the race to zero for both insureds and insurers becomes more of a reality. 

The core value of insurance will still be worth its weight in gold, but imagine the types of solutions we can develop with an abundance of new information, new processes and new technologies in place. 

For anyone in the insurance industry reading this, how do you not get excited about the possibilities in front of us? A new world of opportunity awaits in the race to zero – both in terms of how we reimagine products and policies for consumers and how we operate and process internally. 

For those of you not involved in this data-driven insurance technology ecosystem – what are you waiting for?

The best car-buying experience that I--or pretty much anyone--ever had came 20 years ago. With two young daughters and, thus, soccer car pools looming, my wife and I decided we needed a big, old SUV, and we just happened to have a good friend and neighbor who owned a car dealership that sold them. Mark steered us toward the Yukon XL and, a few nights later, dropped a demo version off in our driveway. We liked it. We picked a color and a few features, and he ordered our car. A few weeks later, he drove that to us, too. We opened a bottle of wine and, in leisurely fashion, signed all the documents, wrote a check and took possession.

Fast forward to today, and, as Consumer Reports writes, many people are headed toward our sort of experience. They likely don't receive a deep, friends-and-family discount and may skip the bottle of wine at signing, but, because of social distancing, people are increasingly ordering cars online and taking delivery at home -- a situation that offers lessons for the insurance world and recommends an approach known as reverse innovation.

Ordering cars online has for 25 years struck me as the right way to do things, and not just because Mark is such a nice guy. You get exactly the car you want, rather than haggling as the dealer tries to convince you to take the heavily loaded car he has on site that is his closest facsimile. Prices drop because dealers don't have to finance the billions of dollars of cars that currently sit on lots or to pay so many salespeople.

The old system has persisted partly because most people, unlike me, want a car right away, not three weeks later. In addition, dealers capture far more of the industry's profits if they, not the manufacturers, handle the sales, and dealers have been able to use state laws to protect their franchises against any centralized, online approach to sales.

But dealers are now having to adapt, and many are struggling. They don't understand the online behavior of customers well enough to know how to guide them through the buying process if a hail-fellow-well-met type can't sidle up to a couple as they walk through the front door of a dealership.

Insurers and their agents/brokers are going through something similar. The shift is less severe--it's easier to walk customers through the details of an insurance policy online or on the phone than it is to try to take a customer on a virtual test drive of a car--but the industry is shifting toward digital during the crisis and will likely never return to the level of in-person interaction that existed just a couple of months ago.

So, how best to prepare for this long-term change?

I wrote four weeks ago about using the restrictions caused by the pandemic as a natural experiment to track how much value you really got out of travel, conferences, face-to-face meetings and other activities that you've never been able to question because they're how business has always been done. Many of us have also long argued in favor of using a "clean sheet of paper" as an occasional exercise to stretch your thinking: You set aside near-term considerations, take out a proverbial blank sheet of paper and imagine what the perfect form of your business could look like in, say, five years. Then you start planning to see if you can't get there from here.

But I wanted to add an idea that will be especially appealing to companies with access to international markets, either on their own or through partners, but that is available even to those of us who just read or watch what happens there. The ideas is reverse innovation.

The innovation is "reverse" because, while those of us in the developed world tend to think that we come up with the new ideas and then eventually export them to the developing world, many ideas can actually flow in the opposite direction. That's especially true when it comes to cost-cutting: An "inexpensive" piece of medical equipment in the U.S. doesn't look so inexpensive in, say, Sri Lanka.

I first came across the idea when I helped two McKinsey partners write a book that, come to think of it, was published seven years ago this week. We described a refrigerator that was designed in India, that cost less than $100 and that was making inroads against "inexpensive" models in the developed world that cost several times as much. I've since become a fan of Vijay Govindarajan, who published a piece with us back in 2013 on how reverse innovation could cut U.S. healthcare costs in half and who has written a very smart book on the topic. The notion has even surfaced as a possible solution to the shortage of ventilators for those who become seriously ill from the coronavirus: A machine designed for rural areas in developing countries would cost roughly $100 each, as opposed to more like $15,000 for those in use across the U.S., and attempts are being made to rush it into production.

In insurance terms, the best example I can think of for reverse innovation is microinsurance. It almost has to be sold in a hands-off fashion, so there must be lessons already available on what works and what doesn't that could be applied to online selling in the developed world. Joan Lamm-Tennant, who is CEO of Blue Marble Microinsurance and who spoke on the keynote panel at the recent (fully online) Future of Risk conference, surely has some advice to offer the rest of us.

There must also be other lessons from other companies doing business in the developing world, where the economics have never supported the kind of person-to-person advice available elsewhere -- and where we may start to see the digital models of the future forming.

Let's go find those lessons.

Cheers,

Paul Carroll

Editor-in-Chief

The world has entered recession and is witnessing a paradigm shift in how we interact with each other and how businesses operate with the massive #stayhome and social isolation campaigns.

We are looking into a New Normal – a VUCAV world (VUCA+Virtual), where companies and people must interact virtually and in an environment with high rates of unemployment and financial crisis.

Insurers need to prepare for this. They need to radically change the ways they think of interacting with the customers and how they manage their processes internally. If not, they won't stay relevant in the New Normal.

This whitepaper explores how insurers can reinvent themselves as virtual and create an insurer ready for success in the New Normal

COVID-19 has left the world in uncharted waters and in many areas forced a digital acceleration of companies’ product and service delivery processes and distribution channels.

The massive #stayhome efforts have fueled this further with virtual meetings and digital ways of collaborating – the methods and tools used are not new, the massive scale of which they’re used is.

We’re witnessing what can be best described as a paradigm shift – our old ways of working, our beliefs of what’s possible to do digitally and the conviction of some meetings require physical presence are no longer the way we work. We are all virtual.

This has massive implications for almost all industries, and one of the more exposed industries is the insurance industry. Famously known as rigid and lacking behind digital development, a whole industry is now forced to face digital – immediately.

Facing digital right now is one thing; preparing for what’s post-COVID is another. When the virus has been contained, the world will slowly gravitate back to a new equilibrium, a New Normal.

It’s extremely important to realize that we will not be returning to a state like what was before the outbreak – too many things have changed permanently for us and the world to return to what was before. We must prepare for the New Normal.

The New Normal's effects, broad and wide

We’ve already entered a world-wide recession; this is not a new situation, and usually governments have financial instruments to minimize the impact of the falling economic growth, typically stimulants for organizations making it easier to run and grow businesses – but as long as there is no one to run the business, as we’re all staying home, these instruments will have less effect than normal.

At the time of writing, the world is yet to see the full effect of layoffs across all industries and sectors, which will only add to the extent of the recession – the massive layoffs will most likely result in wide-spread depression among people, as there will be extreme competition for the jobs available, and many will see their ability to support their families seriously challenged.

Staying home, doing business, has forced us all to go digital. This has developed our virtual meeting skills and our online shopping savvy and forced us to be used to handle our daily tasks and administration work online – we’re looking at a seismic shift of everyone’s readiness for digital products, services and ways of doing business.

The virtualization of the way we live, work, shop and interact directly affects the future demand for products and services, and people skills and competencies – we will see jobs, products and competencies becoming obsolete as the virtual ways no longer require them. As a result, both companies and people will need to redefine who they are and what they offer.

Just think of 3D printing; when physical distribution is cumbersome, why don’t we just download the specifications for what we need and print it ourselves? That’s how they get spare parts to the International Space Station, so it’s here already.

See also: 10 Moments of Truth From COVID-19

The insurance customer is no longer the customer the industry has been used to. Customers have been forced to manage their transactions from home by themselves, or with minimal support from virtual agents (brokers, call centers, etc.) – and because they’ve also been forced to meet their friends and families online, as well as doing all their shopping virtually, they have become used to it.

Their – and our – virtual habits have changed profoundly, so companies must adapt to serving customers virtually. Now and post-crisis.

This obviously has significant implications for most insurers, as they have to rethink their digital products, services and distribution channels. The majority of insurers are working on these elements, but few are ready to deliver a complete virtual customer product and service offering. Even fewer are ready to do so in the current environment.

Responding to a VUCAV world

Insurers must find a path forward if they wish to stay (become?) relevant in a New Normal post COVID-19. The path must deliver products and services in a virtual setting and be capable of running large parts of their operations virtual as well – all this at lower costs than today.

Navigating a company in the "old" VUCA world was complex enough, with new business models emerging, constantly shifting consumer trends and unstable economies and political environments around the world.

Adding the virtual element to the VUCA world, VUCAV, complicates the matter, but this is the New Normal so insurers – and all other firms for that matter – must accept it and act on it.

Failure to do so will put the company at risk of going out of business.

The virtual insurer – Phoenix rising

The basic foundation for building a virtual insurer – or transforming an incumbent to a resilient and competitive company – builds on a set of guiding principles. Key principles – the foundation:

Minimize fixed costs

A vital part of creating a resilient company is to reduce the fixed costs to an absolute minimum, as this will provide the firm with greater flexibility to adjust and adapt to sudden changes in the market conditions.

Fixed costs such as long-term rent agreements, permanent employees and capital investments will stay in the balance sheets for a long time and reduce the financial flexibility of the insurer.

Future investments should therefore be seen in the above light, keeping long-term obligations at an absolute minimum, and the current fixed assets as well as permanent staff should be analyzed to gain a better understanding of how to increase financial flexibility.

A way of increasing flexibility in the workforce is to create centers of excellence within the company, all leading external teams of experts within specific fields, but outside the core competences of the insurer.

This will ensure that key intellectual property is kept at the insurer while specific, more generic tasks and work is outsourced on flexible engagement contracts, allowing the company to scale up or down as required.

Think of permanent staff as the organization’s nerve centers, coordinating all vital functions with external teams.

Maximize virtual

Following the reduction of fixed assets and permanent employees is an increased need for remote work and business development, which is also a consequence of the COVID-19 crisis and a part of the New Normal, where the world has been forced to manage most of their daily tasks virtually.

A key principle for the virtual insurer is therefore to ensure that virtual is permeating all units, processes and systems of the company, including the more difficult tasks of establishing new business between new partners remotely – apart from being a necessity at the moment, this also drastically improves the insurers’ responsiveness in the New Normal.

It does require a continued reskilling of the workforce (and partners) to better deal with being virtual and having more difficult meetings virtually, too – it used to be common practice that tough negotiations and difficult employee talks required physical meetings.

The virtual organization will increase overall speed, as meetings can be held instantly with no transportation required – it’s a more effective way of working and meeting.

Eliminate resource trapping

Resource trapping is what happens when resources are assigned to specific projects in an organization and stay within the unit even after the project has finished. They stay as there are still tasks related to the project, so there’s still a job for the resource to work on, maybe not full time, but there is no real value-add anymore.

As business unit leaders typically are reluctant to give up resources within their organization, there’s little incentive for the unit to free the resource, so the resource is trapped within the unit.

This drains resources, or adds resources unnecessarily, and slows the overall performance and flexibility of the organization. It must be avoided when creating a resilient, virtual insurer prepared to tackle a VUCAV world.

It is therefore vital that being aware of, and eliminating, resource trapping is a key principle to follow when creating a virtual insurer to avoid inflexible costs that are difficult to adjust to market changes.

See also: COVID-19: Moral Imperative for the Insurance Industry  

Process alignment – enabling the business

While the key principles should be the building blocks of the virtual insurer, following these only will not create the agile and fast-moving virtual entity required for successful navigation in a VUCAV world. Creating a responsive organization requires alignment and digitization of the processes and workstreams in the company.

As-is versus to-be

There’s a clear need for introducing new ways of working, heavily supported by technology. This is most often done by mapping out all the current (critical) processes in the organization, bearing in mind that a critical process can be anything from a customer support process to a small, internal process that significantly impedes the daily workflow.

Based on this mapping, the teams will work together to draw out the new, "to-be" processes focusing on how to make this adjusted process as fast and smooth as possible, both for the users of the process and for the customers (which can be internal or external customers).

When implementing the to-be processes, it’s imperative that the processes are digitized to the maximum extent possible. Use digital workflow tools and electronic signatures to ensure a virtual workflow – do not let connection issues to legacy database systems stop this process. Move fast and efficiently.

Think robots, think artificial intelligence

The process optimization work will identify tasks or work streams that for all practical purposes can only be done manually. However, it’s important to analyze to what extent these manual processes are repetitive as repetitive work streams can be outsourced to robots and hence completed faster and much more cheaply as part of the new to-be process.

Deploying robots to handle manual workstreams makes the processes more effective and faster, but the nature of implementing robot process automation will require a clearly defined and documented process, that further improves the overall process sturdiness.

Processes requiring specific knowledge, for example underwriting, should also be looked at, as even underwriting can be automated to a certain extent. Underwriters are already setting the premiums based on formulas, and it’s worth analyzing to what extent it’s possible to automate this process, as well.

If artificial intelligence (AI) – or machine learning – is made part of the (new) underwriting processes, the systems will learn underwriting criteria by themselves and over time become capable of automating more and more increasingly advanced underwriting processes.

Aside from underwriting and process optimization, artificial intelligence can be used to predict changes in consumer behavior early, enabling the virtual insurer to react fast and be ready for the changes even before they are happening.

Working extensively with external partners can further be improved by AI with respect to resource allocation – this would typically be assigning resources in call centers and shared services such as finance, administration and claims management.

In short, adding artificial intelligence greatly improves the insurer’s innovation capabilities, helps optimize operations and greatly support the company in becoming truly virtual.

New ways of working

It should follow from the discussion so far that a virtual insurer requires new ways of working; employees have to get used to working virtually, and performance management systems have to be rewritten too.

Implementing the agile methodology in managing the workstreams and projects significantly increases the flexibility of the company, as the working squads will work independently and autonomously toward their set targets, reducing the need for daily alignment and control.

A project squad can be likened with a holistic, autonomous project team in the sense that the squad represents everything that is required to secure proper project progress.

The squad is created as a competent unit, capable of making the required decisions to move forward. This significantly reduces outside dependencies and speeds up the administration parts of the project.

Of course, some decisions like major purchases or changes that involve other parts of the organization or customers/partners, cannot be expected to be taken within the squad – in these cases, the squad completes all necessary preparations for approvals to move ahead, so, once the changes are submitted for approval, there should be no iterations.

The squads work best when they are assigned ownership and not tasks – empower the teams to take full ownership and control of the project.

The right tech architecture

Very few, if any, incumbent companies have the luxury of being able to start all over building their tech architecture – most are to some extent still dependent on legacy IT systems that are very complex to adapt and adjust to changing internal and external requirements. This has historically been the single-most influencing factor stopping insurers – and others – developing digital products and services.

In the New Normal, it is necessary to have a tech architecture that can cope with rapid deployments of changes to both internal and external systems – changes in consumer behavior must be dealt with quickly, and new and smarter processes should be implemented immediately.

Replacing the existing systems will for almost everyone be impossible – it would be too expensive and too time-consuming, and the company risks operating at significantly lower efficiency while the changes are going on.

Gartner introduced the notion of pace-layered architecture that was later dubbed "two-speed IT," illustrating how legacy IT systems can work with new, fast-paced development without losing what is core to the business; the transactional data.

It is possible to expand an existing tech architecture to support two-speed IT, which will greatly improve the virtual insurer’s ability to act fast on market changes.

Build vs. buy

When expanding the tech architecture, the important questions of build vs. buy comes up, aiming at whether the company should build the applications in-house or buy ready-made software solutions. The discussion typically revolves around application customization vs. price vs. implementation time.

For a virtual, flexible and agile insurer, there should be no doubt that standard solutions, ready to implement, are the right way forward in almost all instances. However, it is necessary to define the market positioning of the virtual insurer first, so the tech architecture can be designed to create a competitive advantage in the selected market and customer segment.

The buy vs. build depends on where the layer of differentiation is chosen to be, and most practices would suggest that the core differentiation should be built to keep the intellectual property in-house.

But differentiation can also be in the way standard software applications are connected. No matter what, it’s important that the areas of differentiation are decided so the new tech architecture can be built to accommodate that. Examples of differentiation can be within:

• Underwriting, bundling of products, special covers or terms and conditions, segment-based pricing, etc.
• Customer experience, ease of buying, embedded in other products (part of a TV price, travel tickets, etc.) or simple claims processes, etc.
• Products/services
• And much more. Bear in mind that even areas of differentiation aren’t guaranteed to last long in the New Normal, so the tech architecture must be structured in a way that makes it possible to rearrange the technical building blocks very easily.

Thoughts on virtual organization

Carrying on the discussion on building the virtual insurer with agile teams and avoiding resource trapping, an organization operating in the New Normal, VUCAV world should avoid the traditional silo structure, as this traditionally hinders fast decision making and reduces the organization’s overall readiness and preparedness for change.

Instead, the virtual company should structure itself around teams, all (most) created for specific priorities, as this will ensure a constant focus on what’s important right now and avoid the building of siloes and internal kingdoms. These teams mostly will be staffed with permanent employees and will also be responsible for managing the outsourced and shared services discussed earlier.

The teams – and the organization – should embrace the principles from Peter Senge’s Learning Organization with a specific focus on a shared vision and personal mastery.

The shared vision supports the agile teams by setting a North Star for the company as a whole, that all agile squads should calibrate their individual goals toward – this creates consistency and unison in the virtual company’s ways of working.

The New Normal and the need for navigating in a VUCAV world requires a new skill set and competencies for employees to perform optimally – it is therefore vital that the organization provides tool and support for the employees to reskill themselves and build the competencies and knowledge required for personal mastery of their tasks.

Key areas of personal reskilling worth highlighting include:

• Ability to work effectively virtually – including staying mentally and physically fit
• Extreme adaptational skills – ready to adjust and adapt to changing job tasks and environments
• Tech savvy – a virtual company requires virtual and digital competent employees
• Skilled in digital conflict management – virtual meetings are a common part of the New Normal, so even tough talks must be mastered virtually

From a management perspective, it’s imperative that all teams are working as autonomously as possible with a maximum amount if authority. This will ensure employee commitment and process ownership, which will greatly improve the overall team – and hence organizational – flexibility.

There’s no doubt that insurers – and most other companies, for that matter – are facing a series of very difficult and tough choices around cost optimization, reorganization and how to design the company of the future. And there are no shortcuts. It’s difficult and hard work all the way.

Nevertheless, it is hard work that has to be done. Now. The consequences of not acting now will be fatal.

Stay safe, and good luck.

For years, the preparation and management of data have exposed themselves as two costly and critical challenges for commercial property insurers. These challenges are hampering production and efficiency and inhibiting growth and profitability. The flow of submissions and the preparation of statement of values are laborious and time-consuming to agents, brokers, insurers and anyone else in between. Without a solution to meet the changing market needs to manage these complex data sets, commercial property insurers' ability to quickly respond to markets and aggressively price business is hindered.

The inability to address these issues has obstructed the process, making it prone to error and hard to scale, especially in today’s market. In turn, this obstruction limits the speed and accuracy of commercial insurers' decision making and debilitates businesses’ potential to grow. The gap between data preparation, screening, prioritization, analysis and pricing steepens, and companies find themselves stagnant and looking for answers. There is yet to be a commercially viable solution focused exclusively on automating the operational preparation and processing component of commercial property insurance data so companies can better meet the growing need of customers and markets and handle the substantial work that is required.

A company’s inability to respond quickly can affect the relationship with the producer, leading to a higher chance of being selected against. These types of companies are more likely to take on more complex characteristics, along with riskier business as the expectation of long processing times is already set.

But we’re starting to implement machine learning into problem-solving tools to address these challenges. These tools enable commercial re-insurers to take their raw data sources and harmonize them with next-gen technology that analyzes, reviews and writes business submissions to provide companies with the competitive edge that’s been sought after for years.

Making the most of your data 

On average, commercial property insurers can only process a portion of the submissions they receive. Typically, managing and preparing results in inconsistencies surrounding labeling, coding and more, which create downstream issues with pricing, modeling and aggregation. Critical amounts of data are lost through the process, and information is not consistently accessible, hindering the ability to make crucial decisions. The only way to solve this and manage business expectations is by hiring additional skilled labor, but this increases the acquisition costs, hurts profits and isolates information among the skilled experts.

Using machine learning, data integration and analysis offer the ability to make data mapping suggestions based on learning algorithms. Manual adjustments are then fed back into the decision-making model, transforming complex, big data into actionable insights that are accessible, in real time, to the entire organization. This allows teams to spend their time on business-generating activities and acting on insights from data, instead of the constant back and forth editing spreadsheets.

See also: How Machine Learning and AI Reduce Risk  

Potential opportunities to grow the business are lost today because of the acquisition costs for new business, but machine learning allows insurers to get from point A to point B by enabling them to screen and prioritize submissions. Today, submissions can be prepared one at a time, but, with machine learning, employees are able to triage multiple submissions at once, including new submissions, enabling the underwriter to focus on the key deals and negotiating terms.

A solution for the enterprise

Giving users the ability to gain access to all commercial property data gives them a wider, more detailed view of the market as well as an understanding of the risk profiles that producers are sending. By providing an automated process to ingest and prepare data, insurers are afforded a more efficient and flexible way of consolidation that essentially helps eliminate errors, cuts costs and promotes growth as companies can now allocate resources to address other areas of the business. Ultimately, automation and machine learning provide insurers with the ability to process submissions at a much higher rate of around 80%.

While giving data access to individuals within the company is beneficial, expanding that access in the form of outsourcing can create a number of different security concerns. Many insurers are operating and sharing data globally, making security and compliance with regulations like GDPR an absolute necessity. Outsourcing is nearly impossible under GDPR due to the heightened risks in sending and having external sources manage large amounts of customer data. Insurers need to show due diligence in not only securing their own data but their customers', as well. In place of outsourcing, we are now seeing data management and storage platforms incorporating heightened security and data integrity into the design, ensuring these tools meet security standards such as ISAE 3402, SSAE 16, AES at rest and SSL/TLS in transit and ISO 27001. Meeting the standards not only helps to prove compliance with regulatory requirements, it also shows customers that insurers are taking their data privacy demands seriously.

Looking ahead

For the commercial property insurer, it is of the utmost importance to have the ability to prepare and manage complex data sets with an easy, quantifiable solution. Emerging solutions across the industry will enable insurers to make fast, appropriate decisions required to address the always-changing market and expand the business.

See also: How Machine Learning Transforms Insurance  

With the introduction of technology such as artificial intelligence and blockchain, combined with machine learning, the realm for new directions provides the insurance industry an unprecedented opportunity to collaborate. While these changes will continue to bring us new and improved methods to get things done faster and more efficiently, one thing is certain, ambitious commercial property insurers are already discovering collaborative initiatives to establish concept cases.

Three Key Takeaways

• The current processes are putting insurers behind their competitors in the commercial property market because they typically process 20% to 30% of the submissions received.
• Machine learning is allowing insurers to triage, screen, prioritize and score submissions much faster and with a higher output rate.
• The result is more completed submissions, which leads to the ability to be first to market.

Credit the coronavirus with one thing. In an era when individuals and organizations strive to establish themselves as “thought leaders,” COVID-19 has vividly--or, should we say, morbidly--demonstrated the importance of people becoming sensible “thought followers.”

Whatever one’s assessment of the public sector’s response to the pandemic, many believe there has been too much comment from too many quarters on the crisis, exposing people to an incessant barrage of information and misinformation. If there was ever a time to refrain from talking unless you have something truly new and valuable to say, this is it.

So, it is certainly gracious for an organization devoted to thought leadership to give room to someone promoting the idea of “thought followership.” It’s also presumptuous for me to think that what I have to say is “truly new and valuable” at a time when “stay home and shut up” is a civic calling. But, here goes.

A sacrilege?

The premise of thought leadership is that there is value in being able to come up with new ideas, either to solve problems or shape how others see them. Being perceived as a thought leader is considered to have value in itself, beyond any immediate impact that one’s ideas might have.

With regard to insurance, an abiding message of commentary over the past 10 to 15 years has been that insurers face transformational changes that threaten to “disrupt” the industry. “Insurtech” upstarts threatened to replace incumbents in a manner similar to how Amazon displaced traditional retailers. In the view of many “thought leaders,” the insurance industry had to shed its hidebound legacy methods and get into the 21^st century, or, or—what?

What, indeed, would happen if the insurance business as a whole remained operationally behind the times in the eyes of people not on the front lines of accepting and compensating risk?

It may seem sacrilegious to say so, but it is more important for insurers to follow than to lead. Innovation and disruption are givens in the modern economy; insurance is used to limit their potentially damaging effects. Insurance is there to preserve things as they were, to the extent possible.

Whose job is it?

To that end, it is not the job of the insurance business as a whole to figure out how to manage new and different ways of risk transfer. On the contrary, it’s up to those creating the risks to convince insurers that the risks can be adequately identified, managed, allocated and priced. 

There’s no right to be insured for property and liability losses. We lose sight of this basic fact because we’ve come to expect a competitive market for coverage to emerge almost automatically whenever a new form of enterprise emerges, almost as if it were a matter of right. 

The typical progression is for E&S markets to experiment with coverage of emerging risks until enough experience is acquired to write them in admitted markets. If professional insurers cannot come up with a way to sustainably insure certain risks, whoever has those risks will either retain them or create their own insurance entity to share the exposure (a mutual company, captive or risk retention group).

Of course, given the robust competition in U.S. insurance, no sensible person would deny that individual insurers must innovate in some way to remain competitive in the long run.

Still, prospective vendors and market entrants are often surprised to see how many insurance organizations remain viable despite having what the newcomers regard as outdated products, services and operations. “Incumbents” with “legacy” processes are likened to prehistoric fauna headed for extinction, yet they still manage to lumber along.

First, be dependable

How is it possible that an entire industry could appear to lag behind others and continue growing? There are a lot of reasons, and, yes, regulation is one of them, but it’s not the only one, nor even the most important. 

If insurance seems to be mired in inertia, it’s because stakeholders in commerce—consumers, organizations, lenders and public authorities—want insurance to be dependable more than they want it to be innovative. 

When it comes to core insurance products, these stakeholders value what’s old, established and expected. Sure, products have to address current exposures, but there’s been little desire and some resistance to having policies that are new and different for their own sake.

To explain, I’ll provide an anecdote from when I worked for an advisory organization that developed policy forms and manuals for standardized lines of P&C insurance. 

See also: Digital Darwinism: Time to Move Faster

As new employees went through orientation, I used to explain how we competed with the market leader to produce forms that had content almost entirely equivalent to that of the market leader. In other words, we competed to standardize, if you can grasp that. We had to be different enough to add value while adhering to long-established parameters and practices of coverage.

To describe the implications of this, I would ask new employees to consider what would happen if they showed up at a mortgage closing with a “new model,” “cutting edge,” “outside-the-box” homeowners policy. Even in the unlikely event the policy was approved by regulators, the transaction would come to a halt. The parties could not stop to read and interpret a new policy. To proceed, they would need coverage in place in a format they immediately recognize.

Challenges

Now, my premise above is being challenged by Berkshire-Hathaway, whose three-page small business policy, called “THREE,” provides broad commercial property and liability coverage in a short policy designed to be read and comprehended by the policyholder. If THREE takes off and starts a trend, that would truly upend decades of insurance marketing practices—and probably lead to a new standard approach.

At this point, some readers will object that my analysis has overlooked insurance distribution and claims management, two transactional elements of insurance where buyers’ expectations are established by the experiences they have with banks, retailers, service providers and other organizations outside of insurance.

In that case, it is indeed wise to be a thought follower, or practice follower, in the wake of industries that specialize in transactions. There’s no need to be a leader here, because insurance is not a transaction-rich business, compared with others.

Think about it. How many transactions a month do you have with your financial institution, supermarket, gas station, utility companies and other providers? Compare that with how many transactions a year—or even in your life—you’ve had with your P&C insurer(s). There’s no comparison.

One of the biggest misconceptions about insurance is that the business has “fallen behind” other financial services in embracing and using technology. The fact is, insurers were among the first major adopters of computer technology as record keeping and manual calculations were moved onto electronic media, and insurers eagerly embraced online data and analytics as they emerged at the turn of the 21^st century.

If insurers “fell behind,” in the eyes of some, it was principally in the 1980s and 1990s, when other industries implemented technology for massive volumes of user-generated transactions that insurers did not have or need.

Insurance transactions are better compared to one’s relationship with a lawyer than with other financial services. People buy insurance the way they buy legal services, with the hope they will never have to make contact, but with the expectation they will be fully and competently supported if they do.

Like legal advice, insurance is really a consultative service. Online portals will sell standardized coverage commodities, like low-cost auto coverage. “Insurance,” properly understood, will consult with households and business to help them select the right types and amounts of protection against a growing range of risks. That will certainly entail a good deal of innovation and thought leadership, but it will also entail a return to the founding principles and practices of modern insurance.

Fail fast? Not here

On their own, constraints on policy form development shouldn’t suppress innovation in insurance, but they do place boundaries on it, boundaries that extend to the corresponding loss information used to help price coverage. 

More than that, however, enduring expectations and practices regarding coverage shape the culture of insurance companies and the industry in general. Given the inherent limitations on insurance product innovation when compared with other industries, insurance is going to attract and retain individuals who value dependability over disruptive change.

Those who prefer the breakneck pace of disruptive change would be frustrated to learn that the current mantra of “fail fast” has little application in insurance. 

“Fail fast” refers to an organization’s toleration for experimental change whose results, good or bad, can be quickly demonstrated, acknowledged and, if necessary, abandoned. Fail-fast is a path to innovative breakthroughs in many industries and can be safely applied to internal agency and carrier operations with limited exposure to product performance or market conduct.

There is almost no room for failing fast in core insurance operations, however.

An underpriced exposure in a portfolio of property accounts can devastate the combined ratio of that book. An overlooked or unintended exposure in liability accounts can do the same. Errors like these can linger in a book of business for months or years before being detected, at which time it may be too late to compensate for the damage.

Again, beyond the immediate impact of the operating results, this limitation on insurance innovation shapes the culture of companies and the industry by self-selecting for people most comfortable operating under such constraints.

A.M. Best weighs in

This discussion might be academic if not for the fact that A.M. Best has just begun formally incorporating an insurance company’s ability to innovate into Best’s assessment of the overall strength of an insurer.

Innovation and thought leadership are not the same thing, as the former can be carried out quietly, and often is in the world of insurance, where even small and subtle adjustments can create competitive advantages that carriers are reluctant to share publicly.

Nonetheless, innovation and thought leadership share the same basic premise: The ability to generate and implement new ideas is seen to have value in itself, apart from their actual impact. The implicit presumption is that an innovative company culture will generate enough good ideas to more than compensate for any bad ideas that are tried and rejected.

Early on, some observers questioned the need for Best to assess innovation separately. If the ability to innovate makes a company stronger, won’t the existing measures of company strength reflect that?

For its part, Best argues that, to the extent insurers can innovate, they can “better respond to external challenges such as evolving consumer preferences, growing business complexity, shifting market dynamics and ever-expanding technological advancements.”

Best adds that “insurers that successfully incorporate innovation will likely strengthen their organizations, increase their customer base and improve their efficiency, supporting their financial strength.”

It’s hard to argue with that, but the issue becomes a little murky when one considers the actual criteria for rating innovation. In one key section, the new methodology scores a company’s “level of transformation” due to innovation according to four statements, labeled 1-4, with one being the lowest and four the highest (best) score.

1. The company’s innovation output is primarily the result of replication of well-used or mature processes or technology.
   Why is this a weakness? If you can do something with existing tools and methods, why change?
2. The company’s innovation output is not industry-leading. The company has adopted some emerging technologies.
   Shouldn’t insurers be selective in their technology investments?
3. The company’s output indicates that it is an industry leader in innovation. Peers often replicate the output results. The company is viewed as a leader in the industry.
   “Peers often replicate the output results.” Where do you want to be in the chain of innovation investment?
4. The company effectively uses cutting-edge processes and technology throughout the enterprise. The company’s innovation is at levels comparable to leaders even outside the insurance industry.
   If your company really needs and can use “cutting-edge processes and technologies,” go for it. If you want to be “comparable to leaders outside the insurance industry,” knock yourself out. But if you want to insure risks on a sustainably profitable basis, why not do so with the minimum investment on your end, and with the greatest possible commitment and contribution by those whose risks you are assuming?

Now, no one should let off-the-cuff comments of an industry observer diminish the importance of what A.M. Best is trying to accomplish. Following extensive review by and input from the industry, the new criteria are thorough and carefully explained, and compose only a fraction of a company assessment.

See also: Will COVID-19 Disrupt Insurtech?  

But insurance professionals should not be distracted by this important initiative from recognizing and embracing the historic role of this business in preserving value so that innovators can create value. One might say that insurance is the protective yin to the dynamic yang of a modern economy, an essential complement that responds to different imperatives.

Thought-following essentials

What, then, is “thought followership?” I would describe it as a series of commitments and understandings to guide decisions within an insurance organization and in its dealings with customers:

• A commitment to minimize disruption until it can add real value;
• A commitment to use established business practices and methods of communication until others are shown to better add or preserve value; and
• An understanding that, all else being equal, an established idea or practice is actually better than a new one, simply because of its track record and common understanding.

For the most part, insurance professionals already demonstrate these commitments and understandings, even as they improve the way coverage is delivered. That approach simply hasn’t been fashionable of late, and the industry and the people who work in it are continually told they have to change the way they think. Well, they don’t, fundamentally. What they have to do is follow where other sectors are leading, and provide old-fashioned assurances to leading-edge enterprises.

Wondering how AI can help detect medical provider scams? Wonder no more.

Artificial intelligence (AI) is redefining work in nearly every industry thanks to the increase in accuracy, efficiency and cost-effectiveness that AI-based applications offer. One of the latest industries to benefit is insurance, where applications are now being deployed to help detect and reduce provider fraud through advanced predictive tools. Claims payers identify fraudulent providers early in the life of a claim and root out bad actors while saving organizations millions of dollars.

The Fraud Problem

Fraud involves deliberately presenting false information to extract a benefit. The most common examples of provider fraud include “phantom billing” (billing for services not rendered), submitting bills for more services than are possible in a provider’s day, providing services unrelated to the injury, using unlicensed or non-credentialed individuals to provide medical services, getting paid kickbacks in exchange for sending patients to third parties and referring patients to entities (such as laboratories or testing facilities) in which the provider has an ownership interest.

While most providers do not engage in fraud, those that do are extremely costly. According to the National Insurance Crime Bureau (NICB), workers’ compensation medical fraud costs approximately $30 billion per year in the U.S. alone.

Fraudulent provider behavior is hard to detect and prove, particularly in workers’ compensation data systems. Advanced data analytics based on AI, however, offers opportunities to overcome the inherent weaknesses in these systems while developing methods to identify and curb provider fraud. Let’s take a look.

Fragmentation of Payers

One of the biggest issues in provider fraud is that no one organization has more than 5% of workers’ compensation market share, so none can see the entire picture of a provider’s claims. This can cause a whole host of issues. For example, if one company has identified a fraudulent provider, other companies may not have this information and continue payments. In states where fraud information is publicly available, providers simply begin practicing in other states, avoiding the state that sanctioned them.

Using AI tools, however, organizations can tap into multipayer pools of aggregate information to spot fraudulent patterns quickly and reliably without compromising payer, employer and employee information. It also makes it easier to flag and curb behavior across a multipayer database.

See also: Untapped Potential of Artificial Intelligence

Inaccurate Provider Identification

The constantly changing complexity of provider identification is another major challenge. Data is often tied to names. Fraudulent providers know this system weakness and frequently change their organization names and addresses as well as other identifiers.

Using AI, data scientists can now reliably link multiple bills from the same provider using a National Provider Identifier (NPI) developed by the Centers for Medicare and Medicaid Services (CMS). Almost all providers have an NPI, and some have more than one. When supplemented with taxpayer identification (FEIN) numbers and license numbers, NPIs can reliably identify 95% of medical providers. As a result, machines can overcome the name game, detecting the long-term, multiyear activities of almost all providers and provider organizations.

Long Lag Times

The interval between when an instance of fraud occurs and when it is detected is often several years. For example, a provider may submit a bill on day one for services unrelated to the injury; the bill will be submitted for review 30 days later and will likely be paid in another 30 days. This practice will be repeated dozens of times by the same provider on the same patient over the course of months. If fraud is detected, the provider will have already been paid, and financial recovery is difficult.

To combat this problem, AI can detect the entire course of treatment on the same claim from the first through subsequent billings over multiple years. Software tracks the diagnoses and the number of procedure codes billed by the same provider on the same claim — per day, per month and per year. As a result, claims staff receive real- time alerts and can intervene when a fraudulent provider initiates treatment on a claim.

Complex Provider Supply Chains

The entire fraud supply chain often includes attorneys, medical providers, outpatient and inpatient facilities, interpreters, testing facilities, medical device suppliers, pharmacies, copy services and transportation services. Unless data sets capture all or most of these moving parts, the chance of detecting fraudulent patterns is very difficult.

With AI, it’s getting a lot easier. Data scientists can use aggregated data to track sequences of out-referral and in-referral, exposing links between fraudulent individuals and entities. Sophisticated techniques isolate consistent and repeatable patterns of relationships between multiple providers and third parties. Data scientists then can graphically display suspicious network clustering patterns inherent in fraud networks.

And these are just a few examples of how AI tools can greatly increase the detection of fraud.

See also: Impact of COVID-19 on Workers’ Comp

Defining the Future of Claims

AI differs from more traditional research approaches because it can generate its own rules to detect fraud and look across large data sets nearly instantly. Via machine learning, databases are continually refreshed, becoming smarter and more effective all the time. By incorporating AI-based solutions, insurance payers can defeat fraud at a systemic level and realize significant financial benefits in return.

As first published in The CLM.

Through the countless discussions that have occurred these past two weeks with many insurers, there have been winning strategies that have shone through as insurers have been executing their business continuity plans. And there have been certain challenges on the other side. Were you a company that needed the support of people to be in the office to “load the tapes,” making sure all those batch jobs on the mainframe computer kept running? Did you have challenges making applications available to your now-remote workforce? Were your call centers still able to fully support agents and policyholders?

One of the greatest successes in this market has been the performance of cloud computing. I remember, back in 2012, discussing the advantages of cloud computing. As an industry, there was just experimental acceptance of this capability – usually relegated to sandbox environments and testing. Jump forward to 2020 – and we see that 84% of all core system buying transactions were cloud-based. Not only have we leapt forward in our use of cloud, but we are now in mainstream acceptance that core systems – some of the most critical systems in the enterprise – are being commonly deployed in the cloud.

Let’s consider for a moment some of the advantages of systems that are deployed in the cloud – just to name a few that have been experienced over the past two weeks:

• Cloud provides a virtual computing environment that also enables virtualized managed services.
• New environments can be created to dynamically test changes.  
• Access is available – for all that need to use the applications regardless of physical location.
• Cloud decreases the need for “onsite” resources – elimination of tape loads, etc.

Investments that insurers continue to make to transform their organizations are bearing fruit today (even though we do not want to have to go through a pandemic to realize this truth). The digitally enabled experiences that insurers are providing to their customers and distribution partners are critical. Never before has it been more important to provide full transparency to the customer. For some, you are experiencing the world as it was before COVID-19 – a world of transformation that was moving forward, understanding the importance of the digital experience, and looking at ways to provide these capabilities. Today we are in a state where these digital experiences are a reality.

See also: Will COVID-19 Disrupt Insurtech?  

If the events of the past few weeks find you considering cloud deployment for your applications moving forward, refer to our recent research report, Cloud and Core Systems: Top 10 Strategic Considerations, for insights on buying cloud-deployed software solutions. Cloud will be one of the levers that insurers can use to meet the digital mandate that is no longer for the future – but is here today.

Insurance carriers and claim professionals deal with various catastrophes each year, so it was only fitting that when COVID-19 struck they were some of the first prepared to revert to "emergency work from home mode."

With many other industries trying to determine how (and if) their workers can take on remote duties, the insurance world led the way with flexibility and (for the most part) ordered adjusters to telecommute so they would not miss a beat of their daily workload. 

This trillion-dollar industry is fairly secure in most crises (the popular mantra being that "everyone needs insurance.") Understood are the IT capabilities needed in advance and the supervisor's faith in employees, as they've been doing this sort of thing for years. It was as easy as a keystroke from insurance upper management to keep workers from driving to their respective claim centers with their laptops and instead plugging in at home and being ready to go. 

Some insurance companies were first to respond in the U.S. by canceling all in-person (unnecessary) meetings and going virtual. They left some of their fellow businesses they share office space with in the dust as those other companies continued to mull over their options (or until the point of being bound by local government orders). Carriers have, for the most part, been eager to protect their workers from risk (isn't that what insurance is known for?) A possible hazard to staff meant a swift and immediate decision to work from home. 

Many carriers have realized the benefits of this arrangement, and even that many employees may put in more hours when working at home, saving themselves a tiresome commute (the average worker in the U.S. commutes over four hours a week, and some high-traffic areas require much more than that). 

See also: Moral Imperative for the Insurance Industry  

Most carriers also subscribe to the notion of in-office safety, encouraging those who are sick to work remotely, whereas some organizations may suggest workers come in or otherwise use a paid time off (PTO) day (few employees are pleased with that option as the average PTO days per year that Americans receive are quite low compared with other countries - another conversation, however!).

Many articles have been recently published with "work from home" tips; below are some of the more applicable to insurance industry professionals:

IF Insurance has penned a column called "How to work from home safely and efficiently?" It discusses an important topic in claims as it suggests that "Remote work provides several benefits, such as the possibility to focus deeply on specific tasks that require uninterrupted concentration." For that large litigation claim file with extensive injuries, this makes much sense; fewer interruptions makes it easier to focus on complex claims. Some other useful tips of the article include letting family members know you need to work in peace and keeping an eye on ergonomics and the setup at home (is that monitor at the correct level?). Planning your breaks with a clear start and end time is also key. Remember to keep in touch with colleagues, and don't isolate yourself completely!

"Working From Home Can Mean You Never Stop Working" is a recent piece from Philadelphia Magazine that reminds us all to keep a better work-life balance while doing so and setting rituals for logging on and off while not falling victim to some of the various pitfalls. Remember to move around so as not sit in one spot all day. Have a list of your priorities for the day and use noise canceling headphones if needed to minimize distractions.

See also: Claims: Beyond the ‘Moment of Truth’  

Arch Daily's website discusses tips for architects adjusting to the new experience of working from home. Largely, these professionals are used to collaborating with others in an office setting and now need to learn how to use digital technology to replicate those interactions. The article offers very useful information for experts in this field (and all others) to adapt to the times we face.

Will other industries learn from insurance and be well-equipped in the future? 

Or will the world change and move drastically to remote working after realizing some of its benefits? And is it really any surprise that insurance carriers are setting the example? 

After all, insurance and risk management by definition set out to identify, evaluate and prioritize risks and apply the use of resources to minimize the impact of unfortunate events (like right now).

In the midst of all the chaos, insurers are being put to test in real time. For all, it becomes the moment of truth for our industry and every individual company.

The strength of our industry is shining through. Insurers have quickly adapted to the new norm. Insurance executives are mindful of how this pandemic could hurt revenues and the bottom line, all financial ratios, even investment returns and stock prices and possibly coverage/claims.

At the same time, we continue to serve as a safety net for society, mitigating risks for all types of disasters – man-made or natural. This is who we are and what we do – as an industry and as each company in the ecosystem. As always, we will assess our strengths and our gaps and adjust our strategies and plans accordingly.

As a vehicle for insurers to understand and monitor the pulse of our industry in the middle of this pandemic, SMA just published a research brief that outlines the “The 10 Moments of Truth and Watch Points for the Future: How Insurers are Responding to COVID-19” highlighting the “whats” and “hows” of insurer response to this new norm. Each Moment of Truth reflects our reality as of April 1; insurers will continue to adapt to our changing environment every day. This brief also highlights the watch points to track and monitor for each Moment of Truth, as insurance evolves over the next several months.   

Below is the list of SMA’s 10 Moments of Truth: 

1. Demonstrating Insurance Strong
2. Stressing Every Risk and Continuity Plan
3. Working Remotely Effectively and Efficiently
4. Sustaining Current Levels of Service
5. Keeping Momentum Going Across Initiatives and Plans
6. Changing the Rules of Engagement
7. Innovating in Real Time
8. Keeping Everyone in the Loop
9. Demonstrating the Value of Digital Investments
10. Identifying the Gaps in Digital Strategies

One thing that this pandemic has already taught us is that we have never needed a digitally connected world more than we do now. Couple this with the reality that a crisis often brings about needed change. The needs, possibilities and opportunities that become clear during this crisis will stand out even more in our environment of fear and uncertainty.

Just remember, we are all part of this amazing insurance industry, and we are all standing strong. We will continue to stay present in this Moment of Truth. 

See also: COVID-19: Moral Imperative for the Insurance Industry  

In the meantime, stay healthy and safe.