To insure is to choose whom to cover, and what not to cover. About the latter: Whenever the choice is between the consequential versus the cosmetic, whenever insurers deem a product or procedure to be inconsequential, and therefore cosmetic, they choose to deny coverage to the insured. That decision may be a matter of economics, but it is not economical in the long run; because when the cosmetic is consequential—when a small investment in a good or service can yield substantial returns, regarding quality of life and success on behalf of a person’s livelihood—it is better for insurers to allow what they would otherwise refuse to even consider covering. It is better not only for insurers but the economy as a whole, when the cosmetic can end stigmas and empower people to live—and work and socialize—with fervor. It is the best way for insurers to earn the trust and goodwill of the insured. To enjoy that trust, insurers need to review the word "cosmetic." They need to rethink how they use this catchall to reject coverage, because the word is easy to apply but too ambiguous to define. They need to respect the needs of an insured patient whose medical condition is chronic but not terminal, whose physical condition causes psychological pain, whose condition can improve with the right product. They need, specifically, to listen to people of a certain age. Among the aged, for example, there is a condition known as “aging odor.” The condition is real, the evidence irrefutable, the solution indisputable. And yet, the condition is purportedly cosmetic—despite the fact that, according to Mirai Clinical, insurers do nothing to stop consumers from spending money on soaps and perfumes that worsen this condition, when one soap can eliminate this condition. If insurers want to show their goodwill, they should subsidize goods that will help the people they insure. If they want to save money, and spare the insured from wasting money, they should re-evaluate everything they deem cosmetic. See also: ‘Organic Insurance’: Back to Basics   Does that mean insurers should approve every facelift, hair transplant, skin cream, spa appointment and teeth whitening session? No. On the other hand, the insured should not have to absorb every out-of-pocket expense. Not when insurers have the freedom to choose—and the financial freedom to do—almost anything they want. In the case of the aged, it costs insurers more not to help them than it does to provide a modicum of assistance. The cost of doing nothing is costly, indeed, as it promotes distrust, propagates disharmony and perpetuates discord among the insured and uninsured alike. Avoiding these costs requires insurers to classify the cosmetic as consequential. By elevating the cosmetic, insurers elevate the reputation of the insurance industry. They show sympathy—they may have empathy, too—for people whose needs are serious. They show us how to help the needy. They show us how to choose responsibly, and honor our responsibilities, so we can help the old, the young; so we shall help all Americans.

What insurers face now, digital giants like Amazon and Netflix faced when they moved to operate exclusively in the digital marketplace: transactions increasingly shifting to digital, and operations affected by an unprecedented wave of automation. Let’s explore the lessons these companies learned as they confronted the challenges that insurers face as they adapt to the digital marketplace. One critical change for Amazon and Netflix was making a fundamental shift in the way their core systems and architecture were developed: they evolved – out of necessity – to migrate to a more flexible and responsive architecture by incorporating microservices. The factors that led to this shift sound strikingly similar to those affecting the insurance world. Here are five key factors for insurance companies to consider when planning their future technology directions, with examples of how Amazon and Netflix addressed similar issues.

• Availability is a fundamental need when designing a digital user experience. Streamlining customer journeys depends on having technology and data at the point of the transaction. Netflix’s big availability issue was with its video library – which is a key selling point of the service. From a customer perspective, being able to watch thousands of movies and other content is less attractive if the customer can’t access the catalog any time. Netflix brought microservices to bear on this challenge, isolating the library functionality and running it independently from the rest of the user experience. This provided the capability to continually and frequently upgrade the catalog. For insurers, intermittent outages – especially on nights and weekends, when consumers and small business owners shop for insurance and digital agents are still working – are equally unacceptable.
• Scalability and availability go hand in hand. When the volume of transactions goes up, processing power must be able to scale up, too. Monolithic tech stacks struggle here, especially because the points of failure can be so small – as insurers well know! Amazon’s shopping cart functionality had plenty of capacity for regular traffic but was challenged when required to scale up for the incredible volume of purchases on Black Friday and Cyber Monday. Inventory control is critical because you have to understand what products are in shoppers’ carts, what inventory can still be offered and when to cut off the sale of a specific item. Amazon decoupled the cart functionality from its monolithic tech stack and deployed a microservice that ran alongside the rest of their tech environment. The shopping cart microservice had the much simpler task of checking the inventory and maintaining customers’ carts. It could access additional processing power as the volume went up without relying on the same servers running the rest of the Amazon architectural stack. And because the shopping cart service was decoupled from the main system software, it could be continually updated and enhanced.
• Speed is critical for scalability, and microservices have a lot to offer here. Both Netflix’s library and Amazon’s shopping cart experience are changing rapidly, with requests coming from thousands of users at a time from different front ends. Digital giants are known for providing a responsive user experience that is highly scalable without the need for serial data processing. Using microservices to support multi-threaded requests have given both companies an edge. For insurers, the support of an increasingly complex maze of distribution outlets requires rating capabilities that can consistently deliver sub-second responses. The ability to decouple this from core processes while dynamically scaling based on the needs of the front end is critical, regardless of line of business.
• Maintainability and upgradability are significant areas of consideration for all insurers, based on the current state of their technology environments. As we look to the policy, billing and claims systems or the front-end user experiences, etc., insurers need the ability to increase the speed of software upgrades to be a more continuous, less disruptive and therefore higher-value undertaking. As we look at the dynamically changing user experiences needed in today’s digital world, the ability to upgrade these components and reuse discrete services at a greater frequency than back-end functionality is becoming a critical capability.

This is where microservices really shine. Each isolated process supports a small, discrete function. Therefore, it is easier to focus on a very specific capability with an update. There is flexibility gained in adapting to new integration points and integrating new services. The magnitude of the testing effort decreases significantly. See also: What if Amazon Entered Insurance? These are game changers for insurers that have been struggling with a monolithic architecture where everything affects everything else. And microservices give insurers the ability to ease pain points in their current technology environments and add capabilities without going through a full rip and replace. We have much to learn from other industries’ successes and failures within the digital marketplace. But, let’s not reinvent the wheel. Let’s look at the lessons learned by the leaders in other markets and apply the knowledge they have gained.

Many insurance companies suffer from slow and inefficient claims processes, which are notoriously lengthy and cumbersome for both the insurance companies and their customers. From long and difficult back and forth to messy, complicated paperwork, claim cycles can be a real pain for all involved. Long claim cycle times increase administrative costs, reduce claims department employee productivity and hurt relationships with providers and policyholders. For the claimants, long wait times for time-sensitive financial decisions lead to poor net promoter scores (NPS) for the brands. The delays in the adjudication of a claim are due to the laborious process of collecting and coordinating a variety of information. Insurance companies typically deploy claims personnel to interact with claimants through the traditional modes of email and phone calls. When customers have to speak to agents in person or through email, it takes an average of six attempts to converse and collect all of the claims data needed, eating up the claims department’s time as well as that of the claimants. Insurance companies are urgently looking for a novel approach to reduce the costly back and forth of processing a claim, into simple, automated engagements. What if there was a better way? Leading insurance companies are now beginning to use new technologies to drastically reduce claim cycle times – chatbots. These chatbots support customers through the life of their claim, just as a customer support specialist would. But now, insurance agent chatbots are available 24/7—and instantly—to answer any question for the claimant or to collect information from the claimant using automated, two-way, texting conversations. See also: How to Innovate With Microservices (Part 1)   Also known as “operator texting” or “agent texting,” these bots are being used for all sorts of use cases, including:

• Confirmation of claim information received
• Confirmation of claim adjudication
• Payroll requests
• Reminders to send pay stubs
• Collection of information
• Gathering information on last day worked

One effective solution for automating the often arduous and costly engagements between businesses and consumers is the concept of “micro-engagements,” which combines robotic process automation with a conversational automation platform. Bolstered by emerging technologies such as machine learning and artificial intelligence (AI), micro-engagements eliminate the friction that exists in interactions with customers, employees and partners. More importantly, micro-engagements, coupled with an AI system, accelerates workflow and fixes the endless wait times and frustration experienced when calling an insurance company. It’s chatbots 2.0! Insurance companies that have implemented micro-engagements have saved significant time and resources, enabling such provisions as keeping the customer better-informed, improving customer engagement and adjudicating claims as quickly as possible. These companies have also seen significantly improved efficiency when it comes to claims processing, with a greater than 30% reduction in call volume and over 30% improvement in NPS scores while reducing costs over 60%. See also: How Agencies Must Embrace Tech in 2019   Finally, insurance companies are finding relief with effective new technology solutions that greatly improve time, efficiency and afford for seamless customer engagements.

Major storms, including accompanying winds and floods, threaten lives, destroy property and damage critical infrastructure. Power outages, broken communication lines and disruption to road, rail, sea and air transport are common in the aftermath of major storms. Among the damages from September’s Hurricane Florence, for example, was the closure of 200 roads in South Carolina, including a section of Interstate 95 – a major highway connecting the U.S.’s East Coast. South Carolina officials estimated that the storm caused more than $300 million in infrastructure damage.

On the other side of the globe, Typhoon Jebi caused widespread damage throughout Japan, and flooding closed an airport. As storms and rising sea levels increase flood risk, governments around the world are looking for ways to better protect people and communities. In addition to devastating societies, over the past few decades floods have led to $550 billion in global economic impact.

While we cannot fully protect ourselves from flood, working across industries is critical to build resilient communities and protect critical infrastructure. With many of the world’s busiest airports at a low elevation – and many more built near water on reclaimed land – these hubs are prime examples of infrastructure in need of protection. Not surprisingly, airport operators are rising to the challenge.

In Depth

September’s Typhoon Jebi shut down Kansai International Airport in Japan’s Osaka Bay. The airport, built on a manmade island and handling almost 30 million passengers a year, suffered considerable damage. A storm surge breached a seawall and flooded a runway and terminal building, leaving thousands of passengers and staff stranded. Kansai, a major international hub that serves several cities (including Kobe, Kyoto and Osaka), was closed for 10 days; and it took a further week to restore regular operations. Complicating the situation was the fact that critical facilities, such as the disaster response center and an electrical substation, were located in a terminal basement and flooded.

See also: Flood Risk: Question Is Where, Not When

Airports are critical elements of our infrastructure and, consequently, their resilience is essential. As the Airports Council International (ACI) noted in a September policy brief focused on airports’ resilience and their adaptation to climate change, “As an essential service provider to a wide range of stakeholders and users, the airport infrastructure and operations must have high levels of availability, reliability and resilience.”

Reclaimed Land, Rising Seas, Sinking Airports

Kansai is not the only major airport built on reclaimed land. Australia’s Brisbane Airport is on coastal reclaimed land, and San Francisco International Airport’s reclaimed site is gradually sinking. Other airports are at risk simply because their low elevation puts them at risk of a storm surge. A recent report from the U.S. National Climate Assessment identified 13 of the country’s 47 busiest airports as having at least one runway within 12 feet of current sea levels.

If sea levels continue to rise, these hubs will face increased exposure to storm surge risk. In general, the hydrological importance of airports: runways, halls and other facilities create large areas of impermeable surface with zero infiltration capacity. During extremely intensive rainfalls, which are increasing in strength due to climate change, airports can become extremely prone to pluvial, or flash, flooding. This can add to the pressure on airport management to revisit how effective their flood protection really is, especially as some structures are decades old.

Addressing the Risks and Protecting Critical Assets 

As structures face risks posed by severe weather and other potential shocks, protecting infrastructure means developing resilience. Greg Lowe, global head, sustainability and resilience, at Aon, underscores the importance of properly safeguarding these critical assets – especially in the context of climate-related risk. Looking at infrastructure long-term, he states, is crucial, and “cities are asking whether their infrastructure is fit for purpose over decades.”

In the case of airports, the ACI’s September 2018 policy brief warned that more extreme weather “may lead to fundamental transformation of the socio-economic system.” For airports, “the risks of flooding, flight disruptions and cancellations become more likely.”

“Airports need to understand the risks and initiate adaptation measures for both existing and new infrastructure, as well as managing critical operations to become more resilient to the changing climate,” according to the ACI brief. The ACI brief also encourages airport operators to examine all the potential impacts of extreme weather on their facilities so they can prioritize and respond to the risks.

“Only comprehensive climate-change risk-management strategies will ensure the continuity of operation, profitability and asset value,” the brief said.

Gary Moran, head of aviation Asia at Aon, echoes the ACI’s advice and thinks many airport operators are taking it to heart. “We are seeing more consideration to protect against flood damage and planning around storm drains around airports so that they are fit for purpose.”

How Airports Are Increasing Resilience

As the exposures worsen, various airports are addressing their flood risks. San Francisco airport officials have installed seawalls and are looking to take other steps to protect the airport, including a potential $383 million project that would include measures to help the facility defend itself against further rises in sea level by 2025.

See also: Top Emerging Risks for Insurers  

Boston’s Logan International Airport has set a goal of becoming a national model for resilience planning and implementation among port authorities. Risk mitigation steps undertaken so far include purchasing temporary flood barriers, raising electrical and mechanical equipment above forecasted flood levels, sealing and waterproofing openings and conduits, installing water sensors and pumps and installing systems to anchor temporary flood fences and flood barriers in emergencies.

Meanwhile, Changi Airport in Singapore has resurfaced its runways to provide better drainage and is building a terminal at a higher level to protect against flooding as sea levels rise. Brisbane Airport officials also are building higher, with a new runway built a meter higher than originally planned. Meanwhile a higher seawall and better drainage to address higher sea levels are also being planned.

Building Storm Resilience

Airports are a critical part of our modern infrastructure, essential to linking people and businesses around the world. Events that disrupt activities at a major airport can have a significant economic impact. As low-lying airports recognize the risks associated with climate change and rising sea levels, it is critical that they begin to build resilience to storm surges and flooding. As they do so, they may well provide lessons to officials elsewhere who are looking to protect other forms of vital infrastructure from storms and other natural perils.

This article originally appeared on Aon’s The One Brief.

When is the last time a P&C insurance application or renewal was a simple and comprehensive process? Chances are the applicant spent hours going through extensive and repetitive paperwork, much of which was the same information that was provided last year. The insurance agent likely spent an equally lengthy amount of time reviewing, reminding and processing. While some insurance agencies have made updates to embrace disruptive digitalization to alleviate these problems, most are still woefully out of date — causing incredibly inefficient work, unorganized communications and old-fashioned experiences for customers. The industry has reached a breaking point: Embrace insurtech or be left behind. The U.S. accounts for $558.2 billion across P&C insurance, and changing trends have created a chance to establish a robust technology plan and take the necessary steps toward better business to compete in a highly competitive market. Established insurance agencies need to invest in insurtech if they want to compete with lean, mean and hungry startups. By leveraging new technology, agencies can address persistent challenges and take advantage of new opportunities. Establishing Digitalization is Everything There’s no one playbook or single solution to meet the digital age for all businesses. Without recognizing a move to a digital and on-demand world, companies can’t avoid falling behind their competitors and fading away. We’ve seen time and time again companies that fail to embrace change. The entire video rental industry went obsolete when Netflix and Hulu burst on the scene. An inability to transform like Walmart is what doomed lesser big box retailers. While a major shift like that has yet to occur in the insurance sector, no agency wants to be known as the Blockbuster or the Sears of the industry. While the industry has been notoriously slow to adapt to the digital age, it is certainly not immune. Many insurance agencies have made a basic digital migration out of sheer necessity, but the challenge of how to stand out from competitors remains. Nine out of 10 insurance companies identified legacy software and infrastructure as barriers for digitalization. But simple changes like embedding digital capabilities directly into business models can produce big gains. See also: Embrace Tech Before It Replaces You   For example, establishing a rich, secure database of digitally enhanced “smart” insurance forms and carrier applications that are regularly updated can save an agent significant time. Customer segmentation software can use data to strategically target and retain customers to make acquisition more precise and less of a guessing game. Risk management programs can calculate accurate policies to avoid having to make costly adjustments months or years later. Pushing to evolve your administrative workflow with basic digital innovations is incredibly valuable to progress and process. Improving Inefficient Operations One of the fundamental roles of all technology is to make life easier for people using it. When enforced properly, technology can increase efficiency for internal and external processes. Seamlessly consolidating basic functions, which normally cost staff and customers inordinate amounts of time, can drive productivity and services with ease. Those who move fastest reap the most reward. The big challenge in 2019 is to enforce these processes. Insurers that implement new internal tools like cloud management drive productivity from start to finish, increasing efficiency and ultimately saving resources by doing so. The tools also improve services like underwriting and claims. The ability to use real-time data to analyze the effectiveness of a workflow can better inform business decisions and can even help determine how to improve the agent-customer business relationship. With that data as a technological foundation to a rejuvenated workflow, agents are able to get key information from a client or prospective customers through simplifying communications and streamlining tasks. This, in turn, delivers the kind of efficient experience that modern customers have come to expect. Agencies that are hesitant to adopt any overwhelming innovation can look at it this way: Capitalizing on technology now would only enable stronger relationships in the future. Studies show these digital-minded insurance companies also generate revenue about 10% higher than the industry average, and are 20% to 30% more profitable. Modernizing the Customer Experience Ultimately, the consumers choose the winners and losers in any industry. Consumers have come to expect a certain level of customer experience that an agency cannot offer without incorporating technology. Customer experience is the foundation of the insurance industry, and a large part of that experience in this day and age comes from technology. In today’s constantly connected world, insureds expect to be able to access their insurance information and documents digitally and certainly on their mobile devices. The bad news is that only 15% of insureds are satisfied with their insurer’s digital experience. The majority of customers are already accustomed to completing other non-insurance tasks online and will choose agencies that offer a simplified tech solution over ones that do not. However, the power of human interaction remains an important part of the customer experience. Technology will empower insurance brokers to do their jobs even better, in a fraction of the time, while offering better service. The aim of technological advancement is never to replace the broker, as people often worry, as 57% of consumers prefer talking to a real person throughout their digital experience. See also: 3 Technology Trends Worth Watching   There is a younger class of business owners who are founding companies, almost all of which will need P&C insurance. According to one Gallup poll, millennials are more than twice as likely as all other generations to purchase their personal health insurance policies online rather than through an agent. Conversely, millennials are the least likely to be fully engaged — and the most likely to be actively disengaged — with their primary insurer. This trend will translate to commercial insurance as more millennials become business owners. These younger business owners are inherently going to be more attracted to agencies that offer a tech solution to simplify the application and management process than those that do not. According to a PwC study, 70% of business owners who purchased personal insurance online would like to purchase commercial insurance online. This has serious implications for insurance leaders who will look to capitalize on the fact that millennials are the largest generation in the U.S. and will grow to dominate the market. With tech-empowered customer experience (CX), digital tools will attract and retain customers by automating tedious tasks. For example, there are technologies that make it a possibility to set automated “smart” reminders, saving agencies the time and hassle of having to follow up and remind clients to complete certain forms. The technologies also significantly reduce risk for errors and omissions, which can result in inaccurate or even a lack of coverage. These can be costly in both time and money to update. Some technologies allow users to log in to online portals or platforms from anywhere with an internet connection, to find their insurance forms, applications and documents. This omni-channel experience is a drastic improvement over the old way of looking through old filed paper documents, sifting through old emails or searching hard drive files. Those services and that key information can offer a near-complete customer view, with 75% of consumers noting that such engagement tools will enhance their experiences. As such, modernizing the customer experience has empowered all parties involved with increasingly sophisticated insurance. Many agencies have rapidly embraced technology, but so many more can still benefit. Their inadequacies and deficiencies will become more visible in 2019 and beyond the longer each waits to embrace technological innovation. Whether it’s to streamline systems or increase internal efficiency, agencies must embrace technology if they want to remain competitive beyond 2019.

Connected, or "smart," homes have been in the news lately—but not always for the best of reasons.

Google had to issue an alert about the need to strengthen passwords on its Nest security cameras because a disturbing number were being hacked. One hacker spewed racist epithets into a family's living room. (It's not bad enough that you've hacked into their homes?) A second hacker peered into a baby's room. Another report says that hacker also turned up the family's Nest thermostat. In what strikes me as a less-than-savvy PR move, Nest blamed the users. It said their passwords had been hacked independent of Nest, and the users were at fault for using those same passwords on their Nest devices. 

But privacy concerns—the bugaboo of our age, it seems—aren't slowing interest in the space.

Systems for detecting water leaks, from companies such as Roost, were prominent at the Consumer Electronics Show in Las Vegas last month, and they have made progress. Some can now simply be attached to the line coming into a house and can detect a leak anywhere in the system. The sensors can automatically shut off the water when a leak is detected and can alert your smart phone. 

Funding continues to pour in to startups in the space, such as Kangaroo (simple motion sensors), Wyze Cam (security cameras) and igloohome (smart locks). Aviva provided some validation by announcing in November that it was buying Neos, a startup offering an array of smart home devices. 

The profusion of smart assistants in the home—notably the Amazon Echo, Google Home and the Apple HomePod—also gives smart devices a hub so they can easily relay information to your phone, to a home security monitor and so on. Those assistants greatly simplify some technical issues and should mean, for instance, that someone like the Allstate Mayhem character won't actually be able to stare into the camera in your Amazon Ring doorbell and dare you to watch as he steals your car. He might be caught by alert authorities before he even left the driveway. (Great ad, though, right?)

But I think the business case for smart homes has yet to be made.

I confess to being jaded because I've been hearing about smart homes since the early 1990s. I even knew people who, based on the far-more-limited technology available at the time, wired their homes so they could, for instance, control the lights remotely and simulate normal use even while on vacation. (That's what happens when you hang out with Silicon Valley types who have more money, time and technical expertise than they know what to do with.)

I think we'll get to smart homes. But I'm waiting to see major insurers decide that, say, the water leak sensors are so inexpensive and can reliably prevent so many leaks that it's worth cutting rates for everyone who has one—without making me vulnerable to some hacker who wants to curse at me, watch my kids and play with my thermostat. We're not there yet.

Have a great week.

Paul Carroll
Editor-in-Chief

Take a moment and consider these questions:

• What are the most important activities you do?
• What are the other activities that pull you from doing the most important activities?
• How could you do less of the least important activities?
• What paperwork, processes or requirements frustrate your customers?
• How could you redesign the customer experience so they could do less of the frustrating stuff?

Organizational complexity slowly creeps into a business and propagates. We don’t feel its tentacles slowing taking their grip before they start to strangle our best performance. The slow creep of complexity happens due to the typical growth pattern of organizations – as we get bigger, we add structures, defined roles and responsibilities, committees, strict processes and so on and so on. Before we know it, our days are taken up with low-value meetings, responding to emails and keeping compliant. We lose track of the highest strategic priorities, and because we’re so busy we get stuck in perpetual firefighting. What many leaders don’t realize is the tremendous performance surge that would come if all the low-value activities and noise that distract and soak up energy from people could be removed. Imagine the impact on performance if people were crystal clear on their top strategic priorities, focused their most productive part of the day on these priorities and had time to really lean into creative problem solving or building relationships with clients or whatever the priorities may be. Furthermore, imagine the customers’ enjoyment if painful bureaucratic processes were removed from their insurance journey. The opportunity to simplify work is huge, but it requires focus and effort. It takes commitment and perseverance to simplify work. It’s a lot easier to add complexity than it is to design a simplified solution that delivers the desired function. It requires intelligence and perseverance to reduce something complex and messy into something streamlined, prioritized, and simple. It’s much easier to add on another process, rule or detail than it is to design something simple that strips elements away to reveal critical elements that can serve to solve the root cause of a problem, enhance focus or accelerate understanding and buy-in. See also: The Insurance Lead Ecosystem   While "getting to simple" may take hard work and persistence, there are some core ways to help those in this important endeavor. My list for how to simplify looks like this:

1. Get clear on purpose
2. Organize
3. Reduce

Get Clear on Purpose There has to be a clear sense of what the bigger picture is so you can begin to remove the things that are not as useful. Without clarity on the strategy, mission or vision, you simply can’t begin to remove or reduce the things that are cluttering the business. When this clarity is missing in companies, people lose sight of or are unsure about what is most important and are left to blindly adhere to their manager’s instructions versus being able to think and act for themselves. A broader understanding of the strategic context has to be the first step in simplifying anything. Some questions that can help you to get clear on purpose include:

• What does success look like?
• What is the best outcome we could achieve?
• What is going to deliver the greatest value?

Organize Once a clear understanding of the strategic context has been established and key objectives are known, work can begin on organizing the chaos. A comprehensive picture of the current state, whether it be how work is done, content in a document or possible features for a product, should be obtained. When the laundry list or dump of current state information is collected, themes can be extracted and used to group and organize the minutiae. This enables sense to be made of the complexity as it creates a perception that the many have become fewer. Some questions to help with organizing chaos include:

• What are the themes?
• Can the themes be organized by relative strategic importance?
• Is there a way of assessing the degree of ease in removing or integrating non-core components?

See also: Insurance and Fourth Industrial Revolution   Reduce Once you have the groupings or themes and you have a clear idea of what you’re trying to achieve, the next intuitive step is to prioritize and reduce and remove those things that are not essential. This is a key step in simplifying, but it is also very challenging. It takes a lot of creative problem solving, brainstorming and design to reveal how something can be streamlined and simplified. Antoine de Saint-Exupéry, the famous French writer, said it nicely: “Perfection is reached not when there is nothing left to add, but when there is nothing left to take away.” Key questions that can be posed to help reduce something complex down its core include:

• What is most strategically important?
• What is least important and easiest to remove?
• How can non-core elements be redesigned or integrated?

The opportunity to take a step back and simplify the insurance industry is tremendous. It will take focus and determination but the potential return in innovation, productivity and customer satisfaction will be well worth it. I encourage you to take the first step.

Making healthcare available to your small business employees can be a daunting prospect. Procuring employee benefits can be costly and confusing to a non-expert in the field. However, it is essential to separate fact from fiction when considering providing your small business employees with the valuable gift of healthcare. Here are four commonly believed myths about healthcare for small businesses: My employees have medical issues; I probably can’t even afford to offer health insurance. For small group health plans, prices vary based on employee age, location and carrier. The health of your employees is not a determining factor. Small business fully insured plans are “guaranteed issue,” which means that qualified employees, regardless of health status, can get coverage. While employee benefits can be pricey, employers do not have to subsidize the entire amount. Depending on the budget, business owners can determine how much they are willing to contribute. Most employers contribute anywhere from 50% to 100% of the employee-only cost. There is a plethora of health plan options available for a wide range of budgets. See also: What SMBs Want in Group Insurance   Employee benefits are too hard to understand. A study recently found that 4% of Americans couldn’t correctly define the four key health insurance terms necessary for a basic knowledge of healthcare (deductible, copay, coinsurance, out-of-pocket maximum). Even if you’ve never offered employee benefits before, lack of familiarity with healthcare-related language shouldn’t stand in the way of making sure your company is covered. Resources are available to help demystify insurance for small business owners. Licensed brokers are available in a variety of formats to answer any questions you may have. There is also a multitude of explanatory collateral easily accessible online for free breaking down health insurance terminology and preparing small business owners to purchase health insurance plans for their employees. I can’t get insurance. I missed the open enrollment period. Small business owners can make employee benefits available to their employees all year. For the majority of states, the open enrollment period for 2019 was from Nov. 1 to Dec. 15, 2018, with some jurisdictions (like the District of Columbia and New York) extending their deadlines to the end of January. However, the open enrollment periods only apply to individual plans and Medicare, meaning that you are not bound by the open enrollment periods. Most insurance companies offer effective dates on the first or the 15th of every month for new benefits. I shouldn’t have to provide insurance to my employees if it isn’t legally required. Under the Affordable Care Act (ACA), employers that have fewer than 50 employees are not legally required to offer health insurance. Employees with 50 or more full-time employees may face a penalty for not providing coverage. However, even if your small business isn’t bound by law to offer employee health insurance, doing so benefits your employees and their families -- and your business. Employees are far more likely to choose and stay with a company if they are satisfied with the health benefits. In a recent AHIP study, 56% of American adults whose employers sponsored their health benefits reported that whether they liked their job’s health coverage was a key in deciding to stay at their current position, while 46% said health insurance was either the deciding factor or a positive influence in choosing their current position. Furthermore, employees who are insured are more productive while at work. See also: Digital Insurance 2.0: Benefits   No small business is too small to offer benefits. Under federal law, a small business must have at least one full-time equivalent employee other than the owner, spouse or family member to qualify as a small business and obtain health insurance. As long as your company qualifies as a small business under the ACA, you can provide your employees with healthcare. There’s often confusion surrounding small business health insurance that may prevent a small business owner from taking the crucial steps to make sure the team is covered. Shopping for and purchasing employee benefits has modernized and become easier over time thanks in great part to continuously improving technology. With all of this information and technology at your fingertips, you can feel confident in taking the next steps to provide health insurance to your employees.

It’s what you learn after you know it all that is really important. This often includes scar tissue gained when things don’t go as planned. In 2009, I was asked to present at a conference and was struggling to find a topic that would engage a bunch of folks smarter, more experienced and richer than me. I walked into a coffee shop in Baton Rouge and saw a magazine cover celebrating the 20th anniversary of the movie "Sex, Lies and Videotape." (The writer and director was Steven Soderbergh, a Baton Rouge native). That movie became the title and theme of my presentation. I included a slide for each of the terms in the title. The SEX slide involved five examples of clients of the financial services industry believing they got screwed when they’ve dealt with agents, brokers, advisers, etc.:

• “Sure your HO policy covers hurricanes, but your loss was from a levee breach.”
• “In today’s news, it was revealed that companies colluded to fix prices.”
• “You have a great major medical policy, BUT it doesn’t cover experimental treatment.”
• “Our universal life projections are very conservative; we’re using 12% returns, and right now our company is paying 14%.” (A real statement from 1983. A few years later, the returns were in the low single digits.)
• “The investment model mixes the most conservative stocks with bonds to protect your principal and still ensure a reasonable return on your investment.” (Yeah, but stuff happens.)

See also: ‘Organic Insurance’: Back to Basics   LIES included the following four statements:

• “We don’t sell products, we sell peace of mind.”
• “Don’t buy cheap – buy quality – buy stability, like Merrill.”
• “AIG is a stable insurance market.”
• “The merger of Travelers and Citicorp into Citigroup creates the financial services model for tomorrow.”

VIDEOTAPE included pictures of the following industry leaders:

• Bernie Madoff
• Hank Greenberg
• Allen Stanford

If you don’t know them, look ‘em up. We sell a “promise to pay.” Our luckiest clients never have a loss. Those who do suffer losses expect to be paid. Yet, they fear that they won’t be. You can be the best broker, agent or adviser in the industry, and you will still have claims that won’t be paid as you would like them to be. When such unfortunate outcomes occur – you may be painted with the same brush as those less than honorable characters who occupy a share of our world. Our industry should be at our best when client circumstances or at the worst. We have to be at work to pay claims when our clients are staying home to clean up their losses. I know we’re only human and can only do what we can do as time allows. Our problem is that the only claim that matters is the claim of the client at your desk or on your phone. And in times of disasters, our clients are under great stress, so they may not be as understanding as they were when they purchased our policies. Perhaps the most interesting lesson I learned following Hurricanes Rita and Katrina (2005) involved flood losses. Many agents explained that when we told our clients that their property policies would not cover flood (only a flood policy provides this protection), they would get angry. When we showed them a document THEY had signed acknowledging that they had "chosen to reject this coverage,” some got violent. See also: Insurance and Fourth Industrial Revolution   Some agents believed that most folks who did not have the coverage knew they didn’t but wanted to blame the mistake on the agent rather than on their own bad decision. When we showed them the document that covered our behinds and exposed theirs, we left them open for criticism from their partner, spouse or significant other. What we do is very important, so do it as well as possible and understand that the client screaming at you is hurting and that yelling at you is good for their soul (if not yours)! Peace.

Success in any industry, relative to your competition, depends hugely on the customer experience you provide. How good is the insurance industry at providing a good customer experience? The numbers aren’t encouraging. The latest EY Global Consumer Insurance Survey found: 14% - Consumers who are satisfied with communication received from insurers; 44% - Consumers who have had no interaction with their insurer in the last 18 months. These numbers could be attributed to a lot of reasons, not least of which is the human-digital disconnect that is a peculiarity exhibited by insurance. People used to buy directly from agents, who also helped them with claims, renewals and other issues that arose. Insurance buyers never directly contacted the insurer or expected any communication from it. But in the digital era, customers can research, compare and buy insurance online without talking to or meeting an agent, unless they need expert advice or clarification. According to a PwC report, 71% of consumers do some digital research (price comparison or social media) before purchasing insurance products. If you want to drive insurance sales in the digital era, there’s an easy way to leverage your physical agent network for increasing digital sales and revenue. See also: Underwriting, Marketing: Sync Up!   This is what I want to explain in this post - how to design and implement an integrated marketing strategy that your insurance agents can follow to generate leads online or offline, and get the commissions for resultant sales – also online or offline. 1. Social media marketing strategy for insurance agents This is a feature we developed for Metlife recently, that won us the collab 3.0 EMEA contest organized by LumenLab, Metlife’s insurtech innovation lab. You can see the demo video that explains how easily agents can be social, and share relevant content that ends up generating qualified online leads: https://www.youtube.com/watch?v=cJ03gtWQbAw Simply share an article you like with your prospects on social media. Make use of a plugin that shows them a lead form alongside the page. Your prospect fills in the form and requests a call back that goes to the agent who initiated the social share. These inbound leads are far more likely to convert than an outbound cold call. This feature in your marketing stack is a great motivator for agents to be social with your customers. Help them identify target groups of customers on different social networks and encourage agents to engage with and be a part of that circle of people. Inbound calls originating from referrals by known social connects convert a lot better than outbound cold calls or an agent sending a private message to unknown people who are not connected. The rest of the sales cycle, once the inbound call is added to your CRM, is the same as any agent-initiated sale. 2. Personalized micro-site for each agent Now you have a social connect who filled in a form expressing interest in a particular insurance product and talked to the agent who sent the form. The agent can now send a detailed proposal, which should include a link that takes the buyer to that agent’s microsite or page on the company website. It should showcase the agent’s bio and expertise and include links to the rest of the site for more information about the company and products. 3. Retarget leads based on interest and location Now you have a lead that has been engaged socially, then expressed an interest in a product and has been contacted by an agent on the phone or in person. An email proposal has been sent, which the insurance buyer is considering. See also: Does Your Structure Fit Your Strategy?   This is the right time to run paid retargeting ads - on Google Adwords, Facebook, LinkedIn and other media where your customers are likely to be. Show them a personalized ad based on the product, location and agent contacted. It keeps you in the buyer’s mind without having to call or email to follow up. Retargeting as the last stage of an integrated marketing strategy increases lead conversion rates by 27%. How to get started with an omnichannel strategy for agents As an insurer, you’ll need to collaborate with insurtech providers, which can help you define digital transformation for your business in a way that enables your agents to sell insurance instead of making them irrelevant. Be prepared to:

1. Open up your data sets to provide access through open APIs.
2. Reinvent business goals into customer goals.
3. Digitize existing manual processes to fulfill customer goals.

This should map your existing manual business processes into seamless customer-centric engagement across digital channels. Implement an omnichannel solution that can make use of your APIs to provide your agents access to customer and lead data at every point in the sales cycle.