A lot of the concern about artificial intelligence in the workplace appears to be based on what people have seen in cartoons, read in novels or watched in sci-fi movies, portraying a world overtaken by robots. Now that AI-based systems and applications are gaining ground, people are getting nervous about the role of machines. Will they take over our jobs?

While this seems like a perfectly logical question, it’s actually the wrong question. Instead, we should be asking what we want AI to accomplish. When we do this, it becomes more evident that, in reality, humans and machines will become partners rather than competitors.

AI Is Not About Replacement

There is no doubt that AI will affect jobs. The World Economic Forum projects that 75 million positions will disappear due to automation by 2022. Yet, its report says:

“As has been the case throughout economic history, such augmentation of existing jobs through technology is expected to create wholly new tasks — from app development to piloting drones to remotely monitoring patient health to certified care workers — opening up opportunities for an entirely new range of livelihoods for workers.”

The report goes on to predict automation will create 133 million jobs, or 58 million more jobs than are lost, within the same period. Gartner’s forecast, which focuses specifically on AI, also indicates that AI will be a net positive for employment. Starting in 2020, the scales will begin to tip in job creation’s favor, with 2 million new jobs opening up by 2025.

What this shows is that AI’s function in the workplace is not to swap humans for robots. In my view, it’s about removing the robot from humans.

Many of the tasks AI is charged with completing relate to rote responsibilities. Considerable human capital is wasted on activities that could be automated easily. By spending time on manual processes, people are not using their brains for higher-order skills like problem solving and decision-making.

PwC found that 70% of business executives believe that AI can enable people to focus on more meaningful work, while a Harvard Business Review survey showed that 36% of executives think one of the top benefits of AI is to free workers to be more creative, and 35% cited AI’s ability to help workers make better decisions. If AI-based solutions remove the mind-numbing functions of many jobs, if they can take away the parts of positions that are inherently robotic, it is a huge win.

See also: Untapped Potential of Artificial Intelligence  

The Intelligence Loop

But before AI can accomplish these aims, AI systems must be given a specific purpose. A company doesn’t just proclaim it has AI (hooray!) and, therefore, all its workers sit around thinking and conversing like some utopian society. No — AI systems must be directed to analyze historical data by someone who has created an algorithm to solve a defined problem. AI cannot exist without human guidance.

By the same token, humans get smarter based on the information they learn from machine analysis. People can then apply their higher-order skills to make decisions based on data coupled with their own knowledge base. AI systems subsequently interpret what humans do with the information generated; they in turn get smarter based on these interactions, and systems are refined. This process continues whenever a query is run, new data is added and action is taken.

In this sense, AI systems and the humans who leverage them become co-dependent. Work improves as machines learn more, sparking a continuous loop. This loop maximizes both artificial and human intelligences, producing what PwC dubbed the “man-machine hybrid,” which is “more powerful than either entity on its own.”

Practically Speaking

The best way to understand how this all plays out and the impact AI can have is to view it in a practical setting. AI and machine learning currently are being used in claims operations to instantly find the right providers for injured workers, formulate Medicare Set-Asides (MSAs) based on years’ worth of data in a fraction of the time, intervene in claims that could be headed to a lawyer’s office before problems escalate and much more. AI certainly furthers these tasks in their own right, but this is where we see the sum is greater than each of the parts.

As claims reps charge AI systems with looking for and synthesizing specific data points, the way claims reps and claimants interact fundamentally changes.

On one hand, claims reps are fully equipped with the right information to answer claimants’ questions and engage with them because they have access to mountains of data that an AI system can interpret. On the other hand, by not having to manually seek out all of the facets that matter in the 90-plus cases sitting on their respective desks, claims reps gain the opportunity to get a real-life picture of the people and cases to which they are assigned. They are liberated to provide care and compassion for claimants on a scale they’ve never achieved in the past. This not only alters how claims are handled but also influences the types of workers designated to handle them.

Reskill, Not Replace

Positions are evolving across nearly every industry. While most paper-pushing days are gone and replaced with electronic communication, more personal, customized processes and the customer experience will become more front and center in the new AI-driven world.

Positions will open up that embrace new skill sets. Employees who bridge the gap between domain expertise and technology will be essential, and those who can navigate between business, analytics and customer service will be in the highest demand. As workers become smarter and more dependent on machine learning, they become even more valuable to their organizations, bringing fresh, creative ideas into the workplace with unprecedented efficiency.

See also: And the Winner Is…Artificial Intelligence!  

So, machines will not take over our jobs, but they likely will remake them in wonderful and surprising ways.

As first published in Dataversity.

There is a great scene in the old movie, "The Outlaw Josie Wales," where a snake oil salesman is selling medicinal cures. The salesman encourages a character to try a sip, and the character responds, "You drink it!" The salesman stutters. The prospective customer asks, "What’s in it?" The salesman says, "Why, I don't know. I'm only the salesman."

I hear that same line from insurance producers all the time! They say, "Here's your policy." The customer says, "What’s in it?" "I don't know. I'm only the sales person. See this caveat right here? It says you have a duty to read your own policy."

I was in a meeting where the CEO of a sizeable agency proclaimed, "I just need producers who sell!" When I asked about the need to employ people who know what they are selling, the response was, "I just need people who can sell!" He wants that snake oil salesman.

Needing people to sell is not the same thing as needing people to sell the right coverages. I asked, "You're saying you need people to sell insurance without regard to coverages?" He said he was not saying that. He then revised his statement and said, “I need people to sell the right coverages." That is a big difference, but then I asked, "Are you going to invest in strong coverage education for these people?" He said, "No. I just need people to sell."

Needing people to sell the right coverages but not investing in solid, really solid, coverage education is just fanciful thinking. The reality is that, without high quality and successful education, those people are going to offer inadequate coverage at best and the wrong coverage at worst.

The question for the reader who runs an agency is, "Do you want to employ the snake oil salesman who has no idea what is in the snake oil he or she is selling?"

I see many distributor models clearly and purposely built on exactly this premise. I'm not saying it is wrong from a business perspective if one has all the legalities and E&O standards of care aligned. What I am saying is that I'm not sure there is any future in this model for live agents because technology and bots can offer inadequate coverage much more cheaply than humans.

See also: Becoming a True Professional Agent  

The question for the individual producer is, "Do you want to be seen as honest, ethical and professional, or do you want to be seen as the snake oil salesman?" Your choice. It is an either/or choice. Many people want to believe a middle ground exists. It may have existed in the past, but it will cease to exist because of changes in E&O conditions combined with how technology will offer inadequate coverages more cheaply.

The question for carriers is this, "Do you want distributors who are seen as polishing your reputation for quality or tarnishing that reputation?"

A snake oil salesman or a person who can make positive differences in the lives of people when they have had a serious loss? It is your choice.

Yoga popularity has grown tremendously in the past several years, and National Health Interview Survey data conducted by the Centers for Disease Control and Prevention (CDC) show increased usage for complementary and alternative medicine (CAM) treatments. In 2007, yoga was the seventh most commonly used CAM therapy. There has been a steady rise in the use of yoga since 2017 to treat musculoskeletal conditions; the limiting factors are cost, convenience, timing of class and access to studios.

Derived from the Sanskrit word “yuji,” meaning yoke or union, yoga is an ancient practice that brings together mind and body. Practicing yoga is said to come with many benefits for both mental and physical health. Proven yoga physical benefits are: reduced inflammation, reduced chronic pain, improved flexibility and balance, improved breathing and sleep. Yoga also has psychological benefits of decreasing stress, anxiety and depression.

If there is a work-related injury, yoga is considered self- care, as it can help prevent seeking medical care. It not only leads to better outcomes while helping to eliminate OSHA recordables and workers’ compensation claims, but it is a skill that can increase quality of life and be used to prevent work-related injuries in the future. Yoga, in comparison with spinal manipulation, physical therapy and acupuncture, may be more cost-effective because it can be delivered in a group format and self-administered at home. However, actual cost analysis of yoga interventions is needed.

This literature review suggests that yoga is effective in reducing pain and disability and improving both physical and mental function.

About one-fourth of U.S. adults report low back pain, lasting a whole day or more, with average duration of three to six months. It is the most common cause of limited activity in people below the age of 45, the second-most frequent reason for visits to a physician, the third-most common reason for surgery and the fifth-most common cause of hospital admission in the U.S., according to Spine Journal The majority of individuals with back pain and sciatica recover from an acute episode in four to eight weeks, and 80% to 90% return to work within 12 weeks post-injury. However, 25% to 80% of patients with low back pain experience some form of recurrent back problem in the following year. Among those who suffer from an episode of low back pain, one year later as many as 33% have moderate intensity pain, and 15% may have severe pain.

In other words, there is a huge opportunity for yoga to address.

See also: How to Optimize Healthcare Benefits  

Yoga Your Way is a new concept in a trend to take yoga outside of the studio and allow anyone to practice and integrate the benefits of mind-body interaction. Yoga Your Way can be brought to the worksite and paid for by the employer as a employee health benefit, providing customized yoga videos designed for a person’s ability and needs.

Studies have shown that practicing yoga 15 minutes per day leads to reduced illness and improved mental health. Yoga Your Way incorporates these principles for the  mobile workforce such as the transportation industry as well for a more stationary workforce. Custom programs can range from simple stretching done in a truck (while parked) to exercises for those overseas in a war zone.

Yoga Your Way is not only providing relief from work-related conditions but is a preventive measure to strengthen and increase endurance, overall health and mind/body awareness.

Yoga is not just stretching in a crowded studio. It it is anyone, anywhere and any time.

An old friend and colleague from the Wall Street Journal, George Anders, tweeted last week that "More than 1 million people list 'thought leader' on their LinkedIn profiles." In his mordant way, George added, "So many thoughts! So much leadership."

George, currently senior editor at large at LinkedIn, where he writes about interesting trends in work and the work force, included a link to an AI that might make a passable replacement for many of those self-designated thought leaders. See if you can tell which of these observations came from the AI and which from a white paper written by a "thought leader":

• "Base + low-to-medium uncertainty will emphasize the idea that you can have a high-to-medium certainty that X will happen, but a low-to-high certainty that Y will."
• "It's not about 'I'll show you how to work' or 'I'll show you how to code' or 'I'll give you the ball' or 'I'll take care of all of that for you' or 'I'll guide you in all of that.' It's about 'I'll guide you in all those areas and more.'"
• "Evolving risks have impacted the daily operations of insurance carriers worldwide and carriers are handling a rising volume of insurance claims, which is taxing human resources and, in many instances, demanding improved industry methodology."

If you guessed that the final example, the insurance-specific one, came from an actual human, you win. That example took a real insight—that risks are evolving, and claims are increasing, so insurers need new skills and methodologies—and simply fuzzed up the thought with corporate-speak, while the AI just sort of swam in circles. But, at least to my eyes and ear, the "thought leader" didn't outpace the AI by much. 

There are loads of actual thought leaders in the insurance world, and I highlight as many of them as I can on the ITL platform. But it feels to me like lots of companies and people aren't even trying to get past the buzzwords. Much of what I read these days talks blithely of transformation and disruption, then tosses in a few references to customer-centricity, sprinkles on some fairy dust about AI, blockchain, the IoT or robotic process automation and declares the industry's problems solved.

And don't get me started about the linguistic exertions that companies go through to try to make it sound like they're innovating left, right and center, when they're mostly in same-old, same-old mode. Some white papers I see use the word "new" so often that the writer must get a bonus for every time it appears. My (least) favorite is the frequent talk of "new innovations"—as opposed to old innovations. "Proactively" is a close second to "new." Almost all verbs are actions, but companies puff up reports by adding the adverb "actively," so we know that they're actively taking their actions. That no longer seems to be enough, so "pro-" gets added for emphasis—companies are actively, actively taking their actions.

I realize that innovation in insurance has hit a bit of a plateau. Some of the really radical ideas, such as peer-to-peer funding, haven't proved practical at scale. There hasn't yet been an invasion by Big Tech, because of the insurance industry's regulation and heavy capital requirements. Even the ferment in the insurtech movement has settled some—investment continues to climb but is increasingly focused more narrowly, on the companies that seem to be emerging as winners.

But, having watched digital innovation up close since the early days of the personal computer, I assure you that the journey in insurance is just beginning—and will move a lot faster if we commit to moving beyond the buzzwords and self-congratulatory verbiage and collaborate on real insights.

We need people like Jon Picoult and Barry Rabkin to keep us honest—Jon recently wrote about his bold prediction for the customer experience, that companies will talk a lot and not do much, while Barry wrote that, on a scale of 1 to 10, innovation in the industry this year won't exceed a 2. 

We also need to push deeper into the buzzwords, so we see what's working and what isn't, and as an industry can see where to try next—such as in this piece on three use cases emerging for blockchain, or my own attempt on a blockchain update earlier this month.

Now isn't the time to pat ourselves on the back for how far we've come. Now is the time to take what we've learned and build on it.

Otherwise, we'll just be stuck with transforming the industry by proactively producing new innovations.

Cheers,

Paul Carroll
Editor-in-Chief

Even in the healthiest of economies, individual businesses may face budget cuts due to poor sales, expense increases or other factors. Oftentimes, one of the first places businesses look to tighten their purse strings is in marketing and customer experience.

Here are some strategies to deal with budget cuts when they hit your customer experience program.

Maintain a Customer-Centric Mentality

“If your company is forced to reduce their CX budget, there are still ways that the CX team can drive ROI for the company,” said Fabrice Martin, Clarabridge chief product officer. “A customer-centric mentality across different sectors of the business and finding ways to make small changes to improve CX is a first layer that organizations should consider.”

Martin recommended analyzing your existing customer data to identify the leading reasons people call into a contact center, then develop solutions to deflect those calls to lower-cost channels such as chat, messaging or self-service. Additionally, you can use existing data to drive new revenue streams -- for example, working closely with the marketing team to improve the messaging, targeting and effectiveness of their campaigns. You can also work with the product team to ensure the desirability and quality of products.

“Once you identify areas of improvement, share those insights across the company to help catalyze decisions that will save money, open up new revenue streams and reduce risk,” Martin said. “With leaders from every sector of the business coming together to make small changes to improve the customer experience, the whole organization can continue to provide positive customer experiences without breaking the bank. In my experience, the key to maintaining strong CX with minimal resources is to identify the program’s primary objectives –– and then implement strategies that can be shared across the organization.”

See also:  Key Changes for Customer Experience  

Use Data to Establish CX Priorities 

The best strategy for maintaining a strong customer experience despite budget cuts is ensuring the cuts don't affect the most important aspects of the CX, according to Matthew Edgar, partner and consultant with Elementive. “This is harder to do than say because it requires having clear data to prove which areas of the website and other marketing campaigns most directly influence the experience customers have. It requires looking at marketing channels not based on conversions or revenue, but on how those marketing channels correlate with metrics like customer satisfaction or customer loyalty.”

For example, if you find that your email marketing drives the highest amount of customer loyalty (as measured by site engagement, repeat sales, referrals, etc.), then email marketing should be the least affected by budget cuts, Edgar added. Of course, you can get (and likely need to get) more granular as you cut the budgets.

Focus on Expense Reduction

“When budgets are cut and CX improvement efforts are jeopardized, one strategy for protecting those CX investments is to focus on the expense-reducing (rather than revenue-enhancing) impact of a great CX,” said Jon Picoult, founder and principal of Watermark Consulting.

Conventional wisdom suggests an enhanced CX comes at greater expense, but that’s not always the case, Picoult added. “The fact is, a better experience and lower costs can actually go hand-in-hand.”

Sub-par customer interactions invariably trigger additional customer contacts that are simply unnecessary (e.g., follow-up calls from customers who didn’t receive a timely call back, new calls from customers who can’t understand a bill or proposal they received), Picoult explained.

“Focusing your CX initiatives to more effectively bring in new customers and remove needless points of sales friction are important strategies for marketing teams to ensure budget cuts have minimal effect on sales performance,” added Jake Levant, vice president of marketing at Lightico. “Customers don’t like to waste time being bounced around between channels, or being asked to perform inconvenient tasks like print, scan or visit physical branches. These poor customer journeys cause customers to lose interest and drop out of sales funnels, ultimately resulting in lost sales. By adopting CX solutions that remove unnecessary touchpoints and create a streamlined onboarding experience for the customer, companies move new business through the pipeline quickly and, in turn, see a steadier revenue stream."

See also: The Best Boost to Customer Experience  

Studies suggest that, at most companies, as many as a third of all customer contacts are unnecessary — generated only because the customer had a failed or unfulfilling prior interaction, according to Picoult. Organizations with large customer bases can have hundreds of thousands of these unneeded transactions. If marketing can eliminate this expense, marketing may convince the CFO to restore the budget for selected CX improvement activities.

Bring Your CX Case to the C-Suite

When budget cuts are looming, you have to sell CX to those with the knives. Typically, this is the executives, said Shayne Sherman, CEO of TechLoris. “When dealing with executives, there are a few key points to hit. Trust me, I am one.”

• Talk about the company's future. Executives deal in the long term because that's what investors care about.
• Mention customer churn. So much of marketing is about getting new customers. If your CX is shored up, you'll keep those customers once you get them, and they'll help bring in others.
• Make it tangible. Show the executives a plan and tell them whose head is on the chopping block. It's easier for them to buy something if it's concrete and not a bunch of platitudes.

By hitting these, you're more likely to keep the budget you have and maybe get a little boost in the process, according to Sherman.

For all the attention Net Promoter Score (NPS) has garnered as an instrument for gauging customer experience quality, it’s startling how many organizations implement it incorrectly.

Indeed, many of the criticisms lobbed at Net Promoter have less to do with the measure itself and more with the perverse manner by which companies use it. (Need a Net Promoter primer? Here is a clip from a recent speech.)

Net Promoter, like any performance metric, isn’t perfect. However, it can provide meaningful value to a business, provided it is implemented and administered correctly. Here are 10 tips to accomplish precisely that:

1.  Ask a follow-up question.

One of the strengths of Net Promoter is the simplicity of the measure – a gauge of customer experience quality delivered through a single “likelihood to recommend” question.

But Net Promoter surveys were never meant to be composed of a single query. Indeed, there is a second, equally important question that should be part of any NPS survey strategy, and that’s something along the lines of “What was the primary reason for the score you gave?”

That second query provides the essential information that’s needed to understand customer sentiment (not just measure it numerically) and then develop specific tactics for improving it. Absent that second, critical question — yes, you’ll have a Net Promoter Score, but you’ll have no idea what to do about it.

2.  Don’t mess with the scale.

Years of research went into the development of the Net Promoter question and response scale, yet that hasn’t stopped many NPS users from putting their own creative slant on the metric.

Fred Reichheld, the creator of NPS, spent years researching the right wording and scaling of the question to maximize its predictive capability (the degree to which improvements in the measure correlated with business growth, and declines in the measure correlated with business contraction). He ultimately settled on an 11-point scale, labeled from 0 (“Not at all likely”) to 10 (“Extremely likely”).

That’s the scale, and there’s no reason to alter it, because any changes will introduce bias into the responses. That means no color-coding (some companies display negative scale points in red, positive ones in green). No scale reversal (it’s 0 to 10, not 10 to 0). No additional labeling of scale points (with smiley faces, frown faces or other cues). No change in wording of the scale labels.

If you want to maximize the success of your Net Promoter program, don’t go rogue with the design and formatting of the NPS question itself.

3.  Don’t fixate on Detractors, exclusively.

Detractors (the individuals who say they’re not likely to recommend you) are toxic to any business. They cost more to serve, they spread negative word-of-mouth and they often suck the life out of the employees with whom they interact. For this reason, a business improvement focus on Detractors is well-placed – learning from their feedback, using it to reveal and address common customer pain points.

However, given many business leaders’ penchant for operating in a “find and fix” mode, they obsess over Detractors at the expense of everything else, glossing over the opportunities that exist to shift Passives up the Net Promoter scale, as well as to learn from (and capitalize on) existing Promoters.

For this reason, it’s important to bring a balanced focus to Net Promoter action plans. Yes, do minimize Detractors (especially if they represent a significant percentage of your customer population). But also invest time in understanding the Passive category and making improvements to turn them into Promoters (an exercise that’s typically less about fixing problems and more about finding new ways to add value).

And don’t forget about your Promoters. They can help you pinpoint strengths in your customer experience so those can be amplified and extended to other customer episodes or segments.

See also: True Value of Net Promoter Score  

4.  Use the three-legged-stool approach to NPS measurement.

There are three distinct types of Net Promoter measurements:

• Relationship measures (a point-in-time survey sent to customers, regardless of whether they had recent contact with your company).
• Transactional measures (a survey sent to customers immediately following a live or digital interaction with your company).
• Relative measures (a point-in-time blind survey, where the company collects Net Promoter data from their own customers as well as those of competitors).

Some companies view this as a mutually exclusive list and try to decide, for example, if they should run Relationship NPS Surveys or Transactional ones. The answer is yes.

Each of these NPS survey types serves a purpose. Each provides insights that the others don’t. As such, in an ideal scenario, organizations should work toward implementing Net Promoter across each of these three dimensions.

5.  Don’t overreact to normal variations in NPS.

When Net Promoter scores rise, everyone celebrates. When they fall, everyone scrambles. In truth, both of these reactions are frequently unwarranted.

There is inherent variability in any organization’s Net Promoter score. (It is, after all, based on a sample of customer opinions, collected via a survey.) It’s important to understand that inherent variability to determine if changes observed in your Net Promoter score are likely due to chance, rather than reflecting actual improvement or deterioration in the customer experience.

Should there be celebrating when Net Promoter scores rise, and soul searching when they fall? Yes, provided those swings are statistically significant and reflect true changes in customer sentiment.

6.  Recognize that it’s not about the score, it’s about the narrative.

We as a society are groomed to focus on numerical measures of performance – school grades, race times, profit targets, etc. It should come as no surprise, then, that many organizations obsess over their Net Promoter score. In reality, however, the NPS number itself is arguably the least important part of any Net Promoter program.

That’s because the score is not actionable. No matter if your NPS is 37 or 68 or -25 – the number itself doesn’t explain why, nor what you should do to improve. That critical piece of information comes from the narrative, the comments that respondents provide to explain why they gave you the score they did.

Every attempt to evaluate Net Promoter results, or to communicate them to the broader organization, should be anchored in the NPS narrative, not the NPS number.

7.  Benchmark wisely.

We as a society are also groomed to compare ourselves wih others (hence the popularity of numerical performance measures, because they make benchmarking so simple and clear-cut).

Well, not quite so simple as it relates to Net Promoter. It can actually be difficult to establish an apples-to-apples comparison when benchmarking NPS scores, because the numbers can be influenced by factors ranging from cultural norms to survey methodologies. For this reason, when you try to benchmark your NPS score against some publicly available data source, it could be a meaningless comparison.

The best Net Promoter benchmark is the one conducted against your organization’s own, past results. That’s the ultimate apples-to-apples comparison. Checking how your NPS score stacks up against legendary companies might be a fun exercise, but it definitely shouldn’t serve as your primary indicator of customer experience success.

8.  Use NPS to drive cultural change.

Companies that treat Net Promoter just as a performance metric are bound to be disappointed with their NPS implementation. Net Promoter’s value transcends performance measurement.

When rolled out correctly, Net Promoter becomes a catalyst for cultural change, because it helps create a shared organizational vocabulary (Promoters, Passives and Detractors) around customer experience excellence. It helps management to better articulate the reaction it wants to elicit from customers, and it equips staff with a behavioral shorthand that helps shape their conduct during customer interactions.

Importantly, driving cultural change through Net Promoter means that NPS education, communication and reporting must target a wide audience. If it’s only a firm’s research team that is schooled in Net Promoter, if it’s just the senior executives who see the NPS results, that necessarily limits the cultural influence (and upside) of the program.

See also: Why Isn’t Customer Experience Better?  

9.  Don’t rush to tie NPS scores to compensation.

Many companies think that the ultimate testament to the seriousness of their customer focus, the quintessential proof that executives’ emphasis on customer experience is credible – is to link their compensation to Net Promoter results.

This can be a really bad idea, on many levels. For example, if the organization doesn’t yet have a clear handle on the inherent variability of its Net Promoter score, then managers could take a pay hit (or get a pay bump) for statistically meaningless fluctuations in NPS. In addition, tying NPS to compensation can encourage unseemly behavior, such as encouraging staff to engage in “score begging” or encouraging managers to make decisions that maximize NPS at the expense of other important measures (such as profitability).

We’re not suggesting never tying NPS to compensation, but it’s a step that should be taken very carefully. In addition, there are many other tactics – short of the compensation link – that companies can employ to focus their staff on Net Promoter and highlight it as a key organizational metric.

10.  Use NPS to manage your business, not just measure it.

This is perhaps the most important difference between companies that truly leverage the power of Net Promoter versus those that use it to create good annual report copy.

In its purest form, Net Promoter isn’t just a measurement tool, it’s a management tool. What’s the difference? In the former case, NPS is used primarily to gauge performance; in the latter, it’s used to improve performance.

The key to making Net Promoter a management tool is to ensure that the collection, evaluation and follow-up on NPS data is institutionalized throughout the whole organization (and not just relegated to some market research team).

Every manager should rely on Net Promoter to provide continuous insight into customer experience quality, to help inform short- and long-term business improvements and to reveal specific incidents of customer dissatisfaction that need to be addressed and remedied. That approach (typically referred to as the Net Promoter “closed-loop process”) is a cornerstone of any successful NPS program.

You can find the article originally published here.

In the healthcare industry, the strides from machine learning and artificial intelligence have been exciting. And because the nature of underwriting in healthcare relies so heavily on member information and huge volumes of data, the potential of leveraging AI and machine learning in determining underwriting risk cannot be ignored. What could make the equation for a better risk score even more compelling? The answer lies in clinical member data that has been enhanced with technology and expert clinical analysis, then made into actionable insights.

Group health plan underwriting can be conducted and risk-assessed with medical and pharmacy claims, especially if three years of data are readily available. However, the results begin to get murky when underwriting is applied to groups where claims history is not available. In this case, underwriters use demographics, actuarial tables, prescription transaction history and self-reported data for pricing health plans, understanding that these data sets may have their limitations. There is risk, if you will, of premium being mis-matched to risk – and this can affect profit greatly.

The Benefit of Incorporating Clinical Member Insights

Lab data in aggregate can be an impossibly cumbersome asset because in its raw state there is no standardization. In fact, there is no standard even within the same lab testing organization. It’s why Prognos saw an opportunity and took on the effort of bringing together clinical data sets from numerous lab testing organizations. We standardize large amounts of disparate, fragmented and inconsistent data, then apply AI, machine learning and deep domain expertise at scale to produce meaningful analytics solutions. The insights are tailored to use cases across healthcare and life sciences. In the case of underwriting risk, the opportunity to enhance member insights with their actual clinical history and likely health trajectory cannot be overstated. It’s a change well worth exploring to improve risk accuracy and better match risk to premium pricing.

How Clinical Lab Insights Are Predictive

The Society of Actuaries reported that, “as healthcare costs have continued to escalate over the past decades, tools that can be used to predict, explain or understand these costs have become correspondingly more important.”

This brings us back to the notion that AI-driven insights can greatly enhance and streamline analytics while also offering predictive capacity. Incorporating analytics-ready clinical member data can: 

• Eliminate the need for simplistic linear regressions and average-driven cost allocations 
• Account for non-obvious, non-linear intersections and insights (geographies, comorbidities, disease state progressions)
• Incorporate more recent, definitive facts about individuals’ health status as well as a thorough retrospective view to better predict state of health and trajectory

As we standardize and enrich clinical diagnostic data,  we’ve also identified the opportunity to support underwriting by predicting group risk. We’ve developed a secure and cloud-based Underwriting Risk Predictor solution being tested by some of the top five payers to more accurately price group health plans without prior claims history. After we receive a de-identified employer census, we match it to our clinical registry of more than 250 million lives. Predictive analytics can be applied again to produce a mid-year risk score prediction for each group and per-member-per-month cost. 

See also: Untapped Potential of Artificial Intelligence  

You focus on producing the most accurate risk assessment to deliver a profitable bottom line and to drive better outcomes for your members. AI can provide a predictive solution that may propel your efforts and deliver measurable ROI.

One of the happiest, most inspiring headlines I’ve seen in recent months read – “Nationwide announces five-year, $160M Future of Work investment.” Finally, an insurer was putting a stake in the ground, announcing a major commitment to address a looming and significant reality – the nature of work is changing. The article addressed the “how” of the initiative with phrases such as “reskill and upskill,” “future-ready skills” and “technology-enabled.”

A recent SMA research report, 2020 Strategic Initiatives: P&C Personal Lines, shows that personal lines insurers are strategizing and deploying around transformative technologies such as AI/ML, IoT and blockchain. Success is not going to happen without the supporting skills, so there is a clear need that must be addressed. Nationwide is stepping up, and that is very important.

But there’s another angle to this. It’s not just about technology skills training. It’s also about restructuring the workforce. If one believes that it’s all about the technology – technology for technology's sake – then going about skill training alone is just fine. But I have met very few people who believe that – including at Nationwide, as explained in press releases and articles. Given the enormity of the changes in motion related to customer and agent expectations and digital transformation, technology skills alone will not suffice. Personal lines organizations need to look at their business structures from an outside-in, consumer perspective, as well as traditional inside-out, operational perspective, and then reimagine business units and operational outcomes.

Make no mistake; this is very hard to do. SMA survey results show that 23% of personal lines insurers are not addressing the structure of their workforce at all. The percentage of insurers that are strategizing around this topic has stayed relatively the same for several years – again confirming that it is very difficult to move beyond tradition and culture and view the organization through a new lens. One of the things that makes this challenging is that the industry has historically reorganized itself around the goal of ROI, i.e., put in a new system and offset the cost through staff reductions. Unfortunately, this generally results in shuffling and redistributing work to remaining staff for quick pay-back versus actually realigning and reimagining processes.

See also: Emerging Technology in Personal Lines  

Many personal lines insurers are in the enviable position of having newly modernized core systems, and opportunities for operational efficiency abound in this environment. But modern core systems are also a launchpad for workforce modernization. Paper-based workflow walls can come down and claims organizations can reorganize around improving service. Underwriting and product development can unify around insight-driven new market opportunities with personalized coverages and services, and actually deliver in weeks versus months and years. Most importantly, reskilled and technology-empowered employees can focus on complex business needs and not waste valuable time on ticking workflow boxes. While it may seem like an over-worked topic, the retiring baby boomers are creating an urgency around workforce restructuring. There has been a long ramp-up to the tidal wave of retiring skill sets, but the moment is at hand. And there is no time to waste.

The new workers entering the workforce will not sit in the same seats as those who are leaving. Fortunately, that is not necessary if personal lines executives take the opportunity to align customer and digital strategies with transformational technology adoption in innovative new ways within organizations that are structured for the new reality of continuing change. Every insurer will have a different price tag to achieve this state, but it will be money well spent!   

If there’s one thing management gurus like to do early in a year, it’s make predictions – and customer experience (CX) experts are no different.

But business predictions are like weather forecasts. Everybody consumes them, but rarely does anybody look back to check their accuracy.

Back in 2014, for example, 89% of companies surveyed predicted that – within two years – they’d be competing mostly on the basis of customer experience (Gartner). Yet, here we are five years after that prediction, and there’s widespread stagnation in customer experience quality (Forrester Research). Overall U.S. customer satisfaction is at the same level it was a decade ago (American Customer Satisfaction Index).

In study after study, companies say they’re going to increase their focus on customer experience. At the same time, CX gurus issue rosy annual prognostications about how that enhanced focus will manifest itself – such as in these examples, culled from prediction lists over the past couple years:

• Companies will create more customer-centric cultures, using new recognition systems and training programs.
• Companies will use technology to digitally transform the customer experience.
• Companies will go the extra mile by empowering their employees to surprise and delight.
• Companies will use robotic process automation to speed customer transactions.
• Companies will leverage AI to automate customer interactions without making them feel mechanical.
• Companies will break down silos and align customer experience strategies across functional domains.
• Companies will use predictive analytics to create more personalized customer experience.
• Companies will overhaul their voice-of-the-customer programs, relying more on text analytics of unstructured content, such as survey comments, call center recordings, social media conversations and online chat sessions.

However, despite all the expert predictions, despite all the pledges to focus on CX, the needle has not moved much for many companies. The disparity can’t just be attributed to heightened customer expectations, as even objective measures of CX maturity indicate that the vast majority of organizations lag in this regard (so much for that increased focus).

The problem is that many companies pay lip service to customer experience, pursuing it to create good annual report copy, rather than to drive fundamental changes in how they do business. When push comes to shove, CX initiatives are often subordinated to other priorities and starved for funding, according to the Qualtrics “State of Customer Experience Management” report.

That’s an unfortunate outcome, given the compelling evidence available that illustrates the ROI of a great customer experience (as well as the penalties exacted for a poor one). 

See also: The Best Boost to Customer Experience  

This is the reality in today’s business world, though, which is why there’s one bold customer experience prediction that actually has a high probability of coming true this year. That prediction is simply this: Not much will change.

Most organizations will lumber along, spinning their wheels on customer experience, discussing it endlessly, executing on minor improvements that amount to corporate window dressing, just so someone can “check the box” on their next performance review.

Most organizations will continue their navel-gazing, focusing inward on structural changes, role shifts, political infighting and inter-silo strife.

Most organizations will lose whatever little momentum they may have gained around customer experience improvement, as top executives with “Organizational Attention Deficit Disorder” spot some shiny new object that becomes the next initiative du jour.

Granted, this is quite a pessimistic outlook. But the fact is, most organizations are unremarkable, and are destined to stay that way. That’s precisely why, when a company actually does break from the pack and deliver a differentiated customer experience, it turns heads.

So, rather than obsess over what everyone else will be doing (or what the CX gurus say everyone else will be doing), focus instead on what your company can do to avoid the fate of mediocrity.

See also: How Fine Print Ruins Customer Experience  

Think about how to send a clear, unmistakable signal to the marketplace — and your workplace — that something fundamental is changing. 

A signal that you’re no longer going to do it “like we’ve always done.” 

A signal that you’re disrupting the status quo in your industry. 

A signal that you’re liberating customers from long-simmering frustrations.

A signal that you’re dispensing with the typical CX platitudes, in favor of very tangible and compelling changes that will make a difference in the lives of your customers and the employees who serve them.

It’s disheartening to say that little will change in the state of most companies’ customer experiences next year. It’s not a fait accompli, though.  If you don’t want your company to be among those validating this bold prediction, well then…  go do something bold!

You can find this article originally published here on Forbes.

Many industry executives talk confidently about the opportunities the Internet of Things (Iot) presents, but is it really an exciting opportunity, or is it all hype?

To begin to think about opportunities and threats, a simple operational definition is probably going to help:

The Internet of Things is: Different “things” connected by a network that collect and transmit data; interpret it and then make use of the aggregated information. Those “things” could be everyday items in homes, in workplaces, in vehicles and in public. The technology allows automated responses, as well as remote access and control from around the world.

Some of the many examples of the application of IoT technology:

So, yes, the IoT is a hugely exciting development that creates significant efficiency opportunities for individuals and businesses. As with most new technologies, over the coming years we will see some IoT implementations fail (a few catastrophically). People will become disillusioned. But, over time, there will be more successes, the benefits will start to crystallize and it will be more widely understood.

The application of the technology in the insurance world will also be far-reaching. The IoT will help monitor, detect and control risks. It will allow early intervention in the event of a loss, potentially mitigating further losses, while providing valuable evidence of what has actually happened. However, the increased embeddedness of IoT also exposes new risks: A fault in the hardware, software or firmware of a device could lead to a catastrophic loss -- imagine heart rate monitors switching off, vehicles disabled midway through journeys, ovens turned on when premises are empty.

Insurers must adapt or may become irrelevant

Many insurance executives find the subject stimulating but a little abstract when it comes to changing the way we do business. The impact will most likely be significant (either positively or negatively) whether we embrace the possibilities or wait until we need to deal with the fallout.

There are plenty of estimates on the future number of IoT devices, some more speculative than others, but there appears to be consensus for somewhere in the region of 26 billion by 2020, and growing fast over the following few years. The insurance industry is, therefore, facing an involuntary paradigm shift as clients implement IoT ecosystems in their homes and businesses.

Client needs and the very nature of the risks they face will be changing. Insurers and reinsurers can either be part of the journey that their clients are taking or try to catch up with the new paradigm once the world has changed. With or without an insurer in the equation, these changes will fundamentally alter the insurance products that clients need. Insurers that are prepared for these shifts, working with their clients to design appropriate solutions, will be the winners.

Probably the best-known IoT deployment in insurance is telematics in auto insurance, but new examples are appearing all the time, such as the adoption rate of water sensors to detect leaks or the recent partnership between Lloyd’s of London and Parsyl that places IoT sensors alongside sensitive marine cargo (to monitor temperature-controlled foods, pharmaceuticals or high-tech products).

Even the most advanced businesses can get it wrong, though. It is worth considering how two of the largest technology companies have approached the integration of IoT. Apple and Amazon both sought to capitalize on IoT to capture the home assistant market. Probably the most important factor determining their relative success has been their ability to interact with the wider smart home ecosystem. One of the companies employed "compatibility strategy" that favored compatibility with its own IoT products, while the other was quick to ensure its product would work with just about every smart gadget in the home through its "distribution strategy"…. We will leave to you to judge which strategy was more effective!

The lesson: Those who stick to a closed ecosystem of products that don’t interact with others are going to lose out to those who provide integration with added-value services that go beyond their core offering.

See also: Global Trend Map No. 7: Internet of Things  

In insurance, data from IoT devices will unlock wonderful new approaches to underwriting and claims:

• Live underwriting: An enhanced view of risk through asset performance and usage data. Increased customer engagement, becoming a "risk partner," not just "risk finance." Alternative usage-based propositions. Live monitoring of compliance with warranties. Real-time coverage adjustments based on changing needs.
• Smart claims: Improved visibility of loss events and their proximate cause, but also some element of loss prevention as the IoT stops the loss from occurring in the first place. Quicker responses to events and better early loss estimation. Enhanced loss data and insight for risk advisory. New triggers for parametric products. Reduced need for (and cost of) loss adjusting.

But, we also need to think about this from the client perspective. With more data, clients become more sophisticated. They understand more about their risk than we do and can control much of it. Potentially, the IoT devices can independently prevent the loss from occurring at all. So, with less uncertainty, they need less insurance, and premiums could begin to fall. What they choose to buy could be very different. In short, insurers and reinsurers need to think about how products are designed to meet client needs.

Being left behind by more forward-thinking (and maybe new) competitors is a real risk. However, the good news is that it is not too late. Most insurer-led IoT propositions are still in the proof of concept stage. With limited evidence of a loss ratio reduction, it can be difficult to convince clients, or even our own executive teams, to disrupt business as usual for unproven technology pilots. The lessons learned by those insurers and reinsurers that are experimenting with IoT will help them win. Being late to this party is not really a viable option.

Grasping the opportunities of IoT and the Internet of Risk

While the opportunities may be great, and the threats from outside the industry may be very real, insurers still need to be careful to avoid leaving themselves open to unforeseen exposures. As an example, "traditional" cyber products have focused primarily on data breach, but now they must also take account of physical hazards. Security cameras, conference phones, vehicles and industrial machinery can provide a gateway for determined hackers. IoT terrorism is also a potential concern, whereby the manipulation of physical objects could lead to death and destruction. 

Insurers focused on “disconnected assets” need to evolve their thinking and propositions as the economy moves toward IoT. We will see fewer disconnected assets (each requiring less coverage), while there will be far more intangible and connected assets that require protection. 

Insurers will need to service clients holistically: Few clients operate uniquely disconnected, connected or intangible assets. They will look for insurance partners capable of servicing their needs across their balance sheet (or lifestyle). Limited products are currently available to cover IoT-related exposures; thus, it falls to brokers and insurers to innovate and raise awareness (before clients find alternative risk financing solutions). 

Insurers and brokers must look to identify how the IoT is changing their clients’ needs and help them holistically understand and manage the risks inherent in their business or personal life. Opportunities will be found in several places:

1. New clients — e.g. asset-less, sharing and gig economy firms/individuals, challenger banks, new physical-tech firms, blockchain service providers, cloud and data dependent services, etc. 

2. New risks — e.g. cyber coverage, drones, intangible assets, autonomous vehicles, crypto-assets being stolen, instant supply chains and connected cities etc. 

3. New propositions — e.g. new distribution models including players that have never operated in the insurance world but have access to IoT insights, e.g. Amazon, usage- based insurance, parametric covers, partnerships with different organizations etc. 

These will all continue to evolve, so taking a lead means being as advanced as possible in thinking how IoT will change the insurance world and how these new (and evolving) opportunities can be grasped. However, this cannot be a purely academic exercise. There must be a focus on actions that can drive short-term revenues, while creating a sustainable advantage for the longer term.

IoT complexity necessitates collaboration

A multidisciplinary approach is essential, factoring in many views from experts in several areas. When considering how IoT could change what Aon needs to do and how Aon serves its clients, we use expertise from various practice groups across our insurance and reinsurance operations, including the cyber, digital economy and technology practice groups, but also colleagues like Stroz Friedberg, a leader in cybersecurity in today’s digital, connected and regulated business world. 

But it isn’t only about getting insights from within your business: IoT is such a broad, societal mega-trend that anyone who only has a single-dimension perspective would be having a blinkered view (and almost certainly slightly rose-tinted). Aon Inpoint works with several global insurtech accelerators to find companies supporting innovation, while gaining experience in IoT and insurtech more broadly. An example includes an insurtech with which Aon is exploring approaches to quantify IoT-related cyber-physical exposure.  

Aon has also created Aon Digital Monitor, tracking or capturing proprietary insights from activity across the insurance ecosystem, to complement our extensive network of startups, vendors, investors and expert advisers tracking what people are investing in.  

The bottom line is that insurers and reinsurers shouldn’t try an "in house" solution. In an IoT-enabled future, partnering with organizations that have the necessary skills and knowledge is essential – either directly, or through an organization that is set up already with those partnerships.

See also: 12 Issues Inhibiting the Internet of Things