Are you next for white-collar crime? Unfortunately, the answer is likely yes. Karen’s family-owned company prided itself on the loyalty and longevity of its employees. However, when she didn’t recognize a vendor receiving continuing payments, she grew suspicious. When the company’s bookkeeper assured her the invoices, which totaled in the tens of thousands of dollars over 18 months, were legitimate, Karen wanted to believe her. A thorough investigation determined the vendor was a front for fraud, and the “loyal” employee was the mastermind behind an all-too-common crime. Chances are you know a client, colleague or acquaintance who has experienced a similar nightmare. According to the Association of Certified Fraud Examiners’ 2018 Report to the Nations, small businesses – those with 100 employees or less – lose nearly twice as much per scheme to white collar crime as larger businesses, $200,000 versus $104,000. Detecting fraud required a median duration of 16 months. While misappropriation schemes like fraudulent disbursements are the most common, at 89% of occupational fraud cases, financial statement fraud schemes are the most costly, racking up a median loss of $800,000 in 2018 – enough to put most small businesses out of business. The most common forms of occupational fraud were corruption, billing fraud and non-cash theft. Why are small companies more vulnerable? First, most employers trust their people, especially those with tenure. If you think Darla in claims who just celebrated 20 years with the organization is unlikely to be running a false invoicing scheme, think again. Fraudsters who have been with a company longer than five years steal twice as much. Fraudsters who collude with coworkers, a common occurrence, up a company’s losses exponentially. Word to the wise: Don’t trust Darla, and don’t overlook her friend Sheila in accounts receivable! Second, there’s a misplaced assumption that it “won’t happen to me.” The truth is that occupational fraud happens all the time, and most victims don't recover a penny. In 2018, 2,690 cases of occupational fraud were reported globally, costing companies over $7 billion. However, the incidence of fraud is likely much higher. Why? Companies don’t want the negative publicity. In fact, the number of occupational fraud cases prosecuted in 2018 decreased by 16%. Third, many companies simply don’t have the resources to establish a fraud prevention department. As a result, internal control weaknesses are responsible for half of all frauds. This includes a lack of formal controls, no management review of vulnerabilities and no independent checks or audits. Many companies choose instead to rely on employees to “tip them off” to co-workers who are skimming or running scams. While employee tips do work, it’s no guarantee that fraud will be avoided or less damaging. See also: ‘Jobsolescence’: How Big a Threat?   The best defense is a good offense. Formal fraud control mechanisms result in lower losses and quicker detection. Among the most common fraud prevention tactics include employee codes of conduct, external audits of financial statement and reporting processes, audits by internal staff, independent audit committees, management certification of financial statements and fraud prevention training for employees and management. Surprisingly, the best tactics for reducing fraud losses and duration are the least used. Surprise audits result in 51% lower losses and 54% quicker detection, and data monitoring and analysis results in 52% lower losses and 58% quicker detection. Yet only 37% of companies victimized in 2018 had these controls in place. Here is my advice to insurance clients on how best to protect their businesses as well as those of their insureds from fraud: Understand that an external audit is not intended to detect risk. Most accounting and assurance firms clearly state in their letter of engagement that an audit of financial statements is not designed for fraud detection. Any fraud-related services require a separate letter of engagement with a specific scope of services focused directly on fraud detection. Know that neither you nor your insureds are impervious to fraud no matter how delightful your people are. There are six well-known behavioral red flags, such as living beyond one’s means, financial and family difficulties, control issues, a wheeler-dealer attitude and unusually close associations with vendors or customers. Fraudsters typically display one or more of these red flag behaviors. Understanding and recognizing the red flags can help detect fraud and mitigate losses. Select an audit/assurance professional who holds both CPA (certified public accountant) and CFE (certified fraud examiner) designations. CPAs understand the financial side of organizations and financial ratios/relationships, while CFEs understand investigative techniques, fraud schemes, prevention and deterrence. Put these distinct knowledge bases together and your organization will have a powerful advocate for mitigating, preventing and detecting white-collar crime. Conduct a risk assessment. The objective is to identify what makes an organization most vulnerable to fraud. The process involves assessing the incentives, pressures and opportunities that individuals within your organization have to commit fraud and determining those who put you at greatest risk. The assessment also looks at existing controls and their effectiveness and whether the organization is complying with regulations and professional standards. The findings serve as the foundation of the fraud prevention strategy. Develop and implement a fraud prevention strategy that incorporates policies and procedures for: preventing and detecting fraud; educating employees; communicating continually; responding to fraud once identified; limiting damage; punishing perpetrators; and rebuilding organizational confidence in the wake of fraud. If you suspect fraud is present in your organization, contact your CFE immediately. A CFE will help determine whether an issue is actual fraud or a mistake, and how best to proceed. The sooner you engage a knowledgeable CFE, the quicker you can determine fraud, the perpetrator, extent of damages and how best to proceed. See also: Hacking the Human: Social Engineering I close this article by asking the same question I opened with: Are you next? It is my hope that your organization is the next to implement an anti-fraud strategy and not the next victim of fraud. While no system of internal controls can fully eliminate the risk of fraud, well-designed and effective controls will mitigate your risk.

With third-party risks on the rise, there is renewed focus on maturing extended enterprise risk management (EERM) practices within most organizations. This focus appears to be driven by a recognition of underinvestment in EERM, coupled with mistrust of the wider uncertain economic environment. To understand the broader risk environment and provide organizations with the insights needed to effectively assess their risk and adapt processes accordingly, Deloitte recently conducted the EERM Risk Management Survey 2019, obtaining perspectives from more than 1,000 respondents across 19 countries covering all the major industry segments. Results shed light on crucial considerations surrounding economic and operating environments; investment; leadership; operating models; technology; and affiliate and subcontractor risk. More specifically: Economic and operating environment: Economic uncertainty continues to drive a focus on cost reduction and talent investment in EERM. The main drivers for investing in third-party risk management are: cost reduction, at 62%, reduction of third-party-related incidents, at 50%, regulatory scrutiny, at 49%, and internal compliance, at 45%. Organizations urgently want to be more coordinated and consistent in extended enterprise risk management across their organization, as well to improve their processes, technologies and real-time management information across all significant risks. Investment: Piecemeal investment has impaired EERM maturity, left certain risks neglected and hurt core basic tasks. Only 1% of organizations say they address all important EERM issues, and only a further 20% say they address most EERM issues. One of the main reasons for this maturity stall is that organizations are taking a piecemeal approach to investment – they are mostly making tactical improvements rather than investing in strategic, long-term solutions. This piecemeal approach has led to certain areas – such as exit planning and geopolitical and concentration risk – being neglected, and some organizations not doing core basic tasks well, such as understanding the nature of third-party relationships and related contractual terms. See also: The Globalization of Risk Management   Leadership: Boards and senior executives are championing an inside-out approach to EERM, which includes better engagement and coordination and smarter use of data. The survey reveals that boards and executive leadership continue to retain ultimate responsibility for EERM in the majority of organizations. Better engagement and coordination across internal EERM stakeholders is a top priority for boards and senior leaders. Boards are moving away from using periodically generated data to more succinct and real-time, actionable intelligence, generated online. But who has ultimate responsibility for third-party risk management? According to the survey results, 24% indicated the chief risk officer, 19% indicated other board members and 17% indicated the CEO. Operating models: Federated structures are the most dominant operating model for EERM, underpinned by centers of excellence and shared services. More than two-thirds, 69%, of respondent organizations say they adopt a federated model, and only 11% of organizations are now highly centralized, which is down from 17% last year. Investments in shared assessments and utilities, and managed services models, are also increasing. Furthermore, co-ownership of EERM budgets is also emerging as a trend. Robust central oversight, policies, standards, services and technologies, combined with accountability by business unit and geographical leaders, is a pragmatic way to proceed. Technology: Organizations are streamlining and standardizing EERM technology across diverse operating units. The survey confirms Deloitte’s prediction last year that a three-tiered approach for third-party risk management will continue. Smartly coordinated investments in third-party risk management technology across three tiers can drive efficiency, reduce costs, improve service levels, increase return on equity and create a more sustainable operating model. More specifically, 59% of the respondents adopted tier one, 75% adopted tier two and tier three continues to grow. Affiliate and subcontractor risk: Organizations have poor oversight of the risks posed by their third parties’ subcontractors and affiliates. The lack of appropriate oversight of subcontractors is making it difficult for organizations to determine their strategy and approach to the management of subcontractor risk. Only 2% of survey respondents identify and monitor all subcontractors engaged by their third parties. And a further 8% only do so for their most critical relationships. Leading organizations are starting to address these blind spots through “illumination” initiatives to discover and understand these “networks within networks.” Less than 32% of organizations evaluate and monitor affiliate risks with the same rigor as they do other third parties. As affiliates are typically part of the same group, organizations are likely to have a higher level of risk intelligence on them than other third parties. See also: Is There No Such Thing as a Bad Risk?   For more information on Deloitte's "2019 Extended Enterprise Risk Management Survey," or to download a copy, please visit their website here. You can find the full report here.

A strong economy does not translate to commercial insurance profits. After eight consecutive years of underwriting losses, commercial automotive insurers are shouting, “Enough is enough!” Today, these insurers are in a strong position to right the ship and turn those losses into profits. While written premiums have increased 64% from 2012-2018, the industry continues to experience significant profitability challenges, having booked more than $11 billion in underwriting losses during that same period, according to BestLink Industry data from A.M. Best. Trade combined ratios have been deteriorating in recent years and peaked at 108.1% in 2016 before improving marginally to 107.8% in 2017 and 105.8% in 2018. [caption id="attachment_37131" align="alignnone" width="570"] ©A.M. Best – used with permission[/caption] Changes in risk exposure are pressuring insurers to improve pricing and underwriting effectiveness. As macroeconomic fundamentals remain strong, drivers are logging more miles and fleets are steadily growing, resulting in a shortage of experienced drivers, according to the Truck Driver Shortage Analysis conducted by ATA. With increases in exposure due to more miles driven, less-experienced drivers on the road and a rise in distracted driving incidents, it can be difficult to see how we can return to profitability anytime soon. Choose a Smarter Path to Profitability Despite these challenges, you can break the money-losing cycle of losses and create profit within your commercial auto book. A simple option is to increase base rates and risk alienating current and prospective clients. Alternatively, you can work more surgically, while improving your underwriting returns by using more data, information and technology. See also: Cyber Insurance Needs Automated Security   There are a number of ways to improve your underwriting and pricing decision-making process and reclaim commercial auto profits:

1. Reduce your MVR expense — Don’t waste money ordering MVRs to determine if a driver has a violation on his or her record. TransUnion’s internal data shows that 72% of drivers have a clean driving record. To validate driving histories, use court record data first and only order MVRs on the drivers who warrant it. Court record data is readily available for a fraction of the cost of MVRs.
2. Use new driver information for fleet underwriting — Aggregated driver information and non-adjudicated violation data are available to help insurers improve underwriting and pricing. For example, according to TransUnion’s aggregated results based on an internal study, we have seen insurers realize up to a 200% improvement in loss ratio lift by using new driver information. Look for ways to use more data to build smarter predictive models for fleet driver underwriting.
3. Include vehicle history in underwriting — Every vehicle has a different story. For example, two five-year-old trucks, same make and model, may have different histories. One may have a branded title, while the other may have a single owner and no damage. Vehicle histories are predictive of future losses, and incorporating this data into your underwriting process can provide benefit. Adopt aggressive portfolio management techniques. Monitor, identify and mitigate changes in risk. Profits are gained by narrow margins in commercial auto insurance, and changes in risk can be one of your biggest portfolio exposures. Today’s advanced portfolio management techniques are more available and affordable than you may think.
4. Reward companies engaged in preventing distracted drivers — Distracted driving is a growing factor in trucking accidents and fatalities. Truce Software and other similar devices mitigate against distracted driving. Provide policy incentives encouraging clients to adopt technology and programs that help reduce distracted driving.
5. Require telematics program participation — Electronically monitoring driver safety and behavior enables you to encourage better driving habits. Monitoring can benefit your customers and enable you to better understand the risk within a fleet. Make telematics a standard requirement for writing a policy.
6. Enhance your fraud prevention strategy — The best defense against fraud is to stay on offense. Insurers face fraud throughout the entire policy lifecycle, from the initial application to the claims process. The majority of insurers believe fraud contributed at least five percentage points to their combined ratio, according to a recent Forrester Consulting study. Fraudsters continue to evolve, and so should your fraud strategy.

See also: Underwriters Need Some Power Tools   As you can see, despite the challenges associated with profitability, there are ways commercial auto insurers can bend the loss curve toward profit. By leveraging more comprehensive data, information and technology, you can give your underwriting business a fighting chance and say, “Enough!” to underwriting losses.

Nearly 60% of insurance executives rank a differentiated customer service experience as having the highest impact on successful competition. For many years, customer demands, the effects of digitizing customer relationships and the creation of a successful customer journey have been the focus when it comes to customer service in the insurance business. But inquiries in the insurance industry are issue-driven, and customers often only reach out when they have a problem and are already likely frustrated. So, how do you make sure customers are truly the focus of your business during every touchpoint with your brand? From when potential customers start evaluating insurance offerings to the point where a customer reaches out for support or submits a service claim with your organization, what are consumers expecting in terms of service? Throughout the customer journey, insurers must adapt to the unique needs of each consumer to provide the best experience and earn loyal customers who will serve as important ambassadors for your company. Here are tips for creating a positive relationship between insurer and customer at each stage of the customer journey: Actively Communicate During the Consultation Phase Insurance isn’t a nice-to-have, and consumers seek coverage out of necessity rather than desire. Changes in someone’s personal situation trigger consumers to enter the consultation phase and start requesting information from insurers. Instead of insurers looking to create demand, customer communication in large part only begins when the need is already acute. Traditionally, interactions between insurers and customers are “accident-driven” instead of being initiated by insurance companies. So, how do you improve the customer experience? See also: 8 Key Changes for Customer Experience   Many insurance companies are failing to promote products or services to customers. Too often, customer interactions are based on need and without cause, occurring haphazardly. Globally, 44% of customers have had no interactions with their insurers in the last 18 months. Instead of relying on customers to communicate, insurers should take more control by making customers aware of comprehensive risks and the need to protect against them. Personalize Across Channels in the Purchase Decision Phase As customers enter the purchase decision phase, the customer experience becomes even more integral. With the growth of digital channels, there are several options for a customer to purchase a policy, such as personal sales, an intermediary, your website or comparison portals. With 80% of customers willing to use digital and remote channel options to complete tasks and transactions, it is critical to meet customers with a highly personalized approach regardless of the purchase platform. Customers value an easy process and individualized options and want to buy from insurance companies that serve up comprehensive policy information that is tailored to their situation. Across all purchase options, the human factor (or personal contact) is a crucial component of converting a prospect into a customer. Personal consultations still remain important, but consumers now also expect to quickly reach you through intermediaries, service centers or digital channels. To offer both detailed and personalized communications, insurance companies need to offer personal consultation services that are supported by other channels to communicate the value of products and services. Balance Humans and Technology During the Support and Service Phases When customers reach out for support, they want the experience to be three things: personal, fast and easy. Insurers must integrate trusted, familiar contact channels with digital options. While customers still want quick and stress-free access to friendly and accommodating insurers over the phone, there is also a desire to communicate via digital contact options like email, chat and even self-service. For customers, analog and digital channels are equally important when they are looking for insurance support. When submitting a claim, customers also want a seamless, rapid and individualized process. Although customers are used to leveraging the service center for direct exchanges with insurers, digital and mobile processing are often underused even though they can increase efficiency by solving claims quickly and providing tracking for customers. See also: Customer Experience Gets a Major Facelift   Final Thoughts The insurer-customer relationship is a valuable differentiator throughout the entire customer journey from the initial consultation through to support and claims. To put customers front and center every step of the way, insurers need to communicate during the information phase, focus on personalizing interactions with customers on diverse channels during the purchase phase and create a blend between personal contact and digital tools to elevate support and claims services. To attract and retain customers, insurers must seek opportunities to innovate their service approach to address customers’ needs and drive positive experiences during every touchpoint along the customer journey.

Clarke's Third Law, posited by science fiction legend Arthur C. Clarke, says that "any sufficiently advanced technology is indistinguishable from magic." Well, we're going to see some magic, courtesy of the technology that led Google to claim "quantum supremacy" last week, and we should start adapting sooner rather than later.

The underlying technology, quantum computing, is as far from conventional computing as quantum physics is from the Newtonian view of the world and will have important implications for insurance.

Traditional computing is already pretty magical. Right, Siri? But traditional computing depends on a highly prescribed approach: Billions of transistors are in either an on or an off position, and problems are solved through an unbelievably fast manipulation of those 0 or 1 values, mostly in sequence. Quantum mechanics, meanwhile, operates in ways so mysterious that even Einstein was famously wary of the implications, and quantum computing is no different. Values don't have to be binary: they can be both 0 and 1 at the same time. (Told you this was weird stuff.) And all the values work together at the same time, not in sequence.

The Google claim of "quantum supremacy" means it believes it has solved a problem with a quantum computer that could not have been solved with a conventional computer. To be precise, Google says it solved a problem in three minutes and 20 seconds that would have taken the most powerful IBM supercomputer 10,000 years. IBM cried foul, saying its computer could have solved the problem in 2.5 days if the problem was set up right, but, even in the best-case scenario, IBM was 700 times slower. 

Quantum computing will take an estimated 10 to 15 years to establish itself, which allows time for us to adapt—but not loads of time, in some areas. Quantum computing will render trivial today's approaches to encryption, which count on making problems (related to prime numbers) too hard to solve, and it takes about a decade to broadly replace one encryption scheme with a new one throughout industry. Quantum computing may require ending today's reliance on passwords and other computationally intensive schemes, in favor of sampling of DNA, fingerprints, retinal scans or other biometric evidence, and the switch can't start too early.

Richard Feynman famously said decades ago that chemistry isn't Newtonian, it's quantum, so any tool that's really going to help us understand chemistry needs to be based on quantum mechanics. Et voila. Such a tool is now in sight, and being able to simulate the quantum behaviors of atoms could lead to all sorts of new materials, new medicines and new understanding of the basic behaviors of our bodies—for instance, while we talk about DNA sequences and can define them, how the strands of protein fold up is also hugely important and has been hard for conventional computers to predict. 

Quantum computing could also lead to much better models for the development of hurricanes and, more generally, for potential natural disasters. While such disasters occur at a massive scale, not at the subatomic, quantum level, the intricacies of the massive number of interactions lend themselves to a quantum computing approach.

Lots of deep analytics in insurance, such as looking for fraud or identifying patterns that can help mitigate risk, also lend themselves to a quantum approach.

And fundamentally new technologies like quantum computing often produce convergences with other technologies that can rewrite the business landscape. Think, for instance, about quantum computing powering the AI that goes into driverless cars. You don't think Google will hook up its "quantum supremacy" computer with the brain that powers all its autonomous vehicles?

Now, any technology that is expected to arrive some 10 years in the future can turn out to be mere science fiction—I'm still waiting for my flying car. And quantum computing has at least one clear drawback: It doesn't provide a definitely right answer like conventional computers do. The quantum world is probabilistic, so quantum computers just tell you an answer is probably right. If you test the problem enough times—Google tested 1 million times in those 200 seconds in its "quantum supremacy" experiment—you can be highly confident, but you still likely want to check your work with a conventional computer. 

So, don't throw away your supercomputer just yet. But do start understanding quantum computing, and even experimenting. It's coming, and it will make today's AI seem like child's play. Quantum computing will pull new companies and even new industries out of the proverbial hat.

Paul Carroll
Editor-in-Chief

Many companies want to establish a culture of innovation, one that encourages flexibility and creativity and supports risk-taking. The benefit? Breakthrough products, a superior customer experience and a nimble response to market challenges. But what is happening in organizations today, and what can HR teams do – specifically the L&D (learning and development) function – in not only supporting, but also driving, a culture of innovation? While the shape of an innovation culture can vary from company to company, certain traits tend to stand out. There should be no surprise that the companies leading the innovation culture charge are unafraid to take risks, create diverse environments where employees can personalize their learning, and are role models for the rest of the company in terms of their approach to learning and development (L&D). (Findcourses.co.uk has highlighted some of the best practices for harnessing risk and building a culture of innovation at your organization.) Creating a safe space for risk Innovation happens when employees feel free to take risks without repercussions. Focusing on employees’ individual strengths has been key to creating a culture of innovation. Focusing on strengths creates trust; it creates a safe space to try something and possibly fail, have a conversation about it and move forward. For many organizations, innovation is a byproduct of their culture that prioritizes relationship-building and trust between employees and managers over learning hard skills. Going hand-in-hand with creating an environment where risks can happen without repercussion, encouraging idea-sharing between colleagues on all levels of the organization will also propel innovation. The takeaway? Learn to create risk programs that allow employees to cultivate their individual strengths while building relationships with others on the team. Where there’s support, there’s innovation - and trust needs to exist between team members for innovation to flourish. Experiment (and then recalibrate) Innovation comes from risk-taking. But because there are so many effective mediums and methods to deliver learning in 2019, it’s important to think outside the box and beyond traditional learning - and to never be afraid of recalibrating based on results. According to the 2019 L&D Benchmarking Survey, employee engagement and risk-taking go hand in hand, with 77% of organizations with highly engaged employees "very willing" to take risks. However, it is also worth remembering that not every risk works. It’s vital to carry out evaluations and continuously monitor feedback to produce and develop the most innovation-driving programs. Evaluation and recalibration are at the heart of world-leading innovation initiatives. Through surveys, focus groups or other evaluations, it’s crucial to determine which programs work, which can be optimized and which should be scrapped. Even more critical, however, is that you cultivate a working environment where employees can question current processes without repercussion. In a space where there’s mutual trust, reflection can grow into innovation. See also: Is Your Education Strategy Effective?   Embrace diversity Research shows that companies with diverse and inclusive workforces are more innovative and profitable - and increasing inclusivity isn’t something that needs to be relegated to your company’s talent management or D&I functions. L&D teams should create or offer initiatives themselves. “We’ve had people from over 25 different countries developing our content,” says Martin Hayter, the Global Assurance Learning Leader for EY. “The team has a global flavor to it. It brings more creativity and higher quality, and we know that the content we develop is going to be applicable to different cultures and to both emerging and mature markets.” The evidence is beginning to emerge: The more diverse your team, the stronger your culture of innovation will be. Keep your L&D function agile An agile L&D program is the key to supporting innovation, especially when your company is composed of a large multinational workforce. L&D teams must be built upon a flexible framework and remain nimble, adjusting to continuous organizational changes without compromising either the speed or quality of talent development strategies. An overly planned L&D program is less likely to adapt with any changes in business strategy, so don’t be afraid to stray from your schedule when business needs shift. This also means that, for innovation to occur, your program needs to tailor itself to the individualized present (and future) need of employees. See also: Case Study on Risk and Innovation   To stimulate a culture of innovation, look outside your company walls for inspiration. Other companies and teams likely have excellent insights that you can apply to your own programs. For your L&D team to create a culture of learning for your organization, your team itself must also be constantly learning. Participating in industry L&D or HR award programs is another way to get insights on your strategy and programs, and it’s one approach EY has used to benchmark themselves. Their L&D team also works with external vendors to ensure they’re incorporating the best practices in the industry. An innovative, forward-thinking L&D team is one way to spark progress across the entire organization. Make the connection between L&D and innovation explicit You could plan great L&D initiatives and hope that it sparks innovation company-wide, or you could be even more aggressive. Planning programming around the concept of innovation might include a speaker series with innovators in your industry, a course on design thinking or hack-a-thons where employees get to take a step back from their daily duties and focus on what could be improved at your company.

More than an asset, technology is an indispensable ally of the insurance industry. Technology in all its forms, from tools that streamline operations to innovations that offer people a reprieve from undergoing a series of operations. Technology that saves lives without sacrificing limbs. Technology that spares insurers the cost of irreversible procedures. Technology that spares people the price of a lifetime of little or no mobility. I refer, specifically, to technology that helps diabetics who suffer from foot ulcerations. As a scientist, who also happens to be a diabetic, I refer to an epidemic we can prevent: an epidemic we must prevent, because the technology is available, the intelligence accessible, the results attainable; an epidemic we cannot dismiss unless we shut our eyes, unless we cannot see—unless what threatens us also blinds us—because it is otherwise impossible not to notice the cripples and amputees among us. See also: Using Technology to Enhance Your Agency   The good news is that we can reduce these risks, thanks to technology of the sort like MOTUS Smart Powered by Sensoria: an Optima Molliter boot, with a dedicated patient mobile app and Microsoft Azure cloud technologies. The boot has interchangeable, different density insoles to relieve pressure from the area of ulceration, thereby improving blood circulation and clinical outcomes. Consider this breakthrough a giant step for not only diabetics but insurers, too. Consider this breakthrough an even bigger leap for all mankind, as the alternative is neither fiscally sustainable nor morally sound. Not when the global cost of diabetes exceeds $1.3 trillion. Not when a surgical saw can no more cut costs than it can be something different than it is. Not when insurers can cut costs by covering what covers—literally—patients’ feet. If insurers champion smart technology, the benefits will be universal. From making health insurance more affordable to giving patients the chance to walk in a way they can ill afford to ignore, from bettering the reputation of insurers to changing people’s lives for the better, technology is invaluable. Consider, then, diabetics as the most visible beneficiaries of new technology and renewed support from insurers. Consider these advances for what they are, the product of extensive research and development. Consider, also, what it means for insurers to earn the trust of clients: to keep and strengthen this trust by acts of prudence and policies that act to inspire doctors, scientists and entrepreneurs throughout the world. Take these things into consideration, to be sure. More importantly, take these things as an invitation to lead. Take the time to do these things well, so we may all move forward together. See also: How Technology Is Changing Warranty   With health as our goal and wellness as our right, let us transform the insurance industry into a model of the highest ethics and the best success. Let us achieve this goal. Let us do all we can, which is more than we may believe or know, because we have it in our power to revolutionize the insurance industry. Let us exercise this power with the intelligence we possess and the wisdom we enjoy.

You’ve probably heard the statistics about why Medicare is the largest growth market in insurance: 10,000 people turn 65 every day. In fact, by 2030, one in five U.S. residents will have reached retirement age, and, for the first time ever, adults 65-plus will outnumber children. Considering that over 90% of Medicare enrollees have some form of supplemental insurance, it’s no wonder that this growth potential is attractive to carriers, agencies and investors looking to make big bets in the supplemental health insurance market. But along with this potential comes a curse of riches. During annual enrollment period (AEP) for Medicare, a flood of potential customers request quotes from brand sites and comparison shopping domains. With each passing day, insurance marketers and sales teams take in and call on leads, nurturing existing quotes and ensuring that the customers they’ve acquired make their first premium payment without defecting, all while trying to shield their existing customer base from their competitors. Friends in these positions have told me they’re running for their lives from Oct. 15 to Dec. 7 every year. So how do we seize the sizable opportunity in Medicare without stepping on the landmines: spending time and money on the wrong people, not spending enough time and money on the right ones, missing multi-product sales opportunities, churning more customers than you’re acquiring? The answer is deceptively simple: Know who your prospects and customers are, understand when they are shopping and be ready to meet them in the market at that time with a relevant and timely message that will help them make the most informed decision. How do you do that? Well, more and more, Medicare shoppers are researching their options online, meaning there is measurable insight (i.e., behavioral data) into who is on a buying journey versus who isn’t, who is just starting versus who is accelerating the buying process and who still needs the white-glove treatment post-sale. Teams that harness this data to power their focus during AEP are winning. Instead of spreading their efforts across all consumers, they are successfully addressing only the ones who need attention. This leads to better performance across every stage of the customer buying cycle: acquisition, placement, cross-sell and retention. But these comments are much easier said than proven empirically. So, Jornaya’s data science team set out to do just that. See also: New Phase for Innovation in Insurance   Jornaya’s Research Findings We analyzed more than 1.3 million Medicare supplement consumer-driven online shopping events that occurred during the annual enrollment period in 2018 to better understand the buying journey from start to finish. The results of that research, Understanding the Insurance Consumer Journey: Auto, Life & Health, shine the light on several areas:

• The Journey Begins Early: The buying journey begins well before a quote is requested. Of the 1.3 million shopping events that were analyzed, 46% of consumers were shopping in the Jornaya network before they requested a quote, and the average consumer began shopping on health insurance domains 72 days before asking a brand about Medicare supplement insurance. Another 18% began shopping more than 90 days before ultimately filling out a lead form.
• Consumers Shop Around: On average, consumers initiated 3.4 health insurance shopping events before submitting a request-for-quote. 93% visited a different health insurance web domain than the site where they ultimately requested a quote. Those consumers visited 3.5 different sites before requesting the quote, beginning their shopping journey 72 days before they filled out a lead form.
• Consumers are comfortable shopping on multiple devices, including mobile. 53% of consumer shopping events that Jornaya analyzed were initiated on a mobile device. And, while only 16% of consumers began their journey on one device and requested their quote on another (e.g. started shopping on their phone but requested the quote via desktop), this segment shopped almost twice as frequently, on twice as many sites, as their counterparts who began shopping on one device and requested the quote on the same device.
• Shopping activity intensifies once consumers request quotes: More than half, 59%, continued to shop after they requested their first quote (versus the 46% who were shopping before the quote). On average, they returned to market 26 days after the initial lead submission. And of those who returned to market within the first 30 days, the average shopper initiated 2.7 additional health insurance events post-quote. A quarter of consumers continued shopping more than 90 days post-quote, averaging 3.2 health insurance shopping events during that time.
• Consumers are shopping for multiple insurance products at once. Of the 1.3 million leads that we analyzed, 21% of consumers were simultaneously shopping online for life insurance, and 30% of consumers were in-market for a mortgage.

Implications for Carriers Knowing that these trends exist, what can insurance marketing and sales teams do to improve? How does this information change their engagement strategy? Here is a high-level summary of the playbook that insurers are using to capitalize:

• Know who your customers are. Use the data and tools available to you to segment your portfolio. Craft plays for each of these segments and be ready to run them when the consumer exhibits buying signals. If you feel ill-equipped to do this with your current infrastructure, explore data and technology vendors who can help you with this.
• Market to your segments as early as you can. This research shows that consumers are beginning their Medicare supplement buying journey several months in advance of AEP. You must comply with the marketing guidelines set out by CMS. That said, you need to meet your prospects and customers in the market when they are interested in learning about their options throughout the year, not only during AEP, when your prospects and customers will be inundated with marketing messaging. Being first in line and top-of-mind when the consumer begins the journey has proven to substantially increase conversion likelihood.
• Assume your prospects are getting more than one quote. Given that the price of supplemental plans is highly regulated, insurance providers must primarily compete on customer experience. Jornaya’s research indicates that consumers are educating themselves, across multiple devices, prior to requesting quotes. Differentiate yourself by using behavioral data to understand where the consumer is in her buying journey and creating value as an adviser to her during that stage. Clearly explain what makes your offering different from other providers she may be considering. Provide consumers with a direct number to call should they have any questions. Tell them you will be following up with them (and when) to help them make the most informed decision.
• The sale is only just beginning post-quote. Jornaya’s research shows that shopping activity intensifies after the initial request-for-quote. 59% of consumers returned to market post-lead. They are doing so for two reasons: 1) They have not yet made a decision, or 2) they made a decision that they are now unsure of. Either scenario is an opportunity/risk that must be considered. A winning strategy takes a data-driven approach to creating multiple touch points over weeks (not days), even post-sale, to ensure a complete and optimal customer experience.
• Identifying parallel buying journeys can differentiate your marketing from your competitors. Consumers are looking for guidance on all major life purchases; not just Medicare supplement insurance. Use behavioral data to identify opportunities to assist them with more than just Medicare. Ask questions that prompt the prospect to think about all his needs. What else is going on in his life that is worth considering? Having this data allows marketers to create personalized offers that appeal directly to the buyer, which trickles down to more positive interactions for agents and the brand over time. Those who take the time to truly help their clients feel at ease about life’s big decisions are much more likely to secure multiple policies per customer, at the point of initial sale and throughout the customer lifecycle.

See also: 8 Questions on Medicare Set Aside   Consumers now spend as much time engaging with digital content as they do sleeping. It’s no wonder they expect brands to personalize their shopping experiences, across multiple devices, especially for major life purchases like insurance. To seize the substantial opportunity in Medicare supplement, insurance firms must seek to better understand their prospects. Leveraging behavioral data to drive early, timely and relevant interactions with prospects and customers is the key to winning (and keeping) a consumer’s business.

Companies that want a fulfilled, resilient workforce are making well-being a comprehensive part of their culture. The line between professional and personal lives continues to blur, and companies can use this as an opportunity to differentiate by moving beyond the traditional benefits package. Well-Being Trends According to a recent study conducted by the National Business Group on Health, midsize and large employers are expected to spend an average of $3.6 million on well-being programs in 2019. Well-being is expanding and evolving, driven by trends that include:

• A focus on financial wellness and the adverse impact that debt, low savings and a lack of planning can have on productivity, engagement and health
• A realization that mental health requires increased attention after the prolonged silence, and in some cases stigmatization, that have made it difficult to connect needs with treatment

Financial Wellness Financial wellness is one of the most popular well-being initiatives. According to Wellable’s 2019 Employee Wellness Trends Report, more than 68% of employers say they will be investing more into financial wellness. Employees are looking to employers to provide financial wellness tools that will increase their overall well-being. The Wellable report also finds that over 70% of millennials say they’ve delayed major life decisions due to their student loan debt, indicating the value of student loan assistance programs. Globally, over the past two years, 27% of workers report suffering from stress, anxiety or depression due to their finances, which diminishes employee productivity, engagement and health. With education costs skyrocketing, this issue isn’t going away. Expect participation in financial wellness programs – that address debt management, budgeting and financial planning – to grow considerably in years to come. See also: Why Financial Wellness Is Elusive     Mental Well-Being and Mental Health In recent years, the spotlight on mental health and mental well-being has intensified. According to a 2017 national survey by the APA, the workplace was the third-leading cause of stress (61%), after money (62%) and the future of the nation (63%). Supporting mental resilience by reducing stress needs to be a key focus for well-being in the workplace. Mental well-being is all about prevention and skill-building. Most of us never learned how the brain works or about the importance of training our brain for ultimate vitality. Instead, we are conditioning our brains to be distracted and overstimulated. The good news is that the latest neuroscience research proves that we can train our brain to perform more optimally. While adoption within the employer population remains slow, brain training apps are increasingly commonplace. Solutions like Total Brain apply the latest brain optimization research to help employees learn skills, but the responsibility rests on employers to offer these types of solutions for mental fitness and mental optimization training to help employees improve brain health. There are also hundreds of apps, websites and online courses designed to enhance mental well-being. In addition to providing mental well-being training to your employees, it is critical to focus on mental health benefits and interventions. Millions of Americans need additional support and resources for the mental health disorders that continue to plague our society. The good news is that, like other chronic diseases, mental health disorders are treatable, and employers have a unique opportunity to improve the mental health of the 157 million U.S. adults who spend more time working than doing any other activity apart from sleeping. The key is that employers must take a comprehensive approach, including:

• Access to care: No matter how much we do to create a culture of mental well-being, employees have to be able to access and afford treatment. To prevent higher co-pays and out-of-pocket costs, employers need to ensure that employees aren’t forced to access out-of-network providers for mental health care.
• Comprehensive coverage: Employers must view a high frequency of claims in behavioral health as favorable instead of trying to mitigate these visits like with ER or specialist visits. Weekly therapy can be a very effective treatment for many, and employers should not be concerned about the number of visits an employee has if the employee is seeing qualified specialists.

The Way Forward If organizations want to thrive in the next decade, they need to invest in the well-being of their employees. There is an opportunity to innovate, set yourself apart with a commitment to the health of employees and create a culture that talented individuals want to be part of for many years to come. See also: Employee Wellness Plans’ Code of Conduct   Take time to evaluate your ecosystem – culture, leadership, management, benefits, employee resources, third-party solutions, workplace environment and communications – then devise a plan, execute and make refinements when data exposes gaps. The result will be a safer, higher-performing workplace driven by empowered individuals who are committed to the well-being of the company that employs them.

Workers' compensation fraud creates a financial and administrative burden for employers, while increasing hardship for injured workers with legitimate claims. The early identification of potential fraudulent cases and quick action by workers’ compensation third party administrators can help make sure workers’ compensation programs run as efficiently as possible in providing needed help for injured workers.

The following are some best practices employers can implement to reduce fraud, as well as guidance on what to do if a claim is “not quite right”:

Identify Questionable Claims

Here are some of the “red flags” that may help identify fraudulent claims:

• The employee does not immediately report the injury to his/her supervisor.
• Information indicates the employee was injured somewhere else (auto accident, playing sports, etc.).
• The facts of the injury do not align with the type of injury or disability.
• The employee misses doctor appointments related to the claim.

Follow the Process

Even if an employer suspects a claim could be fraudulent, the employer must still follow the process to ensure the claim is submitted appropriately and the worker obtains medical treatment.

• The employee still must complete a Claim Form (DWC-1).
• The employer still must provide medical treatment within one day of notice of injury.
• The administrator has 14 days to issue a delay letter, during which no temporary disability will be paid.
• The administrator then has 90 days to either accept or reject the claim, during which time the administrator may solicit additional information.

See also: Real or Fake? Finding Workers’ Comp Fraud  

Investigate Promptly

Once a potential fraudulent claim is identified, it is imperative that investigations are initiated promptly. Investigations should be thorough, impartial and preventative. Using an outside party that specializes in workers’ compensation fraud investigation will ensure that the case is handled in accordance with all regulations and will hold up in court if there is a trial. Remember, only a court of law can determine fraud – not the examiner or the employer. These investigations can include:

• Interviews with the injured worker
• Interviews with coworkers
• Witness interviews
• Manager/supervisor interviews
• Surveillance of injured worker

Upon the conclusion of the investigation, any relevant findings and evidence should be presented to the district attorney’s office as well as the Department of Insurance.

Increase Awareness

One of the best tools for fraud prevention is to let employees know that false claims will not be tolerated and that there are stiff penalties. It also helps to provide employees with easy ways to report any potential fraud that they see.

• Post the penalties for filing false claims on your new hire pamphlet.
• Hang a poster in the break room letting employees know how to report fraud anonymously.
• Share stories about fraud convictions to deter abuse.

One recent example of identifying, investigating and prosecuting a fraudulent claim was in the conviction of a school bus driver in San Mateo County in California in July. The claims examiner identified numerous inconsistencies in the medical reports versus the statements provided by the employee. There were alleged migraines and double vision, but tests did not support these symptoms, and it appeared that they were exaggerated.

Investigations were initiated, and the employee was observed participating in activities that were not consistent with any claimed injury. The investigative evidence was forwarded to the San Mateo County district attorney’s office, which obtained a conviction; the defendant was ordered to serve 60 days in the county jail and pay restitution of $60,000 to his employer.

See also: Workers’ Comp Issues to Watch in 2019  

Organizations must implement a comprehensive strategy to curb fraud. Vigilant fraud prevention programs and investigative efforts can save a company hundreds of thousands of dollars by preventing the filing of fraudulent claims and prosecuting those who take advantage of the system.