The government shutdown is a chance for insurers to inform the public without inciting the American people: to address people’s concerns about, say, their ability to buy health insurance from a site run by the government but governed by the market. This chance is temporary, which means now is not the time for insurers to be silent. Now is not the time to say or do nothing, while citizens worry about the state of their own unions, never mind the president’s State of the Union address, because of their fears about the quality of their health insurance or the stability of their retirement insurance. Now is the time for insurers to show they are people not by virtue of the legal definition of personhood but by the virtues that define a just and humane people. These virtues include helping the public by educating the people without selling them a thing, because people will buy insurance—if they need insurance—so long as they have reason to trust insurers. That trust is the realization of a message: a message that grows with repetition, based on marketing and branding for insurers. It is a message I will continue to repeat, until insurers get the point, until the point is as clear to them as it is to us; that insurers are like a public trust, in terms of how they look as well as the look and feel of the very papers they print for term (and all kinds of) insurance; that insurers have commercial longevity and contractual legitimacy; that insurers have assets beyond the physical, which they can deepen or deplete with a single action. These intangible assets are a matter of perception. If, for example, people perceive insurers to be too big to fail, and if that perception persists, insurers will still exist—they may very well thrive—but they will have failed to safeguard irreplaceable assets like support from the public and the respect of the people. See also: The Opportunity of a Lifetime   Now is the time, then, for insurers to fill the void caused by the government shutdown. Now is the time for insurers to establish goodwill and earn the trust of the American people. By speaking to the insured and the uninsured, by assuring the people of their desire to serve the public interest rather than the interests of private enterprise, insurers can deliver a message that we will long remember. Crafting that message starts now. Honoring that message must never stop, because honesty has no expiration date, integrity has no sell-by date and decency has no end date. The end that insurers should seek is the one they have an opportunity to achieve: popular acceptance. They have a role to play and a statement to articulate. Let us hope that they find their voice, that they give voice to what matters most. Let us hope that we listen to that voice. I wait for the sound of that voice.

Who will win: carriers or startups? It’s a question that has dominated conference panels, opinion pieces and many of the conversations I’ve had with insurance industry friends and colleagues throughout 2018. On the surface, this question feels appropriate. For many consumer-facing insurtech startups, their valuation is rooted in the promise of capturing market share from large carriers. While this has led to a major boom in the number of direct-to-consumer (DTC) insurtechs, in reality, 2018 hasn’t yielded any new startups that are able to make a significant dent in the collective portfolios of the large insurers (Lemonade aside). As many carriers are awaiting the fruits of their multiyear organizational transformation programs, the lack of inroads may prompt a sigh of relief. If the trends we have seen this year continue, perhaps there will be enough time for the product innovation to spring from within the old guard, keeping the industry pecking order intact. Not so fast. Reframing the Debate Before breathing their sigh of relief, carriers might start asking themselves another question: If not carriers, then whom? As far as innovation goes, we continue to see resistance across the large carriers to properly invest in a “test and learn” approach for their internal product development teams. At the end of the day, standing up a new product that would generate only $10 million in additional annual premiums just doesn’t get the runway it would for a startup. Instead, we’re seeing the rise of venture groups, innovation labs and incubators (Metlife Techstars, NYLV, SOMPO Digital Labs, etc.) that are to innovate, then potentially bringing the work in-house. Adrian Jones, who leads investment and reinsurance terms to insurtech startups for SCOR, recently wrote about changing market conditions for reinsurers and their increased exposure to getting “disrupted.” Jones outlines how simpler and leaner startups have eaten away at the markets with the highest profit margins for reinsurers. This has the potential to become one of the most significant factors affecting the consumer space in 2019. Given their new financial exposure, reinsurers will be highly motivated (in a way that carriers currently are not) to adapt and discover new ways to increase their returns. This very well could be the fuel needed to truly ignite the customer experience (CX) advancements the industry has been promising. For a reinsurer, $10 million in annual premium from a startup is not only $10 million. It’s a path to diversify their risk portfolio and, more importantly, to develop an acquisition channel that can yield much higher margins than the current carrier model. See also: Insurtech: Revolution, Evolution or Hype? In the larger conversation, reinsurers are generally seen as key observers in the carrier vs. insurtech showdown, not major players. But given their advanced underwriting capabilities, global footprints, lack of direct customer acquisition workforce and substantially less technical debt compared with their carrier siblings, with the right set of partners reinsurers can provide the scale and expertise the new players typically lack. This enables startups to focus on their differentiators: seamless customer experiences and innovative acquisition strategies. You may or may not be surprised to learn that this trend isn’t new. Many insurtech “darlings” are already taking advantage of this partnership model. Jetty is backed by Munich Re, Root Insurance by Odyssey Re and Ladder Life by Hannover Re. Noteworthy is what these startups can offer consumers outside of the coverage itself. Jetty offers financial resiliency for renters. Root has an IoT-powered auto insurance underwriting model based on mobile data. Ladder Life has significantly trimmed their underwriting questions for term life. Yes, there may be flaws in each value-add example, but that is beside the point. These startups are able to experiment with modified underwriting parameters, and, once they fine tune these products for the masses, the major carriers will pay heavily either by losing market share or by acquiring the startups. In a recent conversation with an executive from one of the largest P&C insurance companies, the executive told me that he sees reinsurers like Munich Re as very strategic partners, yet an ever-growing risk because, in his words, Munich Re could “start cutting us out.” The threat is real. What Should Carriers Do? For starters, carriers need to identify how to enable a top-notch customer experience (CX). In 2018, there has been plenty of talk about improving customer journeys, but few incumbents have released anything remarkable. The time is now for mid-sized insurers and MGAs. There is no reason not to take a cue from the reinsurer playbook. Whether it’s backing an insurtech, creating a direct-to-consumer channel (like our friends at ProSight) or forming platform integration partnerships (as AP Intego is doing), there are opportunities to jump into the fray because the space is perfectly fragmented. Identifying a similarly positioned insurtech is a promising strategy for carriers with a wealth of data in niche markets. But working with an insurtech or building a DTC offering requires underwriting customization and collaboration. If that’s not something a carrier excels at, determining how to leverage existing technology or marketing capabilities is critical. For those with a technology strength, parametric insurance, such as Jumpstart and Floodmapp, may be a better fit. It’s an emerging market I especially have an affinity for. See also: How to Partner With Insurtechs   Regardless, it’s important that carriers develop a set of hypotheses on what will make them successful in whatever their new venture may be. At Cake & Arrow, we heavily rely on design thinking and qualitative research as a low-cost approach to validate strategies. Overall, being nimble, cross-functional and exceptionally tactical will be critical to success, which is why I consider large-scale organizational transformations not applicable here. If all else fails, get the pocketbooks ready, because we will see no shortage of bidding wars in the coming year. This article originally ran at Cake & Arrow. 

Delivering exceptional customer experience requires near-real-time service when a customer has a new claim. In a market that has the highest customer acquisition costs, it’s paramount for property and casualty insurers to keep the customers they have by making their experience as positive as possible. One key is to reduce human error in claims handling, because a whopping 91% of dissatisfied customers decide to move on instead of making their complaints known. It is also important to remember that, while speed is great, the response has to be right for that type of claim. AI can reduce response times while increasing accuracy. Insurance companies must focus on reducing customer effort as a key performance indicator (KPI). Forrester reports that 71% of consumers say that good service hinges on a company’s aptness to value their time. The good news? Field service management solutions leveraging artificial intelligence (AI) help property and casualty insurers lay the foundation for a positive customer experience from the first interaction. Adjuster Self Optimization vs. AI-Driven Optimization Field claims adjusting is full of in-day surprises that reduce efficiency and lead to service-level agreement (SLA) violations and poor customer experiences. To minimize the number and impact of disruptions, it’s important to have an accurate schedule, with each claim assigned to the appropriate adjuster. Predictive field service, powered by machine learning and data science, is key in making this happen. See also: And the Winner Is…Artificial Intelligence!   Companies are increasingly using machine learning to expose how and where to improve operational efficiency. This automated insight, combined with the wealth of precise data captured throughout the life cycle of every claim, delivers the feedback needed to improve decisions. By leveraging these capabilities, organizations can break out of the limitations forced on them by static systems and institute a culture of continuous improvement. Static, legacy solutions and approaches limit a providers’ ability to reach this level of precision and customer service. Improve Customer Loyalty The personal lines market is becoming increasingly commoditized, and it’s common for customers to choose a provider solely on price. To differentiate from competitors, insurance companies can provide a superior customer experience, especially in the face of a crisis. It’s no surprise that 84% of customers become frustrated when their insurance provider does not have or provide information they deem essential. By using AI, companies can ensure the right field adjuster is at the right place at the right time with the relevant information to address the customer need efficiently. Seventy percent of consumers expect their provider to have a mobile option for providing alerts, status updates and scheduling changes as well as a feedback loop on the quality of service provided. As a result, leading insurers are offering policyholders real-time engagement with Uber-like ETA visibility that eliminates a large percentage of calls into claim centers inquiring when an adjuster will arrive. Adjusters can then be scheduled in the most optimal way, based on actual availability, predicted traffic and other critical factors. Handle Complexity in Job Times and Locations Predictive job duration estimates the time it will take to complete a job based on all relevant task and adjuster properties. It continuously learns and improves from historical data. This means, for example, that, as an adjuster gets more efficient adjusting a certain type of claim, the expected job duration decreases. Let’s consider auto claims. To succeed, insurers must interactively expose appointments for appropriate drive-in or direct repair program (DRP) locations. Full awareness of customer’s location, employee and third-party availability, capabilities, cost and travel times quickly presents precise and appropriate options for a customer to select from. Field service solutions collect reams of detailed data at every stage of engagement and crunch the data through machine learning algorithms to enable improved performance. This increased precision and speed increases operational awareness, while pointing to where better outcomes can be achieved. Effective Use of Resources It’s easy to focus on individual adjuster performance when measuring job duration—but it’s not the sole purpose. It’s also important to go beyond looking at job duration at an individual level and maintain a holistic view into operations. With full visibility into performance across regions, claim types, customers and field resources, you can uncover which areas are strong and which areas need improvement. The visibility allows you to set standards, define goals and objectives and work toward improvements to the claim organization as a whole. This is an irreplaceable benefit of incorporating AI and one of the best ways companies can use historical data, in combination with machine learning, to help optimize field resources for the benefit of your customer’s experience. See also: Strategist’s Guide to Artificial Intelligence Managing appraisals, inspections, claims and catastrophic events to the customer’s satisfaction is table stakes, and must occur while balancing business needs. The inherent complexities of addressing these planned and unplanned activities— whether at the asset location, in a field office or at the site of a claim or catastrophe—require a high level of precision to balance the opposing objectives of providing exceptional service and profitability. The key performance indicator (KPI) improvements are visible through an increase in number of claims handled per adjuster, reduction in travel expense, reduction in calls to the claims center and fewer re-dos and missed claim appointments. By taking advantage of the latest field service management solutions, your organization can satisfy expectations efficiently, increasing your competitive advantage -- and your profits. It’s time to consider making a change for your field claims professionals in an effort to enhance customer retention and increase profitability. For success, we will need to reduce human error by leveraging applications powered by AI that make smart recommendations for your customers and your business.

CES, which once centered on consumers and electronics (per its name), now extends far beyond consumers and focuses much more on software and data than on the electronics and hardware. To be sure, it still all comes together in physical devices, and elements like engineering and design are vitally important. But more and more, everything comes back to the data. In fact, at the opening of CES2019, it was declared that we are in the Age of Data. It is no secret that we are amassing data at practically unbelievable rates from a rapidly expanding array of sources. But what is truly astonishing is what IBM CEO Ginni Rometty termed “deep data” in her keynote – the 99% of the data that the world emits that is not even collected or analyzed today. It is exceedingly important to explore all the issues and opportunities related to data. The top areas – all with big implications for insurance – are these six: Capture: Technologies to capture all types of data are advancing rapidly. This includes images, video, audio, text, 3D image capture and motion capture for virtual reality. Increasingly, real- time biometric data and environmental sensing data are being captured, as well. Transmission: 5G is even more prevalent at CES2019 than it was in 2018. As a so-called “ingredient” technology for the connected world, it will have a vital role due to the data transmission capacity needed, speed and ultra-low latency. Security: More digital data means more potential exposures. Some data will naturally be in the public domain. But other data will be owned by individuals, businesses or governments that will seek to protect that data from misuse. Privacy: The ownership of data has become a top-of-mind societal issue. As even more sensitive data gets collected through more devices, the question of data rights becomes complicated. Some companies at CES were promoting “privacy-centric” solutions, which may signal a positive trend. AI/analytics: “AI is Everywhere” was actually the title of one of the sessions at CES2019. And AI was everywhere on the show floors, as well. Granted, AI represents a large family of technologies ranging from relatively straightforward (robotic process automation) to very complex (machine learning/cognitive computing). Interaction: New types of interaction abound. Haptic controls continue to expand. Augmented reality in many forms is advancing. Foldable display screens offer new options. Above all, voice interaction is starting to be available all around us. Of course, what is most important are all the new products, services and insights that will be fueled by data. The vastness of CES2019, with 4,500 exhibitors and tens of thousands of products, is a testament to that. In addition, there are many initiatives in the works that will meet new customer needs and help to solve some of the world’s most important problems. What this means for insurance is that there will be many new data sources and analytics tools available for risk assessment and risk management, increasing exposure to cyber risk in the world, and new ways to communicate with customers and partners. Just as important will be the ways that data will fuel transformation in every customer segment covered by the insurance industry.

The industry used to be a tech laggard. No more. Though there’s still much work to be done, most insurers are now better-positioned to capitalize on their investment in technology. Here are eight key tech trends that continue to shape the industry:

1. Greater stress on cybersecurity

An Ernst & Young security survey revealed that 59% of respondents had encountered a significant cybersecurity incident in their organization. Because insurers store so much sensitive personal and business data, they’re a prime target. Cybersecurity strategy should be focused on proactive measures rather than reactive strategies. Cyber-crooks are relentless and inventive. Security has to be a top priority for insurers of all types and sizes. 2. Filling a gap in employee benefits automation While group proposals and policy administration are both well-automated, between the two comes group onboarding, which has not been automated. But solutions are being developed and implemented. Onboarding solutions will be built on automated data capture and importing. Data integrity is crucial. Employee information must be correct and complete when entered. The solution must also offer robust data security and comply with privacy regulations to securely gather and store employee information. Flexibility is also mandatory because integrating onboarding closely with both proposal and policy systems is essential to efficient workflow. See also: Connected Insurance Comes of Age in 2019   3. Cloud computing Cloud computing will continue to be adopted widely by insurers and insurtech providers as it is cost-effective, speedy and flexible. Cloud providers will continue to improve their technology to deliver sophisticated capabilities. The security risks associated with housing data off-site via a third-party, however, can present challenges. While cloud storage companies are expected to protect data, ultimately insurance IT departments are responsible for their cybersecurity. That requires constant vigilance, hiring skilled people and spending enough money. 4. Internet of things and big data IoT continues to become more useful. Insurers can use real-time data to meet and enhance business objectives. This can boost efficiency and revenue and promote better customer service. As the Big Data revolution continues to expand, IoT adoption in the insurance industry is expected to grow. It will enable collection of data in real time, resulting in lower premiums for insureds willing to participate. There will be continuing adoption of connected devices for loss prevention and pricing in property-casualty, life and health insurance. 5. Analytics Analytics can transform big data into actionable insights. As analytics and data science advance, insurers can better extract value from the huge amounts of data that now exist. Insurers can then leverage sophisticated information analytics to gain a competitive edge in the market. For insurtech providers, there is a huge opportunity in the coming years to develop advanced analytical technologies that can make sense of unstructured data such as real-time video, social posts and live blogging. 6. Artificial intelligence In 2018, more insurance and insurtech companies found effective ways to integrate AI. In 2019, companies will complement a significant part of their structured data decision-making with AI data analysis and decision-making. Robotic process automation will begin to gain a wider application facilitating automation of repetitive processes across the entire IT infrastructure. Robotics and AI can offer improved productivity, shortened cycle times and better compliance and accuracy. See also: How Insurtech Helps Build Trust   7. Augmented reality Augmented reality is starting to have a presence in insurance. An article by software development company Jasoren identifies several AR use cases, such as warning of risks, explaining insurance plans, estimating damages and increasing brand awareness. Alternate forms of AR such as virtual reality, mixed reality and extended reality are shaping how AR is being used. 8. Blockchain The technology behind cryptocurrencies will be adopted for more promising applications. They include “smart” contracts and secure, decentralized data collection, processing and dissemination. While I do not expect to see a full-scale implementation of blockchain technology any time soon, many insurers and insurtech companies are launching projects and initiatives to test its applicability and effectiveness for insurance.

For those of us who are long-suffering customers of  PG&E Corp., the giant northern California utility's announcement that it will file for bankruptcy protection could be seen as same old, same old. After all, this is PG&E's second trip to bankruptcy court just since the dawn of the new millennium—the first, in 2001, followed a botched attempt to deregulate the electricity market. In 2010, negligence by PG&E led to the explosion of a natural gas pipeline in a San Francisco suburb that killed eight people and cost the utility $2.5 billion in fines and legal settlements. Over the past two years, we all witnessed the record wildfires and read about PG&E's likely role, which the company says has led to about $30 billion in liabilities—that it will now try to duck in bankruptcy proceedings.

No one is going to be writing a business-school case study about good management at PG&E any time soon.

But there are two questions that transcend PG&E's managerial dysfunction and that I'd like to hit here, so we can avoid repeating the problems.

The first is: Why couldn't PG&E see the wildfires coming and spend more effort on prevention? The second is: Where were the insurers?

Climate change isn't exactly a secret. Nor is it hard to see the dangers of running high-voltage electric lines over increasingly dry forests and grasslands—with the exception of one very wet winter, California has suffered a dry spell/drought for more than a decade. So, PG&E should have been inspecting lines, clearing trees and brush away from danger areas, etc. The insurers should have been right there, too, insisting on seeing the results of inspections and looking for means of prevention, rather than just pricing the risk and then writing big checks.

Based on some exposure to how utilities operate from a project at the Department of Energy in 2010, I'm not overly surprised by the lack of thinking ahead on the part of PG&E. Do you know how utilities learn about power outages? Phone calls. If they get a bunch of complaints from the same area, they know a line is down and send a crew out to drive up and down streets to try to spot it. The joke at the DOE was that if Alexander Graham Bell came back to life and saw today's phones, he'd be amazed, but if Thomas Edison could see today's electric grid, he'd say, "Yeah, that's about how I left it." 

The lack of forward thinking by insurers disappoints me even more than risk management sloth on the part of PG&E, because we've all been talking for years now about how the industry can become more of an adviser and help clients prevent problems, rather than just price risk and indemnify clients afterward. 

I hope PG&E serves as a wake-up call, not just on its specific climate change and management issues, but on the broad need to face up to emerging risks and to do the hard work of prevention. One disaster like the fire that wiped out Paradise—killing at least 86, displacing tens of thousands and burning down tens of thousands of buildings—is one too many.

Have a great week. 

Paul Carroll
Editor-in-Chief

Digitalization has become the new standard for business success and is fundamentally changing how insurers run their organizations. Just four years ago, less than 40% of insurers identified as a digital insurer; today, more than 90% see themselves as one, according to SMA research. While some are only in the nascent stages of digital transformation, others like Chubb are paving the way by functioning as a fully integrated digital enterprise. No line of business is exempt from digital transformation, but workers’ compensation has the largest initial impact, with concerted efforts from many carriers to improve their underwriting through predictive analytics and redefine the claims experiences for injured workers. Leading insurers are increasingly using digital tools, emerging technologies as well as external and internal data, to enhance sales and service experience for agencies and policyholders while minimizing losses and improving ease-of-use. Liberty Mutual, for example, has employed personalized, interactive videos to enhance communications and drive engagement with injured workers. Similarly, insurers such as QBE are leveraging AI and machine learning to improve patient care, reduce litigation potential and manage fraud. However, becoming truly digital is not just about overhauling agency portals or using technology to improve operations. It’s changing the entire mindset of an organization and can touch every aspect of the business including the people, processes and technology. Here are some of the guiding principles to establishing a successful digital mindset. A Comprehensive Digital Strategy An ideal digital strategy blends emerging and existing technologies to redefine a company’s value proposition to create and support all means of engagement and automation across the company. It’s about finding the right balance between effectiveness and efficiency. There are several stages of building a successful digital strategy. The first is a baseline capability of taking a paper asset and making it digitally available. The second is the ability to apply new methods to enhance digital experiences across the board, whether through automation of internal processes or through customer-facing portals. Finally, it involves smooth transition for handling fundamental changes in an insurers’ business model, which includes looping in all parties who will be affected by the change, deploying changes in phases and using the process of changes and upgrades as learning opportunities. See also: 5 Digital Predictions for Agents in 2019   Speed-to-Market Principles As insurers continue to integrate technology into their organizations, competition is escalating, and getting a product to market as quickly as possible is essential to the success or failure of a project. The value that digital tools and platforms provide to an insurers’ stakeholders is of prime importance, but it’s vital that these changes and updates are introduced in a timely manner. Given that, on an infrastructure level, most companies aren’t built to support digital businesses, the best approach is to integrate the new digital capabilities across the organization in increments. Insurers should begin by introducing a minimum viable product (MVP) to the marketplace and then adapt as needed. Using an iterative testing and learning approach will save time and help make the products better-suited to user needs. Simplified Customer Experience The way customers perceive their interactions with insurers defines the customer relationship. Today, people want insurance providers that offer simple, time-saving products and services and have many options beyond incumbent insurers, with new entrants vying for their business. Most insurers begin digital transformation by overhauling their internal processes to support automation, but true digital transformation should also extend to the customer touchpoint. Insurance buyers have a long list of “asks” in the modern economy. They expect broad coverage, state-of-the-art technology and apps to make the processes simpler. They also demand bespoke risk management solutions and faster claims management. What makes catering to this ever-growing demand a challenge is the number of players competing for the same piece of business. On one hand, we have insurtechs and traditional insurance companies looking to offer efficient digital platforms, and on the other, pay-as-you-go insurance models and producers looking to own buyer relationships with innovative customer solutions and product offerings. As a result, insurers should create ways for customers to reap significant rewards by improving time-to-quote, expedite policy binding and create more flexible billing options. An example of how to achieve these goals is to offer seamless customer services using application programming interfaces (APIs), email, telephone and customer portals. Currently, more than 40% of the applications are submitted via agent portals on average, which share policy documents and commission information. Insurers have a complex and deep sales funnel that can be streamlined if internal systems work together to reduce operational friction. Data and Customer Insights Drive Decision Making Insurance companies have access to a wealth of data, whether from customers or third-party data acquired from IoT, sensors and drones. Over the years, insurers have proven themselves adept at collecting data but struggle to analyze, process and organize the information in a way that helps with real-time decision making. The idea is to leverage data-driven insights to model products and solutions while making updates and enhancements to them. An example of a company successfully doing this is Pie Insurance, which uses predictive analytics to expedite and improve the direct-to-consumer quote experience. Routing data across an insurer’s systems is incredibly challenging, which is why more are moving away from disparate core systems and migrating to a unified platform that supports data flow across the entire organization. Evolve With the Market While Inspiring Change Adoption Across the Board Any cultural or organizational change requires educating the affected parties about the value that technology will bring to their day-to-day workflow. Employing new tools to better the business means nothing if it won’t be used appropriately by stakeholders that interact with the solution every day. This promotes actual mindset change and organizational alignment that prepares companies to continue to build on their digital foundation. For example, an insurer might have stringent underwriting guidelines for how a team should use a predictive model to make policy decisions, but, if the underwriters themselves do not understand the tool or how it benefits them, they risk breaking protocol or providing misguided feedback that makes the model less effective. See also: 3 Ways to an Easier Digital Transformation   True digital transformation not only requires an understanding of what’s needed to replace legacy systems, but also depends on a detailed strategy and plan to see the organization through transformation. Building on top of existing technology is just as important for the future and, without organizational alignment, insurers won’t receive critical feedback and suggestions that can help optimize the technology.

As we all start working toward our goals and targets for the year, what defines a good KPI? Guest blogger Hanne Sorteberg returns to share her experience and advice on how to get these priority metrics right. She also helpfully shares nine pitfalls to avoid. Whether you are an analytics leader setting KPIs for your team, or influencing other teams, this is for you. Over to Hanne… A new business year often brings new strategies and plans. KPIs, key performance indicators, are metrics that provide information on how a business is performing. KPIs ensure that a strategy is achieved, by giving direction to the employees who can realize it. Best case, KPIs are the compass that makes sure we are headed in the right direction. Worst case, they may drive behavior we do not want. Best case, they motivate for increased and improved effort; worst case, they discourage and demotivate. Oftentimes, they are a theoretical exercise put in a drawer without value. Avoiding worst-case KPIs How can we build KPIs that contribute to the growth and development of our business? KPIs should follow the checklist for SMART goals:

• S = Specific, it is evident and clear what the goal is
• M = Measurable, it is possible to measure the goal unambiguously
• A = Ambitious, it’s a stretch to achieve, and at the same time realistic
• R = Relevant, it contributes to the business’ strategy
• T= Timed, the timeframe for when the goal is to be achieved is clearly defined

There are many pitfalls to avoid to succeed with KPIs and goal management. Here are nine to consider: Pitfall #1: Too many KPIs The most common mistake is to be too ambitious and clever, vigorously defining KPIs for the entire business with fancy graphs and Excel macros. The work requires a lot of time to set up, and even more to maintain. Important deviations drown in information overload. A hospital went from one report of over 150 measurements, that no one paid attention to, to a lamp on the manager's desk. It had a green, yellow or red light depending on the waiting time in the emergency room. The lamp caused a significant improvement. A few, important KPIs can be enough to model the most important business processes. First ensure these are established, communicated and anchored in the organization. Then you can consider adding or adjusting the KPI process. See also: Insurtech Starts With ‘I’ but Needs ‘We’   Pitfall #2: Overly fancy KPIs Some KPIs can measure performance well but still be a bad choice. It can be too difficult to obtain the data. It can be difficult to explain what the KPI is, or there may be disagreement on how the KPI should be defined or calculated. Pitfall #3: KPIs that are impossible to measure Some KPIs that are important can be difficult to measure. In such cases, you either have to drop them or find an alternative way to measure them. For instance, customer satisfaction can be measured by an index based on surveys. It is important that the KPI is a numerical value, so that you can define thresholds and measure historical development. Make sure the KPI has the same meaning over time. Pitfall #4: Vanity KPIs Eric Ries, author of “The Lean Startup,“ uses the term “vanity metrics“ for measures that are celebrated as achievements but don’t contribute to the growth and development of the business. The number of page views, clicks, downloads and the like are examples of metrics you can boast about, but they don’t necessarily contribute to increased sales, customers or loyalty. Vanity metrics can take your attention away from the important stuff to follow up on. Pitfall #5: Not defining “good” What are satisfactory results? KPIs should drive the right behavior. It is important to define the thresholds of what is a good result, or green, making clear when there is a deviation that requires actions, to improve a yellow or red/critical situation. Pitfall #6: Not following up on KPIs Many businesses define KPIs as a part of their yearly strategy planning. The KPIs should be followed up so frequently that you have a chance to adjust course in time. Some KPIs may be measured daily or weekly, others more seldom. If something is measured less frequently than quarterly, it is probably not a good KPI. Pitfall #7: Not distinguishing between result and effort KPIs Most KPIs show results a business has achieved. Sales, the number of customers and contracts, waiting time, etc. You cannot influence these metrics directly; they result from what you do. An effort KPI measures the activities you do to affect the results. The number of sales calls, marketing campaigns, number of service calls and hours used for improvements are examples of such KPIs. It is useful to link result and effort KPIs. When a measurement hits yellow or red – which actions are taken? And how much effort does it take to correct? See also: The Dark Side of Product KPI   Pitfall #8: KPIs that drive unwanted behavior Some KPIs can have consequences you did not foresee, or even lead to behavior that is unwanted. If you, as a software vendor, introduce a KPI on the number of bugs, the development time may increase significantly. Measurements comparing when features are delivered to an estimate may lead to estimates that are way too high. A KPI to shorten the length of a telephone call at a service desk to decrease waiting time may cause fewer issues to be handled at the first call. But it may also actually increase the total waiting time. Some of these KPIs may be kept if they are balanced by an additional KPI. The number of bugs measured at the same time as development effort. The length of service calls in addition to the number of issues solved at the first call, in addition to customer satisfaction. It is critical to reflect on whether the KPI will introduce negative and unexpected consequences. If you can imagine any, set up monitoring to evaluate how effective the KPI is over time. Pitfall #9: KPIs aren’t communicated and anchored in the organization KPIs are meant to change the way you act. To measure without doing something different based on the results is wasted time. If you are to introduce a system of goals and measurements, it is important that the KPIs are communicated. This needs to be done in a clear way, and the organization needs to agree to them. Stakeholders should perceive that their effort can affect the KPIs. They need to believe that the goals are realistically achievable. Something should happen when a KPI turns yellow or red, either corrective action or an adjustment of the KPI to make it reflect reality. How are your KPIs? Thanks to Hanne for that practical post, which I’m sure is relevant to many managers at this time of year. What are you going to do differently as a result? Are you confident that you have the right KPIs for 2019? If not, how could they be improved? If you do make changes that work, after reading Hanne’s advice, I’d love to hear your story.

If insurers want to know the future, or to see the best approximation of it, they should review the events of 2018 so they can prepare themselves for the excitement of 2019. They should expand their emphasis on the theme of safety by rewarding companies and individuals for, respectively, teaching and learning basic life support (BLS) skills. Chief among these skills is CPR. It is a skill that saves lives by saving the world entire, by rescuing the entire economy, too, because the savings for insurers are substantial. These savings translate into more affordable and accessible insurance. They reduce the number of death benefits (an oxymoron, indeed) that insurers otherwise have to honor on behalf of a decedent's loved ones. They also allow insurers to better promote life-saving techniques like CPR, which is itself a reminder of how the simplest things sometimes yield the greatest returns, some of which are measurable while others are of incalculable worth. My advice to insurers is to partner with the best, for the best reasons, to achieve the best results. My advice is to seek, and to subsidize, the work of an organization such as National Health Care Provider Solutions (NHCPS), whose mission is to save lives, whose Save a Life Initiative empowers people to learn how to perform CPR, whose many initiatives enable men and women to become CPR-certified. See also: Digital Distribution in Life Insurance   If insurers take this advice, they will at least improve the odds that someone can save a life. They will go beyond the merely fiscal by accomplishing the metaphysical, placing in people’s hands a skill that expresses itself in the universal language of action. It lets people do for themselves what time does not permit others to do for someone in need of immediate medical attention. It enables members of a community to be the first ones to respond when there is no time to wait for first responders to arrive on the scene of a crisis or an emergency. To do these things is to strengthen the bond between insurers and individuals. To do these things is to do the right thing, period, because ethics trump economics. That is to say, if insurers put morals ahead of money, they will establish goodwill among the very people they want to reach. They will have a degree of credibility no amount of advertising can buy and no attempt of marketing can match. They will have authenticity, thanks to their commitment to BLS and CPR. That commitment should increase in 2019, as it can increase the number of lives people save. See also: New Health Metrics in Life Insurance   It can also save the insurance industry from wasting time and money on more costly, and far less effective, efforts. It can—and does—remind us to prioritize what matters most: life. Inspired by professionals, and imbued with the ability to act with the utmost professionalism, BLS and CPR offer insurers the opportunity of a lifetime. Now is the time for them to seize the moment.

It's that time of year: You unwind (in my case, get a cold!), reflect on the year that was and look to the year ahead. Last year, my "2018, a view through my looking glass" gave me a 60% score for my 2017 thoughts. I'm going to keep the format going and start with a quick look back to see how close I was on 2018, then jump into what I see in store for 2019. As always, I'd love your feedback. Here goes! 2018 - Marking my homework - how did I do?

1. Our first driverless journey — As reported in November, Oxbotica said it would complete tests that week. Oxbotica is on a great journey, from the partnership with AXA XL and newly formed partnership with Addison Lee. Marks 1
2. API s/Insurance as service — I'm torn on this one. The vision and ambition are still valid, I just didn't see as many folks get there as I thought would. That said, there have been some notable and clear moves including Slice, ICS, Coverwallet, Lemonade, GoCompare and many more across Europe. Marks 1
3. The deathly fear of Amazon and other GAFA/BAT companies.This one always draws debate and ensuing huge headlines and here. given their history in disrupting markets and attaining significant market share. Nothing launched directly in the U.K. from these organizations, despite much speculation, but they have filed for an Indian Insurance Licence. Marks 0
4. Re-bundling/Orchestration/Insurance. I thought we would see much more of this in 2018 than actually emerged. There was lots of talk, but we still seem to innovate in silos. I think 2019 will see this change; see below for my consolidation predictions. Marks 0.
5. Voice continues to be talked about. Lots more talk, more examples — still no scale. I maintain my position, now more than ever— it will have its place, but very rarely will it be quote-to-bind. Claims, updates and more - quite possibly. Marks 1
6. Regulation.With IFRS17 delayed a year, more time was handed for insurers to get ready — these continue to be long, complex and costly programs for many. How they will be leveraged, only time will tell. Marks 1
7. Insurtech investment - 100% bang on with my prediction here: "It will slow down." In our recent report — Insurtech entering the second wave — we identify that, while investment remains strong in the industry, this has moved from seed to more mature series B, C and later rounds with a lower number of organizations. Marks 1
8. New business models. I didn't know at the beginning of the year we would collaborate with Lloyds of London on this for our Squaring Risks in the Sharing Age report. The net summary of this was there is huge global need and opportunity for insurers here as we change the way we live, work and consume things. Some countries are way ahead of others (the U.K. lags, for example) with many new insurtech startups across the globe now established to fill the gap, including Tapoly, Zego, Dinghy and many more. Marks 1

2018 Score: 6/8 - 75% - an improvement on last year! See also: 5 Digital Predictions for Agents in 2019   2019 - so what does the year ahead look like! Like everyone else, I don't have a magic crystal ball - the below views are based on what I see and hear from the market, day in day out, and the pace at which I think they will surface in the market. In 2017, I talked about speed - I still feel this is something the insurance world needs but hasn't yet grasped fully, partly due to the nature of what we do and partly the speed at which our customers are prepared to make the change in what and how they buy.

1. Speed to market still seems to be the #1 question. How we do launch something new, or get something out there to test? There are so many ways to do this; we, for example, have partnered with Instanda to help launch products in weeks, not months and years, with some great success. Many other platforms are out there that can do this. See my new piece on "Are all insurtechs solving the core system challenge?", which I will post shortly.
2. Scale. Once you are in the market, and now that we are awash with experiments, the next question is: How do we get to scale? I was thinking of this in line with what"s going on with the fintech scene and how the likes of Monzo and Starling (new U.K. challenger banks) have 1.5 million and 400,000 customers respectively, or Bulb, a new challenger in the energy space, with 800,000 customers, grown by 600,000 in 2018. Why do people care about these things more than their insurance provider? I do not know a retail-based insurtech startup with the same volume of customers (outside China)? Anyone?
3. Artificial intelligence. Probably the most overused term of the year, AI will continue to be the most overused in 2019. We spent a good part of 2018 helping clients break this down into manageable parts, what it really means and where it can be applied and where it shouldn't be applied. I expect this to continue through 2019 as there are genuinely so many great opportunities. However, also sometimes - just no. It feels like "digital" of three to five years ago, that adding the word "digital" to anything was a surefire way to secure budget. Is AI this year's equivalent?
4. New business models. Last year, we saw an explosion of startups in the sharing and gig economy space, and in my view hugely valid. The way we buy and use services is changing and will continue to do so. Our work with Lloyds of London validated the opportunity, I expect more in this space. A good example is also what Cover Genius is up to -- listen to the interview with Mitch Doust here. From a business model perspective, I'm still a believer in what Tobi and the team at Laka have unlocked, as well as Dylan at SoSure. These both change the dynamics of what we know; both will have to find scale. SoSure is more straightforward; don't use it, get money back. What's not to love? Maybe a combination of this and the value-added services (see below).
5. Getting to grips with the SME sector in insurance. It's been talked about enough. Many have started already. Our work on Frank and Guru makes it feel like this sector is truly coming of age here and will find new attention as the markets on either side of this get harder. This includes a huge new push into the cyber space. Again, many have started. Watch out for our report on this later this year.
6. Consolidation!This is a big one for me, and I think will see a number of sub categories. Here how I see this breaking down (this is like four predictions in one):

• First — Product consolidation. We have already seen a few small moves here, the original multi-car policies, then multi-product (car and home), then most recently Aviva + was launched. Will we finally start to move away from the product silos? I expect so.
• Second — Value-added services. What we buy is about to change, in a move to make insurance more relevant and engaging. This feels like the long-overdue debate, and I see a gap emerging in an adjacent space of home bills/management, partly enabled by whats going on in open banking (PSD2), partly aggregator technology being applied to the next available area. Services such as Flipper, Snug, Bill Shark and Labrador, along with services such as OneDox, which can already connect to my insurance providers to consolidate everything into one place. These will threaten the "who owns our customer debate" (always the customer!), and I genuinely expect this area to explode. It saves time and money and makes life more convenient while often providing a better deal.
• Third — Insurtechs consolidate and are acquired by carriers. Many of the folks who have been hunting for distribution individually will come together to broaden their portfolio and frankly look for survival while others will be acquired by traditional carriers and baked into their digital offerings and efforts. It's not going to get any easier out there.
• Fourth - Carrier consolidation. I expect to see many more carriers come together as the market seeks benefits through scale or broadening portfolios. 2018 was a good year already for this, and many of those organizations will spend 2019 seeking out the benefits.

2018 was really great, with more Insurtech Insider podcasts (we were at episode 6 this time last year and closed out 2018 with our Boxing Day episode, #31; thanks, Sarah, Pet, Laura, David, Alex and all the team) through our partnership with 11:FS, as well as many other shows, including rebank (Insuring the Gig Economy with Harry Franks from Zego) and InsTech London, the Great Insurtech Debate, the Big Fat FinTech Quiz with Ali Paterson, our collaboration with Lloyds of London on the sharing economy and the global roadshow that followed. Most important was all the great work we did with our clients, launching products, driving new experiments, creating partnerships and delivering initiatives with them. See also: Insurtech: Revolution, Evolution or Hype?   If you had a chance to listen to our final podcast of the year, each of us also made a bunch of predictions for 2019, a quick summary of which is below. You will have to listen here to find out the full details. No surprise: Mine are in line with the above!

• Oliver Ralph, FT – Funding will get tough for insurtechs. May be a shake up in the market here as investors seek returns.
• David Brear, 11FS – Resurgence for the bancassurance model. New and bigger distribution model.
• Sarah Kocianski, 11FS – Value-added services – insurer and startups providing a packaged service.
• Me - Finally get to grips with SME – the untapped middle -- plus the emergence of platforms and consolidation, as I have talked about above,

As the year rolled on, InsureTech Connect in Vegas doubled again to attract over 6,000 people, thanks to the hard work from Jay and Caribou. Will it hit 10,000 this year? I don't think so, but it will be close, especially as the global market, understanding and appreciation continue to mature. I've not even touched on regulation, Brexit or so many other areas that we will continue to weather - these are not optional. Here's to a fantastic 2019, I expect an evolutionary year as opposed to a revolutionary year - but we are working on that, too! I can't wait to dive in together.