The 2017 Atlantic hurricane season was remarkable, including five landfalls of Category 5 storms in the Caribbean Basin and three Category 4 strikes on the U.S. coastline. The 2017 landfalls cost hundreds of lives and record-breaking economic losses, exceeding $250 billion. These losses are sober reminders of hurricane vulnerability and the importance of hurricane prediction for public safety and the management of insurance and other economic risks. Hurricane forecasts have continued to improve in recent years, but they are not yet as good as they could be. Continued advances in weather and climate computer models used to make forecasts and improved observations from satellites and aircraft are driving these improvements. Also essential to progress are advances in understanding of weather and climate dynamics. Short-term track and wind intensity forecasts The National Hurricane Center (NHC) provides five-day forecasts of hurricane tracks and wind intensity that guide emergency management. Technological improvements from higher resolution weather forecast models and improved satellite observations are helping improve hurricane forecasts. The figure below shows the improvement over several decades in the NHC’s forecasted location of storms, referred to as “track error.” See figure 1 below. An average track error at 48 hours of about 50 nautical miles is impressive in a meteorological context. However, a track uncertainty of just 50 nautical miles for Hurricane Irma’s predicted Florida landfall in 2017 meant the difference between a costly Miami landfall or a relatively benign Everglades landfall. As seen in the figure above, we are approaching a track forecast accuracy limit for one to two days, arising from the inherent unpredictability of weather. Over the past decade, the greatest improvements have been in the three- to five-day track forecasts. A recent analysis conducted by Climate Forecast Applications Network (CFAN) compared track errors from different global and regional weather forecast models, all of which are considered by the NHC in preparing its forecast. The European model, operated by the European Center for Medium Range Weather Forecasting (ECMWF) and supported by 22 European countries, consistently outperformed the U.S. models maintained by the National Oceanic and Atmospheric Administration (NOAA) for track forecasts beyond two days. At five days lead time, the ECMWF model had an average track error for the 2017 season of 120 nautical miles, compared with 148 nm for the official NHC forecasts. Innovators in the private sector apply proprietary algorithms to improve upon the NOAA and ECMWF model forecasts. At CFAN, ECMWF forecasts are corrected for model biases based on historical track errors. For 2017, CFAN’s bias-corrected storm tracks resulted in five-day average track error of 114 nautical miles – 26% lower than the average track error for the official NHC forecast. Forecasts beyond five days (120 hours) are becoming increasingly important to the insurance community, especially with the development of insurance-linked securities and catastrophe bonds. The superior global weather forecasts provided by the European model (ECMWF) produced Atlantic hurricane tracks for 2017 with an average track error of 200 nautical miles out to eight days in advance. The proprietary track calibrations and synthetic tracks produced by CFAN from the European model maintain an average track error of 200 nautical miles even beyond 10 days, for the longest-lived storms. Forecasting of storm wind intensity (as measured by maximum sustained wind speed) is also of key importance. The NHC’s intensity forecasts are slowly improving – the NHC’s intensity forecast errors at time horizons of two to five days average from 10 to 20 knots (10 knots = 11.5 mph) over the past several years. The greatest challenge in short-term hurricane forecasting remains the prediction of rapid intensification, as occurred with Hurricane Harvey in August 2017, immediately before landfall. The NHC has invested considerable resources in the development of high-resolution regional models to improve prediction of hurricane intensity. The prediction of rapid intensification remains elusive, although there is considerable research underway on this topic. Seasonal and longer-term forecasts Advances have been made in forecasting the probability of track locations on weekly timescales out to a month in advance. Monthly forecasts based on global weather forecast models are provided by several private sector weather forecast providers. Beyond the timescale of about a month, however, global models show little skill in predicting hurricanes. Hence, most seasonal forecasting efforts, particularly beyond timescales of six months, focus on data-driven statistical methods that examine longer-term trends in the global atmosphere. Sea surface temperatures in the Atlantic and the tropical Pacific are key predictors for seasonal forecasts of Atlantic hurricane activity. El Niño (warmer tropical Pacific sea surface temperatures) and La Niña (cooler tropical Pacific sea surface temperatures) patterns have a strong influence, with La Niña being associated with higher levels of Atlantic hurricane activity. Atmospheric circulation patterns also have some long-term “memory” that is useful for seasonal forecasts. CFAN’s research has identified additional predictors of seasonal Atlantic hurricane activity through examination of global and regional interactions among circulations in the ocean and in the lower and upper atmosphere. The predictors are identified through data mining, interpreted in the context of climate dynamics analysis, and then subjected to statistical tests in historical forecasts. See also: Hurricane Harvey’s Lesson for Insurtechs   While forecasts issued around June 1 for the coming season generally have skill that is better than climatology, different outcomes are suggested by late May/early June forecasts for the 2018 Atlantic hurricane season. Predictions range from low activity (CFAN and Tropical Storm Risk ) to average activity (Colorado State University ) to near or above normal activity (NOAA Climate Prediction Center ). While many of the late May/early June 2017 forecasts predicted an above-normal season, none of the publicly reported forecasts predicted the extreme activity that was observed during the 2017 season. At the longer forecast horizons, forecast skill is increasingly diminished. The greatest challenge in making seasonal forecasts in April and earlier is the springtime "predictability barrier" for El Niño/La Niña, whereby random spring weather events in the tropical Pacific Ocean during spring can determine its longer seasonal evolution. Seasonal forecasts from the latest version of the European model show substantially improved forecast skill of El Niño and La Niña across the spring predictability barrier, which improves the prospects for seasonal hurricane forecasts issued in late March/early April. La Niña generally heralds an active hurricane season, whereas El Niño is generally associated with a weak hurricane season. However, the occurrence of El Niño or La Niña accounts for only about half of year-to-year variation in Atlantic hurricane activity. In particular, the extremely active years such as 2017, 2004 and 2005 were not characterized by much of a signal from La Niña. The greatest challenge for seasonal predictions of hurricane activity is to forecast the possibility of an extremely active hurricane season such as observed during 2017, 2005, 2004 and 1995. CFAN’s seasonal forecast models capture the extremes in 1995 and 2017 but not 2004 and 2005. Improved understanding of the causes of the extreme activity during 2004 and 2005 is an active area of research. The most important target of seasonal forecasts is the number of landfalling hurricanes and their likely locations. The number of U.S. landfalling hurricanes in one year has varied from zero to six since 1920. The number of landfalling hurricanes is only moderately correlated with overall seasonal activity. It is notable that the period of overall elevated hurricane activity from 1995 to 2014 overlapped with a historic 2006-2014 drought of major hurricane and Florida landfalls. Several seasonal forecasters provide a prediction of landfalls. These forecasts may specify the number of U.S. and Caribbean landfalls, the probability of a U.S. landfall (tropical storm, hurricane, major hurricane). Few forecast providers attempt to predict location of the landfalls. New research conducted by CFAN scientists has uncovered strong relationships between U.S. landfall totals and spring atmospheric circulation over the Arctic, which tends to precede summer dynamic conditions in the western North Atlantic and the Gulf of Mexico. Certain insurance contracts with hurricane exposure typically take effect Jan. 1 of each year, and for this reason there has been a desire for Atlantic hurricane forecasts to be issued in December for the following season. Such contracts often are written for a period of a year or even longer time horizons. Because of the apparent lack of hurricane predictability on this time scale, in December Colorado State University provides a qualitative forecast discussion, rather than a forecast. CFAN research has identified some sources of hurricane predictability on timescales from 12 to 48 months. Research is underway to exploit this predictability into skillful annual and inter-annual predictions of Atlantic hurricane activity. Five- to 10-year outlooks Some atmospheric modelers provide a five-year outlook of annual hurricane activity, focused on landfall frequency. A key element of such for such outlooks is the state of the Atlantic Multidecadal Oscillation (AMO). The AMO is an ocean circulation pattern and related Atlantic sea surface temperature that changes in 25- to 40-year periods with increased or suppressed hurricane activity. The year 1995 marked the transition to the warm phase of the AMO, which has been an active period for Atlantic hurricanes. In the warm phase of the AMO, sea surface temperatures in the tropical Atlantic are anomalously warm compared with the rest of the global tropics. These conditions produce weaker vertical wind shear and a stronger West African monsoon system that are conducive to increased hurricane activity in the North Atlantic. There has been a great deal of uncertainty about the status of the AMO, complicated by the overall global warming trend. According to the AMO index produced by NOAA, the current positive (warm) AMO phase has not yet ended. In contrast, an alternative AMO definition, the standardized Klotzbach and Gray AMO Index, indicates the AMO has generally been in a negative (cooler) phase since 2014 – and May 2018 had the lowest value since 2015.

An intriguing development is underway in the Atlantic in 2018. The figure below shows sea surface temperature anomalies in the Atlantic for May. You see an arc of cold blue temperature anomalies extending from the equatorial Atlantic, up the coast of Africa and then in an east-west band just south of Greenland and Iceland. This pattern is referred to as the Atlantic ARC pattern. See figure 2 below. A time series of sea surface temperature anomalies in the ARC region since 1880, depicted below, shows that temperature changes occur in sharp shifts occurring in 1902, 1926, 1971 and 1995. On the bottom graph, the ARC temperatures show a precipitous drop over the past few months. Is this just a cool anomaly, similar to 2002? Or does this portend a shift to cool phase of the AMO? See figure 3 below. [caption id="attachment_32791" align="alignnone" width="375"] Figure 3. Top: ARC temperatures from 1880-2017. The black lines reflect the cold and warm regimes of the Atlantic Multidecadal Oscillation. Bottom: ARC temperatures from 1982 through June 2017.[/caption] Based on past shifts, a forthcoming shift to the cool phase of the AMO is expected to have profound impacts:

• diminished Atlantic hurricane activity
• increased U.S. rainfall
• decreased rainfall over India and the Sahel region of Africa
• shift in north Atlantic fish stocks
• acceleration of sea level rise on northeast U.S. coast.

The figures below depict how the AMO has a substantial impact on Atlantic hurricanes. The top figure shows the time series of the number of major hurricanes since 1920. The warm phases of the AMO are shaded in yellow. There are substantially higher numbers of major hurricanes during the periods shaded in yellow. A similar effect of the AMO is seen on the Accumulated Cyclone Energy (ACE). Seasonal ACE is a measure of the overall activity of a hurricane season that accounts for the number, strength and duration of all of tropical storms in the season. See figure 4 below. These variations in Florida landfalls associated with changes in the AMO have had a substantial impact on development in Florida. The spate of hurricanes starting in 1926 killed the economic boom that started in 1920. Florida’s population and development accelerated in the 1970s, aided by a period of low hurricane activity. By contrast, the warm versus cool phase of the AMO has little impact on the frequency of U.S. landfalling hurricanes generally. However, the phase of the AMO has a substantial impact on Florida landfalls. During the previous cold phase, no season had more than one Florida landfall, while during the warm phase there have been multiple years with as many as three landfalls. A major hurricane striking Florida is more than twice as likely during the warm phase relative to the cool phase. New developments in decadal scale prediction are combining global climate model simulations with statistical models. Such predictions have shown improved skill relative to climatological and persistence forecasts on the decadal time scale. See also: Tornadoes: Can We Stop the Cycle?   2018 Atlantic hurricane season The recent tropic Pacific Ocean La Niña event is now over; the tropical Pacific is trending to neutral with an El Niño watch underway. Sea surface temperatures in the subtropical Atlantic are currently the lowest that have been seen since 1982. For the 2018 Atlantic hurricane season, many forecasters who predicted a normal or active season previously are now lowering their forecasts, considering the trend toward El Niño and the cool temperatures observed in the tropical Atlantic. Based on the overall expectations for low Atlantic hurricane activity in 2018, combined with forecasts of a U.S. landfall ranging from 50% to 100%, we can expect 2018 to be a year with smaller economic loss from landfalling hurricanes relative to the average. Looking at longer time horizons, there is a potential game-changer in play – a possible shift to the cold phase of the Atlantic Multidecadal Oscillation that would herald multiple decades of suppressed Atlantic hurricane activity that would have a substantial impact on reduced landfalls, particularly in Florida.

The sharing economy is an economic system based on the use of technology to share assets or services between parties (individuals or organizations). Participants in the sharing economy use it because it can provide a more flexible and affordable option than some other economic systems. In this way, the sharing economy makes goods and services available to those who would not otherwise be able to access them. Much has been discussed about how the fast-growing web of consumer-to-consumer transactions that is the largest component of the sharing economy presents new opportunities for the insurance industry. The consensus view among insurers is that this potential market is large, growing quickly and under-developed yet tricky to insure with traditional products as it blurs the boundaries between personal and commercial lines. In April 2018, Lloyd’s published Sharing risks, sharing rewards: Who should bear the risk in the sharing economy? The report contained the following key findings:

• Consumers in the sharing economy expect to be protected from the risks of transacting
• Consumers and sharing platforms have opposing views on who bears responsibility for this protection
• There is a significant untapped market of potential sharers who would be more willing to participate if protected by insurance

Maturer platforms in the sharing economy have established risk management programs and are working in partnership with the insurance industry to develop them further. For the many smaller platforms that make up the vast majority of platforms by number, risk management is at an earlier stage of development. The insurance industry has an important role to play in supporting platforms of all stages of maturity. This study aims to promote dialogue between platforms and insurers and, building on the previous report, has systematically analyzed the sharing economy to understand where insurance can support the growth of the sharing economy while also broadening the geographic scope of research. This study, carried out by Lloyd’s, the world’s specialist insurance and reinsurance market, and Deloitte scanned the sharing economy for emerging insurance models, conducted a broad review of business and academic literature, surveyed 8,527 consumers across the U.S., China, Germany, France, the U.K. and the UAE, interviewed more than 20 subject matter experts, conducted a platform-only online questionnaire and held two workshops with representatives from sharing economy platforms, innovation experts and insurance practitioners. See also: The Need for Agile, Collaborative Leaders   The consumer survey data in this report is not an extension of Lloyd’s previous report as the sample, time period and questions were different. The objective of this report is twofold:

• To provide sharing economy platforms with an overview of key risks and the insurance solutions available to mitigate them.
• To help the insurance market further understand how this sector of the economy needs new insurance products and where the most compelling opportunities for product development are located.

In summary, this research found:

• Sharing is widespread: Approximately 500 million people across the U.S., China, Germany, France, the U.K. and the UAE have shared assets/possessions or services in the past three years to earn a profit; more than 680 million in these markets consumed them in the same period.
• Currently, a number of platforms have mechanisms to protect users, ranging from transaction-embedded insurance to guarantee schemes. For users, the protection afforded by a platform is a key consideration in addition to the earning potential on offer.
• Our market scanning indicates that an increasing number of sharing economy platforms provide insurance to their users that is automatically embedded within each transaction, with 57% of adults who have sold services or lent products in the sharing economy in the past three years being insured by transaction-embedded or personally owned cover.
• Of those selling services and sharing assets, 37% of home sharers took out or upgraded a buildings or contents policy prior to sharing, and 49% of ride sharers took out a new motor policy or upgraded an existing one. Among delivery drivers, the figure is 37%, and 20% of freelancers took out or upgraded liability insurance before providing their services.
• In addition, our analysis of the consumer survey identified pockets of high demand for insurance among four specific consumer segments. These groups represent product development opportunities for insurers, brokers and other service providers.
• This study has identified numerous emerging models of sharing economy insurance; some combine elements of well-established commercial and retail covers in a static policy, and others provide more dynamic cover that fluctuates more in line with underlying risks.
• Partnerships with sharing economy platforms form a key distribution channel. In addition to offering an opportunity to reduce customer friction in the insurance purchase process by embedding it within transactions, distribution via platforms offers greater potential for customer access, risk selection and pricing power than distribution via the open market.
• Insurtechs are at the forefront of innovating sharing economy products and services and to date have focused on customer-facing links in the value chain.

You can find the full report here. This article was written by Nigel Walsh and Peter Evans.

In a recent SMA blog, Karen Furtado, SMA partner, posed this question: “Have you ever found yourself hearing a word so frequently that it begins to lose its meaning?” The word she was referring to was “transformation,” but I think that everyone who reads that question immediately has a specific word of their own that pops into their heads. For me, it is the word “disruption” or any iteration of it – disrupt, disruptor, disruptive, etc. In the insurtech movement, those “disruption” words surface again and again. At SMA, we love the word “transformation.” It’s this year’s umbrella theme of the annual SMA Summit. We spend a significant amount of time with our insurer customers helping them with transformation strategies. We help our technology customers dig deep into their transformation messaging and outcomes. But disruption – well, not so much! SMA believes that it is very difficult to truly disrupt the insurance industry (even though there is a tendency among some people to throw the word about with unwarranted abandon). So, you can imagine how surprising it was that, after a long and detailed research initiative earlier this year, we actually hung the “disruptor” tag on Munich Re! See also: How Analytics Can Disrupt Work Comp   The goal of the research was to analyze annual reports, quarterly analyst statements, magazine articles and public presentations to gain insight into, and maybe some best practices from, the innovation and transformation journeys of some of the largest insurers – Munich Re among them. SMA’s recent research brief, Who Is Really Disrupting the Insurance Industry? And What You Can Learn from Munich Re’s Journey, reviews the findings. There are many lessons to be learned from their journey, but three things in particular resonate:

• Munich Re did not let traditional reinsurance roles place rails around their innovation strategies and tactics. For example, they worked with a broker (Marsh) to develop a pandemic product. Neither of the participants is a traditional player in the product development process.
• Munich Re has stayed true to its heritage and traditional competencies of risk knowledge and risk management but approached change through a new lens of innovation and brave technology exuberance. We also saw this with Chubb as it has stayed true to its deep underwriting heritage in its innovation strategies.
• Business units are focused on specific innovation and emerging technology initiatives. They have not cordoned off these responsibilities within IT or stand-alone innovation organizations. Business is an active force, not simply a recipient of innovation outcomes.

It's a bit surprising and even inspiring that a reinsurer is an industry disruptor. Insurers need to study innovation and transformation activities at all industry levels because the traditional (or hyped) competitors may not be the ones that are changing the industry landscape. See also: Innovation: ‘Where Do We Start?’ To be clear, Munich Re is not the only reinsurer that is on an innovation and transformation path. Others are, as well, most notably Swiss Re. However, early on, Munich Re noted unprecedented external forces emerging and, rather than reverting to traditional and frequently successful strategies, the company boldly placed new lenses on business challenges. And the results are – and continue to be – disruptive. (There, I said that word again!)

The topic of Industry 4.0 has been discussed at many conferences in recent times. When you talk to participants and colleagues, you quickly realize that everyone associates this buzz phrase with something different. To make matters worse, the term is now used in almost every industry as a synonym for the digitized, automated and connected world, also known as the “smart factory.” This article discusses the term Industry 4.0 and examines its impact on property insurance. Industry 4.0 is a new level of organization and control over the entire value chain of a product – from idea and design, to flexible production of customized products and delivery to the customer. Customers and business partners are directly involved in the processes. The term Industry 4.0 is synonymous with a range of available automation, data exchange and manufacturing technologies to increase production flexibility and efficiency/profitability and to advance the value chain conceptually in industrial production and manufacturing. The basic principle is the intelligent networking of machines, workpieces and systems as well as all other business processes along the entire value chain, in which everything is regulated and controlled independently. The ultimate vision of Industry 4.0 is to create an intelligent factory in which all production and business units, machines and devices communicate with each other – as much as possible without human intervention, but involving both employees and external suppliers. It should not be forgotten that the term Industry 4.0 is used synonymously for digitized production with the ultimate goal of increasing production at significantly lower costs. Design principles The design principles of Industry 4.0 can be summarized as follows:

• • Networking/interaction: Machines, devices, sensors and people can network with each other and communicate via the Internet of Things, or the Internet of People.
  • Information transparency: Sensor data extend information systems of digital factory models to create a virtual image of the real world.
  • Decentralization: Cyber-physical systems are able to make independent decisions.
  • Real-time decisions: Cyber-physical systems are able to collect and evaluate information and translate it directly into decisions.
  • Service orientation: Products and services (of cyber-physical systems, people or smart factories) are offered via the Internet.
  • Modularity: Smart factories adapt flexibly to changing requirements by exchanging or extending individual modules.

See also: The Unicorn Hiding in Plain Sight   Challenges for Industry 4.0 Although the goals of Industry 4.0 sound promising, a number of challenges remain to be resolved, including:

• • Availability of relevant information in real time through connectivity of all entities involved in the value chain
  • Reliability and stability for critical machine-to-machine (M2M) communication, including very short and stable latency (real time)
  • Progress in network technology toward real-time actions
  • Need to maintain the integrity of production processes
  • Increased vulnerability of the supply chain
  • IT security problems
  • Data, network, cyber and device security, etc.
  • Need to avoid unexpected IT errors that can lead to production downtime
  • Protection of industrial know-how
  • Lack of adequate skills to drive the Industry 4.0 revolution
  • Threat of redundancy problems in the IT department
  • Ethical and social impact on society – what would be the impact if a machine were to override the human decision

Challenges for the insurance industry The insurance industry will continue its interest in collecting data and information for underwriting, and preparing and evaluating it by linking new algorithms and artificial intelligence principles. For example, information collected at the operating and machine level could help to identify certain patterns and predict when maintenance work or servicing is required or when a machine is nearing the end of its life. This allows a more detailed assessment of the actual exposure, which in turn can have an impact on all business areas of the insurance industry – so that the insurance principles might have to be redefined accordingly. In the future, a claim will affect several lines of business simultaneously, which will often make it difficult to identify a person liable for a loss and to assign the loss to a line of business; this in turn will ultimately complicate claims settlements. The probability of business interruption losses – caused by fire or natural catastrophe, for example – will increase due to the virtualized value chain that is the result of the optimization of systems and their dependency on the environment or on suppliers, customers, energy supply, etc. Ultimately, this could lead to a significant extension of the recovery period following a loss event, which will, in particular, be a consequence of the search for causes, the substitution of destroyed machines, plants, networks and communication channels. As a further consequence, the complexity of the linked systems and technologies will also result in exposures not yet known, with serious but also unexpected outcomes. For example, a cyber attack or security failure could lead to an interruption of production/supply, whereby cascade effects can ultimately even lead to a complete collapse of the entire value chain. For the insurance industry, the outcome of such an event could be comparable to current losses from natural catastrophes or a pandemic event. The problem is that industry and insurers generally have little, if any, experience with the real but intangible and difficult to quantify risks arising from the networking and automation of business processes. Options for insurers The economy is doing everything it can to make Industry 4.0 a reality as quickly as possible. One example is the Mindsphere initiative launched by Siemens, a cloud-based open IoT operating system that can already be used today by the companies involved. It was developed for three purposes:

• • To simulate plant and machine behavior before conversion and modernization
  • To monitor machines set up at customers’ businesses
  • To compare production, quality and maintenance data with other machines, and thus increase efficiency and the ability to identify problems – for example, imminent defects – so that repairs can be carried out early and a prolonged production downtime can be prevented

Currently under discussion is the extent to which the insurance products available today in the property and liability lines of business offer sufficient cover for this concept. As Industry 4.0 is controlled via networks and data streams, protection against cyber attacks will certainly be taken increasingly into account in the current coverage concepts. In addition, however, new risks will arise with integrative and automated production, and new insurance solutions will have to be developed to cover these risks. The use of the new technologies will result in new and different liability scenarios for all market participants. One of the difficulties will be to determine, for example, what caused the damage and who could be held liable. In other words, is there insurance cover for a specific loss and, if so, under which insurance policy? In this respect, it is necessary for the insurance and reinsurance industries to address the topic of Industry 4.0 at an early stage and to support policyholders in the implementation of their Industry 4.0 concepts – to recognize the associated changes in risks and their implications for the liability and property insurance cover. To establish the insurance industry as an important know-how carrier and partner for the respective policyholder, a discussion with policyholders must be conducted as a matter of urgency regarding potential risk scenarios and possible protective measures. Furthermore, insurers should support the industry from the outset in the development of necessary protection and prevention measures – such as predictive maintenance, defense against cyber attacks, business continuity plans and measures against the failure of critical infrastructures – to identify and avert potential risks before their manifestation so that a possible loss can be avoided (i.e., preventive risk management). In addition, the insurance industry should promote the development of its own concepts for the analysis and assessment of new risks, including:

• • Turning away from burning cost toward risk models
  • Developing new loss prevention measures
  • Developing artificial intelligence
  • Introducing more extensive data analyses and forecast models to mitigate losses before they occur

The use of big data/IoT technologies can, for example, help insurers identify new risks and, if necessary, develop appropriate insurance solutions. This will include the development of new insurance products that meet both the challenges and exposures as well as the loss prevention and mitigation measures of policyholders, e.g. model terms and conditions for an Industry 4.0 all risks policy. Ultimately, the decisive element will be development of new ways to cope with accumulation scenarios by Industry 4.0 loss events with the focus on major losses. In addition, the internal and external business processes of insurance companies (keyword: digitization) will be affected, for instance, in the areas of communication, transparency, claims handling, preparation of proposals, etc. See also: 3 Major Areas of Opportunity   Conclusion If Industry 4.0 is implemented as planned, it will lead to a revolution in existing business processes that will also affect the insurance industry, which will need to adapt both its processes and current insurance products. In accordance with the promoted goals, Industry 4.0 can create an enormous added value, especially for industrial companies and not least for our global economy and society. It will be accompanied by the generation of enormous data streams that can be evaluated and used for resource-efficient and high-quality production. Ultimately, it will affect our well-known world of manufacturing and selling products and finally our whole lives. However, this concept will also entail new risks, such as cyber, data protection, failure of critical infrastructure and uncorrelated effects. Industry 4.0 will change the insurance industry as a whole and our currently well-known and widely used strategies for defining risks, insurance, underwriting exposures and insurance products. This means that the Industry 4.0 concept will also be a revolution for the insurance sector. This requires those in the insurance industry to follow developments and inherent changes in the industry as closely as possible and to adapt current insurance products to the new realities. In this respect, one can ultimately speak of today’s insurance industry as moving toward an Insurance Industry 4.0.

"Houston, we’ve had a problem here." John Swigert’s famous words were delivered in a voice as calm and clear as the mountain air in his native Denver, but to the Apollo 13 mission controllers thousands of miles below in Texas this fired the starting gun in a race against time. At 2am on April 14, 1970, an explosion in the main oxygen tanks and the failure of a major part of the electrical system suddenly put the Apollo crew’s lives at risk. The extreme conditions in which they had to work to repair it required rapid creative thinking on the part of a large group of people on the ground and aboard the ship itself. As the drama unfolded, the whole world watched, holding its breath. This wasn’t a simple case of pulling a ready-made solution off the shelf; instead it required exploring the nature and dimensions of the problem, redefining and shaping it. Only then did the solution route become apparent, emerging gradually as a direction worth traveling in. Let’s move to a different world and try, for a moment, to climb inside the mind of an artist trying to come up with something novel and of artistic value. This was what researchers Mihaly Csikszentmihalyi and Jacob Getzels did in 1971 working with a group of art students. They gave them a table on which there were around 30 objects and observed them as they carried out the task of constructing a still life composition from them. The results were powerful. These artists didn’t simply place the objects randomly and start to paint; instead they explored, arranged and rearranged, selected and abandoned. They took time climbing around the challenge they had been given, exploring it carefully before finally embarking on their particular journey through the landscape offered by the resources table. See also: Don’t Just Indulge in “Innovation Theater”   When the work was evaluated by a group of experienced professors, there was a clear link between the quality of what they produced and the amount of time and effort they had spent in this exploration stage. Csikszentmihalyi and Getzels called this "discovery orientation." Perhaps of even more importance was that when the researchers followed up their subjects later in their working lives as artists they found that their successful performance (now being evaluated by people buying their creations or galleries selecting their work for exhibition) was closely predicted by the approach they had shown in this early experiment. Problem exploration is correlated with high-quality creativity. So what we do in the early stages of working with a problem matters. We may not even be aware that it is a problem – as the sculptor Henry Moore observed: "I sometimes begin drawing with no preconceived problem to solve, with only a desire to use pencil on paper and only make lines, tones, and styles with no conscious aim. But as my mind takes in what is so produced, a point arrives where some idea becomes conscious and crystallizes, and then control and ordering begin to take place." Sometimes the problem can be like a toothache, nagging away in the background but not drawing our full attention. James Dyson wasn’t the first person to be frustrated at the inability of his vacuum cleaner to pick up all the dust and the need to keep changing the bag. But eventually something snapped in his engineer’s mind, and he took the recalcitrant machine to his workshop to try to improve things. Crawling around the apparent problem of an inefficient filtering mechanism – the particles of dust blocked the pores of the bag and quickly reduced its effective suction – he suddenly had a flash of insight. The actual problem wasn’t one of a better bag but whether you needed a bag at all. What if you could make a cleaner with no bag, using a different way of separating out the dust from the air being sucked through? What Dyson, the Apollo team and countless other innovators recognize is that it’s worth differentiating between simply recognizing that there is a problem to solve (problem identification) and how to make the problem and workable (problem definition and redefinition). The influential psychologist David Kolb suggested that the process is a little like watching a detective at work, “gathering clues and information about how the crime was committed, organizing those clues into a scenario of ‘who done it’ and using that scenario to gather more information to prove or disprove the original hunch.” Part of the challenge here is that unconscious processes play a part; problem finding is often linked to moments of insight or intuition. We catch a glimpse of something about the problem that triggers an aha! moment, a new way of looking at the problem. This idea was first advanced in 1926 by Graham Wallas, who argued that creative problem-solving involved an element of unconscious incubation that was often characterized by a sense of "intimation" as we became consciously aware of the insight that our brains had found. A team led by Gordon Bower at Stanford University began developing a theory around incubation and suggested that this isn’t simply a flash of inspiration – there’s an underlying process going on that involves two stages:

• A guiding stage, where coherence or structure is unconsciously recognized and used.
• An integrative stage, where coherence makes it way to consciousness.

Have you ever gone to bed feeling annoyed and agitated because you’re wrestling with a problem? Finally, you give up on it and turn out the lights – and then you wake next morning and there’s a solution staring you in the face. It sits there, and you’re not only pleased that it has arrived but also have a clear sense of aha! – you know it’s the right answer. What you experience is the transition between the two stages in Bower’s model. So, insight is not luck but the sum of various behaviors going on before that moment. And this fits with current neuroscience – for example, Jacob Hohwy’s idea of the predictive mind, which suggests that when we meet a problem our brain produces candidate solutions for this using models based on experience. We may have to modify the models to suit the particular circumstances of our current problem – it’s not always a simple matter of plug and play – but essentially we reapply templates that we already have on file. In other words, we begin the problem search by looking for something that we recognize – problem recognition. But if we can’t find a match, we begin a secondary activity, which is searching for new solutions to the new situation – essentially reframing, rethinking the problem. What does all of this mean for our approaches to innovation? Clearly, if we’re moving along an established trajectory, doing what we do but better – the Mk2 or 3 version of our product, the latest update to our software, the improvement to our established process – then such incremental innovation will draw extensively on what we already have on our mental shelves. But if we’re looking for a radical solution, trying to break out of the box, then we need to look at how we might help with the task of exploration toward a new solution. There are some useful strategies to help us develop "discovery orientation," for example:

• Trust your gut – intuition is a powerful clue to emerging directions of interest, and it isn’t always possible to explain why you feel this is a direction worth exploring. Research on product developers looking for new technologies found that experienced engineers recognized the value of this and followed up on their early hunches about interesting directions to follow.
• Prototype to explore – one of the powerful reasons behind the use of prototypes and minimal viable products is that they offer boundary objects that make very early ideas available for others to play with and explore. Their value is that they are not the final answer, may even be a long way from it, but the process of exploring and interacting can lead to key insights around which the innovation can pivot.
• Look with new eyes – get fresh insights and questions from people unfamiliar with the problem being identified. By definition, they know nothing about it so they will ask different questions, sometimes naïve but sometimes cutting through to reveal a novel insight.
• Broadcast search – much of the growing evidence around crowdsourcing of ideas for innovation is that by broadcasting a challenge widely we will pick up increasingly diverse perspectives on a problem. The power of innovation markets like Innocentive.com is less that they function as a replacement for our own thinking than that they allow us to access very different ways of looking at our problem. In their studies of the 250,000 regular solvers working on that platform, Lakhani and Jeppesen found it was this diversity that helped lead to novel solutions.
• Construct crisis – under extreme conditions, conventional off-the-shelf approaches may not be suitable, and we need to explore radical alternatives. For example, the origins of "lean" thinking – an approach to process innovation that has literally changed the world – emerged out of a crisis in resources. Post-war Japanese manufacturers were forced to rethink the entire production process and come up with a low-waste alternative – they had to explore and reframe what they were doing. Lockheed’s famous Skunkworks managed to develop a jet fighter aircraft within six months from a zero base and without even having a working jet engine to experiment with. A growing body of research suggests that creating crisis conditions can be a spur to novel insights and valuable new directions for problem-solving.

See also: How ‘Not Invented Here’ Limits Innovation   In the end, it comes back to the idea of problem exploration, playing with the possibilities just like the artists did back in the early research on discovery orientation. It’s a principle that Albert Einstein understood rather well – and his words remain a useful source of advice for would-be innovators: “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

With technology, there's always a backlash. Margaret Atwood, author of the dystopian "Handmaid's Tale," says, "With all technology, there is a good side, a bad side and a stupid side that you weren't expecting." Proponents of a technology can always paint a glowing picture of the good side and somehow get us to not even try to imagine the bad side—then a bad side does, in fact, appear, and the stupid side sneaks up on all us. Backlash ensues.

Her observation popped to mind because of this article in the New York Times last week on the disillusionment settling in among Uber drivers in New York, suggesting that the sharing economy may not be all it's cracked up to be. I've actually been waiting for this backlash for a while, ever since a friend remarked to me about a year ago that Uber is "financed by drivers who don't understand depreciation." They track the hours they spend, plus the cost of gasoline and maybe oil changes, but don't account for the fact that every mile they drive takes something out of the value of the car. As a result, the drivers are essentially making a gift to Uber of the depreciation. The Times article does find disenchantment about the economics of the gig economy, plus even deeper concerns; Uber et al. sold drivers on the idea that they could work in their spare time and finance their dreams, but those careers as, say, recording artists are nowhere to be found. 

The idea of a backlash against tech probably isn't too hard a sell these days. We've all seen Facebook, Twitter and other social media have to scramble to defend themselves against charges that they are facilitating racism, the hacking of American elections and just about any other bad thing you can imagine. Elon Musk—Mr. Ironman himself—has found that not every rocket makes it to Mars and is facing a backlash.

I wish there were some easy lesson I could offer about how to anticipate the backlash against whatever technology you're exploring.

History can sometimes be a guide to understanding technology. In the early days of the commercial internet, some idealists envisioned world peace because all this open communication would lead to understanding and a global community. (No, I'm serious.) But historians pointed back to the early days of the telegraph in the mid-1800s, when similar hopes rose because you could now exchange messages between world capitals in minutes, not weeks or months, and could remove misunderstandings. Those hopes were, of course dashed. (The parallels turned out to be so strong that someone wrote a book on the telegraph whose title was "The Victorian Internet." Telegraph operators actually had the first chat rooms; when lines were idle, they'd gossip with each other up and down the lines.) eBay showed us that markets that theoretically operate with no friction don't actually get to operate in the theoretical world. They have to deal with the real world, one in which all kinds of friction can occur, especially when parties don't know each other and have to find a way to trust each other. Other examples can surely be found related to privacy issues, to the insights that are (and aren't) to be found in data, and so on.

But the only real defense I know is to be jaded: Look for the bad side of a technology even when the evangelist has all your attention focused on the good side. And be ready to duck fast when the stupid side shows up. It will. 

Have a great week anyway.

Paul Carroll
Editor-in-Chief

Insurers come in all shapes and sizes, from Tier 1 monolithic operations to the smallest captives and self-insured groups. One thing has been made clear to me in the 30-plus years I’ve served this industry: Regardless of size, many insurers do not fully understand their technology requirements. I’m not saying this because I want to sell them something they don’t need; I’m saying it because I’ve sat with hundreds of carriers over the years who suffer at the hands of less direct experience or the vision required to recognize the need for improved processes and the technology solutions to support them. This is especially true of small to mid-sized carriers, where budgets are fixed and IT staff is often stretched, leaving little room for ad hoc solutions, much less vision. Here “shadow IT” is often the norm (due to labor restraints, employees wear many hats, prompting those in positions outside of IT to work on catching and solving IT problems). Shadow IT can represent a real and present challenge to insurers of all sizes, because it often fosters a band-aid approach: Well-meaning but inexperienced employees make minor temporary improvements to address major long-term problems. Once the band-aid falls off, the damage is done, the technology solution provider (vendor) is called in and the fix that’s required is often immediate and expensive. See also: How Technology Drives a ‘New Normal’   This dilemma sometimes makes the vendor look like the bad guy, especially if the vendor is opportunistic and leverages the insurer’s misfortune to “fix” the problem with solutions the carrier might not really need. Further, it’s difficult to help remedy problems that the insurer is in denial about. Sometimes, a simple technology needs-assessment helps uncover where the problems originate. But remember that determining technical requirements begins with evaluating business requirements, which require a look at existing processes that are supported by technical support that is lacking in the first place. You can see why firefighting becomes the preferred mode—let’s just fix it so we can keep working. If we back up the discussion a bit, we see that the insurer’s real, primary need is for education. The vendor that is interested in becoming a trusted partner has an obligation to sit with the insurer and work together on confirming the business goals, then applying usage analysis and system requirements. In this way, the vendor becomes something akin to the “Dog Whisperer,” the seasoned canine expert on cable TV who tames otherwise unruly pets by noting that “it’s not the dog’s fault—it’s his owners who need to better understand his requirements.” When the technology solution provider connects with the insurer in a way that exposes the essence of the problem and provides the information and steps necessary to help solve it for the long term, it removes the need for crisis-mode operations. In most cases, this means a big change to the insurer’s existing processes, but the trusted partner doesn’t walk away from this challenge, either, because in almost every case those new processes free up the employee’s time to focus on providing more value downstream. See also: How Technology Breaks Down Silos   Taking the “Dog Whisperer” approach, we have learned from our customers’ use cases and implementation histories and bring the experience to each implementation analysis. We sit down with carriers to help them better understand their objectives and requirements, where the technology and process roadblocks are and what the potential is for that important long-term fix.

You are reading the headline correctly. If you follow these tips, your insurtech will either fail or will be heading toward failure. #5 - Get too much feedback. I truly believe that feedback is the breakfast of champions, but, if you are focused too much on customer validation and discovery, you will fail, as you haven't executed. To avoid analysis paralysis, I recommend doing enough exploration to test your use case. If you are getting five people telling you directionally the same information, then you are good, and it is time to act. Go Execute! If you are getting five people who are telling you totally different things, then revisit or take your hypothesis and break it down. Also, keep a watch on who is your feedback base. Are you talking to decision makers or industry experts? Remember: Insurance is a very old and broad industry, and change is difficult. Ensure your feedback base is made up of industry personnel who face the pain that you are going to solve or have knowledge of it. As a serial entrepreneur, I meet folks every day who are an expert in everything. Really? Getting false confirmations from someone you won't be serving or, on the flip side, someone who doesn't believe you are addressing a real problem can be dangerous for startups. BEWARE. Learn to let the feedback go in one ear and out the other. Here comes the best tip ever: RUN from such advice. (j/k. Be respectful of everyone and develop a filter.) #4 - Form an imbalanced team. If you are a technology company with no tech, you have a problem. If you have a product but lack industry expertise in your team, you have a problem. If you are the type who wants to be in every conversation, not only will I say you have a problem, but your team will have problems. The list can go on and on. Having the right team can make or break an insurtech and requires much TRUST. See also: The Failures and Successes of Insurtech   As an insurtech, having the idea and perhaps the technology is fantastic. Having a team that can implement the product in a frictionless way is the key to more clients and more money. Don’t take shortcuts for implementation. Hire the right people: project managers (ensure they have startup experience or come from a Lean/Agile background), DevOps, QA, etc. Also, ensure you either have a team member or a mentor who specializes in change management to ensure smooth implementation. If you aren’t from the industry (like me), get completely immersed and surround yourself with mentors, go to events such as Insurtech FastTrack from Startupbootcamp, Global Insurance Accelerator, Insurtech Week and NAIC events (especially if you are doing work that affects regulators). #3 - Bootstrap. Most startups fail because they run out of cash. Developing a product is one piece of the puzzle, but how to market and sell takes capital: $$$s and resources. There is a lot of testing and strategy within marketing and sales to get the leads that may convert to customers -- and I haven't even touched on customer retention or operations. It is a great time to be a startup in the insurance industry. There are so many companies that have created a VC arm to their company or are partnering with accelerators to boost startup activity. Some don’t even take equity in your company, like Hartland. But don’t take fundraising lightly. If you want to sustain, you need to start the process of understanding the investment landscape during the idea stage. Even if you have someone who is interested in funding, you are not going to get a check the next day miraculously. Due diligence takes a long time - anywhere from three to nine months, sometimes longer. Also, finding the right lead investor or VC company is critical. Don't get desperaten and sign with whomever; be strategic, as you are forming a marriage. Find the partner that aligns with your goals and can open doors with future customers and investors. #2 - Attend a lot of networking events. For insurtechs, go to the conferences that will get you exposure. We have been very thrilled with NAIC events as we do have a module that needs regulators' feedback. Also, Insurtech Rising was the very first conference we attended back in May, and we were grateful for the outcomes. We can’t wait to attend InsureTech Connect in Las Vegas in October. But have you calculated the time you have spent on your business vs. about your business? (Thanks, Action Coach!) Don't get me wrong, networking is AWESOME, but if it doesn't help your company, your clients or you on a personal level (thanks, Brent Williams), you are wasting time. Might as well take a nap or, even better, go work out! See also: Touching Customers in the Insurtech Era   #1 - Solving all the world's problems. If your product serves everyone, then you will most likely fail if you don't pivot, focus on a segment or market it correctly. Even Facebook started with a focused audience initially before it took over the world. It is incredible to solve problems for various industries, but go deep into one industry first. Having focus and clarity is critical for startups. As an example, Benekiva as a platform solves problems for any organization that maintains beneficiaries. But, rather than being generic and solving everyone's issues, we decided to focus on the life insurance industry so we can have pinpoint focus and go deep in the organization.

You don’t have to scroll very far in your social media timeline to see the posts of outrage and calls for transparency aimed at the players in today’s healthcare insurance game. And, rightfully so. The waste, fraud and, at times, seemingly criminal behavior of the BUCAHs, pharma and healthcare providers is a travesty. It has to change. All these guilty players need to be called out, held to a higher standard and forced to account for their contributions to this mess we struggle with every day. Oh, it’s happening, sweetheart The Bezos-Buffett-Dimon (B-B-D) healthcare venture is heating up. While I have my serious doubts about their ability to solve the crisis (I believe that, as with most movements, change will happen on a much smaller, much more local scale), there is one thing that this trio will certainly bring, and that is visibility and outrage to the mess, and they will do so at a level we can’t even begin to fathom. With all due respect and reverence to the #MeToo movement, and others like it, I predict B-B-D will similarly open the floodgates of horror stories from victims of the travesty that has befallen our healthcare system at the hands of providers of care, insurance carriers and big pharma. We will see and hear, at the most publicly visible level, the telling of stories we are already sharing within our relatively small inner circle on a daily basis.

• Stories of lost lives due to inaccessibility of care.
• Stories of couples who choose to divorce so their child can get the care he or she needs.
• Stories of medications and medical treatment that cost multiples of what they should.
• Stories of the artificially inflated health insurance premiums that have kept businesses from growing and achieving their profit potential, at the expense of the profit of the insurance carriers.

I can feel you getting excited. I can hear you saying, “bring it on, B-B-D!!” See also: Bridging Health and Productivity at Work   Be careful what you wish for The spotlight from the B-B-D venture will be shone in every perceived dark corner of the system, with a particular intensity on anyone seen as a middleman. If you aren’t concerned yet, you should be. Make no mistake, benefits advisers, you will be next. In addition to the stories above, there will also be stories of brokers being paid $50,000/$100,000/$250,000 on a single account for “simply selling a policy.” Get out in front of this tidal wave I know most of you who read our posts work your behinds off every single day with the best interests of your clients clearly in mind. I know the decisions you help your clients make are some of the most complex made in their business. I get it. But perception is reality. And you need to brace yourself for the picture B-B-D is about to paint of you. Be prepared to deal with the perception of being nothing more than the distribution channel of the carriers, a middleman. You know that the carriers, which many of you attack on a daily basis, are going to be a very big, very sexy target of the B-B-D media machine. What you may not know is that you are going to be seen as part of that same target. When your compensation ties you directly to the carriers, when you are contractually tied to the carriers more closely than you are to your clients, it is going to be very difficult to separate yourself from the carriers. Sorry, but it’s true. You don’t even need tea leaves to predict this one A recent article about the venture is titled, in part, “Eliminate the Middlemen” and specifically addresses both pharma and, hold on, brokers. You are already being painted as an overpaid, taking-money-on-the-side, not-making-the-recommendations-in-the-best-interests-of-employers, middleman (go read the article). That sound you may be trying to not hear is one of the gauntlet being thrown down, hard. See also: Association Health Plans: What to Know   No time to spare Now is the time to be re-engineering your business to separate yourself from the carriers and to formally serve the clients you have always served altruistically. I get that there are significant changes you will have to make, many of which are not going to be easy. But there are a couple of things that are relatively easy that will take you in the right direction.

1. Sit down with each of your clients and have a stewardship meeting where you explain very clearly the various ways in which you bring them value.
2. During that meeting, have a transparent conversation about how much you are being paid by them (via commissions built into the premium) for delivering that value. If possible, let them know you will be asking the carriers to remove your commissions and ask them to pay you directly in a fee-based arrangement.
3. Finally, educate them about what is broken about the system and the solutions we are starting to see in the industry. Let them know you will be there to help them take advantage of every innovative solution that makes sense for them.

I get that these may be difficult discussions to have, but, I promise you, they are nowhere near as difficult as the defensive discussion you will have to have if you wait for B-B-D to tell a story on your behalf. Don’t believe me, just ask the carriers that have been on the receiving end of your daily attacks. This article was originally published on Q4intel.com. 

According to the Occupational Safety and Health Administration (OSHA), workplace injuries have a major impact on an organization’s bottom line, causing the employer to bear expenses related to workers’ compensation, medical treatment, legal services, repairing damaged property and so on. Personal injury lawsuits are convoluted, putting your business at a risk of fines and expensive lawsuits. Moreover, personal injury laws differ in every state in terms of the type of injuries they cover and the reimbursements offered. For instance, the law enables personal injury lawyers in Chicago to cover everything, from the carpal tunnel syndrome in offices to spinal cord injuries on manufacturing and construction sites. Thus, victims of a workplace accident have everything to gain. Consequently, it is important for business owners to promote an environment of safety and security in the workplace, thereby reducing the total number of personal injury claims. Here are five effective tips that will help you protect your business from personal injury claims. 1. Pre-empt Workplace Accidents Accidents in a workplace are erratic and unpredictable. Therefore, it is wise to pre-empt the potential safety risks and implement measures to avoid dealing with the aftermath of an injury episode. Every business has a unique set of safety concerns that need to be addressed in time. Identify and tackle the safety vulnerabilities for your business and develop strategies to avoid such setbacks. A business owner is responsible for the maintenance of the office premises and equipment. Hire a building inspector to identify and fix structural issues like loose railings and broken staircases that may lead to accidents. Schedule regular repairs and maintenance to keep your commercial property safe for employees, visitors and customers and protect your business from personal injury claims. Clutter is a potential safety hazard. Keep high-traffic areas like aisles and stairways free of boxes and waste paper to minimize the possibilities of accidents and falls. Workplace driving accidents cost employers an average of $60 billion per year. Make sure all vehicles used for business purposes are thoroughly inspected, repaired and maintained on a regular basis to avoid any accidents in transit. Do not encourage overtime working. More often than not, overworked employees suffer from mental and physical exhaustion, increasing the chances of workplace accidents and injuries. Make sure you have adequate staff to improve the productivity and maintain a safe work environment for all. See also: When Workplace Safety Is Core…   2. Create a Successful Employee Safety Program According to OSHA, educating employees about accident and emergency response and other safety measures can reduce workplace injuries and disabilities by as much as 60%. Conduct pre-employment tests to screen the most efficient, skilled and qualified individuals for the job. Train your workforce to follow safety practices and identify, report and effectively manage site-specific hazards, thereby empowering them to make safe choices. Analyze your workplace for safety hazards and take effective steps to eliminate or control them. If you operate in the heavy machinery, construction or hazardous chemicals domain, make sure your workforce is using the proper safety equipment and protective gear. In an office environment, make sure the housekeeping staff keeps the aisle free of debris and spills, reducing the risk of falls. Moreover, follow the ergonomic workplace standards that promote employee productivity, safety and well-being. Routine safety and evacuation drills prepare employees for dealing with natural calamities like tornadoes, earthquakes and fire. It is critical to reinforce the safety measures at all employee meetings and training sessions. Encourage a culture of safety by stressing the importance of complying with safety standards, thereby reducing the risk of workplace accidents and protecting your business from personal injury claims. 3. Invest in General Liability and Property Insurance When accidents occur at the workplace, the injured employees, customers or visitors can easily file a personal injury lawsuit, imposing heavy fines on the business and damaging its reputation. Investing in liability insurance, however, can alleviate the financial burden of these lawsuits and maximize security for your business. Thus, when faced with personal injury claims of negligence, property damage, libel, slander and advertising injury, you can rely on general liability insurance to protect your business against such claims and cover your legal fees and the medical and miscellaneous expenses. To protect your company’s building and physical assets against fire, theft and accidental damage, it is advisable to invest in a liability insurance policy that includes property insurance. 4. Hire an Expert Business and Commercial Litigation Attorney Personal injury claims not only cost the business money but also put its reputation at stake. Whether you own a small or a medium-sized enterprise or a large organization, it is critical to hire a business and commercial litigation expert who can offer you valuable insights when signing contracts and settling claims. Personal injury lawyers know the personal injury claim process like the back of their hands and are updated on the latest health and safety laws. Thus, they can effectively represent you in court and advise you on the next steps, thereby ensuring that your business is adequately protected against such claims. 5. Know What to Do Once an Accident Has Occurred Despite safety precautions, workplace accidents do occur, resulting in personal injury claims against the employer. When an accident occurs in your business premise, injuring one or more employees, you should know how to handle the situation. First things first, seek emergency help for the people involved in the accident. Secondly, get in touch with your attorney, who can help you manage this situation in a professional manner. Investigate the sequence of events that led to the mishap and record it in the form of pictures and videos. Ask the employees who witnessed the incident to give you a recorded statement about the accident and remember to note their names and contact details. See also: Workplace Wearables: New Use of Big Data   Take Home Message As a business owner, you should always be prepared for dealing with all unexpected events, including workplace injuries. Because personal injury claims severely damage the company’s reputation and eat into its bottom line, the best defense is to take pre-emptive, preventative steps toward minimizing the incidence of workplace accidents, thereby securing the business from such risks. The information shared in this post will help you create a safe work environment for your employees and protect your business from pricey personal injury claims.