The insurance industry has a trust problem – and that’s not even the bad news. Consumers’ lack of trust in the financial services sector is well-documented. The Edelman Trust Barometer found that financial services was the least-trusted industry in the eyes of consumers.  According to an Accenture study, only 27% of consumers consider insurers to be trustworthy. And Deloitte found that only 11% of people have strong trust in insurance agents and brokers. The worse news is that the industry’s preferred instrument for narrowing this trust gap might actually be widening it. That instrument is consumer disclosure, and it has long been the insurance industry’s go-to strategy for cultivating trust: trying to provide transparency in coverage parameters, commissions and other thorny topics. However, as currently practiced in insurance (and most businesses), consumer disclosure is far from the elixir the industry purports it to be. If anything, it is the antithesis of transparency, for two key reasons. Disclosure Downside #1:  Readership First, hardly anyone reads disclosures.  Admit it – as a consumer, when was the last time you read one? Amazon.com has underscored this point in a most amusing fashion via the terms of service it provides to software developers who use its Amazon Web Services (AWS) platform. In the excerpt below, Amazon explains that customers can’t use AWS software to build “life-critical or safety-critical systems.” However, as the highlighted section shows, the agreement lifts this usage restriction if the U.S. Centers for Disease Control and Prevention declare the presence of a “widespread viral infection transmitted by bites or contact with bodily fluids that causes human corpses to reanimate and seek to consume living human flesh…  and is likely to result in the fall of organized civilization.” Yes, you read that right… Amazon is disclosing a contingency for the Zombie Apocalypse. If that catastrophe befalls us, you’re allowed to use AWS software for whatever you need to survive. The fact that the flesh-eating undead can be referenced in an official document like this, with hardly anyone noticing, speaks to a larger and more serious issue: Disclosure documents are an awful way to communicate important information to your customer. Companies bury important details in opaque disclosures that they count on no one reading. Examples abound – conflicts of interest for your financial adviser, service fees for your bank account, cancellation fees for your gym membership, price increases for your cable TV package and – of course – coverage exclusions for your insurance. Organizations hide behind these disclosure documents and point to them as evidence that anything important is indeed revealed to the customer. The reality, however, is that many companies (and sometimes entire industries) use disclosures to convey information that they don’t really want anyone to see. Disclosure Downside #2:  Comprehension The second reason why disclosures fail to advance transparency and trust is because hardly anyone can understand them. These are typically large, dense documents filled with unintelligible legalese and fine print (a shortcoming that was noted by the Federal Insurance Office in its own study of the industry’s transparency). The Edelman 2018 Financial Services Trust Barometer found that consumers viewed “easily understood terms and conditions” as the No. 1 factor that would increase their trust in financial services. But, as the same study revealed, a lack of information transparency is the top reason why consumers distrust this industry. There is a fundamental misalignment between what consumers value (information transparency) and what insurance firms actually deliver (information obfuscation). That discrepancy will continue to haunt the industry until disclosures are transformed from legally mandated administrative documents into genuine displays of customer advocacy. Moving From Confusion to Clarity Accomplishing that transformation will require reinventing the disclosure so it clarifies instead of confuses, and inspires confidence instead of undermining it. Here are some examples of how the insurance industry could achieve that:

• Make disclosures obsolete. One way to attack the disclosure problem is to minimize the need for these documents in the first place. While it would be naïve to think disclosures would ever go away in the highly regulated insurance business, firms should still ask themselves: Are there changes we could make in our business practices that would reduce the need for these mind-numbing disclosures? Southwest Airlines’ highly successful “Transfarency” strategy is a great example of this approach. In contrast to many of competitors, Southwest doesn’t have to agonize over consumer disclosures because it built the business around a simplified and nearly fee-free pricing structure (i.e., no baggage fees, no ticket change fees, etc.).

• Design for visual appeal. Today’s jargon-filled insurance policy contracts, disclosures and amendments not only appear to have been written by lawyers, they appear to have been designed by lawyers. No offense to the legal community, but creating documents with visual appeal is not their forte. That is the domain of marketers, and it appears those folks rarely have an opportunity to work their magic on these types of insurance documents. They are often walls of text with little white space and few navigation clues. That might seem like an insignificant issue – marketing “fluff” – but it’s not. The layout, design and typography of a document can materially reduce the cognitive load it creates on the reader. Put simply, a visually appealing disclosure can engage and enlighten consumers much more effectively than a poorly designed one.

• Use vignettes to build understanding. Even the most jargon-free disclosures suffer from an important shortcoming – they describe terms and conditions in an almost academic fashion, detached from the realities of people’s everyday lives. One can read a disclosure paragraph and gain a theoretical understanding of a concept (e.g., damage from floods vs. wind-driven rain), yet not fully grasp its practical application. This is where explanatory vignettes can be used to great effect. Serving as a complement to traditional disclosure language, these are short “stories” that depict a common customer episode and more vividly illustrate how the legal terms translate into real life impacts. (Some insurers, for example, use this approach to underscore what types of calamities are, and aren’t, covered by a policy.)

• Leverage other communication platforms. The way people like to consume information has changed drastically in recent years, yet disclosures have not evolved accordingly. In today’s digitally enabled world, many consumers like to learn more by watching (video) than by reading (documents). Complex concepts that are conveyed in a written disclosure could be reinforced in a more engaging fashion via a few short videos delivered right to a policyholder’s inbox. The media used to communicate insurance disclosures haven’t changed in decades, but consumer behavior certainly has. It’s time for insurers to bring disclosures into the 21^st century and leverage the digital communication avenues that so many other industries are using to great effect.

*          *          * If insurance providers want to strengthen their customer relationships and instill greater trust in their industry, they need to move beyond regulator-mandated disclosure. After all, just because something is legal, doesn’t make it right for your customer. The key is to communicate with consumers in a clear and forthright way – and disclosures, if properly constructed, can help advance that cause. It’s a cause that insurance firms should vigorously embrace because, when companies communicate with clarity, they send an unmistakable signal to consumers. It’s a signal that you’re advocating for them, that you’re helping them avoid unpleasant surprises – be it in the form of uncovered losses, unexpected fees or the zombie-induced fall of organized civilization. And in the insurance business, that’s the kind of advocacy that makes for a great, trustworthy customer experience.

This is the second in a series. The first article can be found here. Our industry is facing a major problem related to hazard data: More hazard and event data providers are producing higher-resolution footprints for a larger number of catastrophic events than ever before. All this data is difficult (and, in some cases, impossible) for insurers to process fast enough to deploy timely responses to their insureds. If this problem sounds all too familiar, you’re not alone. At SpatialKey, working with our clients has highlighted a consistent struggle that many insurers are facing: There is a gap between the wealth of data available and a carrier’s ability to quickly process, contextualize and derive insight from it. Carriers that try to go it alone by relying on in-house data teams may find that they’re spending more time operationalizing data than deriving value from it, particularly during time-sensitive events. Catastrophe data has evolved tremendously with our data partners, such as KatRisk, JBA and Impact Forecasting, becoming more agile and producing outlooks, not only during and after events, but well ahead of them. We’re seeing a push among our data partners to be first to market with their forecasts as a means to establish competitive advantage. And, while this data race has the benefit of generating more information (and views of risk) around a given event, it also creates a whole lot of data for you, as a carrier, MGA or broker, to keep up with and consume. Three key considerations that arise while operationalizing data during time-sensitive events are:

1. Continuous file updates make it difficult to keep up with and make sense of data
2. Processing sophisticated data requires a new level of machine power, and, without it, you may struggle to extract insights from your data
3. Overworking key players on your data or GIS team leads to backlogs, delays and inefficiencies

1. Continuous file updates throughout the life of an event File updates can bring you steps closer to understanding the actual risk to your portfolio and potential financial impact when an event is approaching or happening. At the same time, the updates can make it exceedingly difficult for in-house data teams and GIS experts to keep pace and understand what has changed in a given model. Data providers, like KatRisk, are continuously refining their forecasts (see below) as more information becomes available during events, such as last year’s hurricanes Michael and Florence. Using SpatialKey’s slider comparison tool, you can see KatRisk’s initial inland flood model for Hurricane Florence on the left, compared with the final footprint on the right. The prolonged flooding led to multiple updates from KatRisk, enabling insurers to gain a solid understanding of potential flood extents throughout the event—and well in advance of other industry data sources. See also: Using Data to Improve Long-Term Care   Over the course of Hurricane Florence, SpatialKey received five different file updates from just one data provider. That means that, for the data partners that we integrate with during an event like Hurricane Florence, we load upwards of 30 different datasets into SpatialKey! If you’re bringing this type of data processing in-house, it’s both time-consuming and tedious; in the end, you may end up with limited actionable information because you can’t effectively keep up with and make sense of all the data. A solution that supports a data ecosystem and interoperability creates efficiencies and eases the burden of operationalizing data, especially during back-to-back events like we’ve seen the last two hurricane seasons. 2) Hazard data sophistication Beyond just keeping up with the sheer volume of data during the course of catastrophes, being able to process high-resolution models and footprints is now a requirement. Many legacy insurance platforms cannot consume the quality and resolution requirements that today’s data providers are churning out. High-resolution files are massive and a challenge to work with, especially if your systems were not designed for the size and complexity of these files. If you’re attempting to work with them in-house, even for a small-scale, singular event, it requires a lot of machine power. The most sophisticated organizations will struggle to onboard files that are 5-, 10- or 30- meter resolution, such as the KatRisk example above. And, doing so could make the model prohibitive, meaning you’ll have spent time and money on data that you won’t be able to use. 3) Dependency on in-house GIS specialists The job of 24/7 data puts an enormous strain on data teams, especially during seasons where back-to-back events are common. For example, during hurricanes Michael and Florence, our SpatialKey data team processed and made available more than 50 different datasets over the course of four weeks. This is an intense effort with all hands on deck. Insurers that lack the expertise and resources to consume and work with the sheer volume and complexity of data that is being put out by multiple data providers during an event may find the effort downright grueling—or even impossible. Additionally, an influx of data can often mean overworking a key player on your data or GIS team, leading to backlogs and delays in making the data consumable for business users who are under pressure to report to stakeholders and understand financial impact—while pinpointing affected accounts. The role of a data team can be easily outsourced so your insurance professionals can go about analyzing, managing and mitigating risk. It’s time to automate how you operationalize data As catastrophes grow in frequency and severity, it’s time to explore how you can easily integrate technology that will automate the process of operationalizing data. See also: Turning Data Into Action   Imagine how much time and effort could be diverted toward extracting insight from data and reaching out to your insureds rather than processing it during time-critical events. There’s an opportunity cost to the productivity that your team members could be producing elsewhere. Check back for Part 3 of this series, where we’ll quantify the actual time and inefficiencies involved in a typical manual event response workflow.

The public sector faces a set of unique risks and challenges. In this session at the RIMS 2019 Annual Conference & Exhibition, members of the Public Risk Management Association (PRIMA) discussed trending topics related to public entity risk management. Speakers included:

• David Demchak, president & CEO, Connecticut Interlocal Risk Management Agency
• Raymond Sibley, director of risk management, City and County of Denver
• Gary Langsdale, university risk officer, Pennsylvania State University
• Jane Waters, insurance program administrator, DC Office of Risk Management
• Mark Walls, vice president, communications and strategic analysis, Safety National (moderator)

How do you educate elected officials on the value of risk management?

• To get their attention, it is important to discuss what matters to them – cost. We developed a total cost of risk model and showed them their losses relevant to them. For instance, showing cost per student for a school district is easier to understand than a straight dollar amount.
• It’s best to educate them as soon as possible when they get appointed. Get to them first. Show them how risk management supports all of the agencies. When you help them, or get them out of trouble, they tend to come back to you as a resource.
• Equating cost to an item – the cost of a fire truck, staff hours, the cost of a teacher’s salary – helps tremendously.

See also: The Globalization of Risk Management   Law enforcement liability is a hot topic. What challenges are you facing?

• Officer-involved shootings, the use of force and the use of deadly force are trending up. We started looking by the selection process. There is a dwindling supply of job candidates, and our vetting process was outdated. We spent a tremendous amount of time updating how we recruit. In fact, we found that recruiting from within the community is very effective. Psychological screening and proper onboarding is also very important on the front end, so we overhauled those processes.
• Profiling accusations are high. The advent of body cams can help to calm communities that certain actions were legitimate, but not every police force has them. Those that have implemented body cams have experienced very positive results. A picture is worth a thousand words.

If you are in a state without court liability caps, how do you deal with that?

• This has a huge impact in how we react. In many cases, we have a strong bias to push a reasonable settlement rather than risk a rogue jury verdict. Many times, juries are motivated by emotion and award accordingly.

See also: Cognitive Biases and Risk Management   PTSD is creeping its way into workers’ comp benefits. What is your experience with PTSD claims?

• It’s brand new. Anyone can file a PTSD claim; it’s not just public safety employees. So far, from what we have seen, none of the claims quite fit the definition, but I expect we will see many in the future.
• We have three layers of help – early reporting, peer counseling and individual psychological help. You cannot report a PTSD claim until over 30 days, so we are hoping these resources will alleviate these situations before they become a workers’ compensation claim.
• Employee Assistance Programs (EAPs) can be a very helpful resource in this situation. They may have solutions to help you handle this.

The first part of this series is available here. I started working for Getsafe in October as a newcomer to the insurance industry. Needless to say, I had a lot to learn about insurance as a domain as well as about Getsafe. I spent the first month or two on the job trying to gain as much context as possible to formulate some opinions of my own. Here’s a summary of my learnings from these explorations: The customer lifecycle is super, super long. The timing of insurance purchases generally correlates with the occurrence of major life events, which means that on average people will only need to buy an insurance product every few years. This presents some pretty interesting challenges for customer engagement as the long timeline between purchases means that we will need to be very creative about how to stay relevant and top-of-mind. We also need to make sure that our products and services can evolve with the lives of our customers. Insurance was meant to be personalized. A very interesting aspect of today’s insurance is that it is possible to lose money by selling more product. This is because insurance as a business relies on making sure that the amount of money collected from customers exceeds the amount of money paid out in claims in aggregate over time. The word “aggregate” is key here, because at the moment the industry does not have the means to make sure this equation always holds at an individual level, meaning that companies simply make money on the “low risk” customers and lose money on the “high risk” customers. Insurance can be a part of every lifestyle. Many companies supplement revenues from their core business with commission from selling insurances. For example, retail shops often sell insurance for the goods that people buy at the store. Banks often cross-sell homeowners insurance policies when customers apply for a home loan. From the perspective of an insurance company, this means that there is likely an opportunity to vertically integrate and position insurance products as a part of a lifestyle instead of purely as standalone purchases. See also: Global Trend Map No. 15: Products   How people buy insurance can become more natural. At Getsafe, every new employee spends a part of the first week mapping out the customer acquisition journey from initial discovery to completing the first purchase. When I went through this exercise, the customer acquisition journey looked something like this:

1. Customer realize he needs insurance.
2. Customer explores options via various tools.
3. Customer gets quotes from some of these options.
4. Customer selects one option.
5. Customer purchases insurance.

What stood out to me here was that the first step of the journey required customers to somehow realize they need insurance. This feels unnatural, because insurances do not occur to me as something that people generally wake up each morning and just decide they need. Insurances do not directly address any fundamental human needs in the way that food fulfills hunger or friends create a feeling of belonging. To me, it feels like the customer acquisition journey ought to have a “step #0” that starts somewhere before the needs of insurances are fully realized by the average consumer. Insurance has a noble origin. As I learned more about Getsafe and the insurance industry, I started asking myself a very fundamental question: Why does insurance deserve to exist? So I started researching the origins of insurance. To my pleasant surprise, insurances have a relatively noble beginning, serving as the instrument by which any given community can empower its members to recover from disasters. Unfortunately, this narrative has gotten lost, because today we generally view insurance companies as sleazy, sales-driven businesses that profit from the fear in individuals. The sense of communal benefit and protection is nowhere to be found in the average person’s perception of why insurance exists. This represents a very large gap between that starting place and where things are today, and I think our mission to reinvent insurance should also include helping people understand how it fits into their lives and why it is good for them and their community. Turning inspiration into concrete statements To add up these learnings, here are three statements that start to concretely articulate how the inspiration from above could inform our product vision. Imagine a world where...

• ...Getsafe provides products and services that directly address human needs. There should be a reason for people to wake up in the morning and want to use one of our products or services.
• ...Getsafe engages with people before they realize they need insurance. We want to be a part of the journey to help them understand how insurances may fit into their daily lives.
• ...Insurance feels more like a companion rather than a pile of paperwork. Getsafe should bring insurance back to its roots and re-create a sense of community around it.

With these concrete statements, we can start to tell a story about the world that we would like to create. Here is a high-level pitch for what we are trying to achieve at Getsafe. Bridging insurance with human needs “Peace of mind” is a basic human need, and here are some ways that the average person might articulate this fundamental desire: I need to...

• ...plan for the future.
• ...have a backup plan.
• ...stop worrying.
• ...feel safe.
• ...be ready for the “what-ifs.”
• ...know my family will be OK.

As an insurance company, providing the appropriate coverage to our customers is one way that we can try to address “peace of mind” for them. Unfortunately, insurance is really complicated, and most customers need help understanding what they need, when and why. Traditionally, insurance agents have tried to bridge this gap by setting up long appointments to interview customers about their needs. For us as an insurtech, how can we use technology to do this better? How can we seamlessly bridge “peace of mind” with insurance products such that it feels completely natural to our customers? See also: How to Speed Up Product Development   The insurance of tomorrow Technology has become ubiquitously embedded within the daily lives of people. In today’s on-demand economy, consumers gravitate toward real-time access and instant gratification. This trend provides the optimal environment for next-generation insurance products to incubate because it affords us ample opportunity to inject ourselves into the everyday lives of people. With a mobile-first approach, our app lives inside the pockets of our customers and travels with them wherever they go. As long as we are providing tangible benefits to our customers, we have the opportunity to position insurance as a life companion, rather than a necessary evil. We foresee the evolution of the “insurance experience” in two phases: 1. Insurance as an app Over the last two decades, technology has dramatically changed how people interact with many products and services. This same movement toward digital and on-demand is now finally gaining traction within the insurance industry. For Getsafe and our insurtech peers, this means that we have the opportunity to define what the “insurance experience” ought to feel like in this new world. As an example, customers can now purchase and cancel insurance policies in real time, without scheduling an appointment or filling out a long contract. We will build technology to transform interactions that have traditionally been complex into one that is frictionless, fast and fair (i.e., claims). 2. Insurance as a lifestyle Because insurances are complicated and usually irrelevant to daily life, we believe that insurtechs will aim to achieve far more than the digitization of insurance products. We believe that for the industry to truly progress, insurance products must become more ubiquitous in the everyday lives of consumers. It should be clear to our customers how we enable them to live the lives they’ve always wanted to live. They should not perceive insurance products as something that they need to buy but hope never to use. Getsafe will reinvent insurance by creating an insurance experience that caters to the digital, on-demand needs of customers. We will scale our operations by developing internal tools. Ultimately, we will also create products and services that bridge human needs to insurance products. Conclusion If you’ve gotten this far, thank you for reading! I sincerely hope that you’ve found both of these articles useful and that you’ve been able to find some tips to apply to your daily work. Feel free to drop any questions or comments and contact me!

From a customer’s standpoint, every interaction with your company should be part of a singular experience — not a siloed, repetitive one. In fact, a smooth, seamless connection between the online and the offline worlds can provide a lifeline. For example, imagine you have to book a plane ticket just a few hours before hopping on a plane. To beat the clock and make your flight may require a few tweets, a visit to the airline’s website, a call to the airline’s customer service team and a quick check-in once you are at the gate. When this kind of interaction happens seamlessly, and the intersections of the online and offline channels work together smoothly, your needs are met quickly and painlessly (and you are not left behind at the terminal). This is the omni-channel customer experience. Defining omni-channel customer experiences Multichannel is when multiple marketing and service channels work independently to enhance the customer experience. When these channels work with one another, that’s when multichannel evolves into omni-channel. Omni-channel results in a single, seamless interaction with consumers across all channels, both online and offline. This can include all touchpoints in the customer lifecycle — websites, social media, live chats, follow-up emails, phone calls and in-person assistance on the sales floor. Look at a bank. Financial institutions should be available to assist you any time of the day or night over multiple channels. The goal is to do so without your having to repeat yourself because the institutions have documented, collected and stored all the information about your offline and online inquiries. For its part, the bank can effortlessly upsell services appropriately because it has the history of your interactions with the bank. Thanks to implementing an omni-channel customer experience, McKinsey & Company increased a regional bank’s product sales by more than 25% in six months. The bank tightened the loose ends between its digital and traditional channels and made the user’s experience as seamless as possible. Why does omni-channel matter? Which of these two options would you choose: a product from a company that pulls your personal data from your previous online experiences and doesn’t ask too many questions, or something from a company that asks you to spend time filling out multiple forms? You likely want to do business with the company that knows what it’s doing and uses the information it has already collected from you to make your life easier. In fact, 70% of customers “say connected processes are very important to win their business (such as seamless handoffs between departments and channels, or contextualized engagement based on earlier interactions).” Furthermore, over 80% of customers are willing to give a company relevant personal information to bridge the connection between their online and in-person experiences. See also: A Management Guide to Omni-Channel   Successful omni-channel implementation offers myriad ways to prevent disconnected departments and processes from happening. It supplies representatives from all your departments with all the company’s information about a specific customer. For instance, a customer began messaging through your website’s integrated chatbot about an issue, then decided to contact your call center. As customers switch from one channel to another, they expect (or at least hope) they won’t have to re-explain what they need. The omni-channel experience focuses on the overall customer experience, making it smoother, more consistent and highly personalized for customers. Build a better customer experience with omni-channel integration Even though the main idea behind the omni-channel experience is fairly easy to understand, companies are still figuring out how to manage it correctly. Many companies can handle the multichannel experience, but industry leaders are investing in omni-channel as a part of their commitment to a great customer experience. Let’s review some ways to make the processes work like clockwork, as well as what to do when integrating channels for an omni-channel customer experience. 1. Understand your customers' behavioral patterns This is where everything begins. Because the omni-channel experience is all about creating a flawless customer journey, understanding this journey from the very beginning is crucial. Gather data. Gather all the data you have about your customers, including how they prefer to interact with your brand. If you have a CRM system, that’s your starting point. Check your various analytics tools, too, to learn more about your customers’ communication preferences when they reach out to your support team or decide to purchase your products. Your data, analytics and key performance indicators (KPIs) are among the most important tools your business can use to make the customer experience as pleasant as possible. Search engine optimization (SEO), search engine marketing (SEM) and email campaigns all offer rich insights into both potential and current customers. “Ecommerce analytics must evolve to track shoppers wherever they may be, whether they are purchasing a product on Instagram, discovering a brand on their phone or cashing in a gift card at a pop-up shop.” As omni-channel becomes more commonplace, well-organized and optimized data will provide the competitive edge. Use surveys. Research the issues that customers come across through short surveys. One method is to enlist the help of your sales and support teams. Those teams are at the forefront of your company, directly represent your brand and communicate with your clients daily. A second method is to weave surveys into your online experiences. For example, when a user performs a specific action on your website, have a brief customer satisfaction survey pop up. These triggered questionnaires can provide valuable feedback. Define segments. Always keep in mind your audience segmentation. Different groups of customers have different needs, and those needs should help you define your user personas. You can segment your users by the products they use, the frequency of their purchases or their customer lifetime value (CLV). A well-implemented omni-channel user experience can increase a client’s retention rate, and therefore potentially CLV. Interview customers. Finally, talk to your customers. Do they feel like something’s missing? What would they like to see in your product line? Is there something your company does particularly well? If you can, ask them a quick question each time they shop with you. For example, after completing your data analysis, your ecommerce store may learn that customers prefer to pick up their order at a store instead of waiting for an item to be delivered. Some businesses have seen increases in their sales by giving their customers the option to track their orders and sending them notifications. These improvements enhance their shopping experience and keep customers coming back. 2. Create your own omni-channel universe After defining your customer journey, generate ideas on how to make the journey more coherent. How can your representatives jump from one channel to another, without data loss, in the most convenient way for the customer? Your customers come to you from various channels, but their personal details should be saved and accessible throughout your data management system and CRM platform. This means that all of the channels and technology you use in your business processes do not operate in silos; they should be synchronized, integrated and able to work together to complete any missing pieces of information. By fine-tuning this process of interchannel and interdepartmental cooperation, you will likely generate more revenue. Because social media is an extension of many people’s lives, many ecommerce sites integrate their services with social platforms. When it comes to online shopping, Instagram and Pinterest reign supreme; however, each industry has its own dominant social network. This means the omni-channel universe extends far beyond your company’s data and platforms and must include social media. 3. Measure your customer experience data After setting up all the necessary processes, make sure your omni-channel experience is performing as planned. Data and analytics give you the ability to view and learn the results of your efforts. To measure your omni-channel customer experience from a subjective point of view, collect feedback from your customers on key points throughout their journey with your brand. It can be through a call center, over an online chat, by a quick online survey or on a social media page. See also: How to Win the Retention Game   Proper management and organization of the data you collect will help you tweak your efforts and put you on the right track to a better omni-channel experience. Research, analysis and data-backed action provide a better understanding of your customers’ needs and expectations. Conclusion An omni-channel customer experience helps companies offer a personalized approach through a smooth, inviting customer journey that drives repeat purchases and loyalty. The process is worth it. Take these steps to improve your chances of achieving a true omni-channel customer experience, and, as a result, you’ll have happier customers who are glad to give you business. Thanks to your efforts to improve the customer experience, your company will see increased revenue and growth.

Now that hurricane season has officially begun, it's time to rethink our strategy for dealing with them. To date, the strategy mostly has been hope. Let's hope that not too many come ashore. Let's hope the damage isn't too bad if they do. Let's hope the federal government will come to our aid quickly if we're hit. 

But surely we can do better than mere hope. I think we can.

The solution, as usual, begins with better information. In particular, we need a sharper understanding of what properties are vulnerable, so owners are fully aware of the risk and can take steps to make the properties more resilient or, at the least, buy adequate insurance. At the moment, a reliance on measures such as the 100-year flood plain for evaluating the likelihood of flooding are far too crude and inaccurate. As noted in the article, "The Top 5 Risks in Specialty Insurance," thousands of properties have been classified as having low-threat status in Florida's Broward County even though it is right on the coast.

Much more detail on property exposures is now possible through digital tools. Elevation is one factor—new tools make it easier figure out how much above sea level each property is, and account for that information when measuring vulnerability, rather than treat thousands of properties as being in the same plain. Our friend Nick Lamparelli of reThought Insurance told me in a recent podcast that it's now possible for insurers to drill down and evaluate a building based on what floor expensive equipment like computer servers are on or even where that equipment is located on a given floor—providing a more accurate view as to whether it's somewhere vulnerable to wind and flooding, or not. 

It's high time we started using such digital tools to get more accurate and detailed risk information.

The adjustment will take time, of course. It will also take discipline. Many clients with cat-exposed property will see rates soar and will resist more accurate risk-adjusted pricing. But the better information needs to find its way into the market to force change.

Other types of technology can also help by hardening properties. One of the revelations to me from the wildfire season in California last year was how a relatively modest investment in building materials can make such a big difference—the fires move so fast that an exterior that withstands a couple of minutes of frightful heat might keep the structure standing, with the insides intact.

While hurricanes are similarly destructive, some materials innovation can mitigate risk. Guy Fraker, our chief innovation officer, talks about windows and drywall designed to withstand debris thrown at them by hurricane-force winds. (Guy's home in the Florida keys was in the eye of Hurricane Irma in 2017 and came through in good shape, though many neighbors were less fortunate.) More mundane approaches involve building homes with living space starting on the second floor, to minimize damage from flooding, and to strengthen the attachment of the house to the foundation and the roof to the house, given the tendency of hurricane-force winds to try to lift a house, or at least the roof.

If we don't change something about our approach to hurricanes, we taxpayers can expect to continue to shell out disaster relief packages on the order of the $19.1 billion that was just allocated by the federal government, largely to help areas hit by hurricanes Harvey, Irma and Maria in 2017. We'll always be subject to the caprices of Mother Nature, and some years we'll skate by with little or no damage, but hope is not a strategy, especially when a far better one is available.

Cheers,

Paul Carroll
Editor-in-Chief

It’s a startling statistic: Due to the massive amount of consumer and corporate data stored across the country, more than half of all data breaches globally are expected to occur in the U.S. by 2023. Although most people assume hackers are only interested in large data breaches, like the one experienced by Equifax in 2017 or Marriott International last year, it’s small businesses that find themselves at a greater risk. In fact, a recent report by Small Business Trends stated that 43% of cyber attacks target small businesses. That number will only continue to grow as cyber hackers develop increasingly sophisticated methods of threatening and stealing sensitive information. Small businesses can also suffer from lost data, unsecured devices and attacks stemming from covert phishing emails. Below are seven simple measures you can put in place to protect your small business this year: 1. Back up your data Over 140,000 hard drives fail in the U.S. each week, and 29% of those failures are caused by accident. Losing data can devastate a small business. Finding a secure way to back up your data is a necessity in today’s fast-paced, competitive business landscape. If you store company data in the cloud, back it up on a physical, on-premise drive to ensure data remains secure and a plan B is available. 2. Update and strengthen passwords The standard eight-character password can be cracked in 15 minutes. That time continuously decreases as brute force hacking bulldozes its way through identifying words, phrases and character password combinations. It’s important to make sure all passwords are 12 to 15 characters and use a combination of upper and lowercase letters, numbers and special characters that can slow down or derail a hacker. A password manager can also be employed to help ensure passwords at each access site contain a different, complex sequence of letters, numbers and special characters. Consistently updating passwords and requiring unique passwords for various devices will help maintain company security. See also: Taking Care of Small-Medium Business   3. Take cybersecurity training courses 97% of people are unable to identify a sophisticated phishing email. Phishing scams cost American businesses $500 million each year, and that number continues to rise, with over 400,000 more phishing attacks occurring in 2016 than the year prior. Data breaches also allow phishers to obtain specific information on a target through information uncovered during a breach and then use that information to appear credible. One way to combat this disturbing trend is to train your staff on how to identify malicious emails. 4. Implement a clean desk policy Unattended computers or documents cause 47% of all data breaches. As a result, many small and large businesses have begun implementing a clean desk policy, requiring employees to clear their desks of all papers and completely shut down their computers at the end of the day, to help ensure proper security of sensitive information. 5. Get cyber insurance On average, it takes 191 days for a business to even realize it has suffered a data breach and 66 days to contain a breach. Cyber insurance can provide critical coverage for any destruction including data lost through theft, cyber attacks, cyber crime, malfeasance or employee error. Cyber insurance companies can provide guidance in the days or months after a data breach, data recovery and forensics, ransom payments, public relations and credit monitoring for those affected by the breach. Having a defense plan in the form of cyber insurance protects your business, reputation and customers. 6. Create a plan 54% of SMBs have no contingency plan for handling a data breach. Not having a plan can make it exceptionally difficult to recover when your business is under attack. By creating a plan that clearly lays out the steps you and your employees should take after a data breach occurs, you can help mitigate the potential damages and losses and quickly begin the road to recovery. 7. Manage all BYODs 87% of companies allow Bring Your Own Device (BYOD). While the concept is admittedly an essential part of maintaining connectivity and handling after-hours tasks, the unfortunate reality is BYOD exposes your business to threats. By tracking all instances of BYOD with a mobile device management system, requiring all devices to be password-protected and developing a written security device policy, however, threats to these devices can be diminished. See also: Cyber Attacks Shift to Small Businesses   Taking these small steps to securing your growing business, and constantly revisiting and revising your cybersecurity plan, are some of the best ways to protect your investments and prevent the likelihood your business will suffer from malicious hackers trying to profit off your data. Prioritize these essential cybersecurity best practices above all else, because the safety of your business, employees and customers truly depends on it.

The information revolution has done more than just provide consumers with access to information; it has created a paradigm shift in the way most professionals conduct business with their clients. Insurance agents and brokers today are not only expected to be a trusted adviser of holistic risk management solutions to meet their clients’ complex needs but also a navigator into their financially stable future. To better understand how consumers are engaged in today’s digital economy, Chubb recently surveyed some 1,200 individuals on how they purchase insurance and the value they see in working with independent agents and brokers. The Chubb survey, “Winning the New Client Journey,” finds that 53% of consumers have shopped online for insurance in the past 12 months and 61% are likely to do so in the future. In addition, successful individuals and families are the most likely to browse home insurance offerings online, with 63% of such individuals and 73% of such families reporting that they have or plan to do so – the most of any income groups. Online shopping is a very attractive option for consumers. It’s convenient. It’s easy. It’s anonymous. It also presents people with an array of generalized solutions offered at seemingly inexpensive prices. The reality, however, is that these offers and their upfront savings may not address the very real needs of the buyer. The information revolution may have armed clients with increased access but not always with the ability to translate price and item information into useful knowledge. The survey also showed that, despite the fact consumers are conducting online research for homeowners insurance, 80% of respondents actually want their agents and brokers to prioritize getting the right insurance policies for protection over getting the lowest price. While the initial question posed by clients might be on price, they are presenting agents/brokers with an opportunity to better help them understand and differentiate the underlying value of products and how these relate to their specific needs. High Touch Improves High Tech and Client Retention Chubb’s survey found that 35% of consumers cited saving time as the top reason for purchasing insurance online. High tech may appear to be a time saver, but it will never replace high touch and the long-term relationship the agents and brokers share with their clients. The basis of a healthy agent-broker/client relationship lies in the following three attributes:

1. The ability to provide clients with guidance rooted in an understanding of their life situation;
2. The ability to differentiate between the fine print of product offerings; and,
3. The ability to think beyond the obvious of how today’s seemingly innocent purchase will affect tomorrow’s complex needs.

Financially successful clients may easily overlook significant property and casualty (P&C) risks during that initial, and seemingly innocuous, online search. An agent or broker’s ability to successfully guide a client from online information gatherer to informed decision maker is a key factor in any business development and retention plan. See also: Insurtech Ingredients? We Just Want Cake   Demonstrating Your Value and Providing Customized Solutions Chubb’s survey also revealed that 54% of successful clients said that agents and brokers actually lose credibility when they lead the conversation with the lowest-cost option. Although clients may initiate a conversation about their price and product search information found online, they reach out to agents and brokers with an opportunity to be a trusted adviser. It’s an invitation to be their counselors and crafters of customized solutions that will help their clients address some of life’s most challenging needs and circumstances. In addition, the underlying value in the agent/broker-client / relationship begins weeks and months before the client calls about the latest insurance information found during an online search. To help retain clients, here are a few basic questions every agent and broker should ask:

• Did I respond in a timely manner during a claim experience or request for a quote on a new policy?
• When my client called about the addition to the house or installation of a pool, did I extend the conversation so the client better understood all the property and liability insurance implications of those additions?

When agents and brokers demonstrate that they anticipate and understand their clients’ broader needs, they will have an opportunity to present bigger solutions. Agents and brokers should work with their clients to build a complete profile of their clients’ risk exposures and stress that one-size-fits-all insurance policies are insufficient for seemingly innocent household decisions, such as the installation of a pool. Clients will assign increased value to the agent-broker relationship, and price will be less of a factor, when you present well-thought-out and customized solutions. Enhancing the Value of Agents and Brokers to Clients Life-changing circumstances and events can be challenging not only for clients, but also for agents and brokers. To help agents and brokers during their clients’ changing purchasing journeys, Chubb has developed a new resource center that includes quick informational videos, resources, tactics that both agents and brokers can download and put to immediate use. Agents and brokers can access that resource at: www.chubb.com/winthejourney. See also: Strategies to Combat Barriers to Insurtech   The information revolution may have equipped clients with increased access to information, but agents and brokers have the insights and knowledge to enhance the value of that information and protect the long-term interest and assets of their clients.

Of all the software sold within the insurance industry, core systems continue to be the dominant purchase for hundreds of insurers. And just when you think the trend might slow – that every last insurer has bought the system that it will need to support its business – we see another cycle of buying begin. 2016 was a low point in core systems buying, with the lowest number of policy, billing and claims systems purchased in several years. Questions started to arise. Was the market finally saturated? Were these needs now filled? Would insurers start to move on to other projects? As of this writing – and from looking at the insurer and MGA buying trends over the past two years – we see that this could not be further from the truth. Buying has been on the upswing since 2016, increasing by 13% in 2017 and 11% in 2018. And I have been asked a myriad of questions: What is hot? What is not? Are more suites being purchased than components? Or are we entering a new era of component buying? What lines of business are insurers looking to support with core systems? Will insurers really buy systems that are operating in a cloud environment? See also: Security for Core Systems in the Cloud   At the same time these questions crop up, we see an industry that has embraced the transformation journey. Many are looking to change their business models, create products that respond to new and changing risks and transform their organizations for the workforce of the future. As insurers look at their business needs and the technology that is required to support these needs, they find themselves looking at aging systems – not constructed for the technology era in which we now operate. The fact is that we are living in changing times. The technology that supported us through the Y2K world is not necessarily the software that will sustain us in a world where transformational technologies such as AI, serverless computing, microservices and APIs are becoming more and more prevalent – and where software that operates in the cloud is a mandate. This new era of computing is making its impact throughout the insurance ecosystem. All must respond – insurers and vendors alike. As we look at our latest research report, P&C Core System Purchasing Trends: Foundational Technology to Fuel the Transformation Journey, we see an industry in the beginning phases of the change. See also: 6 Pitfalls to Avoid With Core Systems   A few years ago, I wrote a blog at the beginning of the baseball season. I said that I believed we were in the seventh inning of a ball game. But we were already getting the idea that maybe there was a new game starting. From the trends we are observing today, we believe that a new game has begun, and we are just in the early innings. The new digital era we are living in, with the capabilities provided through the new era of computing, has changed the game. So, ask yourselves: Which game are you in? What systems are you buying to support it? Are they from the game that is just finishing? Or are they solutions that will support you in the new digital game that is beginning?

To help brokers better understand the current risks in specialty insurance and assist their clients, our team at Aon Programs, which serves independent insurance brokers across the U.S. with access to a portfolio of hundreds of specialized insurance programs, identified the top five areas of risk to watch out for. ********** Flood Risk: Apathy Too many property owners today are blissfully ignorant to the flood risk they face. Even after the 2017 season, which saw Hurricanes Harvey, Irma and Marie cause billions of dollars of damage to the Southeastern seaboard, the public still struggles to see the value of flood insurance. During a 30-year mortgage, a property owner is 27 times more likely to experience a flood than a fire, yet only 20% of the damage caused by Harvey was insured by flood insurance. Conversely, 90% of damage caused by the 2017 wildfires in northern California was covered by fire insurance. After a hurricane season, people tend to think, “It was bad, but we’ll get past this. It won’t happen again.” This is the root of the struggle people have with flood insurance. They get comfortable, and they don’t think ahead, especially while the sun is shining. Take Florida. While the Sunshine State has a higher ratio of property owners carrying flood insurance than the rest of the nation, inland cities such as Orlando have lower ratios of insured property owners. Most of these homes are outside the 100-year flood plain, and homeowners aren’t required by their mortgage company to buy flood insurance. FEMA is remapping flood zones in much of the country. For example, Broward County is a coastal area, yet thousands of properties have been moved from A to X-zone, which sends the message that homeowners don’t need flood insurance. Brokers will play a critical role in advising clients to retain coverage. See also: Protecting Airports From Flood Risk   Fine Art Risk: Catastrophes Coupled with the onslaught of wind and flood damage associated with hurricanes Harvey, Irma and Maria, the catastrophic Californian wildfires and mudslides in 2017 were truly alarming from both a personal and insurance industry perspective. In the past, there would be a lull between events, as was the case between Katrina in 2005 and Sandy in 2012. Now, weather-related severity and frequency dynamics are increasing as we face multiple, successive catastrophes in a single year. Generally, when something gets wet or blown over it can be conserved. But, when it’s incinerated there’s no possibility of restoration, as was the case with the wildfires in California. Many homes, including those in luxurious neighborhoods, were burned to the ground, and the damage caused to art collections was devastating. For instance, one prominent private collector had his home completely burn to the ground. Nearly $10 million worth of artwork went up in smoke. For that particular family the loss was as emotional as much as it was physical – sadly, for the country, an important part of our collective cultural fabric was lost. Meanwhile, we had another prominent collector with a waterfront home in Palm Beach that experienced hundreds of thousands of dollars of damage from Irma. Given the massive aggregation of wealth in that county, the insurance industry is fortunate that the hurricane tracked west. Most individuals chose not to carry standalone flood insurance. Fortunately, specialty fine art insurance policies typically do not exclude the peril of flood, so it’s definitely in the financial interest of wealthy individuals with art collections to obtain this essential protection, particularly because homeowners’ policies exclude flood coverage. Home Health Risk: Malpractice With the aging of the baby boomer generation has come rapid growth in the home healthcare market. People today do not want to live in nursing homes. They prefer to remain in their residence, where they’re more comfortable living independently and costs are lower. To meet this demand, home healthcare agencies provide skilled and unskilled services. In addition to nursing care, they provide non-medical custodial care with home health aides and companions who support activities of daily living including: cooking, cleaning and assistance driving patients to appointments. Unfortunately, with the high number of residents needing home healthcare, these agencies are having a hard time keeping up with the demand. With the overburdening of home care agencies comes malpractice claims. Recently a home health aide took an elderly client shopping— and lost her in the mall. The woman was found the next day outside, having died from exposure to the elements. The result was a malpractice lawsuit that settled close to policy limits. Common malpractice claims involve helping patients with the support of daily activities, like bathing. Lifting patients adds to the exposure. Brokers should be aware of their home health clients’ exposures, including professional liability and hired/non-owned auto to ensure they have the proper coverage in place. Special Events Risk: Bodily Injury Special events cover a wide variety of potential exposures, from a one-day fair at a local church to a week-long art festival at a university, to a musical concert that travels across the country for a year. The venues for each will require your client to provide a certificate of insurance showing general liability coverage. One of the most common bodily claims we see arises from the use of golf carts. Organizers will use golf carts to run entertainers or staff members from spot to spot on the event grounds. Recently, we settled a claim that exceeded $500,000 at a large fairground where an employee who was headed to the parking lot offered an elderly woman a ride. He made a sharp turn, causing the woman to fall from the cart and suffer a head injury. If someone were to walk into your office with a special event, you might be intimidated when looking at the venue contracts, especially if the event involves fireworks or liquor liability. Nonprofit Risk: Cybercrime Notification Cyber is a top concern for organizations in a multitude of industries, including nonprofits. It is imperative that nonprofits be aware of their own specific cyber situation, especially any geographic-specific legislation with which they need to comply. For example, a primary concern in Florida is the privacy data breach statute, known as the Florida Information Protection Act. The provisions of the law are not very well known in the insurance community, particularly when insuring community associations. See also: Don’t Risk a Lot for a Little   Here are the primary provisions of the statute:

• Any commercial or governmental entity that stores personal information is subject to the law
• The entity is responsible for taking reasonable measures to protect the data in its care, such as names, email addresses and Social Security numbers
• Persons affected by a breach must be notified within 30 days from the time it is discovered
• Violations are subject to a $1,000-a-day fine up to 30 days, and $50,000 fine for each subsequent 30-day period, not to exceed $500,000

Most cyber liability policies will provide some assistance complying with Florida’s notification requirements. The challenge is that there is no standardization within the industry. Many liability policies offer as little as a $25,000 or $50,000 cyber sublimit. It is important for brokers to make sure their client is receiving coverage for first-party and third-party claims. The IHG D&O policy for community associations provides coverage up to the full limits of the policy for third-party liability claims and $100,000 for first-party expenses such as notification costs. ********** Staying abreast of emerging risks in the specialty insurance marketplace can help brokers recommend the appropriate coverage to their clients, and minimize their chances of experiencing an errors and omissions claim.