This is an excerpt from "Lead Your Tribe, Love Your Work: An Entrepreneur's Guide to Creating a Culture That Matters." Jeff was a talented designer at Digital-Tutors. He grew up near our headquarters in Oklahoma. This was a huge plus for me because it meant he had roots in the community and wanted a long-term workplace. I wanted people invested in the long-term success of the company. Jeff loved Digital-Tutors, loved his job and loved working there. His work was great, and for years he helped build the artistic standards for our growing brand. He got along with everyone. That perception came crashing down one day when a couple of people brought his fatal flaw to my attention: He harbored a prejudice. This manifested itself in the subtle ways he acted toward one of his black co-workers. As a teacher for years, I usually clued in on those types of passive-aggressive interactions, but Jeff never acted inappropriately in front of me. When I wasn’t around, though, he would “joke around” with his co-worker. It happened often enough that other people noticed a pattern. See also: The Entrepreneur as Leader and Manager   When I talked to Jeff about the situation, he tried to pass it off as harmless fun: “Aww, he knows I’m just messin’ with him!” No, Jeff was getting away with racism. His black co-worker didn’t think it was funny, his other co-workers didn’t think it was funny, and I definitely didn’t think it was funny. One of our core values was respect. I'd defined it as: We will not tolerate the disrespect of people or property. I cannot and will not allow the mocking or someone else's prejudices to belittle any member of my tribe. That’s a clear line in the sand because it goes against our core value of respect. Jeff's conduct clearly violated that, so I let him go. Immediately after letting Jeff go, I called an impromptu meeting with everyone in the company. For some who worked alongside Jeff and were familiar with his behavior, the decision wasn’t a shock. For others who didn’t work closely with him, it was unexpected. Our impromptu meeting explained why they wouldn’t be seeing him in the break room in the mornings or at company events anymore. My purpose for gathering up everyone in the company at once was to make sure everyone got to hear the same information at the same time. There was no chance for gossip stemming from many versions of the story. During the all-staff meeting, I explained the situation with as much depth as I legally could. As I told my tribe, my decision was all rooted in our core value of respect. Finally, I opened the floor for questions. Again, it was about giving my tribe the chance to get answers at the same time. See also: Is the Insurtech Movement Maturing?   To my surprise, some of my employees used this time for questions to express their thanks for making the tough decision to stick to our core values. Those who weren't aware of Jeff's behavior were understandably shocked—as I had been when I first found out. However, they weren't surprised by the consequences. As much as it hurt to let Jeff go, everyone understood it was the best decision for the company. We loved our company, our tribe, and we loved changing the world for our customers. That wasn’t an accident. It was by design, and I had to keep it that way. As the leader, it was my responsibility to make sure bad guys (and gals) didn’t slip past our outer walls and poison us from the inside.

In the U.S., premiums for family coverage have increased 55% since 2007, and business owners often bear much of this financial burden. Employers are reaching their breaking point. Employers are getting creative in an effort to reduce their healthcare costs, including looking for alternatives to the typical preferred provider organization (PPO) plan. Many are choosing self-insurance coupled with reference-based pricing, which is the assessment and payment of medical claims based on Medicare reimbursement data or the provider’s self-reported cost to deliver the service. Reference-based pricing, also referred to as metric-based pricing, sometimes gets a bad rap from different players in the insurance industry due to outdated notions about this type of health plan model. The truth is that the cost savings and other positives are undeniable: businesses typically save up to 30% off their total healthcare spending. In the constantly evolving world of healthcare, it’s important to understand how reference-based pricing has advanced over the past several years and the reasons why many self-funded employers are turning to reference-based pricing as a sustainable healthcare solution. Below are some common misconceptions and the facts you should know as an informed insurance or benefits professional. Misconception: Providers will turn away patients on reference-based pricing plans. Because self-funded employers with reference-based pricing select a reasonable level of reimbursement with a fair profit margin for medical services, the majority of hospitals and facilities accept payments every day throughout the U.S. A common misconception about reference-based pricing is that facilities will turn away patients who have this plan, but it is illegal to deny medical services to any patient in an emergency under the Emergency Medical Treatment and Active Labor Act (EMTALA). In the rare instance where admission is denied for other types of care, skilled reference-based partners can resolve the situation on a case-by-case basis with the facility. See also: When Big Data Can Define Pricing   Fair payments begin with a line-by-line, in-depth assessment of each medical procedure’s cost by a quality reference-based pricing partner that ensures that facilities are reimbursed quickly and properly. Further, the right partner will recommend reference-based pricing as a solution to companies that are the right fit, and in the right market. When choosing a healthcare solution, brokers and employers should ensure the reference-based pricing partner is experienced, knowledgeable about the specific market and focused on building relationships with hospital systems — encouraging collaboration rather than confrontation. Essentially, the “reference point” needs to consider the provider cost and allow for a fair margin above that cost. Misconception: Balance billing only happens with reference-based pricing. Another reference-based pricing misunderstanding is that plan members will be responsible for paying large balance bills after receiving care -- charges that the provider levies beyond what the insurance has paid. With an experienced reference-based pricing solutions provider, the chance of balancing billing for plan members is greatly minimized, because facilities receive a fair reimbursement that they willingly accept. If a payment is not accepted, an expert reference-based pricing solution will assist plan members with balance bills every step of the way and not leave them to resolve the issue on their own. The truth is that balance billing is common across healthcare and most notably occurs with out-of-network claims in traditional PPO health plans, and these members do not have anyone to advocate for or support them. In fact, nearly one-third of privately insured Americans have received a surprise medical bill in the past two years when their health plan paid less than expected. In addition, the number of Americans who don’t have the means to pay unexpected medical bills or are at risk for bankruptcy as a result of uncontrollable healthcare expenses is on the rise. In the case of a payment dispute or balance bill on a reference-based pricing plan, a good partner is dedicated to supporting plan members and advocating on their behalf with minimal disruption, resulting in satisfaction for all parties involved. Misconception: Employers with reference-based pricing are destined for legal action. It bears repeating that most facilities accept payments when the reimbursement amount is fair and paid on time. In the rare instance a facility does not accept payment, there are many steps before the threat of litigation. Often, when a local company meets with a hospital system to discuss reimbursement conflict, there are multiple opportunities for positive results for each party. There are significant advantages for both the health systems and the employers to resolve the dispute by working together and setting precedent for future dealings. See also: 4 Trends to Expect in Health Insurance   If a resolution is not reached, it is vital that an employer is partnered with a solutions provider with strong patient advocacy and legal expertise, ensuring all members and the employer are protected against aggressive billing, collections and potential legal action. Reference-based pricing can be the missing puzzle piece. It is vital that brokers, employers and other industry professionals are armed with the facts about reference-based pricing. Employers should not overlook its many benefits, and industry professionals should know when to recommend this viable solution. Businesses that implement reference-based pricing can use their savings toward growing their business or putting dollars back into the paychecks of their employees. Brokers that offer reference-based pricing can remain in the center of the healthcare benefits discussion and showcase their knowledge to clients. And both employers and brokers should choose an experienced reference-based pricing partner to ensure not only the greatest cost savings but the smoothest experience possible for the employer, employees and provider once the plan is implemented.

In the first three articles we talked about the claims process being a customer experience issue. (You can find them here.) We discussed how this process could be less expensive. We also gave some thoughts about how this process could actually generate revenue for the company. We asked you to image yourself being a financial adviser/life agent. We also asked you to imagine that you were a beneficiary who is on the receiving end of a life insurance policy. Let’s face it, life insurance is a grim subject. It has been said that life insurance is never bought, it is sold. Meaning most people are not driving down the road and think to themselves, I should buy life insurance today. But the insurance space is changing! You can now buy policies online without ever meeting with (or speaking to) a representative. Simple life products such as term policies are now purchased this way every day. Term is not a complex product. Most people feel they don’t need advice on such a simple product, so they go online and purchase it. This is why it is so important to realize that, if your process is stuck in that past, hard to complete, done by snail mail, etc., what are your chances of selling any of your products in the future? When I used to give presentations to life agents, I would ask: “What is the easiest life insurance policy sale you will ever make?” I would receive many answers, like: term insurance, monthly payment types, policies from reputable companies. The list would go on and on. See also: 3.5 Things to Know About Claims Systems   Then I would suggest my answer: “The easiest life insurance policy I ever sold was to a person I had just handed a beneficiary check to!” Think about it, I didn’t have to explain the features and benefits of life insurance. The person just experienced the benefits. I didn’t have to “sell” the person on the need. All I had to do was be genuinely interested in helping. Be there to express care and empathy during a time of need and offer my professional opinion. Here’s how your company can be innovative:

1. Instead of recreating the innovative wheel, seek out and connect with insurtechs. You might be surprised at what you find and how easy it is to work with these startups.
2. Meet your customers when and where they want. Forcing them down a process that is better for you doesn’t help them!
3. Increase efficiencies, decrease mistakes and make it easy to do business with you.
4. Offer a great customer experience for the claimant. This will increase your chances of making this person a future client.
5. Make your process easy - No more feeling like you need an attorney to complete the paperwork and your process.
6. Have a “beneficiary first” mindset.

See also: How to Collaborate With Insurtechs   Here’s how your company can generate revenue from your claims process:

1. Have a beneficiary-first mindset. How would you want to go through the process?
2. Increasing efficiencies in your process reduces expenses. These reductions go to the bottom line.
3. Use your agency/adviser force! They want to help your clients. You should want to make it easier for these agents/advisers to help your clients. When was the last time you filled out the account opening forms or your product offering forms? Try it; it would be a great exercise!
4. Think about ALL of the users in your process. Internal employees, claimants, agents, advisers and potential new clients.

The bottom line — if your processes are stuck in the past, you will decrease your chances of gaining clients. Marketing dollars will not help you sell a product to a person who went through your outdated process and was displeased and unimpressed.

When I spoke at Enservio's Property Innovation Summit last week in St. Petersburg, FL, I followed an astronaut who flew two space shuttle missions and makes guest appearances on "The Big Bang Theory" and a former FBI agent who played the key role in catching Robert Hanssen, the most notorious spy in U.S. history. I was followed by a former Marine sniper who did tours in Iraq and Afghanistan and who co-founded Team Rubicon, which has organized some 80,000 volunteers who are former members of the military and who use their skills to help immediately following natural disasters around the world, such as the recent Hurricane Harvey. One of my daughters said, "'Dad, I'll put this as kindly as I can: Why did they want you there?'"

Fortunately, my self-worth is not fragile, and the topic I covered is an important one for the industry. I thought I'd cherry pick some details here (as long as I can't present you with the astronaut, spy catcher or ex-sniper).

Drawing on the information in our Innovator's Edge platform about tens of thousands of  insurtechs and early-stage technology companies that might have a major impact on insurance, I described for the audience of senior claims executives the companies that I think have the best chance of radically improving the claims process. They are:

• Pypestream, which produces chatbots and provides secure communications links with customers. Everybody has a chatbot these days, but I'm a fan of Pypestream, partly because the company has done so much work in insurance that it has great domain expertise.
• WeGoLook, whose thousands of gig workers around the country (called "Lookers") can efficiently supplement insurers' claims operations.
• Infinilytics, whose predictive analytics can, among other things, help spot fraud.
• RightIndem, which offers a white label claims process that speeds handling and improves the customer's experience.
• Casentric, whose technology helps evaluate personal injury claims.
• ViewSpection, which allows for self-service inspections using customers' phone cameras.
• MotionsCloud, which offers a mobile app that uses AI to greatly speed the claims process.
• Care Bridge International, which offers solutions for future medical valuations, medical reserve setting, underwriting, claim settlements and more.

I also shared this chart, which uses data from Innovator's Edge to show where the funding in claims management tech, alongside some related areas, has been going for the past three years:

I think we can all agree that the claims process has a long way to go. A massive amount of cost can be taken out, and everyone's experience can be improved. Nobody—not those on the carrier side, not the agents and certainly not the customers—enjoy the days and weeks of back-and-forth that are required now, often focused on small details and generating so very much paper. 

Following insurtechs such as the seven I've listed can be a great way to broaden our horizons about what's possible, and finding the one or two right partners can be a great step on the road to profitable innovation. 

Have a great week.

Paul Carroll
Editor-in-Chief

"Your business is as smart as the sum of your team's education." Anyone who’s been with an organization for a few years or has ever led a group understands the wisdom of that statement. Thought leaders, innovators and visionaries can drive an organization to new heights, but creating a culture where learning permeates every level of the company can lead to a more measured, lasting impact. To achieve such an outcome, that sum of a team’s education cannot be static. College offers a good foundation, but doing a deep dive into a specific subject at the start of a career doesn’t cut it anymore (if it ever did)—especially in today’s fast-paced world. Today, everyone is expected to continually augment skills and stay abreast of the latest technology, news and developments. That’s why it should come as no surprise that insurance organizations are rapidly shifting from prioritizing “knowledge workers” to seeking out “learning workers.” That constant hunger for new information and education takes a different kind of skill set, one that is not focused solely on coverages, contracts or sales. Instead, employees need to learn how to learn. Two Learning Mindsets Carol Dweck dug deep into this lifelong pursuit of knowledge in her landmark research and developed what she calls the growth mindset. She posits that learning and intelligence involve two basic mindsets. Some people have a fixed mindset. They believe that intelligence is static—something you’re born with. Individuals with a fixed mindset spend more time confirming and justifying their existing intelligence and less time learning. Those with a growth mindset, however, believe that intelligence can be shaped and developed throughout their lives. They’re quicker to embrace new ideas, find inspiration in others and seek out new avenues of learning. See also: The Formula for Getting Growth Results   This divide in our approach to learning starts early. Dweck observed fixed and growth mindsets in four-year-old children, with some opting to redo a puzzle they had already completed (i.e., confirm their intelligence) and others moving on to a more challenging game. Supporting a Growth Mindset Dweck’s research took the business world by storm, and many employers quickly began hiring employees with a growth mindset. However, Dweck says that some of her findings have been misinterpreted. She’s quick to point out that there’s more to a growth mindset than just effort, and no individual can have a growth mindset about everything all the time. Organizations need more than an impassioned mission statement to develop a growth mindset. Employees should feel supported and rewarded in their pursuit of new knowledge and ideas. That’s easier said than done. Lifelong learning is often touted as an ideal we should all work toward, but it can be ambiguous. In reality, especially on the job, lifelong learning should be more specific than just “know more stuff.” Here are a few tangible ideas for employers to support a growth mindset. 1. Set the expectation early You can start emphasizing lifelong learning even before a job offer. Prioritize resumes from applicants who seek new knowledge and experiences. During interviews, questions like “What’s the last book you read?” or “What are you working on learning right now?” can identify a growth mindset and help you bring in the right people. When new employees start, build learning into their daily work by including it in your formalized onboarding process. Keep that momentum going after they settle in by integrating learning into performance reviews. During reviews, press employees for specific examples of how they stay current on their industry. 2. Establish specific goals and timelines Harvard Business Review has some great insight on turning a “vague desire to improve learning” into specific next steps. One core idea is to establish specific goals—instead of deciding to simply read more, commit to reading one book a month or subscribe to a daily insurance industry email newsletter (and actually read it!). These goals should be structured and have clear objectives. They should be reviewed and adjusted as part of official performance reviews to make it clear that they’re not just nice goals to strive for but something that the organization considers essential. See also: ‘Jobsolescence’: How Big a Threat?   3. Prioritize hybrid skills Jobs requiring new skills emerge every day, and the insurance world is no exception. Case in point: Across all industries, the demand for data analytics jobs is up a staggering 372% since 2011. Not every risk manager or underwriter needs to master data analytics, but, the broader your team’s knowledge base, the more successful your organization will be. Employees are concerned about shifting skills and expectations, too. Providing them a clear path to on-the-job learning can help alleviate these fears and keep your top people focused on growing within your organization. Prioritizing lifelong learning as an organization is the best way to show that your business values the sum of a team’s education.

Most insurance businesses realize that there are benefits offered by upgrading legacy systems and becoming more “tech-forward.” However, not all insurance businesses are prepared to make the leap. Here are four qualities your insurance business needs if you want to succeed in leveraging what insurtech has to offer. 1. Customer-Centricity Customers are at the center of every business, and insurance is no exception. Being consumed with your customers to the point that you fully understand and anticipate their expectations will make leveraging insurtech a much more seamless process. Many insurtech solutions are designed to assist with customer interactions and bilateral communications. Some are even leveraging artificial intelligence to enable more personalized, more scalable coverage solutions. Despite the allure of insurtech, it doesn’t deliver a set-it-and-forget-it solution. It can’t. If your insurance business is not in touch with your customer base to begin with, you’ll have trouble discerning where the use of automation and insight technologies makes sense and where it doesn’t. Moving to a customer-centric approach begins with realizing that there is no “average” customer. Customers have different behaviors and preferences, and, by truly understanding them, you’ll be able to overcome the false appeal of a one-size-fits-all approach and successfully, that is intelligently, implement insurtech within your business. It’s critical that you have a firm grasp of your customers' transactional preferences. In what situations do they expect and prefer to have frictionless, humanless interactions? In what situations do they expect and prefer to have someone to work with? The answers to those questions will differ considerably depending on the customer. Without the answers, even the best AI or automation tools will have a limited or even negative effect on your overall business. A profound knowledge of your customers and their preferences is fundamental to knowing where and when to intelligently apply and effectively leverage insurtech. At the end of the day, “insurtech” is a portmanteau of “insurance” and “technology.” It's about adding new technology to the world of insurance, not about replacing the insurance world with the technology world. As such, it’s important that you use technology in a way that complements your operations. When it comes to insurtech, for best results you should be using it while drawing on the wealth of insurance world knowledge and experience you’ve acquired. That’s especially true when it comes to insurtech applications that interface with or pertain to your customers. See also: How to Collaborate With Insurtechs   2. Holistic Analytical Approach to Data Being adept at critical or analytical thinking goes a long way when leveraging insurtech. Many insurtech solutions revolve around the same basic idea: Improve data capture, automate the information collection process and apply it everywhere. That means that if you’re investing in insurtech, you’re probably already drowning in data or will be soon. Data is great, make no mistake. But data without context or — worse — data that’s analyzed and interpreted without discipline or scientific understanding can be harmful. Misinterpreting your data, looking in the wrong places for insights or letting the data collect dust because of uncertainty as to how it should be tackled are common problems. Acting confidently on bad data interpretations can be particularly destructive. It’s imperative, therefore, that you’re able to intelligently interpret and action your data. It’s important that you approach the data generated from insurtech solutions holistically. A holistic approach to data is one that avoids reverse-causal conclusions, understands and satisfies the demands of statistical significance, accounts for sampling errors and examines patterns with a broad perspective. Key to this is employing properly trained professionals where necessary, assuming a longitudinal point of view and being hypervigilant about duly contextualizing all data sets. For example, consider a new insurance agent who brings in five new applications worth a total of $50,000. Is this agent suddenly a top producer? Perhaps, but it’s important to look at data over time to see how renewals and persistency pan out. If the agent cannot retain business, then new applications and new business do not necessarily mean increased long-term (and in some cases even short-term) profit. Another example might be a client who has recently purchased several insurance policies following a marketing campaign. Did the client buy because of the campaign, or was he already in the market for insurance and would have purchased anyway? In both cases, it’s easy to confuse correlation with causation. 3. Swift Action The insurance business is notoriously slow to change existing processes and procedures. For example, the prevalent agency model for insurance policy sales and management in the U.S. hasn’t changed much since the 1970s. In fact, it has been criticized since that time in academic literature for being outmoded and a costly way to sell insurance to the general public. Today’s insurance businesses need to act quicker. Acting swiftly and intelligently will drive down costs, improve profitability and better set you up to leverage insurtech. Many insurtech applications rapidly collect and deliver data; however, your insurance business needs to be able to act swiftly on that data to capitalize on it before it goes stale. For example, a client who just opened a business needs liability insurance now, not a month from now. Having that data at your fingertips is wonderful… so long as you act on it. Having a quick-twitch motor and a matching mentality is crucial to fully leveraging insurtech. You need to be always on and always ready to act if you expect to succeed in this age of disruption. Aside from hiring the right people — fit for sudden and decisive action — and properly training them how to act and with what triggers, one way to ensure swift action is by automating clerical activities. Time-consuming tasks such as manually filling out forms, document drafting, scanning, faxing and playing signature tag with customers are all examples of activities that needlessly take up too much precious time in insurance businesses. Turning to intelligent management systems that automate these tedious processes will cut out a lot of the red tape and remove some of the most common barriers to acting more swiftly. This should free your time and that of your employees to focus on bigger picture activities, such as leveraging insurtech to its fullest potential and making your business thrive. 4. Open-Mindedness One of the hardest things for insurance businesses to do is break out of the mold they’re cast in. They suffer from a frame of reference fallacy, wherein they cannot see beyond the strictures of their immediate environment and their own experiences. Not looking (or thinking) “outside the box” makes the industry vulnerable to disruptive business models. Lemonade, for example, disrupted the insurance industry by offering homeowners and renters insurance coverage powered by artificial intelligence and behavioral economics. By doing away with brokers and unnecessarily long and bureaucratic procedures, they’re able to offer an instant digital alternative to traditional insurance purchasing. They were only able to do this, of course, because so many in their industry failed to see how new technology, new consumer expectations, and a new business normal pertained to insurance. Most companies lack the vision to connect even obvious dots if they’ve never before been connected. Don’t be most companies! See also: Is the Insurtech Movement Maturing?   Being open-minded and willing to try alternative methods is a must for leveraging insurtech. When you don’t acknowledge your limited frame of reference as a vision block and make a concerted effort to overcome it, you can be unnecessarily boxing yourself in and handcuffing your growth potential. If you're afraid of jeopardizing what's already working, you won’t be able to successfully leverage new insurtech tools and techniques. The question of course is whether “working” is a relative or absolute term. If your current approach is producing 2% growth, that’s great, but how do you know that an augmented approach wouldn’t produce 20% growth? What’s more, the insurance industry is increasingly moving toward a digital model. So much so that soon just keeping up with the times will require you to remain open-minded to radical change. According to a report from Accenture, for example, 47% of surveyed respondents would rather have more online interactions with their insurance companies and 49% have already purchased a policy online with 41% of respondents purchased on a mobile device. The business is changing, and if you don’t change right along with it you’ll likely go the way of the dodo bird. The digital trend is so strong that one major American insurance company estimated that roughly 40% of future business will come from the web, with much of that business coming from mobile. Conclusion Now, more than ever, the insurance industry needs to leverage insurtech. Disruptive startups will continue to set the pace in the insurance industry until older companies manage to learn new tricks as they look to more intelligently leverage digital technologies. Being open-minded, acting swiftly, taking a holistic approach to data and gaining an in-depth understanding of your customers is critical to being able to leverage insurtech successfully. Make it a point to adopt these four qualities and give your insurance business the best chance to grow.

At the WCRI Annual Issues & Research Conference, Dr. Richard Victor, former CEO of WCRI and currently a senior fellow with Sedgwick Institute, discussed his views of workers’ compensation in the future.

The workers’ compensation system was a compromise between labor and business designed to provide no-fault benefits in an environment that gave exclusive remedy protections to employers. Over the years, there have been ebbs and flows to the system in an effort to maintain balance. There is a constant struggle to balance benefits to workers with the costs of the system paid by employers. In the past, when the workers’ compensation system got out of balance, it was due to actions from those within the system. That is something the system could correct with regulatory change. However, right now, there are things happening outside of the workers’ compensation system that could significantly affect it and cause a rethinking of the grand bargain.

Emerging labor shortages

Retiring baby boomers will cause labor shortages in healthcare and the insurance industry, which will delay claims and medical care. This will ultimately increase claims costs.

See also: The State of Workers’ Compensation  

In addition, a stronger economy is ultimately going to lead to a severe labor shortage. When you pair the aging workforce and people retiring with a growing job market, you end up with not enough qualified applicants to fill the positions. Employers have to relax their hiring standards. This leads to unqualified applicants being hired. These people will likely have higher accident rates.

Changes in the non-occupational health system

As workers see their out-of-pocket health insurance costs rise, it becomes more attractive to try to shift illness and injury episodes into the workers’ compensation system. Richard feels that this shifting will result in a 25% increase in workers’ compensation claims by 2030. With soft tissue injuries, it would be very easy for the worker to indicate the injury happened at work instead of at home. Disproving that would be very challenging for employers. Higher deductibles will greatly encourage workers to look for these cost-shifting possibilities.

Millions of workers losing health insurance

The number of uninsured workers is expected to decrease significantly as elements of the Affordable Care Act are repealed or weakened. These uninsured workers are also highly encouraged to shift their treatment into the workers’ compensation system. Richard estimates a 15% increase in workers’ compensation claims due to this.

Aging workforce

The injury rates for the older workers is higher than for younger workers. As the U.S. workforce ages, we will see higher injury rates across the employee population.

Federal immigration policies and practices

Limiting the flow of immigrants into the U.S. at a time there is a labor shortage will only compound the problem. The only way to grow our workforce to keep up with the demand is with immigrants. All of the growth in the labor force going forward is projected to come from immigrants. Roughly 15% of all healthcare workers in the U.S. are foreign-born. If we discourage immigration into this country, Richard feels it could cause a labor shortage in the healthcare industry. It does not even take a change in policy to see a change in immigration flow. After the Brexit vote there was a significant reduction in European nurses registering to work in the U.K. This is even though there had yet to be a policy change in the country.

See also: Healthcare Reform’s Effects on Workers’ Compensation

Conclusions

Taking all of the outside factors into consideration, Richard estimates a 55% increase in the number of workers’ compensation claims by the year 2030. When you add in medical inflation the costs of the workers’ compensation system could triple by 2030 with no change in indemnity benefit levels. With this significant increase in costs, there will be questions about the continued viability of workers’ compensation.

What is the solution? Are there viable options to traditional workers’ compensation? ERISA-style plans like the opt out in Texas have been widely criticized for providing inadequate protections for injured workers. Union carveout plans only apply to a very small sector of the workforce. Could we see workers’ compensation claims organizations become accountable to both employers and workers, with employees having the ability to choose which claims organization they want to use?

Healthcare is being transformed by advances in artificial intelligence, virtual reality, machine learning, sensors and other innovative technologies. Practically everybody has a smartphone, making it easier than ever to gather data and consent to third-party access. Data insights mean providers can offer people products and services tailored to them individually. For insurers, digital technology offers new ways to manage risk that rely less on face-to-face and traditional clinical assessment; this is why there is so much interest in understanding how innovation might work. Selected comments from four key players in the digital health ecosystem make clear the appeal of putting two and two together. Thomas Lethenborg at Monsenso, a mobile platform for mental health, said, “Digital technology helps an individual move from reactive behavior to being more proactive - and this changes the paradigm, in particular with engagement.” It’s a view shared by David Forster of Thrive, a digital interventions app for mental health: “Data drives our understanding of what works best for the individual.” According to Forster, the success of digital technology in clinical settings points to real opportunities in insurance: “It makes it possible to provide policyholders help with illness prevention, early detection and assistance on a personal level.” Ian Prangley, of exercise rehabilitation service TrackActive, continued the theme when he said, “For insurers, digital solutions can drive connectedness, engagement and customer satisfaction while enabling people to self-manage their health. Harnessing data insights and implementing artificial intelligence (AI) is key to achieving this.” See also: New Regulations for Disability Claims   A comment by Danny Dressler of AIMO, an ecosystem integrating intelligent motion analysis into musculoskeletal care, added further confirmation: “As more and better data is gathered and processed safely, AI offers the most promise to take care of people's health and fix issues in both healthcare and the life and health insurance sectors.” By using digital means, insurers can create scalable, automated, speedy ways of supporting people when they need help the most. Proponents argue that digital offers better health outcomes for policyholders that will reduce the costs associated with long disability claims - a win-win for both insurers and consumers. Dressler noted that “technology like ours lets insurers offer customers new solutions such as dynamic pricing, automated claims and even help to prevent claims from happening.” Lethenborg says there is “an opportunity to ensure the data collected gives holistic insights and analytics that we can use to intervene more rapidly, when help is needed.” But it’s crucial the highest levels of privacy and data protection are guaranteed and operators are in full compliance with regulations. An imperfect balance of privacy with innovation is a deal-breaker for consumers. Forster is clear how delicate this balance is: “We recognize our responsibility to safeguard users’ data, but at the same time information technology empowers people to make choices and participate actively in managing their own health - it puts them in the driving seat for the first time.” For digital solutions to be convincing, research and scientific evidence are needed, but, with new services, long-term experience is scarce, and a leap of faith is required. Dressler spoke for all in saying, “We maintain strong links to scientific institutions because the general technologies underpinning our solutions emerge from scientific thesis...[This means] we only implement new features or functions after a rigorous validation process, especially because we are asking people to trust us with their health and well-being.” Dealing with high volumes of data is not without risk, particularly when it’s shared with third parties. See also: A Road Map for Health Insurance   Ian Prangley has pointed to recent concerns over how sensitive data is being used to highlight the challenges faced: “The key is to anonymize and protect data and have customers consent to sharing it on the understanding it will be used solely to improve their health.” This insight is driven home by Lethenborg, who said, “Transparency about how the data will be used is essential to building trust.” Digitization has already brought new products and services that have had positive medical and scientific impact. As Prangley said, “Technology has connected people and changed how we relate to each other. There [are] arguments for and against this of course but in the context of health and wellbeing we believe it’s a great thing.” With mental health and musculoskeletal problems as the leading causes of disability claims in every market, companies can bring digital solutions and opportunities - and health insurers can also feel great about them.

As the world becomes more connected -- with billions of sensors, connected machines, totally digital processes, trillion terabyte of new data and strict regulations on data privacy -- cyber risk appears as a bigger threat on the digital transformation journey of insurance companies. Cyber risk was always there, and companies managed it without detailed policies or billion dollar covers. But, the situation is changing dramatically. In our century, managing cyber risk is a full-time job and requires big budgets. Gross written premium in 2017 for cyber risk policies was nearly $3.1 billion, and it is expected to reach $14 billion just in five years. Insurance professionals expect rapid growth because cyber risk is now threatening not just financial statements but also the existence of companies from every business. Managing cyber risk seems still like maiden soil. There are covers for business interruption, reputation loss and possible physical damages, but it is obvious that there is a lack of clear understanding about how much cyber risk policy owners have. Cyber risk management is still in the very early stage: I don’t know what I don’t know! See also: Urgent Need on ‘Silent’ Cyber Risks   As a result of new capital regimes and strict regulations, like GDPR, Solvency II and MiFID II, there is a remarkable increase in sales and acquisition activities among companies from every sector, and cyber risk appears as a new key indicator during M&A due diligence processes, as well. Four or five years ago, cybersecurity due diligence consisted of asking few questions in a short phone call. Now, cyber risk management can lead to the termination of an M&A deal in a few days or a sharp reduction in price. So, insurers appear as due diligence partners. As all we know, the acquisition of Yahoo was radically changed right after Verizon Communications learned about how 3 billion Yahoo accounts were stolen. When Home Depot was preparing an offer for the Company Store, Home Depot discovered that e-mail and payment card information for as many as 56 million customers was stolen. Cyber risk is climbing to the top of CEOs' nightmares, and insurtech is a trigger -- it is also the best tool for managing cyber risk.

Distracted driving is having a tremendous impact on insurance rates. Distracted driving is the leading cause of accidents Increasing technology has seen the development of user-friendly mobile devices that have been the leading agents of distractions when it comes to driving. Distracted drivers have always existed. However, their number drastically increased with the invention of new applications for smartphones. Distracted driving has been found to be an increasing problem especially among the youth. More accidents equate to higher policy premiums Studies show that a distracted driver is 23 times more likely to cause an accident while using a cell phone. The Boston Globe reports that policy providers in Massachusetts received approval to raise rates by as much as 5% in 2017. See also: Distracted Driving: a Job for Insurtech?   Insurance costs rise drastically Many campaigns have been launched countrywide in a bid to sensitize drivers on how to keep their mind on the road and hands on the wheel. However, overconfidence and lack of focus has seen more drivers lose their lives due to distracted driving -- 52% of road accidents had significant phone distraction before the accident, according to Cambridge Mobile Telematics. Everyone should take part in curbing distractions while driving to help moderate insurance rates. Strict actions should be taken on those violating traffic rules. It is also important to report any road or accident-related cases to a car accident attorney.