The following is an excerpt from, "How Customers Buy, & Why They Don't: Mapping & Managing the Buying Journey DNA." I can assure you that this is not another sales process book. It is rather a book of uncovering and decoding an enigma that plagues too many commercial organizations. It introduces a concept I have developed and named Outside-In Revenue Generation. This concept posits that instead of focusing on their own internal view of how to position and sell their offerings, companies must look to the external reality of how their customers actually buy. It is important to realize, and what is in fact the underlying foundation of this book, how Outside-In Revenue Generation differs from the much-used (to the point of clichéd) notion of “customer-centric” marketing techniques. For decades, it has been touted that commercial enterprises can gain the world by being customer-oriented. This probably started with the wise idea that customer satisfaction differentiates one provider from another. From that starting point, few functions of organizations have been left untouched by the movement to consider the customer. From R&D to after-sales service, organizations have adopted more customer-oriented approaches and processes, and no doubt this represents sound thinking. And I’m not suggesting that business initiatives that put a priority on the customer don’t yield results. They should, and they do, but they could be doing so much more. I must say that more recently I have heard people starting to talk about the buying process and buying journey. However, when I dig a little deeper, what I really see and hear are the selling organizations’ thoughts (and hopes and prayers) about what the customer is doing or, more precisely, what the seller would like the customer to be doing. A vendor-centric buying process, if you will. In some cases, I have even seen organizations take their own sales processes and graft on what they imagine or wish their customers would do at each step. Although somewhat laudable, these attempts to define the customer buying journey from the selling point of view have proven to be myopic. They look no further into the customer’s world than laying out the hoped-for reactions that result from their own sales and marketing actions. I call this an inside-out approach because it centers internally on the selling company, its offerings and its own sales and marketing initiatives. This all seemed okay to me until we talked to hundreds of customers about how they buy. It was only by going behind the scenes of the buying process that I found the truth. The Outside-In approach has nothing to do with imagining what customers should do when you sell to them; it defines precisely what customers will do when they are engaged in a buying journey. Our research has proven again and again that a clear and perilous dichotomy exists between these two ways of thinking about how customers actually buy. The basis of Outside-in Revenue Generation is founded on decoding the “DNA” of the target market’s buying process, which then allows us to ultimately map the entire customer buying journey. It lays out exactly how the supplier can apply that DNA mapping to understand how customers will buy a specific offering and what may cause them to hesitate or stop in their overall buying journey. Perhaps for the first time, we fully reveal and discuss how and why customers don’t buy in the manner sales organizations would like them to. Because they certainly don’t follow a buying journey that echoes any sales process I have ever seen. Traditional ways in which to look at the equation of creating customers have simply been too superficial. They may have worked in the past, but in today’s world where customers have unprecedented access to information, where customers are faced with an endless spectrum of offerings, where decisions are no longer made by a single decision maker but by a dynamic network of decision influencers, traditional approaches fall very short of the mark. Arthur “Red” Motley famously said, “Nothing happens until somebody sells something.” Many, including me, have embraced this as a business mantra. But I suggest that we tip this on its head and change it to “Nothing happens until somebody buys something.” Perhaps that sounds a bit chicken-and-egg-ish, but I would maintain that the implications of this mirror inversion of thinking are far from simple and do merit attention. Organization after organization believes the path to sales excellence is to design, implement and manage a great sales process. However, I now realize that no one buys anything because of a sales process. Customers only buy because of their own buying journey. I must make one thing very clear. In flipping Motley’s comment, I do not for one moment want to leave any impression that sales and marketing and indeed salespeople themselves have any less of a role. In any situation other than selling truly commoditized offerings, the salesperson plays as important a role as ever. What I am suggesting though is that, by understanding the customer buying journey, companies can then develop an overall market engagement strategy. This results in an approach that is exponentially more logical and focused than simply turning a sales force loose armed with little more than product information, value propositions and “a smile and a shoeshine.” One of the most enlightening results that our research turned up was finding that buyers within a target market for a specific offering will behave in remarkably similar ways. This meant that we could decode the DNA of that specific journey and then map the complete customer buying journey for that target market. By mapping the buying journey DNA and discovering what is really going on behind the scenes of the buying process, we could see how many organizations were woefully unprepared to engage in creating and keeping a customer. It is also maddeningly ironic to see so many organizations diligently operating and investing in all their other business functions. The vast majority of businesses invariably show constant and careful attention in their manufacturing, operations, finance, distribution and research activities. But when it comes to creating a customer—that is, sales and marketing—they are anything but deliberate and mindful. Perhaps it is because sales functions are often viewed more as an art—often a black art, by non-sales folks—than a science. The underlying malaise, however, is the mistaken logic that the customer will buy the offering based on the seller’s belief in its inherent value while paying scant attention to the buyer’s wants, needs and the real world in which they exist. Throughout the course of this book, I will show how faulty this logic is and consequently how incomplete and wasteful most sales and marketing investments have become. As you will see, the secret to understanding business success in any market lies in closely mapping the target market’s end-to-end customer buying journey. Anyone charged with conducting business must fully understand what it takes to create and keep a customer, and, in today’s world, that means far more than providing a superior offering. "How Customers Buy, & Why They Don’t" is based on many years of research and analysis into how customers really buy. I wrote it to help those concerned with revenue generation and to uncover what they need to move a customer into a buying journey through all the steps to the acquisition and successful adoption of a particular offering. With this book, organizations, probably for the first time, can have a navigation system by which to design and implement truly effective sales and marketing endeavors that will lead to a predictable, scalable and consistent approach to creating and keeping customers. You can purchase the whole book here.

The insurance industry is going through a revolution, and too many carriers, brokers, agents and team members are failing to keep up with the rapid pace of change. Customers have grown accustomed to convenience, a plethora of information and unending choices in whatever they buy, and this applies to the purchase of insurance products and services, too. People expect it to be easy, efficient and understandable. The insurance industry as a whole is miles behind in the race to deliver unrivaled service to customers. To keep up with the radical transformation, insurance professionals must earn the trust of existing clients and new prospects and become their gateway to everything related to insurance and financial services. The path to this transformation is for the insurance agent or representative to become a “discussion partner” — a trusted advisor who guides customers toward optimum financial decisions by offering them every possible insurance and financial services product while disclosing exactly how his or her superior advice works. See also: Important Perspective for Insurance Agents The goal is to convert everyone into discussion partner clients who do not want to be sold or told; rather, they want a consultant who will advise them on the best products, protection and asset-accumulation guidance they need for their families. Looking closely at the not-too-distant future, here are just a few ways the insurance industry will evolve:

• There will be total transparency about coverages and pricing. Customers will know all the details when they purchase property and casualty products, financial services products, life insurance products and more, in much the same way financial services and securities are sold today.
• There will be a convergence of distribution models. Local storefronts will welcome the use of the omnichannel experience, such as digital, after-hours 800-number call centers; claims service; and 24-hour customer self-service through technology or telephony.
• Technology will streamline processes. The local storefront housing brokers/agents and their teams will still provide service and sales at the point of personal interaction, but they will also leverage the power of digital technology and call centers.
• Collaboration will become commonplace. Open architecture — a financial institution’s ability to offer clients both proprietary and external products and services — in both technology and service will force the insurance industry not only to adapt but also to move quickly toward radical transformation.

The key to agents’ survival is that they must provide unrivaled service at the highest level. Nothing else will be acceptable if the local insurance provider is going to be a part of the consumer’s purchasing and reliance on service in the new world. See also: Use Insurtech to Help, not Replace, Agents   So how can carriers, brokers, agents and team members evolve to the “discussion partner” model of unrivaled service? Here are eight strategies for making the transition:

1. Focus everything you do on the customer. The customer is at the apex and the center of every decision, every system and process. Agents must be hyper-focused on meeting our customers’ needs — everything they desire and have every right to expect. This begins with providing unrivaled service as a discussion partner.
2. Create a team of experts. This is usually referred to as specialization, teaming or collaboration of experts. Agents must build a larger and stronger local team through hiring, mergers and acquisitions and strategic relationships.
3. Collaborate with expertise partners. Not every broker or exclusive agent is going to have access to every market today. In the future, with open architecture, everyone will have a view into the competition’s coverages and rates. Until then, creating collaborative arrangements is important. If clients do need and want specialized products and services, referring them to someone else will not be prudent any more. Agents must have relationships with experts in many areas. Agents must be quarterback, sitting in on the coverage presentation and purchase. This means getting to know experts in various fields and working with them, although agents might not always make a commission. Build partnerships before you need them.
4. Embrace and retool all technology. Agents need to assess current capabilities in the area of technology. Everything is moving at light speed due to artificial intelligence. The things once innovative are now commonplace. Agents need to embrace new technologies and use them to create a seamless experience for customers in the front room. Open architecture will introduce new technologies that discussion partner agencies must embrace as they move forward.
5. Control every step of customer service and the purchasing process. This is the foundation for a successful business model in the future. Insurance professionals need to assume the role of the gateway to everything related to insurance and financial services and guide clients through every step of the process. Agents need to remind clients what they do for them and assure them that they are worrying about the details so the clients don’t have to.
6. Help clients declutter. Insurance agents must be the only financial adviser their clients will ever need. Professionals don’t just refer clients over to other experts any more; they make everything easier. An agent’s job is to declutter clients’ paperwork, declutter how many people they are working with and make their lives easier. Life is complicated enough.
7. Be open to change. The tsunami of change happening in the insurance industry is affecting everyone, from the carrier to the broker/agent to the local team member providing service to clients who have never needed it more.
8. Agents should embrace change, not fear it. Yes, they will lose some clients to technology, such as robo-advisers. But we didn’t lose the entire banking industry because of the ATM. The typical client still wants someone to hold his or her hand through the maze of madness in this world.

The auto insurance industry has been experimenting with technology and tools that are completely changing the way we think about cars. Self-driving vehicles, ride-sharing and vehicles that include their own insurance in the sticker price are all recent innovations — innovations whose long-term effects are not yet known. With the rise of autonomous vehicles and ride-sharing came questions about liability and its related coverage: Who will insure self-driving cars? Who is liable in a ride-sharing accident scenario? As vehicle fleets replace individual ownership, who should carry the coverage necessary to pay medical bills, repair costs and other losses in case of a crash? The changes on the horizon have prompted some commentators, like Deutsche Bank’s Joshua Shanker, to predict that today’s auto insurance industry simply won’t exist in 20 years. Is the demise of auto insurance imminent? Is it likely? Here, we explore the pressures on traditional auto insurance and the ways the field may shift in the next one to two decades. Self-Driving Cars: Who Will Insure Them? Self-driving cars are predicted to change the driving habits of entire nations — and to significantly reduce the cost of auto insurance. A 2015 study by Metromile and Ferenstein Wire estimated that self-driving vehicles would save their owners nearly $1,000 a year on insurance premiums on average, according to Gregory Ferenstein. The study was based in part on data showing that, as of 2015, none of Google’s self-driving vehicles had been in an accident caused by the technology, only by human error, reported Adrienne LaFrance at The Atlantic. Since then, there have been notable instances of tech errors leading to accidents, including the March 2018 death of a pedestrian. More on that in a minute. Still, many commentators have drawn the same conclusion from the data: Prevented accidents mean prevented claims, which will reduce premiums. Even big name investors like Warren Buffett have made such predictions with regard to self-driving vehicles, CNBC’s Elizabeth Gurdus reports. See also: Industry 4.0: What It Means for Insurance   The Reality on the Ground Yet the reality may not be so easy to achieve. For one thing, self-driving cars have yet to be tested in the same wide range of conditions human drivers face daily, says Peter Hancock, a professor of psychology and engineering at the University of Central Florida. Seeing how these cars handle bad roads, inclement weather and similar challenges is essential to understanding whether they’ll really replace human drivers — and how to insure them if they do. In 2015, Volvo CEO Håkan Samuelsson said that Volvo would accept “full liability” for any losses occurring when a Volvo vehicle was in full autonomous mode, indicating a future in which liability coverage for self-driving vehicles is a question of product liability, not driver behavior. Yet, to date, other automakers haven’t rushed to join Volvo in making a similar promise. While Google and Mercedes have self-insured, as a rule “auto manufacturers are not that keen on taking on the insurance risk,” says Rick Huckstep at the Digital Insurer. Automakers have spent billions of dollars on developing automated technologies, and “they didn’t do this to then have to carry 100% liability for whatever happens on the road.” Revising Timelines Even if self-driving cars adopt a commercial liability or product liability approach to coverage, thus eliminating the need for individual drivers’ coverage, a 10- to 15-year timeline may still be ambitious, says Simon Walker, group chief executive at First Central Group. The technology, while ever more widely tested, is not yet commonplace. Determining regulatory, licensing and liability questions will likewise take years; attempts to start that process now have met with uncertainties because the tech isn’t in common use. Customers will need to gain confidence in autonomous vehicles, and their driver-required cars will have to age their way onto the scrap heap. All this is unlikely to happen in just 10 years, or even in 20. And with 10 to 20 years, auto insurers have time to adapt. Some have already begun, in fact. Julia Kollewe at the Guardian cites Adrian Flux, a U.K. insurer, which in 2016 announced what it called the first-ever auto insurance policy for driverless vehicles. The policy covers not only the conventional situations other policies address, but also autonomous-vehicle-specific topics like software updates, satellite or navigation system failure and loss or damage from hacking. If this U.K. company can do it, says Julia Eddington at the Zebra, so can U.S. companies, although they may face more complexity due to the overlapping world of state and federal regulations. As of mid-2018, however, 29 states had enacted driverless vehicle liability laws, according to the National Conference of State Legislatures, which could pave the way for faster adaptation by existing auto insurers. Improved Safety Features: Are Crash-Proof Cars Possible? Self-driving cars aren’t the only way that technology may end the need for auto accident coverage. Safety technology is improving, as well, and Volvo’s promise to cover liability for its cars while in autonomous mode isn’t the only goal the automaker has set to change the vehicle liability landscape. In 2008, Volvo announced an ambitious plan: to create a crash-proof vehicle that would result in zero injuries or deaths, and to do it by 2020. In 2013, according to Viknesh Vijayenthiran at Motor Authority, and again in 2016, Volvo announced its intention to stay on track to create its injury- and death-free vehicles by 2020. Volvo still has a little more than a year to reach this goal, and its statistics indicate the company is on the right track. Volvo won a 2018 Which? Award in the U.K. for “the company’s solid safety record that put it ahead of other short-listed candidates.” Awards and strong statistics are evidence that Volvo is moving in the right direction when it comes to safety, but until this technology is perfected, insurance coverage remains a necessity — and completely autonomous driving technology still has a long way to go. A Car and Its Coverage: A Package Deal? Tesla is also betting on the safety of its technological advances, and in a way that presents an additional challenge to traditional insurance companies: by including auto insurance coverage in the sticker price of their vehicles. Tesla is experimenting with selling “insurance and maintenance included” vehicles in Asia, according to Business Insider’s Danielle Muoio. The price for insurance and maintenance incorporates Tesla’s data about the car’s safety features, including its autopilot system. By including the insurance price in the car, Tesla says, the company believes it offers a better deal to consumers, because many auto insurance companies don’t account for the autopilot system in the same way Tesla does. Tesla may have a point. “If you’re hoping to shave down your premiums, buying an automated vehicle might not be the right move,” Shift Insurance head of business development Raphael Locsin tells Entrepreneur. However, some companies do consider certain other driver assistance features, like electronic stability, when calculating discounts. Insurance companies’ hesitation may be prudent at the moment. A March 2018 Tesla crash with the autopilot turned on proved fatal for the driver, according to Jack Stewart at Wired. Selling vehicles, autonomous or otherwise, with the insurance included in the sales price offers a hybrid approach between purchasing coverage from traditional auto insurers and placing the burden on automakers to cover their vehicles as consumer products. While Tesla has gambled on the approach, it remains the only automaker to do so; even the products-liability model has had more buy-in from the makers of self-driving vehicles and their technology. “Insurance included” models seem the least likely of the self-driving insurance options to threaten the traditional auto insurance industry in the next two decades. Yet they indicate a willingness of companies to take risks to try new models, which are worth noticing. What to Expect in the Near Future Self-driving vehicles piloted by technology that prevents accidents is a powerful vision of the future. It provides a sense of excitement and hope. It also provides challenges to traditional auto insurance companies, many of which are already struggling with auto insurance premiums in a world where many people have eliminated vehicles from their lifestyles. For a $220 billion industry that supports more than a quarter million jobs, the threat is significant, says Patrick Lin at Forbes. Yet technology’s death knell for auto insurance may not be as close as it appears. Driver involvement in vehicle operation is likely to be a necessity for many more years, and drivers will need insurance as long as they must take the wheel. Human error will continue to be a factor in accidents. And demand for insurance against theft, acts of nature and technological glitches will persist even in a world where cars do their own driving.

Technology is changing at an exponential pace, and so are consumers' expectations of having products and services that come with a digital experience. Perfect example: Our Benekiva team recently rented office space and were shocked by the request of our future landlord to mail two signed copies of the contract. As we were discussing this crazy request and wondering why technology wasn't used to solve this simple problem, another startup complained to me about the same issue. Did we get the space? Yes. Did we have a bad taste in our mouth about the process?  Yes. One of the most memorable projects that I led earlier in my career was when I automated cash processing. Previously, a team of 15 took turns printing mainframe screens. Afterward, they had a searchable database with the data at their fingertips. Before I started digging into this issue, I was advised: “You are working with legacy technology; data is not accessible.” and, “The mainframe replacement project is almost approved. Wait another year.” (Yeah, right. ?) If I hadn’t rolled up my sleeves to dig into available data feeds, this problem would have continued until the mainframe replacement project was finished, which actually occurred 3 1/2 years later. This project yielded immediate benefits of one full-time employee, not including the money and trees we saved by not printing paper every morning. Years later, when I came across the Center for Creative Leadership’s direction, alignment, commitment (DAC) model, the reasons for the project's success became clear. See also: 3 Ways to an Easier Digital Transformation Here is a synopsis of the organization I was working for at the time:

• Innovation was encouraged at the very top of the organization, and it didn’t stay at the senior level. Employees across all salary grades were invited to participate.
• There was a culture of celebration. If employees found a better way of work, they won awards and were recognized.
• Technologists were embedded throughout the business. I was one of the first hires of this kind, and we paved the way for others. My role was to learn the business and find ways to improve processes and automation.
• Data drove decisions. Tasks, people, managers, etc. were measured, which allowed bottlenecks to be seen quickly and a course of action determined.
• Most importantly, there was a strong sense of DAC. Direction was articulated and communicated to ALL levels of the organization by the senior-most person. This individual would make his mission to get out of his office and walk the floors – get to know people and share the vision. There was clear alignment of goals and initiatives. If something didn’t meet our key objectives or targets, it wasn’t a priority. No sneaking in projects. Finally, there was a strong sense of commitment at all levels of the organization.

Here is how the DAC approach turned into success at that organization:

• Relationships. You don’t have to be best friends or go out for drinks, but having a good working relationship can make or break initiatives. I was new in the organization but already had started to form a peer group. I was also involved at all levels of the organization – from the cash processor to leadership. After discussing the manual processing with my IT peers, I was introduced to a mainframe analyst who started looking through data feeds that were already being created. She eventually found one that I could use to build a tool that made the data accessible to the cash processing team. Whether you are a startup working with an organization or an employee, learning the organization and the key players (not every key player is a C-Suite executive) is critical to your success. Don’t get fooled into thinking that, if you have upper-level buy-in, you get the golden ticket. Success is involving essential stakeholders at all levels of the organization.
• Culture. This organization took risks, tried new things and explored possibilities. Technology is often the easy part. Where most failures occur is on the “soft” side of project management. Is your team equipped with the right people to navigate beyond the tech? Digital transformation initiatives are hard. If you are a tech startup working with organizations on their digital transformation initiatives, ensure you have people on the team who can handle the change management side of the house.
• Questions. When you hear a no, take the attitude that the “yes” is around the corner. Ask questions various ways to collect data and information. Don’t be afraid to poke around – what is the worst that can happen? I’ve never seen anyone get fired for asking questions. If you have, then you were working for the wrong organization.
• Collaboration. I involved various teams and departments to solve the cash problem. Soup to nuts, we implemented this solution in less than two months – from discovery to implementation. We had so much buy-in and excitement that we won a teamwork award for this project. It was fun to get to know others, and collaboration allowed other problems to surface that some of this team solved quickly.

See also: Innovation Imperatives in the Digital Age If you are an employee of an organization managing digital transformation initiatives or a startup going in as a vendor, don’t ignore the culture side of your projects. Go in with an open and collaborative mind. As Covey states, “seek first to understand, then to be understood.” Keep building relationships and asking questions. Finally, seek to build DAC. Without direction, alignment and commitment, no matter how much money or resources you throw at the problem, your car is stuck in mud. The wheels are turning, but you aren't going forward.

The following is an excerpt from a white paper, available in full here.  I’m a huge fan of Dan Sullivan’s strategic coach program. Many years ago, he said something that, initially, I didn’t fully appreciate or understand:

“What you currently get paid for, you may do for free, or be totally taken out of. What you currently do for free may be the only way you get paid!”

Although he was referring to the advent of the microchip, his message is just as applicable to the digital disruption occurring today. Primarily, agencies get paid for the risk-transfer mechanism they provide (e.g., insurance). They transfer the risk from the individual or business to the insurance carrier. Once the insurance is purchased and placed, the service they provide is reactive. In essence, most agencies are pass-through middlemen that respond to the needs of the insured but that otherwise add no real value. These days, digital technology is rapidly assuming many of the functions and responsibilities for which agents used to be compensated, namely the purchase and placement of coverages, along with reactive service. This makes it easier than ever for customers, especially personal lines and small commercial lines, to buy and service most of their needs via their desktop, laptop or other digital device, with little or no human contact. This trend continues to accelerate at lightning speed. So what are agencies doing now “for free” that may be their primary source of compensation in the future? I believe the answer lies in so-called value-added services and tools. These mainly involve providing risk advice that outlines ways to control the client’s true cost of risk, improves the client's risk profile with the marketplace and protects their assets. The insurance carriers are spending hundreds of millions of dollars on digital platforms. Why? For one thing, today’s consumers are demanding it. Furthermore, it costs the carriers less to do business digitally than personally. There is a staggering cost difference between transactions handled on the phone vs. online. The use of insurance carrier service centers is also altering the way agencies operate. Originally, I wasn’t a fan. However, the carriers have invested significantly in technology and training, and I now urge agencies to put 25% to 50% of their personal lines and small commercial lines into a service center. See also: How Technology Drives a ‘New Normal’   By the way, the bottom 50% of your customers probably generate less than 10% of your commission income. This frees up resources so that you can provide a great customer experience to your best customers. I’m referring to your A and B accounts, the top 20% that generate 80% of your revenue — not the bottom 50%. I realize this isn’t for everybody, but if you don’t know your 80/20 numbers (discussed in depth in Chapter 4), you can’t even begin to make a valid decision about which accounts to place with a service center. It’s also crucial to remember that once the account moves to the service center, it’s moved! It’s gone. It’s no longer in your agency. One of my research contacts said that if he were an agency owner he’d transfer as many transactions and expenses as possible to the carriers. And I agree with him. This frees the resources, agents and agencies needed to focus exclusively on risk assessment and transfers, asset protection and risk management planning. In my discussions with insurance carriers over the years, I’ve found that 54% of incoming phone calls to the service centers are agency personnel calling on behalf of the client. Keep in mind, the client either has been given the service center’s toll-free number to call directly for assistance or the client's call is automatically routed to the center. And yet many agencies continue to service the accounts they’ve moved to a service center. This makes no sense! Once the account is moved, it’s moved. You need to be focused on the clients you’ve kept in-house. See also: Secret to Finding Top Technology Talent   Embracing technology also means getting serious about using all of the capabilities of your agency’s automation system. My content partner in the Better Way Agency program is Angela Adams, CEO of Angela Adams Consulting. She’s unequivocally the best in the industry when it comes to the internal operations of agencies and maximizing their automation systems. I’m constantly questioning her about the use of technology and automation within agencies. Recently, she shared with me that the average agency uses only about 20% of the capabilities of its internal and carrier-provided technology. That’s about the same percentage of agencies that are active in an automation vendors user’s group. I find that incredible! Learning from others is one of the best and easiest ways to maximize your system. How else — and when — are you going to do it? If you’re behind the technological curve, your time to catch up is rapidly running out. With the proliferation of ever-evolving technology, more and more of the routine service items and transactions that keep everyone “so busy” are being handled digitally, outside of the agency. Therefore, to stay relevant and not become obsolete, agencies and their teams will need to pivot from handling transactions to providing risk advice and insurance solutions.

Property and casualty insurers aren’t shying away from digital distribution. “[F]our out of five insurers either have, or are planning to set up, wholly digital sales processes in which humans are involved only when customers need advice,” Accenture global insurance industry Senior Managing Director John Cusano reports. But taking digital distribution from concept to reality still poses major challenges for many P&C insurers. Here, we look at some of the biggest challenges of implementing a digital distribution strategy and how to overcome them. Everyone’s Going Mobile In a 2013 article for Wired, Christina Bonnington predicted that the world would contain 24 billion connected devices by 2020 and that the Internet of Things would result in people doing ever more tasks from their smartphones. We got there early: Statista estimates that the world of 2018 already contains 23.14 billion connected devices and that the number will be more like 31 billion in 2020. And more of these devices than ever are mobile devices. It seems as if the insurance industry only just began to embrace the opportunities afforded by digital technology when customers’ attention switched to this highly connected, primarily mobile world. Today, customers “expect the same intuitive experience from their insurance carriers as they do from their favorite mobile app,” says Rahim Kaba at OneSpan. And they’re not the only ones. “Even insurance agents are demanding better digital capabilities from insurers to increase their ease of doing business,” Kaba says. See also: Is P&C Distribution Actually Digitizing?   Putting Numbers to the Scope of Mobile's Impact Mobile is an essential consideration for insurance companies, according to Andrew Sheridan at DialogTech, who cites several statistics that illuminate the opportunity available:

• 40% of customers’ time researching insurance was spent on mobile, and 51% of these customers purchased insurance as a result of their research.
• 25% of insurance shoppers do all their buying via their mobile devices.
• 66% use a specific insurance company’s app.

Yet going mobile poses some challenges for insurance companies. For one thing, customers expect to be able to do everything from pay premiums to file claims, get driving tips or find a repair shop via a mobile app. That’s a lot of work for an app to do — and the more an app does, the slower and thus less appealing it is likely to be Another challenge is the integration of older technologies with new ones. As Parmy Olson notes at Forbes, older telemetrics devices like Progressive’s Snapshot are starting to give way to smartphone apps that perform similar tasks, measuring speed, distance and other driving-related factors that can affect premium calculations. These apps can seem more convenient to customers, but they can also make certain measurements or calculations more difficult. For instance, telemetric devices installed in the vehicle itself can more easily detect a crash and call for help, says Jim Levandusky, vice president of telemetrics at Verisk Analytics. Embracing Industry Shifts One solution? “Collaboration with the disrupters,” says Trevor Lloyd-Jones at LexisNexis Risk Solutions. Embracing mobile tools like telematics can make mobile apps easier for customers and more effective for insurance companies, and when these tools are approached through software as a service (SaaS) or similar providers, concerns about security or analysis are often addressed as part of the platform. Companies that dismiss disruptors in the insurtech sphere do so at their peril, says Nikolaus Sühr, co-founder and CEO of KASKO. The era of relying solely on historical data may be coming to an end. “Disruption in other industries is actually changing user behavior and the nature of risk, so there is no relevant historical data anymore,” Sühr writes. When moving into mobile for customers, agents or both, don’t be afraid to A/B test mobile apps, try new things and to innovate, says Amir Rozenberg, director of product management at Perfecto. While experimentation must account for the tight regulatory world insurance companies inhabit, trying out options in the mobile sphere allows P&C insurers to better understand how their customers use mobile — and how the company can use what it learns to attract and keep better customers. Within this process, however, it’s important to keep mobile in perspective. “Even with this trend, companies need to ensure a mobile app supplements the overall experience and doesn’t dominate it,” says Rodney Johnson at Kony. One Size Doesn’t Fit All “With customers using more devices in more ways, there are new options for customer engagement,” stated a recent Incom Business Systems white paper. There are also plenty of challenges. Mobile devices feel personalized to customers, and with companies in other industries extending that personalization to their apps, insurance companies are feeling the pressure to personalize, as well. A hallmark of in-person or traditional channels has been their one-size-fits-all approach to customers, according to Shashank Singh in an article at Insurance Nexus. Many P&C insurers have attempted to transfer this approach to the digital world, only to discover it doesn’t work. Data and analytics offer insurers an unprecedented opportunity to understand and respond to each customer as an individual, from recommending products to calculating risk. Digital distribution can also make it easier to capture a growing segment of the P&C insurance market that has changed its behavior as it finds itself priced out of coverage. “Rethinking distribution is key to successful inclusive insurance,” says Peter Wrede of World Bank Group USA. “Low distribution costs make insurance affordable for low-income people.” A 2017 article by in The Street noted that 18 million adults in the U.S. currently cannot afford auto insurance, so they go without, often turning to public transportation or rides from friends instead. As a result, “personal automobile insurance is in a crisis,” said Dave Delaney of Owner Operator Direct. “Rates have been increasing steadily since 2011, and there is no end in sight.” By turning to a digital distribution system to reduce costs, however, insurance companies gain the opportunity to make coverage more affordable, recapturing some of the 18 million customers who currently believe auto insurance won’t fit into their household budget. See also: The Future of P&C Distribution  Lack of Support Systems Personalization of the digital customer experience, leveraging tools like mobile apps, presents a profound opportunity to understand and respond to customers’ needs better than ever before, said Ash Hassib, senior vice president of insurance solutions at LexisNexis. But “data availability isn’t the issue,” Hassib said. “It’s how you use it to underpin sustainable and profitable growth that’s the real challenge for insurers.” And for many insurers, this challenge arises the moment they try to use that customer data within their current organization. “Insurers have focused on digitalizing the front end, with insufficient focus on the systems that support distribution,” said a May 2017 report from the Insurance Governance Leadership Network. Additional challenges in retention have resulted, with insurance companies noting that customers leave because the system doesn’t provide adequate support for their experience. Customers who use multiple channels to communicate with insurance companies are more likely to face problems caused by insufficient systems inside the organization itself. Perhaps this is why, relative to other industries, insurance company employees rated their companies 9% lower on providing a high-quality customer experience, according to Tom Bobrowski at The Digital Insurer. P&C companies were also rated 8% lower than average at “good cooperation between functions,” allowing the company to meet the customer’s needs effectively. One option is to take a hybrid approach, says Sasi Koyalloth in a Wipro Ltd. white paper. A hybrid approach focuses on incorporating human agents into the digitization process, focusing on giving agents and employees the digital tools necessary for seamless communication throughout the organization. Regardless of approach, “a single view of the customer is crucial,” says Robert Paterson at Afinium, noting that software as a service (SaaS) providers already exist with the tools and support needed to help P&C insurers move to a single platform for managing information. And the systems’ cost needn’t be onerous. “Another key driver for adoption of SaaS solutions is its use in developing pricing models that can be directly related to system usage,” Paterson says. Final Thoughts The switch to digital is now or never for P&C insurers. Working with knowledgeable insurtech providers can help companies address concerns about data security, analysis and customer experience, allowing insurers to take full advantage of the digital world to build more personal and long-lasting customer relationships.

Attracting young, talented workers seems to be one of the single greatest challenges facing the insurance industry. There are several reasons for this, chief among them the retirement of the career-oriented baby boomers, because they are taking their institutional knowledge of processes and systems with them. That institutional knowledge resident in each baby boomer is critical and has its roots in the days of apprenticeships, which is defined as “a system of training a new generation of practitioners of a trade or profession with on-the-job training and often some accompanying study.” Unlike an internship, in which the job candidate received work experience for a limited period, being an apprentice meant you committed your career to a particular industry. See also: ‘Jobsolescence’: How Big a Threat?  We know that young people don’t consider insurance a high-powered, exciting industry; rather, many see the industry as risk-averse, stuck in its stodgy ways and afraid to upgrade processes and technology. Perhaps the only exception to this is in the insurtech world, where startups are disrupting the status quo and larger insurers are starting to pay attention. When we look at internal responses (people/systems) to external changes (insurtech/other efficient technologies) among smaller insurers, however, the value of the retiring knowledge worker seems even more critical. This is especially true with insurers that have been clinging to their legacy core systems and are now in a scramble to put new business plans and processes together that will help support the technology required to remain competitive. So, why are smaller insurers more hesitant to embrace modern technologies? Think.Shift Chairman Balaji Krishnamurthy says smaller insurers, municipal risk pools, captives and self-insured groups are timid to adopt new technology because they fall prey to what he calls “the law of inertia,” which states that people tend to endure the pain of the present rather than risk enacting change. “Having lived with the pain of the present (spreadsheets, home-grown databases or software), they fear the certain pain of the change (moving to new technology with considerable unknown attached to it), even when they know that doing so might put them in a better position for the future,” he says. I can tell you first-hand that the future for young professionals does not include working on outdated systems. It does include working for a vibrant, forward-thinking industry that views enabling technologies as a priority. The industry at large is trying to do its part: February is now the official “Insurance Career Month”; the Insurance Risk Management Institute produced a YouTube video called "Why an Insurance Career"; and more than 850 organizations have joined forces to promote www.insurancecareerstrifecta.org, which is designed to inspire young people considering work in the industry. See also: Beat Brain Drain: Boost Your Talent Pool   So, my suggestion is that as your baby-boomer workers continue to plan for their own retirement, avoid the law of inertia and start making your own plans to upgrade your technologies to match the needs and skills of a new workforce. If you do, your new technology will foster superior opportunities for your company and workers; and you’ll enjoy the same sort of security of having institutional knowledge and the long-term loyalty inherent in apprenticeships.

Amid the devastation from Hurricane Florence, one hopeful sign emerged: this video from the Weather Channel. The video is so striking that nearly 17 million people have watched it or a slightly longer version on YouTube, but my point isn't that graphics keep getting cooler. It's that the video suggests public authorities and insurers will soon be able to communicate with people in ways that could save many lives.

Think about the efforts to get everyone to evacuate endangered areas before Hurricane Florence and about all those who sloughed off concerns—leading to the need for thousands to be rescued from their homes and to at least 25 deaths thus far. Now imagine if those thinking about staying were confronted by a Weather Channel-like video simulation showing the possible danger to their specific home: how high the waters might rise in the street in front of their house, what trees might fall on it, how impassable the streets might be for the whole neighborhood and so on.

Psychology suggests it would be hard to ignore such a vivid personal threat, and the necessary technology isn't far off.

Google has already mapped and photographed essentially the entire United States, and it isn't that hard to do a mashup of its Street View with video showing the effects of floods. While the Weather Channel video is awfully realistic, as is, the street signs could be shown for your corner, and the generic house and yard in the background could be replaced by yours.

Getting specific data for the possible effects on your house is trickier, but not for long. Based on maps from Google and others, people have access to increasingly good information about elevations for properties. While FEMA has long provided maps showing whether a house was in a flood plain, the elevation in that plain matters a whole bunch—being 10 feet higher or 10 feet lower can make all the difference. Houses not officially in flood plains can also be affected because of low elevations. Some cutting-edge firms, including the folks at Coastal Risk Consulting (whose Albert Slap wrote the article highlighted below on the need for more sophisticated data than FEMA flood maps provide), are getting very specific about the threats to individual properties. They incorporate not just elevations but tides and other data.

Mash a Coastal Risk-like database together with information from the National Weather Service about possible storm paths and rainfall, and you can generate a real-time estimation of the maximum and minimum threats for every property, with probabilities included. Combine that analysis with Street View, and you can show me, very personally, what I might face in a hurricane.

Et voila! A lot of people who would otherwise hang tight will head inland or go to higher ground while there's still time—before they have to be evacuated by boat or helicopter, or perhaps even die.

Think about how grateful a family would be after the storm to the public authorities or insurer that convinced them to leave before their home was inundated.

This sort of simulation represents some of the incredible power that insurtech is unleashing, and, while it wouldn't come close to solving all the problems represented by natural disasters, would sure be a nice start.

Have a great week.

Paul Carroll
Editor-in-Chief

Claims is a people business – virtually every claims executive I have ever met believes this. If you have ever been in a vehicle accident, experienced damage to your home or business, or been injured in a work-related incident, one of the first things that comes to mind is: I need to talk to someone who can assure me that I have insurance coverage and that there will be resources, both financial and technical, to make me whole again. This reaction is a human one and is not likely to go away. Many claims organizations have tried to maintain staffing levels to ensure a human connection is available to all. However, this is expensive, and claims organizations are already experiencing a shortage of individuals to fill critical claims roles. Claims executives are at a crossroads, and many questions arise. How do we maintain 1:1 people interactions and simultaneously manage skills gaps and expenses? Then there are digital expectations from all parties to the claim – insureds, claimants, distributors, service providers – how are those expectations met? Given all these weighty challenges, many claims decision-makers relate to the phrase: “There’s a light at the end of the tunnel, and it’s a train coming the other way.” But, for many claims organizations, the reality is that the digital train that is coming can provide answers to the people challenges they face. See also: How Work Culture Affects Claims Process   SMA’s recent research report, Claims Transformation: New Paths Forward for Reporting,  Verification and Communications, explores emerging technologies and trends in claims operations. Relative to the people business theme, there are several areas of innovation where concerns, expectations and answers merge.

• Self-reporting via photo and video. Apps that facilitate the insured or claimant in providing visual representation of damage will speed the claim along versus waiting for an adjustor or inspector to do the same thing. Faster settlement clearly meets consumer expectations. Additionally, precious claims resources are preserved for more complex claims.
• Self-reported photos and videos along with AI analysis. The resulting outcomes from AI analysis can facilitate the next-generation of straight through processing (STP), ultimately going well past the current glass and towing claims STP, as things such as machine learning evolve over time. Again, shorter time to settlement with little or no claims adjustor involvement – a win-win.
• Telemedicine and digital health platforms blend consumer-accessed, personalized information with a collaborative environment for adjustors, service providers, medical professionals and other concerned parties. These technologies blend useful, self-service information with human access at the moment of need.

These are just a few examples of the technologies that claims organizations have at their disposal to transform processes and operations. The previously mentioned SMA research report covers many other areas. Make no mistake, balancing when to insert adjustors into processes and when technology can facilitate desired outcomes is not easy to accomplish. One of the key success factors is to look at claims processes from the outside in. This is not intuitive for claims organizations that have spent entire careers managing the challenges and intricacies of the adjustment process with an internal lens to meet corporate compliance goals and tangential department needs within a regulatory framework that can be daunting.  However, looking at claims processes from the consumer perspective – outside in – can suggest ways of execution that fulfill the need for the customer to be compensated for their loss in the fastest way possible or to find the clearest path to wellness. Happily, these outcomes also preserve human claims resources for when an individual really needs it. See also: The Best Workers’ Comp Claims Teams   The technology vs. human paradigm will continue to change, probably forever. However, claims is one of the areas within insurance where expert adjustor skills can truly make a meaningful difference for individual outcomes. But the definitions will continue to change, and the challenge for claims executives will be to continually assess processes through a different lens. Optimistically, the light in the tunnel will be a source of inspiration.

Picture a field army of insurance agents, whose mission is to help people live longer and no longer suffer from an addiction that benefits no one, not even the beneficiaries of a life insurance policy. Picture these agents not in fatigues but shirt sleeves, campaigning like citizen soldiers and delivering relief to their respective communities. Picture these agents neither in a battle of arms nor a contest of strength, but a war for the hearts and minds—and lungs—of smokers; of men and women who want to quit smoking; of individuals who want to end their cravings for tobacco and their consumption of nicotine. Picture a constituency equal to this army, whose lives would otherwise end in tragedy and whose deaths would have no meaning in a library of statistics. Picture more of the same in which, according to the Centers for Disease Control and Prevention (CDC), cigarette smoking is responsible for more than 480,000 deaths per year in the U.S., including more than 41,000 deaths resulting from secondhand smoke exposure. See also: Wellness Industry’s No-Good, Very Bad Year   Picture harmless ways to quit smoking. Picture seminars and workshops. Picture corporate partnerships and public meetings, where insurance agents are themselves agents of change rather than a series of changing faces; where the perception of agents changes to the reality of agents as leaders of every community they represent. We cannot afford to perpetuate the current image, which costs $170 billion per year in treatments for tobacco-related illnesses. We cannot afford to continue to ignore the obvious: that the economic cost of smoking a pack of cigarettes a day is $177 per week or more than $9,200 per year. We cannot afford to lose so many so often. We must not habituate ourselves to the emotional wreckage of a deadly habit; because the second we cease to absorb the enormity of this problem—the minute we distance ourselves from the size of this plague—is the moment we abandon our moral authority and the morale of Americans nationwide. Insurance agents have it within their power to do more than sell policies or find the best prices for smokers who want to buy insurance. They have the expertise to speak to smokers about the bottom line, that they can quit smoking without risking their already fragile physical or psychological health. They can help smokers convert the money they waste on cigarettes, as they lay waste to their bodies, into a commodity that protects their health and lines their pockets with cash: insurance. Coverage is what smokers need. An effective—and harmless—way to quit smoking is what these individuals must have. See also: 2018 Workers’ Comp Issues to Watch   Let us resolve to promote healthy living by saving the lives of those whose health is in danger. Let us eliminate the fog of uncertainty and the cloud of indecision, because we must not be enablers of cigarette smoking or passive smokers in our own right. Let us summon that field army into action. Let us earn this victory, so we may celebrate this achievement.