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.

Small changes can sometimes have a big impact. This is particularly true in the realm of behavioral economics. At its core, behavioral economics (BE) challenge the traditional economic theory that individuals are sound and rational (“slow”) thinkers, by asserting that we instead rely more on heuristics -- or mental shortcuts -- to make quick judgments. Using comprehensive experiments, BE allows us to test ways to encourage individuals to “slow down” this fast processing through simple redesign and rewording. When BE techniques are applied to insurance applications, small changes in the way that questions are designed and worded can lead to more thoughtful completion by the individual. This, in turn, encourages an increased disclosure of medical conditions, resulting in a more comprehensive view of the individual’s health. Ultimately, this additional information and clarity can help the underwriting process, mortality and morbidity results and company profitability. Gen Re was at the forefront of this research for the insurance industry, conducting a BE study related to individual life insurance applications in 2016. This study successfully determined several BE approaches to enhance an application and increase disclosure rates simply through changes in question design and layout. Traditionally, the insurance industry has relied on a more tried-and-true approach to application design. For individual life, companies widely use standardized application questions relating to medical conditions. See also: Making Life Insurance Personal   In 2018, Gen Re set up a new BE experiment to take another look at designs from the 2016 study and to assess the effectiveness of a standardized question design in encouraging medical condition disclosure. This study used standard questions as a control group, testing them against various “treatments,” or different ways of designing the application questions. A sampling of U.S. residents, ages 30-60, was asked to complete online life insurance application questions. Close to 2,500 online applications were completed. Overall, six different question designs (treatments) were tested across 12 medical conditions. The objectives of the study were:

• • Primary: Understand how we can apply insights from behavioral science to increase an applicant’s disclosure level for insurance
  • Secondary: Determine how long it takes an applicant to complete the various treatments, so we can better assess answers to the question, “What is the best combination of time and experience of completing, versus understanding and overload?”

The results strongly supported what was found to be most effective in Gen Re’s 2016 BE study: a five-point scale question design (see Exhibit A). The multiple-choice options on the five-point scale prompt respondents to think about each medical condition, increasing their chance of remembering whether they have ever been diagnosed. Moreover, the clear definitions for each option eliminate the uncertainty respondents may have about whether they qualify as “having” the medical condition.

Exhibit A: 5-Point Scale

Have you ever been diagnosed, treated, tested positive for or been given medical advice by a member of the medical profession for a disease or disorder such as: In comparison, the standardized questions used as the control group were open-ended and asked individuals whether they had ever been diagnosed, treated, tested positive for or been given advice by a member of the medical profession for a particular medical condition (for example, “Any cancer, tumor, cyst or nodule” for cancer-related conditions). This may require a level of medical knowledge beyond what can reasonably be expected of someone who is not a medical professional and can create some uncertainty or difficulty in recollection for individuals completing the application. In addition, although the five-point-scale questions were one of the longest in terms of respondent time to complete -- averaging almost eight minutes - condition disclosure increased by four to eight times over the standardized (control) questions. The standardized question format was the shortest for respondents to complete, averaging just 2.34 minutes, yet it was found to be the least effective question design in terms of increasing medical condition disclosure. See also: Digital Distribution in Life Insurance   By implementing a new design framework, insurance carriers can improve not only the clarity of the application questions but also the level of information that is disclosed by applicants. While companies have much to consider when making changes to their applications, the results of Gen Re’s BE experiments show that small changes can have a big impact. In addition to our leading behavioral economics research, Gen Re also conducts numerous studies that benefit the U.S. Group and Individual Life/Health insurance industry. Our wide variety of industry studies, and our MarketChecks on key topics of interest, keep us at the forefront of insurance research. If you are interested in learning more about our research capabilities, contact me. You can find the article originally published here. Reprinted with permission from Gen Re. ©2019 General Re Life Corporation

The insurance industry is often depicted as resistant to innovation, skeptical of the cost, and unsure of the benefits from embracing innovation and new technologies. So, it was gratifying to hear from a number of insurance leaders who are optimistic about insurtechs and innovation, confident about the opportunities they can create for incumbents, and actively taking steps to change their product offerings and business models.

This was the view from Canada, which ITL’s Chief Innovation Officer Guy Fraker and Chief Operating Officer Paul Winston both experienced as participants and observers at the InsurTech North conference, held last week in Toronto. The conference featured a number of incumbent insurers, advisers and investors, accelerators and insurtechs—all active within the innovation ecosystem of Canada and North America.

Some of the biggest takeaways are:

• A growing number of Canadian insurers—from both the life and P/C sides of the business—are embracing innovation systems and practices and are willing to candidly share challenges and successes with peers.
• Two consistent themes emerged from innovation success stories: The C-Suite is convinced of the need to be successful with innovation, and leveraging carefully crafted constraints propels innovation.
• A key "break-through moment" shared by incumbent carriers actively pursuing new concepts came when they took a candid introspective look at their company and recognized they needed new partners with specific capabilities to successfully innovate.
• Innovation success comes from also understanding the human side of innovation, and that clarity of purpose can help minimize incumbent cultural resistance.
• The insurance industry, now feeling more experienced with various innovation models, seems be expressing not only a sense of arrival but also a mistaken perception that it is not facing disruption, just an acceleration of incremental change.

The conference also presented many valuable lessons, tactics, and strategies for the benefit of attendees that we felt worth sharing with the broader innovation community. Highlights from selected sessions follow:

Meeting the expectations of VCs

Two venture capital investors shared their perspective on insurtechs and what makes a startup an attractive investment.

Commenting on the growth of the insurtech "ecosystem," Maor Amar, Managing Director of Toronto-based Impression Ventures, estimated that he has looked at more than 1,300 startups since June 2017, and in that time has invested in only nine companies.

Among the reasons for VC selectivity, he said, is that within the universe of insurtech startup CEOs, the number of experienced, second-generation leaders—those who have already had one successful exit under their belt—is extremely low. 

Being attractive to VCs also requires that insurtechs have more than "selling to insurers" as a plan, added Jonathan Kalman, General Partner of EOS Venture Partners in Philadelphia. Most insurers have a long buying cycle—typically three years—and their innovation budgets are relatively small, he said. In addition, insurer IT budgets are predominantly devoted to maintenance of systems, with almost none allocated to new technologies and solutions, he said.

Does innovation success require commitment from and communications with "The Top"?

To be successful at innovation requires a leadership team that is convinced it’s a strategic priority and allocates resources for these efforts, said Rowan Saunders, president and CEO of Economical Insurance, based on Waterloo, Ontario. Companies may use an incubator to get an idea off the ground, but for the company to get the full benefit of the innovation it must be moved inside the organization, he said.

Saunders also shared his thoughts about the future of insurance with a statement both equally profound and clear: "In the next 10 years, insurance leaders will move from rating and repair to prediction and prevention."  (We at ITL certainly support this forecast.)

Can incumbents overcome technological and cultural logjams?

The so-called logjams that delay and complicate the adoption of new technology and integration of insurtech solutions with incumbents are not unique to insurance, said Ryan Spinner, head of innovation and disruptive partnerships for Aviva Canada. These obstacles can be endemic in any large organization that is trying to innovation, he said.

Spinner also gave the participants an important piece of advice by sharing from his own experience: "It takes humility and honesty for an incumbent to admit that it might be better to buy than build," he said. 

Wolfpack Competition

The Wolfpack competition among five startups illustrated an important concept: Success in systematic innovation, while minimizing the frequency and severity of "fail fast and learn" experiences, requires clarity and understanding the human side of innovation. At this year's competition, Finaeo won both the "People’s Choice" award from the audience and the Conference Award from the Wolfpack judges.

Founding CEO Aly Dhalla announced he was not there to make a pitch, but to tell a story. He then proceeded to tell a compelling story with a casual and engaging style. This is not to suggest the business model, as well as the technological solution, embedded in his story is not equally compelling. However, the best innovations are often shared, described, and arise from a well-told compelling story that rarely focuses on the technological details. The lesson from this 90- minute competition is how not to fall in love with the cool, new and shiny, but instead understand how the cool, new and shiny will be relevant to people’s lives.  

Build, buy or partner – is this time-tested decision framework still the best approach?

Innovation should be viewed as a process, not a goal in and of itself, according to Peter Primdahl, VP of Emerging Business Models for Guelph, Ontario-based Co-Operator’s Insurance. "It’s an enabler of a company’s priorities and business objectives," he said, adding that innovation should start with a well-articulated problem statement. 

In partnership with Slice Labs, Co-Operator’s launched an on-demand insurance product for home-sharing hosts as a standalone company called Duuo. "We wanted to create something new, not use this launch as a lever to transform the overall company," Primdahl said, noting that it would be hard to take advantage of such opportunities if the overall organization had to change first before it could implement new policies and procedures.

Alice Keung, Chief Transformation Officer of Waterloo-based Economical Insurance, said that her company took the view that the entire company must become more agile and flexible, and adopt a culture that is open to innovation. Economical launched a direct to consumer digital business, called Sonnet, that represented a big change from its traditional distribution partners, agents.

"We don’t want to be disrupted; we want to disrupt ourselves," Keung said.

Sun Life Financial faced some internal doubters and skeptics when it started on its innovation journey, noted Anna Foat, Director of Global Digital Transformation Office in London, Ontario. But as soon as the company showed its initiatives were generating revenue, that made them into converts, she said.

For lasting success, innovation needs to be repeatable, Foat said. "It’s like building an innovation muscle, which helps to overcome inertia" on additional projects, she said.

Another key to innovation success, Co-Operator’s Primdahl said, is greater recognition by senior leadership of the value of learning from innovation experiments, even if they don’t pan out. He said he's optimistic that more companies today "are likely to accept innovation stumbles as a learning process, not failures."

Another driver of innovation is competition. "Every company wants to be seen as innovative. There’s a fear of missing out," said Primdahl, who added that he believes companies should approach innovation as an informed choice, not simply fear of falling behind.

Is achieving scale possible without the wheels coming off?

As a startup, "it’s easy for us to innovate—we have no customers," said Tim Attia, CEO and founder of Slice Labs, in a conversation about how scaling for growth with Guy Fraker. "Scaling is much more challenging, especially if you have something that no one wants to buy."

As many insurance incumbents are evaluating startups and whether their solution is a fit, "insurtechs look at incumbents and evaluate if they can help them to scale," Attia said.

Citing transportation network giants Lyft and Uber, as well as Airbnb, Tesla, and automakers with subscription models, Attia and ITL’s Fraker engaged in a lively exchange about models of embedded and on-demand insurance.  Both agreed that the emergence of new business models and industry entrants will continue to apply pressure on the core incumbent business model.

A.I. will continue impacting insurance, so now what?

Three firms who are leaders in the application of artificial intelligence openly shared how they are leveraging A.I. technological capabilities in the context of insurance. Conference attendees had the opportunity to learn a simple, yet game changing, lesson from the world of technologies from Pypestream President Donna Peeples, Abhay Raman, who is VP at Sun Life Financial, and Cameron Schuler, VP of Industry Innovation at the Vector Institute. Many insurtechs and specific technologies are a "what," whereas artificial Intelligence stands out as a "how." A.I. is now as ubiquitous as connectivity, requiring the selection of carefully designed applications.

Barbarians at the Gate

Some of the big tech giants have shown signs of interest in insurance, "but it’s not clear they’ll be successful, that they’ll be the barbarians to take down the Roman empire of insurance," said Eric Weisburg, Vice President, Research and Consulting for Novarica in Boston.

Insurers have done a great job with regulation and capital requirements, and also have a very different risk tolerance compared with non-insurance companies, so it’s unlikely that tech giants will take away significant market share from incumbents, said David Wechsler, Executive Director of Channels and Partnerships for Philadelphia-based Comcast Infinity. "That’s not to say they might not take an interest in insurance if it means serving their customers," he added, noting that currently he views it as more advantageous for companies like Comcast to partner with insurers than compete with them.

Aly Dhalla of Finaeo, the startup that won the Wolfpack pitch competition at Insurtech North, said "don’t underestimate a VC fund’s ability to transform an industry, such as if Softbank decides to put $50 billion into the market to disrupt an industry."

Sridhar Manyem, Director, Industry Research and Analytics for A.M. Best Co., said that for tech companies to enter the insurance market requires more than a risk appetite. They also have a return perspective and it has to be attractive, he said.

A transformation journey is required for every company within our industry’s ecosystem that wants to remain relevant beyond 2030. So, how do you get past all the hype around disruption, digital and innovation and really set a course to transform? How do you start the journey – with clarity, focus and informed decisions – that will thrust your company forward on the route to staying relevant, competitive and positioned for future success?

A new approach is required. It’s actually not as hard you might think – but it requires a shift in mindset, a change in how we approach strategic initiatives.

See also: Accelerating the Transformation  

Insurers have made clear, but isolated, progress. Most of the transformation that has taken place within the industry so far has come from the traditional approach: replacing core systems, creating portals, adding CRM, improving customer communications, optimizing operations, enhancing products, expanding channels and entering new market segments. Despite the progress resulting from these efforts, the change has been no more than incremental.

The new approach is all about thinking big – thinking beyond our current state, beyond our comfort zones; letting go of the anchors and the siloed transactional thinking; and expanding our vision to encompass possibilities that define a future state with both a customer and operational focus. Or, to put it more imaginatively, looking through a new lens.

Picture a new future state of insurance – just close your eyes and begin to imagine what that could look like! A digitally connected enterprise with fully orchestrated and optimized operations. An organization that delivers state-of-the-art services and products for exponential improvements in ease-of-doing-business for customers as well as internal and external stakeholders.

We just released our latest research brief, “Bringing New Focus to the Transformation Journey: Accelerating Transformation with a New Lens.” It’s a must-read that lays out the blueprint for the transformation journey. It also showcases a transformation use-case from a large insurer that truly demonstrates this approach in action – all starting with a simple vision for Creating an Amazing Digital Experience for the Agent – a multi-year, multi-initiative approach that will reap amazing results. See also: Culture Side of Digital Transformation   Showing transformation in action and real success stories reminds us that, for insurers, thinking big is possible, thinking big is happening, and thinking big is achievable. Everyone is innovating, but not everyone is transforming. To transform, you have to think big and remember to think beyond the traditional.

Hurricane season begins June 1. Experts are calling for a more active season this year, with the Weather Company forecasting 14 named storms, seven hurricanes and three major hurricanes, above the 30-year average. Certainly the population growth and expansion of industries, particularly in the developing world, will ensure that losses from hurricanes will continue to increase. While hurricanes cannot be prevented, losses can be greatly minimized by adequate preparation before the hurricane arrives, including the development and implementation of a comprehensive written hurricane emergency plan. Here are some tips to help businesses minimize damage and get back to work quickly after a hurricane or significant windstorm: Pre-Hurricane Planning The key to minimizing damage is adequate preparation before the hurricane arrives.

• Assign emergency organization roles and responsibilities
• Provide annual training
• Assemble emergency supplies and equipment in a safe location such as plastic tarps, mops, squeegees, emergency lighting, battery-operated radio, tape for windows, lumber and nails, etc.
• Plan for salvage and recovery, including maintaining a list of key vendors, contractors and salvage services
• Anchor large equipment, such as cranes and draglines, in accordance with manufacturers' guidelines
• Fill fuel tanks of generators, fire pumps, company-owned vehicles, etc.
• Be prepared to shut down operations if necessary

See also: How to Predict Atlantic Hurricanes   During Hurricane

• Keep emergency response team personnel at the facility, if safe to do so, and have them prepared to respond
• Continue to monitor weather reports for information on potential storm damage, access to property, utility outage, etc.
• Update management and maintenance accordingly
• Patrol the property continuously and watch for roof leaks, pipe breakage, fire or structural damage
• Constantly monitor any processes, equipment, boilers, furnaces, etc., that must remain online during hurricane
• During power failure, turn off electrical switches to prevent reactivation before necessary checks are completed

After Hurricane

• Secure the site to prevent unauthorized entry
• Organize and prepare emergency crews for salvage and cleaning operations
• If safe to so, conduct an immediate damage assessment, paying particular attention to structural damage, utilities, roof coverings, production and process equipment, fire protection equipment and areas subject to flooding
• Notify utility companies of any outages or damages
• Call key personnel and notify contractors to begin major repairs
• Initiate salvage operations
• Review the effectiveness of the hurricane emergency plane and revise as needed.

See also: Hurricane Harvey’s Lesson for Insurtechs   Damage can be prevented or greatly reduced with proper planning in all stages of hurricane preparation. As we enter the 2019 hurricane season, these steps can help minimize overall damage because there is great preparation before and after; the steps also efficiently help rebuild businesses after the damage.