The California Department of Finance recently wrote a Standardized Regulatory Impact Assessment (SRIA) of the California Consumer Privacy Act of 2018 (CCPA). The SRIA was prepared for the Department of Justice, the primary regulatory body, whose work is hoped to provide some clarity over what remains a confusing array of obligations for most California businesses. The Department of Finance is required by law to do these assessments when the proposed regulation has an economic impact of over $50 million. The Department of Finance went to great lengths to separate the cost of compliance with the CCPA as opposed to the costs generated by possible regulations from the Department of Justice. As to the former, per a letter dated Sept. 16 from the Department of Finance to the Department of Justice, “The SRIA estimates that the initial cost of compliance may be up to $55 billion.” As noted in the report, “Small firms are likely to face a disproportionately higher share of compliance costs relative to larger enterprises.” The definition of small business in the full report appears to be based on an estimate of how many employees would need to generate the revenue necessary to constitute a business as defined in the CCPA. As a result of this calculation, it is estimated that a “small” business would have at least 250 employees. This analysis, however, does not take into account the impact of the CCPA on a small business that acts as a service provider to a business but does not itself qualify as a business under the CCPA. Using the Finance methodology, this would mean any service provider with fewer than 250 employees that receives personal information from a business. These service providers will need to respond when their business customers start asking for revisions in contracts to meet CCPA obligations, and to show they are otherwise compliant with the obligations of service providers under the act. See also: Keys to California’s Consumer Privacy Act   The report also notes, looking to the experience of the European Union (EU) and the General Data Protection Regulation (GDPR): “Conventional wisdom may suggest that stronger privacy regulations will adversely impact large technology firms that derive the majority of their revenue from personal data, however evidence from the EU suggests the opposite may be true. Over a year after the introduction of the GDPR, concerns regarding its impact on larger firms appear to have been overstated, while many smaller firms have struggled to meet compliance costs.” The Department of Finance makes the assumption there will be a fairly static compliance environment after Jan. 1, 2020. That may not be a correct assumption. Alastair Mactaggart, the father of the California Consumer Privacy Act of 2018 (CCPA), announced recently he will be going back to the ballot in 2020 with the cleverly named California Consumer Privacy Act of 2020. At least part of the motivation behind this, according to Mactaggart, is to keep the legislature from weakening privacy protections – a much more difficult task when a law is enacted as an initiative measure. Following his initial filing with the attorney general on Sept. 25, Mactaggart filed a slightly edited version of the proposal – now titled the California Privacy Rights and Enforcement Act of 2020 (CPREA) – on Oct. 2. The new moniker for this may have something to do with messaging in anticipation of a campaign next fall. While the business community is attempting to negotiate with Mactaggart and his coalition in an effort to ameliorate the impact of this initiative, in the rapidly changing world of technological innovation nothing is static. The initiative process in California, however, is public process cast in quick-set concrete. Regardless of what is put into this ballot measure regarding future amendments in the legislature, the proponents of this law will invest in themselves the prerogative to decide what is “in furtherance of” their grand scheme. Their self-serving bureaucracy, the California Privacy Protection Agency (CPPA), is an effort to create a semi-autonomous state within but unaccountable to any of the apparatus of state government. While disdainful of the legislative process, this agency would be governed by a decidedly political five-member panel, two appointed by the governor, one by the president pro tem of the Senate, one by the assembly speaker and one by the attorney general. No mention of the insurance commissioner — just in case you missed that omission. See also: In Race to AI, Who Guards Our Privacy?   Regardless of the fate of a ballot measure on privacy, we are now in an environment where multibillion-dollar compliance costs are table stakes. For those who can afford it, it will be business as usual, even if slightly disrupted. For those who cannot, compliance is a death knell to innovation. Promising technologies that are dependent on personal information will be stifled unless Big Tech can grab it and afford the cost of putting such innovations to market. This affects all aspects of California’s economy. But when Big Government and Big Tech are the only easily identifiable winners in a public policy debate, can we expect anything more?

I recently had an opportunity to experience one of the benefits of pressing pause. While presenting to over 30 Chinese non-English-speaking executives, I learned when to pause for my translator. She was excellent and taught me how long to speak before pausing for her translation. (It’s longer than you might think, as she needed context to translate meaning not just words). The context of my talk was a visit by a leading Chinese insurer, to Cass Business School. To aid the executive education, that prestigious business school invited a number of leading thinkers (plus me) to present to them. Thanks to an invitation from our regular guest blogger, Tony Boobier, I was asked to educate the group on data science and customer insight. It was a good opportunity to build on the presentation that I recently gave to a non-technical audience at the University of South Wales. Anyway, the point of this blog is that I experienced a couple of benefits from needing to pause regularly. So much so that it got me thinking about the wider principle of pausing, prompting me to recall three aspects of leadership that can benefit from more intentional pauses. Benefit 1: Pause when speaking (for insight and hearing) The first benefit I want to highlight is the one I experienced when speaking to that audience. I mentioned when reviewing an excellent book for publc speakers that I spend part of my working life as a speaker. I could definitely improve, but attendees tell me they enjoy my talks and benefit from them. However, being forced to pause for my Chinese translator improved my effectiveness in a surprising way. First, I experienced so much more time to think. Not just remembering what I was planning to say next, but enabling me to reassess what was most important or relevant given context. Second, I spent more time observing the audience and having time to think up questions or tailor my content as a result. A couple of times, I even had new insights or ideas as a result from this greater reflection. See also: Key Difference in Leaders vs. Managers   At times, it was almost like the benefit of spending most of your time listening as a leadership coach. When you do speak, you are much more confident that what you will say is relevant for your audience. Without a translator, such long pauses would seem stilted in a conversation. However, I’d like to encourage us all (including me) to pause more in our conversations. Work at developing your ability to pause and just listen for understanding, rather than spending all the time you are not speaking just thinking about what you will say next. Benefit 2: Pause for self care (to have more energy for your work) Reflecting on my speaking experience, I ruminated on the other ways pausing can help my in my life. I recalled enjoying reading “In Praise of Slow,“ and although I think there are flaws in Carl’s argument, it’s a useful challenge to assuming fast is better. One aspect of this is the need to balance a modern obsession with “fail fast” with a valuing of taking time to think and hone your craft. As I shared when reviewing Cal Newport’s seminal book, it is well worth analysts protecting time for Deep Work. That includes pausing distractions. Another spin on this is the need for more focus on self-care. Too many leaders have bought into the Elon Musk myth of workaholic overwork being viable. In reality, we can neither cheat our need for sleep nor create more time. Most of us will be more productive by managing our energy, and part of that is taking more pauses. I’ve shared before on the importance of you taking a complete break from work when on holiday. A great build on that blog post is this podcast episode from Michael Hyatt. In this recorded live talk, to over 3,500 leaders, he explains the critical need for self-care and how busy leaders can pause. Benefit 3: Pausing from your current role (to prepare for your career) Reflecting further, I also remembered the importance of another type of career break. That is changing the work that you do. A number of times in my own career I have discovered it is powerful to pause one role, to try something else. Having spent the first decade of my working life doing almost every different IT role, I had the opportunity to pivot and try a role in underwriting. My line manager at the time, William Buist, encouraged me to see past traditional barriers and discover that I could master reinsurance recommendation. Since then, I’ve had opportunities to change career direction a couple more times. From underwriting to marketing, from data analysis to building a holistic customer insight team including data science skills. Then five years ago, taking the risk of leaving corporate life to set up my own business. Each change has been worthwhile and built on past different perspectives to improve my effectiveness in each new role. I’ve also seen the same effect in people who work for me. One man left my team to workforce a couple years within a marketing proposition development role. He later came back to a leadership role in our analytics team much more capable as a result. See also: Customer Experience Leaders Widen Edge   Could a change of tack for your career ship actually help you be stronger at your longer-term career goal? How could you pause? So, as always, my final thoughts turn to you, dear reader. If you buy my argument that pausing can bring you many benefits, how could you pause? In your leadership or working life, what are you doing on autopilot? What are you doing fast but mindlessly? Is that really efficient use of your skills and you as a human being? I encourage you to pause right now and take some time to think about your next pause. What will it be?

I have had the opportunity to ask many former Division I college athletes and a few professional athletes how much time they spent practicing. Plenty of articles exist that detail the many hours professional athletes endure practicing, studying film, lifting weights and doing stretches. Professional actors are similar in how they go through hours and hours of practice, readings, run throughs and vocal exercises. An interesting measure is how many hours of practice go into each hour of actual game time. Depending on the sport, the ratios I have calculated and seen range between five and 15 hours of practice and preparation for each hour of actual game time.

Professionals spend a tremendous amount of time practicing and preparing. When I ask producers how much time they spend practicing and preparing per hour of actual sales and client meetings, the answer is usually the opposite. They spend maybe one hour preparing and practicing for every 20 hours of sales and client meetings.

Some producers tell me they do not have time to practice, and, besides, professional athletes are paid much, much more, and the compensation delta is even higher between professional athletes and amateur athletes. Professionals make time to practice so they can earn more. I have found the same effect to be true with producers. True professional producers spend much more time practicing, even reading forms (preparing), than amateur producers.

See also: Do Consumers Trust Their Agents?  

A good example of this practice that is always amazing to me is how so many really good professional agents with big books find the time to use coverage checklists with their clients. Yet, in the same agency, other producers do not use checklists; their excuse is always, always the same: Their clients will not give them the time, or they do not have the time. How is it that a producer whose book is three times or even 10 times larger has the time and finds clients who give him or her the time to go through coverage checklists, while those producers with small books never have the time to act professionally? What a weird phenomenon!

Professionals in any occupation always find the time or make the time to practice and study and prepare. People who want to be seen as professionals, but are really just pretenders, never seem to find the time or make the full effort required to attain the skills necessary for success. These people want the recognition and the compensation, without the effort. Nice work if one can get it, and many insurance agents have succeeded doing just that for a long time because consumers do not know what they are buying until they incur an uncovered claim.

The industry is changing, though, and technology is going to reduce the compensation of amateur agents severely because, frankly, who needs an amateur insurance agent? Do companies need to pay full commission to amateurs when they can achieve the same transactional sales results at actual amateurs' wages? That math is pretty easy to figure.

Why should a consumer pay the same price for an amateur agent as they pay a professional agent? In fact, why should a consumer pay an amateur agent anything?

A professional agent, a truly professional agent, is someone who puts in the hours to learn and know the coverages in depth. A professional agent is someone who takes the time to work with clients to identify their needs, and actually does this every year for every renewal. At the very least, the agent makes a genuine effort to meet with clients at least annually to go over their needs, changes in coverages, changes in exposures and changes in their lives and businesses.

Professional agents do not just "BOP" every account. They actually understand what coverages in a BOP need enhancement to provide their clients with the coverages they truly need. An excellent example of an amateur agent is when a producer tells a client that he has automatic cyber coverage in the BOP. At best, such an agent might qualify for flag football.

See also: Changing Point of Sale for Insurance  

Is this a harsh statement? Not really, because it is reality, and that agent can change reality by actually practicing and preparing and learning the coverages. These situations are fantastic examples of people being in charge of their own destinies. They can be a pedantic peddler of insurance, be lazy really, or they can endeavor to practice, to study, to prepare and to become a true professional who serves a vital purpose and protects their clients' true well-being. The choice is completely yours, but the idea of actually being a professional while hardly ever practicing and preparing is dead. No more pretending.

Recently, I read this article from a venture capitalist: “Can Insurtech Reach Escape Velocity?“ The following passage caught my eye: “In a world where we can summon a car, or our favorite Mexican restaurant’s veggie burrito, at the touch of a button, shouldn’t we be able to get insurance cover for our homes by just providing our address?” This question was reminiscent of one I blogged about two years ago when a “top insurance executive” asked, “If people can buy paper towels on the internet, why not insurance?” The answer to the burrito question is: No. Entering into a complex legal contract where significant assets and income are at stake is not even remotely similar to getting a ride to the airport or ordering delivery of a burrito. I got a homeowners quote from one of these new startups that, according to this article, “gets it,” simply by providing my address. According to the “big data” source, the square footage of the home was 1,200 sq. ft. less than it actually was. Think that might throw off the dwelling coverage limit? Yes, by about $180,000 in this case. A year later, I got a quote from the same startup, and the living area was over 1,000 sq. ft. MORE than it actually was AND the coverage limit was STILL underinsured. I was told for “other structures” the insured had 10% of the dwelling policy limit. But apparently the startup was not aware that one of those structures, a $40,000 boat dock, was not actually on the “residence premises” (it was on Army Corps of Engineers property) and, therefore, according to the insurance contract was uninsured. See also: Is Insurance Like Buying Paper Towels?   The startup didn’t ask about any activities the residents were engaged in like serving on an HOA board and a child’s school athletic booster club, which presented exposures that can be covered by some insurers with a policy endorsement. No umbrella coverage was offered. And the list goes on. People who know NOTHING about insurance get all excited about the super cool technology, speed and convenience. That excitement lasts until there is a six-figure (or more) uninsured loss that could have been covered by engaging in proper exposure analysis beyond simply a street address. Big data is one thing; Big BAD Data is another.

After three intense and exhausting days at InsureTech Connect last week, I’m a little conflicted. It was quite exciting. And there are many fascinating companies and ideas that are truly transforming our industry. But then King Solomon’s words (from the Bible) come to mind – “There is nothing new under the sun.”

I don’t mean to express negative sentiment regarding the state of insurtech and innovation in insurance. Virtually everyone is talking about AI/machine learning. Digital transformation is high on the list of activities and discussions. New options for distribution, the evolution of ecosystems and the continuing progress of the new era of computing are compelling topics. And the potential and progress of transformational technologies like the IoT, autonomous vehicles and wearables fueling But I still wonder whether I saw anything fundamentally new at ITC or whether we are just seeing increasing maturity in the insurtech movement.

There were a few announcements and companies that raised some eyebrows, to say the least. Here is my list of those that the industry should take note of:

1. USAA and Google partnership. These companies have collaborated to create computing visioning/machine learning capabilities for auto vehicle damage assessment. As far as I know, this is the first instance of Google actually developing or co-developing a purpose-built insurance solution. Sure, the company tried Google Compare and has invested in Applied Systems. But this is a case of Google leveraging its deep machine learning capabilities to provide a capability specific to insurance.
2. Mitchell/Qualcomm smart glasses. Augmented reality for use by repairers at auto collision repair facilities is a very cool solution from two well-established, incumbent tech companies, demonstrating that there is substantial innovation coming from these corners (in addition to the startups).
3. The spread of great use cases. Although not new, we are seeing many examples of innovative uses of machine learning, aerial imagery, the IoT, new digital brands, interesting products and more. In past years, there might be one or two examples to cite in a particular line of business or business area, but now there are many insurtechs, incumbent tech companies and insurers that can cite multiple examples of business value delivered.

See also: Can Insurtech Reach Escape Velocity?  

So, I suppose any evaluation depends on your definition of “new.” I prefer to think of our progress as the evolution and maturity of ideas and technology solutions that have been around for a while. But now they are real. And that is a great thing for the industry.

The last few years have been revolutionary for insurance in some ways, but based on the trajectory that I am seeing at ITC and elsewhere, there is tremendous innovation and transformation yet to come. This industry is likely to look quite different a decade from now.

Insurers have a right to air their opinions. Insurers have the freedom to advance their opinions—to advertise their opinions—and criticize hospitals for rising healthcare costs. But insurers should not disguise their opinions with the veil of impartiality, as if they don't have a commercial interest involving healthcare reform. What should be obvious to readers, what is obvious to readers of this site, is less obvious to visitors of other sites; because what people see elsewhere looks more like a newsletter than an ad or a paid piece of advocacy; because insurers risk compromising their credibility by applying a cosmetic touch to a complex issue, one that is a touchstone—more like a lightning rod—for debate, possibly civil; disagreement, probably contentious; and division, definitely passionate and uncivil. If insurers want to avoid that scenario, and they would be wise to do so, they should say what they mean instead of saying what they want in a misleading way: News is for newsletters, and opinions belong on the editorial page. To breach the wall between the two, to pretend to respect the wall while trying to dismantle it, to weaken the wall while claiming to sponsor it, while running sponsorships that look like acts of reporting but read like a call to action—to do these things is to impeach the reputation of the insurance industry. I write these words out of concern for the insurance industry. I write these words to caution insurers, not condemn them, because my concern is for the honor and integrity of the industry as a whole. We cannot afford a loss of confidence—a vote of no confidence—toward an industry of such size and significance. We cannot afford to aggravate an already cynical public by having insurers harm themselves, unintentionally or not; it is difficult if not impossible to regain the trust of consumers. Remember, too, that clarity is better than agreement. That is to say, it is better to state an opinion; it is better to clarify an opinion; it is better to emphasize a point of distinction, to express a point of view—in plain language—than it is to cheapen the currency of communication. See also: Important Perspective for Insurance Agents   More to the point, we cannot afford to further devalue the power of words. Not when we suffer from a poverty of trust. Not when we suffer from a wealth of inflated words and lackluster deeds, from a lack of action by people in positions of trust. Not when we do not trust what leaders say or do. May the insurance industry accept my words with the openness by which I offer them. May insurers accept my advice instead of attempting to avoid it, because criticism is unfair—criticism of hospitals is unjust—when news about hospitals reads like commentary against hospitals. For the sake of insurers, may candor prevail. For the sake of everyone, may clarity be the prevailing idea that governs the writing and publication of newsletters.

Many brokers take a generalized approach to their business. In a competitive field, the thinking goes, it’s best to be able to cover as many industries as possible. However, this line of thinking may be doing more harm than good, as specializing can in fact greatly improve business as a broker. Specializing within one industry may provide a number of benefits for a broker’s sales and marketing tactics, such as internal development of expertise on certain products and gaining a reputation for niche knowledge. Sales and marketing Clients increasingly expect tailored services across industries, and businesses are responding. A 2016 McKinsey survey found 46% of businesses surveyed said most accounts are managed by individuals focused on a specific industry. By 2021, respondents said they expect that number to climb to 66%. When insurance agencies or independent brokers specialize, they’re able to market specifically to what needs exist, based on first-hand observations, and tailor sales tactics to what they know to be most important to the industry. Catering to clients’ needs in this way builds key relationships. For example, if a broker specializes in insuring cannabis businesses, people will get to know the broker by face and name at industry events, and the broker will become ingrained in the industry. Product expertise In addition to gaining more clients through word-of-mouth recommendations, insurance professionals who specialize in a given industry will be able to develop product expertise. Knowing the ins and outs of an industry is essential to speak with authority. This establishes credibility, and speeds up workflow and productivity. Doing something for the first time takes time, but, by the 10th time around, you’re able to do almost anything more quickly. And the more quickly you move -- from getting new business and renewal applications completed to building relationships with specific carriers and underwriters -- the more clients you can work into your roster. See also: Agents, Brokers Are Dead? Not So Fast!   Insuring a manufacturer is different than insuring restaurants, which is different than insuring the cannabis industry. Brokers learn that a cannabis distributor needs fire coverage and theft coverage, while a manufacturer needs stronger protection against physical damages to equipment and employee injuries on the job. Finding a niche If a particular business operates largely in the region where you live, you may want to specialize there. Or, if you find yourself better able to connect with clients in certain industries, you can put yourself in contact with those people more often. Different industries have different events, people and methods of operation. You are likely to enjoy certain types of events more than others, whether those are meetups, large networking events or smaller gatherings. If, in addition to talking about insurance, you enjoy talking about tech, small business or law, you can combine outside interests with your work in insurance. You’ll be able to cultivate relationships by showing you’re interested in potential clients’ fields. You'll be able to make those human connections that people value so much. Find a niche, and you’ll be able to talk about the latest news, particular pain points and exciting developments that clients are looking forward to implementing. Potential clients will remember you for being able to talk about more than just insurance policies and not rushing to the sale. See also: How to Keep Humanity in Online Sales   Operating as a specialist as opposed to a generalist gives independent brokers and agencies opportunities to improve business. Streamlining marketing techniques, gaining product expertise and finding a niche, you’ll become an expert, develop stronger client relationships, improve workflow and build your client base.

The best description of last week's InsureTech Connect extravaganza in Las Vegas may have come from an acquaintance who said, "ITC began three years ago as Craiglist, became Tinder and is now something like LinkedIn."

The reference to ITC-as-Tinder may be a bit spicy, but I think he pretty well captured the arc of the conference as it moved from 1,500 attendees in the first instantiation, in 2016, to the 7,000 souls there last week. ITC began in a sort of "help wanted" mode, evolved into a matchmaker for insurtechs and incumbents and now has established itself as a pretty polished hub for those who want to connect about innovation in insurance.

The shift suggests that the industry as a whole is making progress, and I think I saw that on the floor and in my meetings. But don't take my word for it. Hear from Guy Fraker, our chief innovation officer, who was in the thick of things more than I was, including as moderator of a panel discussion. Here are Guy's observations about industry themes, the most interesting companies he saw and the best advice from his panel:

"The overall quality of innovation in the industry has empirically improved. This year, when a carrier approached me [Me: Conferences are a great place to get free advice from Guy.], it was with a specific issue. 'How do I get unstuck?' 'How do we do this one thing?' In past years at ITC, the carriers would say, 'I'm not sure about this whole innovation thing. Is insurtech going to go anywhere?'

"My biggest concern is that we still have too few companies looking at all this through the lens of the customer. They think about making more money, being more efficient and improving distribution. But they really need to figure out how to become a company that they'd personally like to do business with. [Me: I'd add that carriers still seem to be ignoring some low-hanging fruit even on the efficiency side. An executive told me he thinks that 80% of payments to customers are still made via paper check—a great way to inconvenience customers while inflating costs.]

"The quality of the early-stage companies is definitely higher. They're more seasoned. They have a deeper understanding of the industry. There are a lot of startups with good specs for products. 

"One of the most interesting companies I visited with was Plnar, which lets you use your phone to take a short video of a room and then calculates all the dimensions. The scary but potentially really powerful part is that the video captures all your stuff, which Google and Amazon would be more than happy to use optical recognition to sort through, giving them massive amounts of data on who owns what where.

"There's also no way to ignore the miles-ahead position that Tim Attia has put Slice in as a legitimate go-to-market engine for carriers that want to introduce products quickly.

"We could use something similar for startups. But there is a new trend that may help: tech brokers. They don't have a physical incubator, and they don't invest money like venture capitalists, but they vet companies in person and then go try to find a match, whether an acquirer, a partner, an investor or customers. Kobi Bendelak is certainly doing that at InsurTech Israel for startups there, and others are popping up. There's even a new group in Brooklyn.

"Here's the one thing that hasn't changed: At ITC, as at all the other conferences where I speak, everybody hates Lemonade. Everybody. They must really be on to something."

Cheers,

Paul Carroll
Editor-in-Chief

For insurers to most effectively understand flood risk, they must have access to data that provides a full picture of the hazard, including the different flood types that might affect a property: fluvial, pluvial and storm surge. Although it may seem that flood is just flood, different types can produce various impacts on a property, causing different levels of damage. Fluvial, pluvial and storm surge: Why it matters Much of the U.S. is prone to both fluvial flooding (when rivers overtop their banks) and pluvial flooding (when water accumulates across the surface of the ground as a result of heavy rainfall). However, many coastal regions also experience storm surge flooding, which is a result of increased sea levels caused by weather events. Storm surge flooding is extremely damaging due to the salinity of the water, while pluvial flooding is typically cleaner and quick to recede, likely resulting in lower-cost claims. Without a view of these different drivers of flooding, insurers cannot understand the full exposure to their portfolios or fully engage with the private flood insurance market. Use case: Jacksonville, Fla. The need to understand all the drivers of flood can be illustrated using a residential property on 2nd Avenue, Jacksonville, Fla. Jacksonville is one of the five most vulnerable cities to hurricanes on the U.S. East Coast and at high risk from flooding, experiencing widespread storm surges and flooding during hurricanes Irma and Matthew. The residential property shown in Figure 1 originally fell into a FEMA Zone X (designated as minimal flood risk). Figure 1: Contains data from the FEMA National Flood Hazard Layer. However, when we look at its location on the JBA flood map, we can see some differences in analysis. The JBA flood map identifies this location as at very severe risk to flood (Figure 2, below), from both fluvial and storm surge flooding, whereas using FEMA data alone would not account for either flood type or differentiate between fluvial and pluvial flood. Accessing data sources in addition to FEMA helps provide a more comprehensive understanding of the risk. Figure 2 The complex interplay between flood types The risk is particularly high for hurricane-prone areas like Jacksonville, where storm surges often coincide with inland flooding. It’s important to represent this complex interplay during the mapping process instead of tackling each flood type separately. JBA’s storm surge mapping has been developed in partnership with leading hurricane modelers Applied Research Associates, ensuring that hurricane activity is fully accounted for. Additionally, surge data has been used to modify JBA’s inland flood mapping process to reflect the fact that, during a hurricane, rivers can’t flow out to sea as they can in normal conditions. Flood waters then back up, exacerbating fluvial flooding. For insurers to obtain a complete understanding of the hazard, flood maps must fully represent this relationship. Even with FEMA recently re-mapping the area as a FEMA A Zone, demonstrating that the area is at risk to flood, the drivers of the flood are not clear. As such, underwriting against the FEMA map alone could misrepresent the insurance coverage required. See also: FEMA Flood Maps Aren’t Good Enough   It’s clear that having a view of the different drivers of flood risk is vital for effectively understanding and underwriting the risk, especially in areas where hurricanes can be a major source of flood-driven losses.

Independent insurance agencies (along with carriers, brokers and other insurance firms) are going through digital transformations. They’re moving from (or trying to move from) a paper-based, process-focused insurance experience to a technology-driven, customer-facing insurance experience. We know the reasons:

• Demands by customers for a digital insurance experience.
• Agency need for greater ease of doing business.
• Competitive pressure to increase speed and accuracy.
• Carrier demands for greater productivity.
• Massive insurtech investments targeted to reinvent distribution, underwriting or claims.
• An emerging workforce that was raised on digital (not paper) experiences.

You could add to this list. But the key question is: Can there be a lasting digital transformation without an education strategy to support it? We hear discussions about digital transformation around water coolers and from convention stages. A digital transformation of customer experience and financial performance can make or break agencies, brokers and carriers alike. I’d like to take on several questions related to learning and digital transformations. I am passionate about education and firmly believe it will be the differentiator among insurance firms navigating a massive wave of technological change: Is it possible to create a learning culture while in the throes of transforming the operations and workflows of an agency to a digital platform? To be effective in the long term, insurance leaders must create a culture of learning. Education is the most effective tool to help a firm and its people adapt and improve. In fact, a transformation is the perfect time to commit to a learning culture. Creating an environment in which learning is valued and individuals are supported as they master new skills is a sure-fire route to success, both for the organization and the employees. Leaders must commit to helping their teams learn new skills to succeed. In my experience working for a national member organization of technology users, I see, time and again, successful change happening when learning and developing new skills are the standard. See also: 3 Phases to Digital Transformation   How can leaders empower their employees in the midst of a digital transformation? Employees must first be included in the transformation process —starting at conception and continuing to completion. Successful organizational leadership involves key team members in every step of decision-making. Gone are the days when the boss buys software, then presents the office manager with the manual and the command to make it work. Instead, when leaders partner with key employees early in the process, the team can look for roadblocks and challenges — and minimize their impact. No change comes without conflict. But waiting to confront challenges doesn’t make them easier to overcome: Instead of saving time by involving staff early, you’ve guaranteed chaos when the time comes to introduce the concept. That chaos saps the excitement and energy that should surround a new opportunity and replaces them with angst. Leaders need to clearly communicate the rationale for the change — to help everyone understand why, for example, the new software is needed, how it can improve daily workflows and how it can create a better customer experience. Then, it’s vital to find out what is most important to each team member affected and give him or her information to understand and embrace the solution. And while there might be doubters, naturally, there also will be raving fans among staff. These individuals can rally others to put forth the needed effort. Often, the biggest critic at the outset — if engaged in the process — turns out to be the most enthusiastic cheerleader. And finally, leaders must acknowledge that change takes time. The “factory” can’t be shut down while a process is retooled. The learning, adopting and adapting must take place simultaneously with delivering on the agency’s promise to its clients. Can a more digital work environment (in terms of workflows) actually create opportunities for greater education and knowledge? Having a digital work environment means that barriers disappear or are minimized. The cloud is a great equalizer. No longer is information accessible only to those who know what file drawer it’s in. It’s out there ready to be consumed by anyone who needs it and has the authority to access it. A huge benefit of a digital work environment is the ability to create a knowledge base of agency best practices and workflows — a learning tool that can be a big asset. With such a knowledge base, no matter where or when a firm’s employees work, they have access to the information they need to do their job for the agency and client. This just-in-time knowledge for the task at hand is invaluable not only for learning but for customer experience. What’s more, the inevitable updates are simple — changing a shared resource means the organization is always working from the most up-to-date version of training and reference resources. Also valuable is third-party information such as online help from technology and service providers, often via keyword search. When so many insurance firms are going through transformations, does the firm with a learning culture have a competitive advantage? We cannot expect changes in technology to slow, so it’s imperative to have an information-sharing practice that works across systems, divisions and roles. Yes, there’s a competitive advantage to having a learning culture in an insurance firm, especially when so many insurance firms are going through transformations. A workplace that is easy — and even fun — and that lets workers give input and take risks surely holds more appeal for job seekers. It’s not just hiring, though, that’s affected by a learning culture. Being agile and informed is a competitive advantage for any insurance organization — not only for leveraging technology but also for having the freedom and confidence to habitually peer over the horizon for what’s next. By being able to spin up a new software or business process quickly, your firm is already way ahead of a competitor that takes a wait-and-see approach. Being first isn’t easy. But it does create a window where the competition isn’t. If your staff is already looking for the next big challenge and has confidence in their ability to adopt without sacrificing legacy promises, you’re light years ahead of everyone else. Many people in the insurance industry take pride in their credentials — and they might perceive that those credentials (and their experience) aren’t as relevant in a digital environment, where technology skills might be more front-of-mind. How can an insurance leader deal with how this might affect morale? A successfully implemented digital environment creates space in which work happens effectively. Without the knowledge gained through our industry credential programs, all you have is a technology shell. Without the knowledge of insurance pros defined by the credentials, the digital resource is useless. As an aside: Our industry’s credential process needs an overhaul, too. The industry platforms on which most learning is built are anything but leading-edge, and they’re due for a digital transformation. Too many don’t require continuing education, and those that do — with few exceptions — are lax in assessing whether the individual is maintaining current knowledge. Predict the insurance curriculum of the future. How will it be different? In my view, successful insurance learning experiences will be:

• Easy to access.
• Delivered just in time.
• Taken in small bites.
• Interactive and collaborative.
• Leading to innovation.
• Platform-agnostic.
• Built for an adult learner.

On the other hand, we’ll see fewer:

• Feature-based presentations.
• Long webinars or recordings.
• Topics that aren’t tied to business outcomes.
• Programs designed to check a box rather than advance real learning.

What insurance skills might need to be created or developed for a digital transformation? Insurance professionals with tech savvy will be in high demand. Their skills will enhance workplace efficiency, for sure. But these individuals also will play a key role in developing consultative sales and service approaches as clients and prospects face similar transformations in their business and personal environments. As businesses retool their approach to technology and work to gain the competitive advantage that leading-edge implementation will afford, it’s likely new employees will already have exposure to those emerging technologies. But to help them start their insurance knowledge journey, training and development professionals will be in high demand, What management or leadership skills will be needed for a digital transformation? Business operations, human resources and training are all affected by the speed of adoption required for digital transformation. The ability to develop a strategy that aligns with business goals for growth and efficiency will be essential. Gone are the days of incremental software updates and break-fix approaches to technology and processes. A leader who can see over the horizon and inspire the commitment needed to tackle sweeping change will be a game changer. Hiring individuals already experienced in a digital environment is key to growth. See also: Culture Side of Digital Transformation   Training is the passport for insurance firm leadership and the workforce. Having a plan and good people is only part of the equation. We must be able to guide employees through a learning journey that is formed by just the right amount of support, flexibility and challenge to keep everyone engaged and convicted about the bright future. No matter how important technology is, people are still the center of our industry. As we continue to experience unprecedented attrition of veteran insurance professionals, we must find a way to engage with those just beginning their careers. We must be willing to embrace our differences and give folks the freedom to do more of what they are good at. And we must let go of what worked in the past. The independent agent channel can surge ahead through the effective use of new technologies. We just have to get out of our own way. The future is bright, although a little scary. But what we can’t see or understand today should not stand in the way of marching ahead.