“Our agency is a relationship-based agency. We have the best interests of our clients at heart and offer the best advice and coverage in the most cost-effective manner,” a Dallas-based, independent P&C agent says, and I'm sure most independent agents say something similar. But agents have hundreds or thousands of customers and tons of data to recall for each client, and our memories can hold only so much at a time. The good news is that a lot of data gets captured by agencies that can be consolidated with several other data sources to paint a better picture about the clients, allowing for a more thorough profile and better risk analysis. The core question an agent needs to ask is, “Do I have all the information I need about my clients and can I locate it quickly?” Data is like Lego bricks, just waiting to be used to create valuable insights. Once you start putting them together into unique combinations of datasets, you can create real value and a competitive advantage. Let’s take a peek into a client’s journey through the eyes of an agency and try to identify data needs. We will also look at how data management and data assets will provide a deeper understanding and better client management, with a 360-degree view of an insurance customer. Such a view not only focuses on clients but creates an ecosystem that allows agents to gather, nurture, curate and enhance data about their clients. Agents understand that if a relationship is a life, then data is oxygen. There must be continuous feedback to systems using analytics to understand clients better. See also: Using Technology to Enhance Your Agency   Shown below is a high-level flow of the client journey from a prospect to being a loyal customer, and all elements of communication and data points that can be used better. 1. Closing a prospect — Be the insurance commercial or personal, there is always an individual who will be involved/engaged for policy discussion. It is important to understand the primary contact, any affiliation to a business and the need for coverage. For instance, you may consider calling the contact who is operating a gas station or a convenience store but text or email someone who is looking for a cybersecurity policy. The approach should be tailored based on contact and business profile. By segmenting clients based on attributes, agencies can profile them accurately and develop customized communication approaches. These contacts can be ranked based on their coverage needs and likelihood to purchase a policy. Then, drip communication can be designed to increase positive outcomes, focusing on higher-rank leads and converting those prospect who are ready. You can use the deal board feature of InsuredMine to achieve these results. In this case, initial client data, his communication response data, lifestyle and life stage data from social media can also play an important role. 2. Welcoming new clients: Successful agents pay special attention to a client’s onboarding to make sure there is proper communication at all times. They provide clients with all the information and channels (phone, text, email, chat, etc.) needed to contact them. This "availability on demand" leaves a good impression and reduces challenges when it comes to renewals. So, the question is what data do we have and how do we make the most of it in welcoming our clients? First thing would be to set them up on a welcome drip campaign, which will include sharing agency information, ways to connect and social media connections for updates and engagement. Follow-up communication may also include other cross sales and up-sales requests. (This becomes more effective when we capture more information about clients, including demographics and financial, family, lifestyle and life stages details). It is important to have a system that can help you capture all this data so it can be analyzed for better recommendations. Onboarding data can be as simple as knowing what is the best way to communicate -- email, text, phone or in-person. These are great pointers and need to be reflected in an agent’s communication at the right time with the help of the right tools. 3. Renewals: Come judgment day, and now agents need to go through the trial and prove their worth again, fighting against all odds like an increased carrier premium, other easier and cheaper options, more convenient methods of acquiring a policy through an app or online and many others. Agents need to start engaging clients about 90 days before the expiration of the policy. Agents can start with a drip campaign with a combination of email and text-based communication based on the client’s preferences. Knowledge of new or additional assets of the client will also help the agent provide bundling. Information about the client’s change in lifestyle and life stage data can also provide cover fire. 4. Claims management: This is a tricky one, as agencies may not have all the information to start with. Receiving an initial notification from the client about a claim situation should trigger communication, including carrier contact, claim filing options and customer service. Offering digital tools to help clients facilitate claims filing will provide information about the claim, and that information can be leveraged to better manage the claim and update the client’s risk profile for future needs. 5. General client management and annual updates: There are several clients who are on autopilot with very little overhead, but even those clients would appreciate periodic engagement for an opportunity to update their profile or share feedback. Other opportunities with this type of engagement can create cross sales and policy consolidation options, as well as suggestions for increased or improved coverage in line with changes in clients' financial situations. Connecting with customers at the right time for the right policy using available data and presenting special offers or promotions when they become a flight risk are other ways to engage. It all boils down to the right engagement with the right context, using the right medium, which will start to show results for any agency in a short time. For all the stages above, pulling data from Linkedin, Zillow, DMV, KBB, HazardHub, meteorological department, social media, and census data adds additional context and will help the agent communicate both effectively and efficiently. Other data sources that are equally valuable, but beyond the scope of this discussion, include telematics, sensors (IoT), wearables and GIS data. Understanding business from a client’s perspective and all data elements required at each stage and their respective data sources will do a tremendous favor to your organization:

• Helps create a 360-degree view of your clients
• Provides actionable intelligence to act at each stage
• Improves profitability and retention
• Creates a competitive advantage of data assets

Once you are able to bring in all the available structured and unstructured data, you are ready to tell your data story. We believe every agency has a data story that needs to be analyzed and narrated to operate effectively, showing a deeper understanding of clients. You may use the following four components to discover how to use your data story.

• Understand your business DNA with data segmentation
• Design simple and memorable graphics with data visualization
• Develop intelligent processes with data automation
• Humanize engagement with data experience

Understand your business DNA with data segmentation According to market analysis, customer (data) segmentation generates increased revenue for businesses. Customer segmentation tools help identify areas of improvement in business marketing strategies and inform you what strategies are working and what aren’t. Segmentation can also help increase conversion rates along every step. You can segment your customers based on several attributes based on demographic, geographical, psychographic and behavioral data and tailor your services accordingly. Design simple and memorable graphics with data visualization Data Visualization involves presenting complex data in simple graphs and charts, making it easy to understand. Gone are the days of long spreadsheets or databases! Data visualization tools make data user-friendly and interactive with no need for formal training. InsuredMine has developed some of the best tools to help agents convert their precious reports into attractive and simple visuals to understand data better. See also: The Future of the Agency Channel   Develop intelligent processes with data automation Data automation is performing high frequency, low-value touches with real-time actionable data designed with a mix of business intelligence, micro-customization and user response to the communication. Intelligent processes also lead to improved decision-making and provide for easy governance of processes. Data automation reduces human errors in handling large amounts of data and frees up support time. Data automation provides faster results and insights into analytics. For starters, it can be as simple as automating birthday wishes or renewal reminders. For more sophisticated users, it can be sending out a prospect drip email or client welcome drip email, with continued fine-tuning and segmentation to hyper-target for best outcomes. Humanize engagement with data experience Making effective engagements with clients is valued in this era of automation and robotics. Yes, you can experience data! That can happen through AI-driven chatbots and analytics-powered mobile apps. Both approaches provide a highly contextualized, data-driven experience for clients and reduce the frustration that comes with arranging to meet an agent by resolving non-material issues at the convenience of the client. Data tools help businesses analyze and explore opportunities to provide improved services. When clients experience the difference, they are sure to come back for more. Conclusion: I believe this blog provides a perspective on how an independent insurance agent can leverage internal, external, structured, and unstructured data to augment their efforts at engaging clients and providing them an extraordinary experience. Having a 360-degree understanding of clients will help the agent engage and segment clients at different stages of their insurance journey. These efforts show multiplied results through the use of data automation and data visualization and allow the customers to have the last say with their data experience. Adding in digital tools like a chatbot or a mobile app not only adds to it but will keep your clients coming back just for the experience. So what’s the delay? No matter how and where you start your story, we will help you end it with ‘happily ever after!’

What follows is disjointed and confusing. It is just like the marketplace is going to be in the future. Don’t dismiss this as “all wrong” until you at least consider the impact on you and your organization if any of this is right! Remember, the dinosaurs were “big and bad” until they weren’t! John is a good friend and a smart marketing professional. He is not full of himself. He is, in my opinion, authentic. He suggests the secret to success with his clients is delivery that is “fast, hot and cheap.” It doesn't matter whether you agree, and your clients may think differently – if you’re right, John will never be a threat to you. If you’re wrong, keep John away from your clients. The challenge in today's and tomorrow’s world is that the marketplace is no longer a monolith – a mass market on your “Main Street.” That Norman Rockwell portrait is now more of a mosaic where each tile is determined by the people in the niche targeted and served. They are defined by their age, race, ethnicity, culture, language, chosen style of engagement (verbal or non-verbal), economics, technosavvy, politics, etc. You must meet your clients who, what, how and where they are, not expect them to meet you where you are. IGNORE THIS COUNSEL AT YOUR PERIL! THE CUSTOMER REMAINS KING! Today, our business kingdoms can reach much more widely, but the threat also increases that barbarians can invade our comfort zones. See also: Bold Prediction on Customer Experience   As teenager, I delivered groceries in a truck to corner stores or rural country stores. I felt like a man because I had a commercial driver’s license, unlike most of my friends. That feeling would end when Mr. Courrege would tell me, “Boy, put dat stuff in the corner.” He ticked me off, but he didn't care how I felt, and neither did my uncle, whom I worked for. The customer was king. That was 60 years ago. Today, the market has changed and never have customers had more options. They can shop from this global economy 24 hours a day 365 days a year, in-person or online and with a drone doing the delivery. About a month ago, I ordered a breakfast at the McDonald’s drive-thru. When I opened the bag, I found a coupon with writing on both sides. One side said, “Desde el McMuffin hasta la Big Mac. Ahora te lo llevamos a la puerta de casa.” The other side had the English version: “McMuffin to Big Mac. Now delivered to your door.” Both sides said, McDeliver/Uber Eats. I laughed and thought how stupid can people be – to pay $10 or more to have a bag of burgers and fries delivered. Then I thought about WAITR, a meal-delivery service that originated less than 20 miles from me. It is not as restrictive in terms of options as are the McDonald’s delivery boys and girls. I’ve been told they’ll pick up and deliver your food for a $5 charge plus your tip. A week ago, I received an e-mail offering to sell my home for 2% commission. I don’t know where this realtor was, and I didn’t care. If he could back up his brag. I’d be interested. Fast forward to today. I was talking to a legend in our industry. He’s worked with agents throughout this county for more than 60 years. For his network of agencies, his newsletters and audio tapes were the internet before the internet was born. Today, he remains as positive about the possibilities in our industry as he did the first time we talked decades ago. The only change is that what, how and where he markets and serves is entirely different. He knows that profitable delivery is necessary. Now, remember David and Goliath. Goliath was the best until he wasn’t. David won because he had better technology and youthful confidence, and he was nimble. (Fast, hot, and cheap!). I’m first and foremost an LSU fan. I’m an Alabama fan when they aren’t playing LSU. I believe Alabama's Nick Saban is the best college football coach in the history of the game. He is legend. Unfortunately (at least one night this January), his team looked more like Goliath than David. Did Nick change – NO! Did college football change – NO! Did coaching change – NO! It’s just, I believe that one night, that we saw that the people playing the games are changing. Clemson was having fun. Their youthful enthusiasm was more effective than the discipline of Alabama, with their rigorous training regimen that got them to that night but didn’t carry them to tomorrow. See also: How to Use AI in Customer Service   I’d like to see Coach Saban win at least one more national championship. I pray he passes Bear Bryant. He knows football and how to coach – yesterday. Is he right for tomorrow? Now I ask you – can you and your agency compete in tomorrow’s world? Like McDonald’s and Uber, can you get your clients to pay more than you’re worth for your delivery, or will the marketplace provide full disclosure of commission (or quote net of commission), and your competitors will start competing on the high cost of your delivery? Confused? You should be! I am! CHANGE IS INEVITABLE. YOUR REACTION TO IT IS NOT! Geaux Tigers (LSU or Clemson)! The purpose of business is to make money (win) and have fun! Are you doing both? Clemson did!

To complement recent advice from our guest bloggers, let’s consider the political dimension of applying analytics in business. Annette and Peter have shared useful tips on applying analytics for both customer experience and marketing. However, unlike in the classroom, advancing such use of analytics in business always involves politics. Over the years, as well as protecting technical stars from performance management systems, I have often had to mentor them on politics. Analysts can be idealistic and naive when it comes to the political dimension of office life. So, in this post, I suggest a simple framework to bear in mind when interacting with your stakeholders. I hope it helps you navigate the political dimension, or to coach your team to do so. A framework for the political dimension of stakeholders I have shared before on the importance of mapping your stakeholders and segmenting them, so you can adjust your style to suit them. Beyond this, there is a need to be aware of the political dimension and to act accordingly. Now, the precise details of political implications and game playing in each organization will vary. You will know better than I do what are long-term versus short-term priorities and how different stakeholders might be affected. What I want to share is a framework for identifying where political considerations matter and for which stakeholders. The 2×2 grid was developed by Simon Baddeley (Birmingham University) and Kim Turnball James (now at Cranfield). It is based on their research within the domain of local government, but their findings accord with my experience of working in large corporations. Their analysis of research findings led them to segment people into one of the following four quadrants. These are defined by the twin dimensions of reading (political awareness – ability to read what is really going on) and carrying (political actions – for good or ill). Using those two axes, they identify four clear segments into which your stakeholders may fall:

1. Innocent stakeholders (like naive sheep)
2. Inept stakeholders (like inept asses)
3. Clever but untrustworthy stakeholders (like cunning foxes)
4. Wise stakeholders (like the proverbial owls)

Let’s consider each quadrant in turn and their implications for managing stakeholders when deploying analytics. Quadrant 1: Naive Sheep The first point to make using this framework is to avoid being a sheep. Like lambs led to the slaughter, people in this quadrant are politically unaware, but innocent of any ulterior motive in their work. While potentially trustworthy, they can also all too easily be manipulated by others or become cynical and resentful of the organization. Sadly, I all too often discover that this is the quadrant occupied by analysts or data scientists. One of the reasons for that is actually principled. I have lost count of the times I have heard analysts or even their leaders describe themselves as not doing politics or sick of politics. As with an idealistic government-in-waiting, this is not a viable strategy. See also: Sentiment Analytics Can Drive Growth   Avoiding politics is impossible in any walk of life, but especially large organizations. As Aristotle said “man is by nature a political animal.“ However, it is possible to be political without selling your soul (as this useful article from Harvard Business Review puts it). The challenge for those who identify themselves in this quadrant is to wake up and smell the coffee. Recognize all the evidence that decisions (even important ones) are made for irrational, emotional and social reasons. Listen and watch more. Become more astute at understanding others' goals, concerns and where they might feel threatened. Build trust and collaborate where there is mutual benefit. When working with stakeholders in this quadrant, it can be helpful to propose more collaboration or socializing of their ideas before acting alone. Reassure them by sharing their ideas, but also ensuring they get the credit, even when you have done the networking. You may well become a trusted adviser for getting things done. Quadrant 2: Inept Asses Please note I am speaking about donkeys, not derrieres! These are people who lack political awareness, every bit as much as sheep, but do not have benign motives. Instead, they seek to play political games or manipulate situations to their advantage, while being embarrassingly obvious. They are the David Brent of real world offices. Believing themselves to be players they just make fools of themselves and usually undermine the reputation of their teams. Now we can all make mistakes in life. Errors of judgment. But, if you honestly self-identify in this segment, then the good news is that you have woken up to it. Apologies may be in order, but the most important thing to change will be your options. Stop trying to get one over on people. Start keeping your word and sharing to help others. When working with stakeholders in this quadrant, two things are worth considering. First, for any recommendations, lead with what is in it for them. Emphasize how they could benefit or advance their careers if they get on board. At the same time, be careful. You need to ensure you do not tarnish your reputation by being too closely aligned with their manipulation. You should also ensure it is not easy for them to pass off your work as their own. Quadrant 3: Cunning Foxes Here we reach the true Machiavellian manipulators within your business. At the worst, this is where you will find sociopaths and the few who actually do come to work to hurt others. Less extreme versions include those who have risen to a level of power or control and enjoy playing the system. Although such operators can appear glamorized in TV dramas, they can also leave a trail of destruction in their wake. I have personally witnessed a CFO who clearly took pleasure in humiliating and thwarting the efforts of certain middle managers. In these days of greater awareness around mental health at work and the alarming level of suicide among men under 50, we should be very concerned with such behavior. I have painted a picture of the stereotypical macho boss. But such character traits can also be found in women leaders and in those who do not appear senior. Anyone who has worked in large businesses will know that individuals can also exert control from positions of expertise or influence that are not obvious from org charts. It would surprise me if many of the readers of this blog self-identified as being in this segment. However, I have seen embittered cynicism manifest in some of these tendencies. If you find yourself thinking how you can get your revenge on others at work through the skills you have or ability to sabotage their work – stop. Don’t just think about the consequences if they found out, take time to reflect on the kind of person you want to become. Unfortunately, it is not rare to discover some of these characters at senior levels in large corporations. Being effective political operators, they are also often ruthlessly ambitious. If you identify some of the stakeholders you need to work with as being in this quadrant, then proceed with caution. A few tips may help you. Where possible, brief them before public meetings so they are not caught unawares (you do not want to corner them). At times, it may also make more sense to approach them in a more public setting, after you have secured the support of others you can trust. You should also consider what benefits for them you can highlight and whether it would work best to share those directly or in public. A personal pitch that you know fits with their plans or creates an opportunity may help complement a more public recommendation "in the interest of customers." Quadrant 4: Wise Owls As with all effective 2×2 matrices, this top right corner is where you want to be, having developed the ability to see the different political agendas and plans at work in your business and still being in touch with your soul and secure enough to act in the best interests of others. Those characteristics often distinguish those who are thinking more long-term. Age does not necessarily make one wise, but it might be worth considering if some of those older leaders in your business have wisdom to share. You can spot an owl by reputation. These are the leaders who are known as those who get things done, and people really want to work with them. They may not appear to be shining brightly at present, but you will find their advice being sought by people at all levels. If you have managed to develop both a strong ability to read the office politics and flexible tactics to get the right things done – please consider developing your team. Too few of today’s technically expert managers (across data, analytics, data science and research) possess such skills. Effective transformation of businesses to be data-led and ethical may well rely on your mentoring a generation of leaders to develop such skills. See also: 3-Step Approach to Big Data Analytics   If you have the pleasure of working with leaders whom you identify as being in this quadrant, consider asking them to be your mentor. This may be even more valuable for you if they are in a completely different part of your business. One of the most effective ways to develop increased awareness of office politics and the good judgment of deciding when and how to act is with the help of a mentor. At the least, it would help to consult with such leaders before widely sharing potentially controversial analysis. They may well be able to advise how to influence others. Are you a Sheep, Ass, Fox or Owl? I hope you found those thoughts on the political dimension of office life useful. Which segment did you identify with? Has anything I’ve said changed your view of use of politics at work? Why not dig out your stakeholder map and seek to place each of your key players in one of the above quadrants? At the least, I hope this post has prompted you to think about your ability to read political behavior and your motivations in any covert tactics of your own. A greater ability to operate wisely and ethically within the reality of political workplaces could really advance the influence and benefits of much analytics or insight.

The workers’ compensation claims process tends to creep along, often inviting lawyers to the party and leaving both workers and companies frustrated. But this trend is reversing. Why? Technology has been developed that alleviates the stress points that threatened to eventually break the workers’ comp system. The same is true for other insurance segments, as well. The technologies sparking this massive transformation across the insurance industry are artificial intelligence (AI) and machine learning. AI and machine learning help resolve claims exponentially faster, empowering teams to intervene at the right times, as needed. McKinsey goes so far as to predict that, by 2030, “claims for personal lines and small-business insurance [will be] largely automated, enabling carriers to achieve straight-through-processing rates of more than 90% and dramatically reducing claims processing times from days to hours or minutes.” Teams will be able to personalize solutions based on real data accessed instantly instead of requiring weeks of human analysis that can’t possibly incorporate the millions of data points that machines can. Technologies help claims representatives do their jobs faster and smarter so that people receive better care and organizations enjoy significant improvements in their combined ratios. Insurtech Becomes a Thing While AI-based solutions are relatively new to the commercial insurance industry, they have already given rise to a whole new market segment — insurtech. More and more companies are implementing AI into their offerings, and insurtech vendors are experiencing rapid growth of their customer bases as well as extending the contracts of existing customers based on the early benefits they’ve experienced. As the industry enters its biggest period of innovation in a century, driven by insurtech startups, and as organizations begin to track the magnitude of cost savings and other benefits, several important lessons have emerged. Below are my takeaways thus far from what’s becoming an AI revolution: See also: How Claims Process Must Drive Change   Don’t Do AI Just to Do AI There are cool applications for AI hitting the market all the time. Some sales guy is going to come in and show you something that will make your eyes light up. Don’t give in to temptation and sign on to do something just because it is an AI-based solution. Instead, think about your organization’s most pressing needs. What are your pain points? Where are your hold ups? What are employees frustrated with? If a solution fails to address these needs, it’s just another shiny tool that will never be used to its full potential. Practicality and usefulness are essential. Ease of Use Matters You could find the best solution in the world. It could be designed perfectly to take care of your problem, but, if it’s hard to use, it’s virtually worthless. Employees must want to use a new solution; they need to see how it streamlines their daily tasks and makes their jobs easier. This is essential for adoption. Adoption of AI-based tools can often face generational hurdles. There has been some resistance to AI out of fear that it will take over an employee’s job or simply from the desire to maintain the status quo due to personal comfort and familiarity. These are very real fears, and you would be wise not to discount them. The best way to prevail with a new solution is to show clear benefits to employees and make tools and software as easy to use as possible. Make a Plan AI requires forethought — not just in terms of what an organization needs or how employees might use it but also in terms of how it will be rolled out. There has to be a plan for implementation. Who is going to lead the project? How will employees be trained? What will happen with the data once it is generated? Even the best AI-based tools require management. Decisions need to be made in advance to get the most from any solution. Otherwise, implementation can lead to chaos and frustration, and the luster of a powerful new tool will wear off before it’s ever really put to use. Don’t Try to Do Too Much One of the biggest mistakes companies make once they understand what AI and machine learning are capable of is to take on too much. I would strongly encourage organizations to define and maintain a singular focus in applying the technology. When a company’s primary goal is to generate cost savings, for example, everything it does should turn in that direction. After all, the biggest advances come not when one goes broad but when one dives deep. AI applications are no exception. When organizations maintain a singular focus, they can devise the most consistently innovative and necessary solutions for their teams and customers. Real Personalization Is Possible Personalization has long seemed like a myth in the commercial insurance industry, something elusive that every company chases. With AI and machine learning, personalization will soon become a reality. See also: Why AI Will Transform Insurance   Because AI-based solutions can handle absolutely massive amounts of structured and unstructured data — and because they can learn on their own — users gain highly nuanced levels of information, which they can then apply to customize offerings. This opens the door for all kinds of opportunities to develop custom policies or benefits based on relevant data points. When personalization comes into play, everyone wins because costs, care and objectives are all aligned. Next Generations of Claims Operations On top of cost and efficiency benefits that AI is already demonstrating, the solutions of the future will improve the claims process across the board. For example, the need for litigation is reduced when claims are addressed in a timely manner or when injured workers get in to see the best doctor right from the start. Medicare Set-Asides (MSAs) can be processed in a fraction of the time based on better data. The possibilities are virtually endless when it comes to processes that can be improved. What we can see, however, even from these early days of insurtech, is that AI and machine learning will fundamentally improve how care is distributed and help the entire commercial insurance industry evolve. Looking forward to the years ahead. As first published in Claims Journal.

Lots of industries face criticism because they talk the talk but don't walk the walk. But the insurance industry doesn't even talk the talk yet.

Sure, everyone is talking about improving the insurance customer experience, but look at the words we use. Many are opaque—the industry talks to itself, somehow unaware that customers are listening and are turned off by the gobbledygook. Some words are even offensive—we're saying things to customers that we really don't want to be saying.

We have to at least get our talk—our vocabulary—straight before we can figure out to really engage customers and address their evolving needs.

My least-favorite word is one so widely used that few will find it offensive: "adjuster." My problem: If I'm filing a claim, I don't want it adjusted. I want it paid.

Yes, I realize that processing claims is complicated and that all sorts of adjustments need to be made. I also realize that no industry simply pays when a claim is made against a company. But if you send me an "adjuster," you're telling me right off the bat that you don't trust me, and that's a lousy way to start an interaction. It certainly isn't any way to start a relationship, which is what insurers insist they want with customers these days. Don't trust me, if you must, but send me a "claims professional" or simply a "customer service representative." Don't send me an "adjuster."

Almost as bad is "losses," as in "cat losses" or "medical losses." How about, instead: "payments to highly valued customers in their time of need, after years of premium payments on their part"? Does Amazon record a loss when it ships me something? Of course not. And those payments on health or cat insurance aren't losses, either; they're just the cost of doing business—people don't pay those premiums simply because they like us. So, let's look at our business through the customer's eyes and book "payments" or somesuch, not "losses."

Less offensive but still unnecessarily bad are words like "excess" and "surplus." The insurance may be categorized as excess and surplus to the industry, but not to me, the customer. 

Some words already have meanings—and they aren't the meanings assigned by the insurance industry. A binder is a plastic cover with three rings that you buy for your kids as they head back to school; it is not temporary insurance. An endorsement is something you put on the back of a check—or at least used to, before banks simplified deposits. An endorsement is not an amendment to an insurance policy.

Many terms are opaque, even archaic:

• "Capitation" and "subrogation"? Important functions, but there have to be layman's terms that can be substituted.
• If I'm buying life insurance, good luck getting me to grasp intuitively the difference between whole life and universal life; "whole" and "universal" are practically synonyms in this context.
• "Inland marine"? Please.

While we're at it, let's do away with the acronyms. All of them—at least on first reference, and mostly in subsequent references, too.

Changing the language will be hard because so many in the industry subscribe to what I think of as a 19th century sort of approach to business: Let's make things seem as complicated as possible to justify the existence of lots of experts and intermediaries and to demand nearly blind faith by clients. This is sort of the "don't try this at home, folks," approach to business. Leave the complicated terms to us.

The approach has worked for insurers for a very long time. It has worked for doctors and lawyers. If a cynical T.A. in a philosophy class in college way back when is to be believed, it worked for Hegel, too—he supposedly wrote a short, clear version of his big idea (thesis/antithesis/synthesis), and no one took him seriously; he then wrote a 1,000-page, nearly impenetrable version, called it merely the introduction to his ideas and found lasting fame.

But things have changed since Hegel wrote in the early 1800s. Now, if I want to remind myself about Hegel, I turn to Wikipedia and its clear, little summary; I don't crack open The Phenomenology of Spirit. Change has accelerated in recent years, to the point where even doctors find themselves having to communicate more with patients in plain English.

If doctors can simplify how they communicate about the mind-boggling issues involved in medicine, then the rest of us can figure out how to talk the talk in insurance. We need to begin by taking a hard look at every term we use and revising many of them, from the perspective of a total newbie customer, so we talk to customers the way they expect us to talk to them.

That's the only way to lay the groundwork for the broad improvements in the customer experience that we all want to deliver and that customers are increasingly demanding.

Cheers,

Paul Carroll
Editor-in-Chief

Historically, most independent insurance agencies have been slow to adopt new technologies, instead relying on their personal service to clients to differentiate themselves in the market. While it’s true that trusting an agent who has your security, protection and best interests at heart is a huge part of what makes the independent agent extremely valuable, customer expectations are shifting. Modern consumers embrace a digital-first environment. They expect high-end technology and automation to support their shopping, entertainment and banking needs, and insurance quickly joined that list. About five years ago, buoyed by strong capital investment and a surge in insurtech startups, direct-to-consumer personal lines disrupted the industry by bypassing the advisory and guidance upon which the independent agent model was built. Now, it’s the commercial industry’s turn, as we begin to see similar evolution in distribution models on that side. To remain relevant, independent agents must keep pace with the changing landscape of consumer behavior and the technological demand. Customer experience is more important than ever. When it comes to attracting and retaining clients, and delivering on expectations for speed, it's critical to be efficient and digital. API solution integration has become one of the most crucial components of digitization, enabling smoother workflows and increased efficiency and allowing agents to meet customer expectations for real-time, personalized service. By providing a framework for connectivity, application programming interface (API) protocols allow various pieces of software to interact, to share data, and to move data and tasks from one step of a process to the next. For independent agents and the entire value chain that supports them, APIs are game-changing. They give agents the combination of the digital-first approach customers expect, with personal attention and dependable service. Here’s why APIs are transforming the industry for agencies, customers and insurtech providers. APIs improve office workflow. As in every business, productivity and efficiency are critical in any agency. The ability to complete tasks faster, to save time and effort, not only means less work but also frees up more time for agents and customer service reps to spend collaborating with clients to better understand their needs. With something as simple as writing an auto policy, an agent may start and end the process in two pieces of software — first in the agency management system (AMS) and then in the underwriting system. This requires the agent to toggle back and forth, rekey data and perhaps even hand off the process to another individual. With API integration, the data is entered once, moves through the entire process with an electronic handoff from one system to the next, and can even be picked up by a second individual seamlessly. By cutting down on time and frustration, employees can spend their time on more productive, revenue-generating efforts. See also: AI Still Needs Business Expertise   APIs reduce data entry burden. The problem with lack of integration in most agencies is that it requires redundant data entry. And, each time customer data is entered increases the risk of error and inconsistency. For example, if a CSR enters client Amy Smith Jones’ name into the AMS with no hyphen, but the agent enters it into another system with a hyphen, there are two separate records for the same customer. Now, it’s impossible to see the client’s entire account, and there may be duplicate mailings and other communication breakdowns. With API integration, data is entered once — eliminating the time wasted in redundancy, reducing the risk of data entry errors and ensuring data consistency. APIs improve customer relations and retention. Insurance customers expect personalized service and attention. So, when they call the agency for help, they expect that their agent is familiar with their policies and situation. But, in many agencies, simply handling an incoming call is a lengthy process. An operator answers the phone and determines how to route the call, and then the agent must ask some questions to find out how he or she can be of service. With an API integration between the phone system and the AMS, the handoff happens seamlessly. When the customer dials in, the system uses reverse phone number lookup to identify the caller and pops up the customer’s policies on the operator’s computer screen and which agent handles them. Now, the operator can greet the client personally and transfer the call quickly. When the agent answers, they already have information about the client’s account and can immediately ask whether the call is regarding the homeowners or auto policy. This is just one example of how an API-enabled, streamlined system not only eliminates extra steps but also provides the personalized customer experience that clients expect from their agency. APIs demonstrate your digital prowess. As we’ve already established, consumers expect a certain level of modern, digital automation in practically every aspect of their lives. Using APIs to connect digital technologies gives your agency the forward-thinking image that attracts customers who value that quality. For example, even something as simple as mobile document signing technology that integrates directly with your agency management and underwriting solutions can streamline the process for clients. They can log in from wherever and whenever on their mobile device, sign as required and keep the process moving. Even with the personal service an independent agency strives to provide, there will still be clients who prefer less human interaction and a more digital approach, and APIs allow agencies to retain those clients while still addressing their automation expectations. APIs allow tech providers to remain relevant. There are many solutions in the insurtech industry that solve a niche problem — fillable forms for commercial line submissions, for example, or digital signature solutions. Even some of the larger AMS platforms don’t address every aspect of agency workflow, and many depend on complementary software to fill those gaps. API integrations allow the entire insurtech industry, especially point solutions, to thrive by continuing to provide value in the larger scheme. For the larger platform providers, this saves time and money in developing those features and allows the smaller niche players to remain relevant. See also: Growing Import of ‘Edge Computing’   API integrations clearly benefit the entire insurance value chain, from carriers, underwriters and agencies to insurtech providers and consumers. The alternative — continuing to operate with proprietary systems that don’t adhere to industry standards, perpetuating inefficiencies and detracting from the customer experience — will keep the industry stuck in the dark ages and ripe for disruption by new solutions that radically transform the process and the customer experience. Programs such as Vertafore’s Orange Partner Program are just one example of API programs creating a new model for the industry, enabling rich integrations that empower independent agencies to leverage a broad spectrum of solutions, not only within the platform’s ecosystem but also with a wide range of third-party providers. This type of open API approach ensures both technological consistency through integration standards and allows the entire industry to evolve and grow, while providing a more satisfactory experience for customers.

Providing your employees with insurance coverage is one of the best ways for small business owners to support them. Employees with health insurance are happier, far more productive in the office and more likely to stay at a company if they are satisfied with their current benefits. In this digital age, online benefits marketplaces render finding employee insurance for your employees as modern and straightforward as searching for and buying other high ticket items such as automobiles or homes. There are resources at your disposal should you have any questions throughout the insurance shopping and purchasing process. Below are three reasons online marketplaces help small business owners choose health insurance: Convenience As a small business owner, you are exceedingly busy, and your time is valuable. In a recent Vistaprint survey, small business owners reported spending their time on administrative duties, project management, marketing, product development, design and countless other tasks that are essential to growing their businesses. Your hectic schedule demands that you be able to browse and shop from your laptop or tablet, comparing employee health plan options digitally to save time that you would otherwise spend filling out lengthy paperwork, scheduling meetings or playing phone tag. Sophisticated technology modernizes employee benefits shopping as you know it by removing any confusion or unknowns. See also: 5 Health Insurance Tips for Small Business   Breadth of Options Most small business owners want to know they have considered a wide range of employee health insurance options before buying. You don’t want to sift through stacks of paper when considering your choices, but you do want to make sure you haven’t missed the best plan or plans for your employees. Research shows that 43% of individuals shop and purchase online. Look around the store the next time you are shopping and notice the number of people searching the price of a commodity prior to buying it. Employee benefits are no different. It is important to use the online resources available to you when providing your employees with benefits that suit both their needs and your budget. Broker Support The digital experiences offered by online insurance shopping marketplaces do not mean the death of the broker. People still benefit from having access to an expert in the field should they need any assistance. Even with the most streamlined of digital insurance shopping experiences, you may have questions and concerns along the way, especially because this is a high-cost decision that affects your employees directly. It is helpful to have a licensed broker to answer your questions, put you at ease and act as an ally who can assist you through the process. An online experience does not preclude you from having access to one of these valued resources. Licensed brokers are traditionally still made available to small business owners even online. See also: 4 Trends to Expect in Health Insurance Your employees and their health are important to you. Taking advantage of the ample resources provided by online health insurance marketplaces is the smartest and most cost-effective way to make sure your team is covered. You will save time overall and be presented with a variety of precise information faster, while still having access to support every step of the way.

There are so many great advances in the area of "smart homes" and buildings that it makes me wonder what the actual impact has been, or what I might have had to deal with, without all the smart features. The “smart” concept is to be able to secure a building with sensors that can provide safety features and collect information to reduce the risk of water damage, fire damage or other hazards.

I had a second home built and made it smart and connected in as many ways as possible. And my experience has been that I am generally more aware of all aspects of my home. I receive mobile alerts when there is motion on my front porch. I know the temperature in all areas of the house. Water sensor devices provide peace of mind in knowing that there have been no water leaks – if there is a leak, the sensors are connected to the auto shut-off valve in the basement. The SimpliSafe security system is connected to fire and police through the connected security system and fire alarm.

In essence, I know the health of my home at all times – which has been very handy to the owner of a second home.

See also: Smart Home = Smart Insurer! 

From the homeowner’s viewpoint, I can see the value for an insurance carrier. My insurer worked with me by providing a discount. The process was interesting. To obtain the discount, we correlated the capabilities of new devices we installed to the older discount program that was in already place.

A connected home can be considered an asset both in the sense that it has early detection and prevention capabilities and also that it is being actively managed. However, several barriers need to be overcome. The property owner needs education and access to the combination of devices that can assist with the management of the home or building.

To address these issues, many insurers have ventured into partnerships with companies such as Amazon (Travelers) and Roost (Aviva and Erie), to name a few. But there are big challenges involved here: How do you increase the knowledge of millions of policy holders or commercial property owners? And, how do you make available the key connected devices that can, at a minimum, detect water and fire to mitigate the risk of each?

See also: How Smart Is a ‘Smart’ Home, Really? 

In our most recent report, Smart Homes and Buildings: Ten Strategic Considerations for Insurers, we discuss the key considerations for insurers when developing the best value propositions, including the need to develop a deep understanding of specific customer segments, their needs and their adoption of smart devices.

For some, it may still be a few years away; for other insurers and customer segments, the time to engage in this area is now. For example, insurers that focus on segments such as second homes, vacant homes or specific types of commercial properties should be developing strategies now. But every insurer that writes property insurance must be engaged and following the developments in the smart home/property area. And they must maintain a conversation with agents and policyholders about their needs.

Squeezing efficiency out of decades-old legacy systems can seem like a losing battle for many insurance carriers, where long-term contracts are the nature of the business. Process engineers, both in-house and contracted, have driven efficiency within these operations to the point of diminishing returns. After all, there is only so much that Excel macros and keyboard shortcuts can do to streamline highly manual and repetitive processes. So it is no surprise that insurance companies, as well as other financial services institutions, took note when robotic process automation (RPA) entered the scene. By automating software application interactions, such as populating data, documenting audit trails and performing calculations, RPA promises to spare humans from performing these menial tasks while boosting accuracy, increasing efficiency and lowering the cost of operations by as much as 40%. Moreover, RPA requires minimal integration with legacy technology. By using RPA to streamline manually intensive operations, from underwriting new business to claims processing, process engineers can once again extend the life of these legacy systems. When properly applied, RPA has strong benefits. However, is RPA really living up to the hype? See also: The 5 Top Trends in AI and RPA   RPA Challenges While the application of AI and robotics will eventually drive opportunities for efficiency and improved customer experience, many insurance providers are currently struggling to find value. Most firms have struggled with deployment. Providers cannot assume RPA can be integrated into operations and deployed without intensive collaboration with the IT organization. Scaling an RPA program so a carrier can achieve real benefits requires IT process disciplines that are core to an IT organization, such as setting up infrastructure, managing security and executing testing. Without this rigor, an RPA implementation may fail to deliver the promised results, and an otherwise promising robotics program is likely to be scrapped. The second major failure is managing an RPA program without an end-to-end view of the process using experienced process engineers. Without this perspective, companies often spend months creating bots that deliver little real efficiency because they optimize only small portions of a process without reengineering the overall process with the automation in place. This is a critical step on the road to RPA success, otherwise, RPA may not be the silver bullet providers have been expecting. Making RPA Successful A strong RPA program includes a cross-functional team that combines process and technology experts to reengineer, develop and integrate with the people in the process. By so doing, the team will maximize the ability to identify the best places to apply robotics. Essentially, as the old saying goes, if you fail to plan, plan to fail. Additionally, ensuring that IT disciplines are applied will prevent unnecessary rework. Lastly – and most importantly – a cross-functional team will help implement the new processes with proper organizational change management, which will help ensure acceptance. Using these methods, a business process as a service (BPaaS) platform was recently automated to bring greater efficiencies and a better user experience. By leveraging RPA to automate task entry and acceptance, as well as data extraction, a global provider of employee benefit programs saw a 99% improvement in quality and 78% increase in efficiency. What’s Next? Interest in RPA is booming, but it is no silver bullet. RPA alone can’t solve network latency and choke points along the information chain. There is much to consider when implementing RPA, including involving cross functional teams who will bring process reengineering expertise, IT rigor and change management know-how to the program. Currently, process mining tools are finding new utility as they integrate closely with RPA software companies. These tools allow for a more automated approach to opportunity identification and reengineering. By using artificial intelligence to assist process engineers in assessing the processes being executed on the floor, it helps automate the creation of the requirements documents, saving hours of effort and expediting the building of necessary bots. See also: 3 Ways RPA Enables Growth   The next step is further development and use of artificial intelligence combined with robotics. This combination is already present for the intake processes at insurance companies. For example, using AI to improve optimal character recognition (OCR) and robotics to index and classify customer documents for proper routing within a workflow system is now becoming mature. Soon, new RPA and AI applications will rapidly emerge with the help of knowledgeable process engineers. For example, detecting anomalies in data using AI can help find fraudulent transactions. RPA can then ensure the relevant information is efficiently presented to the case manager for a thorough and efficient evaluation. RPA’s promise to enhance the customer and employee experience while improving the bottom line will continue to boost adoption and spur investment, but providers must be strategic to ensure they realize the potential benefits of RPA.

As I watch the insurtech space, I see a fair bit of hype around disruptive technology. Some of what I see reminds me of the dotcom boom of the late 1990s. Then, as now, lots of startups promise to deliver something ground-breaking, and all are competing in the same space, with many of the same ideas. To put this into perspective, let’s look at the global claims loss pyramid. This pyramid is a simplified model that segments claims into four main types. The base layers of the pyramid — representing technology-driven and networked services, and low-value, high-volume claims – are where technology-enabled offerings can be effective. Technology also is beginning to flow into the level above those, where higher-value and more complex claims reside. The top of the pyramid is large complex claims, which are the most technically challenging and require highly experienced loss adjusters. Aligned with these levels are the requirements for claims talent and experience; base-level claims only need basic skills, whereas the top of the pyramid requires the most advanced skills. At the moment, the insurance industry is aware that the claims experience is often the only contact a policyholder ever has with the insurer, so the claims journey must be completed correctly. Around the world, policyholders are demanding the same amount of transparency and oversight in the claims process that they get as consumers when they order something from Amazon or another online retailer. Many personal lines policyholders expect to be able to track and interact with their insurance carrier via an app or mobile portal. Similarly, if they have an app to see their policy details, renew coverage, etc., then consumers expect to be able to make a claim in that app and track or manage it to completion. It is apparent, though, that many prefer a mobile portal because they rarely make a claim and don’t want to install an app they may never use again. They don’t want to have to remember login details for the portal, so they need an encrypted link that will take them straight to their claim, just like a FedEx tracking number. They expect to be able to communicate with all parties via the portal using messaging, not email, but if they need to send in photos or documentation, they may transmit those through the portal without necessarily knowing or caring who is handling the claim. See also: Visual Technology Is Changing Claims   For large complex/technical claims, however, policyholders and other stakeholders have different expectations as to how their claims are handled, and how the communication works. Many insurtech startups don’t seem to differentiate in this claims segment – to many of them, “a claim is a claim.” In some cases, they clearly don’t understand the distinction between simple, low-value claims with repeatable steps, and larger, more complex claims where multiple, detailed narrative reports are needed to settle the claim. Either that or they have chosen to focus in the volume claims space for commercial reasons. Large complex claims are expertise-driven. Technology can support highly experienced adjusters, but technology for the foreseeable future will not replace the skill sets or expertise needed on such claims. A few of the new breed of software-as-a-service (SaaS) claims systems put the insured front and center in a collaborative claims process. The vendors say they can handle just about any type of claim, but they are only good for personal auto, volume and third-party administrator claims. Liability claims often entail complex sets of facts and negotiation, beyond the scope of most vendor offerings. The vendors also don’t offer client-driven SLA tracking, document management, co-insurers, multi-currency or billing capabilities. They assume that a claims manager overseeing a $10 million warehouse fire will trawl through an app on the phone to see status updates. Client-driven SLA tracking, such as through dashboards, is important for clients to make sure their claims are handled in the correct way. Vendors and their advisers need to understand their market better. Lots of insurtech startups are focused on the easy part of the equation – signing up policyholders via chatbots, submitting claims and using artificial intelligence to settle simple claims. Many startups are creating chatbot apps to sign up domestic policyholders and allow them to submit a claim. Every insurer will have this capability soon, as it is simple to build using third-party AI services, so I don’t see this as a market differentiator. We do not see a new breed of agile SaaS claims systems coming to market yet, probably because that is a more difficult system to understand and build. There is also resistance from some suppliers to handing their data and claims process over to a third-party SaaS provider. I haven’t yet seen one of these new-breed claims systems that is built around SLA-driven workflows that drive the claim to completion, though I am aware of some in development, none could support a traditional claim-adjusting business. What some vendors are currently offering is a claims-light system, focusing on collaborating with the various stakeholders via portals and apps instead of email. In the past, suppliers such as outsourced claims management organizations would each build their own systems to fill these gaps, often because insurers either didn’t see value in owning the claims system or couldn’t successfully bring their own solution to market. This multitude of external systems and processes doesn’t serve policyholders well, because it doesn’t always provide a consistent, positive experience when they make a claim. If I am a homeowner policyholder with ABC Insurance, then I should have an ABC Insurance app on my phone that I can use to manage my policy and any claims arising from it, including all communications with whoever is handling the claim. I should expect any outsourced provider or supplier to be plugged into that same system, either because they are directly using the same system or because their own systems are linked into it via an API. Traditional insurers need to re-evaluate how they outsource their claims to a third party because they continue to risk getting disintermediated from their relationship with the policyholder when so much of the claims process occurs outside their organization and systems. They should guarantee a great customer experience when a policyholder makes a claim, and to do that they need to control the collaboration space — the communication and data-sharing piece. Other financial services organizations have already solved this problem for the same reason: to reduce customer churn. Traditional insurers should be able to get this right, but many will need to become more agile in the way they deliver technology to do so. In the meantime, new entrants are launching with systems that already provide their policyholders with a better, more seamless claims experience. I’m not sure how well their systems integrate with external suppliers yet, but I suspect they will get there quickly because their organizations and systems were designed from the ground up to be agile and innovative. See also: Key Technology Trends for Insurers in 2019   Much of the above is already being discussed within the industry. I focus on the claims systems piece because I have been involved in many of these systems over the years, and it is interesting to see the same ideas come up again and again. We were talking about the “shared electronic claim file” in the early days of the internet. Now we are talking about a “collaborative claims workspace” decades later. I am confident that the technology available today will solve these long-standing problems quickly. I have been involved in discussions with low-code development platforms, and it is incredible what companies can now build and deploy for web, mobile and desktop in a couple of months. At this pace of innovation, advancements in claims technology will bring the industry to a crossroads. Will the industry embrace the opportunity to transform its service through the claims experience? Time will tell.