From a customer’s standpoint, every interaction with your company should be part of a singular experience — not a siloed, repetitive one. In fact, a smooth, seamless connection between the online and the offline worlds can provide a lifeline. For example, imagine you have to book a plane ticket just a few hours before hopping on a plane. To beat the clock and make your flight may require a few tweets, a visit to the airline’s website, a call to the airline’s customer service team and a quick check-in once you are at the gate. When this kind of interaction happens seamlessly, and the intersections of the online and offline channels work together smoothly, your needs are met quickly and painlessly (and you are not left behind at the terminal). This is the omni-channel customer experience. Defining omni-channel customer experiences Multichannel is when multiple marketing and service channels work independently to enhance the customer experience. When these channels work with one another, that’s when multichannel evolves into omni-channel. Omni-channel results in a single, seamless interaction with consumers across all channels, both online and offline. This can include all touchpoints in the customer lifecycle — websites, social media, live chats, follow-up emails, phone calls and in-person assistance on the sales floor. Look at a bank. Financial institutions should be available to assist you any time of the day or night over multiple channels. The goal is to do so without your having to repeat yourself because the institutions have documented, collected and stored all the information about your offline and online inquiries. For its part, the bank can effortlessly upsell services appropriately because it has the history of your interactions with the bank. Thanks to implementing an omni-channel customer experience, McKinsey & Company increased a regional bank’s product sales by more than 25% in six months. The bank tightened the loose ends between its digital and traditional channels and made the user’s experience as seamless as possible. Why does omni-channel matter? Which of these two options would you choose: a product from a company that pulls your personal data from your previous online experiences and doesn’t ask too many questions, or something from a company that asks you to spend time filling out multiple forms? You likely want to do business with the company that knows what it’s doing and uses the information it has already collected from you to make your life easier. In fact, 70% of customers “say connected processes are very important to win their business (such as seamless handoffs between departments and channels, or contextualized engagement based on earlier interactions).” Furthermore, over 80% of customers are willing to give a company relevant personal information to bridge the connection between their online and in-person experiences. See also: A Management Guide to Omni-Channel   Successful omni-channel implementation offers myriad ways to prevent disconnected departments and processes from happening. It supplies representatives from all your departments with all the company’s information about a specific customer. For instance, a customer began messaging through your website’s integrated chatbot about an issue, then decided to contact your call center. As customers switch from one channel to another, they expect (or at least hope) they won’t have to re-explain what they need. The omni-channel experience focuses on the overall customer experience, making it smoother, more consistent and highly personalized for customers. Build a better customer experience with omni-channel integration Even though the main idea behind the omni-channel experience is fairly easy to understand, companies are still figuring out how to manage it correctly. Many companies can handle the multichannel experience, but industry leaders are investing in omni-channel as a part of their commitment to a great customer experience. Let’s review some ways to make the processes work like clockwork, as well as what to do when integrating channels for an omni-channel customer experience. 1. Understand your customers' behavioral patterns This is where everything begins. Because the omni-channel experience is all about creating a flawless customer journey, understanding this journey from the very beginning is crucial. Gather data. Gather all the data you have about your customers, including how they prefer to interact with your brand. If you have a CRM system, that’s your starting point. Check your various analytics tools, too, to learn more about your customers’ communication preferences when they reach out to your support team or decide to purchase your products. Your data, analytics and key performance indicators (KPIs) are among the most important tools your business can use to make the customer experience as pleasant as possible. Search engine optimization (SEO), search engine marketing (SEM) and email campaigns all offer rich insights into both potential and current customers. “Ecommerce analytics must evolve to track shoppers wherever they may be, whether they are purchasing a product on Instagram, discovering a brand on their phone or cashing in a gift card at a pop-up shop.” As omni-channel becomes more commonplace, well-organized and optimized data will provide the competitive edge. Use surveys. Research the issues that customers come across through short surveys. One method is to enlist the help of your sales and support teams. Those teams are at the forefront of your company, directly represent your brand and communicate with your clients daily. A second method is to weave surveys into your online experiences. For example, when a user performs a specific action on your website, have a brief customer satisfaction survey pop up. These triggered questionnaires can provide valuable feedback. Define segments. Always keep in mind your audience segmentation. Different groups of customers have different needs, and those needs should help you define your user personas. You can segment your users by the products they use, the frequency of their purchases or their customer lifetime value (CLV). A well-implemented omni-channel user experience can increase a client’s retention rate, and therefore potentially CLV. Interview customers. Finally, talk to your customers. Do they feel like something’s missing? What would they like to see in your product line? Is there something your company does particularly well? If you can, ask them a quick question each time they shop with you. For example, after completing your data analysis, your ecommerce store may learn that customers prefer to pick up their order at a store instead of waiting for an item to be delivered. Some businesses have seen increases in their sales by giving their customers the option to track their orders and sending them notifications. These improvements enhance their shopping experience and keep customers coming back. 2. Create your own omni-channel universe After defining your customer journey, generate ideas on how to make the journey more coherent. How can your representatives jump from one channel to another, without data loss, in the most convenient way for the customer? Your customers come to you from various channels, but their personal details should be saved and accessible throughout your data management system and CRM platform. This means that all of the channels and technology you use in your business processes do not operate in silos; they should be synchronized, integrated and able to work together to complete any missing pieces of information. By fine-tuning this process of interchannel and interdepartmental cooperation, you will likely generate more revenue. Because social media is an extension of many people’s lives, many ecommerce sites integrate their services with social platforms. When it comes to online shopping, Instagram and Pinterest reign supreme; however, each industry has its own dominant social network. This means the omni-channel universe extends far beyond your company’s data and platforms and must include social media. 3. Measure your customer experience data After setting up all the necessary processes, make sure your omni-channel experience is performing as planned. Data and analytics give you the ability to view and learn the results of your efforts. To measure your omni-channel customer experience from a subjective point of view, collect feedback from your customers on key points throughout their journey with your brand. It can be through a call center, over an online chat, by a quick online survey or on a social media page. See also: How to Win the Retention Game   Proper management and organization of the data you collect will help you tweak your efforts and put you on the right track to a better omni-channel experience. Research, analysis and data-backed action provide a better understanding of your customers’ needs and expectations. Conclusion An omni-channel customer experience helps companies offer a personalized approach through a smooth, inviting customer journey that drives repeat purchases and loyalty. The process is worth it. Take these steps to improve your chances of achieving a true omni-channel customer experience, and, as a result, you’ll have happier customers who are glad to give you business. Thanks to your efforts to improve the customer experience, your company will see increased revenue and growth.

Now that hurricane season has officially begun, it's time to rethink our strategy for dealing with them. To date, the strategy mostly has been hope. Let's hope that not too many come ashore. Let's hope the damage isn't too bad if they do. Let's hope the federal government will come to our aid quickly if we're hit. 

But surely we can do better than mere hope. I think we can.

The solution, as usual, begins with better information. In particular, we need a sharper understanding of what properties are vulnerable, so owners are fully aware of the risk and can take steps to make the properties more resilient or, at the least, buy adequate insurance. At the moment, a reliance on measures such as the 100-year flood plain for evaluating the likelihood of flooding are far too crude and inaccurate. As noted in the article, "The Top 5 Risks in Specialty Insurance," thousands of properties have been classified as having low-threat status in Florida's Broward County even though it is right on the coast.

Much more detail on property exposures is now possible through digital tools. Elevation is one factor—new tools make it easier figure out how much above sea level each property is, and account for that information when measuring vulnerability, rather than treat thousands of properties as being in the same plain. Our friend Nick Lamparelli of reThought Insurance told me in a recent podcast that it's now possible for insurers to drill down and evaluate a building based on what floor expensive equipment like computer servers are on or even where that equipment is located on a given floor—providing a more accurate view as to whether it's somewhere vulnerable to wind and flooding, or not. 

It's high time we started using such digital tools to get more accurate and detailed risk information.

The adjustment will take time, of course. It will also take discipline. Many clients with cat-exposed property will see rates soar and will resist more accurate risk-adjusted pricing. But the better information needs to find its way into the market to force change.

Other types of technology can also help by hardening properties. One of the revelations to me from the wildfire season in California last year was how a relatively modest investment in building materials can make such a big difference—the fires move so fast that an exterior that withstands a couple of minutes of frightful heat might keep the structure standing, with the insides intact.

While hurricanes are similarly destructive, some materials innovation can mitigate risk. Guy Fraker, our chief innovation officer, talks about windows and drywall designed to withstand debris thrown at them by hurricane-force winds. (Guy's home in the Florida keys was in the eye of Hurricane Irma in 2017 and came through in good shape, though many neighbors were less fortunate.) More mundane approaches involve building homes with living space starting on the second floor, to minimize damage from flooding, and to strengthen the attachment of the house to the foundation and the roof to the house, given the tendency of hurricane-force winds to try to lift a house, or at least the roof.

If we don't change something about our approach to hurricanes, we taxpayers can expect to continue to shell out disaster relief packages on the order of the $19.1 billion that was just allocated by the federal government, largely to help areas hit by hurricanes Harvey, Irma and Maria in 2017. We'll always be subject to the caprices of Mother Nature, and some years we'll skate by with little or no damage, but hope is not a strategy, especially when a far better one is available.

Cheers,

Paul Carroll
Editor-in-Chief

It’s a startling statistic: Due to the massive amount of consumer and corporate data stored across the country, more than half of all data breaches globally are expected to occur in the U.S. by 2023. Although most people assume hackers are only interested in large data breaches, like the one experienced by Equifax in 2017 or Marriott International last year, it’s small businesses that find themselves at a greater risk. In fact, a recent report by Small Business Trends stated that 43% of cyber attacks target small businesses. That number will only continue to grow as cyber hackers develop increasingly sophisticated methods of threatening and stealing sensitive information. Small businesses can also suffer from lost data, unsecured devices and attacks stemming from covert phishing emails. Below are seven simple measures you can put in place to protect your small business this year: 1. Back up your data Over 140,000 hard drives fail in the U.S. each week, and 29% of those failures are caused by accident. Losing data can devastate a small business. Finding a secure way to back up your data is a necessity in today’s fast-paced, competitive business landscape. If you store company data in the cloud, back it up on a physical, on-premise drive to ensure data remains secure and a plan B is available. 2. Update and strengthen passwords The standard eight-character password can be cracked in 15 minutes. That time continuously decreases as brute force hacking bulldozes its way through identifying words, phrases and character password combinations. It’s important to make sure all passwords are 12 to 15 characters and use a combination of upper and lowercase letters, numbers and special characters that can slow down or derail a hacker. A password manager can also be employed to help ensure passwords at each access site contain a different, complex sequence of letters, numbers and special characters. Consistently updating passwords and requiring unique passwords for various devices will help maintain company security. See also: Taking Care of Small-Medium Business   3. Take cybersecurity training courses 97% of people are unable to identify a sophisticated phishing email. Phishing scams cost American businesses $500 million each year, and that number continues to rise, with over 400,000 more phishing attacks occurring in 2016 than the year prior. Data breaches also allow phishers to obtain specific information on a target through information uncovered during a breach and then use that information to appear credible. One way to combat this disturbing trend is to train your staff on how to identify malicious emails. 4. Implement a clean desk policy Unattended computers or documents cause 47% of all data breaches. As a result, many small and large businesses have begun implementing a clean desk policy, requiring employees to clear their desks of all papers and completely shut down their computers at the end of the day, to help ensure proper security of sensitive information. 5. Get cyber insurance On average, it takes 191 days for a business to even realize it has suffered a data breach and 66 days to contain a breach. Cyber insurance can provide critical coverage for any destruction including data lost through theft, cyber attacks, cyber crime, malfeasance or employee error. Cyber insurance companies can provide guidance in the days or months after a data breach, data recovery and forensics, ransom payments, public relations and credit monitoring for those affected by the breach. Having a defense plan in the form of cyber insurance protects your business, reputation and customers. 6. Create a plan 54% of SMBs have no contingency plan for handling a data breach. Not having a plan can make it exceptionally difficult to recover when your business is under attack. By creating a plan that clearly lays out the steps you and your employees should take after a data breach occurs, you can help mitigate the potential damages and losses and quickly begin the road to recovery. 7. Manage all BYODs 87% of companies allow Bring Your Own Device (BYOD). While the concept is admittedly an essential part of maintaining connectivity and handling after-hours tasks, the unfortunate reality is BYOD exposes your business to threats. By tracking all instances of BYOD with a mobile device management system, requiring all devices to be password-protected and developing a written security device policy, however, threats to these devices can be diminished. See also: Cyber Attacks Shift to Small Businesses   Taking these small steps to securing your growing business, and constantly revisiting and revising your cybersecurity plan, are some of the best ways to protect your investments and prevent the likelihood your business will suffer from malicious hackers trying to profit off your data. Prioritize these essential cybersecurity best practices above all else, because the safety of your business, employees and customers truly depends on it.

The information revolution has done more than just provide consumers with access to information; it has created a paradigm shift in the way most professionals conduct business with their clients. Insurance agents and brokers today are not only expected to be a trusted adviser of holistic risk management solutions to meet their clients’ complex needs but also a navigator into their financially stable future. To better understand how consumers are engaged in today’s digital economy, Chubb recently surveyed some 1,200 individuals on how they purchase insurance and the value they see in working with independent agents and brokers. The Chubb survey, “Winning the New Client Journey,” finds that 53% of consumers have shopped online for insurance in the past 12 months and 61% are likely to do so in the future. In addition, successful individuals and families are the most likely to browse home insurance offerings online, with 63% of such individuals and 73% of such families reporting that they have or plan to do so – the most of any income groups. Online shopping is a very attractive option for consumers. It’s convenient. It’s easy. It’s anonymous. It also presents people with an array of generalized solutions offered at seemingly inexpensive prices. The reality, however, is that these offers and their upfront savings may not address the very real needs of the buyer. The information revolution may have armed clients with increased access but not always with the ability to translate price and item information into useful knowledge. The survey also showed that, despite the fact consumers are conducting online research for homeowners insurance, 80% of respondents actually want their agents and brokers to prioritize getting the right insurance policies for protection over getting the lowest price. While the initial question posed by clients might be on price, they are presenting agents/brokers with an opportunity to better help them understand and differentiate the underlying value of products and how these relate to their specific needs. High Touch Improves High Tech and Client Retention Chubb’s survey found that 35% of consumers cited saving time as the top reason for purchasing insurance online. High tech may appear to be a time saver, but it will never replace high touch and the long-term relationship the agents and brokers share with their clients. The basis of a healthy agent-broker/client relationship lies in the following three attributes:

1. The ability to provide clients with guidance rooted in an understanding of their life situation;
2. The ability to differentiate between the fine print of product offerings; and,
3. The ability to think beyond the obvious of how today’s seemingly innocent purchase will affect tomorrow’s complex needs.

Financially successful clients may easily overlook significant property and casualty (P&C) risks during that initial, and seemingly innocuous, online search. An agent or broker’s ability to successfully guide a client from online information gatherer to informed decision maker is a key factor in any business development and retention plan. See also: Insurtech Ingredients? We Just Want Cake   Demonstrating Your Value and Providing Customized Solutions Chubb’s survey also revealed that 54% of successful clients said that agents and brokers actually lose credibility when they lead the conversation with the lowest-cost option. Although clients may initiate a conversation about their price and product search information found online, they reach out to agents and brokers with an opportunity to be a trusted adviser. It’s an invitation to be their counselors and crafters of customized solutions that will help their clients address some of life’s most challenging needs and circumstances. In addition, the underlying value in the agent/broker-client / relationship begins weeks and months before the client calls about the latest insurance information found during an online search. To help retain clients, here are a few basic questions every agent and broker should ask:

• Did I respond in a timely manner during a claim experience or request for a quote on a new policy?
• When my client called about the addition to the house or installation of a pool, did I extend the conversation so the client better understood all the property and liability insurance implications of those additions?

When agents and brokers demonstrate that they anticipate and understand their clients’ broader needs, they will have an opportunity to present bigger solutions. Agents and brokers should work with their clients to build a complete profile of their clients’ risk exposures and stress that one-size-fits-all insurance policies are insufficient for seemingly innocent household decisions, such as the installation of a pool. Clients will assign increased value to the agent-broker relationship, and price will be less of a factor, when you present well-thought-out and customized solutions. Enhancing the Value of Agents and Brokers to Clients Life-changing circumstances and events can be challenging not only for clients, but also for agents and brokers. To help agents and brokers during their clients’ changing purchasing journeys, Chubb has developed a new resource center that includes quick informational videos, resources, tactics that both agents and brokers can download and put to immediate use. Agents and brokers can access that resource at: www.chubb.com/winthejourney. See also: Strategies to Combat Barriers to Insurtech   The information revolution may have equipped clients with increased access to information, but agents and brokers have the insights and knowledge to enhance the value of that information and protect the long-term interest and assets of their clients.

Of all the software sold within the insurance industry, core systems continue to be the dominant purchase for hundreds of insurers. And just when you think the trend might slow – that every last insurer has bought the system that it will need to support its business – we see another cycle of buying begin. 2016 was a low point in core systems buying, with the lowest number of policy, billing and claims systems purchased in several years. Questions started to arise. Was the market finally saturated? Were these needs now filled? Would insurers start to move on to other projects? As of this writing – and from looking at the insurer and MGA buying trends over the past two years – we see that this could not be further from the truth. Buying has been on the upswing since 2016, increasing by 13% in 2017 and 11% in 2018. And I have been asked a myriad of questions: What is hot? What is not? Are more suites being purchased than components? Or are we entering a new era of component buying? What lines of business are insurers looking to support with core systems? Will insurers really buy systems that are operating in a cloud environment? See also: Security for Core Systems in the Cloud   At the same time these questions crop up, we see an industry that has embraced the transformation journey. Many are looking to change their business models, create products that respond to new and changing risks and transform their organizations for the workforce of the future. As insurers look at their business needs and the technology that is required to support these needs, they find themselves looking at aging systems – not constructed for the technology era in which we now operate. The fact is that we are living in changing times. The technology that supported us through the Y2K world is not necessarily the software that will sustain us in a world where transformational technologies such as AI, serverless computing, microservices and APIs are becoming more and more prevalent – and where software that operates in the cloud is a mandate. This new era of computing is making its impact throughout the insurance ecosystem. All must respond – insurers and vendors alike. As we look at our latest research report, P&C Core System Purchasing Trends: Foundational Technology to Fuel the Transformation Journey, we see an industry in the beginning phases of the change. See also: 6 Pitfalls to Avoid With Core Systems   A few years ago, I wrote a blog at the beginning of the baseball season. I said that I believed we were in the seventh inning of a ball game. But we were already getting the idea that maybe there was a new game starting. From the trends we are observing today, we believe that a new game has begun, and we are just in the early innings. The new digital era we are living in, with the capabilities provided through the new era of computing, has changed the game. So, ask yourselves: Which game are you in? What systems are you buying to support it? Are they from the game that is just finishing? Or are they solutions that will support you in the new digital game that is beginning?

To help brokers better understand the current risks in specialty insurance and assist their clients, our team at Aon Programs, which serves independent insurance brokers across the U.S. with access to a portfolio of hundreds of specialized insurance programs, identified the top five areas of risk to watch out for. ********** Flood Risk: Apathy Too many property owners today are blissfully ignorant to the flood risk they face. Even after the 2017 season, which saw Hurricanes Harvey, Irma and Marie cause billions of dollars of damage to the Southeastern seaboard, the public still struggles to see the value of flood insurance. During a 30-year mortgage, a property owner is 27 times more likely to experience a flood than a fire, yet only 20% of the damage caused by Harvey was insured by flood insurance. Conversely, 90% of damage caused by the 2017 wildfires in northern California was covered by fire insurance. After a hurricane season, people tend to think, “It was bad, but we’ll get past this. It won’t happen again.” This is the root of the struggle people have with flood insurance. They get comfortable, and they don’t think ahead, especially while the sun is shining. Take Florida. While the Sunshine State has a higher ratio of property owners carrying flood insurance than the rest of the nation, inland cities such as Orlando have lower ratios of insured property owners. Most of these homes are outside the 100-year flood plain, and homeowners aren’t required by their mortgage company to buy flood insurance. FEMA is remapping flood zones in much of the country. For example, Broward County is a coastal area, yet thousands of properties have been moved from A to X-zone, which sends the message that homeowners don’t need flood insurance. Brokers will play a critical role in advising clients to retain coverage. See also: Protecting Airports From Flood Risk   Fine Art Risk: Catastrophes Coupled with the onslaught of wind and flood damage associated with hurricanes Harvey, Irma and Maria, the catastrophic Californian wildfires and mudslides in 2017 were truly alarming from both a personal and insurance industry perspective. In the past, there would be a lull between events, as was the case between Katrina in 2005 and Sandy in 2012. Now, weather-related severity and frequency dynamics are increasing as we face multiple, successive catastrophes in a single year. Generally, when something gets wet or blown over it can be conserved. But, when it’s incinerated there’s no possibility of restoration, as was the case with the wildfires in California. Many homes, including those in luxurious neighborhoods, were burned to the ground, and the damage caused to art collections was devastating. For instance, one prominent private collector had his home completely burn to the ground. Nearly $10 million worth of artwork went up in smoke. For that particular family the loss was as emotional as much as it was physical – sadly, for the country, an important part of our collective cultural fabric was lost. Meanwhile, we had another prominent collector with a waterfront home in Palm Beach that experienced hundreds of thousands of dollars of damage from Irma. Given the massive aggregation of wealth in that county, the insurance industry is fortunate that the hurricane tracked west. Most individuals chose not to carry standalone flood insurance. Fortunately, specialty fine art insurance policies typically do not exclude the peril of flood, so it’s definitely in the financial interest of wealthy individuals with art collections to obtain this essential protection, particularly because homeowners’ policies exclude flood coverage. Home Health Risk: Malpractice With the aging of the baby boomer generation has come rapid growth in the home healthcare market. People today do not want to live in nursing homes. They prefer to remain in their residence, where they’re more comfortable living independently and costs are lower. To meet this demand, home healthcare agencies provide skilled and unskilled services. In addition to nursing care, they provide non-medical custodial care with home health aides and companions who support activities of daily living including: cooking, cleaning and assistance driving patients to appointments. Unfortunately, with the high number of residents needing home healthcare, these agencies are having a hard time keeping up with the demand. With the overburdening of home care agencies comes malpractice claims. Recently a home health aide took an elderly client shopping— and lost her in the mall. The woman was found the next day outside, having died from exposure to the elements. The result was a malpractice lawsuit that settled close to policy limits. Common malpractice claims involve helping patients with the support of daily activities, like bathing. Lifting patients adds to the exposure. Brokers should be aware of their home health clients’ exposures, including professional liability and hired/non-owned auto to ensure they have the proper coverage in place. Special Events Risk: Bodily Injury Special events cover a wide variety of potential exposures, from a one-day fair at a local church to a week-long art festival at a university, to a musical concert that travels across the country for a year. The venues for each will require your client to provide a certificate of insurance showing general liability coverage. One of the most common bodily claims we see arises from the use of golf carts. Organizers will use golf carts to run entertainers or staff members from spot to spot on the event grounds. Recently, we settled a claim that exceeded $500,000 at a large fairground where an employee who was headed to the parking lot offered an elderly woman a ride. He made a sharp turn, causing the woman to fall from the cart and suffer a head injury. If someone were to walk into your office with a special event, you might be intimidated when looking at the venue contracts, especially if the event involves fireworks or liquor liability. Nonprofit Risk: Cybercrime Notification Cyber is a top concern for organizations in a multitude of industries, including nonprofits. It is imperative that nonprofits be aware of their own specific cyber situation, especially any geographic-specific legislation with which they need to comply. For example, a primary concern in Florida is the privacy data breach statute, known as the Florida Information Protection Act. The provisions of the law are not very well known in the insurance community, particularly when insuring community associations. See also: Don’t Risk a Lot for a Little   Here are the primary provisions of the statute:

• Any commercial or governmental entity that stores personal information is subject to the law
• The entity is responsible for taking reasonable measures to protect the data in its care, such as names, email addresses and Social Security numbers
• Persons affected by a breach must be notified within 30 days from the time it is discovered
• Violations are subject to a $1,000-a-day fine up to 30 days, and $50,000 fine for each subsequent 30-day period, not to exceed $500,000

Most cyber liability policies will provide some assistance complying with Florida’s notification requirements. The challenge is that there is no standardization within the industry. Many liability policies offer as little as a $25,000 or $50,000 cyber sublimit. It is important for brokers to make sure their client is receiving coverage for first-party and third-party claims. The IHG D&O policy for community associations provides coverage up to the full limits of the policy for third-party liability claims and $100,000 for first-party expenses such as notification costs. ********** Staying abreast of emerging risks in the specialty insurance marketplace can help brokers recommend the appropriate coverage to their clients, and minimize their chances of experiencing an errors and omissions claim.

Based on conversations we have every day, we know the concept and execution of a successful marketing strategy is one of the greatest challenges that benefits agencies struggle with. While agencies have survived without such a strategy and plan in the past, those days are over. Sadly, not only do we hear of the marketing challenges every single day, we also hear the excuses as to why agencies can’t or, more accurately, won’t embrace marketing.

At SMA, we have been tracking what we and others have called emerging technologies for the better part of the last decade. However, the question arises, “When is an emerging technology no longer emerging?” Technologies such as drones or mobile payments are often classified as emerging tech, but these technologies are, in fact, relatively mature. And their adoption is becoming widespread. Artificial intelligence is also touted by many as an emerging technology, which is quite odd given that the term AI was coined in 1956. But maybe classifying technologies as “emerging” misses the main point anyway, which is how technology transforms industries. Thus, rather than approach the topic from a pure technology perspective, we believe it is more important to take an insurance business perspective. This is why we at SMA now discuss a category we call transformational technologies. From this point of view, when the technology was created or how far along it is in the development cycle becomes irrelevant, although those are still interesting facts. Instead, the focus on transformational technologies places emphasis on which technologies are now having (and will have) the most impact on the insurance industry. What, then, are examples of transformational technologies? There are a large number of technologies that fit the bill, so perhaps it is more useful to sort them into categories. First, a major point before identifying the four key categories of transformational technologies – data is at the center of transformation and is fueling every transformational technology. Whether the data is proprietary or generally available, structured or unstructured, or gathered from traditional or new sources, it is essential to every single transformational technology. See also: Emerging Tech Is Poised for Growth   The four main groups of transformational technologies include:

1. The connected world: sensors, devices, platforms and solutions that are related to buildings, vehicles, people and other physical things in the world
2. Access, transfer and security tech: technologies such as 5G, edge, blockchain and biometrics that are vital for information in a connected world
3. Insights and actions: the analytics and AI technologies that derive meaning and drive actions
4. New UI technologies: tech that now includes voice, chatbots, augmented reality and more

It’s important to understand how these technologies in combination with foundational technologies address specific insurance business problems and opportunities. The following examples show the power of applying a business use case lens to identify potential solutions that leverage transformational technologies. Claims fraud: Technology to address this age-old problem has been evolving for decades. There are now solutions that combine machine learning with existing claims administration systems, damage estimation systems and data – to take fraud detection and management to new levels of effectiveness. Property underwriting: Aerial imagery captures digital data from drones, satellites and fixed-wing aircraft, which is then analyzed by AI/image recognition/machine learning algorithms to present insights to underwriters on property characteristics and risks. These technology systems are integrated with the foundational systems and data that underwriters use today. See also: Insurtech’s Lowest Common Denominator   Change is sweeping through the insurance industry, which is likely to continue full steam ahead for the next decade. The transformational technologies that are the catalysts for much of this change will continue to evolve and be applied to more and more use cases across the insurance enterprise. And whether we call them emerging, transformational or something else will make no difference: These technologies are ushering in a new way of doing and experiencing everything.

Cybersecurity threats faced by insurance companies are growing and evolving at an alarming rate. This has been spurred by many factors, including the internet of things (IoT). While the IoT presents opportunities for insurers, it also exposes security gaps. The severity and frequency of cyber-attacks are likely to increase. Insurers must commit to protecting sensitive customer information in a compliant and reliable way. The cybersecurity threat is huge. It is time for insurance companies to reboot their approaches to cybersecurity. Common cybersecurity threats facing the insurance industry Cyber-extortion Cyber extortion is increasingly becoming a common problem. Some types of ransomware attacks are so effective that victims may be forced to meet the attacker's demands and pay a hefty bribe to get their systems running again. Automated threats Credential cracking, vulnerability scanning, bad bots, credential stuffing and denial of service can potentially shut down a company’s systems quickly. Identity theft and loss of confidential data Identity theft may result from system vulnerabilities to data breaches. For instance, files stored on a firm's local servers may not be protected adequately. Insurers collect and store sensitive personal client information. This information can be particularly valuable for attackers to sell in black markets. They can use it as a tool for fraud, extortion, unauthorized borrowing and many other financial crimes. Business disruption and reputation damage Cyber-attacks can seriously disrupt business. For instance, a cyber-attack on Sony Pictures erased its computer infrastructure, including telephone directories, emails, voicemails and business records like contract templates. A malicious attack like this on an insurer could disrupt operations for months. See also: Cybersecurity for the Insurance Industry The foundation of any insurance business is policyholder trust. If an insurance company were to suffer a data breach exposing policyholder information or a cyber-attack that renders it unable to conduct normal operations, that trust would be shaken. This, in turn, can lead to reputation damage that may hurt the confidence of investors, consumers, policyholders and rating agencies. Four tips for boosting security 1. Assess your defense capabilities realistically Pressure-testing the company's defenses can determine whether they can repel targeted, high-impact attacks, whether external or internal. The testing includes vulnerability assessment, testing programs, penetration tests and scenario-based testing. Consider hiring a cyber-security firm to test your defenses. 2. Invest in early detection Insurers need to continually invest and innovate to thwart potential attackers. Early detection is crucial. Otherwise, a cyber-attack can sit undetected for weeks. Efficient and quick detection and response will help determine the source of the attack, the systems targeted, extent and cause. Then, the threat can be neutralized before damage is done. Insurers need to invest in technology. There is a wide range of software solutions that provide near-real-time threat detection. 3. Making cybersecurity everyone's job While implementing sophisticated systems will reduce external threats, insurers tend to neglect internal threats such as human error, which could include revealing customer data in response to a convincing phishing email. Cybersecurity awareness among employees can significantly decrease the risk of cyber-attacks resulting from human error. Alert employees can provide early detection. An Accenture survey found that up to 98% of security breaches that are not detected by a firm's security team are discovered by employees. 4. Learn from the past and evolve Effective cybersecurity requires insurers to learn from previous cyber incidents and use the learning to improve planning and technology investments. Solutions include:

• Upgrading systems: Using last-generation or unpatched security software provides easy fodder for cyber attackers. Speak to your IT consultant about upgrading your systems.
• Migrating systems to the cloud: The cloud provides users a wide range of compliant and secure storage solutions. Choose a cloud provider that offers the highest possible security.
• Implementing appropriate security software, protocols, and appliances: This will effectively shield data and systems from automated threats.
• Establishing a disaster recovery plan: Despite all efforts, systems can be breached. Have a detailed up-to-date plan so that you can respond effectively to any problem, major or minor.

See also: Global Trend Map No. 12: Cybersecurity   Cyber-crooks are relentless and determined. Security is an continuing battle. You can’t afford to let down your guard a second. Staying one step ahead of hackers takes constant effort.

The relentless pace of the digital age continues to change insurers’ strategies. However, for more than a decade, two constants have been the need: 1) for a customer-oriented mindset and 2) for adapting quickly to an increasingly fast-paced world. As carriers have tried to come to grips with new ways of doing business, one of the biggest recent developments at the corporate level is Experience Design owning a seat at the table. Why? For starters, Experience Design has hard-won expertise and plays a vital role in the customer experience and brand architecture. In addition, Experience Design teams are good at solving problems and often have experience doing so in multiple industries. Instead of trying to figure out after strategy planning what the future could be, involving Experience Design will help carriers define it from the outset. Building on existing strengths Although some industries are further ahead in digital capabilities, design and customer experience than insurance, most insurers do have some real strengths. First and foremost, they tend to have a very solid understanding of their customers. Moreover, they have extensive experience adapting products and services to changing market conditions. See also: In Search of a New ‘Dominant Design’ However, digital has profoundly changed the way carriers interact with customers and how quickly and frequently they need to act. New technologies have amplified the need to listen more closely to customers and respond to their needs in weeks and months instead of months and years. Almost all carriers can do a better job taking the insight they possess and quickly turning it into something actionable, such as more flexible and adaptive products and more frequent and meaningful interactions with customers (and on their terms). Always on What makes this change in focus difficult for most insurers is that they’ve historically operated in a stop-start, point-A-to-point-B manner. But, in a digital environment, constant improvement is now the rule of thumb. Recognizing that work gets done but is never really finished is a major shift in thinking for the industry. See also: How to Redesign Customer Experience In response, leading carriers are no longer looking for a big launch but are incrementally improving products, even if they evolve into something quite different than their original form. This continuous cycle of launch, learn, adapt and relaunch is where Experience Design excels. As carriers increasingly involve creative solutions and get better at working in the always-on business cycle, their product offerings and relationships with customers will improve.