If you Google the phrase “digital transformation,” you’d get more than 450 million search results, including educational pieces, research reports and information on technologies. Yet many organizations still face major challenges. Often, these obstacles aren’t even related to technology. According to a recent study from Novarica, the biggest challenges come from not knowing where to initiate a digital transformation journey, how to minimize disruption to business, how to accelerate time to value and how to ensure stability and agility throughout the process. We often discuss three paths, or phases, to digital transformation to clarify how insurers can achieve their goals. The paths also take some stress off organizations that see the goal but get lost in the haze of how to get there. The process starts with digital enablement. Digital enablement Prior to the digital enablement stage, many organizations feel like they are drowning and in need of change. Processes take too long and often rely on paper; customer experience is poor; and employees feel stuck. The problems push organizations to enter phase one of their digital transformation journey: preparing an outline of a digitization strategy with a clear mission and goal. In this phase, there may still be multiple digital "silos" where information is stored, often in legacy systems. Unconnected, insurers cannot get a complete view of business processes and customer information. To overcome this, IT departments should take time to understand and evaluate the organization’s full technology ecosystem and all the required systems that a new solution would either replace or integrate with. Once the ecosystem assessment is complete, the organization can evaluate the best solutions and partner with vendors and system integrators (SI) to help map out the scope of the project, keeping realistic expectations and goals in mind. One of the last steps within the digital enablement phase is putting the right team together to put the strategy in place. By starting with a critical department, like claims, insurers can gain quick momentum and showcase success before expanding the solution as needed. Digital Optimization Gartner defines digital optimization as "the process of using digital technology to improve existing operating processes or business models." In this phase, insurers are often enacting the same business processes – but using technology to optimize the procedures and experiences for end users and customers. For example, take the typical claims process. Once the claim is filed, an insurer receives, investigates and acts on the claim. Using the digital optimization model, the insurer would receive the claim in a digital format, and digital workflows would route the right information to the right adjuster at the right time, who could then review the claim and come to a resolution faster. By expediting the process, insurers decrease time to decision while increasing customer satisfaction. “A large incumbent could more than double profits over five years by digitizing existing business,” McKinsey reports in its Digital Disruption in Insurance report. Digital transformation Many insurers find that achieving digital transformation is much harder than they originally thought, not understanding that it is a continuing process and never really quite finalized. Insurers create revenue streams not possible in earlier stages of the transformation journey. The enterprise-wide, digital-first strategy ensures that digital information and data stays digital, available from anywhere at any time. Many insurers are still in the initial phases of digital transformation – sorting through goals and assessing needs within the digital enablement phase. The good news is that they are taking the time to evaluate needs and how they hope to achieve their goals. Some are even are starting technology evaluation processes, looking at content services platforms to help them modernize and digitize. By defining problems from both a business and technology viewpoint, insurers can gain approval from all stakeholders and buy-in from the beginning for a more successful transformation journey. It’s clear that insurers that embrace digitization will continue to thrive within the industry’s digital future. By selecting technology that will both uncover insight in data and provide the ability to quickly develop and support new products, insurers will attract new customers while continuing to provide exceptional service to current customers.

With headlines about catastrophic and historic storms driving increased interest in flood insurance, the emerging private flood insurance market – an alternative to coverage through the National Flood Insurance Program (NFIP) – is increasingly attractive to homeowners. As realtors guide their clients through the home buying process, here is some basic information that clients need to know about this new option: Q: What is private flood insurance, and what does it cover? A: Private flood insurance is a risk management tool backed by global capital markets that provides financial protection for buildings and personal property damaged by floods, helping families, communities and businesses to recover from these devastating events. Q: What are the differences between an NFIP and private policy? A: There are two primary differences between an NFIP and private policy: regulatory authority and source of capital. The biggest misconception with private flood insurance is that the NFIP is regulated and that private isn’t. Private flood insurance is heavily regulated and falls under the jurisdiction of state insurance regulators – just like homeowners, hurricane and auto insurance. While these state-based insurance regulations are separate from the federal regime that regulates the NFIP, the level of consumer protection and oversight is comparable. The second difference is who’s bearing the risk of loss. With an NFIP policy, FEMA holds all program risk, with U.S. taxpayers serving as the ultimate backstop. With private flood insurance, independent insurance companies bear the risk of loss. As a result, these companies cannot accept any risk in any location and must be more discerning with respect to underwriting, coverage and price. While private insurers cannot be all things to all people, this disciplined and thoughtful approach means these insurers can deliver a sustainable and valuable product to homeowners. See also: Here Is How to Make Flood Insurance Work   Q: How can a private policy work in tandem with an NFIP policy? A: A private policy can act as either an alternative or a complement to an NFIP policy. Private policies equip agents with customizable options that can cater to individual homeowners’ needs, allowing insurance agents to craft solutions that ultimately protect more people from floods. Private policies can also complement an NFIP policy. If you have a policy through the NFIP, you can purchase private insurance to increase the limits of your coverage. Private insurance is also available to expand coverage, such as adding protection for contents in a basement or the expense to clean out a swimming pool. Q: Who qualifies for private flood insurance, and how does it work? A: The NFIP is essentially a one-size-fits-all policy available to almost every person in all geographies. However, homeowners aren’t all the same. That’s the beauty of private insurance programs – they’re different programs offering different value propositions to different people, like high-net-worth homeowners or renters. Q: What is/isn’t covered by a homeowner’s policy when it comes to a flood? A: Generally speaking, most homeowners’ policies exclude flood losses completely. A homeowners’ policy may cover water damage from broken pipes or sump pumps, but most exclude loss from inundation, whether resulting from swollen rivers, storm surge or intense rainfall. The flood insurance industry is rapidly changing, and there are new opportunities coming online every day. Every realtor should take time to understand these new options. In most situations, the home is the family’s most valuable investment. Wherever it rains, it can flood, so take time to consider solutions that can protect these treasured investments from catastrophe. See also: Emerging Market for Flood Insurance   This article is provided for general informational purposes only and is not intended to provide individualized business, insurance or legal advice. You should discuss your individual circumstances thoroughly with your legal and other advisers before taking any action with regard to the subject matter of this article. Only the relevant insurance policy provides actual terms, coverages, amounts, conditions and exclusions for an insured.

You know what happens when you assume? That's right, you’ve heard the line before. But it's true. So, why do we continue to assume so many things that we just don’t know will hold up? 

People who study these things tell us that we all have to make assumptions to a certain point, or we'd spend all day fiddling with faucets and door handles to figure out how they function. But assumptions only work in situations where we have experience. Assumptions get us in trouble in new settings that don't operate like the ones we've seen before.

We often rely on the collected wisdom that has developed in an industry, but various studies have found that, in new settings, experts are no better at predictions than the rest of us. They're just more confident. Much more confident. Yet we fall for their "expertise," time and again.

A classic example: In 1980, McKinsey did a major study for AT&T that predicted there would be a total market for 900,000 cellphones globally by 20 years later. Expecting such slow growth, AT&T dropped plans to market a cellphone. Well, the McKinsey experts were off by 108 million phones as of 2000, and today there are billions in use around the world. AT&T had to buy its way later, at a hefty price, into a market it had invented. It turns out that decades of expertise in landline phones didn't help McKinsey or AT&T see how their assumptions about cellular were wrong.  

In the insurance industry, we find ourselves at a similar inflection point: facing a different landscape, unexpected events, a new set of circumstances, unfamiliar environments. So, we at ITL have been listening as we've spoken to industry insiders in recent weeks and months to try to pick out assumptions that are widely held but that may not hold up.

As that famed management strategist Mark Twain said, "What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so."

Here are nine thoughts on what we all know for sure that just may not be so. (Please respond at the end of this commentary with your own thoughts on what may prove to be false assumptions. We plan a follow-up in two or three weeks.)

Consumers want a relationship with their insurance company. Sure, and I want a relationship with the guy who did my colonoscopy. If you can tell me something I actually want to know, then, sure let's hear from you from time to time; otherwise, leave me alone.

A digital strategy is key. Yes, it is, but only if you have the pieces to implement it. I can’t tell you how many companies we come across that are working on their digital strategy but don’t have any capability for digital distribution. That's like putting a bunch of ketchup on a plate but forgetting the French fries.

The consumer’s only choice when it comes to risk management is which insurance company to buy from. Look at all the ways clients are working to find alternatives to insurance and to reduce risk – e.g., the self-insurance trend among employers lining up healthcare and the efforts to reduce vulnerability to cyber attacks, rather than to just insure against them.

Life insurance is about what happens when you die unexpectedly. In fact, we suspect that life insurance will increasingly become part of how people manage their lives, especially their finances. Term insurance may even become an add-on to other products – take out a home mortgage and get some life insurance thrown in, for instance. Distribution costs would head toward zero, so, those commissions of more than 100% of the first year’s premium? Not for long.

We're collecting the right data, just like we always have. Or, maybe not. New risks come with new data and new underwriting concerns; old data need not apply, in many instances. New sources like the Internet of Things provide new data at astonishing speed; processing needs to move toward real time.

Brokers will always make their money selling insurance products. Nobody wants to buy insurance. Even those of us in the industry don’t want to buy insurance. But there are loads of services and products related to health and safety that lots of us would like to buy, from brokers smart enough and nimble enough to offer them.

Companies don't need to partner or buy their new technology; they can build it. Or maybe not. At least, you may not be able to move as fast on your own as if you found a partner or a supplier. Some of this is cutting-edge stuff, and the top developers tend to want to work for software companies, not insurers.

I have time. Maybe, maybe not. Here’s a test: Try to get on a decision maker's calendar for anything of any consequence – a partnership with an insurtech, an idea for an innovative product, whatever – and let me know if you can schedule that call before September. Then imagine what happens when someone figures out that customers demand quicker response in this digital age and greatly speeds up the clock cycle in insurance. What happens then?

IBM's development process worked for decades, until the personal computer came along in the 1980s and sped up the clock cycle of the industry. IBM consistently introduced PCs in the 1980s and 1990s six to nine months after competitors came out with machines based on the new Intel processor – and new models were only profitable for the first six to nine months of each cycle. IBM, once the most profitable company in the world, had to go through years of painful retrenchment to realign itself with the market. You're not immune.

Yeah, 20% to 30% of insurance companies won't exist in a decade, but mine certainly will. Really? Why? How do you know you’ll be one of the stand-alone survivors?

As I said, please use the comments tool below to let me know what we should add to our list. I won't, well, assume I got them all.

Wayne Allen
CEO

Getting the best outcomes for injured workers involves much more than just treating the actual injury. Their recoveries depend on a variety of additional factors; such as whether they have access to healthy food and clean water, their ability to travel to medical appointments and the extent of support they have. Increasingly, workers’ compensation payers are finding that these social determinants of health (SDoH) have a significant impact on the healing process and a worker’s ability to return to work. While these issues may not be a direct responsibility of stakeholders, addressing them to whatever extent possible can vastly improve and expedite the process. Many of us already do this when catastrophic injuries are involved. We believe SDoH could and should become a critical review of a workers’ compensation claim as a way to improve overall health and well-being among the workforce and create better medical outcomes. Two experts were on hand for our most recent Out Front Ideas webinar to provide their insight and outline strategies the industry can take to influence SDoH factors:

• Darin Hampton, regional recovery coordinator for International Paper
• Maggie Alvarez Miller, senior manager of client service management for Mitchell

Defining SDoH SDoH is not a new topic. Within the healthcare system, stakeholders began implementing programs 20 years ago to address the structural determinants and conditions in which people live, work and age. We included SDoH in this year’s Issues to Watch because we believe there is a significant opportunity in the workers’ compensation system to address these in the claims process. SDoH includes multiple categories, such as:

• Economics. Does the person have a stable income? Does he or she have enough money not only for his medical needs but to care for his or her family?
• Environment. What is his neighborhood like? Is it safe?
• Transportation. Can the worker get to and from work? What about travel to his medical appointments? Can he or she drive? If not, does he or she have other options, such as public transportation?
• Nutrition. Can the injured worker access quality food and clean water?
• Support. Does the worker have a network of family and friends who can help? Social isolation and community connections are imperative in a person’s ability to recover from an injury or illness. In fact, within Medicare and Medicaid there is a realization that a person who is not engaged in his or her community is more likely to have a readmission.
• Culture. Is there a discriminatory attitude toward the person in his or her living area or within the medical community?
• Understanding. An injured worker needs a basic understanding of what he or she needs to do to facilitate his recovery. Managing chronic conditions, for example, is crucial, along with taking medications as prescribed.

All these and other factors come into play in how well an injured worker recovers and returns to work. How an organization addresses SDoH depends on the company, the culture and the worker himself. See also: How to Embrace Workforce Flexibility   Employees of International Paper, for example, typically work in remote areas, where paper mills are likely to be. Also, many of its workers are older. That creates challenges in trying to ensure they have access to medical providers, quality food and water and a network of support. What’s Happening The workers’ compensation system could benefit from programs that some health plans and health systems have implemented to help connect patients to appropriate resources in the community. RWJ Barnabas, a New Jersey-based healthcare provider network, addressed the low levels of nutritional and health literacy in one area by creating a farmer’s market and community garden. In several major cities, health systems invest in apartments for patients whose current living environments may not be adequately equipped to fulfill their needs. They also augment the new housing with nutrition classes and provide caregivers to help improve overall health. Kaiser Permanente is developing a system that will allow patients and caregivers to "click" and get referrals to community providers of nutrition, transportation and other resources. The idea could translate to the workers’ compensation system by allowing claims team members and clinicians to identify services that could help an injured worker, for example, get healthy foods from a local deli. Literacy Understanding the healthcare system and, especially, the workers’ compensation process increases an injured worker’s engagement in his own recovery. Many employees have little or no idea how these function. Improved communication is a key to creating more understanding among injured workers. Companies that operate multiple facilities away from corporate headquarters can be challenged when a worker suffers an injury and has many questions. Training front-line supervisors on all aspects of workers’ compensation goes a long way to address the lack of understanding. When an employee gets injured on the job, a trained supervisor can direct him to appropriate treatment and address any concerns he has. Internal websites are another way companies help injured workers access information about their claims. Workers can see information such as when their next medical appointment is scheduled and when their next payments will be made. The knowledge — or lack thereof — among employees may be such that they are unaware of basic healthcare services. For instance, they may never have had an MRI and do not know what to expect. Case managers are in a position where they can work with the injured worker to help him or her make the best medical decisions. The managers can also prevent complications. A person who has comorbid conditions may not realize the impact those can have on recovery. Truly helping an injured worker increase his or her health literacy involves more than just informing; it requires gaining an understanding of what is and is not understood and explaining it in a way that makes sense. Culture According to panelists, cultural differences have a tremendous impact on a worker’s recovery. This involves much more than just language. The perception of authority in some cultures can also affect how a person deals with the injury and recovery. In Hispanic and Filipino cultures, the fear of losing one’s job can be such that the person does not report an injury. Cultural understanding among employers, payers and other stakeholders can help alleviate certain challenges that may arise and speed recovery. Having the injured worker partner with someone who is trained to understand cultural diversity can go a long way. Some companies have "employee advocates" assigned to work one-on-one with the injured worker. The advocate is the first point of contact and makes it clear that he or she is there to work for the injured worker’s benefit. Having that person available to respond to questions and concerns can also go a long way in preventing the injured worker from seeking an attorney. The advocate may steer the worker to outside resources that address health issues aside from the injury, such as smoking — directing him or her to a smoking cessation program — or obesity. The advocate may work with the employee on ways to get his or her children to school or how to handle a confused spouse. Whether it is an advocate from an external source or a trusted person within the injured worker’s own company, the idea is to address all the employee’s concerns in a holistic way. Tapping into appropriate community resources and ensuring the worker understands and uses all applicable benefits available can break down some of the cultural challenges and address literacy issues. Cultural competencies within the claims team is vitally important to align with the needs of the workforce. Whether it’s a matter of age, religion, geography or whatever differences workers have, those handling the claims should be trained on diversity and be adept at how cultures differ and ways they affect recovery. Applications for Workers’ Compensation An injured worker had a malfunctioning well, leaving him without an adequate supply of clean, accessible water. International Paper considered the problem and ended up paying $3,000 for a new well pump. While such a purchase would seem way outside the bounds of normal workers’ compensation expenditures, the company reasoned it would allow the worker to stay in his home and recover, rather than having to go to a rehabilitation facility at an estimated cost of $30,000. The employee healed and returned to work, which the company considered a win for everyone involved. That is just one example of how SDoH factors can affect a claim and how paying for something on the front end saves suffering, time and money for the worker and the employer. See also: Insurance 2030: Scenario Planning   Another example is a case in which the worker was rendered a paraplegic and unable to return to his double-wide trailer. By purchasing a new home, the worker was able to return to his community, where he was close to healthcare and a supportive community. Again, a better outcome and lower costs were achieved. It is not unheard of for employers/payers to purchase homes for injured workers. What may seem like an unreasonable expense ends up saving money and improving outcomes in the long run. But it’s not only catastrophic claims that have underlying SDoH that should be considered. Looking at an injured worker holistically and considering his or her overall situation can prevent "creeping catastrophic" claims. A claim that initially seems routine may become complex when SDoH factors are involved. As our speakers told us, it comes down to communicating with injured workers at the beginning of a claim and identifying those with circumstances that could affect recovery and drive costs, then figuring out how to tackle them. A good way to begin is to start small. Look at individual items on a claim, such as obesity and food, and find appropriate resources. Or, if an injured worker is socially isolated, provide a home-health caregiver to meet with the person. The injured worker who has transportation problems may need extra money for a bus pass to get him or her to medical appointments. These are small ways that payers can make a difference on these claims. Assessing claims early on to identify these and other issues is imperative. There are forms to help, such as those available on the American Academy of Family Physicians’ website. The organization has a variety of tools to help assess SDoH so stakeholders can mitigate them. While it is not possible to hire a perfect workforce, organizations are increasingly finding creative ways to maintain a healthy workforce and help those who become injured or ill. Some are finding apps that can address various SDoH; in others, HR departments are evolving their benefits because of the unique needs of their workers. One of the questions we were asked during the webinar is how to identify SDoH without violating a worker’s privacy. As Maggie Alvarez Miller explained, supervisors can ask open-ended questions. Let workers tell you what issues they are having and how the employer may be able to help. Also, nonverbal cues and body language might be a signal to try to engage the worker. At the very least, the HR person or supervisor can discuss her suspicions with a nurse case manager or other medical provider. Finally, having a dedicated employee advocate can be a way to let the worker feel comfortable and open up about issues that might impede recovery. The advocate may also pick up cues from the injured worker’s environment, such as expired food in the refrigerator. Some injured workers are concerned about their abilities to perform their normal home-life activities, especially if a spouse or others expect them to undertake tasks such as cooking and cleaning. The worker may fear his or her inability to do so will cause stress for other family members. An injured worker in such a situation could benefit from a discussion with an employee advocate, nurse case manager or other person about how to address the issues with the family and then bring family members into the conversation. Spouses or children may not be aware of how the worker is feeling and, on hearing, may be willing to help out. Additionally, there may be outside resources that can be brought in to assist for the short term. To listen to the full Out Front Ideas webinar on this topic, click here.

There are rumblings of fear and nervousness about the long-term impact of artificial intelligence (AI). Are we ready? Have we thought through the potential consequences? More and more questions pop up, which is understandable considering AI’s capacity for profound change. But it doesn’t really matter if we’re ready for AI or not. Let’s consider what AI does and how it can work for all businesses as well as in specific industries. It’s Not a Replacement Artificial intelligence is, essentially, algorithm-based software that can “see,” “hear” and “think” in ways that often mimic human processes — but faster and more accurately. It is easy to see why business would not be ready for this. AI can teach you something by looking at your data more deeply and in a less biased way than you would ever be capable of otherwise, and this could sound ominous or threatening to human jobs. But it doesn’t mean a loss of value for humans. Rather, the innately human characteristics of higher-order thinking, of seeing what’s not on the page, and making decisions that account for intangibles, can be applied in far more strategic ways. This is a pretty incredible proposition, one that any business should want to embrace. AI informs and empowers people to do their jobs even better and with greater efficiency. It can also help bring a high degree of personalization to services and products. When fear creeps in, it is important to remember that AI is a tool that humans control. People have the final say. We’re not looking at a “machines will rule the world” scenario. How You Feed the Machine Matters If there is another knock on AI-based technologies, aside from questioning whether AI will replace humans (it won’t, although jobs in the future may look a little different), it’s the issue of bias. Some argue that data generated through AI is inherently biased because humans assign machines to look for and pull out specific elements, and, therefore, human biases have entered the equation. This is not necessarily true; it depends on how you set things up. Many companies feed data into systems and don’t “tell” the machine anything; they let it tell them. With this approach, all bias is eliminated because the data is clean. The human interpretation of resulting data is what then adds bias. See also: Untapped Potential of Artificial Intelligence   For example, if I input all of the addresses and relevant statistics in Chicago, a system will eventually learn which are the high-income areas all on its own, but if I feed the system data that I code as high-income, I’m making the choice. From this perspective, you can think of AI like the lab partner you always wanted who could conduct every experiment perfectly but let you determine how the findings should be applied. The Transformation Has Begun Perhaps the best way to conquer AI apprehension is to look at some of the exciting applications of AI-based software across industries. In healthcare, companies are using AI to match patients with the right doctors at the right time, doctors who, along with researchers and drug companies, are using AI to determine the best, most effective treatments for incredibly complex medical conditions. Faster, more efficient research capabilities powered by AI are saving people’s lives. Local, state and federal governments are using AI for everything from virtual assistants to controlling traffic lights to furthering policy initiatives. And AI is one issue that has received bipartisan support. In 2016, President Obama issued a report titled, “Preparing for the Future of Artificial Intelligence.” The White House stated: “Advances in AI technology hold incredible potential to help America stay on the cutting edge of innovation. Already, AI technologies have opened up new markets and new opportunities for progress in critical areas such as health, education, energy and the environment.” Earlier this year, President Trump unveiled his own American AI Initiative, directing federal agencies to conduct R&D on AI, work with outside researchers, set clear standards and more. As part of its rollout on Feb. 11, Trump noted, “Continued American leadership in artificial intelligence is of paramount importance to maintaining the economic and national security of the United States.” There is also tremendous promise for education, where AI is expected to help schools and teachers accomplish more than ever. With help from AI, schools can make better use of their resources and reduce admin time, while teachers can focus on teaching the way that their students need instead of prescribing to a one-size-fits-all curriculum. See also: 3 Steps to Demystify Artificial Intelligence  I could give even more examples, but you get the point. If even the sectors known to be among the slowest adopters of change are exhibiting a willingness and excitement to put AI to work, the train has left the station. You’re going to have to get on board. In part two of this series, I will dive deeper into why businesses must look beyond what’s happening in the world today when considering what to do about AI. You cannot plan successfully for tomorrow based solely on what is happening today. As first published in Dataversity.

The thought of a major insurance company, and its brand, disappearing from the market seems impossible to comprehend and more like the stuff of an attention-grabbing headline. But that’s probably what everyone once thought about Atari, Commodore, Kodak, Nokia, Polaroid, Blockbuster, The Sharper Image, Enron, Blackberry, DeLorean, Radio Shack, Motorola, Toys 'R' Us, Tower Records, HMV, Palm, AOL, Compaq, Borders, Circuit City, Pan Am, Netscape, Nortel – and now Sears. As I was reviewing the NAIC 2018 insurance industry rankings and market share, I could not help but notice that some significant trends were accelerating. In the private passenger auto insurance line of business, Geico has overtaken Allstate to take the #2 spot with a 13% market share and continues to close in on State Farm, whose share has dropped to 17%. In fact, Geico has publicly stated its intention to overtake State Farm soon. Now this does not mean that State Farm or Allstate is at risk of going out of business anytime soon, but it does underscore the power of market trends that could over the longer term displace carriers that are not paying attention. Consolidation among top tier insurers is one of the many ways that insurance brands will disappear. According to Deloitte’s 2019 Insurance M&A Outlook report, the aggregate deal value of P&C acquisitions grew by 316% to $34.1 billion in deal value, up from $8.2 billion in 2018. American Family, the 10th largest U.S. auto insurer, recently acquired a number of smaller competitors, including Ameriprise Auto & Home, Main Street America, the General and Homesite. And #13 Kemper recently acquired Infinity. Also, in 2018, #19 Hartford Insurance acquired specialty insurer Navigators. Just as Amazon’s direct-to-consumer model disrupted brick-and-mortar retailers, insurers that deliver and service consumer products and services digitally and on mobile devices will continue to outpace competitors that operate in a “middleman” distribution model. Auto insurance insurtechs such as Metromile, Root and now others will not displace tier 1 auto insurers but will further erode their customer base, particularly those in indirect distribution models. See also: Insurance 2030: Scenario Planning   The Internet of Things, consisting of an estimated 50 billion “always on” sensors in connected cars, property and factories and on people by 2030, is enabling the development of very different on-demand and other types of insurance products that lend themselves to fulfillment by smaller, technology-driven companies, further displacing traditional insurers. As if these threats were not enough, look for car manufacturers to pile on by leveraging connected cars to exert greater control over the sale and design of auto insurance as well as the collision repair claims process. And the potential nail in the coffin – autonomous (self-driving) cars will shift risk and responsibility from “drivers” to manufacturers and software developers – ultimately eliminating auto insurance as we know it. Insurance carriers that recognize the implications of all of these trends are already making strategic plans to defend themselves. State Farm is in the midst of a long-term restructuring plan that will see it shed thousands of jobs and consolidate its facilities into three major U.S. operational hubs and in 2015 sold its substantial Canadian business to Desjardins. But eliminating overhead alone will likely not be sufficient. Others are pursuing strategies to alter product offerings to focus on risk prevention and avoidance, to diversify out of traditional insurance into protection products, alternative transportation and travel services and to develop strategic partnerships with auto manufacturers. Others are restructuring and positioning their companies for eventual acquisition, merger or sale. See also: Innovation: ‘Where Do We Start?’   A historical side note: Sears founded Allstate in 1931 and sold its products in the Sears tire and battery department. Allstate was spun off as an independent company and went public in 1993. Major insurance brands may not disappear any time soon, but their dominance and longevity can no longer be taken for granted.

For nursing professionals, medical malpractice is the 200,000-pound monster in the room. If a nurse inadvertently commits an error and a patient is injured, and then the patient decides to sue the nurse for malpractice, the resulting settlement payments and legal expenses can cost, on average, a total of $201,916. In this article, we’ll discuss what nursing professionals need to know about medical malpractice, look at a legal claim study and offer some risk management recommendations on how you can reduce the chance of getting bitten by the malpractice monster. What Is Malpractice? When you pass your licensing exams, your state board of nursing provides you with a professional license that certifies that you have the knowledge necessary to provide treatment and care in your state. Malpractice is defined as the failure to provide the degree of care required under the scope of your license that results in an injury. Legally, four elements must exist for malpractice to occur:

1. Duty: A nurse-patient relationship is present. The nurse has the duty to treat the patient according to the standards of care recognized by the nursing profession.
2. Breach: A breach of that standard has been established. Examples: Failure to notify the attending physician of a change in the patient’s condition; failure to properly complete a patient assessment; or failure to administer the correct dose of a medication.
3. Cause: The patient sustained an injury caused by the nurse’s error.
4. Harm: The injury resulted in damages, such as pain, medical bills or loss of income.

Patients tend to define malpractice more loosely. They may initiate a lawsuit because of the perception of wrongdoing. Real or perceived, win or lose, an allegation of malpractice can be devastating and typically results in an investigation by your state board of nursing. Depending on the outcome of that investigation, action may be taken against your license. For these reasons, making good risk management habits routine can help increase the likelihood of positive patient outcomes, reducing the chances of a lawsuit alleging malpractice. See also: What Shapes Malpractice Coverage?   Who Can Allege Malpractice? The injured patient can allege malpractice, as can legal counsel or, in the case of a minor, it could be the parents or guardian. In the event of a death claim, it could be the estate of the deceased party. Examples of Damages When a malpractice lawsuit is initiated, injured parties will seek damages to “make them whole.” Tangible losses are called economic damages. Intangible losses are called non-economic damages.

• Economic Damages
  • Medical expenses
  • Loss of income
  • Funeral expenses
• Non-Economic Damages
  • Mental anguish
  • Pain and suffering
  • Loss of consortium

Notice of Claim A notice of a claim informs you of legal proceedings against you. The notice outlines the allegations that caused the injury and will include a demand for services or money. A claim notice can also mean the filing of a suit or the starting of arbitration proceedings. Notice of a claim may include any of the following:

• Summons/complaint
• Letter demanding free services or money
• Oral threat or complaint
• Notice of arbitration

Act Early: Spotting and Reporting Incidents Recognizing potential incidents, acting quickly and reporting them to your supervisor or employer’s risk manager and to your professional liability insurance carrier may help reduce the likelihood of a claim. If a patient sustained an injury as a result of any of the following scenarios, report it immediately to document the incident. Such incidents may include:

• Slip and fall accidents
• Treatment-related injuries such as burns or fractures
• Complaints about unusual pain or discomfort
• Concerns over adverse treatment results
• Medication-related injuries

Malpractice Claim Dos and Don’ts

• Do
  • Contact your manager or supervisor
  • Contact your organization’s risk manager
  • Contact your malpractice liability insurer
• Don’t
  • Add or delete information in the patient’s chart
  • Try to resolve the situation on your own
  • Discuss the matter with anyone other than your defense attorney or your insurer


Legal Case Study This case study involving an ER nurse illustrates how easy it is to get drawn into a malpractice lawsuit—and how following good risk management procedures can help avoid a guilty verdict. Situation A patient was brought to the ER where he was well-known to the department staff. He was intoxicated, agitated and aggressive. For the patient’s safety, four point physical restraints were ordered. Per hospital protocol, security staff applied the restraints and checked the patient’s person for contraband. The ER nurse performed patient monitoring and assessment checks every 15 minutes as ordered, missing only one check to care for a critically ill patient. The missed check, along with the ER nurse’s monitoring and assessment findings, were fully documented. Shortly after the ER nurse performed a 15-minute check, the patient attempted to burn off his restraints with a cigarette lighter, igniting his bed linens and clothing. The patient suffered severe burns over 25% of his body, including both hands, causing him to lose his fingers on one hand. Allegations The patient sued the attending physician, the hospital and ER nurse. The allegations against the nurse included failure to properly assess and monitor the patient and failure to provide proper care in a safe environment. Results Although the patient suffered life-changing injuries, it was determined that the ER nurse acted within the standard of care. The nurse’s documentation of events made an aggressive defense possible and ultimately successful. While this was a favorable outcome for the ER nurse, the resulting malpractice claim took 12 years and two trials to resolve, and the total cost to defend the ER nurse was $500,000. Nurse Practice Act To understand the standard of care required, know the Nurse Practice Act in your state. You can find your state’s Nurse Practice Act and keep abreast of changes to the law by visiting the National Council of State Boards of Nursing website. The Importance of Good Documentation The ER nurse’s documentation was key to successfully defending her case. A patient’s record is a legal document. Your notes can provide evidence of the treatment you provided, as well as acts against any miscommunication with that care. As a general rule, if it wasn’t documented, it wasn’t done. Your legal team can prove you provided specific treatment and care if it is found in the patient’s record.

• Document your patient care assessments, observations, communications and actions in a timely, accurate and complete manner.
• Never alter a record for any reason unless it is necessary for the patient’s care.
• If it is essential to add information to the record, properly label the delayed entry.
• Never add any documentation to a record for any reason after a claim has been made.

Dos and Don’ts of Documentation

• Do • Read and act on progress notes of previous shift • Be specific and objective when you document your observations • Document complete assessment data • Document interventions and status of patient following any intervention • Communicate any changes in the patient’s condition in a timely manner
• Don’t
  • Use vague expressions
  • Record a symptom without including what you did about it
  • Use shorthand or abbreviations unless they are approved
  • Give excuses
  • Record for someone else
  • Record care ahead of time

Policies and Procedures Wherever you work, the facility will be engaged in patient safety measures. Make sure you know and understand your facility’s policies and procedures for preventing errors and ensuring positive outcomes. Learn the documentation standard in your facility for how to chart, correct errors, make late entries and copy/paste in the electronic record. See also: Empathy Transforms Health Insurance   Should a malpractice claim occur, your defense team will analyze your documentation, and when complete records are available can use it to build a strong defense. It can also weaken a defense if it looks like the entries were copied and pasted from a previous patient. Lastly, know your facility policy on incident reporting and chain of command. Key Takeaways for Protecting Your Career

• Know and comply with your state scope of practice requirements, Nurse Practice Act and facility policies, procedures and protocols.
• Follow documentation standards established by nurse professional organizations and comply with your employer’s standards.
• Develop, maintain and practice professional written and spoken communication skills.
• Emphasize continuing patient assessment and monitoring.
• Maintain clinical competencies aligned with the relevant patient population and healthcare specialty.
• Invoke the chain of command when necessary to focus attention on the patient’s status and any change in condition.

While no healthcare professional is immune to the 200,000-pound malpractice monster, you keep it from affecting your career by making sound risk management procedures a part of your practice. Following the recommendations outlined in this article is a good place to start.

By now, most of us are so familiar with McDonald’s “do you want fries with that?” strategy that it’s easy to forget how brilliant it is. Let me refresh your memory. In 1993, McDonald’s implemented a new policy: Every time a customer placed an order that didn’t include fries, the cashier would ask if the customer wanted fries with that. The result: an added 15% to 40% in annual revenue. Just as important: The boost didn’t require any expensive training or investments from the company. So how does all of this apply to insurance sellers? Turns out, many insurance companies can implement a similar point-of-sale upselling strategy to increase market penetration and revenue. Here, I’ll offer examples of several other companies doing this successfully and offer takeaways for those in the insurance industry. 1: Partner to Be Present at the Point of Sale One of the biggest struggles for insurance sellers is getting customers to come to us. Even when they want and need insurance, it’s easy to forget to make the purchase, which isn’t good for anyone. The solution is to be present at the point of sale for the item that needs to be insured. One company that’s been doing this for a long time is Expedia, an online travel agency. The site helps you search, compare and purchase your plane tickets, rental car and hotel stay. At several points during the checkout process, you’re offered the opportunity to add travel insurance to back up your trip. As you approach the “Complete Purchase” button, this coverage only seems to make more sense. This strategy is brilliant because it makes life easier for everyone: the customers who are about to make a big purchase (which could be derailed by bad weather); the airlines, which want to make sure their customers have a great experience; and the insurance provider, for obvious reasons. Of course, not everyone will buy right away. To make this strategy as effective as possible…

• Ask for contact information from those who don’t buy so you can follow up later.
• Be explicit about your plans for contacting people; otherwise, they may ignore your communications or mark them as spam.
• Remind customers of your connection when you contact them. Mention the company you partnered with in your first communication.

Of course, many insurable purchases are still made in person. When it’s not possible to integrate via an app, it’s time to… See also: How to Keep Humanity in Online Sales   2: Unite Disconnected Systems The classic example here (and one that my company, BriteCo, addresses) is buying an engagement ring. In a typical transaction, the seller may be able to offer an appraisal, which buyers must then take to their homeowners or renters insurance provider to see if they can get the ring scheduled. That’s not ideal for a number of reasons, chief of which is that the purchaser is likely to forget to follow up (and may even lose track of the appraisal), meaning that the valuable asset goes uninsured. We’ve found success by creating a software system to handle the entire appraisal and insurance flow. First, our jeweler partner logs in to a simple-to-use, cloud-based platform to create an appraisal in minutes. That appraisal triggers an insurance engine, which generates a customized insurance quote. A customer who buys from a BriteCo jeweler partner will get a digital copy of the appraisal via email or text, immediately followed by a separate message with the insurance quote for the appraised piece(s). The customer can purchase insurance right then and there, on a smartphone, and leave the store fully covered. Many buyers won’t immediately be ready to purchase insurance, but with the ability to access a policy in their pocket (literally!), they can easily follow up later. This removes much of the confusion about the insurance process that can cause customer dropoff and, of course, helps prevent valuable jewelry from going uninsured. 3: Add Value for All Parties As you cultivate partners who can help you connect with customers, it helps to be able to offer tangible benefits to everyone involved. For example, human resources software giant ADP has a partnership with the small business insurance agency Insureon that lets ADP customers easily apply for business insurance, which nearly every business needs and which tends to be difficult for small-business owners to find. Everyone wins in this partnership: Business owners get access to essential coverage that can prevent major financial losses, ADP manages its risks by helping its customers get insured (including for professional liabilities such as workplace discrimination), and Insureon gets an opportunity to sell to those in ADP’s large customer database. Just as important, the partnership offers business owners a third-party vote of confidence as they make a decision about commercial insurance, a product that many have little or no experience with and so often feel uncomfortable evaluating independently. 4: Aim to Be Subtle and Persistent Once you start looking for masterful upselling, you’ll see it everywhere. Apple gently offers AppleCare as an add-on throughout its checkout process, without ever shifting into a hard sell. Amazon and Office Depot surface additional warranty coverage for higher-ticket and tech products in checkout as you complete your purchase. See also: Bold Prediction on Customer Experience Think about these experiences from a customer point of view: There aren’t obnoxious pop-up windows you have to click past. Instead, the add-ons are part of the array of available support being offered as a part of an extremely fluid sales process. That’s an important model to follow for an industry that hasn’t always had the friendliest reputation. The Worst They Can Say Is “No” Remember: McDonald’s managed to increase revenue by at least 15% by asking a simple question at checkout. Part of this strategy’s brilliance is that not everyone has to buy fries – or insurance – for it to work. Even if many customers decline the offer, the ones who accept it will make a difference. As hockey legend Wayne Gretsky once famously quipped, “You miss 100% of the shots you don’t take.” Questionable statistical analysis aside, the man has a point.

Long-term care (LTC) insurance is no stranger to large amounts of data. However, in my 10-plus years in an LTC claim operations role, there is a piece of data I’m surprised continues to be shared without the proper context – claim terminations for people labeled “recovered.” Across the industry, this piece of data is used in actuarial assumptions and operational processes -- but not just for claims where the insured has recovered. Before I explain further, a little background: Claims data is a crucial piece of the overall risk management puzzle, especially for LTC insurers. The reserves associated with future claims represent a huge amount of the liability they are holding separate. Claim termination rates are closely watched. Insurers generally have three main designations for terminations for closed claims: 1. Death This one is pretty easy to understand; the insureds stopped receiving benefits because they are now deceased. This occurs 73% of the time based on the recent study conducted by the American Association of Long Term Care Insurance. 2. Exhaustion of Benefits Again, another simple concept. The insureds ran out of benefits before they died. This occurs 14% of the time, according to the AALTCI study. 3. Recovery Here is where we find the complexity. The very nature of the word implies the claimant in this category is now healthier and no longer needs to receive benefits. According to the same study, this occurs 14% of the time. See also: Using Data to Improve Long-Term Care   The problem with this category lies not with the study, which accurately reflects what insurers report, but rather the context and consistency of how this data is classified. What’s suggested is not quite the reality. But it requires a little digging to understand what I mean. Now for the Context Insurers and the claim administration systems they use require their data be categorized into larger buckets. It’s much easier, after all, to analyze and predict variables when there are fewer varieties of those variables. Instead of having many claim termination reasons, let’s find a way to just have three. Sounds simpler, right? Unfortunately, this approach changes the recovery designation into more of an “Other” category. Any claim that is closed where the insured isn’t deceased and still has benefits remaining ends up in this classification. Some examples: Preservation of Benefits Some insureds have limited benefits (and thus can run out of them). These claimants tend to be in their 60s, 70s and lower 80s. Given they’ll potentially fall short of benefits, they sometimes choose to stop receiving benefits to save them for future needs. Respite Care Most policies allow for several weeks of respite care per year. This benefit is independent of the elimination period and allows families to open a claim for a short time while the primary caregiver takes a much deserved break. Again, when these short claims close, they are coded as recovery. Moving Abroad Many policies do not cover care received outside the country. So, when insureds move overseas at the end of their life, the claims unfortunately must be closed, and their policy then lapses by their choice. Spouse Retires/Family Member Becomes Caregiver This one is close to the preservation of benefits status. Some policies exclude family members from providing the care. When the claim is initially filed, the spouse is still working or family members are unavailable to assist. These factors can change and cause a family to close the claim while the family member is able to care for the insured and save the rest of the money for later. Lack of Contact As odd as it sounds, sometimes claimants just stop sending in bills. The company attempts to contact them over several months, they search online databases for proof of their passing and they contact every phone number and e-mail address they have in connection to the claimant. At a certain point, they have to stop trying and close the claim. Unreported Death Related to lack of contact are deaths that are not reported to the insurance company and don’t get picked up by the search techniques most insurers use. Even if the companies later find out that the insured passed away and close the policy as a death, they generally don’t go back and change the termination status of the claim, so it remains, a recovery. Less than $100 left on the policy This one adds a final bit of humor to the list. The benefits available on an LTC policy are often not used in the exact amounts intended, so the policy is not exactly exhausted by the final benefit payment. I have seen situations where the amount left on the policy is so small, the insured (or the family) doesn’t send an invoice to request the final amount. All of these examples have something in common. The claimant didn’t die, and there were benefits remaining on the policies. So every one of these situations would be reported as a recovery. So what? So what am I trying to say here? All data is inaccurate? No, the data isn’t inaccurate, it just requires the proper context before it is used for analysis. Without the proper context, statistics could be used to suggest that, 14% of the time, an insured who qualifies for long-term care benefits will improve enough to regain independence and no longer require assistance. See also: Time for a ‘Nudge’ on Long-Term Care   The reality is much harder to know. While you would expect some recovery on acute conditions (think hip replacements), would it surprise you to know that as many as 25% of these recoveries are claims where the insured has been certified with cognitive impairment? Did those claimants really get better and no longer require care? Another 25% of the recoveries most likely fall into one of the categories above. So that means about half the recoveries reported, aren’t really recoveries. Recommendations:

• Talk to your internal claims team to get their input. Involve them in the collection and analysis phases, not just at the read-out of the final product. By working together with some of the key claims experts, you will gain better context around the data.
• Understand your internal processes and procedures. Learn the details of your company’s processes associated with opening, approving, paying and closing claims.
• Be careful when using industry-wide data. Not every company’s processes are the same, and data elements may have different definitions. Only rely on and draw conclusions when you understand the contextual factors surrounding the data.

Forrester’s “The U.S. Health Insurers Customer Experience Index, 2018” found that the consumer experience with health insurance companies is among the lowest-ranked in the industry. The cause, according to Forrester: Insurers don't engage with emotion. Making an empathetic, emotional connection with consumers should be a top priority for health plans that want to differentiate themselves from competitors in an increasingly crowded market.

Why Customer Experience Is Essential — and Difficult

A positive customer experience can set a health insurance organization apart from others. With more choices available than ever, members are ready to switch health plans if they feel you’re not meeting expectations. Not only that, they’ll share stories with each other, and these stories and reviews matter more than you think.

I saw this play out with my company’s recent open enrollment process. My colleagues and I were deciding which insurance company we would choose. A couple of employees mentioned how difficult it was to work with one of the companies on the docket, while another woman said that one option was more collaborative and seemed like it cared about her health. She said she wouldn’t mind paying more for a trustworthy company, and, just like that, eight of us were swayed to go with the more expensive option because of the experience it delivers.

To be fair, the industry faces significant hurdles in its quest to improve customer experience. Health is a personal and sensitive area, so healthcare is an emotional field. When dealing with intimate, frightening medical issues, it’s easy for consumers to transfer their fears and frustrations to something as complicated as insurance. And it doesn’t help that consumers often don’t know exactly what they’ve bought until they need to use it, which sometimes causes unpleasant surprises.

See also: Thought Experiment on Life Insurance

Communication between members and health plan representatives is another barrier to connection. Because many member-payer interactions happen over the phone or via email, it’s difficult for health plan representatives to empathize with consumers. Add to that the high turnover rate within this field. A lack of trained, experienced staff makes it difficult to build trust and long-term relationships with consumers.

A Simple, Human Approach to Customer Experience

Despite these challenges, focusing on the human element of health insurance will improve the consumer experience — if you make empathy and top-notch communication the driving forces. Getting in front of new members is crucial. Because they probably don’t have a full understanding of what they’ve bought until they need it, you have an opportunity to give them more information and build trust.

Consider it a preemptive strike: As soon as they sign on as members, welcome them with communications that outline just what they’re getting from you, and explain how they can best communicate with your organization. When questions arise down the line, they’ll feel prepared instead of frustrated.

Using plain language is crucial because the industry’s jargon confuses many. In a Policygenius survey of more than 2,000 Americans, plenty of health insurance consumers were confident they understood basic health insurance terms like co-pay, deductible, out-of-pocket maximum and co-insurance. But when asked to provide definitions, far fewer respondents — 4%, to be exact — could correctly define those terms. Being able to communicate insurance terminology so the everyday consumer can understand will be essential to forming member relationships and offering an excellent experience.

Empathy is equally important. Again, health insurance is an inherently emotional field, and you have the opportunity to interact with members with the kind of sensitivity, empathy and emotional intelligence they crave. 60% of consumers will cut ties with a company if they feel staff members are apathetic. From copywriters to customer service team members on the front lines, train people on how to empathize with others and how to communicate with empathy. This isn’t a skill that can be taken for granted.

See also: 4 Trends to Expect in Health Insurance

Finally, don’t forget about your own employees. If you take care of them as you would your members, you’ll empower them to provide the best possible service and experiences. Research shows that recognition is employees’ No. 1 desire, and it can inspire them to do their best work. Everyday affirmations and formal acknowledgment that they’re doing great work can help encourage employees to maintain the highest standards when it comes to customer service.

Customers need to trust their health plans if they’re to build an enduring relationship that lasts through a turbulent, competitive market. That trust is best established through authentic human connection. A focus on clear, empathetic communication and emotional intelligence can be transformative, giving even the most frightened, confused member a feeling of comfort and support.