Awareness is the best insurance policy. It saves costs by saving lives. It is as important to the fate of the insurance industry as it is to fate of the entire nation. The awareness I refer to comes from recognizing the risks we face and the ways we can solve them, starting with the one thing that is both portable and invaluable: education. The more educated a person is, in terms of his or her ability to perform a life-saving procedure such as CPR, the safer everyone will be. Put another way, the education of one translates into economic rewards for many—from fewer hospitalizations and lower medical fees to more affordable health insurance and better options in general. Or: Sometimes, the most practical skills are the most profitable. CPR is such a skill, which not only save lives but strengthens communities. For those communities most in need of help, where first responders are too far away to be the first ones on the scene, the person who knows CPR is the man or woman who can save a life. Compare that scenario with the alternative, where an ambulance belatedly arrives and the patient hovers between life and death. Picture that patient in a hospital, unable to breathe without a ventilator and unresponsive to the simplest gestures. Whether that patient is rich or poor is no matter, not when the richness of life itself vanishes and medical bills are a matter for insurers to pay or to decline to cover altogether. If insurers want to avoid that scenario, they should invest in what works. They should support organizations whose mission is to save lives by teaching life-saving techniques. See also: A Road Map for Health Insurance   According to Mackenzie Thompson of National Health Care Provider Solutions (NHCPS): “Interest in learning how to perform CPR is a global initiative. From Africa to the Americas, every village or township needs to be empowered with life-saving knowledge. In fact, more people from the U.S. access our online certification courses on CPR than any other nation. If saving lives saves insurers money, all the better.” I agree with that statement, as it is neither too complex to achieve nor too controversial to accomplish. In other words, teaching CPR does not involve creating or maintaining huge bureaucracies. It does not involve legislation that divides the public or strains people’s finances. It does not take too much time to practice or too many practitioners to attract supporters. Do not underestimate, also, the power of goodwill. Which is to say the insurance industry has everything to gain—and nothing to lose—by popularizing what is good for its beneficiaries and a benefit to itself: life. The healthier people are, the less costly it is (or should be) to insure them. The happier they will then be, too, because they are alive and well. If insurers want to see the ROI on CPR, they should look to the individuals who owe their lives to this procedure. They should look to promote CPR in every county, city and state. They should look at themselves as champions of change.

Workplace violence is a daily threat to workers in many industries. Aside from mass shootings, which grab headlines, more than 2 million workers are victims of violence every year. The issue is a challenge for employers striving to maintain a safe working environment for their employees. By understanding the scope of the problem, the underlying reasons for violence and the types of violence that threaten specific industries and workplaces, organizations can make a significant impact on reducing incidents against their workers. During a recent “Out Front Ideas with Kimberly and Mark” webinar, we had two prominent experts join us to discuss this very challenging issue:

• Bub Durand, practice leader of medical group support services for Kaiser Permanente’s Northern California region
• George Vergolias, PsyD, vice president and medical director for R3 Continuum

Scope of the Problem OSHA defines violence as any act or threat of physical violence, harassment, intimidation or other threatening disruptive behavior that occurs at the work site. That includes everything from threats and verbal abuse to physical assaults and even homicide. Many employers, however, are wary of even discussing the issue out of concern that people will view their particular companies as being overly violent. In fact, several potential speakers in retail and other industries we approached to join our panel declined for this very reason. Despite their reluctance, we know that the workplace has increasingly become the site of violence, especially in certain industries. Healthcare Healthcare is the industry that generates more attention than any other with regard to violence – and with good reason. The most recent government statistics show there are 7.8 cases of serious violence per 10,000 employees, which far exceeds any other industry, and that number is likely much lower than the reality. Many healthcare facilities, especially in high-risk areas such as emergency departments and Level I trauma centers, are routinely the sites of violent outbursts. Patients or their families attack providers all too frequently. Many of these workers have come to believe violence is just part of the job. Unfortunately, those in a position to change this often foster that culture. We may soon see an increase in the numbers of incidents reported, due to mandates for increased reporting, especially in California. Schools Mass shootings at schools have been getting lots of attention. However, not talked about is the fact that schools are increasingly the site of daily violence or threats by students against teachers and staff. For example, one of the nation’s largest school districts reported a 10% increase in violence-related claims in the past five years. With incurred losses of $19 million, these claims represented 15% of the total and 12% of the system’s incurred losses. The numbers do not include many of the threats and harassment incidents, which often go unreported. One reason for the increased number of violent incidents reported in schools may be the increased awareness of the issue and the potential for remedies, both legal and administrative. Another is the implementation of zero-tolerance policies that require or strongly recommend reporting. One more is the increase in kids acting on their emotions, more so than they did in past years. Overall, workplaces have seen an uptick in homicide rates in recent years, even though the rate in the general population has decreased. Some experts speculate that may be due to increased stresses facing workers, such as financial pressures. Social media may play a role in increased violence in the workplace, because it seems to empower some people to act in ways they normally would not. This sometimes spills over into real-world, face-to-face situations. On a positive note, efforts to reduce violence in the workplace are paying off. While homicides among government employees increased 30% between 2003 and 2013, the rate decreased 30% in the private sector. See also: Broader Approach to Workplace Violence   Types of Violence Developing violence-prevention programs requires knowing the type(s) of violence to determine the best approach. For example, gender may be part of the equation. Men are more likely to be killed at work during robberies, especially in retail establishments, while women are more likely to be victims of domestic violence. Domestic violence is one category that is often not adequately addressed in the workplace. Many employers believe that, because the potential perpetrator is not an employee, he is not a threat to the workplace. Statistically, it is a very real problem that should be considered and included in violence prevention plans. In fact, violence can be initiated internally or externally. It may be started by an employee within the company, or externally by a customer, former employee, vendor or someone connected with an employee. There are also emotional vs. predatory incidents of violence. Knowing what drives each incident category is important to help prevent it.

• Emotional violence generally occurs as a reaction to a threat or fear. An example would be two boys ready to duke it out in school. Neither actually wants to fight, but they also do not want to be humiliated, so they pretend they are ready. Diffusing this situation can be done by intervening and stopping both of them equally.
• Predatory violence involves forethought, rather than being reactionary. A sniper is an example of predatory violence. Preventing these situations is much more complex.

Temporary States vs. Emotional Traits Some attacks occur because the person is temporarily in a highly emotional state. It could be an emotional reaction, a psychotic episode or a drug-induced state. A permanent trait, on the other hand, means the person has a personality factor that is driving him to act in a demeaning or abusive manner. Those traits are more consistent and predictable over time. An example of someone in a temporary state would be a father who has just been told his wife was killed and his child is in surgery following an auto accident, and he speaks very little English. His inability to fully communicate, and his efforts to see his son in the emergency room, could easily lead to a violent outburst. Security personnel might be inclined to handcuff the man, per protocol. However, such a situation can be diffused by understanding why he is acting the way he is and getting a language interpreter to speak with him calmly. It is important to understand the context of the violence and not assign permanent traits to someone who is only in a temporary state. That can sometimes be tricky, especially if a zero-tolerance policy is in effect and mandates that security personnel handcuff any violent perpetrator. If someone is acting out in hostility, especially if it is atypical behavior for that person, asking questions can help prevent an incident. This can be especially effective in the case of students at school; pulling the person aside to find out what is driving his actions is often effective. Assessing the Risk There are many ways to determine the types and levels of risk to an organization.

• Traditional assessment. One approach includes a traditional security risk assessment of the grounds, the physical security environment and the security practices and policies, using specific metrics and historical performance of law enforcement and risks in the local community as factors.
• High-risk area assessment. As Bob explained, a new California law addressing workplace violence in healthcare has led Kaiser Permanente to conduct additional assessments of its facilities. One involves looking at high-risk areas, such as emergency rooms. The type of risks present there could include family members worried about patients who have been brought in, or patients left waiting because their injuries are not life-threatening, and they become impatient and agitated. These assessments look at the safety and physical security practices along with engineering controls.
• Administrative and workplace controls. These focus on ways to distinguish employees from visitors. Kaiser Permanente, for example, requires workers to wear ID security badges from the waist up.
• Employees’ knowledge. Part of assessing risk is to determine whether staff members know what to do at the first sign of a threat; do they know the security code to call, and what to expect as a response? Employees also are assessed to make sure they understand they may sometimes have to call in outside law enforcement and must know how to do that.
• Physical layouts. A patient who presents a danger to himself and is brought in involuntarily needs to be placed in a safe room. The assessment would look for any dangerous objects in the area the person could use to injure himself. Staff members are quizzed to ensure they understand what needs to be removed from such an area.
• Remote worker assessment. Many healthcare or hospice workers go to an offsite home or other location. Because the risks are often unknown in those environments, employees need to understand what to do. For example, the worker could ask whether there are any firearms in the home.

It is also important to assess both safety and security because they are different. Security would include a door in a particular location of the facility that serves as an exit, that visitors cannot enter. However, a worker who props the door open, even briefly, defeats the purpose. Employers need to promote a culture of safety within their organizations, as well enhancing security. See also: New Idea for Active Shooter Incidents   Training The best workplace violence policies mean nothing if people are not trained on them. Employees need to clearly understand what to do in a given situation. Training should be conducted at least annually and with any new hires, and employees should be given competence testing regularly. Staff members need to be clear on the expectations of security personnel or they increase their own risk of becoming victims of violence. Proper training also improves legal defensibility. An important point to emphasize in training is to examine the threats to each particular work site and each specific area of a work site. While the same policy may apply, there may be different priorities depending on the risks and the employees. A one-size-fits-all approach should be avoided. It is also important for the trainer to understand what the policy says before starting the training. A zero-tolerance policy is different from others. Unfortunately, some companies seek training before a policy is fully developed. In addition to training staff on policies, management must adhere to it. Otherwise, they risk creating a toxic work environment if someone reports a concern that is ignored. The trainer needs an adequate amount of time to perform effective training. It is imperative to make sure employees fully understand the policies and procedures. Threat Responses There are a variety of ways for employees to mitigate violent threats in the workplace:

• Be aware. Being aware of the surroundings, how the worker is feeling and how the other person is feeling is important. The other person is likely feeling agitated, so the worker must be able to stay composed.
• Understand/do not judge. Where possible, engaging the person can prevent a violent incident. Workers can try to find something they like or have in common with the person.
• Explain the consequences and alternatives. Angry people are not thinking clearly. Nor are they thinking about how actions will affect their lives or families. Calmly explaining the ramifications can help.
• Change the tone of voice. Speaking calmly to an agitated person may help reduce his anxiety.
• Avoid provoking. Telling the person to “just calm down” could make him more angry.

The goal is to help redirect the person so he slows down and begins to think more clearly.

The long-awaited decision by the California Supreme Court in King v. CompPartners (2018) S232197 is finally out. In it, the court unanimously held, through a majority and two concurring opinions, that a claim for malpractice against a utilization review (UR) physician for injuries arising from a review decision for the treatment of a compensable injury could not be maintained under the workers’ compensation system and is barred by exclusive remedy. The case will be extensively analyzed by all participants in the workers’ compensation system. This will include parsing of various comments in the two concurring opinions regarding whether the UR process is performing up to expectations. As noted by Associate Justice Goodwin Liu in his concurring opinion, “The legislature may wish to examine whether the existing safeguards provide sufficient incentives for competent and careful utilization review.” The other concurring opinion, by Associate Justice Mariano-Florentino Cuéllar, stated, “Even now, those safeguards and remedies may not be set at optimal levels, and the legislature may find it makes sense to change them.” It is difficult to find a point in time where a thorough analysis of the system is contemporaneous with the judicial review of it. Such is the case here. The utilization review events that caused this case to be brought occurred in 2013. Given that this case was dealing with a review of prescription drugs, it is important to note that “safeguards and remedies” now include the Medical Treatment Utilization Schedule Formulary. As stated in the formulary, “ For injuries occurring prior to Jan. 1, 2018, the MTUS Drug Formulary should be phased in to ensure that injured workers who are receiving drug treatment are not harmed by an abrupt change to the course of treatment. The physician is responsible for requesting a medically appropriate and safe course of treatment for the injured worker in accordance with the MTUS, which may include use of a non-exempt drug or unlisted drug, where that is necessary for the injured worker’s condition or necessary for safe weaning, tapering or transition to a different drug.” [8 CCR 9792.27.3(b)(1)] See also: Where the Oklahoma Court Went Wrong   This particular regulation also states, “Previously approved drug treatment shall not be terminated or denied except as may be allowed by the MTUS and in accordance with applicable utilization review and independent medical review regulations.” [8 CCR 9792.27.3(b)(4)] In addition, Senate Bill 1160 (Mendoza) requires UR processes to be accredited by July 1, 2018. The accrediting agency is URAC, although the Division of Workers’ Compensation has the authority to add requirements for certification. The purpose of accreditation is to have an independent, nonprofit entity “…certify that the utilization review process meets specified criteria, including, but not limited to, timeliness in issuing a utilization review decision, the scope of medical material used in issuing a utilization review decision, peer-to-peer consultation, internal appeal procedure and requiring a policy preventing financial incentives to doctors and other providers based on the utilization review decision.” [Labor Code Sec. 4610(g)(4)] Much has happened to the system that was under review by the court in King. To improve on this progress, we need to understand what has been done already to provide more safeguards and remedies for injured workers while being faithful to the “grand bargain” that is workers’ compensation. This cannot be done by turning back the clock.

I'll be quick this week because I'm a bit out of touch and more than a little tired, having spent the past three days driving my younger daughter's household goods from home in Northern California to Washington, DC, where she just started law school and moved into an apartment. (Sunday was the big day—1,250 miles—for those keeping score at home.)

I could tell you a lot about the history of Rome, having spent almost the entire trip listening to a podcast on the subject. Instead, I'll point you to two articles that surfaced last week and that underscore themes that I believe are crucial.

The first article, on "business process elimination" (as opposed to business process outsourcing), reminds me of a line from my old friend and colleague, Gordon Bell, who developed the first minicomputer back in the 1970s. He said that "the most reliable part of a computer is the one you leave out." Peter Drucker stated the principle more generally and famously when he said, "There is nothing so useless as doing efficiently that which should not be done at all."

We in insurance need to keep that principle in mind as we use technology to become more efficient. There are many things we should simply stop doing. No amount of effort should be spent on using fax machines more efficiently, for instance. They, and many other insurance anachronisms, need to just disappear.

The second article is a dramatic story about a drone saving a woman who was drowning 230 feet offshore in Spain. It would have been tough for a lifeguard to fight through the surf and reach her in time—but a drone got there. It dropped a life vest that inflated on impact, and she managed to grab hold and save herself. The drone kept watch on the woman and some friends, who were also struggling, until the lifeguards could get there.

That sort of story is worth keeping an eye on because, while a lot of the focus thus far for drones has been on their use in assessing damage following home fires or natural disasters, drones can also prevent a lot of injuries and deaths. The International Association of Certified Home Inspectors, for instance, reports that 164,000 inspectors fall off ladders just in the U.S. each year, and that 300 die. Imagine how many injuries and deaths can be prevented as drones replace ladders.

Then imagine all the other things that we as an industry can use technology to do if we move our focus past paying people after bad things happen and work to prevent those bad things from ever happening.

Have a great week.

Paul Carroll
Editor-in-Chief

Insurance companies with legacy systems can find it extremely challenging to bring their data together because of different data formats and system access methods. They might have multiple sources of content with similar information for customers, claims, agents, books of business — information that, like in most organizations, was acquired over time or resulted from a merger. They might have mainframes and relational systems, and then they bring in third-party data. Add the fact that the insurance agency is invested in digital transformation, and you realize that the insurer’s relationship with the customer is changing. The relationship with the customer used to be managed by the agents. Now, there’s a desire to manage customers more directly by the actual insurers and bring in that data. The complexity of the underlying data sources and the data they want to bring together makes this difficult. The challenge is trying to move all the data into some sort of central, unified location, but insurers are not able to do it at the scale that they would like. There are many attributes related to customers and policies and claims. So, instead of bringing all that data together and asking all the questions that insurers would like to ask, they cherry pick three or four. They spend a lot of time writing extract, transform and load programs, as well as other data processing pipelines, to move data from the source systems into some sort of target schema. So, the day to day is a lot of gnarling, churn, programming and data movement to answer a slimmer portion of the entire question set that companies would like to ask of the data. See also: Workplace Wearables: New Use of Big Data   Modeling Data to Detect Fraud When it comes to fraud indicators, there are many signs that can be identified by the relationships in the data. For example, on a policy application for insurance, there are phone numbers, addresses and the relationship to an agent or an organization who sold the policy to the individual. If someone gets a policy with one agent and then tries to get a similar policy with a different agent, the applicant could be shopping around for the best deal or the agent could be trying to give someone a policy he doesn't need. But relational databases typically aren’t good at highlighting these types of issues. In addition, while some things that are more easily modeled as a graph, the hierarchical data in insurance is typically put into rows and columns and tabular format. For example, in insurance, a book of business can belong to an organization or an agent, but an organization can have agents, which can have a book of business. It’s a recursive model. If you want to understand the relationships and examine some sort of policy tied to them, the analysis can get very complex. But when you put the data into a graph, where you have it modeled as entities and relationships, you can quickly pattern match to see who are the individuals and agents who have a relationship to a policy or application. A person should only have one type of relationship to a certain type of policy. When you compare and quickly visualize and see this person has two relationships to two policies that are similar, you can ask, “Why?” You can very quickly tease out that there is something there. If the pattern doesn’t match, the issue is quick and easy for you to identify. There is a similar scenario for agents. Agents can sell certain policies and not others. When you model the data as a graph, you can say this agent has an inappropriate relationship to a policy. A one-line, simple query can expose the agents who are engaging in this type of behavior. Also, when you have that visualization of their relationship to the policies they are and aren’t allowed to write, an actual physical pattern emerges of those relationships, where it gets easy to identify and spot who is up to nefarious or questionable activities. Using Data to Prevent Fraud There is a lot of complexity in these organizations and in how agents, customers and the insurers interact. If an insurance organization were going to start a modernization project around fraud investigation and fraud prevention, it should leverage the technology that allows it to quickly manage information as a graph. Property graphs are very adaptive; they are additive. Traditional data integration requires that you must understand all your sources and all the attributes before you begin. Then you come up with the schema to encapsulate all the data, and that’s what the proposition is. This encapsulation takes years, and no one ever hits the target because business sources and targets change. With graph technology, you can start to rapidly connect just the data you need as you need it and continue to append and add to those graphs to create a rich view of the data landscape. With a graph, you can start to tease out things and use the relationships where addresses, phone numbers and emails become things unto themselves related to a person, policy or a claim. See also: 5 Key Effects From AI and Data Science   The reason you want to do these types of things is because you can quickly start loading hundreds of thousands of policies and claims and applications into the system, and you can start to look at things like shared addresses, shared numbers and shared email addresses. Very quickly, you can start to see who is up to legitimate activity and who is up to illegitimate activity. There are indicators regarding things like a phone number. Fraudsters tend to use the same phone number for all fields of any policy applications. When you load these applications together and examine at scale, you’ll see in the data that no one else has a relationship to the phone number the fraudsters have used. But it’s common to see people share phones in a home or office when they’re not engaged in fraud. You can tease out those relationships, as well. Another example is address information. When you look at policy applications, the person’s address shouldn’t necessarily be the same as the employer’s address or the agent’s address. There is value in having the entities and relationships to model, so you can quickly identify who has the appropriate relationships to which entities. You can see if someone is even a policy holder, if the person has any relationship with the agent, if the person has the same address as the agent’s, etc. When you load all the data into the system, relationships allow you to quickly see the behaviors between the transactions. This is one of the key benefits of working with connected data.

The Internet of Things (IoT) is predicted to support more than 20 billion devices by 2020, according to Gartner. This is a market that covers 60% of consumers worldwide, creating huge opportunities for industries to connect and engage with their customers. Connecting with consumers hasn’t always been easy. Contact typically took place at points of sale, during claims and during renewal periods. Now, with the use of wearables, smart homes and telematics, insurers are connecting with customers on a continual basis and providing valuable feedback – and prices – based on activity levels. The business of insurance is complex, with core factors such as risk evaluation, long-term contracts and unpredictable settlements. However, the benefits of insurtech and the unlimited availability of new sources of data that can be exploited in real time have fundamentally altered how consumers interact with their insurance providers. IoT devices are helping consumers and insurers get smarter with each passing day as these technologies bring promising results in helping insurers reshape how they assess, price and limit risks and enhance customer experience. See also: Industry 4.0: What It Means for Insurance   Connectivity and Opportunities Numerous technologies have shown how improved connectivity can generate opportunities in the insurance industry beyond personalized premium rates. If implemented properly, IoT applications could possibly boost the industry’s customarily low growth rates. It may help insurers break free from traditional product marketing and competition primarily based on price to shift toward customer service and differentiation in coverage. Several technology trends that are increasing connectivity in insurance include: Extended Reality (XR) — XR technologies are altering the way consumers connect with society, information and each other. Extended reality is achieved through virtual reality (VR) and augmented reality (AR), which aim to “relocate” people in time and space. Eighty-five percent of insurance executives in Accenture’s Technology Vision 2018 survey believe it is important to leverage XR solutions to close the gap of physical distance when engaging with employees and customers. Wearable Sensors — Reports indicate that the average consumer now owns 3.6 wearable devices. These technologies can mitigate claims fraud and also transmit real-time data to warn the insured of possible dangers. For example, socks and shoes with IoT apps can alert diabetics on possible odd joint angles, foot ulcers and excessive pressure, thus helping in avoiding costly disability and medical claims and even worst-case scenarios such as life-changing amputations. Commercial Infrastructure and Smart Home Sensors — These sensors can be embedded in commercial and private buildings to help in monitoring, detecting and preventing or mitigating safety breaches such as toxic fumes, pipe leakage, fire, smoke and mold. This increases the possibility of saving insurers from large claims and homeowners from substantial inconveniences such as lost property or valuables. Savings can be passed to insureds who use these sensors. Usage-Based Insurance (UBI) Model — Cellular machine-to-machine (M2M) connectivity and telematics link drivers and automobiles in entirely new ways. Traditionally, auto insurance has relied on broad demographic features such as gender and the driver’s age, plus a credit score, to set premiums. Now, through IoT devices, insurers can not only offer reward-based premiums but can provide a connected car experience to customers with feedback on weather, traffic conditions or driving habits. See also: 3 Ways to an Easier Digital Transformation   Strategy will play an important role in connectivity as insurance carriers transform legacy core systems into digital platforms that support deeper connectivity with their customers. This strategy must address a carrier’s ability to handle, process and analyze the new types of data that will emerge from the use of these technologies. Artificial intelligence will also have a big impact. According to a recent study, 80% of insurance customers are happier and more content when they can connect with their insurance providers through various channels such as phone, emails, smartphone apps and online. Through the use of the IoT and connected devices, insurers will improve customer experience by shifting from reaction after an event has occurred to preventing losses digitally.

Silicon Valley exemplifies the saying, “The more things change, the more they stay the same.” Very little has changed over the past decade, with the Valley still mired in myth and stale stereotype. Ask any older entrepreneurs or women who have tried to get financing; they will tell you of the walls they keep hitting. Speak to VCs, and you will realize they still consider themselves kings and kingmakers. With China’s innovation centers nipping at the Valley’s heels, and with the innovation centers that Steve Case calls “the rest” on the rise, it is time to dispel some of Silicon Valley’s myths. Myth 1: Only the young can innovate The words of one Silicon Valley VC will stay with me always. He said: “People under 35 are the people who make change happen, and those over 45 basically die in terms of new ideas.” VCs are still looking for the next Mark Zuckerberg. The bias persists despite clear evidence that the stereotype is wrong. My research in 2008 documented that the average and median age of successful technology company founders in the U.S. is 40. And several subsequent studies have made the same findings. Twice as many of these founders are older than 50 as are younger than 25; twice as many are over 60 as are under 20. The older, experienced entrepreneurs have the greatest chances of success. Don’t forget that Marc Benioff was 35 when he founded Salesforce.com; Reid Hoffman 36 when he founded LinkedIn. Steve Jobs’s most significant innovations at Apple — the iMac, iTunes, iPod, iPhone and iPad — came after he was 45. Qualcomm was founded by Irwin Jacobs when he was 52 and by Andrew Viterbi when he was 50. The greatest entrepreneur today, transforming industries including transportation, energy and space, is Elon Musk; he is 47. See also: Innovation: ‘Where Do We Start?’   Myth 2: Entrepreneurs are born, not made There is a perennial debate about who can be an entrepreneur. Jason Calacanis proudly proclaimed that successful entrepreneurs come from entrepreneurial families and start off running lemonade stands as kids. Fred Wilson blogged about being shocked when a professor told him you could teach people to be entrepreneurs. “I’ve been working with entrepreneurs for almost 25 years now,” he wrote, “and it is ingrained in my mind that someone is either born an entrepreneur or is not.” Yet my teams at Duke and Harvard had documented that the majority, 52%, of Silicon Valley entrepreneurs were the first in their immediate families to start a business. Only a quarter of the sample we surveyed had caught the entrepreneurial bug when in college. Half hadn’t even thought about entrepreneurship even then. Mark Zuckerberg, Steve Jobs, Bill Gates, Jeff Bezos, Larry Page, Sergey Brin and Jan Koum didn’t come from entrepreneurial families. Their parents were dentists, academics, lawyers, factory workers or priests. Anyone can be an entrepreneur, especially in this era of exponentially advancing technologies, in which a knowledge of diverse technologies is the greatest asset. Myth 3: Higher education provides no advantage Thiel made headlines in 2011 with his announcement that he would pay teenagers $100,000 to quit college and start businesses. He made big claims about how these dropouts would solve the problems of the world. Yet his foundation failed in that mission and quietly refocused its efforts and objectives to providing education and networking. As Wired reported, “Most (Thiel fellows) are now older than 20, and some have even graduated college. Instead of supplying bright young minds with the space and tools to think for themselves, as Thiel had originally envisioned, the fellowship ended up providing something potentially more valuable. It has given its recipients the one thing they most lacked at their tender ages: a network.” This came as no surprise. Education and connections are essential to success. As our research at Duke and Harvard had shown, companies founded by college graduates have twice the sales and twice the employment of companies founded by others. What matters is that the entrepreneur complete a baseline of education; the field of education and ranking of the college don’t play a significant role in entrepreneurial success. Founder education reduces business-failure rates and increases profits, sales and employment. Myth 4: Women can’t succeed in tech Women-founded firms receive hardly any venture-capital investments, and women still face blatant discrimination in the technology field. Tech companies have promised to narrow the gap, but there has been insignificant progress. This is despite the fact that, according to 2017 Census Bureau data, women earn more than two-thirds of all master’s degrees, three-quarters of professional degrees and 80% of doctoral degrees. Not only do girls surpass boys on reading and writing in almost every U.S. school district, they often outdo boys in math — particularly in racially diverse districts. Earlier research by my team revealed there are also no real differences in success factors between men and women company founders: both sexes have exactly the same motivations, are of the same age when founding their startups, have similar levels of experience and equally enjoy the startup culture. Other research has shown that women actually have the advantage: that women-led companies are more capital-efficient, and venture-backed companies run by a woman have 12% higher revenues, than others. First Round Capital found that companies in its portfolio with a woman founder performed 63% better than did companies with entirely male founding teams. See also: Innovation — or Just Innovative Thinking?   Myth 5: Venture capital is a prerequisite for innovation Many would-be entrepreneurs believe they can’t start a company without VC funding. That reflected reality a few years ago, when capital costs for technology were in the millions of dollars. But it is no longer the case. A $500 laptop has more computing power today than a Cray 2 supercomputer, costing $17.5 million, did in 1985. For storage, back then, you needed server farms and racks of hard disks, which cost hundreds of thousands of dollars and required air-conditioned data centers. Today, one can use cloud computing and cloud storage, costing practically nothing. With the advances in robotics, artificial intelligence and 3D printing, the technologies are becoming cheaper, no longer requiring major capital outlays for their development. And if entrepreneurs develop new technologies that customers need or love, money will come to them, because venture capital always follows innovation. Venture capital has become less relevant than ever to startup founders.

It’s rough out there. In the world of marine insurance, syndicates are shutting down, losses are mounting and Lloyd’s is demanding turnaround plans for the worst-performing 10% of insurers’ business. According to Jim Mulrenan, a recently retired veteran of TradeWinds, from 2010 to the end of 2017 fewer than half of the 79 marine insurance syndicates were profitable. Over the past three years, just 16 out of 71 syndicates made money. Since June 2017, seven marine insurers have shut up shop. More may follow. For those that remain, though, we at Windward see a great opportunity that - if seized - could help marine insurers regain their collective mojos. Start with the syndicates that have left the building. They’ve reportedly trimmed marine underwriting capacity at Lloyd’s by $100 million, or about 5%. Fewer shops writing ships should lead to higher rates, as there would be less capacity. Swedish Club Managing Director Lars Rhodin says hull rates have already “bottomed out.” See also: Huge Opportunity in Today’s Uncertainty   The good news doesn’t end there. As ship owners find the insurer they’ve used for the best part of a decade is no longer around, they’ll be forced to take their business somewhere new. This poses a dilemma for insurers: On the one hand, they want the new business, as it should mean more profits; but on the other, they don’t know these “new” fleets and owners as intimately as their existing portfolio, and so they worry about taking on unknown risks. New business takes up the slack from renewals It’s an understandable concern and one that will likely grow as new business becomes a larger share of insurers’ portfolios versus renewals. We believe the best way to assuage these concerns is technology: Marine risk analytics bridges the gap in underwriters’ knowledge of new owners and fleets; it helps them efficiently evaluate potential new business and pounce on the risks they like. With budgets strained, chief underwriting officers and heads of marine are right to keep a firm grip on the purse strings, even in anticipation of higher profits. Investing in technology always throws up questions - will it work (yes, it’s already working), will we get a return on investment (yes, it’s already delivering value), will our team be able to work with it (yes, it’s intuitive) or will they worry about losing their jobs (they shouldn’t; they’ll now have a competitive edge)? See also: Insurtech Is Ignoring 2/3 of Opportunity   Ultimately, the marine insurers that survive and thrive will be those whose leaders seize the opportunities that technology can bring. We strongly believe that the time to act is now. Because if it’s not, it may be never.

I did a Google search on the number of project management methodologies that exist currently, and I kept getting results like "9 methodologies made simple" and "15 methodologies you must know." In the world of "methodologies galore" such as Waterfall, Agile, Six Sigma, Lean, Lean Startup, Kanban, etc., etc., with each body of knowledge or pundit preaching that they are the best and most effective, how might one "declutter" the jargon and really apply effective project management for their initiatives? As insurtechs, we also need to take into consideration client methodologies and what is being used in their organizations. Here are three key principles that I've applied to my nearly one-plus decade of project management, whether I’ve implemented Scrum, Lean, etc.: Keep It Simple: Don't overcomplicate your project management process. Simplicity is the ultimate sophistication. I have seen slides from companies talking about their project management approach that make me go take a Tylenol. Project management is not about methodology, process or tooling (they are essential -- don't get me wrong). The focus is about people and communication. Keep It Nimble: At Benekiva, how we manage internal projects and our road map is different than implementing a client engagement. We are nimble to adapt based on clients' feedback. If they want status reports, they are getting them. If they want an Excel output, they get it. Keep It Short: This relates to how we schedule iterations/sprints and work effort. Keeping them short allows us to respond to any change or "aha" moments effectively with minimal impacts. Keeping it short also eliminates procrastination, where things get pushed to the last minute. See also: How to Improve ‘Model Risk Management’   Applying these three principles to your project management practice will allow your company to do enough project management while giving you more time to communicate to your stakeholders and adding value where it needs to be added.

It’s no secret that the insurance industry is going through an exciting time of innovation, growth, and transformation. This certainly poses risks for insurers if they fail to adapt to these changes, but it also offers significant opportunities. Changes are also occurring among American consumers, as more economic risk has begun to shift from government and business onto the shoulders of Americans themselves. Long gone are the days of income security through guaranteed pensions; defined benefit pensions have been replaced by 401(k) plans; health insurance costs put more responsibility on the employees and less on the employers; steady guaranteed income has given way to much more volatility in people’s bi-weekly paychecks; and employer-sponsored benefits are waning as more people rely on the gig economy for work. This “risk shift,” as political scientist Jacob Hacker calls it, provides a huge opportunity for insurers because they’re in the risk business. But it also presents a challenge. Do insurers understand what average Americans today see as their biggest risks? Do insurers know how to insure against the risks to provide the peace of mind that insurance is meant to provide? Is the insurance industry at risk itself of becoming irrelevant if it doesn’t take note of these changes and adapt products and services accordingly? These questions were asked in research we recently completed looking at the insurance needs of low- to moderate= income (LMI) Americans, defined as having household incomes of less than $60,000. Based on that research, there are three main takeaways for the insurance industry for how to stay relevant in today’s changing landscape. 1. LMI individuals largely rely on savings and borrowing to cope with shocks, even shocks that are insurable. (These shocks can range from relatively minor ones, like an unexpected repair or expense, to something much more serious, like a major illness or the death of a family member.) The risk here, of course, is that, while self-insuring with savings and assets may seem sufficient in theory, very few people have enough savings to self-insure adequately. 68% of LMI individuals report that it is very or somewhat difficult to build short-term savings, and 66% report similar difficulty in building long-term savings. Credit is equally problematic as potential over-indebtedness poses more risks to consumers. A major takeaway from our research was that consumers are unclear about when savings are an appropriate tool to use to weather a shock and when insurance is. The interplay between savings and insurance, and other tools like credit, to build financial resilience shows how interconnected and complex people’s financial lives are. See also: Innovation — or Just Innovative Thinking?   2. A significant challenge that all consumers face is the uncertainty of their insurance coverage and whether it will be sufficient in the case of a shock. The research clearly showed us that having an insurance policy in place does not necessarily mean that someone feels fully protected. Focus group participants in our research consistently indicated that they would not know if their policies, regardless of type, were adequate to protect them against a shock unless they had to actually use them. As one LMI focus group participant in Baltimore explained, “There needs to be some explanation. It is very difficult to know, except for a mandate by the state, how much is desirable.” This lack of confidence negates the peace of mind that insurance is meant to provide. This obviously has the largest implications for LMI customers, who may in fact be inadequately covered and therefore ill-prepared to cover costs not covered by their policies. 3. LMI consumers remain uninsured not because they don’t understand the risks they should insure, but because they have to prioritize the risks that they can insure. It really all comes down to price. Finding good value for money was the most important quality that consumers looked for in an insurance company. This quality ranked higher than other seemingly important ones, such as having products that best fit one’s needs or being easy to do business with. While shopping for the cheapest policy doesn’t necessarily mean having less insurance coverage, it may affect coverage by forgoing useful features that can provide added protection. Price is also a major influencer in the decision not to purchase insurance at all, even if people know they need it. Of those in our research without life insurance, 51% thought they needed it. This shows that LMI consumers are forced to make complicated financial decisions based on the risks in their lives and the resources they have. I remember one woman in Baltimore with a young daughter who chose to purchase disability insurance instead of life insurance with the disposable income that she had. I would have thought that life insurance would have been the most important protection she could provide for her daughter. Yet she reasoned that a loss of income would be a significant blow for her family. She had used her disability insurance in the past, it filled an income gap and she expressed glowing satisfaction. Life insurance was important, and she knew it, but it would have to wait for another day. See also: 4 Technologies That Are Changing Risk   This anecdote is an apt way to conclude. Consumers do not place their risks and mitigating strategies into product silos like insurers do. To stay relevant in the midst of significant societal changes, insurers should take a holistic view of someone’s financial life, and the risks they face, to better serve existing customers and, more importantly, attract new ones who are dangerously unprotected.