Much is said about blockchain technology and how it will change how business operates. As with any new technology, a gap exists between understanding the theory and seeing the practical applications. But it should be no surprise that blockchain technology is already being used to secure the digital electronic health record (EHR) of large numbers of people in Europe. EHR, augmented with data from self-monitoring devices, will change how health is managed. But this digital future comes with legal and ethical risks. Legitimate concerns include how sensitive personal data can be kept secure from theft or cyber-attacks. Without the assurance that blockchain technology promises, digital files can be corrupted, deleted and altered. Since much existing data protection legislation is purblind to digital data, the European Commission has acted to reform the rules across all E.U. member states. The General Data Protection Regulation (GDPR), aimed to strengthen data protection for those in the E.U., puts clear legal obligations on controllers and processors of any personal data. This move aligns with the concept of a “personal data economy” in which people take control of the scattered mass of digital data about themselves and share it with whomever they choose. Many individuals seeking life insurance want to share their medical data simply and promptly, so it’s important that rules protect that process without hampering it. See also: Blockchain: the Next Big Wave?   Beginning in May 2018, the GDPR will act to hand back control of personal data to individuals. Their data will be portable between service providers, and people will have the right to be “forgotten” and to have their data deleted when there are no legitimate grounds for retaining it. It is hoped GDPR will simplify the regulatory environment for businesses across the E.U., creating savings and increasing competition. Estonia is on the front foot. The country’s e-government system, which uses a website and smartcard to provide residents instant access to hundreds of public services, has earned it a reputation as a digital pioneer. Notably, too, the entire electronic patient records of its 1.3 million citizens are collated in one central database. The security of this store of highly sensitive personal data is underpinned using blockchain. Blockchain may be used in any form of asset registry, inventory and exchange. This includes transactions of finance, money, physical property and intangible assets, including health information. In Estonia, individuals’ EHRs are condensed as “blocks” and linked into “chains” by computer code in a bid to keep them safe. The blockchain registers every change, access and update to the records, including hacks or attacks from malware, using a series of computer code -- tracks that can’t be modified without leaving a trail. This makes it impossible for the information to be tampered with, deleted or improperly changed in any way without its being spotted. Patients may log in to view who has accessed their data at any point or added information to their records. This means people can feel their data is more secure and their rights protected while the opportunities for medical or insurance fraud and other harmful misuse are mitigated. Estonia stores complete patient histories in a national database to protect public health and create efficiencies and cost savings. The value in the combined medical data is used to drive improvements in the quality and effectiveness of care. The information can be exchanged between doctors so that interactions with clinical services are simpler and personalized. See also: Insurtech in 2018: Beyond Blockchain   Sharing data for the common good requires a high degree of trust. One way of ensuring accuracy is to allow people to agree on what represents the truth. Blockchain is a “trustless” system because the network of users act together to vouch for the accuracy of the record. The example of blockchain protecting patient records in Estonia demonstrates its potential to implement other trusted and secure transactions with less bureaucracy. For more perspective on how technology is changing life insurance, click here.

I cringe every time a company wants to do a benchmarking study. Wikipedia defines benchmarking as “comparing one's business processes and performance metrics with industry bests and best practices from other companies.” From the requester’s perspective, it is the prudent thing to do. So what’s the problem? The problem is the company’s mindset. Typically, the company already knows it is falling behind the industry and wants to pinpoint exactly how badly it lags. The company subsequently sets its sights on “catching up” with industry leaders, which will actually only make the company average. The leaders have in effect set a new standard for what their mutual clients expect. Is it really worth investing the time and expense to perform a benchmarking study, digest the results, prioritize, fund and develop new components just so you can become average? By the time the changes are implemented, the industry leaders have moved on to more innovative products and solutions, forcing you to reevaluate and repeat everything you’ve just completed in an attempt to become par...again. Is that what your customers and investors expect from you? Is that really the best you can do? You’ll seldom find an industry leader doing benchmarking studies. Rather than focus on the competition, vanguards focus on assessing the needs of the customer. What are the current pain points? What needs are being unmet? How many unnecessary steps or how much excess time does it take for a customer to use your product or service or interact with you? Wouldn’t it be cool if we could only offer/eliminate/change _________ (fill in the blank)? Leaders force their teams to think creatively about solving problems, which in turn often makes their company unique and makes their customers loyal. See also: Insurance 2025: Smart Contracts   Talk to the folks on the front line to gather feedback on what is and isn’t working, and ask what they are hearing from customers. What kind of feedback are you getting through social media or customer surveys? Listening to clients is an acquired skill and often is not fully appreciated for the value it holds. I’ve seen a company implement the wrong strategy after misinterpreting the multiple choice survey responses and failing to study and digest the free form comments. Surveys can become a landmine of misdirection if not done right. How many times have you completed a survey that asked about how well the customer service agent handled your problem, when the real problems had nothing to do with the agent and everything to do with the flawed processes created by the company? Make sure your surveys provide customers with open-ended questions that give them the opportunity to tell you what you can do better. Their comments will only add value if you actually take the time to thoughtfully harvest and analyze them. Ignoring the answers to a free form question is a huge lost opportunity. Having spent many years successfully leading innovation, I can honestly say that I never looked at what the competition was doing. I didn’t care. In fact, I often felt that, if I studied my competitors, it would taint my view and subconsciously lead me down their imperfect path as opposed to forging my own targeted solutions. It was more important to study our internal processes and any workarounds we had implemented, which is an easy way to flush out underlying problems that affect both the customer and company. Innovation, after all, is really about solving problems in a creative way. See also: The State of Workers’ Compensation   Sometimes, what’s going on outside your industry could be more important than what is happening within your industry. Disruptive companies typically come from outside and are not shackled by tradition or legacy technology or benchmarking results. They’ve asked the right questions – what would make things better or easier for the customer – and listened carefully to the responses. That’s where you’ll find valuable answers that will lead you to a new strategy – one where you’ll do more than just keep up with the industry leaders. It’s time to forgo benchmarking as a tool of the past, one that supported businesses that moved en masse at yesterday’s slower pace. Instead, rely on your own customers and internal resources to show you the way forward.

The number of foreigners purchasing property in the U.S. surged between March 2016 and March 2017, according to the National Association of Realtors. The association said foreigners bought 284,455 properties, about a third more than a year earlier. And, similar to previous years, a larger percentage of buyers, especially in states like Florida and Arizona, were European citizens. European home buyers who insure their properties through U.S. companies could require those businesses to upgrade their data protection efforts soon. As of May 25, U.S.-based businesses that have operations in the European Union (EU) or that have customers who are citizens of E.U. nations will have new requirements to meet regarding data protection. This is when the new General Data Protection Regulation (GDPR) takes effect. Any companies not prepared to meet the new regulations that experience a data breach could face massive fines. GDPR was designed to better protect E.U. citizen data. Standards vary based on where the data originates, but generally any information like name, address, credit card number, etc. is covered. In the domestic U.S., protected data is defined as personally identifying information (PII). As defined by GDPR, for an E.U. citizen it is known as personal data. Failure to protect the PII or personal data to the right standard could bring a hefty bill or, on consistent failure, even an order to cease business in E.U. countries. See also: VPNs: How to Prevent a Data Breach   Current U.S.-based data privacy regulations require companies to notify customers if a data breach occurs, but in the U.S. there can be a significant time delay between the breach and the notification letter; not so with GDPR. GDPR requires that supervisory authorities be notified within 72 hours, even while a breach is still being investigated. Failure to report within 72 hours could lead to significant fines. Maximum fines could be $26 million, or 4% of global gross revenue, whichever is greater. Insurance companies selling plans to E.U. citizens purchasing homes, rental properties or commercial properties in the U.S. could be affected by GDPR because they gather personal data on applications and store data on customers. If a hacker is able to breach the insurance company’s systems and gain access to E.U. citizen data, the company would be required to notify GDPR supervisory authorities and prove that it met all GDPR requirements. Failure to cooperate with an investigation or to meet GDPR requirements could lead to fines or worse. The first step toward compliance for any company is determining the need for and, if necessary, assigning a data protection officer (DPO). A company will be required to have a DPO if it possesses large amounts of data covered by GDPR. The DPO must be available and involved in any events where there is a possibility of a loss of GDPR-covered data. The DPO will be the point person for any GDPR issue with the affected persons and the supervisory authority. Obviously, because the DPO will be instrumental in proving a company’s compliance with GDPR, this individual needs to know the regulations and the company’s security protocols inside and out, backward and forward. If a company is not required to have a DPO, it should still have a plan in place for who it will call if the supervisory authority opens an investigation. Additionally, any personal data that is lawfully received, stored or processed by a company needs to be encrypted. This means completely encrypted at rest and in transit, complete end-to-end encryption. GDPR does not allow for lenience regarding outdated software or new implementations that are being investigated for deployment. Companies will also now be required to complete data protection assessments and privacy impact assessments. They will be expected to increase visibility into what level of impact a breach might have for customers and the company, if one occurs. And, all efforts made to comply with GDPR need to be documented so they can be given to a supervisory authority upon request. The best source of information on the regulation requirements is gdpr-info.eu. See also: Firms Ally to Respond to Data Breaches   Once GDPR takes effect, if a company experiences a breach or is contacted by a GDPR supervisory authority the best course of action is to show an attitude of compliance by offering complete support for the investigation. Then, contact the legal team. It is important to remember that complying with GDPR can be complex. It takes some time to update systems and processes to the level of security required by the new regulations. It can also be costly, and disruptive, but the protection of data is becoming paramount in the new business paradigm. For GDPR, the cost of compliance is geared to be less than the cost of sanctions.

Sometimes, finding the answer in confusing times is really a matter of knowing the right questions to ask. For example, the Novarica Nine Insurance and Technology Trends for 2018 and Beyond looks at three groups of three key issues:

• External trends, like disaggregation of value, the insurtech bubble and drive for innovation leveraging emerging technology.
• Technology capabilities in data and analytics, digital channels and core systems
• IT management issues like security, talent and alignment and governance

In each of these nine areas, planning a successful strategy starts with asking the right questions. Some questions I encourage our insurer clients to ask themselves are: What is our distinctive value to this stakeholder in transferring risk from individuals and businesses to the capital markets? (Disaggregation) We’ve long talked about disintermediation of distributors, but, in the current environment, any intermediary between those looking to buy coverage and those looking to take risk are intermediaries. Insurers and reinsurers, as well as distributors, need to make sure they they’re providing a unique, differentiated value to justify their position in the value chain. See also: Predictions From 6 Insurtech Leaders   What's different about our approach to the problem? (Insurtech) There are many different opportunities to engage with insurtechs, but the most interesting thing carriers can learn from new market entrants is, what’s different about their approach? As the Zen saying goes, in the beginner’s mind, there are many possibilities. In the expert’s mind, there are very few. New entrants into the market can help insurers avoid overlooking new ways to solve customer problems. What would this enable us to do? (Innovation and Emerging Tech) Emerging technology is full of possibilities, from AI to RPA to IoT to drones. The important question is, what could we do if we had access to this technology and its capability? Could we price better? Gather information faster? Create better customer experience? Framing the right question can drive better strategies for exploring innovation and emerging technology. If we knew, what would we do? (Data and Analytics) Everyone wants more data and insights, but few have a plan to act on those insights. Without an idea of what could be done better if more insights were available, and a plan for how to do that, insights are worthless. How could this be easier and faster? (Digital) Insurers have different definitions of digital strategy, but it really all boils down to this question – how could this be easier and faster? Better UX? More pre-fill? More predictive analytics? Simplified products? Simplified processes? Yes to all. And then do it again. How will this create a foundation for evolution? (Core) Core systems are still the ultimate foundation for speed to market and ease of doing business, and are critical in enabling analytics and insights. Insurers should consider whether their core systems are really up to the challenge of creating a foundation for evolution in product and process, or whether they will be an anchor to the past. What is our realistic goal? (Security) Perfect security is attainable – unplug the internet and all terminals and lock the server in a dark room. Becausse that’s not realistic, insurers should do a realistic assessment of risks, costs and impact on business effectiveness. Why should anyone work here? (Talent) This is a challenging question to face. Insurers talk a lot about talent availability, but they talk less about what’s compelling about the opportunity to work for their companies. Is the pay stellar? Is the environment stimulating? Does the role have an opportunity to create an impact? If not, your problem may not be the supply of talent. See also: Where Are All Our Thought Leaders?   How does this IT capability drive business results? (Alignment) IT leaders often have a hard time translating the capabilities they enable into business results. But how can anyone expect business executives to invest in something they don’t understand the value of? Not being able to draw a line between tech capabilities and business results is fatal. Communication and understanding are critical skills for IT leaders. Insurers really need to examine whether they are providing a distinctive value and a positive experience in every area both internal and external. Some of these questions are not comfortable to ask, or to answer. But having a realistic set of answers is the first step in developing an effective strategic plan.

Part 3 – Your claims process can become a revenue driver for your products! In our first two installments, which you can find here and here, we discussed that your claims process is a customer experience issue and that a company can reduce expenses within the claims process. This article is going to ask you to think outside the box and disrupt the way a life insurance claim is processed. First, let’s review a typical process for a life insurance claim:

1. Claim process is initiated by the beneficiary.
2. Claim packet is mailed to the beneficiary to complete.
3. Beneficiary completes claim packet, includes any necessary documents and mails it back to the company.
4. Insurance company receives the claim and initiates an internal claims process. More documents or verifications may be needed, and requests are sent to the beneficiary.
5. Beneficiary completes additional requirements.
6. Insurance company verifies and completes the claims process.
7. Check is mailed to the beneficiary.
8. Check is deposited into the bank of the beneficiary.

This is a very simplified version of a typical claims process. There may be some differences in this process from company to company. However, you get the basic idea of the process. My previous experience as a top financial adviser at a major company led me to believe that this process is stuck in the past, provides a poor customer experience and is in great need of an update. As part of my adviser role, I had the opportunity to speak at events and gain the perspectives of other advisers. I also spoke with my clients to really get a sense of their experiences with filing claims. Now, imagine with me that you are a financial adviser or agent for a life insurance company. You are the person who prospected the individual and identified a need for a life insurance policy. You built the relationship and gained the trust that allows you to sell a $1 million life insurance policy. GREAT! You just did them a great service. You offered someone peace of mind. Guess who gets to experience the forward thinking, care and love for the futures of spouses, kids, grandkids and legacy? The beneficiaries will be the only people who truly experience the amazing benefit their loved one left for them. Let me ask, would it be beneficial for you, the adviser, to provide an exceptional experience for the beneficiaries? Stay with me. See also: Finding Efficiencies in Claims Process   What if the new claims process was a technology solution that allowed your company to make this adjustment to the claims process? It could look like this:

1. Beneficiary initiates and completes the claims process on a digital platform that has all the documents pre-filled for convenience. The platform allows beneficiaries to use their mobile devices to scan and upload any additional documents that are needed by the company.
2. Insurance company receives all documents completed and signed. All documents and correspondence are associated with the correct claim in real time.
3. Insurance company verifies and completes the claims process - all on a digital platform provided by the life insurance provider.

Here is where the revenue can be generated if your company is forward-thinking and truly wanting to be innovative. Remember when I asked you to imagine that you were a financial adviser? Now step back into that thought process. What if your company electronically notified and looped you into the claims process? Would that be valuable to you as the adviser?

• Would this allow the adviser/company to create a new relationship that is built, and continues, on an existing relationship?
• What if your company electronically sent you pre-filled account opening forms and asked you, the adviser, to reach out to the beneficiaries and help them through this process? Would that be valuable to the adviser?
  • Would the adviser have an opportunity to build a relationship with the beneficiary?
  • Would the adviser have chance to retain the $1 million instead of those assets getting deposited at a bank or competitor?
  • Would the adviser have an opportunity to present products or services that could benefit the beneficiary?
  • Do you think the beneficiary would find value in this?

Now imagine that you are the beneficiary. Would it be helpful to complete the claims process quickly, efficiently and on your time frame?

• Would it be helpful to have a professional help you with the process and $1 million benefit you are about to receive from your loved one’s good planning?
• Would you want to leave the same legacy for your heirs?
• If the company provided you with a great user experience, a professional to help you through the process and genuinely wanted to create a lasting relationship with you, would you consider doing business with this company yourself?

See also: Global Trend Map No. 10: Claims   Based on my experience as a trusted adviser, I would find extreme value in a company that engaged and embedded me into the claims process. In addition, advisers have been through this process many, many times and can add true value to those who have not been through the process. When I was involved with the claims process, a few things happened:

1. We were able to start a new relationship that is built on a common previous relationship. Most beneficiaries would think, “If dad trusted this adviser and company, I can too.”
2. We were able to continue to provide service to a family who had already experienced the value of what our company offers.
3. We were able to offer a true benefit and meaningful solutions to the beneficiary.

Stay tuned for the final issue – Part 3.5: Your company can be innovative and generate revenue with the help of insurtech startups.

Most learning and development pros are familiar with learning styles—the idea that people respond to various teaching methods differently. Visual learners need pictures and diagrams, social learners prefer group training, solitary learners just want to be left alone with a textbook. The concept is based on the belief that different parts of our brains handle different functions. If one area of a person’s brain functions more strongly, that person will prefer learning in a way that uses that portion of the brain. Well, I’ve got some bad news: the idea of different learning styles is something of a myth. Study after study has found that everyone’s brain learns in pretty much the same way. Research conducted by Paul Howard-Jones, professor of neuroscience and education at Bristol University, found that the human brain is extremely connected—we don’t use just one part of the brain when we learn. People may have learning preferences, but there’s no scientific basis for different learning styles. Howard-Jones calls it a “neuromyth,” similar to the misconception that we only use 10% of our brains. See also: Beat Brain Drain: Boost Your Talent Pool Now the good news: Just because learning styles don’t have a strong scientific basis doesn’t mean that efforts to tailor training to how people learn best are for naught. Daniel Willingham, professor of psychology at the University of Virginia, has done research in the area of elementary and high school education and says that many teachers he talks to share this view. Learning styles may not explain everything about how students learn, but they’re a useful way to “prime the creativity pump” when coming up with lesson plans. Ideally, lesson plans should blend a variety of learning styles to make training more effective. 4 Learning Styles You Should Take Advantage of Neurology aside, here are four learning styles outlined by Neil Fleming’s VARK model along with some training exercises associated with them that could benefit all learners by making sessions more engaging and memorable. 1. Visual learning. This doesn’t refer to YouTube videos or PowerPoint presentations. Instead, visual learning focuses on charts, graphs, maps and other diagrams that convey information—think infographics. If you want to increase visual learning models in your training, look for ways to explain complicated ideas or the flow of a specific process with a graphic. 2. Aural/auditory learning. This style isn’t about just hearing the material; it’s really about using language to communicate ideas. Lectures and group discussions are effective examples of aural/auditory learning, but so are conversational emails. To boost your aural/auditory quotient, ask trainees to repeat concepts in their own words and have them work in small groups focused on brainstorming and talking through training material. 3. Read/write learning. This is where the infamous PowerPoint presentation fits into the training equation. Read/write learning is all about the written word, with a heavy focus on manuals, procedures and other comprehensive texts. This style works as a great baseline for many training sessions—give trainees the textbook or the full PowerPoint presentation, then use other learning styles to mix up the delivery and keep things interesting. 4. Kinesthetic learning. This learning style is focused on creating real-life examples. Case studies and other real-world scenarios are a great way to give your training some immediacy and consequences; trainees will see that they’ll actually have to use this stuff on the job. Simulations and mock exercises are a great way to get people engaged and thinking about the material in a more real way. See also: How to Outfox Our Brains About Risk   Regardless of which camp trainees fall into, the key is to mix up the styles so that trainees engage in the material in different ways. For example, start with a PowerPoint presentation or assign a chapter from a textbook as homework, then discuss the content by encouraging employees to summarize it in their own words. Finally, break trainees into groups to come up with real-world examples or create a chart summarizing the material.

We know the agent channel isn’t disappearing from the insurance and financial services industry anytime soon. However, it’s not going to look the same way it did 10, five, even one year ago. That’s because consumer expectations are changing rapidly, due in large part to the multi-channel shopping experience made possible by mobile and social media and delivered by companies like Amazon. “All those expectations consumers have are coming to the insurance space,” said Chip Bacciocco, CEO of TrustedChoice.com, during Denim Summit 2017. “Insurance customers have an expectation of interacting with an expert to buy insurance any time of the day or night. They want to know where their friends buy insurance from. They want to know the ratings and reviews of different agents. They want transparency in value.” Here are three important things to keep in mind as you develop your multi-channel customer experience:

• Customer service. For most consumers, shopping for insurance doesn’t start on the phone any more. People want to have a conversation with a person after they’ve done their own research about the products and services offered. They want to feel informed and empowered — and many of them will be. Be sure your customer service representatives are well-trained and given the authority to perform higher-level service for those consumers who have already exhausted all self-service channels. After all, the last thing a consumer who is used to having requests completed quickly and seamlessly wants is to be transferred to another representative. Bacciocco recommends observing what you’re doing today in terms of customer interaction. “The number one way to do it: Listen to your phone calls,” he said. “Record every inbound call. We record 10,000 inbound phone calls every single month through TrustedChoice.com.”
• Consistency. It’s no surprise that in a digital, multi-channel world, your brand is being represented through multiple channels — agent, website, social media, call center and so on. It’s critical that consumers receive the same information and experience no matter what channel they’re engaging with. “What is the consistency of the products you’re offering? The price of those?” asked Denise Garth, senior vice president of strategic marketing for Majesco, during Denim Summit 2017. “If I go to different channels, and the price is different, you’ve lost credibility, you’ve lost trust and you’ve lost any aspect of having value.”
• Buying vs. renewing. Agents still dominate new insurance policy sales with both consumers and small- to medium-size businesses. However, renewals tend to be less of a face-to-face process. “That is really, really critical because that’s when you’re going to lose them,” Garth said. “If you don’t have a digital channel to engage with them really well to renew that policy and provide that service, you probably will lose them.”

See also: Global Trend Map No. 12: Cybersecurity With 224 million smartphone users in the U.S. spending an average of two hours every day consuming social media, you have too much to lose to put the mobile and social media channels on the back burner. As you develop your multi-channel strategy throughout 2018 and beyond, be sure you are keeping in mind the customer service experience you’re delivering, its consistency across channels and the process for renewing policies in a digital way.

April is one of the best months for learning about early-stage companies and technological platforms influencing insurance. Why April? Because this month the Global Insurance Symposium is held in Des Moines, Iowa. What we find makes GIS so special is that both attendees and speakers take off the gloves, show a willingness to look beyond the status quo and discuss the state of the future. 

Guy Fraker, our Chief Innovation Officer, will be speaking on a panel exploring "wearables technologies" at the GIS and we want to use that subject to highlight the importance of incumbent insurance organizations taking a broader view when selecting market intelligence platforms. Such platforms can help a company to assess the vast array of innovation opportunities that continue to emerge.

Insurers have a choice when it comes to innovation-related research and intelligence, which generally is:

1. 100 yards wide and ankle deep.
2. A mile wide and one inch deep.
3. A mile wide and a mile deep. 

Which of these options is most likely to yield insights that lead to the exponential break-through opportunity?

Let’s say for the sake of argument that the broadest actionable insights are going to come from Option C. A corresponding assumption, though, might be that this choice represents too much information and would require one or more analysts and months of work to manage the information and yield those insights.

Today, however, such an assumption would be inaccurate given that a qualified and tested A.I. platform can accelerate the analysis. Option C therefore does not require any more effort or resources to take advantage of its depth than Options A and B.

Another consideration is whether a user is served by a market intelligence platform that stays within the boundaries of conventional wisdom, restating the same information one can find through countless sources, or better served by one that pushes deeper. 

In the options listed above, the phrase “a mile wide” refers to the practice of taking a wider horizontal view of innovation. In contrast, Option A, "100 yards wide," reflects an analysis that is slightly more focused and makes some additional effort to discover insights.

Innovation does require questioning the status quo, including the very definitions of labels like "wearables technology." Now, let’s move beyond theory and conjecture, in favor of actual data points.

In July 2017, CB Insights, an often-cited source of innovation research, published an analysis of wearable technologies that listed 149 funding deals from 2016 totaling $1.8 billion. In its analysis, the article highlights how funding took a dramatic decline in 2017 to $628 million.

Another market information source, Coverager, includes 14 "enablers" in the category of wearables. The table of wearables tech lacks any explanation or context beyond early stage company identification.

What is missing from both platforms? Neither firm seems to challenge the most basic question: What is a wearable? Is a wearable device one that measures fitness activity and may even monitor vital signs? That would certainly fit a conventional definition. 

Insurance Thought Leadership’s Innovator’s Edge platform takes a broader view. According to Innovator’s Edge, the conventional definition of wearable technology includes 358 early-stage firms that received $2.7 billion in funding in 2017. However, these companies are just the tip of the iceberg.

Innovator’s Edge also tracks 528 wearable medical device innovators from 62 countries that received $16.7 billion in funding last year. Consider, for example, Retina Implant out of Germany that has created an electronic retinal implant to gradually restore sight to specific cases of blindness. Is this not a wearable?

We can also look at nano-medicine companies such as Liquidia Technologies from North Carolina. Liquidia is developing particle based vaccines that can attack a variety of viruses residing in the body. Is this not a wearable?

More importantly, in terms of identifying early stage firms with the potential for driving down chronic health care claims, might this be a wearable firm worth knowing about? Possibly, but it would not likely be found in these other platforms.

Early-stage firms in the wearable market also come in the form of medical device startups—many of them targeting improved health care diagnostics and treatment protocols—which received $9.3 billion in funding by year end 2017. This category also includes firms such as BoneSupport, which has created an injectable material to help fractures heal faster, serve patients with chronic bone fragility, along with many other applications. Located in Switzerland, it is in the final stages of an IPO, having been backed by a total funding exceeding $100 million. 

The chart below is an example of Option C: A mile wide and a mile deep. By the way, just the 3 companies mentioned above received $220.3 million in funding last year.

In conclusion, the technological capabilities being brought forth by billions of dollars and many of the brightest minds don’t neatly fit as a square peg in a square hole categorization.

Relying on a superficial analysis of innovation—which intuitively sounds agreeable because the information is neither provocative, nor wakes one up in the middle of the night—is very tempting and easily digestible, but please don’t allow yourself to fall into that trap. Picking an intelligence source that doesn’t take a wider view limits your options without your permission.

Those insurance industry executives who understand innovation growth can be measured in multiples and not percentages also display a willingness to venture beyond their comfort zones to discover real innovation opportunity. This will be one of many topics discussed at the GIS conference on April 25-26, and we hope to see you there.

Guy Fraker
Chief Innovation Officer

Paul Winston
Chief Commercial Officer

P.S. In addition to in-person events, we are pleased to be participating in several upcoming webinars each of which is aimed at helping insurance organizations improve their understanding of the opportunities from innovation:

May 3: “Insurtech and Insurance in the Age of Innovation” Presented in partnership with Johnson Lambert, this webinar will focus on how and where to start an innovation program, defining what innovation means and who should be part of the team within an organization to have the best chance of success.

May 9: “A Systematic Approach to Successful Innovation” This webinar from the Insurance Information Institute and Innovator’s Edge will introduce attendees to a systematic process for insurance innovation that has been successful at driving meaningful ROI at some of the world’s largest insurers and reinsurers. This webinar is the first of a two-part program that will be followed by a live interactive workshop in Chicago to help attendees focus their efforts and identify key opportunities. Register to attend both.

May 16: “Insurance Innovation Mythbusting” This webinar, part of the National Association of Mutual Insurance Companies’ Insurtech and Innovation Webinar Series, will address the myths and realities of innovation, especially for insurance companies that question whether it is possible for a smaller organization to succeed at this and are uncertain how to begin. 

We encourage you to consider attending these events to further your understanding of what innovation means for insurance organizations and to more confidently drive innovation results. You can also track our upcoming webinars here: http://info.innovatorsedge.io/webinars

It used to be common to say that “technology is marching forward, improving business and society.” But today, it would be more accurate to say that technology is sprinting forward – with progress at breakneck speed and breakthroughs happening in multiple fields on a regular basis. There are so many technologies – some new, some just emerging – that is it virtually impossible to track the progress of all of them, let alone explore all their implications. This may put insurers in an uncomfortable position. Insurance is an industry based on historical data and long-term predictions. However, technologies are now inundating the world with real-time data and a change-pace so accelerated that it is difficult to make predictions. Fortunately, SMA’s new research report, The Emerging Tech Landscape: 10 Mega-Trends for 2018 and Beyond, assists by taking a big-picture view of the key developments in the tech world.

To paraphrase George Orwell’s quote from Animal Farm, “All technologies are equal, but some technologies are more equal than others.” Every technology has a role to play in the business and personal spheres. Mature technologies such as telephony and email still matter. More recent technologies like mobile and social media have become mandatory, foundational technologies and have been instrumental in transforming the world. Emerging technologies such as autonomous vehicles, the Internet of Things (IoT), wearables and many others are poised to anchor the next wave of global transformation – affecting the way we live, work and play. It is these emerging technologies that require the rapt attention from insurers now. The earlier technologies are still very important, but insurers have already built those into their business and have had lots of experience with them. But the emerging technologies now have more potential to fundamentally change the insurance industry than anything else at any other time in history. The risk landscape will change. Many new options are becoming available that will change internal operations. Customer expectations are changing, and new customer segments are coming into view.

See also: Key Insurtech Trends to Watch  

Some of the mega-trends that insurers should be monitoring and considering in terms of strategy implications are:

• 5G and AI Form the Foundation: 5G communications networks and artificial intelligence will form the key foundations for the digital connected world in the next decade. We will need to move lots of data very fast and automate the analysis and actions surrounding that data.
• User Interfaces Are Revolutionized: We are witnessing a dramatic expansion of how we interact with computers and the world around us in new and more natural ways. These new UI technologies affect both emerging technologies and incumbent technologies. The technologies are now rapidly maturing to mimic and capitalize on all of our senses as well as the movements of our bodies.
• Mobility is Hot: Autonomous vehicles are enjoying a great deal of press these days. But this is only one aspect of a complex picture of the evolution of mobility. The notion of mobility encompasses many innovative technologies and approaches to moving people and goods from place to place.

These are just a few of the mega-trends that are important for insurance. Expect these and others to be dominant themes over the next few years. Taken as a whole, the change wrought by emerging technologies is likely to rock the insurance industry for the next decade. That said, insurance is still insurance, and the industry has many strengths to build on. The great challenge (and opportunity) for senior management teams is to double down on traditional insurance strengths while building a highly adaptive organization to respond to changes and prosper in the new era.

See also: 5 Trends for Employers to Watch in 2018  

Click here for more information on SMA’s recent research report, The Emerging Tech Landscape: 10 Mega-Trends for 2018 and Beyond.

For decades, workplace safety has been about reactively auditing the work environment to pass a "tick box" exercise. This has not only led to high and sometimes fatal costs to businesses, but also higher expenses, more losses and a general inability to improve safety. But we are seeing changes – workplace safety puts loss prevention up front as a target, leading to lower loss ratios not just in regard to profits but more importantly for human life. First things first: Let's acknowledge that the auditor model does not work Time and time again, studies have shown that workplace safety improves when you let business owners manage their own safety. The more involved owners, managers and the workers themselves are in monitoring safety measures, the higher the chances of success. In fact, empirical evidence shows that safety incidents are one-seventh as likely to happen with engaged worker-centric approaches. Conversely when third party auditors are involved, more often than not companies just put up an appearance of compliance to get through the audit. The results are lose-lose, disengaged workers, expensive auditors and no inherent increase in safety. See also: Seriously? Artificial Intelligence?   The smarter the device or building, the safer the worker Today we have the tools to genuinely anticipate and prevent accidents, and one of the best tools is that thing everyone carries around these days, a mobile phone. The list of wearables that can bolster workplace safety is also growing longer every day as we progress toward an Internet of Things. With a smartphone, workers can take a picture of any hazard (for example, an electrical fault) with augmented reality, and the GPS on the phone turns the hazard into a dynamic alert as opposed to being some static and often hidden document. So, even if it is not removed immediately, as it is unlikely to be in most cases, workers can be alerted as they approach it. (Note: The experts seem to call this contextual awareness.) The smartphone is just the start; the building itself is now smarter, with sensors for temperature, smoke, moisture, electric current, humidity, noise, light measurements, etc. In the more industrial workplaces, helmets, wristbands and even gloves are being embedded with sensors, so they can send alerts to employees and their managers in real time, allowing them to take preventive measures if workers’ well-being is compromised or safety procedures are not being followed. As safety data pours in, machine learning steps in to make the most of it While augmented reality is great for short-term risk management, machine learning makes sense of all the safety data collected and helps in long-term risk management. Placing this data among financial, environmental, occupational and social data can result in a system that updates in real time and any time (and not just via third party audits) and gives users GPS coordinates, pictures and notes. For insurance companies, this combination of IoT data feeding into machine learning capability will help deliver more sophisticated risk prediction models and underwriting risk assessment tools than the industry has ever seen before. See also: Digital Playbooks for Insurers (Part 4)   There is no need to hide things from this auditor Because it is self-audit!! But what does this mean to an insurance company? First, it means the focus now moves to loss prevention and subsequently, and carriers will have to lower premiums for worker-centric safety management. The lowering in top line premium is offset by lower expenses in using safety auditors and lower claims, leading to a better underwriting profit. This is not far-fetched; we have already seen this on the personal side and on the auto side with telematics. The trick this time around is combining with other data sources and machine learning for insights, which most humans could not comprehend in a traditional underwriting scenario. I’ll leave you with a sobering fact – 4,836 fatal work injuries were recorded in the U.S. in 2015 itself. That’s 4,836 too many. It is time for insurers to lead the charge on eliminating (the right kind of eliminating) with worker-centric processes powered by augmented reality and machine learning.