S___ happens! Fifty years ago, Rock, David and I were at Pelican Aviation’s hangar listening to several seasoned pilots talk about their most terrifying experiences in the air. One said, “The engine made a loud noise, the plane shook violently and suddenly I couldn’t see a thing.” One of us innocently asked, “What happened – did the windshield shatter?” His answer was simple, “No, tears.” Having spent much of my adult life in insurance, I’ve seen many disasters. The question is: Are we ready? Hurricane Katrina was a terrible event for Mississippi. In New Orleans, there was minimal wind damage, but there were levee failures and accompanying social/civil chaos. There was also a little-noticed success story: LSU’s medical school relocated from New Orleans (blocks from the chaos) to Baton Rouge in about a week. This required some luck, community (BR and NO) support and, I believe, some divine intervention, but it was an example of leadership at its best. What if you had to relocate your office, all your team and everyone’s families following a catastrophe? Have you even considered the possibility? See also: 4 Lessons From Harvey and Irma   Here’s reality – many if not most of us will face great challenges. Some may parallel experiences we’ve seen before, just with greater or lesser intensity. There will be more fires, hurricanes and floods. Terrorists will attack us again. Planes will crash. We can’t stop all the bad in the future – the best we can do is try to avoid or at least mitigate the damage. Most of us watched the successful rescue of 12 young soccer players and their coach from a flooded cave in Thailand. Relative to 9/11 or Hurricane Katrina, it is a minor event, but I believe it will prove to be one of the best case studies anywhere of what to do when the stakes are high, time is limited and you don’t know what to do. Remember, these folks were lost for about 10 days before anyone even knew where they were. The last few days of their stay were examples of calm, leadership, courage, planning, possibilities and then very deliberate action. Every Seal, volunteer, civilian, etc. should be celebrated for their effort, courage and patience – living and learning as they progressed. They didn’t rush in, reacting to a terrible situation. They walked, crawled, and swam in, well-prepared and observing appropriate caution. In construction, we’d say: Measure twice, cut once. Never forget that one of the rescue team died early in the process. Was this loss the impetus to do things differently? I don’t know. I do believe our greatest learning occurs in adversity – it is the wisdom of scar tissue! The death was tragic but may have slowed the process and improved results. I encourage each of us to consider the disasters that could be on our horizon. Begin a crisis management process with your families and your organizations. You won’t have all the answers, and you don’t yet know all the questions – nonetheless, be as prepared as you can and program for the unexpected. Plan your actions and act your plan. See also: Innovation — or Just Innovative Thinking?   A speaker once said at an agents meeting, “the merchant of misery is either at your door, just left or will soon arrive.” The best thing you can to is to be as prepared as possible and hope and pray you are blessed with the courage, skills, patience, process and RESULTS that these Thai crisis managers enjoyed. Be prepared. Practice your preparations. Preparedness is a process not a one-time event. If in the end all of your preparation is not needed, BE THANKFUL. If it is needed, you may thank me for the suggestion. Good luck and Godspeed.

Choosing the right insurance policy handling application may unlock significant value, but choosing the wrong one may impose a strategic constraint lasting years. As such, it is good practice to take the decision on what application to progress in a structured manner. This article proposes a series of elements to consider. Policy Only vs. Integrated: Choosing between a solution for policy handling only and a solution that offers policy handling capabilities together with other modules such as billing, claims and rating is a question of analyzing the existing capabilities of the insurer to determine what needs, or may in the future need, updating and what does not.

• If the insurer wants to improve its capabilities in areas other than policy handling, then an integrated solution could be considered. The options in this case are to either implement the policy solution and the relevant module/s at the same time, or first implement the policy solution as a minimum viable product (MVP) and then implement relevant modules later. The thinking is that implementing multiple components from the same suite may be simpler than implementing components from different solutions.
• If the insurer is confident that it has strong capabilities in all areas other than policy handling, and that in coming years it will not need to upgrade these capabilities, then there may be a case to pick an insurance solution that only has the policy handling module.

Public Cloud vs. Private Cloud vs. Hybrid Cloud vs. On Premise: Focusing on hosting for the policy handling application, the key options are:

• Public cloud, where the application is hosted on a cloud owned and managed by a third party. Advantages of this approach are lower maintenance, high scalability and high reliability.
• Private/enterprise cloud, where the application is hosted on a cloud owned and managed by the insurer in question. Advantages are high flexibility with regard to configuration and security.
• Hybrid cloud, which combines elements of private and public clouds. The key advantage is that the host insurer can choose to maintain highly sensitive assets on private cloud and the rest on public cloud.
• On premise, where the application is hosted on infrastructure owned by the insurer. The main advantage is that, because data is not being processed on a cloud, a number of regulatory restrictions do not apply.

See also: Awareness: The Best Insurance Policy   The decision on what hosting approach is best for the insurer can then inform the choice of policy handling solution in two ways. First, validate for each application being considered whether it was natively developed for the preferred hosting approach or whether it was adapted to that hosting approach. For example, an application that was originally developed as on-premise only may have been “ported” to be deployable on cloud. Second, analyze what success other insurers had in implementing each insurance application with the preferred deployment approach. Customer-Facing vs. Non-Customer-Facing: A front-to-back insurance policy handling solution has both a customer-facing front end, such as a web front end, and a non-customer-facing engine for the processing of policies; a back-end-only solution lacks the former.

• If the insurer does not wish to transact through new customer-facing channels, then a back-end-only insurance solution may be desirable. Validate that the existing channels can be effectively integrated with the prospective back-end-only application.
• If the insurer wishes to implement new web quote and purchasing capability, then it may be beneficial to select a solution that already encompasses the relevant functionality. Examples are applications that have a pre-built web front end that is already integrated with the back-end policy handling engine.

High vs. Low Automation: High-automation policy handling solutions have labor-intensive tasks, such as issuing renewals and rating quotes, handled automatically; low-automation solutions, the opposite. Although it could be thought that greater automation is always advantageous, that is not always so. The appropriate level of automation depends on the type of business being transacted.

• High-volume, low-value business, such as travel, is well-suited to automation. Because transactions are highly standardized, it is more efficient to have the application run them automatically than it is to have handlers do the work.
• Low-volume, high-value business, such as directors and officers, on the other hand requires, significant personal interaction with brokers and clients, meaning that a low-automation solution is appropriate.
• For anything in between, case-by-case analysis should be done. Following that, candidate insurance applications should be analyzed to determine whether they natively include the relevant automated transactions.

Data Migration vs. No Data Migration: The migration of one or more mature books of business from a legacy application to a new insurance application is in many cases the underlying business case for the implementation of the new insurance application, but that is not always the case. Where one or more books of business are to be migrated onto a new insurance application, analysis should be performed on what capabilities the application has with regard to policy data migration. Specifically:

• Does the out-of-the-box application allow for the creation of migration records?
• Have other insurers performed policy migrations into the application, and did they succeed?
• Does the solution have an integration layer that can be used as part of the extract/transform/load (ETL) process?
• What level of customization would be needed to enable manual data migration?

See also: Understanding New Generations of Data   Key Takeaways:

• An integrated solution encompassing modules such as billing, rating and claims may be adequate where the insurer wants to improve those capabilities.
• The choice of hosting approach, focusing on either cloud or on-premise, may influence the choice of policy handling solution.
• Where the insurer wishes to introduce new customer-facing channels, selecting a solution featuring out of the box a front-end, customer-facing solution may be advantageous.
• More automation is not always best; low-volume, high-value books of business may require lower levels of automation of core transactions.
• If there are books of business that are to be migrated into the prospective application, analyze what capabilities the application has with regard to data migration.

Recent research conducted by LIMRA found there is a $16 trillion gap in U.S. life insurance coverage – a good majority of which can be attributed to millennials. Millennials, anyone born between 1981 and 1996 (ages 23-38), are the least likely to carry life insurance – even if they are married and have children. To investigate the discrepancy further, Hyland recently conducted a survey of more than 300 millennials from across the U.S. to learn more about millennials’ life insurance purchasing decisions, or lack thereof, by asking what compels them to engage with a life insurer. Our survey uncovered some interesting insights – most importantly, that millennials don’t exactly know where to start when it comes to life insurance. Millennials are looking for help, and that’s good news. The bad news is they expect help via the channels they are already accustomed to – digital and social channels – which most life insurers haven’t adopted yet. For life insurers, millennials are an untapped market, and they’re looking for innovative, digital-first experiences. Here are some tips life insurers can implement to help better position themselves. Be a trusted adviser Only 38% of the millennials surveyed said they carried a life insurance policy that covered all major expenses. Roughly 62% said they were uninsured or only carried life insurance through their employer. Although we live in a world where information is readily available at the tap of the screen, millennials still seek experts to help them make the right purchasing decision. Some of the more innovative life insurers are at an advantage because they already have the right technology in place to offer information and fully digital experiences. See also: How to Resuscitate Life Insurance   So how can you set yourself up for success with the millennial market? Success first involves assessing your current processes and product offerings – and seeing how you can evolve them digitally. Many insurers are investing in technologies, like content services platforms, to digitize information and processes, streamline operations and offer the best service possible. Many of these systems integrate directly with core line-of-business processes to ensure a digital experience from the initial request for information through policy acceptance. Expedite the process The survey found that 45% of respondents prioritize other financial goals over life insurance. Of that, nearly 25% said they haven’t even considered purchasing a life insurance policy, and 6% think the process is outdated and intrusive. Additionally, millennials believe life insurance premiums are far more expensive than they actually are – up to five times more expensive, according to a Life Happens report. It’s clear that many millennials are uninformed about life insurance, although they know it is important and can give their loved ones peace of mind and financial protection. Insurers can help millennials by meeting them where they are. This means reimagining current business processes and designing a digital model by harnessing the right technologies. An important aspect of digital transformation isn’t just to recreate a paper process in digital form. Map the process and imagine how you can transform it with electronic workflow and automated notifications to keep the process moving. This will meet millennials' expectations for quick access to information and even quicker processes. Eliminate complexity One respondent said, “Life insurance feels very complicated and difficult to learn. If they could ‘dumb it down’ and show how policies/payments/industry worked, it would be so helpful.” Education was another major theme that came through the survey. Becoming a modern life insurer means becoming both more engaging and more informative. Life insurers need to move beyond old tactics, like cold calls and mailers, and start using technology like chatbots driven by AI. See also: Digital Distribution in Life Insurance   Content services platforms help support additional digital transformation goals by fueling life insurers’ ability to engage with the customer, learn about their needs and provide them with products and services they want – faster than ever. Capabilities like intelligent automation technology can anticipate the needs of both users and customers to drive automated processes – helping employees focus on high-value tasks and develop more meaningful conversations. Millennials are a largely untapped market for life insurers. Hyland’s recent survey found that millennials need a better guide to help them along the way – from education through policy selection. Insurers that are adaptive, flexible and innovative are at an advantage over competitors that are stuck in their ways. By embracing and investing in digital transformation technologies, like content services, life insurers can fill the gap and better reach millennials. Providing them with easy, secure and complete access to information, anytime and anywhere, will facilitate more responsive and meaningful interactions. In turn, these technologies streamline processes, lower costs and improve overall experiences for customers – traits that are appealing to every market.

When I moved to Brussels with the Wall Street Journal/Europe in the mid-1980s, my father called a friend who had lived there to ask what his 25-year-old single son needed to know about the city. The friend replied: "Brussels is for people with families, but Paris is a short train ride away."

I spent countless weekends in Paris during my three years in Brussels. The first landmark I visited: Notre Dame. The last landmark I visited before moving back from Europe: Notre Dame. The profundity of the place grabbed me and held me. I sometimes sat and read in the plaza in front, just to soak in the ambiance that the bustling tourists created, even when I didn't go inside. 

How was fire allowed to gut this treasure? 

I'm reminded of a colleague at the WSJ who was an investigative reporter known for seeing the world in black and white. The joke was that his ultimate lede would be: "There are a lot of bad people in the world. Here are their names...." 

I want names, people to blame. 

But the role of the insurance industry, unlike journalism, is to restore a situation to where it was before a tragedy and then to help prevent future ones, not to identify villains. So:

The restoration part is covered because the Catholic church, the French government and a host of wealthy patrons have rallied to the cause. They won't be able to reproduce the lumber from 13,000 trees that was aged through an intricate process for 50 years before being used in the part of the ceiling that came to be known as "the forest," and they won't reproduce the elaborate carpentry there that helped make Notre Dame a marvel in the Middle Ages. But they will restore Notre Dame well, and we will all enjoy it again. The cathedral that survived the French Revolution (during which statues were publicly beheaded) and two world wars will add another chapter to its history.

That leaves us with the question: How do we prevent future catastrophes? 

Prevention requires, first, acknowledging the breadth of the problem. We can't just protect iconic  churches like Notre Dame, the cathedral at Chartres and Westminster Abbey, then declare victory. This article catalogs the threat to monuments throughout Western Europe, noting that questions need to be asked "about the state of thousands of other cathedrals, palaces and village spires that have turned France—as well as Italy, Britain and Spain—into open air museums of Western civilization."

Second, we need to be far more aggressive about identifying risks, especially during the precarious, frequent renovations, such as the one that's been taking place at Notre Dame. As this New York Times article details, officials at Notre Dame were complacent. They convinced themselves that 850-year-old timber would burn slowly. (Not even close.) They eschewed firewalls and sprinkler systems because of esthetics. Officials installed a sensitive alarm system but decided they would only summon firemen after a guard verified the alarm, which meant climbing a narrow stairway that would take a fit person six minutes. In the event, the guard dispatched after the first alarm sounded at Notre Dame didn't see a fire, so it wasn't until a second alarm and a second climb into the attic that the blaze was spotted—31 minutes passed between the sounding of the first alarm and the call to the fire department.

Third, we must take advantage of modern digital tools as much as possible. At Notre Dame, a medieval scholar used tripod-mounted lasers four years ago to create a model of every aspect of the cathedral, accurate to within a 50th of an inch, that will guide the restoration. He didn't live to see the extraordinary value of his work, but others can and should build similar models of other landmarks. 

The reaction to the fire added a factor to risks, at least related to landmarks, that I confess I didn't see coming but that needs to be considered, even though it will be hard to mitigate. Almost as soon as the fire started, conspiracy theorists began spreading the baseless claim that Islamic extremists had started the blaze at the Catholic holy place. When megadonors offered to finance the restoration, some raised an outcry about how other worthy causes were being neglected. What about the three black churches in Louisiana that had been intentionally burned down? Even, what about the water system in Flint, Michigan? 

I'm sad that a fire to a majestic, historic monument can't just be dealt with as a tragedy on its own terms. But I'm happy that more than $2 million has now been donated for the rebuilding of those churches in Louisiana, and that Notre Dame should now get the care it deserves so it can awe and inspire the next 30 or more generations. Let's see if we, as the authorities on risk management, can't do better by the many other touchstones of our civilization.

Cheers,

Paul Carroll
Editor-in-Chief

Much of the insurance industry’s success depends on communications, starting with the initial customer contact through to routine transactions, claims processing and policy renewals. It’s extremely important to know your customers and to make sure that your customers know you understand their needs today and into the future. Meeting legal and regulatory requirements across all types of customer communications is equally important. This becomes even more challenging as insurers increase their use of various digital technologies and communications channels, expanding the places where content is being created, maintained and deployed. To address all these requirements and also create a consistent, cohesive customer experience across all channels of communications, organizations need to re-think their approach to how they manage the content that is the foundation of these interactions. If your enterprise is like many in the industry, you have years of communications templates stored in different departmental silos across your business, which can amount to literally thousands of pieces from sales, marketing, accounting, claims and so on. These documents may reflect the evolution of your company over time and include different logos and ever-changing regulatory language. Value lies in your corpus of communications, but the challenge is harvesting it, organizing it so it is easy to use and can be managed efficiently to create a consistent message and experience. The adoption of digital communications channels will only add to this issue. There are four steps that insurance organizations can take to assess their inventory of communications and optimize the content that lies within. Step 1 — Clean up legacy content Although sifting through legacy content can seem like an overwhelming task, it is essential to:

• Identify the documents that should be eliminated due to outdated content
• Correct inconsistencies in messaging, branding and formatting
• Eliminate and consolidate duplicate similar content for greater management efficiency and consistency

It is not unusual for organizations to uncover outdated addresses and language, as well as inaccuracies in product descriptions, regulatory content, offers, salutations or how account numbers are referenced. All are common occurrences that can create confusion and frustration for customers—and your own field agents and customer service representatives. See also: Whole New World for Customer Contact   It’s also important to align content to defined brand and messaging standards. Content owners and experts from the key internal departments should participate in this cleanup effort to ensure consistency across your enterprise. While you can do this review manually, it can take months of labor to sort through the materials. It is far more efficient and effective to leverage purpose-built analytics that not only help automate the process but integrate with your customer communications management (CCM) to streamline the process. Even better, a system that is cloud-based allows a distributed workforce to collaborate in real time. Step 2 — Rethink your content As insurance companies adopt digital technologies, they must examine their content for re-use, clarity and suitability for these new channels. The review of your communications inventory is a great opportunity for content authors to rethink the content for omnichannel applications and, when possible, restate it in simpler language. Questions to ask when editing for simpler language include: Can this be said in a simpler way? Does it contain legal jargon or technical terms that need to be defined? Is it consistent with brand guidelines and voice? Is it factually correct today? Is it appropriate for this channel? Are you sending the right message, and does it resonate with your audience in the way you want it to? A major factor in building a loyal customer base is the ability to build trust through consistent communications. By making your omnichannel communications clear, concise and consistent, you will be able to drive increases in loyalty. Step 3 — Design for agility Many of your customer documents most likely contain many of the same content components that are used repeatedly yet managed separately, such as the same logo, address, tagline, regulatory content and product descriptions. Now consider how long it takes to make an update when one piece of content changes and that change has to be made across multiple communications that exist in multiple systems. A change of this kind can take weeks, even months, especially if a marketer, for example, has to request the change be made by your IT department. Modern customer communications management systems can address this issue in several ways. These systems can act as a central hub for managing content that powers omnichannel communications. In addition, look for systems that enable non-IT users to make these kinds of changes. By cutting IT out of the change management cycle, you can speed time to market and be the agile organization your customers expect. In addition to centralizing your content, you need to ensure you can intelligently manage your content and communications. This helps you avoid simply duplicating past activities and ensures that your communications inventory will be readily accessible to appropriate members of your internal staff. The best way to do this is to adopt an approach through which you can share content and templates across communications. Picture the same types of common content we mentioned earlier. Imagine being able to make a change to a common piece of content once and have it update instantly across all the documents and channels where it appears, and having a library of 90 written and approved outbound emails. You will likely manage those as separate templates and communications, even though they contain much of the same content. Now imagine how much easier it would be to create and maintain those communications by leveraging a single “parent” template that passes down its core structure, format and key pieces of content to 89 “children” that each contains its own unique dynamic content. These advanced approaches can greatly streamline change management processes as well as accelerating your ability to create new communications on demand. This kind of variation management enables you to deliver a consistent customer experience and ensure brand integrity. See also: Reconnecting With Customers Via Claims   Step 4 — Personalize for relevant content The final step in your communications overhaul is to incorporate advanced personalization. This is more than simply personalizing a letter with a customer’s name and specific account information. Advanced personalization leverages customer data and intelligent content so that you can tailor graphics and marketing messages to suit customer preferences and profiles. Integrating your content management platform with customer relationship management (CRM) systems gives you the ability to create variations of communications and use targeting rules to drive unique content to selected demographics. While upgrading and streamlining your customer communications processes might appear to be similar to rolling a boulder uphill, it can be done in a logical, step-by-step way. Though it remains a labor-intensive project, much of the process can now be automated, and the benefits in terms of improved customer experience and satisfaction, particularly as you incorporate digital technologies into your communications strategy, can translate into greater success and profitability for your organization.

Reputational risk is the biggest strategic threat facing the business world. When it comes to uncontrollable events that can affect a company’s reputation and revenue, nothing looms larger or carries a more devastating wallop than a cyber event. It only takes a misstep on social media, an employee’s accidental email or a data breach that exposes sensitive customer information to tarnish a brand’s good name. Just ask companies like Yahoo, Equifax and Sony, which experienced high-profile breaches that severely harmed their reputations. For small to medium-size businesses, the consequences of data loss can be just as profound: More SMBs are getting hit with cyberattacks, and these events are increasingly costly and disruptive to their normal operations, according to the Ponemon Institute. In response, a growing number of states are adopting cybersecurity laws to better guide insurers through cybersecurity insurance regulations. South Carolina, Ohio and Michigan were among the first to enact such data security laws. Those states emulated a 2017 model law by the National Association of Insurance Commissioners (NAIC) that provided framework for carriers, agents, brokers and their business partners around data security, investigation and breach notification. States that are following suit include Mississippi, Connecticut and New Hampshire. See also: Quest for Reliable Cyber Security   Insurers, take note: This is just the first wave. Expect other states and regions to adopt versions of this legislation. It follows a similar trend that occurred when states began writing their own laws mandating notification of affected consumers after a data breach. California enacted the first such law in 2002. In 2018, Alabama and South Dakota became the last of the 50 states and the District of Columbia to implement breach notification requirements. The state rollout of cybersecurity regulations for the insurance industry benefits consumers by offering more protection, to be sure. But it also spells opportunity for carriers that act now, driving them to double their level of compliance by:

• Sharpening their cybersecurity expertise with best practices to share with customers, and
• Practicing what they preach by becoming model citizens, examining the cybersecurity in their own business and getting cybersecurity right.

Though each state will build its own cybersecurity rules for insurers, they are drawing from the NAIC’s Insurance Data Security Model Law, which was inspired by the New York State Department of Financial Services’ Cybersecurity Regulation for the financial services industry. The model law outlines specific cybersecurity practices for insurers in areas including: risk assessment and management; board involvement; oversight of third-party service providers; information security program evaluation; incident response, reporting, investigation and notification; and annual certification. This means insurers with a national reach will need to track emerging state laws. They’ll likely adhere to the most stringent requirements to cut through the layers and complexity—and that’s good news for consumers. For example, Michigan may give a business 10 days to report a cyber event, but South Carolina requires 72-hour notice, and Ohio requires a notice of three business days. National carriers will likely adopt the 72-hour notice to also be in compliance in Michigan and Ohio. What carriers can do now

1. Establish a cybersecurity oversight team. Gather representatives from your IT, operations and other departments to review cybersecurity protocols and make recommendations for improvement.
2. Conduct an internal risk assessment. The new guidelines are auditable, meaning that cyber is now part of an insurer’s normal complains. Effectively, insurers are now being regulated by, well, themselves. Conducting a risk assessment will help.
3. Evaluate third-party service providers. This is a pain point for many companies because it requires that all their vendors and partners contractually agree to follow certain cybersecurity practices as part of their working relationship.

See also: Best Practices in Cyber Security   Meaningful cybersecurity legislation at the federal level is unlikely at the moment given the complexity in Congress despite a U.S. Department of Treasury endorsement of the model law in its 2017 report, “A Financial System That Creates Economic Opportunities.”

How many companies do you hear say, "We are customer-centric"? Pretty much all of them, right? To be fair, I can't imagine many would ever come out and say they are NOT customer-centric. But I rarely believe the claim of being customer-centric. What I think most companies mean is that they are product-centric first, then and only then customer-centric. That is: What’s in our kit bag that we can sell to you? We as the consumer end up with multiple product (centric) offerings and do the orchestration and administration ourselves. This is the way it’s always been. The average consumer has between 12 and 17 individual insurance products. Think about it: home, motor, pet, life, gadget, protection, health... the list goes on. Then add up the number of people per household. What happens when you have four adults (two parents, two kids): Is that 40 policies? For grudge purchases like insurance, that's a whole load of grudge! Another way to validate this product-centricity -- when you call your insurer and the rep asks you for your policy number before your name! If we innovate and design products in silos, we create great individual products -- but do we miss the big picture? We create a fragmented and poor end-to-end experience for customers, leaving them to do all the hard work. We may as well buy products from multiple providers (which in most cases we do). There are very few composite carriers that have got this right (or are moving toward an integrated approach). We make the problem worse by advertising in the same silos (in the U.K., at least) on our price comparison sites and focus on how long it takes to get cover: home insurance in eight minutes, travel in three and life insurance in three. LV did a study saying we spend more time choosing our annual holiday than we do buying life insurance. That just seems mad to me! How are we meant to engage with customers or get them to fall in love with what we are offering? We need new methods! See also: So, You Want to Work With Insurtechs?   When Is Insurance NOT Insurance? I am a firm believer of falling in love with the things we want. I don’t want:

• Auto insurance - I want the ability to drive from place to place.
• Buildings insurance. I want the cover I need so that my mortgage company gives me the money to buy a house.
• Health insurance - I want the help to stay healthy and out of hospital and so on. You get the idea here.

Partly, this is the move from reactive to preventive capabilities - or at least that's what we say in the insurance circles. See here for the Great Insurtech Debate that covered some of this. I LOVE YOU To help move away from these multiple product silos, the key for me is the addition of some sort of service. Customers actually want more than the insurance product. So give them the same products, this time shielded by a services layer they actually need and engage with. This service layer would have a number of fundamental impacts, both positive and negative: Positives:

• greater customer-centricity, as the services layer does the orchestration/administration
• less burden on the customer at the product level - makes our lives more convenient and gives us time back
• higher number of products per customer for the carrier (usually an important or at least measured metric across the industry -- and ranges from 1.1 per customer to six)

Negatives

• may reduce insurance premium written despite being more profitable because of the service revenue
• may reduce transparency? Will the regulators like this?

That leaves the new model looking more like this: the service layer getting bigger, the insurance slices shrinking and all the lines blurred between the once product-centric and siloed innovation world. It also means we innovate at the customer level, not the product level. Feels like a WIN WIN WIN. So What Do These Services Look Like? There are tons of examples here that can be called up and not just in personal lines. In the same way I pay for uptime on aircraft engines, I can do the same from Hartford Steam Boiler given their IoT acquisitions, with preventive maintenance and servicing vs. buying the policy outright in the first place. Some initial examples could include: For insurers, the next question is: Do I need to own those services, or could I just partner with multiple other providers to focus on the right outcome? Think about emergency home repair in your home policy or legal cover on your motor cover. These are still at a product level but not owned by the insurer themselves. The key question is - What did the customer come out to buy in the first place? Step out a level and start to aggregate the thinking at the customer (need), level not the (individual) product level. One of my favorite examples is Peugeot's Just Add Fuel. It plays to many things for me -- from mobility as a service to brilliant orchestration of the end-to-end things you need to drive: servicing, tax, roadside assistance, tires and, of course, insurance. Super-convenient and hassle-free! I call the Peugeot approach embedded and invisible insurance. Many folks don't like this term or general principle, asking what happens to all the spending on identity, brand and direct marketing. Will regulators like the approach -- is it transparent enough? The winner will be the most efficient manufacturer. A great example of this is CoverGenius, which is integrating to the commerce level, not making the customer do the swivel chair integration! Hear from Mitch Doust, too, on the InsurTech Insider podcast here on what they are up to and how they enable embedded insurance experiences for their customers. See also: Predicting the Future of Insurtech   A great example from another industry on removing barriers for customers comes from Match.com. Any single parents wanting to go on a date get up to three hours babysitting free of charge. Now, I’m not single, but finding a babysitter is nearly impossible where we live. Beyond Insurance So let's assume for one minute that the top half of my customer circle is filled with tens of insurance products that we all have. Now expand to look at the services we engage with on a regular basis and are likely to love as little as insurance. I quickly arrive at utilities and banking, with many lessons and observations that I think can be worked through for insurers, too. Utilities It’s fair to say we love these (read: care as little) as much as we do insurance. It’s pretty much a commodity product with some big legacy incumbents and some startups. Sound familiar? The startups have some unique and interesting propositions, be it great user experience (Bulb is my favorite), 100% renewable energy or something else. There are price comparison sites helping you find the best/cheapest option based on your usage and preferences. But just like insurance, there is a level of inertia that limits people from switching energy providers. That said, there are a number of things going on here that may, just may, have material impacts for how we engage insurers. Specifically, automatic provider switching! There’s been a whole host of firms pop up and offer this service. In the U.K., we have Labrador, Flipper, WeFlip and now AutoSergi from the price comparison website giants themselves, plus many others. With Flipper, you pay a monthly subscription of just £2.50 to automatically flip to lower-cost providers, but it's free until you have made savings. In the U.S.. you have BillShark, and this is just the tip of the iceberg. The Guardian ran a piece late last year on how we can help people change providers for the best deal, in some cases saving £1,500 per year. There are easily 10-plus players in this space now, although not without challenge. I recall Flipper has been to the brink and back, and, just this month, it's reported that Labrador has gone bust (here). Challenges aside, take the idea of auto switching to insurance? Would most of us actually care if our journey out was insured to a different provider to the journey back, or house insured with provider X one month and a different one the next? The Final Ingredient in the Cake: Banking As much as I love all of the new Neo Banks and challenger capabilities such as Starling, Monzo, Yolt, Emma and hundreds of others, my life seems to take place on my credit card. While I have moved to a Neo Bank (and properly moved, shutting down my old account), it does pretty much what I had before. Yes, maybe with a shinier interface. Yes, in a more engaging way. But I have my money in, and then bills out. It's not that complicated. What sets my bank apart is the Market Place, which enables access to insurance through a number of providers, as well as many other services and utilities to make use of the open banking and transactional data. Another New Bank, Monzo, which could be valued at $2 billion if the latest rumored raise is correct, has an iconic following for its Hot Coral card. The more than 1.5 million customers give Monzo an opportunity to service this customer base with more than just banking. In a recent blog, Monzo talked about services that could be added: bill switching, clearer fair insurance and much more. With All These Ingredients, How Do We Make Cake? Many all-in-one services already exist. One of my favorites is Onedox, which wraps all of the above into a single service and has a website and app that allow you to add:

• household bills, including broadband, media, phone, streaming services
• other stuff, like when my mortgage is due, my TV license, my local council tax and much more
• having all the bills (pdfs) downloaded to one place without me having to log in anywhere else

I can add multiple providers, I get one-click energy switching and a neat app to store all this stuff in one place, rather than log into my separate providers and accounts. See also: 3 Insurtech Trends Accelerating in 2019   Keep going. Add insurance providers (below) and soon insight through open banking. See here for the vision on that particular one. I find Onedox super helpful and already notice behavior changes, in that I don't need to go to any of the other providers. Youtility is another that was recently featured in the national press. So, who will own the customer of the future? We want our time back. Period. For insurers, this means that we can no longer offer something people can't fall in love with, or want last in the chain of thoughts. We have to find ways to blur the lines. Why can't insurers take the front foot on this one, creating and orchestrating partnerships that add value? Summary I have a few key questions that keep coming up again and again:

• When is insurance not insurance? Will we focus on the service, not the underlying cover?
• Who will own the customer of the future? Is it the utility, bank or insurance company?
• What other industries have done a great job at orchestrating their own and other services into a single, convenient marketplace or offering?
• How does the U.K. market differ from Central Europe, the U.S. or Asia?
• Is there a combined service you would subscribe to if offered?

I can summarize this story in five points:

1. Value-added services blur the lines between product silos, changing the premium and profit mix for carriers.
2. Insurance can become embedded and invisible in the underlying service.
3. As services move beyond insurance only, there are plenty of ingredients, but we eat cake!
4. Watch out for open banking and utility switching -- if they win the race, where does that leave us?
5. The change is happening already.

Ultimately, there is no point serving customers all the individual ingredients and saying, go make it yourself. They really just want cake! As always, would love your thoughts, builds, challenges on this.

Until recently, the typical insurance customer was a baby boomer or Gen Xer, but that is changing. As these two generations mature, millennials – those born between 1981 and 1996 – are rising to take their place. This emergence of a new consumer cohort comes just at the right time for insurers. The free flow of capital and technology has created a Darwinian Economy where survival depends on an insurer’s ability to adapt. Insurers have been feeling the squeeze as deal volume declines and renewals shrink. Regulatory barriers and the push to modernize the customer experience only add to the pressure. In this fierce battle for market share, millennials present a new source of growth. Millennial businesses, homes and families need insurance. In fact, millennials already account for 16% of vehicle insurance spending, 12% of health insurance spending and 6.9% of personal and life insurance. Those numbers will grow as millennials enter their peak earning years. As more millennials are ready to purchase insurance products, what will they be looking for, and how can insurers capture their share of the millennial wallet? Shaped by the Great Recession To better understand millennials, consider the economic climate in which they were raised. Millennials grew up as the tech bubble burst and the Great Recession hit. Along the way, they amassed huge student loan debts. When they graduated, finding good secure employment was difficult. The Federal Reserve Bank has summed up millennials’ economic position compared with prior generations. They have lower real incomes than earlier generations did at a similar age, fewer assets and a greater debt load. While millennials may appear to be a poor target for insurers today, their fortunes will change over the next 10 years. According to Deloitte, total U.S. wealth is expected to balloon to $120 trillion by 2030. As the Silent Generation and baby boomer share shrinks from more than 80% to just over half, millennials will see a fourfold share increase. How can insurers prepare to serve this new market? Millennials are frugal and savvy shoppers. They do their research before buying. Insurance for this generation needs to be transparent and economical. Provide plenty of information on your website, and consider pay-as-you-go, usage-based insurance. See also: Millennials Demand Modern Experience   Millennials at Work Millennials have been tagged as lazy and entitled but are more likely just misunderstood. They have a better work ethic than they are given credit for and are more financially aware than prior generations. As children of the tech boom and the Great Recession, they value entrepreneurship and the need to prepare for disaster. These experiences, above others, will drive their future insurance preferences. In the small business world, millennials may be the most insurance-needy generation ever. Morgan Stanley and the Boston Consulting Group (BCG) estimate that, by 2020, millennials and Gen Xers will collectively own more than 60% of U.S small businesses, up from 38% in 2016. Millennials are emerging as a new source of growth for small business insurers. What will attract millennial business owners to an insurer? Start with a digital customer experience. Morgan Stanley and BCG project digitally underwritten insurance will grow from $4 billion to $33 billion by 2020. They say, “going digital may be expensive and painful at first, but in the long run it will save time, cut costs and allow insurers to better tap the dynamic and growing opportunities in the small-business market.” Millennials also value simplicity. Morgan Stanley suggests making “products less complex, with easier-to-understand terms and a less cumbersome claims process.” The Tech-Native Generation Millennials are the generation of instantaneous chat, purchase and socialize. From research to communicating, they are fundamentally different than their generational predecessors. Texting and smartphones are second nature. For insurers, this means traditional channels may not be enough to engage millennials. They are online consumers and are more likely than any prior generation to purchase through a connected device. A recent study found that 85% of millennials own a smartphone, and 53% prefer to use it to shop online. The mobile experience you provide is critical. One study found that perceived mobile usefulness and ease-of-use influence shopping attitude and purchase intent among millennials. A final factor to consider is transparency. Millennials are savvy shoppers and will expect to understand a product before they buy. In a study from Label Insight, transparency ranks at the top of customer loyalty factors for millennials, with 78% valuing it. See also: 3 Reasons Millennials Should Join Industry   Explain coverages visually and complement your online experience with easy access to agents for complex questions. Concluding Thoughts Millennials are the first tech-native generation. They grew up accustomed to online transactions and instant response. They expect all the services they use to act this way. They are frugal, smart shoppers and very brand loyal when they establish a preference. Responsiveness, transparency and economy are essential if you wish to address this market. Offer products that are easy to understand, priced fairly and sold digitally, and you will capture your fair share of this new growth opportunity. Excerpted, with permission, from “The Insurer’s Millennial Playbook.” Request a copy of the complete e-book at https://www.instec-corp.com/millennial-insurance-form.

In 2016, California teen Amanda Clark was on the phone when her Chevrolet Trailblazer rolled three times, landing on its roof. According to the Sacramento Bee, Clark wrote: “I hate the thought of dying without my family knowing how I felt about them.” Yet one year later, Clark was in a second auto accident. She was driving while on the phone again and lost control of her car. Cellphone records showed that she was texting. She was found unresponsive at the scene and died the next day. These stories of distracted driving are becoming more common among U.S. drivers, sadly. Drivers continue to pick up their cellphones—for social media reasons, nonetheless—while behind the wheel, removing their attention from what’s happening around them to focus on a five-inch screen. As April’s Distracted Driving Awareness Month arrives, DriversEd.com has released new survey data in its 2019 Distracted Driving and Social Media Report. The most alarming findings: 55% of surveyed participants admit to checking social media while behind the wheel, and 25% said they’ve even recorded a video while behind the wheel. “There’s no way around it: The data is startling. I wish I could say the solution is as simple as parents talking to their teen drivers about the dangers of distracted driving. But parents are also the ones checking their Facebook, watching YouTube videos and recording Instagram videos,” said Laura Adams, safety and education analyst at DriversEd.com. “We are in an ever-growing distracted driving crisis, and the consequences are deadly. “For many drivers, health and safety take a backseat to their likes and shares,” Adams added. See also: 5 Steps to Understand Distracted Driving   Why is this problem still so prevalent? Part of the problem actually has to do with hearing those scary statistics: We don’t really believe they apply to us. It’s a phenomenon that cognitive scientist Tali Sharot named The Optimism Bias. Basically, when people think about their own futures, they tend to overestimate the likelihood that good things will happen and underestimate the likelihood of bad things. In the context of driving, that means we overestimate our own capabilities. In fact, one study showed that 93% of U.S. drivers think that they’re in the top 50% of safe drivers. Thus, drivers also underestimate their likelihood of being in a car accident. This would explain why so many drivers will agree that texting while driving is bad but admit to doing it anyway: We know it’s dangerous in general, but we don’t quite grasp how much of a risk it is to ourselves specifically. Take it from a teen… Grace Keller, a former DriversEd.com student and guest teen contributor, suggested drivers keep their belongings, including cellphones, in other parts of the car to avoid distracted driving behavior. “I usually throw my backpack in the back seat with my phone and all my other potential distractions in it, so that I don’t even become tempted. Though I admit it can be difficult — I mean, we’re all living in a very high-tech society where we feel the need to constantly be plugged into our social media, group-chats, etc., but whatever it is you need to look at or check up on can wait,” she stated. How you can help The National Safety Council is asking the public to use these life-saving measures to help curb the growing rates of distracted driving–related injuries and fatalities:

1. Commit to putting your #phonedown. Stow your cellphone in your purse, backpack or trunk to keep it out of reach. If it’s needed for GPS use, switch to “auto mode” to turn off notifications and calls.
2. Stay engaged in teens’ driving habits. Parents should lead by example by putting their phones down. Head to “Parents: Tools to help your teen resist using their phones,” on DriversEd.com for more parent-focused information.
3. Practice defensive driving. Buckle up and keep in-car distractions (passengers, music, etc.) at a minimum to focus on the road ahead. Be sure to get enough sleep to avoid fatigue and drive attentively.
4. Recognize the dangers of drugged driving. From prescription opioids to alcohol to marijuana use, learn how each one impairs your ability to drive safely. Visit www.stopeverydaykillers.org to learn more.
5. Fix recalls immediately. See if your vehicle is currently under recall by visiting www.checktoprotect.org.
6. Ask lawmakers and state leaders to protect travelers on state roadways. The National Safety Council’s State of Safety report shows which states have the strongest and weakest traffic safety laws.

See also: Distracted Driving — an Infographic   The 2019 Distracted Driving and Social Media Report was conducted by DriversEd.com as a follow-up to its more broadly focused 2018 Distracted Driving in America Report and zeroes in on risky behind-the-wheel social media behavior: feed checking, video watching and video recording, providing insight on the current state—and dangers—of distracted driving and social media use. The survey was conducted online using Survey Monkey. One thousand, twenty-nine participants were polled, spanning across the U.S., with the U.S. driving population represented by the 943 respondents who, before completing the survey, answered that they have a driver’s license. Of those 943 respondents, 522 answered that, while behind the wheel, they have checked social media while either at a red light, at a stop sign, stuck in traffic or moving on the road. Those 522 respondents represent drivers who admit to checking social media while driving. The demographics of those polled represented a broad range of household income, geographic location, age and gender. The article was originally published on DriversEd.com.

On Nov. 20, 2018, Insurance Journal reported an article suggesting auto insurance premiums will decrease by $25 billion by 2025. To put that in perspective, that is approximately 5% of all U.S. P&C premiums. Think you've seen a soft market before? Just wait. The article continued to state that new coverage lines will more than make up the difference, according to the report author, Accenture. It proposed that businesses in particular will buy $81 billion more in other lines. This means woe for the personal lines carriers and agents who have achieved far more personal lines premium growth in the last 10 years than commercial (an average annual rate increase of approximately 3.3% vs. -.1%, 2005-2017, inclusive). The authors argue that driverless cars will make the roads safer but increase the need for product liability. I am not sure about this because it has been reported that some manufacturers are planning to forego product liability insurance on their driverless cars. Maybe they had a change of mind or the authors are providing insights missing from press releases the Securities and Exchange Commission might want to review. Or maybe the manufacturers' contracts will place all liability on their vendors or others (like the owners who do not read their software agreements). The authors suggest consumers, companies and governments will quickly buy much more cyber coverage. They probably do need to quickly buy more, but, with as many as 3,000 cyber forms floating around in the U.S. alone (according to a recent Rand Corp. study), what cyber is actually being purchased? The Rand study is important to understanding future cyber purchases because, as it suggests, some of the forms may not be intended to pay claims, some companies' actuarial models may be shots in the dark and clearly some companies' forms indicate they really do not know what they are doing (at least this is my impression of Rand Corp.'s conclusion). These are big issues that put into doubt what the cyber insurance market really even is, and what happens with the inevitable shakeout? If some companies do not really know what they are insuring (reading some companies' forms suggest they really do not know what they are insuring) and are taking shots in the dark on pricing (and reserving maybe?), there may be a problem of stronger and smarter companies not achieving adequate market share until the shakeout occurs. See also: Cybersecurity for the Insurance Industry   Add to this confusion the fact that explaining cyber insurance, and explaining exactly what the different cyber forms are insuring, is very difficult. Agents need to try doing this to understand that increased cyber sales are not magically going to happen. Beware the agent who pretends that all cyber forms are the same or that, just because an insured has purchased a cyber policy, they now have "cyber" coverage. The insured may think it has much broader coverage than the carrier interprets (which will be interesting for those companies less sure of what they are even insuring; see the Mondelez v. Zurich suit for a great example). Also, after asking dozens and dozens of agents what they are even insuring when they sell a cyber policy, I'm often met with blank stares or statements that they do not understand cyber so they don't sell cyber. Product liability sales may increase. Product liability has been one of the most volatile major lines of P&C insurance over the last 20-plus years, so any prediction specific to this line seems problematic. Since 1996, NPW specific to product liability per A.M. Best (author's calculation) has only increased 35%. Private passenger auto has increased 106%. In the last 10 years, NPW has actually declined 11%. I am not suggesting these results are rational, because the combined ratio for product liability is an abysmal 129% over the last 10 years. Its worst combined ratio was 159% in 2011, and its best was 84% in 2006. The volatility is absurd and does not really correlate well with NPW growth. This combination of volatility and lack of charging more premium for really horrible combined ratios makes predicting this line's future problematic. I hope experts' predictions are correct regarding other lines taking up the slack. Even if correct, though, personal lines agents and personal lines carriers are going to suffer if they do not begin writing commercial. Small commercial will be hurt, too, because small commercial will lose the auto, clients seem reluctant to buy quality cyber coverage and they do not usually need product liability. The winners, if the study's authors' predictions are correct, will be carriers and agents/brokers writing large, complex commercial accounts. If the authors are wrong about companies and consumers purchasing a lot more insurance but of a different line, then the entire industry suffers mightily. Another article in the same edition published a report from Minnesota’s Department of Labor that the state's workplace injury and illness rate decreased in 2017 to its lowest rate since the state first began measuring it. I suspect Minnesota's results are similar to other states. The significant advances in safety and the reduced need for employees to work in more dangerous environments relative to total employment support the probability that workplaces should be safer than ever, even in a booming economy. The workplace will become even safer, with more modular construction, better safety devices and monitoring and continuing emphasis on safety. A safer environment means less rate in this line, too. See also: Leveraging AI in Commercial Insurance   Maybe the industry needs to offer more law school scholarships to future plaintiff attorneys to take up the slack. Otherwise, most signs point strongly to the devaluation of insurance. Insurance is more important in a risky world than a safer world. Maybe insurance companies will get desperate and begin insuring previously unthinkable, uninsurable perils and fill the gap that way. Whatever happens, though, insurance sales are going to change significantly. The industry is at an inflection point for carriers and distributors both. This is not a point of despair, but it is a time that requires true strategic thinking and planning to identify the opportunities that exist and to plan for those opportunities, without getting too far ahead and losing what one already has. This is hard work. It requires quite a balance, which is why dedicated strategic planning is truly required. You can find the article originally published here.