Last year saw some of the deadliest and costliest wildfires in California history. With the long-term impacts of the Camp and Woolsley fires still being felt months later, many in California are already thinking ahead and considering how best to prepare for future wildfire seasons. The problem is only going to get worse due to climate change: The total area exposed to wildfires is increasing, and the wildfire season continues to grow longer. Recognizing this new reality, the California Senate recently passed a bill that would authorize the state to purchase insurance to mitigate the costs associated with natural disasters such as wildfires. When fires threaten a community, all evacuees (even those lucky enough to have homes they can eventually return to) will incur financial impact – from lost wages to the cost of emergency accommodations. These expenses are not generally covered by insurance, leaving a serious protection gap at a vulnerable time. Parametric insurance products could provide immediate financial relief in the form of automatic pay-outs for insureds living in the evacuation zone – these products present an intriguing protection option for California residents and communities. Automatically Triggered by Pre-Defined Events Parametric insurance, also known as index insurance, is an innovative product that pays a fixed sum when a precisely defined event takes place – for example, wind of more than a certain speed at a specified location. The insurance is not a direct substitute for conventional insurance because of the "basis risk" – the potential gap between the policyholder's loss and the payout. But the upsides are certainty and a rapid payout, because there is no claim to be made or adjusted. Those upsides could be appealing in certain circumstances. Parametric insurance is increasingly being used in the developing world to fund rapid relief and recovery in response to natural disasters, such as drought leading to crop failure. There are moves to develop products that will make a partial payout in advance (for example, if a major storm is forecast) to fund even earlier intervention. As the impact of climate is felt more widely, we may see an increased take-up of parametric insurance in the developed world, too. California wildfires could be a particular case. Evacuation Costs Impose a Financial Burden Emergency relief shelters generally provide aid within the first few days of fires, but displaced evacuees soon have to look to other housing options. Reports on the aftermath of disasters show that nearby hotel and motel rates jump. Aside from housing costs, evacuees are often forced to pay out-of-pocket expenses for food, gas and emergency supplies. Evacuees with homeowner or renter insurance coverage may have traditional insurance policies that eventually help with these costs. Policies with inclusions for “Additional Living Expenses” (“ALE”) typically cover food and housing costs, furniture rental, relocation and storage and extra transportation expenses. However, under the traditional insurance model, insurers will reimburse residents for ALE only after a claim has been filed and adjusted. See also: How to Fight Growing Risk of Wildfire   Regardless of whether an evacuee is eligible to receive ALE, the scale of destruction leaves many evacuees uncertain as to how they will afford cost-of-living expenses in the immediate-run. Evacuees unable to afford these costs are subsequently left at the mercy – and often slow response – of government-funded emergency relief. Parametric Insurance Can Provide Financial Emergency Relief Parametric insurance can fill the protection gap, providing wildfire evacuees with rapid funding when they are forced to evacuate. Recently approved California legislation will require local emergency notification systems to warn residents of impending danger, and these warnings could serve as a trigger. A parametric insurance product offered to local municipalities may likewise afford cities and counties with quick and predictable funds. Government emergency relief funds are initially paid to cover state emergency operations. Local municipalities affected by wildfires rely heavily on relief from non-profit organizations, but, when such relief cannot adequately address immediate and longer-term financial needs, the burden is placed back on the residents to pay expenses out of their own pockets. Parametric insurance policies can be crafted to uniquely address the needs of regions threatened by climate catastrophes. For example, some of those exposed might have traditional insurance policies with significant excesses. Parametric insurance could be used in conjunction with these, so the policyholder receives a speedy payout when cash flow is tight during an evacuation, and then make a conventional claim for the balance of the loss. Whether used independently or in conjunction with other insurance, a parametric insurance product will lessen many of the financial burdens associated with wildfire evacuations. A Greater Role for Parametric Insurance Potential wildfire evacuees are one group that may benefit greatly from a parametric insurance product, but they aren’t the only Californians who could benefit from the predictability and efficiency these products can afford. Parametric insurance is currently used to insure crops from failure due to various weather conditions. This product can similarly be modeled to wineries and commercial agriculturists in Northern California who are concerned that wind, ash and debris from wildfires could diminish quality. With climate change increasing the devastation of wildfires in California, parametric insurance can play an important role in responding to the increasing financial burdens placed on the affected residents. See also: The Challenges Ahead in 2019   Beyond California The number of natural disasters that have wreaked havoc in California recently make the state a natural outlet for parametric insurance products, but it is far from the only area of the country where these products may be useful. Hurricanes routinely leave long-term damage throughout the U.S., from Texas to Puerto Rico to New York; in fact, the number of weather-related loss events in this country has tripled since the 1980s. The ability to provide rapid funding for relief, recovery and reconstruction efforts is an essential need, and parametric insurance provides an effective solution. There is no simple or one-size-fits-all solution to natural disaster protection. But novel forms of risk transfer such as parametric insurance hold a great deal of potential. This resilience-linked product is an excellent example of how the insurance industry can respond to weather-related threats in effective ways, and represents a key opportunity for future innovation.

The occurrence of school shootings, store robberies and job-related fatalities have all contributed to the increase in cases of post-traumatic stress syndrome (PTSD) in the workplace. This session at the RIMS 2019 Annual Conference and Exhibition discussed the need to address the issue on a broader basis. Speakers included:

• Dr. Teresa Bartlett, senior vice president, medical quality, Sedgwick
• Denise Algire, director, risk initiatives, and national medical director, Albertsons
• Dr. Steve Wiesner, on-the-job medical director, workers’ compensation service, Kaiser Permanente

Post-Traumatic Stress Disorder (PTSD) is a complex disorder that affects the memory and emotional responses of a person who has experienced or witnessed an event that involved actual or threatened death or serious injury. The worse the trauma, the more likely it is that a person will develop PTSD and the worse the symptoms. The most severely affected patients are unable to work, have trouble with relationships and have great difficulty parenting their children. See also: The Need to Be Open on Mental Illness   MRI and PET scans show changes in the way memories are stored in the brain for patients who suffer from PTSD. The disorder actually changes the portions of the brain that regulate the fight or flight response and the area where memories are coded and stored. Symptoms are generally grouped into three types: intrusive memories, increased anxiety and avoidance/numbing. Prognosis depends on the patient’s health prior to developing the disorder but is improved with early treatment, preferably within the first 12 months. Patients with PTSD are more likely to have amplified pain and stress reactivity when they are injured, leading to longer-tail claims. Major life-threatening events that can lead to PTSD:

• Combat or military exposure
• Sexual or physical assault
• Childhood sexual or physical abuse
• Serious accidents, such as a car wreck
• Terrorist attacks
• Natural disasters, such as fire, tornado, hurricane, flood or earthquake

When PTSD occurs in the workplace, an employer’s program should address early intervention, specific functional limitations, treatment consistent with care and time away from work as part of the treatment plan. Clinical involvement early in the claim process is critical. A successful employer program should include critical incident response as well as continuing guidance and counseling. Critical incident response gives the employee a chance to express feelings or reduce stress and gives management an opportunity to show concern for colleagues, both of which can help the employee re-acclimate when the person returns to work. See also: How to Help Veterans on Mental Health   There are many work accommodation considerations to take into account for employees suffering from PTSD. Modifying specific environments that trigger memories of the original stressor can be very helpful. For example, an employee who was present for an armed robbery could be transferred to a different location, if possible. Allowing work-at-home or flexible scheduling opportunities can also be effective, to allow the employee ample time for mental health treatment. There are an extraordinary number of other possible accommodations that may be needed, addressing alertness/concentration, decreased stamina, memory loss and stress intolerance. If an employer is committed to safely reintroducing the employee into the work environment, the employer will need a clear and actionable plan.

The dispiriting news that 11 people died this year in efforts to summit Mount Everest brought back memories of my callow youth, when I volunteered to make the attempt for a story for the Wall Street Journal. There may also be a hopeful lesson for how the insurance industry can mature.

The Everest attempt would have been part of an informal series in which I played daredevil. I sailed across the Atlantic in a 42-foot boat, having never even set foot on a sailboat before, and wrote a front-page piece about the adventure (including 70-foot waves). A couple of years later, a friend convinced me that I was just dumb enough to go to a school for professional wrestlers and provide an inside look. After I wrestled a match on cable-TV in 1989 and wrote my article, the WSJ's managing editor showed the video to the Dow Jones board of directors and won me a corporate award for service above and beyond the call. He told me by summoning me to his office and saying he had good news and bad news. The good news: "I have a $1,000 check for you." The bad news: "I'm looking for someone to swim around Manhattan."

I responded that I wasn't much of a swimmer but that I'd happily climb Mount Everest if he'd put up the fees. His response was incorrect but potentially life-saving: "Nah," he said, "it's getting too easy."

Fast-forward to 1996, and we all learned just how dangerous Everest still was even though Sherpas were installing ropes and ladders for the tourists everywhere they could. 1996 was the year when journalist Jon Krakauer (a veteran climber, unlike neophyte me) summited Everest, then witnessed the series of events that left eight climbers dead. 

I got the message and never again considered an attempt, but the number of climbers keeps growing—as does the death toll. Sixteen Sherpas died in an avalanche in April 2014 as they set up base camp. Nineteen people died in an avalanche on the mountain a year later when a 7.8 earthquake devastated Nepal, killing more than 9,000. Five people died on Everest in 2018, a year in which more than 250 foreigners summited. And this year, 11 died despite no particular issues with weather. 

So, what's my hope for the insurance industry? Doesn't Everest just show that people can convince themselves to ignore even deadly risks?

My hope stems from seeing how much more information is available to climbers and guides than was available in 1996, the season that Krakauer chronicled in "Into Thin Air," and in understanding how much improvement is still possible. The increased "wiring" of the mountain could serve as an example of how technology can head off catastrophes—the sort of thing that insurers increasingly need to do, rather than focusing on pricing the risk and paying claims after a loss.

In 1996, there was barely any communication with those at the top of the mountain -- just some occasional connection via a satellite phone—so information about weather was limited for climbers. One who summited that year prepared to bask at the top, only to look out and realize that a major storm was fast approaching. He recognized the cloud formation solely because he was a commercial airline pilot and not, say, a journalist. He hightailed it down from the summit and, through sheer happenstance, survived the whiteout that led to the eight deaths. 

By contrast, a doctor saved himself last year through technology. He brought along an oxygen saturation meter, which, when pressed against his skin, told him that a feeling of weakness wasn't just something to push through: His blood was dangerously low in oxygen, showing that he was headed toward a lung condition that is often fatal at high altitude and that he needed to head down immediately and abandon the ascent.

Many people succumb to what climbers call "summit fever"—you've worked so hard, and you're so close, how can you turn back even if your body feels like it's shutting down? Ten of the 11 who died this year had summited and were on their way down when they collapsed. Fitbit-like medical technology will increasingly let climbers measure their physical state and understand when their health is at a critical level and that they need to turn back to save themselves. 

Information about conditions near the summit will keep getting better, too, and not just for the weather. Many of us have seen the photo showing stop-and-go traffic near the summit on May 22, but few have seen the photos from a Sherpa in the same spot a week earlier, when nary another soul was in sight. As climbing parties become more connected, it'll be easier to manage traffic. Maybe you move your attempt up a day or back a day if you think you're just going to sit there for hours in the "death zone" (above 8,000 meters, or roughly 26,000 feet), where the altitude takes a monstrous toll.

Everest will still have its allure—K2 is a much harder ascent, but who brags about climbing the world's second-highest mountain? And many will enable climbers. Nepal, such a poor country, isn't going to turn away people willing to pay $11,000 apiece for a climbing permit and to generally pump money into the economy. Guides, charging some $35,000 a pop on top of the permits, aren't going to turn away clients, either. There will always be something asynchronous about a summit attempt, too—months of training and weeks of adjusting to altitude end up in daily or even hourly decisions about weather and in instantaneous assessments of health.

But there's still hope that much better information will lead to better decisions about when to take the risk and when to wait for another day. That's the plan from sea level, anyway.

Cheers,

Paul Carroll
Editor-in-Chief

As insurers strive to become more relevant to their customers and more efficient, they have embraced the strategic importance of their data. Insurance companies have been using various data streams to predict property damage and loss for generations. But while they have been collecting increasingly large stockpiles of consumer data, until recently they have lacked the tools and talent to operationalize it -- particularly with the level of transparency required by regulatory bodies -- to drive better products and services and operational efficiencies. Advances in AI and machine learning have enabled insurers to improve the customer experience and boost policyholder retention while cutting claims handling time and costs, eliminating fraud and protecting against cybercrime. These new tools and platforms have generated increased interest in using data science across the industry, and insurance companies have been investing accordingly. According to a recent study, 27% of large life/annuities insurers and 35% of large property/casualty insurers are expanding their data science efforts to some degree, while 13% of large life/annuity insurers are piloting an initiative. Midsize insurers are similarly active in the space, with 20% of life/annuity carriers and 24% of property/casualty carriers looking to expand their data science efforts. See also: Turning Data Into Action   But while investments in AI are growing, insurance organizations are often finding that their existing analytics and business intelligence technology and talent aren’t capable of meeting their current and expanding needs. Challenges in resources, technology infrastructure and the ability to operationalize models quickly and efficiently can prevent insurers from fully leveraging AI and data science to drive business impact. To overcome these challenges, and maximize the ROI on AI investments, insurance companies must look to innovative solutions such as data science automation. While data science is becoming a valuable tool in the insurance industry, implementing a data science program is not easy. A typical enterprise data science project is highly complex and requires the deployment of an interdisciplinary team that involves assembling data engineers, developers, data scientists, subject matter experts and individuals with other special skills and knowledge. This talent is scarce and costly. This is neither scalable nor sustainable for most insurance organizations. Data science automation platforms fully automate the data science process, including data preparation, feature engineering, machine learning and the production of data science pipelines - enabling insurance organizations to execute more business initiatives while maintaining the current investments and resources. Data science automation allows data scientists to focus on what to solve rather than how to solve. End-to-end data science automation makes it possible to execute data science processes faster, often in days instead of months, with unprecedented levels of transparency and accountability. As a result, insurance organizations can rapidly scale their AI/ML initiatives to drive transformative business changes. There are several key areas where data science automation can make a big impact in the insurance industry. For increasing operational efficiency, AI-based automatic underwriting and claims management will be a major trend that we will see in coming years. In customer relationship management, AI will be used more frequently to help profile customer behaviors, helping insurers to get a better and deeper understanding of their customers’ wants and needs. This, in turn, will help to drive revenue growth. See also: Role of Unstructured Data in AI   In the near future, data science and AI will be widely implemented in the insurance industry, and the barrier to adoption for data science and AI will become low. Once this happens, accumulated critical use cases will be key differentiators for insurance companies implementing these technologies. Data science automation accelerates the data science process, enabling insurers to explore 10X more use cases than with the traditional method of data science. Early adopters have already started to leverage automation to scale their data science initiatives.

So what convinces people to support an idea, whether the support be their time (e.g., joining your project), money, endorsement or any other backing to help you and your idea? Our research suggests that people and organizations will be influenced primarily by three related innovation-specific factors:

• Human capital: who you are as a leader of innovation
• Social capital: who you know with expertise and resources
• Reputation capital: what you’ve done to warrant a reputation for innovation

The effect of these three types of capital can be multiplied by impression amplifiers that help you gain attention and credibility for your ideas. How exactly are potential supporters influenced by these factors? In academia, we use what we call a simultaneous equation model to describe how these factors work together. Sponsors are simultaneously weighing all these factors: whether you have the innovation skills as a leader to pull this off (who you are as a leader of innovation), whether you are well-connected with others who will need to support your project (who you know with resources or expertise) and whether you have a track record and reputation for innovation success (what you are known for). Potential sponsors may weigh each of these factors somewhat differently, but they consider all these parts of your innovation capital to decide whether to support you and your ideas. These combined parts work together like gears in an engine (which is why we have depicted the figure above as a set of gears). As you get each gear moving, it can have a flywheel effect. The flywheel effect, first coined by management expert Jim Collins, refers to the process of getting a huge flywheel (say, a massive 5,000-pound metal disk) into motion. Initially, attempts to move the flywheel produce almost no movement—it is almost impossible to imagine the flywheel at speed. Then, slowly, the wheel gathers speed, and suddenly the momentum of the flywheel kicks in your favor. You push no harder than during the first rotation, but the flywheel goes faster and faster. Each turn builds on the work done earlier, compounding your investment of effort. Eventually, the huge, heavy disk flies, with almost unstoppable momentum. The innovation-capital engine—with its three gears and the lubricant of impression amplifiers—can propel a person’s innovation capital in a similar way. This analogy is relevant because building your innovation capital starts with small steps that can eventually have big outcomes. Innovation capital outliers—leaders like Bezos and Musk, who are numbers one and two in our ranking—didn’t start out being that different from the rest of us. They accumulated their innovation capital through small steps and then got momentum from the flywheel cycle. Today, they have more good ideas to champion because more people bring good ideas to them; they develop more social connections because of their reputation—people want to know them. And because they have access to a greater number of good ideas and more social connections, they can build their reputation for innovation by launching more innovations. These components are related in a positive way—more of one component leads to more of another (academics call this relationship mutual causality, but you might just think of these components as reinforcing each other). Resource holders simultaneously consider all three components when deciding to give someone their time or resources for an innovation project.

The ecosystem of hazard models and data is rapidly expanding, and this is exciting news for the P&C industry. But with all the hazard data that is being generated, especially during catastrophic events like hurricane and wildfire, comes the need for a more streamlined way to access it. Data quality and modeling is continually improving—more accuracy, better science, higher resolution—which we have witnessed here at SpatialKey working with providers like KatRisk, JBA, RedZone, Swiss Re, Impact Forecasting, HazardHub and a host of others for a number of years now. But while the quality and quantity of data in the market is abundant, some carriers are lagging behind when it comes to accessing and interpreting these models because their systems are disjointed and outdated. Accessing data from disparate sources, or “system hopping,” delays response time and can sabotage a carrier’s downstream customer satisfaction. Three key challenges that insurance organizations face related to the accessibility of hazard data are:

1. Disparate solutions and proprietary formats
2. Access to hazard data during time-sensitive events
3. Ability to compare multiple views of risk

Let’s take a closer look at the impact of these challenges and what can be done to solve them: 1) Problem: Disparate solutions and proprietary formats While data choice is abundant, you may find that you’re still hopping between platforms to access and visualize hazard data and models in the context of your exposure data. A key reason for this is the proprietary nature of some trusted industry catastrophe models. They can drive inefficiencies by limiting where data can be visualized and how. This leads to the necessity of piecing together multiple disparate solutions to fully understand the extent of an event.  Without the ability to quickly and efficiently calibrate views of risk, you’ll be left with more questions than answers. Solution: Rather than visiting multiple platforms to piece together the impact of an event relative to exposures, leverage multiple views of risk via a single platform—while having them in-hand sooner. This way, you can better estimate losses and allocate your event response resources. See also: Effects of Weather Are Gathering Force   2) Problem: Access to hazard data during time-sensitive events Timely procurement of trusted and up-to-date footprints during the course of an event can also be a challenge without a centralized solution to access data and contextualize it with advanced analytics and visualization tools. Data providers like KatRisk, JBA and Impact Forecasting, in particular, are generating their views of risk well ahead of an event and before many other data providers. A comprehensive view of an event means having data readily in-hand before, during and after an event—and preferably via a single solution where you can compare multiple footprints in the context of your portfolio data. Solution: Quickly integrate data from both private and public sources, so you can quickly extract insight from it—and get back to the more important aspects of event response, especially customer outreach. 3) Problem: Lack of ability to compare multiple views of risk The ability to compare multiple hazards and models in one place is increasingly important with complex events like hurricane, which involve multiple perils (i.e. wind, surge, flood) from multiple providers. While more views of risk can be a benefit, you can quickly hit information paralysis. Which model got it right? Which model is closest to my organization's view of risk? As we’re all aware, models and their outputs are nuanced. Decisions come down to identifying the right models and model components that best represent your lines of business, geography and business practices. During Hurricane Michael, for example, our clients had access to event footprints for wind, surge and inland flood around-the-clock from expert data providers. These up-to-date, multi-peril footprints, coupled with our financial modeling, could be evaluated and compared in real time, helping clients understand potential exposure and ready response efforts. This pre-landfall view of Hurricane Michael from within SpatialKey is showing NOAA surge and wind bands overlaid with sample portfolio data. NOAA updates are available approximately every four hours during hurricanes, along with regular updates from expert providers like KatRisk, JBA, Impact Forecasting and others. This enables you to view and compare multiple models from within SpatialKey for a more comprehensive understanding of an event. Solution: A platform like SpatialKey helps you assess if a model is the right fit for your business—enabling you to step through methodology and figure out the questions that models provoke but don’t answer. Hurricanes and wildfires, in particular, expedite the need to evaluate footprints to understand the business impact, as deriving insights is extremely time-sensitive. For example, you may be interested in the geographic boundary of a major flood to get boots on the ground. Or, you may want to understand the gauge readings (rain, river, surge measurements, etc.) in an effort to process and validate claims. It’s time to streamline your access to expert data Event response is a time-consuming effort, and it’s when speed and efficiency are needed most. In the early days of an event, you need to know how you and your customers will be affected and to what extent. But, you may feel like you have no time to get answers to stakeholders—and having to hop between disparate sources only delays your understanding. You need to streamline your access to expert data while providing a centralized location to compare views of risk and visualize data in the context of your portfolio. See also: Turning Data Into Action   Now, with just one place to access and analyze data during time-sensitive events, you have...

• Increased your operational efficiency by reducing (or eliminating) disparate solutions.
• Streamlined your access to the most up-to-date footprints and models.
• Increased your understanding of risk with the ability to compare multiple hazards and models via a single solution.
• Gained an immediate understanding of your actual financial impact (so your stakeholders are happy).
• Focused your resources on what matters most: mitigation and customer outreach.

In Part 2 of this series, we’ll discuss how you can spend less time processing hazard data and more time driving better decisions. 

Insurance company executives are being pressured by board discussions, distribution channel partners and customer service requirements to more aggressively leverage the “shiny objects” that insurtech offers. Artificial intelligence (AI) is one of insurtech’s brightest contributions, and it seems natural for insurers to use advances in AI — including machine learning (ML), natural language processing (NLP) and robotic process automation (RPA) — to leapfrog competitors. Unfortunately, not every insurer is ready for AI or able to take full advantage of the opportunities in this category of emerging technologies. There are, however, several ways insurers can prepare and evolve to a position of strength from which AI can make a strategic business impact. 1. Ditch Dirty Data For a variety of reasons, insurers tend to have a good amount of “dirty” data, rife with inconsistent formats or standards, incomplete conversions resulting from merger and acquisition activity and data transfer from paper files. A proliferation of dirty data can put insurers in the untenable position of sacrificing whatever valuable intelligence may exist in historical files to a “Day Forward” strategy. Insurers looking to prioritize AI projects must invest in cleansing bad data and improving data mastery. Those efforts will naturally include improving access to, and use of, both structured and unstructured data. The “magic” of AI gives the impression this technology is a silver bullet capable of maximizing the value of the unstructured data prevalent in handwritten forms, PDFs, images, email and text messages and social data, which increasingly inundate insurer workflows. However, the organization of clean and available data is a precursor to AI implementation. See also: AI and Results-Driven Innovation   A recent report by Eric Weisberg and Mitch Wein of Novarica, “MDM in Insurance: Expansion and Key Issues,” details the need for insurers to invest more heavily in improving data mastery and hiring for positions such as chief data officer or data scientist, instead of purely tech talent. “Insurers are placing a priority on data initiatives to support their predictive modeling and AI programs,” Weisberg and Wein wrote. “High data quality is imperative for digitization where data is being exposed to outside parties. Existing and emerging data regulations are also driving a need for improved data governance. Chief data officers and multi-tiered data governance organizations are becoming more prevalent as data is increasingly being treated as an asset. Challenges exist with organization, resourcing, process and funding that can stymie the results of well-intentioned data programs.” 2. Cultivate the Right Culture The fast-evolving nature of technology often means insurers are in a fluid state of decision-making about deployment. As innovation further penetrates traditional industry settings and transforms basic processes and products, insurers must decide if the organization’s culture and leadership are truly capable of committing to the journey of transformation, let alone arriving at the destination. New tools, such as AI solutions, will demand new skills of managers who have built careers leading and inspiring people, and who understand the importance of change management to the organization. So, sorting out the boardroom and operational priorities of the CFO and CIO, or the VP of IT and COO, can help ensure solid business cases and implementation strategy for innovation — such as AI initiatives. 3. Prioritize the Policyholder In addition to cleansing dirty data and strengthening internal change management, preparing to better leverage AI should include a re-prioritization around the policyholder and the customer experience. Insurers need more customer-centric processes from the ground up and a reinvention of existing products and processes that treat the policy as an attribute of the customer instead of the other way around. Customer acquisition is notoriously expensive, and insurers face the additional challenge of relating an age-old industry and product to a new generation of consumers. To be successful, the gap between old and new, and between company and customer, must be narrowed substantially. AI can aid such efforts through innovations such as natural language processing (NLP), which recognize information included in voice conversations or recordings and then quickly and accurately deliver relevant policy files or information. Chatbots can also improve the speed of customer service interactions, and ultimately the speed at which policyholder concerns are resolved. Claims service is good example of a process in which insurers are already starting to see the benefits of incorporating AI solutions, and are using this technology to do everything from reporting first notice of loss (FNOL) to initiating claim processing, or even deploying an adjuster, if necessary. See also: Future of Claims: Automation, Empathy   Defining Goals As insurers prioritize spending on AI initiatives and implementations, the danger is ignoring persistent shortfalls in important areas — such as data mastery, operations and even underwriting. And, it is important to recognize that innovation implemented in the form of an AI solution alone is not, and never will be, a viable strategy. AI can be an enabler of a strategy. But without clearly defined goals and a flexible operating model capable of supporting an evolving and demanding policyholder portfolio, even a successful AI implementation can end up as no more than a footnote. Process automation, machine learning and other types of AI initiatives will continue to make for compelling business cases. To realize full potential and benefits, those tools should be focused on winning clients and implementing accessible, 24/7 customer service and operationally optimizating to support competitive differentiation. Cost savings from AI will typically flow as a by-product. But, without leadership, champions who embrace and drive change and organizational data mastery, the AI tools will be underused and unlikely to fulfill the promise of growth and service excellence.

Customer experience (CX) has become the most significant differentiator in today’s market, and Gartner’s research proves it with hard numbers: 81% of companies expect CX to be the key battleground in the race for market dominance. Unfortunately, the insurance sector has traditionally been more product- than customer-focused. This discrepancy now makes insurance companies rethink their attitude toward doing business and become more customer-oriented. Technologically, a good place for insurers to start this shift could be to adopt an online self-service portal. The numbers prove that it’s quite in demand: 88% of U.S. customers expect an organization to have a self-service portal. If tailored well, a portal might help insurers to get closer to their customers, increase their loyalty and improve service quality, all of which greatly contribute to the overall CX. Let’s break down how exactly self-service portals boost CX for insurance businesses.

• First, portals help insurers deliver their services in more accessible and convenient ways. Portals let policyholders submit a claim, pay a policy and look up their recent activities any time and from any location, so there’s no more need for customers to visit an office. This also means no need to spend time on commuting there as well as filling in any paper blanks: The system will store all the details. Also, as far as insurers don’t have to process claims manually, they can focus entirely on verifying their legitimacy and accelerating further steps. As a result, claim approvals speed up.
• Besides accessibility and simplicity, security defines self-service portals. As web developers from Iflexion rightly note, industry trends come and go, but security concerns are here to stay for both businesses and their customers. With all the relevant security mechanisms in place, self-service portals let policyholders safely sign up for insurance plans, pay for policies and navigate their account history, paying no heed to cybersecurity risks.
• Search-optimized content is another reason why self-service portals are worth considering. Customers prefer searching for an answer online before contacting an assistant. That's why it can be reasonable for insurers to use self-service portals as platforms with helpful information. For example, such information can include reviews of different insurance types, terms and conditions, pricing plans and answers to common questions. In the latter case, a page with frequently asked questions (FAQ) might be useful. Users can navigate such a well-organized knowledge base faster, with no need to dig through tons of other information.
• If customers fail to find information, they’ll need to consult an assistant. By giving your customers access to live chat or other contact options, self-service portals establish easier ‘insurer-policyholder’ communication.
• Another benefit of adopting portals is all about personalization, the staple of today’s consumer culture. For insurers, self-service portals can make one-on-one service a reality through some simple personalization options such as customized toolbars, reorganized sections with billing transactions, claims and policies, as well as cross- and upselling recommendations.

Think about the “recently viewed” section that returns policyholders to their latest activities. Users won’t have to search their browsing history but get immediate access to what they’ve looked through. As a result, customers get an easy access to their own personal activity feed. Not by CX Alone To sum up: Self-service portals boost CX in insurance as customers can receive personalized and secure services faster, search for information more effectively and get in touch with support assistants more easily. See also: 9 Elements for Customer Portals  However, there are other reasons to adopt a self-service portal apart from CX improvements:

• Insurers can automate routine tasks such as filling in and submitting reimbursement requests. This partially frees staff for other tasks such as insurance data check or claim legitimacy verification.
• Insurers can lower their support costs: A well-maintained FAQ section can save your support staff’s working hours and, by extension, associated costs.
• A self-service portal can also reduce paper and printing costs. It might seem a little thing, but it’s not: Considering yearly volumes, printing becomes an essential budget-drainer.
• Digitally stored histories of customers’ activities accelerate the insurance claim process, as there is no more need to go through piles of paper forms.

The good news is, a self-service portal can start paying off nearly immediately. As it picks up traffic and starts bringing value to your customers, you’ll see your support team unloaded and customers’ satisfaction steadily rising.

This article is based on a keynote speech, “Disruptive Leadership,” at the World Forum Disrupt, Strategy & Innovation Conference in New York City.  This is part two a two-art series. The first part is here. Through my work over the past decade, I have been observing highly effective leaders, and, as a result, I came up with five main pillars of disruptive leadership. I covered three in the first piece and will cover two here, with a conclusion. 4. Make the Rules — Break the Rules Legacy leaders hold on to the rules. Startup leaders abandon the rules. Disruptive leaders break the rules and write new ones but always explain why. The market is constantly changing, and to stay in the game sometimes means breaking the rules - disruptive leaders constantly challenge the existing best practices and develop new ones. It is a leader’s duty to communicate the “new norm” and “new best practices.” If employees are not informed or do not understand the new norm, the company can’t play collectively as a team. Willingness to break the rules isn’t the same as absolute absence of rules. See also: Why the Insurance Industry Is Primed   Reflect: What rules at work or in your career could you challenge or change? 5. Resist Ambiguity — Embrace Ambiguity Leading disruption means getting used to constant ambiguity and uncertainty. This is particularly challenging for legacy leaders, who are used to being able to provide absolute certainty and clarity to their employees. When they are not able to offer that, they sometimes remain silent because they don’t want to give false promises. This strategy, however, is counterproductive, as it builds even more anxiety and mistrust. Disruptive leaders excel at guiding others through chaos. They innovate and iterate. They keep their eyes and ears open, and they are better informed the second time. They excel at communication by explaining in practical terms how the changes under way tie into the business objectives, even though they are not able to explain every single step that will take them there. They empathize with their teams and involve them in their thinking. However, they do not compromise the decisiveness. Disruptive leaders understand that leading by consensus is not always the most effective way when the environment changes abruptly. Reflect: What is the one thing you could do to become better at embracing ambiguity in your work and your career? See also: Insurtech’s Lowest Common Denominator   Conclusion Neuroscientists say that we have about 80,000 to 90.000 thoughts each day and that about 80% of them are negative. What is even more interesting, about 95% of those thoughts are repetitive -- exactly same as yesterday. A neuroscientist. Dr. Joe Dispenza, wrote a phenomenal book called “"Breaking the habit of being yourself" – how to lose your mind and create a new one." He talks about how everything we have learned and experienced has been incorporated into our biological “self,” and we wear it every day, diligently, as if it were a uniform. So my question to you today is: What would happen if your brain were not wearing a uniform every day? What would happen if you started looking at your current reality, job, career, life as a mere indication of what is possible and start seeing the space of unlimited possibility that is so much more? Because that’s what disruptive leaders would do.

Telemedicine makes it possible for injured employees to reach a qualified clinician from home or the worksite, providing a promising alternative that ensures early treatment. In a session at the RIMS 2019 Conference and Exhibition, panelists discussed how technology can improve efforts to manage an injured employee’s healthcare experience. Speakers included:

• Ann Schnure, vice president of telemedicine operations, Concentra
• Janine Kral, vice president, risk management, Nordstrom

Every state has adopted telemedicine in some form, with an increasing number accepting telemedicine for workers’ compensation, but many companies and individuals have been slow to adopt. In the past few years, however, adoption and usage have grown significantly. In addition, over 75% of health delivery organizations, like physician groups and hospitals, use or plan to use telemedicine soon. 80% of larger employers use telemedicine, and that number is expected to jump to over 90% in 2019. Telemedicine Usage for Workers’ Compensation The first thing to remember where workers’ compensation is concerned is that there are no federal regulations for telemedicine. Each state has its own medical board that regulates medical rules. For workers’ compensation claims, wherever the patient is when the person needs to see a doctor, that state’s medical rules will apply, regardless of where the patient lives or where the accident took place. See also: The State of Workers’ Compensation   There are some differences between telemedicine for group health and telemedicine for workers’ compensation. State workers’ compensation divisions provide additional oversight. Billing and reimbursement are also different. Rates vary widely between group health programs but follow standard billing and reimbursement procedures for workers’ comp. Despite these differences, patients report high satisfaction with their telemedicine experience. A robust communication and rollout plan is required to facilitate awareness and use. Use Cases for Telemedicine in Workers’ Compensation Telemedicine is not right for all workplace injuries but can be effective for certain situations. It can be used for minor injury visits, recheck visits, telerehab, specialty visits (dermatology, behavioral health) and pathogen exposure counseling/treatment. For these situations, telemedicine can eliminate travel to a provider, bring care to geographically dispersed workforces in remote locations and provide after-hours injury care. Injuries appropriate for a telemedicine visit could include strains, sprains, contusions, abrasions, simple burns or occupational dermatitis. Telemedicine can be a option for up to 60% of rechecks, regardless of the initial injury type. Implementing a Successful Program One of the first things to consider in implementing a telemedicine program is choosing a model to use. There are several options to choose from, including Triage Only, Recheck Only, One-and-Done and Comprehensive. These models all vary in their use of occupational medical experts/generalists, phone/video and scope/continuity of care.

• Triage Only is widely accepted, limited in scope and uses either phone or video.
• Recheck Only requires the patient to first get in-person care. This model may or may not maintain continuity of care and typically uses video.
• One-and-Done is typically staffed by a generalist, provides no continuity for follow-up care and could use phone or video.
• Comprehensive models offer occupational medical experts. The patient can begin and continue with telemedicine, and these models use video for full treatment.

See also: How Telemedicine, AI Are Transforming Care   Other items to consider include the technology and equipment needed, what the workflow will look like, the experience of the provider and communication between the employer and other stakeholders. Telemedicine may not be right for every situation and will not affect spending on catastrophic claims but can provide several benefits for employers handling smaller workers’ compensation injuries.