You’re probably familiar with the name of the most recent Nobel laureate in economic sciences, Richard H. Thaler. A professor of behavioral science and economics at University of Chicago, Thaler's core work is "Nudge," a book he wrote with Cass R. Sunstein, in which the authors make the case for why to nudge people toward certain behaviors that are beneficial for the individuals and for society as a whole. Thaler's work has contributed to the creation of behavioral economics and could have major implications for economic research and policy, according to the Nobel committee. Settings of influence It’s common knowledge that the setting in which people make decisions very often influences the choices they make. What we buy at a supermarket is influenced by the position of products; what we choose from the menu often depends on what pictures of food are shown. These are simple examples, but implications extend to how a person or family relates to healthcare, insurance, savings strategy and so on. According to Thaler and Sunstein, even “small and apparently insignificant details can have major impacts on people’s behavior,” so whoever presents choices must frame them in some way, and the framing will affect the decision-making. The nudge approach has already been tested in different contexts, one of which is the U.K. government’s 2012 policy of auto-enrollment for private pensions. It is a great example of how a nudge policy can have benefits – it led to considerably higher private-sector, pension-saving participation, because individuals can opt out but are otherwise considered enrolled. See also: Major Opportunities in Microinsurance An example that is closer to the industry of our interest refers to a global insurer that has built on one of behavioral economics’ most powerful insights: “Losses loom larger than gains.” Starting from this premises, the insurer created more than 20 nudges and tested them on a large scale—in more than 7,500 cases of breakdown assistance. In one such case, the insurer’s service representatives described partner repair shops as “the natural, default choice, framing the benefits as something that would be lost if the customer went elsewhere—a subtle shift away from merely listing the advantages of choosing a partner repair shop.” The unexplored potential of microinsurance With particular focus on the smartphone — the main proxy of today’s customer — insurtech has introduced the concept of microinsurance: insurance policies of limited duration and contained costs available directly on the client’s smartphone with no paperwork. Currently, microinsurance covers around 135 million people, which represents about 5% of the entire market potential, with an average 10% annual growth rate. The risks covered by such solutions are the typical ones of the traditional insurance market: life, health, accidental death and disability and property insurance. Developing countries have economies that are generally based on farming and agriculture, and they cannot manage to cover all the needs of a growing population exclusively with the goods they produce. Approximately 70% of the world’s seven billion people live in poverty, which makes the case for insurance products like health and life, agricultural and property insurance, even catastrophe covers. An estimation of the potential market for insurance in developing countries is between 1.5 billion and three billion policies. Closing the protection gap Microfinance and microcredit, believed to have been originated at the Grameen Bank founded in Bangladesh in 1983, are commonly associated with poorer, developing countries and, by association, so is microinsurance. Nevertheless, the latter has a different kind of business potential. Microinsurance is not just a short-time insurance coverage at reduced cost for people in developing countries. It is an innovative way of selling insurance that is aligned with customer expectations while covering a specific need, at the right moment, at the right price, in a customer-centric approach – or so it should become. This type of insurance could help close the protection gap, both in developed countries and developing ones. The role of microfinance, in contrast, is to create “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high-quality financial services, including not just credit but also savings, insurance and fund transfers.” Microcredit means providing credit services to those with low income. It is an extension of very small loans to impoverished borrowers who typically lack collateral, steady employment and a verifiable credit history. Provided that people who live on a low income are offered the right service, means and knowledge, they will become effective consumers of financial services. The MicroInsurance Centre estimates that in the next 10 years or so, the microinsurance market could grow to one billion policy-holders, representing a third of the potential projected 3 billion market. It is key not to take insurance demand for granted. Bringing the benefits of insurance Insurance often has a negative connotation in the developing world, which stops it from reaching more people. The market needs an innovative approach based on customer education and incentives. The advantages of having an insurance cover has to be clear in the minds of potential customers and, for that to be achieved, trust and information are very important. There are several mediums that can help in accomplishing this task: like agents on the field, TV and radio program plot lines, or even literacy campaigns. To create demand, other types of incentives can also be used, including tax exemptions, subsidies or compulsory cover. For microinsurance to function in a developing country, the products and the processes to be put in place must be simple, and the premiums need to be kept low. This can only be achieved if incumbents change their mindset and implement an efficient administrative strategy combined with the right distribution channels. Insurers will have to find the right business model and partners when approaching such markets and should consider less common mechanisms for controlling moral hazards, adverse selection and fraud. For example, proxy underwriting, group policies and waiting periods mitigate adverse selection. At first, investing in microinsurance might seem a bit reckless, but the returns are gradual over time: starting with reputational gains in the short term, knowledge in the medium term and growth in the long term. Moving toward smart lives Already more than half of the world’s population uses a mobile phone, and 34% of the total population are active mobile social users, with a 50% penetration for internet usage worldwide. Fewer and fewer people use fixed telephone lines, as mobile phones are the dominant means of communication, even in the developing world. According to a Pew Research Center survey, in the last two years there has been a significant increase in the number of people from developing nations who declare that they use the internet and own a smartphone. Moreover, in nearly every country, millennials (those aged between 18 and 34) are much more likely to be internet and smartphone users than those over 35 years of age. This phenomenon is characteristic of both advanced and emerging economies. Despite these trends, fewer than 5% of people with low income have access to insurance or to covers that they need. These qualities make underdeveloped countries an ideal market for the insurance industry to explore because they present some great opportunities. Relevance of Thaler’s nudge theory This takes us to microinsurance and what it has in common with the nudge theory. Insurance should adapt to the customers’ habits and their environment, so we believe the best way to do that is by selling microinsurance that has a short duration with a push approach. It’s called a push approach because the insurance seeks the client out and not vice-versa. This could be interpreted as a gentle nudge that arrives exactly when the client needs it, directly on his or her smartphone, offering protection against an immediate and perceivable potential risk. Machine learning and artificial intelligence (AI) have evolved to allow a detailed profiling of the potential customer and the context. See also: Big New Role for Microinsurance   As Thaler suggests in his book, the context makes everything and helps conclude the sale. By interpreting the variables that could influence the customer, a good AI-based solution should be able to capture the precise means and moments to deliver short-period insurance offers to truly interested users. The trick is to avoid annoying customers with offers that do not interest them directly, in the wrong moment. The answer is an AI-based solution that can correctly interpret different types of data coming from the customer (through use of apps, of the smartphone, of wearable devices connected to the smartphone and so on). Why nudge people toward microinsurance? Why is it so important to nudge potential clients into buying microinsurance coverage? Consider a common statement regarding the industry that has proven true over decades: “Insurance purchase is not exciting; insurance is sold, not bought!” That is precisely why need has to be stimulated, especially with the arrival of smartphone technology. The key to selling insurance to millennials and the whole “connected generation” is to reach them with the right message, at the right time, on a device where they swipe, tap and pinch 2,617 times a day: their smartphone. Companies should get customers’ attention by using the same channels that they use and talk to them in their “language.” Empowered by technology, members of this generation search out authentic services that they utilize across platforms and screens, whenever and wherever they can. This might just be the perfect moment to develop solutions that are able to nudge people into behaviors that can benefit them, offering short-term coverage for atypical situations that would otherwise remain uncovered. A good step toward closing the protection gap – if you look at it from an insurer’s perspective. Article originally published on Qrius. 

Of course, insurance advisers can’t save healthcare alone, but they will play a pivotal role. We must first recognize the key players:

• Employers (purchasers of healthcare via health insurance)
• Employees/dependents (consumers of healthcare)
• Physicians/hospitals/clinics (providers of healthcare)
• Insurance carriers (financiers of healthcare)
• Insurance brokers/advises (role varies dramatically)

To truly save healthcare will require collective change from at least four of these five groups. I’ll let you decide who may be the odd-player-out. By now, you are, or should be, aware of a new trend in the design of benefit programs: moving away from traditional carriers/networks and toward direct-pay programs where purchasers/consumers are contracting directly with the providers of care. While this approach has been producing real results for several years in isolated situations, the trend is still in its infancy. As you might expect, with some of the players' self-interests at play, its eventual maturity is anything but certain, and certainly not imminent. It is a path to maturity for which brokers/advisers need to be paving the way. In a comment he left on one of my LinkedIn updates, where I partially reflected on the emerging trend of these direct-pay programs, Robert Nelson, MD (spokesperson for the Georgia chapter of the Free Market Medical Association) made the following request: “I would love to hear the perspective from the supply side that actually performs the care and interfaces with brokers & TPAs on price-transparent direct contracts, from a position of owner (provider of service).” In response to Dr. Nelson, Dr. Keith Smith (medical director at Surgery Center of Oklahoma) observed: “The rate at which a physician (or facility like mine) transitions to a 100%-pure, non-insurance model will, and should, vary depending on the degree to which the local practice environment functions like a cartel. In areas of the country where large hospital systems and abusive carriers exist predominantly and work together, the speed with which a disruptor can achieve independence will be slower than in areas that are not so cartelized. "I am aware, however, of DPC (direct primary care) practices that have successfully launched in highly cartelized environments with tremendous success, partly because the physician(s) had decided that if their venture was unsuccessful they were going to quit practicing anyway.  At the Surgery Center of Oklahoma, we worked with insurance for years but do not at this time.  "Once a mutually beneficial arrangement with a self-funded employer (or a cash-paying individual) makes its entrance in a practice or facility, the abuses and coercion of the carriers cannot as easily be ignored or tolerated. One ‘win-win’ arrangement creates a desire for nothing but ‘win-win’ arrangements, and the journey to a pure model has begun.” See also: High-Performance Healthcare Solutions   Sean Kelley (president at Texas Free Market Surgery & MedSimple) then added the following observation: “I agree with Dr. Smith about the impact of market conditions on adoption of new, non-insurance, direct pay models. The cartels have erected competitive barriers over time with just this type of disruption in mind; the opacity at every level and supported by the entire cast of characters in the healthcare value chain are testaments to this fact. "(1) Most doctors want to see a new model emerge and will support it, some more energetically than others who fear a backlash or are at the end of their careers. DPCs have the most risk while independent specialists are able to straddle in our model and Dr. Smith’s.  "(2) Many broker/consultants desire change, though only a select few are risking their existing accounts; they are more likely to use a new direct pay model as a wedge to gain an edge with new prospects. "(3) Purchasers are unprepared for this type of disruption; the health plan data they get is highly summarized, making it impossible to compare what they currently pay for services to direct pay providers like Texas Free Market Surgery or Surgery Center of Oklahoma. Additionally, health plan purchase decision processes are mostly ad hoc, with multiple leaders holding tacit vetoes over direct pay contracting. "(4) Given this landscape, it takes years to create a few 'win-win' arrangements with the true innovative purchasers before the rest of the market will even start to pay attention. Many of the status-quo incumbents believe that almost any new model will eventually asphyxiate and go away. I firmly believe adoption of the direct pay model is mostly constrained by the demand or purchasing side. Purchasers hold the key; if there are enough purchasers, open and willing to enter into direct pay contracts with transparent, high-quality healthcare providers, most will react to the change and flock to the new direct pay model." For me, this was an unbelievably insightful exchange. Some of my key takeaways From Dr. Smith: In many markets, the providers of care and the insurance carriers operate in a cartel-like fashion to protect their own interest and to slow, if not outright halt, disruptive (direct-pay) innovations. However, once a provider is able to break the stranglehold of the “cartel” and experience a win-win with the purchasers/consumers of healthcare, this new structure is addictive, and the traditional approach becomes unacceptable. From Sean Kelley: He agrees that this cartel-type behavior is real and all too common. Both providers of care and brokers/advisers desire to see change take place but are afraid of its consequences on their respective practices. Many providers may only become drivers of the change as they approach the end of their careers, while many advisers will only become drivers when pursuing new business; they are not so willing to put existing client relationships at risk. Purchasers need access to THEIR data, a key to becoming comfortable in changing the way they make their purchasing decisions. The rate at which the direct pay trend reaches maturity is largely dictated by demand from the purchasers. With increasing demand, and the subsequent success stories sure to follow, there will soon be a tipping point at which the rest of the market will follow suit. This is exciting stuff! We are on the cusp (okay, that may be overly optimistic, but we can kinda, sorta see the cusp) of fixing one of the most challenging issues facing our country and our economy. But the solution requires change, sharing and collaboration at a level that I’m not sure many industries have ever experienced. If Sean Kelley is correct, and I believe he is, the biggest key to driving this trend to maturity is demand from purchasers. And, the key to increasing that demand is education of those purchasers. This is where brokers/advisers become the linchpin Advisers, your job as educators for your clients about how to most effectively finance the purchase of healthcare has never been more critical. Of course, you can’t educate them until you have spent significant time studying the issues and solutions yourself. The curriculum for your education is already being built. But, just know, as with any emerging trend, the curriculum continues to evolve. There are conversations taking place every day on LinkedIn that should be required reading for you. There are many generously sharing their ideas and experiences online. In addition to the people already mentioned above, here are a few others to follow to help get you connected to the larger community working to drive these changes in the healthcare system:

• Dave Chase
• Jeff Bernhard
• Adam Russo
• Alex Lickerman
• Dutch Rojas
• Art Baldwin
• Nick (Joseph) Heinen M.D.
• Suzy Johnson
• Josh Butler
• Rachel Miner
• Adam Berkowitz
• Megan Cook
• John Sbrocco
• Andy Neary
• Rina Tikia
• Mick Rogers
• Karen Kirkpatrick

And members of our Q4iNetwork who are deeply involved:

• David Contorno
• Bret Brummitt
• Joe Cacciatore
• Tom DiLiegro
• Robson Baker
• Cary Goss
• Tim Doherty
• Taylor Lindsey

In addition to the daily, online conversations, you NEED to read Dave Chase’s book, “CEO’s Guide to Restoring the American Dream.” Before we are truly prepared to educate the purchasers, there is a lot of collaboration that needs to take place within and between the groups of interested parties. See also: Healthcare: Need for Transparency   Providers of care need to collaborate and communicate with one another to ensure the right access to care and infrastructure are in place. Benefit advisers need to collaborate and communicate with one another to ensure there is the necessary critical mass taking this approach to their respective clients. And, the providers and advisers must collaborate and communicate with one another to help make this transformation of healthcare as smooth as possible for the purchasers. Change is never easy, but this change comes with particularly complex challenges. Not the least of which is changing a purchasing pattern that drives one-sixth of our economy. This change can’t happen in a vacuum (one employer at a time) if it is to be sustainable and rapid. We have to ensure it scales, and scales quickly. As my friend Josh Butler recently observed, change is only scalable through collaboration. All interested parties must come together as part of the solution or find themselves on the outside, victims of the solution. This article originally appeared on Q4intel.com.

As insurers undertake digital transformation programs, many rightly turn to the claims function. Claims is a very good candidate for such initiatives because of its importance to the relationship between customers and their insurers. Claimants and insurers both want speedy and fair resolution, based on clear lanes of direct and personalized service. A data-driven, analytics-enabled claims process can satisfy the objectives of all parties. Continuous improvement to customer experience in claims is critical to any strategy. After all, claims are a real “moment of truth” for insurers, with meaningful impacts on outcomes and customer loyalty. Insurers that craft the right strategies and deploy the right mix of digital technologies will be able to turn their claims operations into a source of competitive advantage, market differentiation and brand perception. While advanced technologies such as robotic process automation (RPA) and artificial intelligence (AI) are very much part of the long-term transformation story, there is much insurers can do that will generate immediate benefits. What matters to claimants — and how to deliver EY’s insurance consumer research confirms that speed, efficiency and transparency are among the most important characteristics of a quality claims experience. Better data and analysis can help streamline steps in the claims process, setting the foundation for an enhanced experience. Those analytics also set the foundation for the future where many claims will be resolved via “no-touch” processes. See also: 4 Ways That Digital Fuels Growth   Insurers seeking to automate their claims processes or to achieve straight-through processing for basic claims have multiple options, including:

• Advanced telematics data (including video imagery) can be instantaneously captured during an automobile accident and downloaded from the cloud to automatically trigger a first notification of loss (FNOL) entry. Underwriters can “score” the data to determine the extent of loss relative to the automobile’s current value.
• Drones and satellites can survey damage and collect information about property damage to initiate claims before a homeowner makes contact.
• Via intuitive apps or other interfaces, insureds can submit photos of damage to their homes or vehicles to initiate the claims process, provided there is no sign of fraudulent behavior (which analytics programs can evaluate).
• Property and casualty (P&C) insurers may use historical repair data to dramatically decrease estimating times for different types of vehicles and homes. They may also better manage repair costs and quality based on deeper analysis of these data sets.
• AI may be used in combination with social media and other data to scan claims for the likelihood of fraudulent behavior.

Insurers also have good options when it comes to personalizing service, which include:

• Voice analytics that can assess customer sentiment during phone calls, with appropriate classification and prioritization of resolution.
• Behavioral analytics that can be applied to model likely customer needs and identify high-value policyholders or those likely to dispute a claim.
• Analyses of customer records that can identify claimants facing renewal as well as good candidates for purchasing additional products.

A redesigned claims experience can pay immediate dividends (e.g., lower processing costs, improving claims resolutions or higher renewal rates). In all of them, insurers can engage at key points during the claims life cycle, with accurate and consistent information delivered on a timely and transparent basis. At the same time, claims teams can focus on high-value interactions, high-risk claims and other exceptions. The path toward a better claims experience No matter where insurers fall on the maturity curve today, there is much they can do to transform the claims process. The path to success begins with a series of well-thought-out steps designed to produce useful learning and incremental value. Huge investments in new technology or large teams of data scientists are not required for substantial improvements. Organizational and cultural factors are also part of the claims transformation equation. Insurers should endeavor to integrate third-party data (such as medical claims, consumer credit and weather data) with existing records. They also have the opportunity to pilot the use of automated notifications via chatbots and to encourage customers to submit photos of damage. While taking these initial tactical steps, they can begin building the business case for, and perhaps even pilot, more advanced capabilities, such as “no-touch” claims handling for specific products, regions, claims types or payments. Insurers in the intermediate phases of their digital transformation journey should consider expanding automated claims handling to more claims types and larger amounts, broaden their use of chatbots for communication and seek to integrate more external data sources. They can also deploy drones as “adjusters” and establish analytics Centers of Excellence in claims. More mature organizations will look to leverage new data storage and management technologies as the basis for advanced analytics and real-time visualization. They may also strengthen antifraud efforts by implementing machine learning. The most forward-looking insurers may build out data science teams to probe large and diverse data sets stored in analytics ecosystems. Similarly, they may expand claims volumes handled via RPA-enabled straight-through processing and evaluate medical treatments or repair effectiveness against leading practices. See also: Digital Transformation: How the CEO Thinks   As claims organizations become more digital, the benefits of additional data and more effective analytics should extend beyond the customer experience. Machine learning and visualization techniques can help assess and predict claims risk with greater accuracy and certainty. They also provide a consistent claims handling approach relative to unbiased reserving, litigation, subrogation and other claims processes. It is worth noting that technology enhancements alone will not produce a claims organization for the digital era. A cultural willingness to embrace change also matters. Many insurers must overcome risk-averse cultures to encourage experimentation and “fast failures” in the spirit of learning what works best for their culture and customers. How do they do that? Test-and-learn approaches are a good start for insurers with limited digital capabilities. Pilot programs for automated claims processing and bot-driven notification systems are an ideal place for many organizations to start. Customer experience is everywhere In the digital era, where customers have been trained to expect real-time access to data and personalized service, the stakes for the claimant customer experience have been raised. Insurers must learn to deliver what customers want and expect — and deliver it efficiently, accurately and quickly. Digital transformation makes it possible, while offering insurers significant upside in terms of lower costs, increased customer loyalty and reduced risk of fraud.

Intuitively, stents make sense. If you’ve got occasional chest pain due to reduced blood flow to your heart, having a stent—a thin mesh tube inserted into a coronary artery to hold it open—is a seemingly logical solution. Half a million of these procedures, called angioplasties, are performed every year, at a cost of roughly $20,000 apiece. Alas, sometimes hard data trumps intuition. Recently, a landmark “sham surgery” study showed these procedures don’t make a difference in people with stable angina and a single narrow coronary artery. Stents are inserted using a catheter. In this study, 200 people with chest pain who had single vessel disease had the catheter inserted. Half of them got a stent, and half did not (that’s the sham arm of the study). And the envelope please… Six weeks after the procedure, there was no real difference in the patients, either in chest pain or performance on treadmill tests. In other words, the placebo surgery did just as well as the real thing. While these results were described as “unbelievable” by some cardiologists, they are not much of a stretch from what we already knew about stenting. Even five years ago, the New York Times reported on research that found No Extra Benefits Are Seen in Stents for Coronary Artery Disease in patients with stable angina. That article also reported there was an “insignificant difference” between people who have had stents inserted and those who didn’t. A cardiologist and professor of medicine at Yale told the New York Times, “When people are making decisions, it’s important to disclose to them that this procedure [stenting]—outside of an emergency—is not known to be life-saving or to prevent heart attacks,” adding, “the vast majority of people who have this procedure have the expectation that it will help them live longer. That belief is out of alignment with the evidence.” See also: Global Trend Map No. 4: Industry Health   The good news is that we know that there are more conservative measures that can slow or reverse heart disease, include quitting smoking, exercising more, improving your diet and losing weight if possible. There are a range of safe and effective drugs that can help reduce chest pain as well as your risk of a heart attack. Although rare, there are some serious risks with angioplasty, such as bleeding from the site of the incision used to insert the catheter, damage to the blood vessel itself, irregular heartbeats and damage to the kidneys caused by the dye used. The risks of complications are low, but why would you take any risk, endure an uncomfortable recovery and pay a substantial co-pay or deductible, if there is no evidence of benefit? Like many medical procedures, the amount of unneeded and unnecessary stenting is a byproduct of the healthcare system’s financial structure that rewards doing more procedures, when doing less is often wiser and certainly cheaper. Sometimes the best procedure is none at all.

Parties sometimes want to put one number on the table without specifying how much of that number may represent permanent disability (PD), future medical care or any other issue in dispute. There are pluses and minuses to this approach. Benefits of Slicing A typical workers' compensation mediation requires resolution of multiple issues, each of which is subject to a separate evaluation calculation. Often there are sub-issues. For example, in calculating PD, not only is the disability percentage up for discussion, but perhaps also the average weekly wage or dates when compensation should or should not have been paid as temporary disability (TD). See also: Tips on Mediation in Workers’ Comp   Drilling down to the reason for disagreement on each issue can be enlightening. One side may have an “Aha!” moment when they finally catch on to why the parties have been at odds. Before mediation, they may have negotiated without understanding the other’s motivation. When negotiations are stalled, slicing can shift the parties’ focus. Slicing can produce forward movement when negotiations are stalled. Focusing on individual issues may resolve some issues while allowing parties to litigate only the remaining disputed issues. Sometimes resolution of a single issue, such as which medical treatment will be authorized, leads to parties adjourning the mediation to test the good faith of the adversary as well as the mediation process. After this initial hurdle, parties can return to mediation. The Benefit of the Single Number Offer/Demand Presenting a single number allows a negotiator to “log roll.” When evaluating for settlement, a negotiator can borrow from one column where the argument is strong to shore up the evaluation of another issue where success is not so certain. By presenting a single number, the negotiator minimizes argument about a single issue and leaves it up to the offer recipient to parse the figure among the issues. See also: How to Know When a Claim Should Settle  

I cringed took when I heard Richard Branson ask the film's media rep, "Is there any way we can combine these last two interviews?" I was waiting in the lobby of Virgin's New York offices to talk with Richard Branson about "Don't Look Down," the documentary about his record-breaking transatlantic and transpacific hot air balloon voyages. Already that morning he had appeared on "CBS This Morning," exercised with NYC school children, met with the Virgin team and conducted a series of other interviews. "We could," she said, "but Jeff Haden from Inc. magazine is next..." "Oh," he said. "I've been looking forward to speaking with Jeff. Let's not combine them after all." Do I believe Branson actually knew who I was? Heck no. But I do believe, out of the corner of his eye, he glimpsed me standing there, and chose courtesy over expediency. Classy move. A couple of minutes later I was ushered into a conference room. Branson stood to introduce himself and then sank heavily back into his chair. As I took my seat, a staffer placed a sandwich beside him. He smiled and looked apologetic. "It's been a long day, and I'm famished," he said. "Please, feel free," I said. "I totally understand. In fact, I once brought my lunch to a job interview." (I actually did.) He smiled. "Did you get the job?" he asked. "Oh, hell no," I said, and we both laughed. See also: The Unicorn Hiding in Plain Sight   "Well, I would like to eat, but I can't unless you join me," he said, offering me half of his sandwich. "No thanks," I said. "I'm fine. But I would love for you to go ahead, because I wanted our conversation to be casual and not feel like an interview." He paused. "I really must insist," he said. "I won't be able to eat unless you join me." Who says "no" twice to Sir Richard? Not me. So I took small bites of my half, while he dug in to his. For a moment, imagine you're Richard Branson. You run dozens of different companies. (Shoot, you're creating a commercial spaceline.) You correspond with world leaders. You're a philanthropist and humanitarian and adventurer. You're near the top of every business writer's interview wish list. Hundreds of people need, and thousands of people want, a moment of your time. Yet one day you notice a guy you don't know in your peripheral vision, and no matter how busy or tired you feel and no matter how pressing other matters may be, you decide to be gracious -- not because you have to, not because you're expected to, but simply because you want to. The next time a person asks for your help, offer to do a little more than requested. The next time you see a person who seems unsure, hesitant or feeling out of place, take the time to help the person feel more comfortable. As Maya Angelou says, "People will forget what you said. People will forget what you did. But people will never forget how you made them feel." I still remember what we talked about... but what I remember most about Sir Richard is how he made me feel. If you want to make a great impression on the people you meet, that's the perfect place to start. See also: What the 3 Little Pigs Teach Us   My new book, The Motivation Myth: How High Achievers Really Set Themselves Up To Win, will be published on Jan. 9 by Penguin Random House. It overturns the idea that motivation leads to success; instead, small successes lead to constant motivation and let you achieve your biggest goals -- while also having more fun. And it lays out strategies guaranteed to create those successes. Pre-order it now, and you'll be my new best friend.

You are more likely to be reading this on a mobile device than on a laptop or desktop, and almost certainly not on a printed page: and therein lies the source of the problem. A Pew survey from June 2017 revealed that 85% of U.S. adults now get their news on a mobile device at least some of the time, up from 72% last year and 54% in 2013. At the outset here let me be clear – I am not a Luddite, anything but! I am an eager and early adopter and user of gadgets and technology. I owned one of the very first mobile car phones long before cellphones existed. I am, however, concerned about our addiction to some newer technologies, particularly smartphones, and the dangerous and pervasive distractions they are creating. We are quickly becoming permanently distracted by technology, whether in motion or stationery – and what may be even more disconcerting is that we know it and most of us are doing nothing to stop it. Dr. Sally Andrews, a psychologist at Nottingham Trent University in the U.K., conducted research that shows that “a lot of smartphone use seems to be habitual, automatic behaviors that we have no awareness of.” Smartphones have come to occupy what is referred to as “privileged attentional space,” comparable with the sound of our own names. According to Pew Research Center, more than three-quarters of Americans own a smartphone. In 2016, American consumers spent an average of five hours a day on their smartphones, nearly double the amount of time from 2013 , research firm Flurry Analytics says. We habitually check our smartphones hundreds of times a day, from the moment we awake until bedtime. See also: How Technology Drives a ‘New Normal’   Of the many distractions that permeate our lives, distracted driving is especially dangerous. Distracted driving has become a national safety crisis because of the rise of smartphones. According to statistics from the U.S. Department of Transportation, 10% of fatal crashes, 15% of injury crashes and 14% of all police-reported motor vehicle traffic crashes were attributed to distracted driving. In 2015, 3,477 people were killed because of distracted driving, and 391,000 were injured. Total auto fatalities grew 5.6% to more than 37,000 in the U.S. last year. In spite of all the new driver assistance and accident avoidance technologies appearing in newer vehicles, auto accidents have increased 14% over the past two years — the biggest increase in more than 50 years, according to the National Safety Council. Distracted driving — and the ubiquitous use of smartphones behind the wheel — is one of the leading causes of this deadly trend. Too many drivers are texting, talking, surfing the web and using social media and apps on their smartphones while driving. New sources of distraction appear almost daily and are adopted without hesitation. Case in point: A new in-car app from General Motors called Marketplace lets drivers order coffee and browse deals while behind the wheel. It’s shocking that it even exists. A recent survey conducted by Harris Poll on behalf of the Property Casualty Insurers Association of America (PCI) reveals that 92% of respondents perceive that distracted driving, including the use of a cell phone, talking to passengers, eating and adjusting the radio is the No. 1 contributor (92%) to the increase in crashes across the country. As professionals, we struggle with our work/life balance, and we suffer from scattered demands on our attention. We all strive to be more productive, but mobile technology is not only failing to help us accomplish that, but it is actually making it worse. To be blunt, smartphones are making people stupid! More accurately, smartphones are addictive and distracting, and they make it harder for us to pay attention to what we are doing. Adding to all of this, 29 states and the District of Columbia currently have laws legalizing marijuana in some form (medical or recreational), and, according to the Highway Loss Data Institute, collision rates were about 3% higher in three states that have approved the sale of marijuana for recreational use – Colorado, Oregon and Washington. There is no reason to expect this new contributor to distracted driving to do anything but grow. Work-related pressures also play a part in distracted driving. A recent survey conducted by Harris Poll for Travelers Insurance found that 43% of respondents who drive were in touch with work either by talking on the telephone (38%); texting (17%) or emailing (10%). These drivers admit to using the phone while driving, often because they feel the need to be available at all hours or don’t want to upset the boss, a survey has found. And distracted driving is only the beginning; we are already seeing technology distractions creeping into other aspects of our daily lives; wearables and smart-home, voice-activated, internet-connected devices are proliferating – and interrupting to notify us of something we may or may not care about. In any event, they are distracting. There are solutions to distracted driving, and we should embrace, promote and adopt them. A new generation of telematics service providers are partnering with auto insurance companies to offer distracted driving prevention solutions on mobile apps. Mobile device manufacturers are beginning to build in safeguards. Apple’s new mobile operating system iOS 11 features a long overdue “Do Not Disturb While Driving” mode to combat the dangerous practice of texting from behind the wheel, while also switching off other alerts that entice people to look at their phones while driving. And the adoption of digital voice assistants is rising, although they do not completely eliminate distracted driving. Legislation against distracted driving, adherence and enforcement varies widely, and we should continue to support it and ensure that penalties are severe and enforcement efforts are strict. No states ban all cell phone use, but 47 states plus D.C. ban text messaging for all drivers. Thirty-eight states and D.C. ban all cell phone use by teen drivers, and 21 states and D.C. prohibit any cell phone use for school bus drivers. Fourteen states prohibit all drivers from using hand-held phones while driving. However, these regulations are not fully observed or enforced. See also: How Technology Amplifies Evil   Of course, there is our own self-control and just plain common sense. Why not just turn off our smartphones when we get into a vehicle we are about to drive? In Silicon Valley, some tech leaders are predicting a new trend will become widespread in response to the problem – “smartphone fasting” — going without a smartphone for varying lengths of time. But just think – technology also promises us self-driving cars at some nearby future point, at which point we can use our smartphones 100% of the time if we want while in transit. That resolves distracted driving, but the larger issue of technology distraction from family, friends and our daily lives remains to be addressed.

Property and casualty insurers understand that technology is continuously reshaping consumer expectations and exerting pressure to change the way they do business. In our research, 73% of insurers are seeing demand for digital distribution, but delivering online buying is only the tip of the iceberg when it comes to meeting consumer experience standards. The most complicated task for insurers comes in connecting the multitude of back-end systems required to run existing operations, into a connected web that facilitates the lightning fast exchange of information necessary for today’s digital age. Standardizing the Customer Experience When it comes to creating a consistent customer experience, insurers face new and evolving challenges. In the old world order, before consumers demanded digital engagement, customer relationship management was simpler. “The insurance industry was once dominated by policy-centric, inside-out thinking,” wrote Mark Breading, partner at Strategy Meets Action (SMA). “Relationships were simple – a policyholder was matched with a policy and perhaps an agent/producer. Much of the executive focus and corresponding technology investment was designed to improve operational efficiencies and manage the portfolio of risks.” To that end, insurers implemented complex technology solutions to manage customer relationships and insurance policies. CRM systems stored information related to the customer’s contact information, coverages, product information, recent transactions and account balances. With little visibility between CRM systems and policy administration systems, they did nothing to help agents when it came time to quote and issue policies. As agents spoke with consumers about coverage such as auto, information was entered into a policy administration system related to that product. A year later, when the customer phoned the agent to get a quote on coverage for a newly purchased property, the agent could view customer data from within the CRM system related to auto insurance, including the policies already in effect, but the information wasn’t visible through the policy admin system related to homeowners coverage. To make matters worse, data from the auto policy administration system was also inaccessible to the homeowners’ system, so agents had no way to use existing data to facilitate a faster response to the customer’s request. Instead, the agent had to gather and re-enter customer data into the policy silo to quote, bind and issue the homeowners coverage. The problem for many insurers is that these disparate and disconnected systems still exist today, with the addition of digital channels of engagement to further complicate the matter of meeting consumer experience standards. Digital Demands Require United Systems According to Breading, insurers are placing a high priority on gaining digital capabilities. “One of the key findings of our recent research on strategic initiatives for 2017 is that digital is gaining more momentum than any of the 16 initiatives we have been tracking,” Breading wrote in a recent blog. “Strategies to become a digital insurer have now reached a high penetration in the industry, with 72% of insurers now claiming that they have this initiative underway.” See also: 3 Ways AI Improves P&C Economics   Digital channels create another layer for insurers to address in the customer-centric movement. Lack of visibility between CRM, policy admin and agency management systems creates roadblocks and bottlenecks in the consumer experience. Insurers will have one record on a customer as a homeowners lead, and this will live in a separate silo than a lead on the same customer seeking auto coverage. To make matters worse, these databases often disagree. Currently, many insurers have no way of combining data across operational silos or of tying information from third-party vendors, such as credit agencies, into the real-time actionable insights necessary for digital engagement. Agency Management Suffers Too While 74% of consumers start an insurance buying transaction online, J.D. Power reports that 22% will move to a consumer-facing call center to finish the purchase. Consumer-facing call center agents are responsible for assisting consumers with questions generated during web-based engagements and for reaching out to consumers who start quotes online without completing the transaction, but agency management systems often provide little visibility into activity initiated through digital channels. Agents are required to re-enter information already provided by consumers online and to move from one policy admin system to another to quote, bind and issue multiple policies. The opportunities for error increases as information is re-entered, and customer dissatisfaction rises. Without clear insight into digital activity, agents lack information that could guide measurable follow-up, such as when a consumer abandons an application or leaves the online storefront after receiving a quote. Agent productivity suffers as well without tools to track web-based activity and prioritize leads and follow up. According to Breading, insurers are limited by a customer view that delivers only “an awareness of the current and former products owned by the customer, the performance of those products, information related to product needs of the customer and perhaps some relationship information like the agent involved.” To deliver streamlined interactions and facilitate engagement, as well as the instant insights required to meet consumer expectations for immediacy, insurers need a single view of the customer. Breading calls this the ultimate 360-degree view, where every employee and system has the information necessary to engage in informed interactions with the customer in real time. Gaining a Single View of the Customer To gain this 360-degree view of the customer, insurers need visibility across all back-end systems from a central vantage point. According to Novarica’s research, 70% of carriers are in the midst of implementing new core systems to unite these operational silos. Rick Huckstep, industry influencer and chairman of the Digital Insurer, sees a problem with this approach. Core systems are expensive, take years to implement and are difficult to adapt to a changing environment. “Often, by the time these large IT implementations are finished, they are already a legacy system,” Huckstep said. Instead of investing in core systems replacements, Huckstep recommends a two-speed approach. Employing insurtech platforms, insurers can capitalize on investments made in IT legacy systems by building the agility and responsiveness necessary for online distribution into the digital front end. “Insurtech’s core systems are like the latest generation of robotic armed patrol boats — they are agile, automated and cheaper, have a shorter cycle time to commission and are task-specific,” Huckstep said. By breaking insurer operations into simplified layers, we can gain a better understanding for the role of Insurtech digital distribution platforms. The top layer is customer-facing. This is where agents reside as well as the online storefront offering digital engagement. On the bottom layer are the core systems that make it possible for the insurer to buy and sell policies and manage customer or agent relationships. In between, we have the digital distribution platform. As customers enter the online storefront and provide personal information, it’s the platform capabilities that enable application prefill by pulling data from third-party resources, depositing it automatically into policy administration, agency management and CRM systems. Because the platform has a single, cross-system view, appetite is determined and quotes are provided in seconds. Platform analytics even use carrier data in conjunction with customer information to provide real-time product recommendations. It’s a similar situation when consumers phone the call center during an online transaction. Because the platform provides a single vantage point to all customer and system information, the agent can see not only the customer data that has been entered into the policy admin system, but where the consumer is in the application process. Agents are able to pick up exactly where the consumer left off and realize the same benefits of automation when determining policy eligibility, providing quotes and binding and issuing coverage. Transaction speed and efficiency are maximized, giving consumers a seamless cross-channel experience. Agency management takes a step forward in the platform economy as well, flagging consumers who fail to make it through the quote-to-issue lifecycle, prioritizing work flows and supporting more frequent customer communications by tracking activity across product and operational silos. Entering the Era of “Platformification” Accenture says that 76% of executives see partnerships as critical to their competitive advantage. Platform-based business models are the goal of 94%, creating ecosystems where insurers and outside digital resources join forces in synergistic relationships that promote asymmetric growth. “The ‘Platformification’ trend is about leveraging the power of platforms and APIs in open environments, to create new marketplaces and new ecosystems,” said Sebastien Meunier, insurance industry influencer. Platformification is a growing part of insurance. As insurers embrace relationships with insurtech providers on digital distribution platforms that unite back-end systems and provide a single vantage point to the information contained therein, a more customer-centric environment is rapidly created. A top 10 insurer that offers products direct-to-consumer through digital and agent channels recently partnered with an insurtech digital distribution platform provider. The platform united silos and allowed internal agents to quote, bind and issue home and auto products from a single application. See also: Possibilities for AI in P&C Insurance   Three years into the agreement, the platform was managing as many as 4,000 quotes a day, and the number of policies sold had more than tripled through agency channels. Considering the success, the insurer made the decision to start a pilot program, offering the same advantages of seamless product bundling directly to consumers in select states. Within the first three months, the insurer recognized 50% growth in bundled business over the same quarter the prior year. The insurer could have continued the trial, but given the benefits to consumers and the bottom-line, moved quickly to a full rollout, offering the advantages to customers nationwide. Uniting back-end systems to provide a single view of the customer is critical to revenue growth and customer retention in the digital age. How is your organization tackling the challenge of siloed operations?

McKinsey research has found that insurance companies with better customer experiences grow faster and more profitably. In 2016, 85% of insurers reported customer engagement and experience as a top strategic initiative for their companies. Yet the insurance industry continues to lag behind other industries when it comes to meeting customer expectations, inhibited by complicated regulatory requirements and deeply entrenched cultures of “business as usual.” Some companies–many of them startups–are setting the gold standard when it comes to customer experience in insurance, and are paving the way for the industry’s biggest insurers to either fall in line, or risk losing out to smaller competitors with better experiences. Through a combination of new business models, clever uses of emerging technology and deep understanding of customer journeys, these four companies are leading the pack when it comes to delivering on fantastic experiences: 1. Slice - Creating insurance products for new realities. Slice launched earlier this year and is currently operating in 13 states. The business model is based on the understanding that, in the new sharing economy, the needs of the insured have changed dramatically and that traditional homeowners' or renters' insurance policies don’t suffice for people using sites like AirBnB or HomeAway to rent out their homes. According to Emily Kosick, Slice’s managing director of marketing, many home-share hosts don’t realize that, when renting out their homes, traditional insurance policies don’t cover them. When something happens, they are frustrated, angry and despondent when they realize they are not covered. Slice’s MO is to create awareness around this issue, then offer a simple solution. In doing so, Slice can establish trust with consumers while giving them something they want and need. Slice provides home-share hosts the ability to easily purchase insurance for their property, as they need it. Policies run as little as $4 a night! The on-demand model allows hosts renting out their homes on AirBnB or elsewhere to automatically (or at the tap of a button) add an insurance policy to the rental that will cover the length of time–up to the minute–that their home is being rented. The policy is paid for once Slice receives payment from the renter, ensuring a frictionless transaction that requires very little effort on the part of the customer. See also: Who Controls Your Customer Experience?   Slice’s approach to insurance provides an excellent example of how insurers can strive to become more agile and develop capacities to launch unique products that rapidly respond to changes in the market and in customer behavior. Had large insurance companies that were already providing homeowners' and renters' insurance been more agile and customer-focused, paying attention to this need and responding rapidly with a new product, the need for companies like Slice to emerge would have never have arisen in the first place. 2. Lemonade - Practicing the golden rule. In a recent interview, Lemonade’s Chief Behavior Officer Dan Ariely remarked that, “If you tried to create a system to bring about the worst in humans, it would look a lot like the insurance of today.” Lemonade wants to fix the insurance industry, and in doing so has built a business model on a behavioral premise supported by scientific research: that if people feel as if they are trusted, they are more like to behave honestly. In an industry where 24% of people say it's okay to pad an insurance claim, this premise is revolutionary. So how does Lemonade get its customers to trust it? First, by offering low premiums–as little as $5 a month–and providing complete transparency around how those premiums are generated. Lemonade can also bind a policy for a customer in less than a minute. Furthermore, Lemonade has a policy of paying claims quickly–in as little as three seconds–a far cry from how most insurance companies operate today. When claims are not resolved immediately, they can typically be resolved easily via the company’s chatbot, Maya, or through a customer service representative. But perhaps the most significant way that Lemonade is generating trust with its customers is through its business model. Unlike other insurance companies, which keep the difference between premiums and claims for themselves, Lemonade takes any money that is not used for claims (after taking 20% of the premium for expenses and profit) is donated to a charity of the customer’s choosing. Lemonade just made its first donation of $53,174. Lemonade’s approach to insurance is, unlike so many insurers out there, fundamentally customer-centric. But CEO Daniel Schreiber is also quick to point out that, although Lemonade donates a portion of its revenues to charities, its giveback is not about generosity, it is about business. If Lemonade has anything to teach the industry, it is this: that the golden rule of treating others as you want to be treated, holds true, even in business. 3. State Farm - Anticipating trends and investing in cutting-edge technology. The auto insurance industry has been one of the fastest to adapt to the new customer experience landscape, being early adopters of IoT (internet of things), using telematics to pave the path toward usage-based insurance (UBI) models that we now see startups like Metromile taking advantage of. While Progressive was the first to launch a wireless telematics device, State Farm is now the leading auto insurer, its telematics device being tied to monetary rewards that give drivers financial incentives to drive more safely. The company also has a driver feedback app, which, as the name suggests, provides drivers feedback on their driving performance, with the intent of helping drivers become safer drivers, which for State  Farm, equals money. By anticipating a trend, and understanding the importance of the connected car and IoT early on, State Farm has been able to keep pace with startups and has reserved a seat at the top–above popular auto insurers like Progressive and Geico–at least for now. If nothing else, unlike most traditional insurers, auto insurance companies like State Farm and Progressive have been paving the way for the startups when it comes to innovation, rather than the other way around. For now, this investment in customer experience is paying off. J.D Powers 2017 U.S Auto Insurance Study shows that, even as premiums increased for customers in 2017, overall customer satisfaction has skyrocketed. 4. Next Insurance - Automating for people, and for profit. Next Insurance believes that a disconnect between the carrier and the customer is at the heart of the insurance industry’s digital transformation problem. In essence, it’s a communication problem, according to Sofya Pogreb, Next Insurance CEO. The people making decisions in insurance don’t have contact with the end customer. So while they are smart, experienced people, they are not necessarily making decisions based on the actual customer needs. Next Insurance sells insurance policies to small-business owners, and the goal is to do something that Next believes no other insurer is doing–using AI and machine learning to create “nuanced” and “targeted” policies to meet specific needs. An important aspect of what makes the approach unusual is that, instead of trying to replace agents altogether, Next is more interested in automating certain aspects of what agents do, to free their expertise to be put to better use: “I would love to see agents leveraged for their expertise rather than as manual workers,” Pogreb told Insurance Business Magazine. “Today, in many cases, the agent is passing paperwork around. There are other ways to do that – let’s do that online, let’s do that in an automated way. And then where expertise is truly wanted by the customer, let’s make an agent available.” See also: Smart Things and the Customer Experience   While innovative business models and cutting-edge technology will both be important to the insurance industry of the future, creating fantastic customer experiences ultimately requires one thing: the ability for insurance companies–executives, agents and everyone in between–to put themselves in their customers' shoes. It's is a simple solution, but accomplishing it is easier said than done. For larger companies, to do so requires both cultural and structural change that can be difficult to implement on a large scale, but will be absolutely necessary to their success in the future. Paying attention to how innovative companies are already doing so is a first step; finding ways to bring about this kind of change from within is an ambitious next step but should be the aim of every insurance company looking to advance into the industry of the future. This article first appeared on the Cake & Arrow website, here. To learn more about how you can bring about the kind of cultural and institutional change needed to deliver true value to your customers, download our recent white paper: A Step-by-Step Guide to Transforming Digital Culture and Making Your Organization Truly Customer Focused.

December is the perfect month to predict the key insurtech trends for the year to come and to think of New Year’s resolutions: what specific trends to tap into to enhance the digital strategies. We believe these trends should relate to what an insurance carrier would like to accomplish, to what a winning insurance firm of the future would look like. We believe that that such winning insurance firms will have four essential elements. 1: They are always part of their customers’ lives Fast-changing customer behavior and new market dynamics make it essential for insurance carriers to increase the contact frequency and provide more value in these contacts. Fortunately, all sorts of connected devices offer an unprecedented entry into customers’ daily life. 2: They continuously build contextual ecosystems Adding value is about solving the real problem. People don’t want a mortgage; they want a nice house to live in. Insurance is usually just part of a solution, but rarely the entire solution to the real problem a customer is facing. To help solving the real problem insurers need to become more part of the context, and of the ecosystem of companies and organisations that play a part in that context. 3: They act ‘simply human’ With all sorts of new technologies being applied to digitise processes insurers run the risk of neglecting the feelings side of customer engagement. People crave for organisations that are human. The solution is to create ‘the best of both worlds’; to leverage technology to empower front liners. 4: They strive for operational excellence Digital transformation to improve operational excellence will continue to be top of the agenda in the years to come. And rightfully so. Yet, at the end of the day, digitalised processes and a lower cost base are table stakes. It is simply not enough to stay in sync with fast changing customer behaviour and new market dynamics. Operational excellence is essential, but it also a qualifier, not a winner. Engagement innovation needs to be built on top. This is where the previous three essential elements kick in. It is these four essential elements that drive our Top 10 Insurtech Trends for 2018; the key trends that set the Digital Insurance Agenda. We’ll illustrated each trend with insurtech solutions that featured at the 2017 DIA editions. Key words? Platforms and partnerships. Obviously, we’ll pay ample attention to this at DIA Amsterdam 2018 (May 16-17). Trend 1. Data-driven Services In order to really become part of customers’ daily lives new data streams from e.g. connected devices need to be turned into new insights and these new insights need to be turned into new propositions and services. This is where insurance carriers need to explore opportunities beyond their traditional primary process to really help solving the real problem that customers are facing. Many insurtechs are dedicated to supporting incumbents in these efforts. The Floow DIAmond Award winner The Floow (Sheffield, UK) designs telematics systems to make vehicles safer and cheaper for all. Their GoWithFloow (GWF) is a platform for car sharing. It is sort of the Airbnb in cars, including rating the owner or borrower of the car. But where the platform differs from other examples of car sharing and vehicle lending is the addition of The Floow telematics engine and scoring system which is integrated into the software. This means that when a driver borrows a car their behavior can be tracked using the smartphone-as-a-sensor capabilities. The Floow use this information to develop a score for the driver to help lenders decide who to lend their car to. The Floow is engaging with insurance companies to bring the proposition to market. This sort of capability will help meet changing mobility demands by creating a marketplace of vehicles. HeartShield HeartShield (Vienna, Austria) developed an artificial intelligence platform that uses patient data to recognize risk factors and determine whether someone is a potential candidate for a heart attack or heart failure in time. Instead of using 19th/20th century statistics, they allow computers to learn warnings signs autonomously using data from all sorts of devices that can measure heart rate; including smartphones, smart watches and clinical or portable ECGs. Peer-reviewed scientific papers show that the algorithms behind HeartShield outperform the best heart rate variability predictors in detecting heart disease, and is more reliable than blood test based risk scores in recognizing coronary artery disease. Trend 2. Invisible Insurance In banking we notice that more and more payments are becoming invisible. Think of machine to machine payments, of what Amazon is doing with Dash, and how you pay for a ride with Uber and for a song at iTunes. We see the same thing happening also in insurance. You purchase a product and there is already an insurance embedded in that. Customers purchasing the BMW i3 or the i8 are entitled to a seven-day free-of-charge, comprehensive car insurance from BMW Car Insurance. This is simply activated over the phone by the customer. Customers are then provided with an overview of insurance options available to them after their seven-day free policy has expired; all designed and backed by Allianz. Qover DIAmond Award winner Qover (Brussels, Belgium) have built an ‘Insurance as a Service’ platform to change the way insurance is designed, managed and distributed. Qover is a cover holder of Lloyd's of London and acts as a digital wholesaler of proprietary white label insurance. They target among others large non-insurance distributors; basically any business, from automotive brands and utility companies to ecommerce merchants and traditional retailers, to seamlessly integrate insurance into their products via open API's. See also: Insurtech: The Year in Review   Trend 3. Upstream Platforms Push strategies are becoming less and less effective. Pull is the name of the game. Pull is about understanding and solving the need behind the insurance solution and being present in that context. Insurers need to move upstream and be present in the context of specific life events and decisions, big and small. Pinganfang Ping An has adopted the strategy of the synergistic development of traditional and non-traditional businesses. Pinganfang.com for instance, is the largest real estate e-commerce platform in China and part of Ping An Group. Its business model integrates ‘real estate + internet + finance’ and seamlessly includes a wide range of financing services in the customer journey of buying a new home. Richard Sheng, director of branding & corporate communications Ping An Group in our book Reinventing Customer Engagement: “We are creating all sorts of portals in non-traditional domains such as home, health, car, but also food and entertainment. Each and every one of them are new business lines that create new value for themselves, as well as for Ping An. All these platforms have large numbers of users and interactions, and advanced data mining and precision marketing capabilities. When relevant, and at a logical moment, customers are brought into contact with Ping An's traditional banking and insurance activities. The new business lines are not only increasing their own value; by enlarging the total customer base and by allowing new synergies they also increase the value of the entire ecosystem of Ping An enterprises.” Abracar Abracar (Munich, Germany) was developed in 2016 as part of the Accelerator program of Allianz X and is the first spin-off of the incubator. The startup is Germany’s first professional car broker. They help car consumers to sell their car at the highest price without any effort. Abracar takes care of all steps of the selling process starting by creating a professional expert’s report, over 50 pictures, writing an attractive listing, filtering the potential buyers, negotiating the final price and preparing the contract. The car buyer benefits from the expert’s report, an Allianz warranty, financing solutions and competent consulting. Trend 4. Bancassurance Revival PSD2 is the new payment services directive by the EU. This directive makes it obligatory for banks to open up customer data to third parties. Originally, the intention was to increase the competition between banks to improve payment products, but it effectively creates opportunities to all sorts of third parties to provide new opt-in services to these customers. Although this is hardly on the radar screen of insurance carriers, we believe this will revamp the bancassurance model. Moving from bank partnerships for just distribution and using bank data in the marketing and underwriting processes to really being much closer to customers. When we interviewed Markus Pertlwieser, chief digital officer Deutsche Bank, at DIA Munich 2017 he agreed that the right PSD2 applications offer great opportunities to link insurance to a certain payment, making insurance much more individual and much more real time. Also at DIA Munich 2017, Vikas Chhariya, global head of digital partnerships AXA Group, mentioned Aadhaar, India’s national biometrics identity program, as an interesting platform. Banks need to comply, so that fingerprints will give hundreds of millions Indians access to financial services, including insurance. Strands Strands is a leading provider of Personal Financial Management solutions (PFM) for banks such as Barclays, BBVA and Deutsche Bank. PFM uses payments and other data to help bank customers understand their financial situation, give some tips how to better manage finances and prevent overdrafts, and improve wiser financial decision-making. PFM drives engagement between banks and their customers. Strands is actually a fintech rather than an insurtech. In the last few years the company has been investing a lot in the development of smart recommendation engines (using AI and Machine Learning) that continuously learn about the user financial behaviour and then proactively make contextual recommendations of financial products, including insurance. Let’s say you are 40 years old and you have no pension plan in place. Through a Siri-like PFM medium, the Strands PFM will intuitively decide to offer you a pension solution. SaveUp Munich Re’s Life Financial Solutions Business has developed a new variable annuity product concept called SaveUp. It's the first attempt to revolutionize the savings life insurance space in Europe, through new product offerings and an entirely new distribution channel via a smartphone app but it also supports distribution via banks. SaveUp is a simplified savings product suitable for online self-service sales and management via web and smartphones. It is packaged for young consumers as a guaranteed savings and investment offering, allowing them to participate in investment markets while maintaining the security of their chosen guaranteed amount. Trend 5. Innovation Multiplied In a recent study DIA academic partners Alexander Braun and Florian Schreiber (University of St. Gallen) argue that real innovations require more than just new technological improvements to unlock new economic value. It is about combinations of innovative new models. Now think about insurtechs working closely together, combining their ideas to come up with something that is even more innovative. Innovation multiplied. And that’s exactly what we already see taking place in the DIA community. KASKO + Picsure KASKO (London, UK) supports insurance companies by offering an API-powered agile insurance product platform that sits in between digital customer touchpoints and your legacy IT, taking internal IT off the critical path to product launch. Picsure (Munich, Germany) creates smart AI solutions for the insurance industry, in particular for object recognition, fraud detection and identity checking. KASKO and Picsure teamed up to create an innovative watch insurance product for Swiss insurer Baloise. Sentiance + Sureify Sentiance (Antwerp, Belgium) is a data science company turning IOT sensor data into rich insights about people’s behavior and real-time context. These insights enable insurance companies to understand how customers go through their everyday lives, discover and anticipate the moments that matter most, and adapt their engagement to real-world behavior and real-time context. Sureify Labs (Silicon Valley, USA) created a platform that engages a customer over their lifetime. Their Lifetime Platform is a set of cloud-based software applications that allow insurers to digitally engage with their policyholders via web, mobile and various personal health and device data sources. The platform drives customer loyalty, brand recognition and better customer experience. After winning the DIAmond Award earlier this year Sentiance won again at DIA Munich through their collaboration with Sureify. They demonstrated the wizardry of the Sentiance technology that extrapolates behavior insights from a diversity of mobile-user data, and then showed the full circle that Sureify provides by turning these insights into buying signals and engagement opportunities. Trend 6. Competitors Cooperate Innovation beyond digitising the current processes and thoroughly exploring the opportunities that insurtechs around the world have to offer require a certain scale. Only the few carriers have sufficient size and presence to do this all by themselves. Teaming up with other insurers is the solution. The ultimate in cooperation can be found in Germany. Twelve insurers, ranging from multinationals such as Allianz, Generali and Munich Re, to domestic players like Versicherungskammer Bayern, LV1871 and Nürnberger Versicherung, have all put money into WERK1; an incubator that already supports ten insurtechs, located in an old cookie factory in Munich. And because these insurers are convinced that it is about continuously developing a stronger ecosystem, they have launched Insurtech Hub Munich in July 2017. The Insurtech Hub Munich initiative is unprecedented, in terms that twelve insurance carriers, big and small, are working closely together with leading universities and research institutions, with the State of Bavaria and the City of Munich as well as with blue chip corporates from adjacent industries such as automotive, health care and cybersecurity. Our DIA database shows that 180 insurtechs have ties with Munich. To put that into perspective: California, where Silicon Valley is situated, host 160, according to Braun and Schreiber’s survey. In our view, that makes Munich the de facto insurtech capital of the world. The activities of Insurtech Hub Munich will strengthen that position even further. Trend 7. Network Effects Scale economies get an extra meaning. Scale benefits are not just about ever-growing efficiency in processes within the business. It's also about ever-growing added value through network effects. Network effects can for instance be created by leveraging the growth and activity of estLibraryablished allied platforms. PayPal, for instance, grew on top of eBay. Zhong An teamed up with Alibaba’s online shop Tao-Bao to create a shipping return policy seamlessly integrated into every transaction. They’re selling hundreds of millions policies. AXA Group engaged in partnerships with companies such as Alibaba, Uber and car sharing platform BlaBlaCar. Clearly a clever choice to profit from network effects. They’re all fast growing digital players; so AXA’s business with them will almost automatically grow as well. We mentioned in trend 2 that Qover is targeting large non-insurance distributors to seamlessly integrate insurance into their products via open API's. Also a perfect example of ‘how to create scale through network effects’. With insurtech becoming mainstream, the challenge is adoption at scale. Leveraging network effects is a great way to achieve this. Trend 8. Empathy Empowered According to many headlines algorithms are displacing human advisers, saving costs. We believe there is ample opportunity to create the best of both worlds by combining new digital technologies with human skills. To relate to their customers, financial institutions need to secure the feelings side. Humans inject emotion, empathy, passion, creativity, and can deviate from the procedure if needed. Deploying technology to empower human front liners such as brokers and agents results in better conversations, higher conversion and finally, greater solutions for customers. SaleMove SaleMove (New York City, USA) provides solutions for delivering a high-touch, in-person customer experience online. SaleMove enables for instance life insurance brokers to interact with their online customers in real-time through voice, video and collaborative browsing - leading to better conversations, higher customer satisfaction and increased conversions. Wefox DIAmond Award winner Wefox (Berlin, Germany) combines the personal advice of a traditional insurance business with modern app technology, thereby bringing together the evolved needs and expectations of customers, insurance brokers and insurance companies. Wefox’s long term vision is to pull the entire insurance industry, in particular brokers, into the digital age, leveraging to the max what digital has to offer. They are very successful with already more than 150.000 end customers and over 600 brokers in 3 countries. See also: Global Trend Map No. 2: Insurtech   Trend 9. Behavioral Economics The ongoing success of South African health insurer Discovery’s Vitality program is creating more and more awareness for intelligent combinations of data and behavioural economics. Adrian Gore, founder and CEO of Discovery, in our book Reinventing Customer Engagement: “If you promote healthier behaviour, you can offer more sustainable insurance. Behavioural science says that people need incentives to change. The Vitality program is a complete wellness system that tracks everything from physical activity to nutrition over the course of a person’s life. It combines engaging policyholders through personalized and regular interaction, motivating and incentivizing them to manage their wellness, live better and to make healthier choices through tailored programs.” Lemonade Lemonade (New York City, USA) offers homeowners and renters insurance. We like Lemonade so much because it is fully powered by artificial intelligence and behavioral economics. By replacing brokers and bureaucracy with bots and machine learning, Lemonade promises zero paperwork, instant everything and killer prices. Lemonade’s chief behavioral officer Dan Ariely helped designing systems and processes that ensure that the interests of the insurer and the insured are aligned. But also how behavioural economics reflects in Lemonade's daily customer experience. When we interviewed CEO Daniel Schreiber on the occasion of Lemonade’s first anniversary he shared: "Not just our business model but also the whole product flow is informed by behavioural economics. For example, we ask people to sign on the top of the form, not at the bottom. Behavioural research shows that asking people to pledge honesty first, results in forms that are actually more accurate." Insurers could benefit much more from psychology and social sciences. Dacadoo Consumer engagement is becoming more and more important in the health insurance industry. Dacadoo (Zurich, Switzerland) has developed a mobile health engagement solution enabling individuals to track, manage and benchmark their health and well being in an easy and fun way on their smartphones. The Health Score indicator moves up or down in real-time, depending on how body values, emotional wellbeing and activities change (exercise, nutrition, stress and sleep). To help individuals remain engaged, motivation techniques from behavioral science are used such as online gaming, social and collaborative features from social networks, and personalized feedback. Trend 10. Purpose Reboot New digital technologies are not only critical in repositioning the industry along customer-centric models but also offer insurance carriers the opportunity to reboot themselves as a force for good in the communities in which they operate. More and more insurers leverage insurtech to tackle important global challenges today and in the future. Connected devices and advanced algorithms are already improving patient care while simultaneously decreasing costs. Micro-insurance solutions are offering protection to low income populations that were previously considered uninsurable. Insurtechs strike the right chord among millennials that are dangerously under-insured. And insurtech innovation is helping to offset the damage caused by natural disasters such as hurricanes and floods. Allm Allm (Tokyo, Japan) is dedicated to reshaping healthcare by developing HealthTech medical communications platforms for healthcare professionals and the medical industry, using cloud technologies and smart devices. A more efficient communication and new innovative technologies help to improve decision making and can save more lives and reduce costs while improving customer experiences. Understory Understory (Minnesota, USA) is a smart weather hardware and analytics company that creates unprecedented details of how weather affects people and businesses. The data applications for Understory’s sensors are enormous, as US$ 485 billion of the US economy fluctuates with weather. With Understory’s white-labeled weather and home safety insurers can easily help their customers know what to do to prevent potential property damage. Neosurance Incumbents have difficulty connecting to millennials. As a result this segment of the future is hardly aware of the importance and necessity of insurance, with a high number of under-insured as a result. The average attention span of people is getting lower and lower and our daily lives seem to be made up of micro moments related to the use of smartphones. Neosurance (Milan, Italy) provides micro-insurance solutions for insurance carriers that want to address the ‘connected generation’. By gathering contextual data, the Neosurance is capable of identifying a potential specific insurance need for that customer and send a notification on the smartphone. The user can choose to activate the cover with 4 easy taps on the screen. A great way to get a whole new generation more familiar with the benefits of insurance. BIMA DIAmond Award winner BIMA (Stockholm, Sweden) provides insurance and underwriting to millions of low-income people via innovative partnerships with major mobile network operators and financial services businesses. They offer a range of affordable life, personal accident and health micro insurance products. BIMA partners with leading telecoms players such as Telefonica, Orange and Axiata Group. Consumers can pay for insurance via deduction of prepaid airtime credit. In just six years, the BIMA model has transformed the insurance landscape in the countries where they operate, proving that it is possible to reach consumers at the bottom of the pyramid at scale. BIMA has over 24 million registered customers in 14 countries across 3 continents, 93% living on less than $10 per day. Check out www.digitalinsuranceagenda.com for more info on DIA Amsterdam (16 and 17 May 2018).