The conventional wisdom in the healthcare industry for decades was that emergency room use is often unnecessary and a waste of expensive resources. This view was firmly supported by a 1996 study reported in the New England Journal of Medicine that stated that it is widely believed that 50% of the 90 million emergency room (ER) visits each year were unnecessary. In addition, the study reported that 50% of ER charges went unpaid. Many healthcare experts, including me, felt that uncompensated care resulted in major cost shifting to health insurers and employer paid health plans. As a result, the unnecessary use of emergency rooms by the uninsured and the working poor had been a major emphasis in healthcare reform efforts for decades and was a major driver for enactment of the Affordable Care Act, and the individual mandate just recently overturned by the GOP tax plan. See also: Opioids: Invading the Workplace Today, one of the major national health insurers has a policy to charge higher out-of-pocket costs, or actually deny payment, to insured claimants who use the emergency room unnecessarily. The president of the health insurer stated that the ER should only be used for the purpose for which ER departments were created, “for life-threatening conditions and not common medical ailments.” This policy is vigorously opposed by healthcare consumer rights organizations and many emergency room physicians. Now, a seven-year federal study reported by the University of California at San Francisco stated that, today, only a small fraction of ER visits, or 3.3%, are “avoidable.” Laura Burke, an emergency room MD and researcher at Beth Israel Deaconess Hospital in Boston, stated that, “sore throats and runny noses are not bogging down the system.” She firmly believes only a few visits are truly preventable and the reason that patients come to the ER are “usually for reasons that make sense. Maybe they work two jobs and at 2 a.m. was the only time they could come for care.” Many emergency room physicians agree that ER visits are not the best option for minor infections and sprained ankles but worry that the crackdown by health insurers will result in patients avoiding the ER when they, in fact, have a serious health problem. If the health insurers’ goal is to save money, retrospective claim denials could have the opposite effect. Chest pains that someone thinks are indigestion due to the pepperoni pizza they had for supper may be the onset of a heart attack. ER visits in the U.S. are escalating and expected to reach 150 million visits per year. Researchers believe the aging population and the opioid crisis are driving up recent utilization. Last year, there were 64,000 fatal opioid overdoses in the U.S., a 22% increase from 2016. A local EMT stated to my friend that half of all their calls now involve heroin/fentanyl/opioid overdoses. This is a national nightmare with no end in sight. On top of this national opioid crisis, the Centers for Disease Control and Prevention (CDC) has just issued a flu emergency that has spread to 49 states. This is the first time in 13 years that the flu has hit all 48 continental states and is particularly dangerous to children and the elderly. According to NBC News, there have already been 20 pediatric deaths due to this strain of the flu, versus three pediatric deaths this time last year. This year’s flu season started early, took off quickly and is now peaking as a full–fledged epidemic. CDC officials estimate the epidemic could turn bad to worse and run another 13 weeks. The national flu emergency is now complicated by a shortage of Tamiflu, which can dramatically reduce the symptoms if administered within 48 hours of the onset of symptoms. In addition, there is now a widespread shortage of IV bags in ERs, because a major manufacturer based in Puerto Rico was devastated by recent hurricanes. Some ERs are now using Gatorade instead of IVs to help treat dehydration due to flu symptoms. Otherwise healthy people with mild cases of the flu should be treated by their primary care provider within two days of the onset of symptoms. But high-risk patients, including the elderly and children under 14, and anyone having trouble breathing, who can’t keep fluids down or who runs a fever over 100 for more than one day should seek immediate medical attention. Maybe it’s time to revisit health insurance policies by state and federal health officials about retroactive denial of payments due to all the “unnecessary” use of ERs based on a myth and outdated 20-plus-year-old studies that are no longer valid. At the same time, even if only 3.3% of ER visits are “avoidable,” that still results in roughly five million unnecessary ER visits per year in the U.S. Health insurers want patients to consider alternatives to the ER such as drugstore walk-in clinics, urgent care centers, nurse 800-number health line services and telemedicine. I also highly recommend the use of 100% credible free resources such as the CDC and Mayo Clinic websites. See also: The Real Problem With Healthcare in U.S.  The American College of Emergency Physicians (ACEP) recommends people be familiar with symptoms of common illnesses and injuries. Minor medical conditions such as colds, low-grade fevers, cuts and sprains should be treated by primary care providers and walk-in clinics. Serious conditions such as loss of consciousness, signs of stroke, heart attack, major bleeding, trauma, sudden severe pain and coughing or vomiting blood should immediately result in a 911 call. The amazing people who work in ER departments, the physicians, nurses, technicians and support staff are overwhelmed across the country right now. In California, triage tents are being set up outside ER departments. One EMT unit in Dallas is reporting a 600% increase in calls. Let’s hope and pray they will have the resources available to prevent this public health crisis from getting worse and can stop preventable deaths, especially if it as simple as someone fearing that their ER bill won’t be covered by health insurance.

As 2018 begins, what key trends will shape the coming year, and how can you position yourself to capitalize on them? 2017 was a tumultuous year for the reinsurance industry, so, which reinsurance themes will carry over into 2018, and how is the industry positioning itself? 1.  Cyber: software is eating the world With the relentless invasion of software into every aspect of our lives, you see businesses, governments and consumers all wanting to cover their cyber risks through comprehensive reinsurance policies. The issue is that the pervasiveness of software exposes many more lines of reinsurance to cyber risk than is first apparent. How then can the reinsurance industry be more dynamic in understanding and pricing these aggressive and fast-evolving risks in a timely and efficient manner? See also: The Dawn of Digital Reinsurance   PCS made an important step in September by launching a Global Cyber Index to provide industry loss estimates for international cyber events. The creation of the index is the first step to developing cyber-focused insurance-linked securities (ILS) products. 2. Alternative capital will continue to be important to the reinsurance market Although the 2017 hurricane season is projected to be the costliest in U.S. history, the demand from capital markets for reinsurance risks is unlikely to diminish. Trapped collateral and ILS losses may put off some existing investors, but new investors looking for uncorrelated returns will continue to enter the marketplace. With around $30 billion of outstanding catastrophe bonds and ILS, 2017 saw historic levels of catastrophe bond issuance. This has encouraged the U.K. government to support the growing market by approving new Risk Transformation and Tax Regulations last week. The impact of these regulations will be fully tested in 2018, but, as the market grows, increased transparency and the ability to trade ILS products on a secondary market will be aided by the appearance of electronic marketplaces. 3. Technology developments will continue to improve the reinsurance industry  The pace of innovation and change, driven by technology, across the reinsurance industry gathered momentum in 2017. At AkinovA, we continue to work with a number of the leading re/insurance market participants to build an independent third-party marketplace for the transfer and trading of risk.

CES (formerly known as the Consumer Electronics Show), has become the biggest tech event in the world. CES2018 was so massive that there could probably be 50 different Top 10 lists. Here are just a few of mine that I hope you will find interesting and useful.

1. 5G and AI are the top enabling technologies for the connected world of the next decade.
2. Voice assistants are everywhere – incorporated into every smart device possible.
3. Everyone is talking about mobility (driverless vehicles, the sharing economy, smart cities reshaping transport).
4. The next big user interface (UI) trend will be Augmented Reality for All (AR for All).
5. Cutting the cord is a big trend (wireless power, untethered virtual reality (VR), wireless audio, etc.).
6. Biometrics gain steam for security (facial recognition, fingerprint, voiceprint, iris scan, etc.).
7. Smart Cities are gaining more visibility (they even had a special agenda and exhibit focus this year).
8. AI is not only an enabler for the next decade, it is becoming dominant today.
9. Specialized chips and sensors abound – for LiDAR, AI, visioning, and many other applications.
10. Smart-home tech continues to proliferate, and winning platforms and companies are starting to emerge.

1. BYTON vehicle: New car company with an awesome vision for a “smartphone on wheels.”
2. Flexound: Sensation of touch added through sound waves.
3. Bellus3D: 3D modeling of human face/head to create avatars, etc. (To see mine, click here).
4. Aflac robotic duck: Cuddly animatronic, AI-based duck given to kids with cancer.
5. IV-Walk: Vest to administer IV fluids and enable patients by providing more mobility.
6. Foldimate: Automatic clothes-folding machine.
7. LG Display’s roll-up TV: Ultra-thin 65” OLED TV display that can be rolled up.
8. SapientX: Movie quality avatars for conversational AI.
9. Monuma: Blockchain-based app to record and estimate the value of costly objects.
10. Guardian by Elexa: Water monitoring system with leak detection and automatic shut-off capability.

1. Tennibot: Autonomous tennis ball collector.
2. Robomart: World’s first self-driving store.
3. Phrame: Smart license plate frame.
4. 90Fun Puppy 1: Self-driving luggage (yes, it follows you around).
5. B-Hyve: Smart yard (monitors watering systems).
6. Milliboo: Smart couch.
7. Kohler: Connected, talking toilet, enabled by Alexa.
8. Somnox: Small robot that you can cuddle and sleep with.
9. Velco: Connected handlebars.
10. Kuri: Robot that acts like a digital pet.

See also: Collaborating for a Better Blockchain  

What, you may ask, does this have to do with insurance? It turns out that many of these are relevant for insurance in one way or another (okay, maybe not the talking toilet). But overall, these lists give a small glimpse of the era of unprecedented innovation that is sweeping the world. The things that the insurance industry insures, the way insurers communicate with prospects and policyholders, the nature of risk and how insurers improve operations all are being affected by the trends in emerging technologies, and we are only at the beginning of the digital, connected world.

In our earlier post on Analytics and AI, we pointed to the growing volume and exploitation of (big) data at every point in the insurance value chain. But where is all of this data coming from? The old data sources and data-gathering methods have not gone away, but they cannot on their own explain the continuing boom in the data-analytics industry. The critical factor is the recent mass proliferation of sensors in the real world, capturing data on millions of connected objects, from toothbrushes to oil tankers. The Internet of Things (IoT) has arrived, and insurers are taking notice. The possibilities of the IoT for insurance are boundless, from turbocharging underwriting models and using sensor data for preventative messaging to usage-based products and dynamic pricing. In this installment, we explore:

• where IoT technologies stand to produce the greatest benefit, both across the insurance lifecycle and across different insurance lines
• new IoT-enabled models like usage-based insurance (UBI) and insurance-as-a-service
• IoT platform implementation across different insurance lines and regions

Our stats and perspectives derive from the extensive survey we conducted as part of our Global Trend Map; a full breakdown of our respondents, and details of our methodology, are available as part of the full Trend Map, which you can download for free at any time.

"There is a big shift from today’s protection to tomorrow’s prevention. New technologies using sensors and devices are becoming more widespread and can prevent incidents from happening. Broadly speaking from an industry perspective, it has potential for better risk understanding and creates happier customers." – Dennis Nilsson, assistant vice president, head of advanced analytics, insurance, at TD Insurance

While other technological advances often represent the optimization of an established insurer capability (as with many applications of analytics, for instance), IoT in theory enables insurers to rewrite the rules of the game by moving from risk protection to risk prevention. For many use cases, this remains hypothetical, and many questions around business/monetization models, as well as the precise role of insurers in the nascent IoT ecosystem, remain unanswered. However, IoT is, in one form or another, increasingly part of carriers' strategic horizons. Do you have an IoT strategy? 54% of all respondents had an IoT strategy, and we see that this is fairly uniform across the ecosystem, insurers and brokers and agents scoring 49% apiece, and technology partners 65%. This solid showing by technology partners is not surprising – in many cases, insurers’ IoT platforms are being developed by third-party service providers. Given the upward trend in platform implementation, we expect that the proportion of insurers with formal IoT strategies will sharply rise in this timeframe, as well. Assessing the Impact of IoT: Insurance Lifecycle IoT is such an open-ended technology that we further asked our respondents to specify those areas of insurance they thought would benefit the most. The areas that come out on top were analytics (81%), customer-centricity (68%), pricing (64%), digital (61%), claims (60%) and underwriting (59%). The clear lead for analytics is understandable given the symbiosis in which these two technologies stand. No IoT means limited data for analytical models; no analytics substantially weakens the business case for IoT.

"Drones, which are also IoT devices, are being used by property and casualty companies to examine property damage after catastrophes and storms, saving them a lot of time and money, so people don’t have to climb up on the roofs, which is dangerous and time-consuming." – Stephen Applebaum, managing partner at Insurance Solutions Group

Before checking out the impact of IoT on different insurance lines, let's now explore some of these key IoT beneficiaries in a bit more depth and observe how they mesh as part of today’s emerging UBI model: analytics, customer-centricity, pricing, digital, claims and underwriting. See also: Insurance and the Internet of Things   IoT does not affect all these areas separately; rather, they are all co-beneficiaries of the paradigm that IoT enables, in which the underwriting and claims components of the insurance lifecycle are increasingly fused. On the one hand, the massive volume of data being generated by connected devices is feeding analytics and algorithmic models, increasing carriers’ understanding of risk and the accuracy of underwriting models. On the other, this data is not a static mountain; it is accessible in real time. This means that underwriting models can be continuously updated by way of dynamic pricing. This new model, often called UBI, means that policyholders can be judged on their actual behavior – which they can feel motivated to change – instead of being subjected to the tyranny of averages. So instead of charging high premiums for bad risk and then being hit with the claims bill, insurers can offer incentives for less risky behavior on the part of their policyholders through the prospect of lower premium prices (or benefits in kind) and thereby reduce their claims burden. This model is established in the auto line – with help from in-car telematics – as pay-how-you-drive, and we have also seen similar innovations in health, in particular Discovery Health's Vitality Program.

"Technology used well can change the current customer proposition. The traditional insurance model has the opportunity to move from post-loss reactive reimbursement to proactively managing down customers' risks. The latter model is significantly more valuable to the customer and can change insurance from the grudge transaction that many view it as today into an ongoing value-enhancing relationship. Incumbents working with insurtech startups can accelerate this evolution" – Nick Martin, fund manager at Polar Capital Global Insurance Fund

IoT does not just enable insurers to tailor policies to actual behavior; it also allows insurance-as-a-service, with flexible policy spans. Rather than taking out an annual policy, which may overshoot the mark, customers can take out insurance in real time on a case-by-case basis, precisely when they need it the most. In the auto world, this has crystallized as pay-as-you-drive, but the applications are potentially much broader, for example insuring your car against theft for the duration of a trip into town or your airport luggage against loss at the point of check-in. In the longer term, the ability to sustainably offer lower premiums – which relies on reducing claims costs or premium spans – opens up to carriers segments of the customer base that were hitherto under- or un-insured, expanding the scale at which they can operate. As we have indicated, IoT innovation can be particularly significant for claims departments, and this is not just by reducing payouts but also by allowing insurers to work out exactly what has happened when a claim event does occur (for instance, with car crashes). To further investigate the impact of IoT on claims, we spoke to Minh Q Tran, general partner at AXA Strategic Ventures: "IoT could have a huge impact on claims by preventing accidents from happening or warning so that the damage doesn’t get worse. "In the car industry, the development of connected and autonomous cars should prevent accidents and decrease dramatically linked damages, changing at the same time insurance intervention. Car insurance startups are using auto-tracking devices to teach newer drivers how to stay safe (Marmalade Insurance) and help locate cars if they are stolen (Insure The Box). "Many insurtechs are being created to more accurately analyze drivers’ attitudes and data, so that insurers can adapt their offer to customers and new ways of driving." Stay tuned for our dedicated post on claims, in which we explore further the impact of IoT on claims departments. Or, if you'd prefer to read on immediately and access all 11 key themes, simply download the full Trend Map free of charge here. However, if it is to be successful, insurance IoT requires more than just devices and back-end analytics: Insurers also need to radically reevaluate the relationship with the customer. In the past, policies were renewed infrequently (in many cases as rarely as once a year); the behavioral science inherent in IoT-empowered models requires more frequent interactions and a larger number of (digital) touchpoints. Insurance needs to change its perception in the eyes of consumers if it is going to gain firstly their trust and secondly their data, by becoming fundamentally more customer-centric and making its value proposition clearer (we go into these themes in more detail in our later installments on marketing and customer-centricity and distribution – read ahead here). We can see then that IoT is not, and cannot be, a siloed technology for the new-age insurer; it directly affects, and is affected by, all work being done in analytics, customer-centricity, pricing, digital, underwriting and claims. Assessing the Impact of IoT: Insurance Lines We didn’t just ask respondents to indicate which aspects of insurance they saw benefiting the most but also which insurance lines. Auto, home and health came out on top, while P&C/general, commercial and life were relatively behind.

"Technology is having an impact. In the P&C space, we are seeing a real focus on IoT and how devices can give better information and be part of an insurance program. Wearables are going to make even more inroads into health and wellness products." – Cindy Forbes, EVP and chief analytics officer, Manulife Financial

The new UBI model enabled by IoT has clear implications for our three leading lines (and for personal lines, in general). In health, we can point to connected wearables to monitor an individual’s health and to price accordingly; in auto, to in-car telematics that monitor driving behavior; and in home, to smart security devices. We see a whole host of commercialized solutions in these areas already. We asked Sam Evans, managing director at Eos Venture Partners, for some more detail on the impact of IoT in home insurance: "There are a multitude of applications ranging across motor, home and health. One key application where we have seen significant progress in insurance is combining smart home technology with a traditional home insurance policy. "There are multiple benefits for both the insurer and the policyholder. The technology, including smart cameras, motion sensors and water-leak devices, has the potential to significantly reduce claims experience by providing early warning and notification. As an example: In the U.K., where the largest cause of damage is water leakage, a device that allows the water to be shut off when a leak is detected will therefore significantly reduce claims costs and ensure a happy homeowner. "One of the leaders in this area is a U.K. insurtech called Neos, which is pioneering the move to preventative home insurance leveraging the latest IoT devices." As we see in the graph above, there is a substantial gap between our leaders, auto (80%), home (71%) and health (64%), and our stragglers, P&C/general (44%), commercial (33%) and life (29%). However, the current primacy of the personal lines should in no way blind us to the potential of IoT for commercial lines, which, despite not attracting quite the same media attention to date, remains huge. See also: Coverage Risks From the ‘Internet of Things’   IoT can transform the insurance proposition attaching to any kind of valuable commercial asset – provided that it can be monitored. For example, opening up data streams from industrial equipment for algorithmic modeling enables preventative maintenance, reducing the burden of failure for both equipment owners and insurers alike, and the same applies to sensitive cargoes in transit. As with UBI for the personal lines, the carrier is transformed from insurer to assurer:

"Connected insurance is a big opportunity in commercial insurance, but it won’t come overnight. It’s the less mature use case today because it’s more difficult to figure out the commercial or industrial process, how to put sensors on that process and how to get at the data. But the opportunity to change the product’s structure, the paradigm you are using to insure that kind of risk, is really large; it’s impressive." – Matteo Carbone, founder and director at Connected Insurance Observatory

Our stats on implementation (which we examine below) show that commercial & P&C/general currently exhibit a lower level of platform implementation than our other lines. However, in line with the strong all-round potential we have indicated here, we find minimal difference between our different lines when we look forward to anticipated levels of implementation in the near future. IoT Adoption by Region It is one thing to establish in which lines and areas of insurance the potential impact of IoT is greatest – but where are we on the adoption curve? 22% of all concerned parties have already implemented IoT platforms; within 12 months, this is set to rise to 47%; and within 24 months we will be at 72% implementation. What this tells us is that we are in the midst of an IoT rush, which will see it become a majority-practical phenomenon within two years for those players today still predominantly at the theoretical stage. Regionally, we detected a relative lead in implementation for Europe versus the rest of the world, with 30% of respondents having already implemented. However, the scores for these two groups quickly align, as we can see above. You can read more about our notion of Europe as an early adopter in our dedicated Regional Profile, by downloading the full Trend Map below here. Stay tuned for our next post, in which we look at that all-important field, especially for the success of IoT products: Marketing & Customer-Centricity.

The reward for showing your wellness program works is now $3 million!

As almost everyone in the wellness industry knows, we have offered a $2 million reward to anyone who can show that conventional annual “pry, poke and prod” wellness saves money. I’m feeling very generous today, so let’s make the reward $3 million. Even more importantly, let’s loosen the rules — a lot —  to encourage applicants. You’ll find the $3 million reward is not just more generous but also far easier to claim than the previous $2 million reward. Loosening the Rules Except as indicated below, the rules stay the same as in the previous posting, but with the following relaxed standards. Most importantly, I’ll now accept the burden of persuasion. It is my job to convince the panel of judges, using the standard civil level of proof, that you are wrong, as opposed to you having to convince them that I am wrong. Next, let’s expand the pool from which the judges can be drawn. It wasn’t very nice of me to allow you to choose from only the 300 people on Peter Grant’s exclusive healthcare policy listserve, because obviously no one invited into a legitimate healthcare policy listserve thinks wellness saves money. See also: Should Wellness Carry a Warning Label?   In addition, you can also choose among the 100-plus people on Dave Chase’s email list and the 70 people on the Ethical Wellness email list. (www.ethicalwellness.org)  To make things totally objective, we will add as judges whatever two bloggers happen to be the leading dedicated lay U.S. healthcare economic policy bloggers at the time of the application for the award, as measured by the ratio of Twitter followers-to-Twitter-following, with a minimum of 15,000 followers. So judges are chosen as follows: two bloggers chosen by objective formula, plus we each choose six people from among the other 460, with the other party having veto rights for five of them. That gives a total of four judges, who will choose a fifth from among those roughly 500 people. The original rules included the requirement of defending Wellsteps’ Koop Award.  After all, the best vendor should be exemplary, right? A beacon for others to follow? A benchmark to show what’s possible when the best and brightest make employees happy and healthy? However, now you have another option. You could instead just publicly acknowledge that the Koop Award committee is either corrupt or incompetent, as you prefer, because that possibility cannot be ruled out as a logical explanation for Wellsteps winning that award. Your choice…. Next, you may bring as many experts with you to address the adjudication forum as you wish to bring. I, on the other hand, will be limited to myself. Further, you no longer have to defend the proposition that wellness as a whole has saved money. You can, if you prefer, simply acknowledge that most of it has failed…except you. Meaning that, if you are a vendor that has been “profiled” on this site in the last two years, you can limit your defense to your own specific results. You don’t have to defend the swamp. That new loophole allows companies like Interactive Health, Fitbit, Wellness Corporate Solutions, etc. — and especially Wellsteps — to get rich…if what I have said specifically about them is wrong. I have $3 million that says it isn’t. Special Offer for HERO Ah, yes, the Health Enhancement Research Organization (HERO). The belly of the beast. Let me make them a special offer. Paul Terry, the current HERO Prevaricator-in-Chief, has accused me of the following  (if you link, you’ll see they had enough sense not to use my name, likely on advice of counsel, given that I already almost sued them after they circulated their poison pen letter to the media): I’m convinced responding to bloggers who show disdain for our field is an utter waste of time. I’ve rarely been persuaded to respond to bloggers [Editors note, in HERO-speak, “rarely” means “never” — except for that intercepted Zimmerman Telegram-like missive], and each time I did it affirmed my worry that, more than a waste, it’s counter-productive. That’s because they’ll not only incessantly recycle their original misstatements, but worse, they’ll misrepresent your response and use it as fodder for more disinformation.* Tell ya what, Paul. let’s debate disinformation, including your letter. Aside from the standard 10% entry fee (used to pay the judges honoraria, reserve the venue and compensate me for wasting my time with your THC-infused quixotry), all the economic burden falls on me. The only catch: I have asked you on multiple occasions to clue me in as to what my alleged disinformation actually is, if any. That way, I can publicly apologize and fix it, should I choose to do so.  Before applying for this award, you need to disclose this alleged disinformation. You can’t just go around saying my information is made up, etc. without specifying what it is. By definition, “disinformation” is deliberate misrepresentation. To my knowledge, as a member of the “integrity segment” of the wellness industry, I have never, and would never, spread disinformation. On the other hand, if I did spread inadvertently incorrect information by mistake, it seems only fair to let me fix it — especially given that I have been totally transparent and generous with my time in explaining to you what yours is, and how to correct it. (I might have missed some. Keeping up with yours is a challenge of Whack-a-Mole-meets-White-House-press-correspondent proportions.) See also: Wellness Vendors Keep Dreaming   So perhaps it is time to man up, Mr. Terry.  You and your cronies claim to have been collecting my “disinformation” for years, without disclosing any of it. I’m offering you a public forum and $3 million to present it. Otherwise, perhaps you should, in the immortal word(s) of the great philosopher Moe Howard, shaddap. A couple other mid-course corrections to the previous award offer.  Someone wondered if this offer is legally binding, so if your attorney’s knowledge of contract law matches your knowledge of wellness economics, they can voice their likely spurious objection. I will publish the objection and address it if need be, to make the reward a binding offer. Another commenter whined that maybe I just won’t pay the reward. I’m sure that’s the reason no one has applied. (Not.) So, put 10% of the entry fee down, and I’ll attach a lien.

In the opening segment of this series on complexity, I discussed the three network graphs that have emerged in the risk markets and which business models embody them. For quick reference: In the second segment, I discussed the emergence of peer-to-peer insurance, which will accomplish the three core functions of the risk markets that currently exist in a “black market” unformalized state by using distributed managerial methods, which are:

• Risk transfer;
• Escrow of funds for a defined purpose; and
• Management of reallocation of escrowed funds.

In the third segment, on distributed ledger technology, I looked at how it can be configured as a cohesive platform that would embody all three network graphs. I discussed how the roles of individual peers, along with carriers and agents, can work together to formalize the P2P methods in the risk markets. For a quick reference: In this final segment, I will look at the current balance of the market share of each graph type in the risk markets, how the balance may change and what the new equilibrium state might look like in the risk markets. Before doing that, I would like discuss an important idea that emanates from the blockchain and cryptocurrency communities: the idea that there could be “one ledger to rule them all,” or, asked another way, “Could a single ledger be an all-encompassing ledger, accounting for all value?” The simple answer here is “no.” No single ledger, technology or network will ever be all-encompassing. That would be silly, as it would reintroduce the systemic weakness inherent in centralized system structures, namely the risk that by taking out a single central node (or ledger, in this case), the whole system could collapse. See also: 4 Marketing Lessons for Insurtechs   Just as was realized in the blockchain and cryptocurrency communities, the idea of a “risk ledger to rule them all” is not a desired structure; in the risk markets, a single distributed risk ledger to account for all funds escrowed against all risk types is not a desired structure. Because of the nature of risk and the diverse set of risk exposures in the world, there will need to be a diverse set of risk ledgers. We may see something materialize that looks like the following as an example of four distributed risk ledgers, each for a specific category of risk exposure. Hold on to that thought for now…. I would like to again reference some of the work done by the Ripple team and their thought leadership toward a solution to address the concern of “one risk ledger to rule them all.” The Ripple team has introduced a protocol that will enable value to move in a cryptographically secure way between two or more distributed ledgers. It is called the Interledger Protocol, and more information can be found on their site here. Using the Interledger Protocol, the Ripple team has articulated how various types of distributed ledgers, each engineered for a specific strength, can be networked together to create a term they have coined the “Internet of Value.” Without a single shred of doubt, it is a true statement that “finance is getting its internet,” and it is already here, albeit in a state of maturity similar to the internet circa the late 1990s. Unlike the slow pace of the internet’s growth, however, finance’s internet will not take as long to mature — mainly because it received an advantage from the preexistence of the internet itself and all that has been learned. Insurance and the risk markets of all the various financial services are the lowest-hanging fruit. This might seem like a stretch in today’s environment, but it is not hard to imagine that by connecting many risk ledgers (each escrowing funds against a specific risk type) and using the methods outlined with Interledger protocol, that we will see the emergence of an internet of risk. Just like with the internet of value we see emerging today, the internet of risk will be made of many different distributed risk ledgers networked together. I would define the internet of risk as a network of distributed risk ledger networks. The technical name for a “network of networks” in complexity science is a “multiplex.” Risk markets have been operating with an informal and non-digital multiplex structure for some time. Because each insurance company manages a risk ledger and because reinsurance companies function to connect insurance companies' risk ledgers together, the reinsurance industry effectively embodies a decentralized network of insurance companies — and both graphs combine to embody a multiplex of risk ledgers. In all likelihood, over the coming years we will observe the digitization of the existing multiplex of risk ledgers that is the risk market into a network of digitally connected distributed risk ledgers, with each individual risk ledger serving the specific needs of a specific risk exposure. KarmaCoverage is intended to be this “multiplex of risk,” organizing the connections between the risk ledgers of all types of P2P risk sharing. And it aims toward the goal of insuring that, as the P2P segment of the risk market grows, it maintains a high degree of resilience, enabling society to transfer risk efficiently among individual peers, successfully addressing the various risk exposures of those peers. You would expect to ultimately see this play out and create an internet of P2P risk ledgers that looks something like this: ' To be fair, it is not possible to know the ultimate structure (or graph) of this multiplex of risk. It will emerge by a process of self-assembly. It must employ distributed managerial methods to avoid reintroducing the fragility inherent with its centralized structure. That said, many portions of it can (and should) be centralized for efficiency purposes. Distributed systems have weaknesses, as well, one of which is the introduction of some degree of inefficiency. We would not want to act out that behavior where “if all you have is a hammer, everything looks like a nail.” The functions that should be centralized combine a make the business case for something like KarmaCoverage. Now, let’s take a look at how this may have an impact on the existing balance of market share where each graph serves as a percentage of total risk. Using data on the currently formalized methods of total risk and by assigning a percentage to each graph in the risk markets, you find that the graphs settled at roughly these percentages:

• Reinsurance: 40%
• Insurance: 60%
• P2P coverage: 0% (This does not account for all the risk transfer activity that occurs informally in the black market of P2P risk transfer.)

There are two factors to consider when thinking about how the equilibrium state of the risk markets will balance out in the information age. To answer this, first we need to consider market growth and look at how the size of the risk markets will grow as a result of formalizing the P2P black market activity. Second, we need to consider the market share split among the three graphs, given that P2P will no longer continue to be 0% of the formalized market. Let’s look at Uber and the taxi market for a benchmark. Uber CEO Travis Kalanick, speaking at the 2015 DLD conference in Munich, said the taxi market in San Francisco was about $140 million per year, while Uber’s revenues in San Francisco were running at $500 million per year and still growing at 200% per year. Ignoring the continued growth, these numbers indicate roughly a 350% growth in market size. See also: How to Outfox Our Brains About Risk   Approaching this question about the growth in market size from another angle, and after reviewing various sources, the global formalized taxi market size is roughly $20 billion in revenue per year, while Uber’s annual revenue is only about $5.5 billion. These numbers would indicate roughly a 25% growth in market size. While this is a simple and quickly obtained benchmark, it would be easy to conclude that the process of formalizing the P2P segment of the risk markets will drive somewhere between 25% and 350% growth to the size of the risk markets. This would take the roughly $5 trillion in global annual premiums of the combined insurance and reinsurance industries and, after adding the P2P industry segment, bring the size of the risk markets to somewhere between $6.35 trillion (on the low side) and $17.5 trillion (on the high side). Reality check: There is a big difference between risk and taxi rides! Taxi rides are more prone to growth in market demand because of economic activity and population growth than the risk markets are. Risk, on the other hand, is more prone to shrinking demand because of improved mitigation of actual risk because of safer technology and other factors driving the reduction of risk. As one example, let’s look at auto risk as we make the transition into driverless cars, which stand to make a very significant dent in auto risk exposure. We are already seeing a 40% decrease in accident rates from mere “accident-less” cars equipped with accident-avoidance technologies. Using these benchmarks (and my crystal ball), the fact that the frequency of small loss events is much higher than large and catastrophic loss events leads me to predict that the formalizing of P2P methods in the risk markets will result in the doubling of the size of the formalized risk market at some ambiguous point in the future. I will also assume that the ratio between insurance and reinsurance shown above does not change. This would end up with risk markets growing to nearly $10 trillion, with the market share being split among the three segments like this:

• Reinsurance: 20%
• Insurance: 30%
• P2P coverage: 50%

Surely these assumptions and predictions are wrong, but this is more of an exercise in trend observation, not an attempt to actually predict the state of the risk markets at some specific future point. There will be other drivers that will have an impact on the shifting balance. One easy-to-understand but powerful and potentially market-driven force would be consumers voluntarily choosing significantly higher deductibles. This trend is already in motion. One indication of this trend on home insurance policies is that in California, on policies covering more than a million dollars, the lowest deductible that is compliant with regulatory rules is for $10,000. While that example is imposed on the industry, here in Florida, we saw the industry self-impose an increase in deductibles from hurricane losses after the 2004-05 seasons — while, at the same time, many large carriers simply pulled out of the state, leaving a vacuum to be filled by newer, smaller Florida domestic carriers. Using formalized P2P “networked self-insurance” methods, it is possible for consumers to achieve an average of $10,000 in coverage on an annual basis for less than $100 per month and to simultaneously fill the deductible gap all the way down to the first dollar of loss, fully addressing total risk exposure. That could easily lead to enabling consumers to request $10,000 deductibles on all their insurance policies, which would have a material impact on gross premiums. On home and auto insurance losses, more than 90% of claims are less than $10,000. If the consumer behavior of requesting ever-higher deductibles on their traditional insurance policies occurs, it becomes easy to consider that premiums on traditional insurance may currently be at or near their historical high. See also: 4 Steps to Integrate Risk Management   Obviously, this process of formalizing the P2P segment of the risk markets will face headwinds, but since I entered the industry with an eye on the intersection of risk markets and crowdfunding methods back in 2013, we have seen the number of P2P insurance companies grow from one to dozens all over the world. It seems like the moment for the formalization of P2P methods in the risk markets is here. Because of the convergence of factors discussed in this series (and a few others), I believe we will see a Napster-, an Uber- or an AirBnB-type of service emerge for the risk markets in the coming years. I have started a LinkedIn group for discussion on blockchain, complexity and P2P insurance. Feel free to join here. The whole mini-series is available for download at KarmaCoverage.com.

The impact of drones in multiple industry sectors, including insurance, has been the subject of increasing interest. Market research is making a forceful case that drones are a technology that insurers cannot afford to ignore–drone uptake globally and their growing capabilities present multiple opportunities for insurers. A recent Goldman Sachs report forecast that drones will create a $100 billion global market opportunity by 2020. The fastest growth, the report predicts, will come in commercial and civil government uses of drones. The banking group expects governments and businesses to spend $13 billion on drones between now and 2020 and consumers to spend $17 billion. This will create a $1.4 billion market for drone insurance, the report predicts. PwC is even more bullish. A report released in May calculates the global market for the commercial application of drones at more than $127 billion and predicts that drones will generate $6.8 billion in value for the insurance industry. See also: Drones Reducing Accidents on Job   The growing value of the global drone industry and the growing capabilities of individual drones both present important opportunities to insurers.

• The provision of drone insurance will become a growing business as these machines are used in greater and greater numbers. This will give insurers the chance to grow their core business.
• Drones themselves can be useful tools for improving insurance operations. They will give insurers the opportunity to innovate.
• The use of drones across industry segments will affect risk, and how it is insured.

See also: The Many Questions Raised by Drones   In my next three posts in this series, I look at the use of drones in insurance applications, the imperative for drones to be insured and the potential impact of cyber threats.

One thing we know for sure is that the “train has left the station” when it comes to healthcare reform. No matter what party you follow, or policy you like to support or ignore, the healthcare industry MUST change to a value-based platform. What that means is that, while the financial infrastructure of receiving healthcare used to be a pay per visit/test/hospital stay, etc., it is moving to a payment system based on outcomes -- or "value," as we like to brand it, because it sounds better. What that means is a radical change for any associated industry, including, foremost, insurance companies, the ultimate risk bearers. All insurance executives rejoice, right? The idea of offsetting the risk to the providers responsible for the care of the patient sounds like one heck of a business strategy. Is it, and what does this mean to the insurtech conversation? My point of view: A LOT. Keep reading. I promise I’ll keep it short…who has time for long articles? My goal is to get your thoughts charged around how this affects you and give you an idea or two It may be relevant to know that I am a long-term provider advocate, having been the chief administrator of a large OB/GYN group while I cut my teeth in healthcare and having served 10 years as the CEO of the then-largest and most prestigious primary care/internal medicine group in the region. I can tell you that this movement is the RIGHT thing to do, and I can also tell you that it is complex, expensive and overwhelming. See also: U.S. Healthcare: No Simple Insurtech Fix   The days of small practices with time to actually spend with the patient and not face the computer (and be buried in endless paperwork burdens, digital or not) are seemingly gone due to the demands of the system. If you have been to a medical facility as an actual patient in the last year, (and I hope you have been for at least your annual physical), I am confident that you saw this first-hand. Your experience likely included witnessing every staff member from the front desk to the clinical team inputting data of all sorts into the computer, and perhaps not having enough time asking you how you “really” were. (READ: COULD THIS BE A RISK ISSUE?) What you may have also noticed is that you probably had to pay more than you expected. Gone are the days of the $10 co-pay. The movement to high-deductible plans has changed the game completely. So what does this mean to you? In the March 2017 article by Sam Evans, “The 10 Trends at the Heart of the Insurtech Revolution” #1 was that “Insurance will be bought differently,” (also sold, underwritten, etc.) The demands of the medical community and the patient are under attack with what seems like an endless need to capture and understand data, learn, develop new payment infrastructures and oh, by the way, be transparent so everyone knows exactly what is going down. Dr. Halee Fischer-Wright (the CEO of the national Medical Group Management Association and a physician) rants in her new book, "Back to Balance," about this early and often. She says that “according to the MGMA study, it costs the average practice $40,069 per physician per year to just manage and report quality measures. For a relatively small practice of 10 doctors, that’s more than $400,000 per year. Not to improve on measures--just to report.” WOW- She continues with story after story and urges us to consider how to get a better balance and to put the patient at the front of the conversation. It’s a good read, and I’d recommend it if you have clients in the healthcare space. Three key points to digest:

1. Value-based healthcare is here to stay: It changes everything for every healthcare-related client you have. If you are on the risk side of the business, understanding how the new systems are creating learning opportunities, barriers and downright sinkholes that your clients may fall into is mission-critical. (I didn’t get into it, but clearly the issues with technology and the added complexity of detailed health information is the patient privacy/hacking issues… oh, yes… another policy that healthcare providers need to buy or buy more of to protect their patient information.)
2. The pure cost of healthcare is increasing due to many competing factors, and most of that cost is SHIFTING to the patient. This means insurance is being bought differently. This means that new insurance alternatives are popping up, (concierge, direct primary care, employer-sponsored, etc.) and that there are NEW customers for you to understand and educate on the role that insurtech plays in their world. Many of these are NEW AND INNOVATIVE companies that need deep knowledge on these matters.
3. Anyone who has physician/hospital clients should be VERY AWARE AND EDUCATED on every aspect from risk assignment, to education, how technology affects patient care and ultimately malpractice, financial pressures- I would say EVERYTHING is up for review and understanding.

See also: Healthcare: Need for Transparency If as an industry, we are to be the BEST PARTNERS for our clients, then we must do more than have a cursory understanding of the multiple issues with value-based care. If anyone needs a tutorial, I am up for helping out!

As more insurers consider moving some of their core systems to the cloud, many want to know how secure their data and applications will be.

There are four major security considerations for cloud-based core systems: application risks, data risks, intellectual property risks and physical risks.

See also: Why the Cloud Makes It All Happen  

There are two basic models for how an insurer can use core systems in the cloud.

• Model One: An insurer licenses core systems from a core system vendor, and then the insurer or an integration partner deploys and uses those core systems in the cloud.
• Model Two: A core system vendor deploys its core systems in the cloud, and then makes those core systems available to an insurer on a subscription basis.

Leading cloud providers create and maintain a set of services and capabilities to provide security for infrastructure and platform cloud elements. The breadth and depth of these tools and capabilities are generally equal to, and often better than, those utilized by individual insurers that deploy core systems on their own premises.

When properly addressed, security considerations should not be a barrier to an insurer using and realizing the benefits of cloud-based core systems.

See also: How Can Insurers Leverage the Cloud?   For access to the full report, please click here.

This article will be a 15-minute read. If you work for an insurtech startup that wants to get a deal done with an insurance carrier, it will be a very valuable 15 minutes. If you know somebody like that, please forward it to them.

Imagine this: You are the founder of an insurtech startup. You’ve got a great solution that could deliver meaningful results for any insurance carrier that brings you on. You’ve been through an accelerator (or two), have received initial funding and have your advisory board in place. You may even have a couple of pilots under your belt. Now, it’s time to really start cranking up your sales/partnerships.

As you roll out sales strategies for the year, I thought it would be useful to provide a guide for startups to consider when preparing to meet with their next prospective carrier. Collaboration between startups and carriers is a topic near and dear to my heart. While the focus is primarily for B2B startups, many of the same principles outlined below apply to D2C startups, which are looking to partner with an insurance carrier for distribution purposes.

The framework for this guide is as follows:

1. Know your value
2. Know your customer
3. Find out who holds profit and loss (P&L)
4. Help them understand how you’ll bring value to them
5. Sign a letter of intent (LOI) and agree on a pilot
6. Focus on both the art and science of the sale

Know your value

Startups, if you are reading this, please keep the following question in mind when you are reading the rest of the article. Is your solution going to help a carrier save costs or increase revenue? Have a clear value proposition and give tangible examples of what you do (i.e., use cases where it is already working). For example:

• Saving costs – DO YOU remove the need for manual/high cost processes? Identify opportunities to improve lapse rates, persistency ratios, loss ratios? Provide the carrier with new data sets for better and more accurate modeling? Etc.
• Driving revenue – DO YOU increase a carrier's number of prospects? Increase conversion rate? Increase sales volume because of a new niche product capturing a new market? Etc.

If you can not answer this question, you may want to focus on this first before reading the rest of this article. At the very least, have that question answered before you follow the advice provided in this article.

Know your customer

You know what value you provide to carriers.  Now, it’s time to go meet with them. Wrong. Before you meet with a carrier, do your homework and be specific about which carriers you want to target.

See also: Insurtech vs. Legacy Insurance Carriers  

Information you should know about the carriers you are targeting:

• What is their organizational direction?
• Who is their main competition, and what has their competition been doing when it comes to innovation?
• Who are the key players within the organization? (See next section)
• Has the carrier done anything really meaningful in the market recently?

The more you know about a company when you walk in, the better. Don’t you feel good when someone knows a bit about your solution when you first meet the person?

There are plenty of ways to get this information. Read about the company and research whatever is publicly available online. Use LinkedIn and your network to find out more if you can’t find it online. Once you’ve done your homework and know who you are going to target, work on getting in the door. LinkedIn and your network will be powerful here, too.

However, before you meet with a carrier, it’s important to know who in the organization you will and need to meet with. The below is a basic, high-level organizational chart of an insurance carrier (this will vary depending on the organization): A few notes on this chart:

CIO = Chief IT officer

CDO = Chief distribution officer

Chief actuary can either report to CFO or directly to the CEO (I have seen both)

Innovation can sometimes be labeled as transformation or digital strategy (I have seen either or all three)

Experience and service – relates to customer (i.e. customer experience and customer service)

I have not included HR in this diagram (they are a very integral part to any company, but usually not involved in insurtech initiatives)

Now, it’s time to meet with the carrier. So, who do you target?

Find out who holds the profit and loss (P&L)

Ultimately, any initiative that an insurance carrier undergoes must have some sort of return on it. As such, as part of the approvals process for an insurance carrier, the people who have the most say as to whether or not to bring a solution on board will be the ones who hold a P&L. Why are those who hold a P&L important? Because they will be the ones who are ultimately measured on the success of an initiative and the people you will have to convince to buy your solution.

Others are important, too, so you need to know who all the players are and what motivates them, as all will have different and important roles throughout the whole sales cycle.

Who are the players? While you read directly below, keep in mind what your solution is offering and who the person is who you are ultimately going to need to get the most buy-in from.

The top  CEO – This one should self-explanatory

The control functions  – these are people who may not be a user of your insurtech solution but will want to analyze it to the nth degree to make sure it’s good for the organization as a whole.

CFO – The CFO monitors/controls the P&L, so, yeah, he or she is important. The CFO may even be one of the most important, as, in some cases, the CEO will only sign off on a project once the CFO has endorsed it. That question I asked before (save cost or increase revenue) is of utmost importance to this person. Expect the answer to that question to get scrutinized, too.

Chief actuary/appointed actuary – As mentioned before, I’ve seen this position report directly to a CEO and to a CFO. Regardless, the person in the position will ask questions of a financial nature. If you have a solution that claims to improve lapse rates, increase persistency or anything else that touches pricing, be ready for some detailed questions from this department.

CRO – I’ve seen variations of this, but, for the most part, risk will encompass compliance, risk and legal. These are three very important departments of the business:

• Compliance – compliance will look at things from a regulatory perspective.
• Risk – enterprise risk management is an interesting concept for insurance and could encompass a lot. Here is a useful article on it. Effectively, risk functions will look at a variety of risks – from market/macro risks to conduct risks to credit risks.
• Legal – this one should be self-explanatory.

The profit centers – these are the ones who will likely use your insurtech solution and the ones who will ultimately get measured on the effectiveness of your solution (i.e. P&L).

Chief distribution officer – This position will vary depending on the organization; its primary goals are to grow revenue (i.e. sales, business development, commercial). If your solution has anything to do with any part of the sales value chain, then buy-in from the chief distribution officer will be key.

COO – Operations departments have a variety of functions under them – from underwriting to customer service to claims. If your solution has anything to do with back-office operations or the customer, then this is another key stakeholder for you.

Both of these definitions are wide for a purpose. These two departments have the most interaction with a customer/policyholder and will be very particular about anything that is going to affect that relationship. They will need to be convinced that the solution being implemented does not disrupt that relationship.

Many insurtech solutions are targeted at improving the customer experience. However, these two departments have the experience in actually doing it for their existing customers and will feel very particular about saying what can be done to improve that relationship. Be mindful of this when you start engaging with people from these departments.

Lastly, the aim of many carriers is to make more prominent the role of the chief customer officer or a customer experience department. For the moment, I put that position into the advocate category below, unless the person specifically holds a P&L.

The advocates – these are typically the ones you will meet with first and the ones who will be very important in convincing the the profit center category that your solution should be taken on board.

CMO – I debated as to whether to put this person in the profit center category, but I feel they belong more so in the advocates column. The reason is that a lot of the solutions brought on by the marketing team are then provided to the distribution team to help with their sales. In some cases, where the carrier has a D2C solution, it may fall directly under the CMO/product team. If the CMO holds a P&L, you may want to consider this person/department a key stakeholder rather than an advocate.

CIO – This is where you will see the titles of innovation, transformation or digital strategy. The IT department is obviously an important one for you, as you will have to work with when it comes to implementation of your solution. IT departments are seen as an enabler to the rest of the business. This means that, while you need to convince this team that your solution is technically sound, IT will not make a call on your solution from a business needs standpoint.

Note: I put corporate strategy under the CFO office in the org chart above, as sometimes there are two or more different strategy departments in an organization. Sometimes this is a completely separate department that reports directly to the CEO. Regardless of which department it is in, I would label any strategy department as advocates.

My labels above are the traditional ones, but some organizations may have people who are more powerful than others. Try to find this out through the power of your network.

Help them understand how you’ll bring value to them

The first meeting will likely be with one/some of the advocates. These may be of the manager/senior manager level, who are knowledgeable enough to do the first round of vetting for their more senior managers/key stakeholders in the organization. This session is an opportunity for the carrier to get a high-level understanding of what is being proposed to see if it should bring this solution forward. You will need to at least demonstrate the answer to that key question during this session.

After a few of these sessions, assuming the carrier is interested, more senior management/other key stakeholders will join in to get their view. If you start seeing more senior personnel in your meetings or people who fall into the profit center bucket, then you are on the right track. If you keep only meeting with advocates, it may be time to start questioning whether you are making progress.

See also: Rise of the Machines in Insurance  

It’s also fair to ask the carrier who will be held accountable for the success or failure of the solution being implemented. It will help to get those people involved and excited early on. Getting people excited and on board is half the battle. It feels like the deal is done. Then, the red tape comes in.

Queue the approvals process.  

Approvals to undergo a new initiative for an insurance carrier can be cumbersome. The person who is leading the project will need to do a write-up of the solution for the rest of the organization to evaluate (this will include some combination of people from the control function, profit center and advocates). This write-up will include:

• Why the carrier should do this project (qualitative and quantitative analysis that will include costs/benefits/KPIs)
• The technical architecture of the solution
• Risks associated with the solution, with mitigating controls (technical and non technical)
• Regulatory/legal implications
• And more

This may be seem like a lot, but multibillion-dollar corporations need to ensure they have a paper trail for initiatives. (Side note – you should always have an audit trail yourselves!) For a startup, the more you can help with this report and prepare yourselves for these questions, the better. Think of ones that are specific to your solution. You will save time if you address these early on.

The carrier will also want to assess your solution against three or four others in the market. Hence, it is important to know your competition and how you stack up. Again, if you have this upfront, you will save time later. You will want to constantly communicate with your key contact(s) at the carrier throughout the approvals process, helping them and being with them to answer any questions that may come up. Once approval comes in, they will want to start work, so you had better be ready.

Sign an LOI and agree on a pilot

Once all the approvals are done, get your LOI signed and agree on a pilot. An insurance carrier typically will not do this until it has done all of the internal approvals.

Focus on both the art and science of the sale

Sales is an art and a science. The science is a lot of what I mentioned above; know your prospect, have a sales pitch down and close. The art is things that you learn through more practice, such as non-verbal queues and cultural nuances. If you are doing cross-border collaboration (i.e., an American startup going to Asia or vice versa), there are a ton of nonverbal queues and cultural nuances to be mindful of. Some practices that are OK in some markets may not be in others. I own a book called Kiss, Bow, or Shake Hands. I bought this when I first moved overseas, and it has been most helpful to me in this respect.

Lastly, I’ll repeat some advice that I mentioned in my ITC review from Benoît Claveranne, group chief transformation officer of AXA:

• When a startup approaches an incumbent, they should make clear what they are looking for – to be invested in, bought out or partnered with. A lot of time is wasted on this during early engagement, and it will help move the conversation along if it is clear early on.
• For startups – make a call after one to two meetings to see if the incumbent is serious about doing business. Do they have a budget and a team to develop it? If not, it may be time to move on to the next client.

Summary

During my financial advising days, I read Dale Carnegie’s "How to Win Friends and Influence People." The one principle from that book that has always stuck with me is "make the other person feel important." By making people feel important, you let them know that you genuinely understand and care about their needs first and that you are not just trying to sell them something, but instead, providing them with a solution that meets that specific need.

The above is is a high-level guide for you, the insurtech founder, to help make an insurance carrier and the people you are pitching feel important by, ultimately, understanding their needs and how you can help them.

Creating partnerships between insurtech startups and insurance carriers is something I am passionate about and spend time doing every day. I am inspired when I hear stories from the field and new ideas on how to better this process.

I would love to hear your thoughts and feedback on this topic.

This article first appeared at Daily Fintech.