In 2017, a 15-year-old girl from Bedford, PA, was trying to live an ordinary teenage life until her classmates began bullying her. They attacked her on social media sites like Facebook and Kik about her red hair and braces, some going as far as telling her that she should kill herself. Her mother remembers finding the young girl sobbing for hours because of what people were saying about her in school and online. Even though her mother took her phone and tried to comfort the girl, less than a week later she would die by suicide. While the rate of death by suicide among teenage girls is at an all-time high, they’re not the highest risk demographic of the more than 40,000 people who die by suicide in the U.S. each year. According to the CDC, seven of 10 suicides in 2015 were men, making men 3.5x more likely than women to die by suicide. Now the third-leading cause of death among adults age 15-44 worldwide, the global rate of suicide will hit 1.53 million per year by 2020, which constitutes one death by suicide every 20 seconds, according to the World Health Organization. Children as young as 11 are dying by suicide as a result of experiences on social media, and we know of at least three examples of children broadcasting their own death to live audiences using social media tools such as Facebook live, Twitter and YouTube. How are leaders responding? In response to these disturbing trends, Facebook has partnered with organizations like the National Suicide Prevention Lifeline to develop a set of tools intended to help individuals find resources and support who are considered "at risk" for self-harm. The first of these tools is a new suicide-prevention feature on Facebook that uses artificial intelligence (AI) to identify posts indicating suicidal or harmful thoughts. The AI scans the posts and their associated comments, compares them with others that merited intervention and, in some cases, passes them along to its community team for review. The company plans to reach out to users it believes are at risk, showing them a screen with suicide-prevention resources including options to contact a helpline or contact a friend. While in some cases the artificial intelligence software will notify the Facebook community if it flags a situation as “very likely urgent,” in most cases it will simply work in the background to offer messaging and advice to the friends and family of a person in need. See also: Blueprint for Suicide Prevention   Dr. John Draper, of the National Suicide Prevention Lifeline, said that he feels that the software sounds promising. “If a person is in the process of hurting themselves and this is a way to get to them faster, all the better,” he told BuzzFeed News. “In suicide prevention, sometimes timing is everything.” Facebook is also making certain suicide prevention organizations available via Facebook Messenger, its instant messaging app. Facebook users will be able to flag posts that they feel indicate "at risk behavior,” which Facebook will respond to with an on-screen option to receive suicide-prevention resources. Can we use social media to predict suicide? New research out of Korea suggests that we might be able to begin using social media to predict suicidal behavior. The three-year study looks at the social and environmental factors that contribute to suicidal behavior and describes correlations between public mood and suicide and how data from social media sources and weblogs (blogs) might be used to predict that behavior; their primary hypothesis being that social media variables are meaningfully associated with nationwide suicide numbers. At the end of the study, the research team concluded that, “We found a significant association of social media data with national suicide rate, resulting in a robust, proof-of-principle predictive model,” and the team suggests social media data be used in future predictive modeling. How suicide prevention advocates are using social media. Sites like the Suicide Prevention Coalition of Colorado, the Mighty and To Write Love on Her Arms are also using social media to engage audiences with messages of help and hope. The Suicide Prevention Coalition of Colorado, an organization of which the author of this article is a member, uses Facebook, Twitter and email newsletters as educational and communications tools to promote events, raise awareness of mental health legislation and bridge the gap between service providers across the state of Colorado that might not have the resources they need as solo practitioners. To Write Love On Her Arms (TWLOHA) is a site that offers hope and help to those struggling with depression, addiction, self-injury and suicide. With a Facebook following of more than 1.5 million and a Twitter following of nearly 300,000, they share individual stories of hope and recovery and work to destigmatize suicide and self-harm. The Mighty is a blog with more than 5,000 contributors and 150 million readers that also gives people suffering from mental health disabilities a place to find resources, encouragement and support. This site, like TWLOHA, focuses on shared experiences. Individuals struggling with disability, disease and mental illness write in and share their stories of hope and recovery. Bell Canada, a telephone company in Canada, is running a "Let's Talk" campaign dedicated to raising $100 million for mental health programs by 2020 and encouraging people to find the strength to come out and talk to someone if they find themselves struggling with thoughts of self-harm. See also: 6 Things to Do to Prevent Suicides   What you can do to get involved today. Twitter is a wonderful conversation tool where you can do a search for keywords like #SuicidePrevention and become a part of the conversation with leaders, educators, individuals struggling and those with experience. A continued effort to destigmatize mental health issues helps those struggling realize that there is help. You can use social media to interact with your legislature. Most politicians today are active on social media, and some even have live events on social media, giving us the opportunity to ask them where they stand on issues such as mental healthcare as well as share our opinions on the issues. You can share resources on social media, especially around the death of a celebrity, to help further the conversation online and help someone find resources who might not have the strength to ask for help. Finally, if you or anyone you know is struggling with thoughts of suicide and need to talk to someone right away, reach out to the National Suicide Prevention Lifeline at 1-800-273-8255 or visit online at http://suicidepreventionlifeline.org/talk-to-someone-now/. If you need support for suicide grief or suicidal thoughts but are not in crisis, the National Suicide Prevention Lifeline offers resources on how to help either yourself or a loved one.

Walmart’s acquisition of Flipkart has created shockwaves in India, with the realization that the vast majority of its $16 billion price will go to foreign investors, namely Tiger Global, SoftBank, Naspers and Accel Partners. Now Indian investors are kicking themselves for missing out on the largest e-commerce exit ever. But they have no one to blame but themselves: Flipkart tried hard to raise money locally but was ridiculed and turned away, leaving only the foreign giants to rescue it. This pattern will repeat itself until India’s investors realize that the best opportunities are not in Silicon Valley but at home. Frankly, I sympathize with Flipkart founders Sachin and Binny Bansal because I, too, have seen the Indian inferiority complex at work. In a talk I gave at INK India in 2014, I predicted that a billion Indians would gain internet connectivity through their smartphones within a few years, and that this would begin to transform the country. Tens of thousands of startups building health sensors, robots, drones and commerce and infrastructure tools and hundreds of thousands of application writers addressing local problems could solve not only India’s problems but those of the world. See also: India’s Coming of Age in Digital   I also tried educating the executives of Wipro and Infosys. When they told me of the huge funds they were setting up to invest in Silicon Valley, I warned them that no one there cared for their companies or investments; at best, they would be offered bottom-of-the-barrel deals and be left chasing rainbows. And that is largely what has happened. I live in Silicon Valley and am a professor, not an investor. I did, however, get involved with one Indian startup, because it had world-changing potential yet was dying on the vine. Indian investors ridiculed the notion that something of such magnitude could emerge from India; all they did was waste the time of the founders. The company, HealthCubed, develops a compact medical-grade device that provides more than 40 measures and tests, including blood pressure, electrocardiography, blood oxygenation, heart-rate variability, blood sugar, blood hemoglobin and urine protein and is able to diagnose diseases such as HIV AIDS, syphilis, dengue fever and malaria. These are the same tests that labs and hospitals provide — but for less than one hundredth of their cost in the U.S. Simply having the lab results immediately constitutes a huge benefit in a rural health clinic. Additionally, the data can be immediately uploaded to the cloud, allowing for rapid evaluation by a remote physician. And analysis of the bounty of data thus collected will enable fresh insights into many conditions. I rarely have a problem getting Indian executives and VCs to return my emails. Yet when I wrote to them about HealthCubed, most didn’t even respond. Ironically, the investors who did respond said the valuation of the company was too high — without even asking what it was. So I gave up on India and advised HeathCubed CEO Ramanan Laxminarayan to register the company in Delaware and move the intellectual property to the U.S. Then I invested my savings in the company and joined the board. James Doty, MD, a world-renowned neurosurgeon and entrepreneur who founded Stanford University’s Center for Compassion and Altruism Research and Education, did the same. He found the technology to be more advanced and more effective than anything he had ever seen. Acumen, a New York–based impact investment fund, also invested in the company, as did American moguls Ray Dalio, Ross Perot Jr, Bridget Koch and actress Sela Ward and her VC husband Howard Sherman. One of Silicon Valley’s most respected investors, Raju Reddy, and an alumnus group from BITS Pilani also readily supported the company. The product is now helping hundreds of thousands of villagers in more than a hundred districts of four states of India, thanks to the Aditya Birla Group. The world’s largest NGO, BRAC, is using it to improve health and create employment in hundreds of villages in Bangladesh. Tens of thousands of Rohingya refugees in United Nations clinics outside the borders of Myammar are being diagnosed with it. And it is now set to roll out in Ghana, Senegal and Nigeria. See also: What India Can Teach Silicon Valley   I expect that, by the end of 2019, HealthCubed will have done more than 100 million diagnostic tests; and that eventually products such as this will disrupt the U.S. healthcare system itself and will quickly spread throughout the Americas — and that India’s VCs will have another cause for regret. That’s not to say Indian entrepreneurs shouldn’t take some of the blame. As Silicon Valley’s Hemant Kanakia said to me in an email: “Part of the problem I have observed while being an investor in Indian startups in the last six years is that Indian entrepreneurs have a short-term outlook; they want to make money and live the lifestyle of the rich. Sachin Bansal had no ambition like founders of China’s Tencent or Baidu have — of conquering the world.” Yet even Silicon Valley was like this when its ecosystem was in its infancy. I’ll bet that as a generation of founders such as the Bansals achieves great success, they, too, will develop grand ambitions.

The idea of risk-sharing began 5,000 years ago when Chinese merchants combined their cargo on multiple ships. Now, this dinosaur industry is being pushed into the modern era with the help of the Internet of Things (IOT). This technology has the power to transform insurance, but it comes with its own challenges. The traditional insurance claims process has stayed the same for decades, and it doesn’t sit well with customers. According to an Accenture Strategy Report, customer churn because of declining loyalty and poor customer experience represents as much as $470 billion in life and property and casualty premiums. The growth of the IOT has disrupted the industry and forced companies to change how they process claims. Customers use technology in their everyday lives and expect companies to do so, as well. Just 15% of customers say they are satisfied with their insurer’s digital experience. In today’s fast-paced world, customers want results right away. Insurance claims that take weeks or months to process can be a serious source of frustration. See also: Welcome to New IoT: ‘Insurance of Things’  However, the IOT allows insurers to move more quickly and make powerful data-driven decisions. Companies no longer have to wade through paperwork and can instead move through the claims process more efficiently. Instead of filling out countless forms, customers can now submit claims via mobile apps by taking a few pictures. Connected devices like biometric and environmental sensors make it easy to calculate risk and adjust policies as situations change. Data from connected devices allows insurers to know their customers on a deeper level with more accurate personal information, which can help create powerful bonds and add an element of customization to insurance that has long been lacking. Insurers can also more easily detect fraud, recommend personalized products and create more accurate estimates. In an analog world, an insurer didn’t know when a customer put a house on the market. In a digital world, insurers can know of available homes right away and recommend a new home insurance policy, plus auto and life insurance coverage. Aside from improving the customer experience, using the IOT also helps insurers cut costs. Automation can cut the cost of the claims process by as much as 30%. In many cases, those savings can be passed on to customers. IOT-connected devices have helped some insurance companies lower their premiums by as much as 25%. Most insurers believe that connected devices and more data will prevent greater losses, which could decrease the number of claims and lower insurance prices for customers who have reduced risks. In health insurance, data from devices can monitor a person’s health and recommend products and policies based on that data. Many companies are already offering discounts to customers who link their devices to their insurance coverage due to the likelihood of lower risks. However, the growth of IOT in insurance isn’t without challenges. Consider the example of a Danish woman who had been receiving insurance payouts to cover her inability to work due to an injury. Her profile on a running app told a different story—she was actually much more active than she claimed and regularly participated in sporting events that would have been near impossible if she really was an injured as she claimed to be. The woman’s insurance payments were cut in half, but questions arose about the rights of an insurance company to use data from IOT devices. Similar cases are popping up around the world of private customer information being shared online and companies using that information against their customers. Insurers need to be transparent and communicate their terms and conditions to their customers. See also: Global Trend Map No. 7: Internet of Things   Most insurers know the importance of striking when the iron is hot and adopting new data-rich practices before they become commonplace and don’t yield a competitive advantage. However, the IOT shift is so great that it can be overwhelming for companies to know where to start to get the best results. Aside from the growing pains, most insurers agree that the IOT will revolutionize the industry and customer experience. In an industry as regulated as insurance, taking advantage of new IOT technology is one way companies can stand out and offer a forward-thinking approach to their customers. It’s definitely time for change in insurance, and that change is coming through the IOT.

“A safe, secure environment is a comfortable, productive environment,” Joe Oliveri at Johnson Controls recently told ASMag. “With integrated, comprehensive security and fire and life safety system oversight in place, facility managers are better-equipped to minimize disruption and focus on creating what matters most: a safe, secure environment, maximum efficiency and up-time and a healthy bottom line.” But safety and security aren’t just concerns for companies. They’re concerns for property and casualty insurers, too. As digital tools and connectivity expand into workplaces, building connectivity affects workplace safety — and insurance risk — in unprecedented ways. Here, we’ll take a look at some of the biggest safety and security concerns and how P&C insurers can adapt to incorporate workplace connectivity into their view of coverage and risk. Connected Buildings and Safety: An Overview Central to the rise of connected buildings is the Internet of Things (IoT), the ecosystem of devices with internet connection capabilities. As Naina Khedekar recently noted at Tech2, the number of “things” on the internet is expected to hit 50 billion by 2020. Increasingly, denizens of the Internet of Things are sensors, tools and even clothing — devices integrated in larger networks such as those in a smart building and used as part of everyday work. Connected co-working spaces are increasingly common, architect and designer Sarah Kay notes at Facility Management, and companies are finding ways to use connectivity to improve building safety, as well. Connected buildings can be pushed to previously unthinkable frontiers. Deloitte’s Amsterdam headquarters, “The Edge,” currently holds the title of world’s most energy-efficient building, according to Stu Robarts at New Atlas. See also: How Connected Will Connected World Be?   Forty thousand sensors control everything from air temperature to solar panel angles, and a centralized online system assigns workspace on an as-needed basis, maximizing both energy and workspace efficiency. These tools can be turned to improving workplace safety and security, as well, with equally profound effects on accident risk. How Are Connected Buildings Reducing Onsite Accidents? While the initial interest in IoT-connected smart buildings focused largely on energy efficiency, forays into security and safety have begun to gain serious attention. As Karyn Hodgson recently noted for Honeywell, integrated security systems are a relative newcomer to the world of connected buildings. Many companies still rely on proprietary systems that don’t communicate with the building’s other controls, such as those for lighting, environment or scheduling and use. Yet the opportunities for connecting security to these other systems are profound, and companies are beginning to realize it. “With network video now the norm, physical security systems have an opportunity to be more integrated,” Steven Anson of Anixter told Hodgson. “There is a desire today to be more efficient. Customers ask, ‘How can I leverage these resources?’ ‘Why can’t my building be more automated?’ ‘Why can’t I see actionable intelligence?’” P&C insurers should be asking Anson’s last question, too. Integrated, smart security systems mean data — and a lot of it. When security is connected to and communicates with other building controls, not only can the security system use these to improve its own function, but it can also harvest and analyze data that can identify potential weak points, track patterns and suggest ways to improve security more efficiently. This information not only changes the risk calculation for insurers. It also suggests ways that P&C insurance companies can more effectively work with insureds. The Role of Wearables and Mobile Devices Building security isn’t the only safety-related sphere for IoT. Companies are starting to look at the ways that wearables, handheld devices and other tools can improve worker safety and health, as well. IBM’s Jen Clark and Dr. Asaf Adi describe one such project. Building on the concept of wearables for fitness, the IBM team began incorporating sensors into protective clothing. “Every 15 seconds, a worker dies from a work-related accident or diseases and 153 workers have a work-related accident,” Clark and Adi write. “The global number of non-fatal occupational accidents reaches a staggering number of 317 million, annually. Even more concerning, 2.3 million people die each year from occupational accidents and diseases.” This human toll also hurts companies’ and insurers’ bottom lines, accounting for $220 billion in losses each year. The IBM project uses wearable sensors to detect risks common to the environments in which the sensors are worn — everything from particulate matter to fall risks. The sensors are embedded in ordinary protective clothing like hard hats and safety vests. They track data in real time, allowing those on the site to identify and anticipate risks sooner than human sense alone might allow. A similar innovation is Intellinium’s “smart shoe,” a boot designed for workers who venture into extreme or hazardous areas. The boots are designed to help workers stay in communication in these areas, even when they’re out of one another’s visual or auditory range. “Even in the heart of the Sahara, you have the possibility (within a certain radius), to send a warning message to a coworker who can’t hear you or see you, the signal being sent through vibrators and support membranes located in the shoe,” Intellinium said in a press release. See also: Workplace Wearables — Now What?   Other Considerations for P&C Insurers Smart buildings and safety equipment offer opportunities to gather data that can be used to better measure and underwrite risk. However, these smart components pose other considerations for property and casualty insurers. One of the biggest additional questions is this: How should P&C insurers insure smart properties? As Cognizant noted in a 2014 white paper, insurers preparing for a connected world need to do three things:

• Understand how smart buildings work. What are the components that make the system “smart”?
• Know what you’re insuring. Does insurance cover only the hardware, or both the hardware and the software, in case of error? If a smart system is supposed to prevent or warn of another type or accident and it doesn’t, how does coverage apply, and what liabilities arise?
• Prepare to handle the data. Even the smartest building or equipment can’t help insurers understand what went wrong or how their responsibilities apply if insurers cannot access or analyze the data these tools provide.

Data security remains a significant concern in IoT, especially when some smart objects have proprietary security defenses and others have none at all. Currently, many buildings aren’t “smart” at all. Those that have begun to integrate smart systems may or may not have focused on workplace safety and security. As the use of connected buildings, equipment and other objects continues to increase, however, P&C insurers will be best poised to demonstrate their own value and to maintain strong customer relationships if they are themselves aware of the biggest questions surrounding the Internet of Things and have formulated plans to address them.

Mark Twain once wrote that "the difference between the almost right word and the right word is ... the difference between the lightning bug and the lightning." We're beginning to see that distinction play out in corporate innovation programs: A few are producing lightning, but many are just catching lightning bugs.

Guy Fraker, our chief innovation officer, offers sharp insights in a new blog post into why some win and some lose. Guy has generated plenty of lightning in his time, both in his innovation work at State Farm and in his pioneering consulting work, including at Munich Re, and he says that the organization of the innovation team is key. Read the full article here: "Attributes of Effective Innovation Teams."

Companies mistakenly assume that they can organize innovation teams as they do other sorts of teams, but innovation is different, Guy writes. The teams need to focus on developing a product or service, not a process, and need to be as fully invested in the result as a startup CEO would be. No assuming that you can just do your best and move on to another role in the corporation if things don't work out.

The skills that are needed are different, too. Someone who might be well-regarded in the corporate environment may be completely wrong for the innovation team. For instance, as Guy explains, innovators typically are well above average in their abilities to persuade but well below average on empathy -- no points awarded here for being a people person.

Guy's research and experience certainly jibe with mine. I've watched plenty of companies promise innovation over the years, reaching back to the early 1990s, when archrivals IBM and Apple announced two surprising joint ventures that were to set the world on fire, even though anyone paying attention knew the corporate cultures couldn't mix. The senior IBMer named to run one of the "startups" still thought he'd have an assistant to carry his briefcase for him, so the attempts at radical innovation mostly just produced low comedy -- at one early meeting, the IBMers showed up in polo shirts and khakis to try to fit the Apple culture, and the Apple folks arrived in suits and ties. 

Just lightning bugs with that pairing. 

Here's hoping for some lightning for you (and Guy's research can help keep you on the right path).

Have a great week.

Paul Carroll

Editor-in-Chief

P.S. If you're going to be at the SAP Global Partner Summit on June 4 in Orlando, please let us know by emailing rgriffin@innovatorsedge.io. Our Wayne Allen and Rock Griffin will be there, as part of a soon-to-be-announced partnership with SAP, and would love to meet as many ITL subscribers as they can. They can also tell you more about, or even demo, our Innovator's Edge platform, which tracks thousands of insurtechs and tens of thousands of other companies whose technology could foster innovation in insurance and risk management. 

In early December 2017, CVS Health entered an agreement to buy Aetna for approximately $69 billion. Not only would this acquisition be the largest health insurance deal on record, but it is also likely to change the face of the health insurance industry. So what can we learn from it? Quite a bit. What can the insurance distribution business learn from CVS? Lesson 1: Perhaps the biggest lesson is that, rather than wasting your energies resisting change, it is wiser to put change to work for you. The specter of disruption and the trends underlying disintermediation can be your business’ greatest assets if you’re willing to adapt, work within the laws of economic physics and embrace customer-centricity Lesson 2: The consumer and his/her omnichannel convenience needs to drive future-facing strategy. With this in mind, companies will need to work to better understand their customers and to tell apart their different customer types. Lesson 3: Once that’s done, companies can identify which customer type — which unique market segment — is most important to their business and how that relationship can be strengthened and sustained. Lesson 4: You may need to tweak or even somewhat redesign your product/service offering to better accommodate those clients best-served by the unique combination of your available and potential resources, expertise, technology and employees. Lesson 5: In some cases, you’ll discern gaps in your offering that require you to invest in new technology or to recruit and train new employees to specialize in specific markets. You might even look at merging with or acquiring another firm that will strengthen, complement or supplement your offering and help you to meet the demands of tomorrow’s more sophisticated and demanding customers. If all that sounds like a tall order, it’s because it is. You’ll have to use some elbow grease and put in the leg work. But there are also ways to make the work a little less daunting and give yourself an edge. Leveraging digital platforms and big data innovations, smart businesses are enabling highly efficient transactions that are both customized and scalable. See also: Global Trend Map No. 9: Distribution   Of course, there are also lessons aplenty to be taken not just for your business on a granular level but on a wider economic level. Consumers will no longer tolerate a supply chain that sees their vital products and services changing too many hands with too little added value. Today’s customers expect service providers to go out of their way to not just meet their demands but to anticipate their needs. This is especially true when it comes to services delivered by supply-side intermediaries. This isn’t just the case for healthcare; it holds for all essential services. The insurance industry at large, and especially brokers and agents, besieged by the forces of disintermediation, can learn a lot from CVS. When it comes to insurance intermediaries, that means keeping a finger on the pulse of the demand side of the industry, identifying transformational market forces and re-examining your business model to see how you can put those forces to work for you. As demonstrated by CVS’s acquisition of Aetna, if you can streamline the delivery of your goods and services so that your presence is a benefit rather than a detriment to your customers, you’ll not just win the day but the morrow as well. The value proposition of an end-to-end, customized and data-driven experience is not unique to healthcare. In fact, that experience should be adopted as the guiding mantra and policy-shaping battle cry for insurance agencies and brokerages the world over. Final thoughts CVS is a giant in its industry, and it still had the humility and foresight to understand its predicament and prepare accordingly. It would have been much easier for the company to rest on its laurels and for the C-Suite to take solace in its strong earnings reports. It would have been easier, and it would also have been a mistake. You cannot ensure future success on the basis of past actions alone. Whether you realize it or not, if you work as an insurance intermediary, disruption is coming for you. As Eric Andersen, CEO of Aon Benfield, bluntly declared in 2015, “The traditional broker chain… could collapse... as reinsurers, carriers and their brokers all look to move more closely to the ultimate client.” Whether through M&A, joint ventures, a niche strategy or a technology-driven continuance strategy (or something else altogether), now’s the time to explore every possible avenue to improve your business’ market resilience. The underlying forces of change are sweeping through the insurance industry and compelling forward-thinking operations to act. 2017 clocked in with more than $20 billion worth of M&A deals. What’s more, the second half saw a 50% increase from the first. That’s remarkable. At the same time, technological innovation is pushing forward at an equally rapid pace. Accenture reports that “Some 83% of insurance executives expect platform-based business models to become part of their growth strategy over the next three years.” Either way, one thing remains clear: Insurance distribution businesses will need to adapt to a fast-changing environment to ensure that their value propositions remain viable in the face of uncertainty. To survive, your business will need to deliver a more customer-centric and more end-to-end experience. At the company level, this means having more support staff and specialists to provide not only quick and comprehensive but also innovative and customized solutions for problems that your customers might not yet even realize they have. It’s here that smart technology can be the game changer. First, it provides better integration and visibility across the entire organizational structure. Data points are collected and centralized on the account level through a number of input sources — including email correspondences, the client portal, broker/agent-entered data, public records, social media, telemetry devices, BI insights and more. This ensures that all relevant information is at the fingertips of the interested party — anywhere at any time. Information will no longer be siloed between departments, and it will be shared automatically. After all, it’s often these extra customer insights that can make a difference. For example, any number of data points can speak to a new policy need or an opportunity for upselling or cross-selling. If that information is kept with, say, the marketing department and not shared with agents, a huge potential opportunity could be missed. Of course, this streamlined system also needs to be monitored and managed in an intelligent, timely, appropriately granular and end-to-end way. Not every approach or idea is going to work, so agents and brokers will need to understand where they are seeing a return on investment and what needs refinement. Risk taking will be a required part of the business moving forward, but that risk can be mitigated with smart tracking and analytics. See also: Distribution: About To Get Personal   Today, consumer preferences are shifting, and this will only continue. Forward-minded insurance professionals know this and are working to build their businesses to dominate tomorrow’s industry landscape. In fact, 84% of insurers report being increasingly pressed to reinvent themselves and evolve their businesses to survive and thrive in disruptive environments. Companies need to be constantly thinking about how they can cater to a new generation of consumer, those who want one-stop shopping and value the ease of buying products and services above all else. The agencies that are smartly leveraging technology to develop ways to make their customer experiences more personalized and convenient are going to succeed over the long run. In other words, the CVS-Aetna deal is — at its core — about streamlining the supply and distribution of healthcare in a way that meets shifting consumer expectations and provides a more end-to-end, customized and data-driven service. You can find the full paper here.

Insurance agents and financial advisers who don’t have a strong social media presence could be missing out on a lot of potential business, according to a new study conducted jointly by Life Happens and LIMRA. The study found:

• More than a third of Americans (34%) — and more than half of millennials (54%) — are likely to ask for recommendations for an insurance agent or financial adviser on social media.
• 54% of millennials and 44% of Gen Xers are likely to check an agent’s or adviser’s social-media presence on sites such as Facebook, Twitter and LinkedIn.

“This year’s study reinforces the increasingly important role that social media has on an adviser’s marketing efforts,” said Marvin Feldman, CLU, ChFC, RFC, president and CEO of Life Happens. “Advisers and agents must ensure their profiles are regularly updated and provide consumers with quality content and information.” At the same time, the study found, most consumers still desire a personal connection with a professional when buying insurance. Millennials are the most likely to want to meet with a financial professional before purchasing life insurance (73%), compared with Gen X (64%) and Boomers (69%). How should we respond to these findings? Below are three ways for insurance and financial services firms and their agents and advisers to make the most of these findings.

• Invest in social media and mobile marketing (especially advertising). With so many consumers turning to social media to evaluate financial products and professionals, it is critical that agents and advisers have an active social media presence. And, with recent changes Facebook made to its News Feed algorithm making it harder for businesses to get into consumers’ News Feeds organically, it’s more important than ever to invest in ads.
• Take a multi-channel approach. Consumers want to take advantage of both personal networks and professional help, online research and in-person guidance. Agents and advisers must present an “always-on” persona as consumers utilize a multi-channel approach to researching and buying insurance.
• Connect personally — and locally. Meaningful, human relationships still play a critical role in the insurance and financial services industry. One of the best ways to create these relationships is to connect with people on a local level. Consumers may not have an intrinsic connection with a national brand logo, but they can create a tangible connection with an agent or adviser with an office down the street.

See also: 3 Useful Cases for Social Media  

High-dollar workers’ compensation claims are rare, but they can be extremely costly and have a significant impact on an employer’s workers’ compensation costs. The rarity of these claims makes studying them challenging. Safety National recently completed a review of our large claims and uncovered some trends. Background/Definitions Safety National is the largest provider of excess workers’ compensation coverage for self-insured employers in the U.S., insuring close to one-third of all self-insured employers. We are also a significant writer of high-deductible workers’ compensation coverage. Because self-insured claims data is not reported to agencies like NCCI, our data can offer a perspective that others cannot provide. The largest industry sector that we insure is public entities, including municipalities, K-12 schools and state agencies. Our other larger industry sectors include healthcare, higher education, light manufacturing and retailers. Safety National’s entire book of claims includes the large losses that employers rarely see. By handling thousands of such claims, we are able to develop an understanding of their challenges and cost drivers that others do not possess. This experience also gives us insights into managing these severe cases. For the purposes of this article, we are defining “large workers’ compensation claims” as those with a Safety National total incurred of more than $1 million. This is over and above the underlying employer’s retention, which, for the claims reviewed, ranges from $225,000 to $3 million. “Catastrophic claims” are defined as severe burns, brain injuries, spinal cord injuries and significant amputations. These losses attract immediate attention from all those involved because the severity of the claim is apparent at the time of the injury. “Developmental claims” are defined as those more-routine claims that continue to develop over time to the point where their total incurred meets our definition of a large claim. Developmental Claims While the catastrophic claims get the most attention, we see significantly more developmental claims crossing the $1 million threshold than our catastrophic claims. Approximately two-thirds of all claims we define as large losses started out as fairly routine claims, including back, shoulder and knee injuries. The most common reason for escalating costs in these claims was multiple failed surgeries. Prescription opioid medications became the next significant cost driver, with annual prescription costs that were often more than $50,000/year. It usually takes 10 years or more for these claims to reach the point where they are reported to Safety National, and, if not settled, such claims can remain open for 30 years or longer. Thus, these developmental claims have an extremely long tail. See also: The State of Workers’ Compensation   One interesting trend in these developmental claims is that there was often an opportunity to resolve the claim years prior for well below where the ultimate incurred exposure ended. However, the long-term exposure on the claims was not properly recognized, and, because of this, settlement demands were deemed excessive and the claim was left open as costs continued to escalate. The importance of accurate exposure evaluations and claims reserving cannot be overstated. Catastrophic Injury Claims Catastrophic injury claims are rare, and, because of this, many employers do not feel they have exposure for such claims. However, the reality is that these accidents can happen under a variety of circumstances. According to Safety National’s claims data, five accident causes accounted for 86% of our catastrophic injury claims: 24% — Motor Vehicle Accident If you have employees who drive, you have significant exposure for catastrophic injury claims. Often, these are single-vehicle claims where the driver lost control due to road conditions. Interestingly, we have seen many vehicle accidents involving police officers where the injuries sustained were likely a direct result of the officers not wearing a seat belt. 24% — Fall Most of the catastrophic injury claims involved a fall from elevation. However, we have also seen catastrophic injures from a simple trip and fall where the injured worker struck his or her head, causing a brain injury, or landed wrong, causing a spinal cord injury. These types of claims can happen anywhere, including schools, retail settings or just on the stairs in an office building. 20% — Struck By This includes a wide variety of potential causes, including being struck by machinery, falling objects or a vehicle (while not operating a vehicle, themselves). With the large number of public entity claims we manage, there are a significant number of claims that involve municipal workers being struck by vehicles while performing roadside maintenance and other activities. However, we have also received catastrophic injury claims that involve someone struck while crossing the street to a parking garage or being struck by a falling object while in a warehouse. 10% — Act of Crime Most, but not all, of these claims involve police offers being shot in the line of duty. However, there are also claims where people working in a retail store or school were shot. This category includes mass shooting claims. 8% — Burns Severe burns can occur in many different occupations, ranging from industrial to food service. The costs of these claims are extremely high in the first two years because of numerous skin graft surgeries. The remaining 14% of catastrophic claims come from a variety of causes. We have seen brain injuries caused by severe food poisoning and flesh-eating bacteria contracted from a simple scratch. In addition, medical complications from minor surgical procedures have led to brain injury claims. Catastrophic injury claims can, unfortunately, happen anywhere to anyone. Rising Costs of Catastrophic Claims Medical advances are saving lives and improving the quality of life for those with catastrophic injuries. However, these medical advances are also very expensive, and the cost of the claims tail on catastrophic injury claims is increasing dramatically. In addition, prosthetics used to be very simple, with a single prosthetic being used for all activities. As we have seen in the Paralympics, prosthetics have become very advanced and can, in many cases, replicate prior function. In addition, injured workers now often receive multiple prosthetics for use in different activities. These advanced prosthetics greatly increase the function for their users, but they are also significantly more expensive than they were 20 years ago, and they wear out more rapidly because they allow for increased activity levels. It was not that long ago that a workers’ compensation claim with a ground-up incurred of more than $5 million was a rarity. In reviewing Safety National’s claims history for the last 40 years, we had only three such claims prior to 1990. When you consider all of Safety National’s claims in the last 40 years with an incurred over $5 million, 35% of them occurred in the last eight years, and 22% occurred in the last five years. We are also now seeing catastrophic injury claims with over $10 million incurred. See also: How Should Workers’ Compensation Evolve?   Medical advances also affect the survivability of severe injuries. We recently saw a severe burn case where the injured worker survived for less than three months and the medical costs were more than $10 million. Ten years ago, that injured worker would have died immediately because of the severity of the injuries. An injured worker with a brain injury or paraplegia can now have a near-normal life expectancy. Twenty years ago, those same injuries would have resulted in significantly reduced life expectancies. These extended life expectancies mean that, for someone in their 20s at the time of an accident, we could realistically see claims costs eventually exceed $20 million. Conclusion Large workers’ compensation claims are infrequent, but the costs of these claims are significant and can have a tremendous impact on an employer or carrier’s claims costs. Catastrophic injury claims are even rarer, but the costs of these claims are increasing rapidly, with single claims exceeding $10 million and the potential for such claims to reach $20 million. This article was written by Mark Walls and Stephen Peacock.

It is probably a bit presumptuous to liken the insurtech startup movement to Hamlet’s famous “To be or not to be” soliloquy. It is, after all, a well-known and historical Shakespearean reference. However, the similarity is in the questions asked, and such a question has probably been asked prior to many defining moments. And just as Hamlet pondered many questions, there are many questions that revolve around the state of the insurtech movement. At this juncture, some five years into this movement, the one question that has most likely gone by the board is – Is it real?  You can debate whether we are at the beginning of the insurtech cycle or at the end. However, there are several strong points in favor of the fact that it is real. See also: Convergence in Action in Insurtech   SMA has been following the insurtech startup trends since 2013. Currently, we track approximately 1,200 insurtechs. It is definitely a fluid number. Some startups go out of business, and others come in to fill the void at a regular pace. In the 2013-2015 timeframe, the insurtech startup landscape was a tsunami of activity – it was difficult to get one’s arms around what was happening. In the latter half of 2017, some strong realities emerged. SMA’s recently released research findings have revealed several major insurtech trends or themes that are specific to insurance and have meaningful implications for the industry. In response to the “is this real” question, three of the 10 themes anchor the insurtech movement firmly in reality.

• Insurtech has spread to all tiers and lines of business – Originally, most of the activity was in personal lines and health. Now, of the P&C contingent, which SMA data indicates is 39% of all the activity, a little over half is personal lines; 35% is commercial lines; 13% is workers’ comp. Historically, technology providers have targeted particular tiers for their sales efforts. The startup community targets insurance business problems without a specific tier focus. What this means is that insurers of all sizes are able to adopt insurtech-provided technology. SMA partnering data shows that there are insurtechs with customers ranging from top 10 insurers down to single-state insurers. The bottom line: The fact that insurtech is not focused on the top echelon of global players but rather on business problems across the insurance ecosystem lends itself to the “it’s real” theme.
• Live implementations are increasing – Not surprisingly, in the beginning of the startup movement, most of the activity was around fundraising and proofs of concept. In 2017, and continuing at an accelerating pace in 2018, insurer “go lives” are happening. Some insurtechs have 10, 12 or more insurer logos on their websites. These are not investor listings; they are the names of insurers that are rolling out capabilities in the marketplace. In particular, drone usage, smart home/connected property and connected vehicle initiatives are common and growing. The “it’s real” indicator is that insurers are not going to roll out technology that affects their customers just for the fun of it – customers are not guinea pigs. Insurers are seeing the value in insurtech offerings and are executing.
• Insurtechs are partnering – While there is nothing wrong with a technology provider staying in their space, a long-standing trend within the insurance industry has been partnering for greater value. This has not escaped the attention of a number of insurtechs. For example, Bold Penguin and Ask Kodiak have partnered, as have Elafris and Hippo and Betterview and Understory. Mature technology providers also see the value of startup partnering; for example, Willis Towers Watson and Roost, Verisk Analytics and Driveway. Majesco partners with a network of insurtechs. The “it’s real” factor is that insurtechs are not simply attempting to see what they can do just for today – but, rather, what they can do for the long haul, to become strategic contributors within the insurers they work with.

While there are still questions about the insurtech movement, one of them should not be – Is it real? Business value is being generated by many startups – and no insurer is going to walk away from that. New channels and service opportunities are emerging that are generating interest and execution. New products are sprouting up at a regular pace. Not every startup and every idea is going to be a winner, but many will be. And some already are. Bottom line? Both Hamlet and Shakespeare would be proud of the insurance industry for seeing the possibilities and not just the questions. See also: 4 Key Qualities to Leverage Insurtech  

“[A]n insured should not have to consult a long line of case law or law review articles and treatises to determine the coverage he or she is purchasing under an insurance policy.” – Kovach v. Zurich Am. Ins. Co., 587 F.3d 323 (6th Cir. 2009) Ah, if only that was possible. Or is it… The latest insurtech/startup news being reported by the media (i.e., the latest PR being regurgitated without journalistic scrutiny) is that Lemonade is testing out a revolutionary new “open source” homeowners/renters policy that will allow the industry and consumers to “co-create” an insurance policy that can be used by anyone. Here is the sample policy alleged to be the “big bang” of hip, easy-to-understand insurance policies: Lemonade Policy 2.0 Here is the Github area where you can comment or ask questions: Github Policy 2.0 Collaborative Site How many consumers are experienced at drafting legal contracts? How many insurance industry professionals have experience in creating insurance policies that pass legal and regulatory muster? If it was so easy, it would be difficult to find any case law involving insurance policies. Below are some observations, questions and suppositions based on my initial perusal of the document at the link above. It’s the best I can do given that the “policy” reads like a “Deep Thoughts” SNL Jack Handy skit.

• The welcome introduction says the policy is written in a way that’s simple, easy to understand and fun to read. I find nothing in this rambling, babbling amalgamation of seemingly random thoughts to be easy to understand. And, let’s face it, insurance policies in any form are not “fun to read” even if you include super cool, awesome language like “your stuff,” “yuck” and “ouch” that might appeal to pre-teens. But, if that’s your market, I’d add some cartoon drawings, maybe teddy bears that shoot lightning out of their eyes to simulate a power surge exclusion.
• Lemonade seems to believe that being able to place your homeowners insurance in two to three minutes using a contract that’s only a few pages long is a good idea. I wonder if this is ignorance, naivete or maybe something else.

See also: Lemonade’s Latest Chronicle   The first part of the policy says it’s “The Squeezed Version.” Another super-cool, groovy, far-out, and gnarly play on words (I’m an old guy…what do today’s hipsters use for “groovy” and “far-out”?). In any case, I’m assuming “Squeezed Version” refers to a summary of policy terms, such as:

• The policy covers “events” that take place during a particular period. What contractually constitutes an “event”?
• Coverage appears to be for the six perils of theft, vandalism, fire, smoke, burst pipes, appliance leaks, plus “damage others may accuse you of causing,” whatever that last term means. Have you ever run across a homeowners policy that only covers a half dozen or so perils? Ever? In modern history?
• There appears to be a per-item limit of $2,500. I don’t think I’ve seen that in any other policies. And what constitutes an “item”? So there’s only $2,500 for your new $4,500 John Deere riding mower? But wait…keep reading because, unlike other homeowners policies, there appears to be ZERO coverage for your riding mower.
• Temporary living expenses are covered up to $2,500. That should be good for about a week of coverage. Maybe two weeks if you don’t SuperSize your meals.
• If the exact item damaged or destroyed is not available, the insured will be reimbursed an amount to buy something “equivalent.” What about antiques? Does “equivalent” mean functional replacement cost or another antique that is equivalent. And don’t forget the maximum $2,500 per item you don’t usually find in other homeowners policies.
• The personal property limit, temporary living expenses limit and $100,000 liability limit are the “maximum we will reimburse you, in total, per year – even if the losses you suffer are larger.” This sounds like an aggregate limit. Every mainstream homeowners policy I’ve seen has an automatic reinstatement of limits, not any aggregates.

The next part of the policy says it’s “the full story,” which presumably is the details of coverage:

• The policy covers “stuff that you own” and that’s normally kept at your home. Most homeowners policies cover property that you own OR USE. People rent, lease and borrow property of others.
• The policy says that owned property is covered for four perils: a fire, a burst pipe, theft or vandalism. Didn’t the “Squeezed” version earlier also include smoke, appliance leaks and “damage others may accuse you of causing” (whatever that last thing means)?
• And what about proximate cause vs. concurrent causation, an issue addressed in most homeowners policies because of extensive case law? If vandals disable your sump pump, and your basement is flooded, is that covered or not?
• Cash is excluded. That’s not the case for most renters policies. There’s an exclusion for “assault weapons” and any other firearms that are not “stored securely and used responsibly.” What constitutes being stored securely…if they’re stolen, that’s de facto proof they weren’t stored securely? Who decides whether use is responsible?
• In the “what’s not covered” section, it says damage to property is covered for fire, smoke, theft, vandalism, burst pipes or appliance leaks (ah, welcome back, smoke and appliance leaks). Hey, what happened to “damage others may accuse you of causing”?!
• Once again, Lemonade says your stuff is covered for $10,000 per year. Sure sounds like an aggregate limit, something not found in most other HO policies.
• The policy does not cover “losses that could have been foreseen or prevented by you through reasonable steps.” Aren’t many losses preventable, like that frayed extension cord? And, again, what is “reasonable”?
• Neither illegal property nor illegal activity is covered. What makes something “illegal”? If you burn leaves when, unbeknownst to you, there is a burn ban in effect and you damage your and your neighbor’s property, there’s no coverage because what you did was “illegal”? And, because there is no severability clause in this policy as there is in most other policies, does this exclusion apply only to the person committing the allegedly illegal act, or does it apply to everyone?
• The policy excludes damage by “motorized vehicles of any kind.” So, there’s no coverage for using a riding lawn mower? What about someone injured by a child’s “Barbie” car? Most homeowners policies provide some coverage for this.
• There is no liability coverage for “assault weapons” or other firearms that are not “stored securely and used responsibly.” I thought Lemonade was socially conscious. So much for innocent victims.
• “Damage that’s related, or similar, to something you’ve been accused of in the past 10 years…isn’t covered.” Is this just liability claims or direct property damage claims, too, because the policy doesn’t separate the two. What makes something “similar to”?
• Apparently there is a “Bad Weather Package.” Does this mean there’s no windstorm or tornado coverage?
• The policy says Lemonade can cancel or nonrenew with 10 days notice. Presumably that will change with state laws. Maybe.

Here are some “Issues” that Lemonade responds to from open source contributors, including: “Clarification around ‘stuff that’s used for your business’” “Clarification around cannabis coverage” Much of these “clarifications” from Lemonade are what policy form drafters include in the contract language to begin with. Otherwise, interpretation of the extensive broad, vague, ambiguous wording in Policy 2.0 is subject to varying interpretation by different individuals over time. That’s not contract certainty and not desirable. It’s exactly what leads to litigation. When my son moved into an apartment, the management required proof of renters insurance. If you didn’t have any, they had an endorsed vendor where you could buy coverage online. To their credit, the policy form was available online. It was pure crap. Very limited named perils. Very little in the way of bonus coverages. $50,000 liability coverage. And the deficiency list goes on. The cost of the policy was $120. I got him a quality policy with a mainstream insurer on an open perils and replacement cost basis for $180. Homeowners insurance is not a commodity, and an insurance contract should not be structured, in accordance with the infinite monkey theorem, as if it was the result of a warehouse full of typing monkeys that came up with an insurance policy instead of a Shakespearean work. See also: Lemonade Really Does Have a Big Heart   It’s interesting that an innovative insurtech is proposing a policy that appears to have less property coverage than the 75-year-old 1943 New York Standard Fire Policy with an Extended Coverage endorsement. To quote the old Firesign Theater comedy troupe, “Forward, into the past!” So what is Lemonade really trying to do? I wonder if their highly hyped behavioral algorithms aren’t working as expected and their loss experience is poorer than anticipated. When that happens, one approach is to abandon the industry-standard ISO HO-4 you’re selling for something worse than the E&S marketplace currently provides and hype it as a good, innovative thing. And make it open source so that your competition has an equally inferior product to sell. Most journalists will simply guzzle the PR and regurgitate it like a drunken sailor on shore leave. At least the old snake oil salesmen of yesteryear conducted business with a wink and a nod. Yes, I admit it… I’m an old guy questioning new things. But being an old guy might explain why I enjoyed reviewing this latest Ralph Kramden-like scheme of Lemonade so much. It reminds me of Ted Mack’s Original Amateur Hour. Come on, kids, let’s leave the contract drafting to the professionals. As real “innovator” Al Einstein said, everything should be made as simple as possible, but no simpler.