At InsureTech Connect, there were a lot of innovative approaches and capabilities on display. But the term “bubble” could be heard on many attendees’ lips, especially those who’d watched the event double in size each year. In related news, Deloitte put out a report showing that although the flood of insurtech funding continues, funding for new companies is way down. What’s happening? Well, at the end of the day, "insurtech” means selling insurance to someone or selling something to an insurance company. Both of these things are really, really hard and take a really, really long time, no matter how cool your tech is. Over the past three years, there’s been a lot of news about big funding rounds, but not a lot of news about big exits. Most of the exits we have seen are driven by an incumbent insurer deciding that an acquisition is the best way to incorporate some new capability into its own offerings, or add a cool founder group to their team. Now it seems that most insurtech investors are using their capital to try to ensure their puppies stay healthy long enough to get taken home by a wide-eyed insurer or tech vendor. See also: How to Partner With Insurtechs   During the first fintech boom in the ‘90s, there was a lot of talk about nimble little mammals eating the dinosaurs who refuse to evolve. It was true that the dinosaurs needed to evolve. But they mostly did it by eating the mammals. For insurers, the insurtech bubble is a great thing. Venture capitalists are funding the R&D that insurers have refused to fund themselves. There’s a lot of great learning to be had for free, and insurers should pay close attention. When the bubble pops, there will be a handful of new participants in the insurance ecosystem, and a whole bunch of nutritious mammal carcasses lying around.

Brian Harrigan, Founder and CEO of InsurIQ, describes the company's ability to give consumers a more holistic view of all their insurance coverages in one easy to use platform, simplifying the process of researching, buying and managing a portfolio of insurance products as needs change and evolve.

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According to a recent Gallup study, more than one in three employees have changed jobs within the past three years. Among this group, common driving forces behind the change included gaining an improved work-life balance, having opportunities to do the work they want to do in the best environment possible and feeling valued as an employee over time. Feeling valued is arguably the most important among individuals and employers today, given the increased competition in the corporate world. Without a deep connection to a company, employees are likely to be on the prowl for a different opportunity elsewhere. One of the ways employees and their management can eliminate the urge for individuals to leave because they feel less than valued is through strategic collaboration revolving around career development. Team leads and employees have an opportunity to come together to develop well-defined, achievable career goals based on both individual needs and corporate goals. This is most effectively accomplished when a realistic plan of action is in place, including the mechanisms listed below. Meaningful Discussion About Career Progression It is nearly impossible to create strong career paths for employees in a collaborative environment without both individuals and management teams taking part in the process. This begins with in-depth discussions about what an employee wants and how that fits in with the company’s overarching vision. Sitting down with employees to talk through possible career paths, professional development opportunities and training requirements is a necessary step in collaborating. These conversations should cover what the employee wants over time, what the employer needs and how that can be accomplished based on current and future skills and competencies. See also: 4 Keys to Charting Your Career   Provide Training Opportunities Collaboration on career path progression also requires some form of corporate training and professional development opportunities for employees. Based on the career goals of employees and objectives of the organization, individuals and managers can come together to better understand what training initiatives are needed and wanted. Leaders should be willing to ask employees what professional development tools they required to move forward in their career, and how they are able to acquire new knowledge and skills. Similarly, employees need to feel confident that their wishes are heard and acted on in corporate training offerings. This collaboration leads to a more effective development program that helps improve the success of career pathing for leaders and employees. Using Integrated Technology Solutions In today’s business world, the use of technology has made collaboration a much easier process for companies and employees, regardless of location or size of the organization. Using a digital platform like career pathing software provides a streamlined way to define clear career paths for employees based on organizational needs. Through this technology tool, employees can select the skills and competencies necessary to achieve career progression while linking these to the necessary training and development courses. Employees can then easily see what they need to accomplish over time to move toward their selected career path. Once new skills are achieved, managers can offer recognition to employees and select those who are ready for a promotion or lateral move. Not only does this ease the process for both managers and employees, but it also offers more flexibility in and control over career movement over time. Connecting Individual and Corporate Goals Collaboration in career development among employees and managers also requires a connection between company goals and individual wants and needs. With the help of performance management tools, an organization has an opportunity to integrate career scenarios and employee accomplishments with the larger objectives of the company on an continuing, consistent basis. When these crucial aspects are clear and trackable for both management teams and employees, there is a greater opportunity to develop career paths that are beneficial to both parties. See also: Time to Formalize Insurance Career Path   Organizations that focus on a collaborative work environment in the realm of career development are known to thrive more than those that separate managers and employees in the process. Coming together to discuss career opportunities, designing professional development and training programs and using technology solutions to do so gives both employees and managers a voice in the process.

It’s 2028. The world’s population stands at more than 8 billion. In the past decade, we’ve added a billion people, and we’re living in a hyper-connected world. Our smart tools are diagnosing a growing number of conditions—taking your pulse and counting steps was just the beginning; the smart tools of 2028 detect all kinds of vitals to accurately diagnose a number of ailments and diseases. Even our roads have changed. Today’s glass-topped highways are beautiful stretches of solar roadways embedded with a multitude of sensors aligned with the self-driving cars traveling on them, preventing accidents. Insurers have figured out ways to underwrite and insure all that autonomy in all of its different modes. The same is true for transportation-as-a-service. And, we’re already discussing how to regulate and insure the next generation of vehicles – custom, 3D-printed, flying cars. The pace at which all of this has happened is amazing. But the big question is, how did we get here? In a word, telematics. Telematics – aka the Internet of Things – changed everything since it started interacting with all of our lives years ago. For insurance, it started with underwriting and data monetization. And, although there were a lot of interesting early results, there wasn’t a lot of uptake or market success. That all started to change in 2018. Data exchanges started to come out. Telematics data (from OEMs, mobile devices or OBDII devices) started to funnel into one place, normalized and ready for insurance companies to use to make attractive offers to subscribers. Insurers could also use the data to innovate. At the time, CCC was already working with its data exchange, CCC X. Our systems had already processed more than 50 billion driver miles. In retrospect, that time really was the turning point for telematics. As an industry, we saw the checkerboard get filled up—slowly at first—by forward-thinking companies that were making investments in telematics technology. 2018 was a turning point for the auto insurance industry. The real tipping point started to come when we looked at other use cases for telematics data. Those cases vastly increased the adoption of the technology and made it much more mainstream. On top of that, telematics was combined with other technologies and innovations of that time, and that was what really sent us on a rocket ride. When early use cases evolve, things get exciting In 2006, cell phones were mainly used by people making phone calls. Remember how fast it all changed when the first smartphone came out? What really made cellular technology take off was when the smartphone became your calendar, your music collection, your newspaper. It became how you bought products. It was everything, and everyone had to have one. And remember the companies that were slow to adopt? They had a tough time. In 2018, it was exactly the same with telematics. New use cases opened up the future and enabled innovation. See also: It’s Rush Hour in Telematics Market   In April of that year in Cypress, Texas, CCC began working with State Auto to ingest telematics that would enable connected claims. With a flip of a switch, a 100-year-old accident triage process was changed. Suddenly, State Auto knew about a crash seconds after it happened. And what did they do? They picked up the phone, called their customer and said, “We see you’ve been in a crash. How can we help?” One hundred years of process was flipped on its head overnight. Customers were amazed. That was the beginning of when people started to ask themselves about how things were done. The moment when change happens Up until this point, the three fundamentals of the insurance process were set in stone: I own my car, I drive my car, I call my insurance company when I get into an accident. After telematics, people started to think differently.

• I own my car. Do I? Remember, new modes for transportation as a service and driving subscriptions, among other innovations, started to become a more widespread conversation. People started to consider that maybe they didn’t need to own a car.
• I drive my car? Do I? 2018 was also right around the time when self-driving cars and taxis started hitting the streets of Singapore, Tokyo and Las Vegas. Maybe I don’t have to drive my car?
• I call my insurance company when I get into an accident. Should I? As mentioned, on April 26, 2018, we found that maybe that was no longer necessary or always true.

Another flashback. In 2018, we also introduced the capability to determine injuries from telematics-powered crash dynamics. We used the data to understand the principles of force and delta V and used that to detect what kinds of injuries the people in the car may have, the potential severity of those injuries and what the range of medical treatments would likely be. That came together to allow our customers to treat people with the same efficiency and process as we were able to repair the car. Finally, around this time telematics was applied to the repair. Cars were getting a lot more complicated, and there were a lot more sensors, more diagnostic trouble codes (DTCs), etc. Cars were capable of sending data right from their computers straight to the repair shop to make repair faster and more accurate, helping to ensure those increasingly complex cars were getting fully repaired and safely returned to the road. The change greatly expanded the use of telematics. But what really lit the match was when those telematics use cases started being combined with other innovations of that period. See also: Advanced Telematics and AI   Photo analytics in estimating? Check. Insurers were already using AI to instantly detect from one photograph the likelihood a car was repairable or a total loss. AI was used to build the estimates themselves, using photographs and the help of telematics data. From there, mobile and smart technologies enabled the detection of an accident all the way through to the disposition of the vehicle. The experience was self-guided and highly efficient. The person in the car accident was interacting with shops and insurance companies to get the job done in a streamlined way. All of these new possibilities were suddenly at our fingertips. That crash in Cypress, Texas, if it was serious enough, would have the tow truck quickly dispatched to pick the car up. Or, if the injuries were serious, an ambulance could get there more quickly, saving the customer’s life. Continued acceleration After 2018, the acceleration of technology innovation went through the roof. That’s how we got to the world we live in today. We were struck with this awareness of exactly how telematics and photo analytics are going to lead to a new world order. The future became clear. Those that got in early with those data exchanges and started using telematics for UBI purposes started to gain an understanding of data and chip away at the learning curve. They improved their book of business. They added use cases, detected crashes and delivered better injury disposition for customers and better repairs. Those experiences and that knowledge base got them to a point that, when the autonomous vehicles started coming in all different modes and configurations, they were ready to price the risk. When the transportation as a service option started coming up, they were ready to go. Innovation is always the same. It doesn’t matter if it’s 2018 or 2028 or 2058. The timeless advice about innovation is this: You need to adopt as early as possible. You need to give yourself permission to fail, the opportunity to learn and the time to get it right. When that match gets lit, you are ready to take the rocket ride to the future. Stay brave and power forward.

It seems we've struck out in trying to arrange a conversation between the CEOs of State Farm and Lemonade on what role technology should play in interactions with customers, in the wake of a State Farm ad that mocked chatbots and seemed to be aimed, at least in part, at Lemonade. We tried various dates, on both coasts. We made it clear that we weren't trying to embarrass anyone, that we weren't looking for any gotchas. But State Farm wasn't interested.

You can understand why, at least to a point. When a colleague of mine back at the Wall Street Journal wrote "Den of Thieves" about the Wall Street scandals involving Michael Milken, Ivan Boesky et al. back in the 1980s and early 1990s, Alan Dershowitz for some reason decided to take out a series of full-page ads in the New York Times denouncing the book—which promptly went to No. 1 on the Times best-seller list and stayed there for months. You can imagine that State Farm is being smarter, in deciding not to help raise the profile of a startup like Lemonade. 

Still, I'm disappointed. The role of technology in customer interactions needs to be figured out, and we in the insurance industry are smarter as a group than we are individually. Our motto at ITL is, "Nobody is as smart as everybody." 

Technology will play a major role in some ways, simply because it can be so much faster and more convenient than calling a company and waiting on hold or than mailing documents back and forth. But if history is any guide—and it almost always is—we're going to make some mistakes, moving either too fast or too slowly. It would help to share our experiences.

So, we at ITL will keep trying to seed the conversation on the role technology can and should play. For now, perhaps the best place to continue is at the "Inventing the Future of Risk and Insurance" group that I moderate on our Innovator's Edge platform and that includes some very smart and wise people. To join the group, click   here. If you haven't already joined Innovator's Edge, you need to click   here  first. (Registering take seconds and is free.) Maybe we can even get some State Farm folks to join in on the sly.

Have a great week. 

Paul Carroll
Editor-in-Chief

The next wave of innovation is sweeping the insurance industry as customers look for more personalization from their insurers. As policy needs and driving behaviors vary from customer to customer, there is no single perfect package. Customers demand personal treatment, and technology gives insurance providers the opportunity to follow suit. But, the more companies that move toward personalization, the more difficult it will be to stand out. Just weeks ago, Root Insurance – a startup that offers customers a personalized auto insurance experience – sped up this transition with its latest round of funding and a $1 billion valuation. This heavy investment in behavior-based insurance (BBI), or rating consumers on their driving performance rather than factors like zip code or credit score, certainly won’t be the last. Other small startup insurance companies offer their customers a more tailored and personalized plan, as well. But will these smaller companies lead the industry into broadly applied personalized insurance models? Or, will major insurance companies with large-scale credibility and longtime reputation come to the forefront? Smartphone telematics, big data, and AI-powered analytics enable legacy companies with an extensive outreach to truly disrupt the industry. These longtime players can offer the personalized experience as well as the credibility and resources to shift the entire insurance landscape in a new, digital direction. See also: How to Extend Reach of Auto Insurance   A personalized experience with a reputation customers trust As we’ve seen extensively in e-commerce and marketing industries, customers have come to expect brands to know their habits and to adapt purchasing and engagement experiences to fit their personal preferences. While it is a relatively new trend for the auto insurance industry, it will continue to grow over time. Customers do not want to be treated as a statistic any more, with their premiums based on credit score or geographic location alone. In fact, 73% of drivers surveyed said that they’d prefer insurance rates be based on their driving behaviors. Smartphone telematics solutions allow insurers to easily receive customer data that provides insight on an individual’s driving habits and performance, providing the necessary information to more accurately stratify risk and deliver more personalized, regular consumer touchpoints and – in some cases – behavior-based rates. Out of the 10 largest U.S. insurance providers, nine claim to be, at the very least, testing forms of smartphone-based telematics programs. The various use cases include building better risk and pricing models, offering behavior-based discounts and rewards and providing feedback and gamification to motivate customers to become better drivers. Not only do these use cases benefit the customer, but also the insurance provider. In the auto insurance industry where the top three providers make up 41% of the market, and the top 10 take 72%, there needs to be a clear differentiator for companies to win more business, retain top customers and establish themselves as leaders. Smartphone telematics is one way major insurers can differentiate themselves in consumers’ eyes. Better pricing and longer-term improvements in driver behavior will drive higher retention and new business while accident detection, faster claims and higher levels of positive customer engagement will enable them to take on a leadership role. See also: Will Technology Kill Auto Insurance?   Many new startups are basing their platforms on providing customers with a tailored experience, but the top insurance companies have the most power to affect change in a congested, commoditized environment. The future is promising with the growing popularity of smartphone telematics, enhancement of IoT solutions and our ability to glean insights on personal driving behaviors from large quantities of data. These technologies and capabilities have the power to further advance personalized insurance experiences and help insurers increase profitability. The insurer that embraces the end-to-end technological innovations available will be the ultimate standout, creating a customer experience that is seamless, efficient and human.

Big data stands to transform the insurance industry in unprecedented ways, providing insights into customer behavior and risk that are unmatched in the history of the industry. Yet property and casualty insurers have significant hurdles to overcome before they can leverage big data and its associated analytical tools to its fullest extent. P&C insurers struggle to use the data they gather because many organizations are still siloed, meaning that information is stored in separate databases that don’t communicate between offices, buildings or departments. About 80% of the average P&C company’s data is dark data, or data that is difficult or impossible to find when needed, MarkLogic’s  Derek Laufenberg  writes. How can insurance companies bring their dark data into the light? Here are some pathways to integration: Evaluate Your Assets There is a great amount of untapped potential in the company data that decision makers are unable to access. The best way to begin leveraging this data is to inventory data sources, TechRepublic writer Mary Shacklett explains. When a P&C insurer’s data sources are accounted for, it's easier to plan a process for effectively integrating those sources and improving access to them. After discovering the company’s existing data sources, consider how this data is currently used and shared. Do staff use cloud-based spreadsheets to share and compare data? Do they rely on email and regularly scheduled meetings? “The centuries-old insurance industry seems to still be heavily drowning in paperwork and redundant manual procedures,”  Kevin Doubleday writes in Insurance Thought Leadership. Evaluating data storage, accessing and sharing procedures help illuminate the most effective places to start the integration process. See also: Cognitive Computing: Taming Big Data   Put the Company in the Customer’s Shoes Data management strategies influence customer satisfaction, loyalty and willingness to recommend a company more than most executives think, Corrie Mieszczak at Evergage says. Mieszczak recommends approaching de-siloing with the goal of developing “a 360-degree view of each customer.” As property and casualty insurance becomes more customer-focused and retention-sensitive, the need to understand customers becomes more urgent. To learn what customers want, P&C insurers need to track the right data and leverage it to meet that customer’s needs when they occur, John Mayo adds at PropertyCasualty360. Once data sources are accounted for — and leaders understand how they’re currently used and shared — its easier to understand how those sources relate to the customer experience. “Corporate silos are customer experience killers because customers don’t care about how your company is organized,” Forbes’ Dan Gingiss says. Instead, pinpointing the end of the customer experience enables P&C insurers to spot places where integration will be most effective. By integrating data and employing tools like artificial intelligence and machine learning, forward-thinking insurance companies are creating a competitive advantage for themselves, says Dario Debarbieri at IBM Watson. Debarbieri suggests that the customer experience can be optimized through seamless collaboration across marketing, commerce and supply chain channels. Insurance companies that incorporate the customer’s perspective into their approach to de-siloing improve their chances of becoming future-ready. As outlined in an MIT Sloan Management Review study co-written by Peter Weill and Stephanie L. Woerner, “Future-ready enterprises are able to innovate to engage and satisfy customers while at the same time reducing costs.” These organizations give customers a good experience while at the same time treating their data as an accessible strategic asset. Determine What De-Siloing Can Do for You Risk is one of the top concerns for P&C insurers facing integration. If the data set is hacked, for example, InfoSum and DataSift founder Nick Halstead says that connecting all of the organization’s data into a single pool potentially puts more information at risk. Yet merging silos can also play a key role in improving overall enterprise risk management, Risk Management Monitor’s Thomas Abelmann adds. By integrating data and planning across the organization, P&C insurers become more effective at creating, implementing and evaluating competitive strategies — and staying ahead of risks. “In the past 30 years, we’ve made enormous strides in creating technological tools that help de-silo data and information so they can be better shared and used across organizations,” Bluescape CTO Demian Entrekin says. “But silos still exist in most complex organizations, particularly when it comes to nonlinear areas like strategy.” Better integration can also help insurance companies fight fraud, according to Ethics and Insurance blog founder Duncan Minty. Analytical software, including programs that use artificial intelligence (AI), can improve fraud detection, but only if the algorithms are trained on a sufficient data set — a set that can be much more difficult to obtain when data is siloed. Finally, de-siloing can improve efficiency and productivity, two essential steps for an insurance industry struggling with a concurrent drop in auto insurance premiums and a rise in catastrophic property claims. “When your company’s data lives in separate, non-communicating systems, you’re hampering your company’s ability to get the most out of that information,” says April Rassa, marketing and growth director at Progressly. “You’re also creating extra work for employees, because when it comes time to actually put the data to use, the only way to share knowledge with other departments is via manual, inefficient methods such as spreadsheets, email or chat.” Joe McKendrick at Informatica says that de-siloing offers the opportunity to solve one of the largest problems facing insurance companies and other industries today: a surfeit of data with very little insight. Integration, McKendrick adds, helps organizations understand customers, competitors and risks. See also: Insurtech’s Act 2: About to Start   Don’t Cut Corners Many insurtech companies and other organizations offer myriad shortcuts for integrating data, but many of these shortcuts don’t provide the commitment or stability needed for long-term success. “The popular cloud-based analytics services — IBM’s Watson, Salesforce’s Einstein, et al — offer easy-to-use and economical options for bringing analytics functionality in house, but this isn’t a very good idea,” says Scott Robinson, Lucina Health director of business intelligence. Instead, Robinson advocates for an approach that treats analytics as a new way to look at the insurance business — both its internal processes and its treatment of customers. By encouraging departments and teams to bake in the use of analytics, and by offering a comprehensive software platform that allows each group to focus on its area of expertise, insurers stand to create more lasting, effective change. Yet P&C insurers must take care not to let a goal of comprehensive, stable change turn into a quest for unattainable perfection, Datameer’s John Morrell says. “Creating the perfect data architecture and data delivery processes is, in practical terms, unachievable.” Instead, P&C carriers can focus on taking the process one step at a time, enabling more access to data by beginning with the departments, offices or teams who can best improve customer service with better access. By evaluating the availability of data sets — and their role in the customer experience — P&C insurance companies are better-positioned to choose the solutions that benefit their operations most. “Digital transformation requires breaking down the classic silos of front, middle and back offices to transform each into a unified, seamless customer experience,” says business transformation and automation leader Vartul Mittal. To succeed at this task, P&C insurers must do more than simply create an app or improve their website. They’ll need to focus on “contextual data and a middle office that can move from explaining the past to predicting the future” by leveraging machine learning, sophisticated algorithms and access to big data.

Risto Rossar, Founder and CEO of Insly, discusses how the company helps insurance clients to quickly launch new products and take advantage of market opportunities, and how Insly is enhancing its solution to simplify insurance for its customers.

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Shelly Klose, Founder and CEO of True Flood Risk, describes how the company enhancing flood risk assessment and underwriting by enabling users to more precisely analyze property elevation and vulnerability to flood risk, access National Flood Insurance Program premiums and connect with agents and brokers to secure coverage.

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Rob Whitton, Vp of Business Development for Decision Research Corporation, describes the technology solutions the company provides to large insurers, MGAs and startups to automate critical processes, from rating to claims, and speed time to decision making.

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