As insurance companies look to optimize performance, mitigate risk and meet rising consumer expectations, they still face a plethora of challenges when it comes to data and analytics. Companies continue to aggregate more and more data – but the manner in which they are doing so is not necessarily efficient. Some 40% to 50% of analysts spend their time wrangling the data, rather than finding meaningful insights.

To address these operational inefficiencies, TransUnion commissioned Aite Group to conduct a study of insurance and financial services professionals. The findings from this study outline how companies can stay competitive in the insurance industry while adapting to the evolving world of data and analytics.

Like most established financial institutions, insurance companies have multiple data repositories across the organization. Individual business units own their respective processes for capturing and managing data and, more often than not, manage at the product level rather than at the customer level. This often leads to inconsistencies, with no set definitions of key terms such as “customer.” As a result, information and insights are isolated to silos – by lines of business or by product – creating barriers toward seamless data integration.

To maintain a competitive edge, insurance companies recognize the need for new data sources. More than half of the study’s respondents plan to increase spending on most types of data sources, especially newer ones, such as mobile. However, as big data gets even bigger, it becomes increasingly difficult for analytics executives to find valuable insights. Addressing the challenges that arise from big data volumes requires an enterprise data management strategy as well as an investment in the proper analytics tools and platforms for processing and analyzing the data for meaningful insights.  

The majority of these institutions are currently grappling with fractured data and legacy systems, which prevents these companies from extracting value and making the data actionable. 70% of those surveyed indicated that a single analytics platform, one that coordinates and connects internal and third-party systems, is a major differentiator. However, only about two in 10 respondents indicated that their current solutions have these capabilities.

This highlights the need for a coherent enterprise data and analytics strategy and a common platform to hold and integrate existing and new data sources, as well as analytical tools. The platform needs to be flexible to support different skill sets, react to changing market conditions and have the ability to integrate alternative sources of data.

See also: Why to Refocus on Data and Analytics  

In addition to leveraging the right tools, sourcing the right talent remains a key challenge for executives. Nearly half (45%) of insurance professionals indicate that having the right talent greatly improves their ability to underwrite profitable policies. However, due to a lack of bandwidth, insurance companies often do not have the resources to allow their analytics teams to stretch their analytics creativity. 

These operational challenges can result in a significant amount of time being dedicated to cleansing and prepping the data – preventing analytical teams from performing more valuable activities such as model development. The operational challenges create an obstacle for retaining talent as these sought-after data scientists are instead assigned to trivial work. 42% of the insurance professionals surveyed indicated that it is also challenging to find qualified data scientists in the first place. 

As the use of descriptive, prescription and predictive analytics gains traction, it is imperative that executives recognize the challenges and explore solutions. By overcoming these barriers, the industry will be better prepared to embark on the next frontier of data and analytics.

For more information about the TransUnion/Aite Group study, please visit the “Drowning in Data: Thirsty for Insights” landing page.

Much has been written over the years about what sets great claims organizations apart from all others, but none of these analyses really apply anymore.

The new world in which insurance and claims now operate features totally different customer profiles, plus emerging, tech-enabled solutions that can solve challenges in the claims process that have existed for decades. Additionally, we have very different insurance products and coverage opportunities and a highly competitive business environment in which all participants are judged not just among their peers but against the most popular consumer brands across all industries globally.

Old marketing and advertising strategies are no longer relevant, as new forms of communication have emerged that influence consumer opinions and the way in which information is disseminated and consumed.

In short – the game and the rules have changed, materially and forever!

In today’s world, leadership, collaboration and partnerships have the greatest impact on the quality of the claims process and experience.

Leadership Impact

The greatest single influence over all of this is leadership, which can come from a variety of directions, but most effectively from the CEO or other C-suite leaders. This is where authority and power reside, and where company vision, mission and culture are created. It is the mission, not the perks, that attracts and motivates employees.

The most successful insurance companies are those with leaders who set and continuously articulate the corporate tone, support gender equality, diversity and inclusion, promote family culture, celebrate employee achievement and life milestones and aggressively encourage a healthy work-life balance.

See also: Future of Claims Intake for Insurance?  

And today’s most successful claims operations are those in insurance companies whose leadership understands the value of and promotes collaboration and partnerships. In the new world, nothing innovative or entrepreneurial really happens without mastering this collaboration.

Leadership Support

Obvious examples of support include financial investments, budget, staffing and upskilling initiatives. In larger insurance organizations, other assistance may include inter-departmental support from IT, finance and digital and innovation teams. Alignment with legal support is also essential, especially in light of regulatory and other potential exposures when making process and consumer changes.

Perhaps less obvious, but still critical, is the creation of an environment that encourages a culture of innovation that is future-focused, one that features tolerance for mistakes with safety nets in place. This is certainly challenging for leaders who are typically balancing risk and exposure and the demands of shareholders and directors with the recognized need to innovate at an unprecedented pace.

The most successful companies have developed teams and processes to identify, engage, evaluate and partner with the best insurtech startups, which promote “test and learn” and which are able to move rapidly from piloting to implementation. Also demonstrated by these leaders is a willingness to temporarily accept imperfection and iterate to accelerate progress, which is a departure from traditional methods of elongated pilots. Being a “fast follower” and waiting for peers to succeed or fail with pilots is only a recipe to fall further behind innovators. 

Positioning for Future Success

Perhaps most important of all for leaders is to provide resources to claims organizations to extensively assess the insurtech landscape for potential partners and to keep their knowledge current, because startups constantly improve their solutions. 

It is imperative that this effort be a team approach, where the broader organization is involved and such learning and information is socialized, as opposed to restricted to key individuals or select innovation teams. One such approach is to measure and monitor organizational return-on-learning. In other words, in much the same way as policy coverage expertise or damage evaluation are coveted skills for adjusters and claim leadership, organizations should assess the effectiveness of sharing knowledge around automation, technology and collaboration.

See also: Avoiding the Pitfalls in Catastrophe Claims  

These initiatives are neither easy nor inexpensive, and they undoubtedly require total leadership commitment, but they can turn average competitors into industry leaders and ensure longer-term success in what we all know is going to be a totally different marketplace and world.

At the Connected Claims USA conference (June 24-25, Chicago), insurance leaders and insurtech partners will be gathering to learn and form lasting partnerships that will change the game.

The coronavirus crisis presents us with a "natural experiment." I wish it didn't, but it does, and we ought to take advantage of the experimental possibility if we're to benefit at all from the weeks and months of danger and uncertainty that lie ahead of us. While the near-term focus clearly needs to be on battening down the hatches—taking care of our employees, our families and ourselves—if we can also establish a process for testing and learning, we can better position ourselves and our companies for the world that will exist on the other side.

A natural experiment is one that occurs in nature because it could never ethically be set up artificially. You don't, for instance, withhold a promising medicine from a control group because you want to see how much worse they do than those who are given the medicine. Probably the most famous natural experiment in recent years occurred in Oregon in 2008, when funds for Medicaid were expanded, but there wasn't enough for everyone. A lottery determined who qualified, so you had the state's poor randomly divided into have and have-nots, whose health was tracked over the following two years. Results were less than many had expected: There was no statistically significant difference on physical health measures. But there were significant gains by the haves on mental health and financial security vs. the have-nots. And at least there is real data. (You can read more here if you're interested.) 

In the case of the coronavirus, the natural experiment comes from the fact that we have to cut back on face-to-face interaction, sharply for a few weeks or more and at least moderately for months, perhaps many months. That will mean the cancellation of many conferences, a drastic reduction in meetings, a surge in remote work, far fewer in-office meetings with clients—and a major opportunity to see how well digital interactions can substitute for physical ones.

Because digital interactions are inherently less costly than physical ones—no more hopping on that plane, checking in to that hotel room, paying that conference fee, for instance—now is the time to test every digital interaction you've been considering. Even older clients, who might have assumed they needed a sit-down meeting, are now open to the idea of dealing with you remotely. The choices are, basically: interact via some digital technology or don't interact at all. 

You can take the next stretch to condition employees, corporate partners/customers and individual clients to the more efficient digital interactions, in ways that weren't possible previously.

But you won't want to continue doing everything digitally, because, despite all the futurists touting work from home for decades, there is value to face-to-face interaction. The key is to take an experimental mindset. 

You expected to generate X amount of business at the giant schmoozefest known as RIMS that was just canceled. Well, how much did business, in fact, drop because you couldn't go? How much do you think various new, digital interactions that you instituted managed to fill the gap? Now compare your lost business against what you would have spent and recalibrate what you'll do in the future—keeping in mind that benefits can be ephemeral; it's hard to put a clear value on that chance meeting that maybe leads to business years down the road. 

Calculate how many hours you and colleagues/employees spend in face-to-face meetings. Now, over the next weeks and months, see what you think you lose (if anything) in collaboration/camaraderie by doing those remotely or by not holding them. (When I stepped into an Intel conference room in 1996, during the Andy Grove era, I saw a sign saying that before holding a meeting you were to calculate the per-hour salaries of all those who would attend and cancel the meeting if you couldn't demonstrate that you'd increase earnings by more than the salary total consumed by the meeting. Smart man, that Andy Grove.) 

Establish metrics for your dealings with customers today, then see how they change once you switch to phone calls, texts, emails, videoconferences, etc. Calculate the difference in costs, too, so you can better decide what the right mix of channels should be once the world returns to normal. 

You can track your own activities, too, especially if you're now working from home rather than heading into an office. I, for instance, am finding I'm far more productive now that I can't have sports on in the background while I work. I assumed that, with the sound off, the broadcasts didn't distract. Well, yeah, not so. Those sports will stay off even when the various seasons resume. (I don't know if it's true, but I've seen people claim on Twitter that Shakespeare wrote King Lear and other classics while London was under a quarantine for black plague—and note that Julius Caesar wouldn't have been assassinated in the Roman Senate on the ides of March if he'd been able to work from home.)

My old friend and onetime neighbor Andy Kessler wrote a smart column in the Wall Street Journal on Monday about how stock market crashes can prefigure a major shift in the economy—in his case, following the 1987 crash, the smaller high-tech stocks he covered as a securities analyst for Morgan Stanley moved to the forefront, gradually eclipsing IBM and carrying the world into the Internet age. Sure enough, amid the stock market carnage on Monday, Amazon announced that it intended to hire 100,000 warehouse workers and delivery drivers.

The opportunity to lead in the next phase of the economy is open to all of us, at least to some extent, if we can take a test-and-learn approach even while dealing with all the other craziness. We're going to suffer through a pandemic and, it increasingly seems, a recession. We might as well get something out of it.

Stay healthy.

Paul Carroll
Editor-in-Chief

P.S. Here is a piece from the Daily Beast that, based on my experience in tracking economic crises, seemed informative. It lays out four scenarios for how the pandemic will play out and, eventually end. 

P.P.S. Here is a link to the first of a variety of educational quizzes at Quizzify.com, run by our friend Al Lewis. I found them informative and interesting. You might try your hand, perhaps even sharing with colleagues. We can all stand to be smarter about the challenge in front of us.

If the COVID-19 pandemic has taught the world anything, it’s that each event is different from the last. It’s not enough to have an abstract plan in place when disaster strikes. The most effective disaster recovery and business continuity (DR/BC) plans are those that organizations practice routinely. Insurers and companies across all industries should be prepared to stay online during a range of natural and man-made disasters, from earthquakes to pandemics and cyber-attacks. 

Modern consumers have come to expect 24/7 accessibility from their service providers. A weak infrastructure that can’t reroute traffic or a third-party partner’s lapsed platform causing an entire system to go down are not just inconveniences—they’re threats to customer relationships. DR/BC plans should take such liabilities into account and be tested end-to-end. 

Most insurers created DR/BC plans with hurricanes, winter storms or other natural disasters in mind—not terrorist attacks or pandemics. Organizations should consider these plans as living documents for precisely this reason. The impact of contagious illnesses (e.g., COVID-19) on company staff and leadership may not be present in existing plans. If so, organizations may need to put social distancing into effect, especially in key departments with high concentrations of knowledge or ability. 

Preparation Is the Best Prevention

Even the best-informed DR/BC plan is unlikely to cover every scenario. Preparing the entire organization for emergencies, however, drills in responses to create a form of muscle memory that makes employees ready to respond when new threats emerge. Pressure testing or refining a system is better done when an organization is running at full capacity rather than after a disaster has emerged. 

See also: Coronavirus: What Should Insurers Do?  

Plans may attempt to cover a broad range of known issues and look to incorporate reasonable fail-safe provisions to address contingencies if partner systems go down, but they should still follow two rules.

1. Documentation should be easily—and immediately—accessible. 

Even if plans establish clear lines of communication, explain how to access critical systems and lay out how to frame decision protocols, they do no good if employees can’t access them when the time comes.

Organizations should store DR/BC plans somewhere that is easy to locate, and there should be multiple instances of the plans. If an entire grid is down, for example, SharePoint is not a convenient place to house emergency instructions. Insurers should also encourage their employees to take information home with them. Corporate networks should not be the only storage space for emergency documentation—and demonstrating knowledge of DR/BC plan access points should be covered as part of employees’ test exercises. 

Employees are only able to act in a crisis if they have the hardware they need. Laptops or tablets should be available to take home; bringing these devices with employees should be part of regular training exercises. Equipment is not useful during a test or a “live fire” event if it stays at the office overnight. 

2. Plans should be created early and practiced often. 

The greatest key to a successful DR/BC plan is preparing long before precipitating events are on the horizon, when the organization can consider all scenarios. Employees will know what to expect and how to behave when disaster drills are routine (like fire drills), no matter if the employees are part of IT or serve as a member of a business unit. 

The events that teams practice for are seldom the ones that happen in real life, but preparing for a wide array of scenarios can help management and associates to stay calm and focus on understanding what is new or unusual about the emerging situation. When rational responses to crises become second nature, individuals and organizations can survive a wide array of incidents with lower stress and less negative impact on the people who depend on them most—their customers. 

If possible, employees should undergo regular online training in these emergency protocols with certification available. That way, newer employees or those less familiar with DR/BC plans and procedures can receive updated experience until the whole team is on the same page about where and how to access the information they need during an emergency. 

See also: How Coronavirus Is Cutting Connections  

No insurer can prepare for every possible emergency, especially when the future is uncertain, as it is with COVID-19. But maintaining a well-thought-out DR/BC plan that exists as a living document can help any organization keep a cool head when people need to make big decisions quickly. Creating a plan early and making sure employees know how to access it are foundational to keeping the lights on (and customers satisfied) when disasters and other unexpected events occur. My motto as a CIO in insurance and banking was, “Prepare for the worst; hope for the best,” while remembering that hope is not a plan on its own.

Software-as-a-service (SaaS) has become part of the tech lexicon since emerging as a delivery model, shifting how enterprises purchase and implement technology. A new “_” as a service model is aspiring to become just as widely adopted based on its potential to drive business outcomes with unmatched efficiency: artificial intelligence as a service (AIaaS).

The AIaaS Opportunity

According to recent research, AI-based software revenue is expected to climb from $9.5 billion in 2018 to $118.6 billion in 2025 as companies seek insights into their respective businesses that can give them a competitive edge. Organizations recognize that their systems hold virtual treasure troves of data but don’t know what to do with it or how to harness it. They do understand, however, that machines can complete a level of analysis in seconds that teams of dedicated researchers couldn’t attain even over weeks.

But there is tremendous complexity involved in developing AI and machine learning solutions that meet a business’ actual needs. Developing the right algorithms requires data scientists who know what they are looking for and why, to cull useful information and predictions that deliver on the promise of AI. However, it is not feasible or cost-effective for every organization to arm itself with enough domain knowledge and data scientists to build solutions in-house. 

AIaaS is gaining momentum precisely because AI-based solutions can be economically used as a service by many companies for many purposes. Those companies that deliver AI-based solutions targeting specific needs understand vertical industries and build sophisticated models to find actionable information with remarkable efficiency. Thanks to the cloud, providers can deliver AI solutions as a service that can be accessed, refined and expanded in ways that were unfathomable in the past.

One of the biggest signals of the AIaaS trend is the recent spike in funding for AI startups. Q2 fundraising numbers show that AI startups collected $7.4 billion — the single highest funding total ever seen in a quarter. The number of deals also grew to the second-highest quarter on record. Perhaps what is most impressive, however, is the percentage increase in funding for AI technologies — 592% growth in only four years. As these companies continue to grow and mature, expect to see AIaaS surge, particularly as vertical markets become more comfortable with the AI value proposition.

See also: Predictions for AI Adoption in 2020  

Vertical Adoption

Organizations that operate within vertical markets are often the last to adopt new technologies. AI, in particular, fosters a heightened degree of apprehension. Fears of machines overtaking workers’ jobs, a loss of control (i.e., how do we know if the findings are “right”?) and concerns over compliance with industry regulations can slow adoption. Another key factor is where organizations are in their digitization journey. For example, McKinsey found that 67% of the most digitized companies have embedded AI into standard business processes, compared with 43% at all other companies. These digitized companies are also the most likely to integrate machine learning, with 39% indicating it is embedded in their processes. Machine learning adoption is only at 16% elsewhere.

These numbers will likely balance out once verticals realize the areas in which AI and machine learning technologies can practically influence their business and day-to-day operations. Three key ways are:

Empowering Data

Data that can be most useful within organizations is often difficult to spot. There is simply too much for humans to handle. The data becomes overwhelming and thus incapacitating, leaving powerful insights lurking in plain sight. Most companies don’t have the tools in their arsenal to leverage data effectively, which is where AIaaS comes into play.

An AIaaS provider with knowledge of a specific vertical understands how to leverage the data to get to those meaningful insights, making data far more manageable for people like claims adjusters, case managers or financial advisers. A claims adjuster, for example, could use an AI-based solution to run a query to predict claim costs or perform text mining on the vast amount of claim notes.

Layering Insights for Better Outcomes

Machine learning technologies, when integrated into systems in ways that match an organization’s needs, can reveal progressively insightful information. A claims adjuster, for example, could use AIaaS for much more than predictive analysis. The adjuster might need to determine the right provider to send a claimant to based not only on traditional provider scores but also on categories that assess for things like fraudulent claims or network optimization that can affect the cost and duration of a claim. With AIaaS, that information is at the adjuster’s fingertips in seconds. 

In the case of text mining, an adjuster could leverage machine learning to constantly monitor unstructured data, using natural language processing to, for example, conduct sentiment analysis. Machine learning models would look for signals of a claimant’s dissatisfaction — an early indicator of potential attorney involvement. Once a claim is flagged, the adjuster could take immediate action, as guided by an AI system, to intervene and prevent the claim from heading off the rails. While these examples are specific to insurance claims, it’s not hard to see how AIaaS could be tailored to meet other verticals’ needs by applying specific information to solve for a defined need.

Assisting Humans at a Moment’s Notice

Data is power, but it takes a human a tremendous amount of manual processing to effectively use it. By efficiently delivering multilayer insights, AIaaS provides people the capability to obtain panoramic views in an instant. Particularly in insurance, adjusters, managers and executives get access to a panoramic view of one or more claims, the whole claim life cycle, the trend, etc. derived from many data resources, essentially by a click of a button.

See also: How to Use AI in Customer Service  

The Place for AIaaS

AIaaS models will be essential for AI adoption. By delivering analytical behavior persistently learned and refined by a machine, AIaaS significantly improves business processes. Knowledge gleaned from specifically designed algorithms helps companies operate in increasingly efficient ways based on deeply granular insights produced in real time. Thanks to the cloud, these insights are delivered, updated and expanded upon without resource drain.

AIaaS is how AI’s potential will be fulfilled and how industries transform for the better. What was once a pipe dream has arrived. It is time to embrace it.

As first published in The Next Web.

“That's only for young people,” the board member of a German insurer said when I presented Tiktok as a possible next big thing for the industry

"What do you think; how many people downloaded it?" I asked.

Brief silence.

"If you ask like that, a few million.”

Me: “Over 1.5 billion. It is the most downloaded app of the year - worldwide"

Again, silence.

"Okay, how would you use it with us?"

A lot of discussions inside and outside the industry go like this. A lot of insurers are happy to have seemingly caught up. We just created websites for individual agencies, putting some sales application processes online, or are outperforming each other at Google Adwords. But now, the next development seems to be passing us by--the new video platform from China: Tiktok.

Tiktok has -- like YouTube in 2005, Facebook in 2008, LinkedIn in 2009 or Instagram in 2010 -- a seductive specialty: free organic reach in the millions. As with the other networks, this will not last forever. But whoever invests one dollar here today will probably get it back multiple of times.

What is Tiktok?

At Tiktok, short videos of up to 60 seconds are uploaded. Most are between 10 and 15 seconds. An algorithm determines which videos appear on the user's home screen, the so-called for-you-page. When videos are finished, shared or viewed repeatedly, more and more users receive them. Due to the shortness of the videos and the rigid selection methods of the algorithm, the user is usually shown one appealing video after another.

This leads to very long average time spent in the app. In the U.S., it's over 52 minutes per day. Tiktok has replaced all other social networks in this key performance indicator (KPI). Over 41% of viewers are between 16 and 24 years old. However, the number of users in older groups is exploding, too. The number of adults has quintupled in the last 18 months.

There is a possibility that Tiktok will replace other networks such as Facebook and Instagram worldwide.

How do you become successful on Tiktok?

With our account, we achieved over 74,000 likes and over 1.8 million views with 2,400 followers within three months. We produced several viral videos that reached over 50,000 or even 70,000 views within a few days -- also over 250,000. Because many popular categories -- such as dancing, lip-sync and modeling -- fell out for us, we focused on business and relationship topics. Videos about business trips were particularly successful (examples here and here). We also tested insurance topics, such as "The 5 Biggest Insurance Losses" or the need for liability insurance, but with less success.

See also: Social Media: Your Top Referral Source  

Is this interesting for insurers and salespeople?

Tiktok is not for every insurer, broker or agency. Tiktok is only relevant for companies that want to grow above the market average and are willing to try new tactics. It is only relevant for decision-makers who want to deviate from pushy sales using sophisticated attention hacking strategies.

The idea is to create a situation in which the sales person doesn't reach out to the customer trying to convince him or her; customers approach the salesperson in the moment of need.

With Tiktok, currently, enormous reach can be generated with little effort. But we hardly see any companies, and international celebrities like Will Smith appear only slowly. This is often due to the fact that they are successful on other channels and would need to start at zero on Tiktok. A lot shy away from having to start all over again and possibly fail. Therefore, previously unknown content creators dominate and build an enormous follower base.

Insurers can use this new channel, especially for branding and recruiting but also for sales. How? By creating content that appeals to the corresponding target group.

I see a special opportunity for insurance and finance content that addresses problems of different target groups. A particularly good example is Tim Hendrik Walter, who attracted over 725,000 fans and over 14.6 million likes with legal topics (as the German “Mr. Attorney”). He does this by explaining legal questions to target groups, such as “When can I order from Amazon?” or "How to get dressed in court?"  

Insurers and salespeople could certainly do the same with their topics.The board member quoted at the beginning asked what the most important criterion was to start at Tiktok. The most important thing is to try out the app yourself as a decision-maker and to watch content (iTunes - Playstore).

Our biggest mistake in the beginning was simply using content from other channels for convenience. As soon as we started generating content specifically for Tiktok, the reach exploded.

Those who are particularly creative get a particularly high reach.

Even as an insurer.

Let's tackle this.

Agile adoption for insurers has grown significantly in the past few years; most have already begun their agile journey and are at varying stages of maturity. Yet agile has financial, organizational and cultural implications that can reshape the entire organization. Adopting this methodology often leads to the flattening of hierarchies, new budgeting processes and a change in role for the project management office (PMO).

Alignment Implications: Projects to Product

Following trends outside the industry, a growing number of insurers are choosing to organize their IT value delivery around supporting products rather than delivering projects. Products are durable, whereas projects are transient; they have a clear beginning and end. The idea of well-defined ending and scope has always been in conflict with the core ideas of agile, where scope can change week to week, and the end can come earlier or later as needed.

Part of this realignment to product means that many insurers are retooling their PMOs to fit an agile delivery model. PMOs that endure in highly agile organizations tend to shift away from a directive model to one that is more supportive and consultative. Agile works best when teams are empowered to operate as semiautonomous units—this doesn’t mesh well with the controlling PMO model.

Some insurers with advanced agile organizations have chosen to replace their PMO with other organizational structures like product management. Product managers are defined by scaling agile frameworks like SAFe and are common in software organizations. The product-based nature of agile implementations also requires consistent vision over an entire life cycle, with product managers as the custodian of that vision.

Organizational Implications: Funding and Federation 

One of the biggest challenges in shifting to product-focused IT alignment is how the work will be funded. Advanced agile tends to depart from traditional ROI-based funding. Instead, teams are funded for a fixed period (usually a year) where funding levels reflect the business value of the product and the road map. 

The transition to an agile delivery approach can be a catalyst for IT organizations to move away from centralized IT and toward greater federation. This shift provides business partners with greater accountability for delivering on the business value proposition. 

Stronger IT alignment with business also means that IT metrics will measure outcomes rather than inputs, outputs and plan adherence. The lack of detailed plans render many traditional metrics obsolete. Measuring business outcomes like new sales or claims duration can supplement traditional agile metrics like velocity.

See also: A Short History of Agile Development  

Cultural Implications: Agile Innovation

Agile allows teams to collaboratively and creatively solve hard problems. It requires a tolerance for failure, a willingness to experiment, psychological safety, high degrees of collaboration and a lack of hierarchy. All these are defining characteristics of the world’s most innovative companies. Several large carriers are using agile as the blueprint to drive this kind of cultural change. They have executed aggressive plans to restructure their organizations, redefining roles and management, transforming governance and adjusting key performance indicators (KPIs) to drive the desired behaviors.

Yet some organizations resist the migration to agile because it represents a change from how things have always been done. Outdated compensation and reward structures can also impede agile adoption. Executive sponsorship is important to deal with this challenge; equally important is advocating for change at all organizational levels.

Exceptions to Agile

Insurance carriers shifting to agile are realizing benefits in improved software quality, better business outcomes, lower cost and risk and increased customer satisfaction. Yet agile isn’t the right solution for every organization or every type of technology investment. Full implementations like large-scale financial system replacements, including general ledger and ERP systems, may not be ideal candidates for agile. Rigorous testing cycles required in a comprehensive testing phase completed near the end of development inhibit the value of quicker release cycles.

Moreover, the business is often not ready to become a dedicated partner. When business partners aren’t available in day-to-day delivery of the solution, the outcomes aren’t very different from a waterfall or iterative development model. Agile also tends to be unsuccessful if IT relies heavily on full offshore development teams without a product manager on site. Insurers recognize the benefits of agile development: increasing alignment between IT/business, improving speed to market and boosting employee engagement. However, this transition is not immediate.

Insurance carriers are at different levels of maturity depending on how long they’ve been practicing and the willingness of business and IT to adapt. Novarica’s recent brief, Agile Maturity Model for Insurers, provides an overview of challenges and implications of agile adoption at insurers, as well as a capabilities model to define stages of maturity across areas affected by a transition to agile.

“Pathogen outbreaks are an emergent property of global 21st century society,” Dr. Richard Hatchett, executive director, Coalition for Epidemic Preparedness (CEPI), Bloomberg BusinessWeek, Feb. 13, 2020

As a society, we are obviously becoming increasingly more connected. Most of the time, we don’t realize the fragility caused by our interdependence. We take our connections among and between people, physical artifacts and digital artifacts for granted and seem them as benign as the sun rising in the East and setting in the West.

Until COVID-19 emerged in late 2019, all of our discussion about connectedness was framed almost entirely on social networks, networks more generally and, of course, network effects (i.e., the Big Tech companies – that we voluntarily use – that are ruining (or is that running?) our lives and ruining society). 

COVID-19 is cutting society’s connections

The emergent properties of our global 21st century society have been primarily related to digital: cyber risks; social media that enable bullying, spreading misinformation and amplifying outrage; and "trial by Twitter."

But a global pathogen has supplanted our discussion about emergent digital issues. With COVID-19 cascading through country after country, the world is going into quarantine as we experience:

• entire countries being locked down
• major sections of countries being shut down
• conferences around the world being canceled or moved to a virtual format
• colleges asking their students to leave campus and attend classes virtually
• businesses asking their employees to work from home
• shopping malls being abandoned
• sports games being played without fans
• "social distancing" (not shaking hands and staying at least six feet away from another person) and vigorous hand-washing being strongly recommended practices
• panic buying in some locales, with people stripping grocery stores bare of items needed for hand cleaning, sanitizing and bathrooms. 

All of the above are natural human reactions to a pathogen infecting hundreds of thousands and killing thousands of people, that to date does not have a vaccine or a course of treatment. 

Moreover, all of the above, other than the guidance relating to hygiene, are drastically slowing or stopping commerce around the world. 

Per an article in Fortune.com dated March 11, 2020:

“Nearly 75% of companies are seeing capacity disruptions in their supply chains as a result of coronovirus-related transportation restrictions, according to an Institute for Supply Management survey published Wednesday (March 11, 2020). This is a strong warning that COVID-19 is weighing down the global economy.”

I’m not arguing that the measures being taken should not be taken. I am glad that all of the actions are being taken. That doesn’t alter the fact that commerce, or the pace of commerce, is grinding to a halt. 

(Personally, I believe that every U.S. state and international communities should cancel their entire schedule of events for the spring and summer, including fairs, festivals, music events, theaters, outdoor plays, college commencements and other social gatherings until a vaccine or course of treatment for COVID-19 is identified and made available to everyone.)

See also: Coronavirus Boosts Cyber Risk  

Hoisted on our own petard (of connections)

As a society, we are currently being hoisted on our own petard: A natural phenomenon is driving us to cut our global and regional (and local) connections or at a minimum put them on the shelf. COVID-19 may not be taking society back to the Middle Ages, but it seems as if it is taking society back to a time before any significant amount of global trade was conducted through systems of linkages or networks. 

Society can not become completely digital

I realize there are probably quite a few people who see COVID-19 as an opportunity for society to become entirely, or at least mostly, digital. We may be forced to strive to make that happen until we have a vaccine or course of treatment for this pathogen. 

However, a significant component of society is, and will always remain, analog. Physical artifacts are not going to disappear. I believe that significant parts of our society can become even more dependent on digital interactions (what I label Mediasphere in the visual below). But the practical reality is that people need, at a minimum, to have:

• food to eat and utensils (and plateware)
• water to drink and containers for the water
• clothing
• medicine (over-the-counter or prescription) and containers to store the medicine
• a choice of physical artifacts to sit on for homes and offices
• a choice of vehicles to share/own/lease
• groceries and storage, plus carry-bags for the groceries
• appliances in homes and offices (for any number of practical reasons)
• infrastructure to move:
  • food, water, medicine and medical devices
  • physical artifacts
• trains, planes and trucks to move food, water, medicine, medical devices and other physical artifacts from one terrestrial point to another terrestrial point.

COVID-19 or not, our society is, and will remain, a mixture of physical and digital artifacts. 

Societal connections: linkages and networks

Humans have been building linkages and networks to support interactions with each other throughout the history of our species on our planet. We are an animal that communicates in a wide variety of ways, including speech, art, trade and an ever-expansive set of tools. From the Cave Walls of Lascaux to the walls of Facebook, from the Silk Road to ocean maritime shipping and from party-line telephones to ubiquitous, mobile IP-connected telephony, humans have continually created and expanded communication pathways to share, shop and entertain.

I am purposely not defining or discussing the differences between linkages and networks. Additionally, a more robust discussion would also include ecosystems and platforms and the impact of global pathogens on both of them. But I will say that I consider the walls of Lascaux, the Silk Road, ocean maritime shipping and party-line telephones to be linkages rather than networks.

Three major domains of society’s linkages and networks

In the visual below, I attempt to capture three major domains of society’s linkages and networks and some of the key elements in the two historic domains of geographic territories and marketplaces:

• Geographic Territory: A small village or a town, city, state, province or entire country. The territory consists almost entirely of physical artifacts but is increasingly leavened with digital capabilities (i.e. IoT).
• Marketplace: Where people and businesses go to shop and purchase goods (including food, water and medicine) and services (including healthcare). Throughout most of our existence, the marketplace has been entirely composed of physical artifacts. However, as society has become more computerized, more digital, more mobile and of course connected using the Internet and web, the marketplace is increasingly a locus of both physical and digital artifacts.
• Mediasphere: My made-up term to mean a digital arena that supports communication, commerce, entertainment, virtual office work, news and other digital services (i.e., virtual reality, augmented reality, holograms). The Mediasphere consists entirely of digital artifacts. (Other than that the infrastructure that enables the very existence of the internet is itself a portfolio of physical artifacts.)

COVID-19, an emergent property of our 21st century society as Dr. Hatchett stated, affects all three domains. The pathogen is effectively slowing or closing the interactions between and among people and physical artifacts within geographic territories and the marketplace. 

Simultaneously, COVID-19 is transforming the Mediasphere into a crucially important domain for humans to interact digitally whether for business, education, news, entertainment or other digital services. As some articles in the press have noted: COVID-19 will really test the limits of the digital haves and have-nots. This pathogen may be the trigger that finally motivates governments to ensure their entire populations can access the web and do so in a cost-effective manner (for consumers).

Implications and advice for insurers

During the COVID-19 crisis, insurers should:

• ask all of their employees, whether now working in the home office, a field office or an agency, to work from home
• provide the necessary equipment, and requisite security and privacy, for their employees to work from home
• hold meetings virtually
• strengthen the security of all of the company’s digital connections (including data flows within the company’s value chains and flows to/from external sources)
• ensure that employees have the necessary telecommunications access to the content (forms, documents, files, presentations, other) they need to perform their work at home, including uploading the work from each employee
• ensure that employees can be tested for the COVID-19 virus from home.

For sales, claim service and customer administrative service, insurers should also create the infrastructure, processes and access to the requisite content for interactions with clients and claimants to be done virtually. Insurers that are using video solutions to fulfill these interactions will create more satisfied clients and claimants.

See also: Coronavirus: What Should Insurers Do?  

Prepare for post-COVID-19 times

Insurers need to be ready for the time the current global pathogen is contained (by vaccine or course of treatment) by:

• maintaining constant awareness of what events, even events that seem outlandish, could shred the firm’s connections
• considering if it is possible to (profitably) offer new insurance covers to mitigate the risk of pathogens (even thought they are very low- frequency and very high-severity events) beyond business interruption or cancellation insurance
• creating analytical templates of “density of risk” territory profiles that illustrate the distribution of client ages and the distribution of clients' chronic conditions and diseases in each territory where the firm has insurance clients.

What else would you suggest for insurers to do both during this current pathogen crisis and for the time after COVID-19 is resolved?

We are all familiar with the concept of nurse triage to help manage work-related injuries. A new telemedicine concept, doctor triage, takes the idea to the next level.

The telemedicine approach reduces costs, increases flexibility for both doctors and patients and allows for consultations 24 hours a day. Patients speak with board-certified physicians who determine if self-care, emergency room or clinic visits are appropriate and do so more authoritatively than is possible with nurse triage. Early results from our own Doctor Now program find that 99% of the people who were recommended for self-care returned to work without additional treatment. Part of the reason appears to be that, among those who speak with a doctor, self-care recommendations are followed more often.

Doctor triage is part of the growing trend in enhancing telemedicine programs. The number of patients using telemedicine services increased to 7 million in 2018, up from less than 350,000 in 2013. In 2017, about 70% of employers offered telemedicine services as an employee benefit.

Telepresence combined with telemedicine creates saving not just in direct costs for treatment but also in indirect costs. In the U.S., the average total time for a medical visit is 121 minutes, with a minimum travel time of 37 minutes. The average clinic visit is 84 minutes, and the average emergency room visit is two hours, often extending well beyond. Most of the time is not spent with the physician but is spent waiting to see the doctor. By contrast, the average telemedicine visit takes 15 minutes (including wait time); the average time for a doctor triage call is less than 7 minutes.

Adults in the U.S. spent 1.1 billion hours of unnecessary time traveling and waiting for a doctor last year, resulting in additional costs of lost productivity and lost time from work.

Workers' comp is an area that still remains very much uncharted for telemedicine, and that needs to change. Our young Doctor Now virtual clinic shows the potential. Looking at recent doctor triage sessions: 61% of the calls were for self- care, and 99% of those callers agreed to the self- care and returned to work. Only one person was referred to the emergency room for chest pains. Others were referred to clinics for evaluation and treatment of eye injuries, fractures, lacerations, etc. All received appropriate care, and most returned to work in some capacity.  

The tele-triage approach is especially valuable for those who use our electrodiagnostic functional assessment (EFA). Employers use it to screen employees when they join a company, to establish an objective baseline on physical condition and abilities that can be used as the basis for comparison when an injury occurs -- the baseline and comparison let everyone see whether a work incident caused dysfunction, and the baseline provides a goal for treatment.

With EFA, a truck driver who feels he or she sustained a back at injury at work could simply pull to the side of the road and call the 24/7 clinic line. If no emergency care is needed, and there is a baseline EFA for the body part in question, the triage doctor can schedule a second EFA, sometimes for the same day. The triage doctor can also recommend self-care.

If there is no baseline EFA and there needs to be an additional evaluation outside of the triage, a virtual clinic evaluation can be arranged, typically within the hour. The individual can be seen while still at work or in the comfort of his or her home.

Virtual clinic visits offer the injured worker specific analysis; treatment often leads to full-duty release within four visits. Virtual clinic evaluations are typically $150 each. Therefore, with simple musculoskeletal disorders (MSD), a full-duty work release can be obtained for under $1,000, with no narcotics prescribed -- telemedicine doctors are not allowed to prescribe narcotics. This is truly a good outcome for everyone.

Even in a state where the employer must give the employee a panel of doctors to choose from, the virtual clinic is one option presented to the employee, along with other panel providers. Insurance carriers are embracing this concept and adding the specialized virtual clinic providers to their panel.

New telemedicine services improve outcomes for not only employees but employers. The return-to-work results and cost savings for employers are dramatic, but the outcome for workers is even better: improved quality of life.

In the insurance industry, documents represent the vital communications between the insurer and the insured, yet, for those who are blind or partially sighted, reading and understanding documents is difficult or impossible without the help of a sighted person or an assistive device. This may be especially true of websites and related digital communications channels, which are primarily visual media and often problematic for the 15% to 20% of the U.S. population that is blind or partially sighted, a number that is expected to increase with the aging baby boomer population. Given that they have global spending power of $6 trillion, according to the World Wide Web Consortium’s report “The Business Case for Digital Accessibility,” addressing this market is a business strategy well worth pursuing.

The U.S., Canada and other jurisdictions have enacted laws requiring documents, including those posted on websites, to be made accessible to those with visual impairments. Some of the most prominent legislation includes the Americans with Disabilities Act (ADA) of 1990 and the Rehabilitation Act of 1973, Sections 504 and 508 in the U.S., as well as the Accessibility for Ontarians with Disabilities Act (AODA) in Canada. Over recent years, there has been a 400% increase in demand letters to businesses and an annual 37% increase in Department of Justice (DOJ) lawsuits related to website accessibility. 

In October 2019, the U.S. Supreme Court sustained a lower court’s decision in a case brought by a blind individual who claimed discrimination when he was unable to order a pizza via the internet because he couldn’t read the restaurant’s website. Though the ruling was announced only a few months ago, it set a loud and clear precedent for the increasing number of lawsuits related to the accessibility of internet-based communications and transactions. If such a ruling can take place over something like eating pizza, imagine what we have to be concerned about in the insurance industry with its ever-growing body of regulations?

See also: The Best Boost to Customer Experience  

Privacy is also an important issue. When customers access sensitive personal information, such as their health records or policy documents, they should not have to ask someone they know to read a document to them or have a call center representative offer to read it over the phone. All customers want the ability to conduct their own affairs. Making your organization’s documents accessible shows respect for your customers’ privacy and desire for independence.

Options for making documents accessible

To truly meet the individual needs of visually impaired customers, employees and others, insurers may need the ability to produce documents in a variety of accessible formats, such as Braille, large print, e-text or audio formats made available online or produced on a CD. Most organizations work with a third-party provider for printed documents, using specialized software for creation of large print or Braille formats and mailing them to customers.

Accessible PDF and Accessible HTML are growing in popularity for making communications compliant and can be accessed through a website or web portal.

Developing a new website or reworking an existing one to make it accessible requires special knowledge and skills that can go beyond those of some website designers, possibly necessitating training or the use of consultants. For example, designers must familiarize themselves with the specific applicable industry standards. The World Wide Web Consortium (W3C) has established the primary international standard for accessibility on the web, called the Web Content Accessibility Guidelines (WCAG). WCAG 2.0, published in 2008, provides comprehensive guidelines regarding how to make a website accessible, including the documents accessed through it. The guidelines include four principles of web content accessibility: It must be perceivable, operable, understandable and robust.

The public-facing static documents that reside on your website will also need to be made into accessible formats. The initial conversion can be outsourced to organizations that can provide a fast and cost-effective migration. Tools and training can be employed to keep updated documents accessible as they are updated.

Transactional documents that are individually created and contain personal information can be set up manually with accessibility components when the document is created in its source composition software, as long as the software supports adding accessibility features. While this will normally make the document immediately accessible when output to a digital format such as Accessible PDF or HTML, it also has drawbacks in terms of the time and employee training required to do it, as well as increased storage costs. Making transactional documents accessible from the outset is challenging because few customer communications management (CCM) document composition software solutions can include accessibility components within documents and create WCAG-compliant documents.

See also: How to Improve the Customer Journey  

Because of these challenges, an automated, post-document-composition method of achieving document accessibility is often preferable. This approach makes it possible to enable content to be properly “tagged” for accessibility no matter what system was used to compose the document. When the conversion is executed during retrieval from the archive, it also significantly reduces the cost of archiving the large files that are created with accessible documents, because documents don’t need to be stored in their accessible form. Automation also avoids the delays involved if documents are made accessible only upon request.

Those companies understanding the ramifications of expensive fines and damaging publicity have been at the forefront of making their websites and digital documents accessible to all. They also understand that taking an aggressive approach to accessibility is more likely to gain and keep loyal customers within the growing population with vision loss. Individuals with or without vision loss will select the insurers they interact with based on how easy it is to work with them. Supporting this growing market is an investment in the future of your company.