While solutions to help employees manage their travel-related expenses have evolved steadily over the past two decades, innovation in the space has really accelerated in the last five years. Never have organizations of all sizes had so many options to choose from. As Gartner points out in its 2017 Market Guide for Travel Expense Management Software, organizations that are still processing expense reports manually can rapidly improve efficiency, accuracy and end-user satisfaction by moving to a modern expense management application. Well, things are about to accelerate even more. We are sitting on the cusp of the third wave of technology innovation, a wave that will transform the industry to the point where our kids and our grandkids will not even understand what “doing your expenses” means. When you explain to them how you used to do it in the old days, they will look at you in the same way that we would look at someone today if they described having to walk over to the TV and turn the dial to change the channel, or dialing a telephone number on a rotary phone. The First Wave How did we get here? The first wave of expense management innovation began in the late 1990s and lasted until the launch of the iPhone in 2007. The focus initially was automation and policy enforcement. The main players were the big enterprise resource planning (ERP) vendors, which built T&E applications as an extension to the ERP suite. These “solutions” were better than the decentralized, Excel-based systems most companies had been using up until that point. Expense management became easier in the sense that there was now a central tool where the company could specify certain policies, and employees could input their expenses. If something was out of policy, it didn’t have to be reimbursed. See also: Innovation Pivots: 10 Lessons Learned   These early tools helped with policy enforcement and vastly reduced the number of Excel spreadsheets floating around, but they didn't really go far enough. Employees found them extremely difficult to use. While they provided a user interface in name, it was clear that the vendors had not considered optimizing the user experience at all. What enabled this shocking lack of attention to the end user was the fact that ERP solutions were sold exclusively to finance and to IT, without any end users involved in the purchasing process. As the adage goes, “If you’re not at the table, you’re on the menu.” The frustration of end users would prove this to be true. The Second Wave Finally, in 2007, Apple launched the product that changed several industries: the iPhone. In expense management, the iPhone enabled a second wave of products that were not ERP-based, unleashing a classic wave of rapid innovation across the whole space. For the first time, we saw the rapid rise of cloud-based, pure-play expense management solutions. These applications offered a more nuanced approach to everything from user experience to reporting to approvals. There was a much better marriage of the needs of the user and the needs of the company. The biggest breakthrough, of course, was giving travelers the ability to do many expense reporting and approval tasks on their mobile phones. Today, as we pass the tenth anniversary of the iPhone launch, we can look back and say that, during this decade, we have succeeded in porting over the same old highly manual desktop-based processes into our mobile phones. Indeed, if we look at it simply from the perspective of being able to do everything on the phone that we can do on the computer, then it appears that we have tapped out all the innovation in this space. We’re done, right? Nothing could be further from the truth. We have been asking ourselves the wrong question this entire time. The question we were asking before was: How can we make this faster and easier? We’ve now done that in many ways that would have seemed futuristic just a few years ago. You can take a picture of your receipts on your phone, and they go right into an expense line. We can use GPS to automatically calculate your mileage. You can even speak your expense lines directly into your phone, on the go, when you’ve got a carry-on bag on one hand and you’re trying to catch your flight. The first two waves were about simply transferring the same level of work to more convenient mediums, first from Excel to an ERP-based specialized tool, then from the desktop computer to the mobile phone. However, the third wave will be about eliminating the work altogether. The Right Question The right question, as it turns out, is: Why are we spending any time doing this manual work in the first place? If you’re traveling and expensing for work, chances are good that you are a highly paid and thus highly valued employee. Why would your company want you spending any time at all on an activity that adds no value? Sure, there is a communication issue. Somebody needs to know exactly what has been expensed, and it has to be coded so that the finance team will understand and be able to approve it. But, in the not-too-distant future, employees will no longer have to take photos to communicate this information. They won’t even have to speak into their phone, and they will certainly not be typing anything at all into their phones or computers. Their transactions will automatically be recognized as either business spending or personal spending based on artificial intelligence that understands their patterns as a user and as a mobile traveler. This is a future state that we can all embrace. Following the Money How will this happen? Here's one possible way: payments. Today, we very rarely see cash payments any more, especially among millennial employees, who already represent the biggest demographic in most workplaces. Shifting to 100% electronic payments paves the way for a much bigger convergence between credit card and payment companies and expense management providers to share data. We already have partnerships between credit card companies and expense management vendors where transactions through a credit card partner automatically go into the expense management system. I believe we will see this on a much larger scale. Expense management technology will evolve to where the tools will be able to look at all the payments an employee is making, identify those that are business expenses and bring them in for reimbursement, perhaps even immediately. The concept of an expense report will be as foreign in the future as the concept of a typewriter. See also: Key Trends in Innovation (Part 7)   Certainly, there may be privacy considerations about allowing your employer access to your spending data, but it seems that majority of us have proven ourselves willing to sacrifice privacy for convenience, and repeatedly. We did it with mobile phones, where we allow location tracking so that we can use our maps apps. We did it with web browsers, where we allow companies to track our browsing history and market to us directly with banner ads. We did it with online payments, where we willingly hand over confidential credit card data. Does anyone doubt that we will do it again with expense reports to enable faster, more accurate repayment with less hassle? In this new world, business travelers will simply live their lives. When travel is booked through the company booking system, perhaps automatically based on scanning your emails for coming meetings away from your base locations and with knowledge of your travel preferences based on your history, all the details of the trip will be instantly shared with your expense system. When your trip starts, the expense system will begin recording and populating the expense report using payment, GPS and other data, with no effort needed. Any non-compliant activities will be flagged before they happen. For example, in the late afternoon, you might get a push notification reminding you of the spending limits for dinner and suggesting some nearby restaurants that would fit the bill. When the trip ends, the traveler gets a completed report to approve for reimbursement. That’s what the third wave of expense management solutions will do for corporate travelers. It’s an incredibly exciting time to be in this space.

The first two parts of this series are here and here. William Gibson, the author, once said, “The future is already here - it's just not very evenly distributed.” So what is "already here" in relation to claims handling? Two data points:

• Lemonade, the new U.S. insurer, says it has used AI to complete the entire claims process in less than three seconds.
• Fukoku Life, in Japan, expects 30% efficiency gains from replacing employees with an artificial intelligence system that can calculate payouts to policyholders.

See also: ‘Gig Economy’ Comes to Claims Handling   The Insurer of the Future will handle almost all of its claims automatically, without human intervention. It will:

• Detect claims using sensors on the Internet of Things (IoT) and data feeds from, for example, death registries
• Analyze those claims by drawing on multiple internal and external data sources and applying artificial intelligence (AI) to establish what needs to be done
• Assess appropriate reserve values and input them to the insurer’s financial systems
• Trigger external supply chains, such as clean-up and restoration services, body shops and online retailers, to return the policyholder to the pre-loss state
• Instruct loss adjusters where necessary, ingest their subsequent reports and act on their findings
• Make payments directly into policyholders’ bank accounts where appropriate
• Trigger, and follow up on, recoveries and reinsurance claims as needed

See also: Insurtech: Can It Help Claims Experience?   In the early days, this will happen for simpler claims only. But in due course, as the abilities of cognitive/AI systems surpass those of humans, claims personnel will no longer be required by the Insurer of the Future.

Health literacy and effective decision support tools are the “soft underbelly” of Healthcare Consumerism (HC). Creating smart patients lags behind the other building blocks of HC. If this area of current weakness is not resolved properly and/or if plan sponsors do not emphasize and support health literacy in materials and actions, HC may fail. To be successful, HC should have extensive educational, informational and decision-supporting tools. The plan member needs help with product selections, and patients need support with clinical options, cost concerns and lifestyle decisions. These tools serve as the foundation for encouraging behavioral changes by helping individuals make informed health care and medical treatment decisions. Information is intended to supplement the patient/physician relationship and provide a level of understanding about a potential or proposed course of treatment. Decision aids help shape consumers’ knowledge of the benefits and patients’ understanding of the risks of each treatment option. With improved knowledge of expected outcomes, consumers using decision guides have been more involved and effective in making decisions as partners with their doctors. Five compelling points underline why consumer decision guides are an integral part of the HC process.

1. Patients as consumers want information — and control. They want to pick their health plans, doctors and treatments; they want information, options and involvement.
2. Patients as consumers use — and like — decision aids. When offered and effectively communicated, people use them and find them helpful.
3. Decision aids change minds. When personal choice plays a critical role or patients are undecided about their options, decision aids are particularly useful.
4. Decision aids improve the quality of care and lower costs. Informed medical decisions can reduce unnecessary visits and services, increase use of highly effective services and ultimately lower costs.
5. Decision aids are getting smarter. Use of prescribed decision aids have become increasingly effective as health plans use predictive modeling to identify specific opportunities to support smart decision making.

  Health Literacy by Generation First Generation Decision Support First generation decision support services focus on providing members information on discretionary expenses such as, prescription drugs costs, relative office visits costs, plan comparison cost calculators and basic clinical library information. See also: Insurtechs Are Pushing for Transparency   Consumer information tools help individuals assess the relative value of purchases, whether paid for personally or covered by their medical plan. Such tools may help individuals:

• Compare benefit plans;
• Evaluate wellness, wellbeing and preventive care lifestyle changes;
• Locate in-network providers;
• Select alternative prescription drugs based on cost and efficacy;
• Evaluate the risks and benefits of expensive procedures or tests;
• Compare providers based on quality indicators; and
• Understand acute and chronic conditions and how best to manage them.

Second Generation Decision Support Appropriate content, form of messages and good programs and tools are necessary but not sufficient to change consumer and health behaviors. Second generation decision support tools that focus on changing health and consumer behaviors require active patient involvement with learning, practice, reinforcement and rewards. Although measurement of the value of behavioral changes can be challenging, collection and evaluation of program metrics are essential. The road to providing education and support tools is neither an easy nor a short path. A Kaiser Foundation study of how consumers compare the quality of health care among different providers showed they would first seek a friend or family member, followed by a health care professional. At the bottom of the list fell published materials and a toll-free number. More recently, health consumers have shown a strong interest in web tools. Smart phone technology and readily available phone apps are easy and convenient sources of medical information. Be sure that plan members are provided the right tools that are consistent with the plan design and coverages. Without question, HC requires significant effort and responsibility from individuals. They must make decisions about how they want to spend their healthcare dollars, which providers to see and what services are necessary. Both proponents and critics agree that success depends on members making good health and healthcare decisions based on medical evidence, personal preferences and overall value. For HC to ultimately succeed within an organization, it must put interactive action-based health decision tools into the hands of its members. Below is a listing of typical decision support tools. Basic Design Information: —HRA fund accounting —Underlying PPO plan design —Disease and/or medical management —HSA fund accounting —Debit/credit card Personal Benefit Support: —Plan comparison cost estimator —Account balance —On-line claim inquiry —Summary plan description Personal Health Management: —Health risk appraisal —Health & wellness information —Targeted health content —Medical record, history —Health coach Provider Selection Support: —Physician quality comparison —Physician cost comparison —Hospital quality comparison —Hospital cost comparison Care Support: —On-line provider directory —Provider scheduling —On-line Rx comparisons —On-line patient decision support —24/7 nurse line Third Generation Decision Support Tools Third generation tools extend the impact of decision support tools to other health, safety and performance metrics of an organization. Aggregated claim and risk assessment data can serve as the foundation to help identify opportunities for ongoing improvement in the health needs of the employed population. Targeted information, assessment, self-help and interventions in areas such as stress relief though lifestyle change and work process changes can have a dramatic impact on health and performance. In addition, organizational resources (other compensation, safety and recognition programs) may be better leveraged to optimally engage and support the employee’s health, well-being and productivity. For example, there can be an integration of and hot links to HR programs of financial management, leadership training, family support programs and other corporate self-help and training. Fourth Generation Decision Support Tools Fourth generation decision support tools will focus on the individual needs of each member. As fourth generation concepts develop, vendors can provide “arrive in time” information and services at critical moments for care. “Information therapy,” as promoted by Healthwise, suggests the active use of patient oriented information with clinical evidence based medicine. Information needs to be embedded into the process of care — as information therapy. See also: Is Transparency the Answer in Healthcare?   “Information therapy” is the prescription of specific, evidence-based medical information to a patient, caregiver or consumer at just the right time to help that person make a specific health decision or behavior change. It is the ultimate consumer decision support aid. For example, Healthwise identifies potential of “prescribing decision support” aids for each of the following tests and treatments:

1. Prostate surgery
2. Back surgery
3. ACL surgery
4. Coronary artery bypass surgery
5. Medication for depression
6. End-of-life care
7. Prescription of beta-blockers following heart attacks
8. Early-stage breast cancer testing
9. Colon cancer screenings
10. Immunizations and eye test reminders for diabetics

Information is powerful if used as an important part of medical care and if supported with incentives and part of a value chain for treatment. If properly integrated into care, it can be as important to health and healthcare as a medical test, medication or treatment. With good information, people can achieve better health outcomes at lower costs. With good information, consumers will be better equipped to fully accept their role in the new world of HC. The information presented and contained within this article was submitted by Ronald E. Bachman, President & CEO of Healthcare Visions. He is the author of a book entitled “Understanding Healthcare Consumerism.” You can find more information and free videos regarding Health Literacy and Healthcare Consumerism at www.ihcuniversity.com.

In recent months, we have witnessed a series of significant events producing large — and mostly uninsured — economic losses. The Equifax data breach exposed personally identifiable information from more than 140 million consumers; there were tens of billions of dollars in flood losses from Hurricanes Harvey and Irma; and the damage costs from long-term power outages and business interruption losses stemming from Hurricane Maria’s devastation in Puerto Rico are still being calculated. All those underscore the low level of insurance penetration for perils like flood, cyber and contingent business interruption even in the U.S., one of the most highly insured economies in the world. Spurred by the growth of new technologies, the advent of new business models reliant on increasingly complex supply chains and the dynamic forces of climate change, emerging risks such as these have become increasingly important to consumers and businesses around the world. At a recent industry gathering, Mike McGavick, CEO of XL Catlin, asked how the insurance industry can remain relevant to its customers when it has seemed unable to develop insurance products to protect against some of the most critical risks facing policyholders in our modern, connected economy. It is an important question. While the insurance industry’s development of new products has typically lagged in the changes in technology and risk environment that drive demand for protection, the wave of new products, business processes and companies from insurtech startups can help insurance industry incumbents to accelerate their response to a changing risk environment. There are three categories of insurtech innovation that will be critical to this evolution: data, analytics platforms and tradable risk. See also: 8 Exemplars of Insurtech Innovation   Over time, free-market economies have evolved in ways to manage a variety of risks through the use of insurance. But the fundamental nature of emerging risks has challenged the insurance industry’s ability to develop new insurance products and price those products using historical data that actuaries typically rely upon to parameterize their pricing models. Even if such historical data existed, it would have limited predictive value for emerging and changing risks such as cyber because of the dynamic nature of the risk, as hackers constantly develop new methods to evade security and more and more of our intellectual and physical assets become interconnected through the internet. And the forces of climate change are quickly rendering historical data sets obsolete — even for classes of risk like hurricanes that have been considered to be well-understood. A number of innovative companies, both insurtech startups and a few more established enterprises, are building new platforms and data collection modalities designed to enhance the amount, granularity and quality of underwriting data for a broad range of traditional and emerging classes of risk. Companies like reThought Insurance (US flood insurance MGA), Audeamus Risk (a platform for managing and underwriting operational risk) and both Cyence and Symantec in the cyber risk area are collecting unprecedented amounts of data, including new data elements that can provide real-time indicators of changes in risk profiles in these areas. Other new technologies including sensors, wearables, telematics and social media networks can capture types and quantities of data far beyond what insurers have used to set premium rates and loss reserves. These new datasets can provide insurance and reinsurance companies with more extensive amounts of data and real-time information, allowing a carrier to track and monitor its policyholders with far more timely and actionable information than has previously been available. Increased quantity and quality of exposure data is a prerequisite to insuring emerging risks, but making sense of this tsunami of data requires other forms of innovation. Developments in artificial intelligence and machine learning provide new tools that can allow insurers and investors to filter vast data sets to isolate the variables with the most predictive value in signaling relationships between exposure and claim activity. But improvements in data collection and analytics alone are not sufficient to provide the risk-bearing capacity needed to accommodate emerging risks with the sheer volumes of exposure to loss of flood, cyber and contingent business interruption. A new approach is needed to develop vehicles through which the risk burden — and profit potential — can be spread beyond the insurance industry to tap into deeper pools of capital. The capital markets are great for this kind of creativity, as evidenced by the creation and development of asset-backed securities markets over the past 40 years, which brought liquidity to markets for mortgages, credit cards and auto loans. Since the 1990s, the insurance industry, where reinsurers historically have served as the “lenders of last resort,” has seen the emergence of capital market solutions to manage accumulations of risk. These have taken the form of so-called “alternative capital” products that have enabled hedge and pension funds to assume property reinsurance risk through catastrophe bonds and similar vehicles. In recent years, these products have served to dramatically decrease the cost of capital in the catastrophe reinsurance market while creating a high-yielding investment opportunity whose returns are uncorrelated with equities or interest rates. At Extraordinary Re we have built a trading platform for insurance risk, initially targeting “extraordinary” risk classes such as cyber and flood. By embedding our trading platform inside a reinsurance company, we bridge the insurance and capital market worlds, enabling insurers to transfer accumulations of risk to institutional investors in the form of tradable reinsurance. This innovation allows investors to assume risk in a liquid market with the ability to control the amount and types of risk and the timeframe over which that risk is carried. That permits the allocation of capital in a more flexible manner than is possible in the insurance industry, which takes a “buy and hold” approach to underwriting risk. It will even become possible for different investors to hold shares of a single reinsurance risk at different points in the lifespan of that risk between policy inception and the date when the last claim is settled. A trading market allows risk to be allocated to the most efficient (and lowest cost) capital provider throughout the term of each risk. See also: Insurtech: Are We Waiting for Godot?   The creation of this risk-transfer market produces a new source of data that will provide new benchmarks for pricing and valuation, leading to new product development efforts among the insurance companies originating the risk. Such an information feedback loop is particularly valuable for rapidly changing types of risk, where investors’ trading responses to real-time changes in the risk environment (including changes identified using new data sources and analytics) are likely to have far more predictive value than any historical data set. Only the global capital markets can provide the resources of liquidity and expertise to value and manage emerging risks. If the economic history of capitalism has taught us anything, it’s that a liquid trading market is the best mechanism for allocating capital and pricing risk in a dynamic and changing environment.

I have tracked insurer IT budgeting and planning for more than a decade. During that time, there has been one major shift: Core systems replacement went mainstream as fear of inaction surpassed fear of change. Otherwise, I used to joke that I could republish a prior year’s study and no one would notice. This year, however, we may be starting to see some real evolution in insurer IT spending and planning. Security issues and innovation are breaking into the list of top concerns and challenges as multi-year core systems projects started in previous years are being completed. While average spending patterns haven’t yet changed significantly, there is a shift in priorities and challenges — and an increased variability in the sample of the nearly 100 insurers who participated in Novarica’s 10th annual study. Property/Casualty: Analytics and Speed to Market For property/casualty insurers, business intelligence and analytics are the most frequently cited areas of need; more than half of P/C insurers put it in their top three needs (followed by distributor ease of doing business and speed to market for product changes). Note that if the responses for speed to market for product changes are combined with the responses for speed to market for true new products, that becomes the most common area of priority for P/C leaders. Large P/C insurers are generally more optimistic about the capabilities of their key applications, except for CRM and portals. Core systems replacement activity is significantly lower this year than in previous years — partly because of variations in the sample, but also reflecting the effects of prior investments. Midsize P/C insurers are more conservative in their self-assessment than their larger peers, with more than 30% rating their own capabilities as “poor” or worse in customer portals, CRM, UW workbench, BI and predictive analytics. More than half are currently engaging in core policy administration system replacement or are planning to start a new replacement in 2018. See also: My 4 Ps for Investing in InsurTech   Life/Annuity: Digital For life/annuity insurers, the most commonly demanded business capabilities are digital marketing and customer engagement, surpassing even the combination of speed-to-market for product changes and true new products. Other common high-priority areas for life insurers include optimizing internal workflow (also a digital capability) and reducing operating expenses. In aggregate, large life/annuity insurers are most confident in their distribution and compensation management and CRM abilities and are least confident in their abilities in analytics, digital engagement, underwriter workflow and core policy administration. This correlates with significant replacement and enhancement activity in portals and core admin, as well as significant enhancement activity in analytics. Midsize life/annuity insurers judge their customer portal capabilities harshly, with half rating them “poor” or worse and 40% planning replacements for 2018. Additionally, 30% of the participants in this group are also engaged in core policy administration and claims replacement projects. Innovation and Insurtech While not as high priority as short-term needs, about 20% of respondents did note that the demand to support innovation and leverage insurtech was among their top three business priorities for the coming year. None had it as the business’s top priority, however. Tactical concerns continue to dominate. Security One significant change from last year is the increased citation of security as both a priority and a challenge, with 30-40% of insurers placing it in their top three compared to less than 20% in previous years. Although aggregate security spending levels haven’t changed significantly over the past year, remaining at close to 10% of total spending, security is consuming a much greater proportion of CIO mindshare than in previous years. One CIO said recently that the amount of time he spends on security issues has doubled every six months. More than 60% of insurers are planning to expand their capabilities in key security areas, including device security, application security, intrusion detection and data encryption. Similar numbers are also improving their audits and procedures. Insurers will need to continue to devote additional resources to security in 2018 and beyond. Unfortunately, taking those resources out of insurers’ traditional IT budgets of 3-4% of premiums would mean hamstringing their abilities to develop and deploy new capabilities. Insurers that have not already done so are likely going to create a real IT security organization and budget in addition to, not replacing, their current IT spending if they want to continue to move forward safely. See also: Security Training Gets Much-Needed Reboot   General Outlook Once again, the outlook for insurance IT in the coming year is very similar to the current year — with the notable exception of an increased focus on security. Business leaders are demanding additional capabilities in analytics, digital and speed to market; IT organizations are responding with enhancements of existing systems and replacements of legacy. While replacement activity is still significant, it seems to be ebbing somewhat among property/casualty insurers as the investments of the past decade are going into production. But overall, spending levels will remain essentially consistent, with some insurers spending slightly more, some holding steady and a smaller number making cuts. This consistency itself represents a risk. With security demands growing at the same time as business demands for digital and data capabilities, insurers are not going to be able to meet these concurrent demands within a traditional IT spending framework. Insurers need rethink their approach to IT budgeting. Rather than asking how little they can spend on IT next year, insurers should be asking themselves two key questions: What is the real price of maintaining a robust security program, and how much can I afford to invest in technology to remain competitive now and in the future?

If I were a young actuary or underwriter, I’d be worried — because the Insurer of the Future won’t have much need for my skills. What do these professionals do for a living? They rely on their personal experience and various data sources to understand and price a risk more accurately. Sometimes they carry out complex statistical calculations in support. See also: How Underwriting Is Being Transformed   But the Insurer of the Future will have its experience data captured on its internal systems. It will also tap into vast amounts of additional data available from external sources, some structured, some unstructured. And it will channel all of this data — far more than a human actuary or underwriter could ever handle — to its artificial intelligence (AI) engines. These AI engines will examine the data for patterns, apply multiple statistical models and add their own experience from previous analyses to come up with a much more accurate price, massively quicker than a human ever could. And for the Insurer of the Future, the AI engines will be wired directly into the sales and underwriting processes, which will operate “straight through,” with no involvement from humans. There will be room for some human oversight roles to ensure that the AI engines don’t “go rogue” and generate crazy pricing — but the vast majority of actuaries and underwriters will no longer be required. See also: Strategist’s Guide to Artificial Intelligence   Please see “Part 3 – Claims Handling” for further predictions.

I’m an analog dinosaur in a digital world. In the 1970s, I participated in an organizational planning process that lasted for nearly a year, concluding in an excellent document with many dozens of pages that came to rest on the “bottom shelf” and not the “bottom line.” Then, ours was a Father Knows Best World – driven from the top down, operating at a snail’s pace compared with today, where we live at the speed of thought – where opportunities happen within the blink of an eye. Planning is still critically important, but the process now must be “fast, hot and cheap!” Real fast. To convert this concept of planning to a concrete “Tweet” (fewer than 140 characters), I offer the following formula/framework: Planning includes purpose, passion, perseverance and precise performance creating a personalized and positive client experience. (128 words) This planning can be completely researched in less than an hour or two. I offer the process as “framing your future” – not the pyramid (top-down hierarchical model of yesterday) but rather a square framework capturing the part of the world marketplace that you wish to define and serve. The base (foundation) of this framework is PURPOSE. This is the “why” of your future. Simon Sinek in his video – “Start With Why” –explains this as well as it can be done. If you are serious about the process of planning, start with the first 10 minutes of his presentation. If you don’t have time to do this, quit the process now and “continue to do what you’ve always done.” See also: Go Digital… but Don’t Change Who You Are   The left side of the frame is about PASSION. It is about the drive needed to live your purpose. Check out Susan Boyle’s audition on "Britain’s Got Talent." Watch the audience as she introduces herself – the skepticism of some and the contempt of others. In my mind, they were pre-judging the age, shape and condition of the “jukebox” from the outside and not the excellence of the “sounds (music) and passion” that was inside the “box.” In about three seconds, she won her skeptics over. Passion is needed for success. The top side of the frame is PERSEVERANCE. It is about never quitting. It’s what (I believe) drove our troops onto the beaches at Normandy. It was about prevailing against all odds or to die trying. Check out online – Nick Vujicic, the limbless preacher. After watching about five minutes of any of his presentations, tell me about your problems or why you can't-do something. Perseverance and quitting are choices. One will sustain you; the other will “restrain” you. You choose. Your results will be dictated by the choices you make. The right side of this “planning” model is about performance, precision, and perfecting your product and delivery. It is about standing above the mediocrity that is most markets. It is about exceeding the expectations of your clients and the markets you serve. It is not about being perfect in everything for everybody but is about being relentless in your pursuit of perfection. It is about becoming the “choice” of those individuals and populations that you choose to serve while recognizing they have many, if not unlimited, options. It’s more than “standing out in the crowd” – it’s about your clients and prospects searching for you and the experience you provide TO THEM in a very crowded global marketplace. Sunday morning, my wife and I stopped at Starbucks. She loves the place and its drinks – I visit to observe the culture. I drink a small decaf coffee – she chooses a grande drink defined by words I don’t understand. She’s hip – I have an artificial hip. Although I’m not a fan of Starbucks, I am envious of the marketing genius that was their creation. In 1970, a cup of coffee cost three cents at home and 25 cents out. Coffee was a commodity if you bought it by the pound at your supermarket. If you enjoyed coffee after a meal in a fine restaurant, it could be considered a “service.” Starbucks leapfrogged all these distribution options and made coffee an experience. Today – for its devotees – it remains what some might consider an addiction. As I sat in the Starbucks last Sunday, I watched people stand in line to order their drink du jour and occasionally a “treat” to eat, then stand in line again to await its preparation. Many would grab and go with their drink – others would then move to a small table in a crowded room alone or with their posse – trying to talk loud enough to be heard and soft enough to not be overheard. Get the picture? See also: The Challenges of ‘Data Wrangling’   What caught my eye were the “splash sticks” that were being inserted into the cover of the filled coffee cups. I don’t know if they are there to keep the coffee hot or to keep it in the cup. To me, it was Starbucks' never-ending pursuit for the “perfect experience” for their customer or more correctly their “followers.” Starbucks has been successful – it is the “little things,” the endless pursuit of perfection, that will assure their future. Does your organization live its Purpose, with Passion, Persevering regardless of the circumstances, and constantly monitoring and demanding Performance, Precision and innovating to assure Perfecting the client Experience?

When disaster strikes, organizations can face significant losses—not only from damage to physical property but also from the business interruption caused by the event. Here are five key tips to keep in mind when filing an insurance claim after a disaster: Disaster Response Checklist: 1. Communicate with employees and external stakeholders. Following the activation of an emergency preparedness program, it is critical to communicate with employees and business partners about their well-being, as everyone will be dealing with potentially significant, or even devastating, personal and professional issues. 2. Review your insurance policy. Even if a business does not suffer physical damage, it may have coverage for business interruption losses. For example, if a business’s customers or suppliers have been flooded and cannot receive the business’ goods or services, the insurance policy may include what is referred to as “Contingent Time Element coverage.” Non-physical damage coverage for business interruption losses can also include lack of access to facilities (road closures), government declarations of emergency, cancellation of events or loss of utilities, among others. See also: 6 Reasons We Aren’t Prepared for Disasters   3. Maintain contemporaneous documentation. To say that the hours and days after a disaster are hectic is an understatement. This is a trying time for businesses as they try to rebuild and recover. However, keeping careful records even during this time of disruption is critical. Email traffic around current market conditions, cancellations of sales or suppliers/customers being affected is critical to preserve as it is extremely valuable to a business interruption claim. 4. Get the right team on your side. A major property claim can take several months to resolve, and the complexity of the issues that may arise requires external experts to look out for a business’s interests while management focuses on what is important—rebuilding and recovering. Additionally, the fees paid surrounding disaster recovery services are often reimbursable by the insurance carrier, resulting in no out-of-pocket costs to the affected business. 5. Establish milestones for claim recovery. Following a catastrophe, resources are often stretched thin. It is important to create milestones and hold all members — from the adjusting team to internal stakeholders — accountable for achieving those goals.

Open enrollment for individual health insurance policies is coming up. It is important to be aware of significant changes that will affect those applying for new coverage or changing coverage. Being familiar with these changes will help you successfully keep your health insurance and enroll. Since January, there have been multiple attempts to formally repeal the Affordable Care Act, which all ultimately failed in the Senate. Unfortunately, there is a clear trend that steps are being taken to weaken the ACA. The Affordable Care Act remains in place. Any claims that the ACA or Obamacare are failing or dead are not true. Due to the hard work of multiple state insurance commissioners, as 2018 Obamacare deadline nears, U.S. states believe every county is covered. There is no further pretense: It is Trump vs. the Affordable Care Act. Failing to work with Congress, Trump has through executive actions and the announcement to terminate the payment of cost-sharing subsidies, thrown the entire health insurance ecosystem into greater chaos. The termination of the cost-sharing subsidies is a short-term issue while the executive actions are slightly longer-term. These actions will cause further instability in the health insurance marketplace as it is almost certain that fewer people will enroll in health insurance plans this year. The reduction will mostly come from younger, healthier people, which will lead to a pool of people who have health issues and will have higher claims. Higher claims mean higher premiums. And higher premiums will lead to fewer enrollees leading to a tougher, but not failing market. Michael Che of Saturday Live summed it up accurately with the comparison of Trump tweeting: “The Democrats ObamaCare is imploding. Dems should call me to fix” to Godzilla tweeting: “Tokyo is totally imploding right now. I alone can solve!” Here’s what you need to know about the termination of the cost-sharing subsidies: Insurance companies must continue to offer policies with subsidized premiums to those who qualify (58% of the 11.1 million Americans enrolled in ACA plans). The ACA requires insurers to charge lower out-of-pocket costs to low-income consumers, and the CSR payments compensate insurance companies for doing so. So, CSR payments are not a bail-out for insurance companies. And insurance companies are suing the government to make these legally obligated payments. Insurers have already filed their premium rates for 2018. Insurance companies can still attempt to raise rates or even pull out of some markets. The loss of the CSRs is a huge cost for any insurance company that didn’t price in the possibility of the CSRs being eliminated. However, given that Trump has consistently threatened to not make the CSR payments, insurance companies have for the most part taken this into account; in other words, they were not surprised. Insurance companies can terminate their contact with the federal exchange if cost-sharing reductions are terminated. However, they are still subject to state laws on withdrawing from the marketplace. They can only terminate their exchange enrollees if they fail to pay their premiums, which many people would likely do if an insurance company left the exchange and they no longer received the advance premium tax credit (APTC). A number of states allowed insurance companies to file dual rates, with one set assuming CSRs and the other set assuming no CSRs. Some states had already ordered insurance companies to add a surcharge to cover the potential loss of CSRs. For example, California required an additional 12.4% surcharge on silver plans. To find out how your state is allowing insurance companies to deal with the uncertainty over cost sharing reductions, check out this compilation of data. In fact, Trump’s action would lead to an increase in enrollments in ACA plans in many states, including California, where about 90% of enrollees pay subsidized premiums. Covered California, the state’s Obamacare exchange, calculated in January that the reduction in net, or after-subsidy, premiums in gold, platinum and bronze plans resulting from the higher subsidies would lead to an enrollment increase of 20,000 people, or 1.4%, in subsidized plans. That’s good. What’s not so good is that the change would batter the unsubsidized population — those with income higher than 400% of the poverty level. Bottom line, insurance companies will get less money from the government for helping low-income people with out-of-pocket costs on silver plans, causing silver plan premiums to increase to compensate. That will then trigger the federal government to increase all APTC-based subsidies to make sure people can still afford insurance. And to take advantage of the ATPC and avoid the higher-priced silver plans, people will move to bronze, gold and platinum plans. In fact, Trump's health subsidy shutdown could lead to free insurance. See also: How to Save Individual ACA Market   According to a report by the Congressional Budget Office released in August, “The Effects of Terminating Payments for Cost-Sharing Reductions,” this will result in about 1 million fewer people covered in 2018. However, by 2020, the effect on coverage would stem primarily from the increases in premium tax credits, which would make purchasing non-group insurance more attractive for some people. As a result, a larger number of people would purchase insurance through the marketplaces, and a smaller number of people would purchase employment-based health insurance. The CBO report does not take into account the other changes made by Trump and his administration. Here’s what you need to know about open enrollment: Increased tax credits for those who qualify (84% of enrolled): The ACA includes an additional subsidy that is designed to reduce the cost of premiums, ensuring that family budgets are largely unaffected — it's called the Advance Premium Tax Credit. CSR payments are applied only to silver plans. Insurance companies will add a premium surcharge, then, to the silver plans. Silver plans are the basis for the amount of the APTC that consumers receive. So, for most consumers, an increase in the silver premium will be offset by an increase in the APTC. Because of the application of the CSR linked premium surcharge to silver-tier plans, nearly four of five consumers will actually see their premiums remain the same or decrease as the amount of premium assistance they receive will rise. To qualify for the APTC, your income must be between 133% and 400% of the federal poverty level. The premium increase impact will be heaviest on those who do not qualify for Advanced Premium Tax Credits. Because more people qualify for APTCs, the net cost to the federal government will actually rise. Find out if you qualify for the APTC here. If you are in one of 19 states that did not expand Medicare, your premiums will be higher because there will be a larger number of enrolled who qualified for the CSRs. This will be offset by higher Advanced Premium Tax Credits. Increased premiums for those in silver plans in 2018: Silver plans are the only plans that qualify for cost-sharing subsidies. Without the CSRs, silver plans may no longer be the best choice for many people. The individual mandate remains in place, and there is a minimum penalty ($695 for adults and of $347.60 for children under age 18) for not having health insurance. The maximum tax penalty is $2,085 per household. The IRS has announced that it will not accept a return that does not have the health coverage question completed. There will be a shorter open-enrollment period of six weeks, rather than the 12 weeks in previous years. Open enrollment starts on November 2017 and ends on December 15, 2017. It is important to act quickly and to be aware of this much-earlier deadline. Open enrollment is the only time when you are able to change to a completely new plan on the public marketplace or switch cover tiers, with changes taking effect on January 1. There are special enrollment periods for those who meet certain criteria, such as losing group health insurance coverage. Certain state exchanges have longer open enrollment periods:

• California: runs through January 15, 2018
• Colorado: runs through January 12, 2018
• District of Columbia: runs through January 31, 2018
• Massachusetts: runs through January 23, 2018
• Minnesota: runs through January 14, 2018
• Rhode Island: runs through December 31, 2018
• Washington: runs through January 15, 2018

Note: Insurance companies were in favor of this because the hope is it will encourage healthier people to enter the risk pool. This was also a recommendation in my Health Insurance Roadmap in conjunction with limiting special enrollment periods, which encourages people to keep their policies throughout the year (and keep their paying premiums) rather than hopping in and out of the risk pool. Reduced access to healthcare.gov: HHS has announced it will shut down the federal exchange site for 12 hours for all but one Sunday during the open-enrollment season (December 10) as well as on the first day of open enrollment (November 1). More than 36 states use healthcare.gov for their marketplace.

• HHS has reconfigured its website to make enrollment information harder to access.
• This limited access could have a secondary impact because of additional website outages with greater numbers of people using the site at one time, compounded by the shorter enrollment period.
• Website key point: More than 12 million people enrolled on the state and federal marketplaces for 2017 coverage — with nine million of those enrollments being on the federal exchange.

Marketplace outreach funds have been significantly reduced by 90% (from $100 million to 10 million). Budgets have been restricted to mostly being online — so no television, radio or print ads. So don’t wait for any advertising for healthcare.gov .

• Earlier this year, the administration pulled paid advertising for sign-ups on HealthCare.gov.
• HHS has, instead, produced videos designed to undermine public support for “Obamacare” with funds that were intended to help promote enrollment in the ACA. These “testimonial videos” feature individuals claiming to have been harmed by the ACA.
• These actions have prompted an inquiry by a federal inspector general into these decisions and regarding whether they have had a negative impact on sign-ups.

Less help with open enrollment, cuts of 90% to navigators — this reduces the ability to get advice to review different plans. For the most recent open enrollment period at the end of 2016, navigators received over $62.5 million in federal grants while enrolling 81,426 individuals for an approximate cost per enrollee of $768. For this open enrollment period, CMS plans to spend $10 million on education activities. (Source: CMS Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period.) Funding for in-person outreach has also been cut in half, from $62.5 million to $36 million. The Trump administration has ended contracts with firms that have provided in-person assistance to states using healthcare.gov. Regional representatives from the HHS will not be participating in open enrollment events in states and with health advocacy groups as it had done in the past so to reach uninsured populations by helping with sign-ups in terms of explaining, enrolling and shopping. Here’s what HHS press secretary Caitlin Oakley had to say last month: “Marketplace enrollment events are organized and implemented by outside groups with their own agendas, not HHS. These events may continue regardless of HHS participation.” She went on to say, “As Obamacare continues to collapse, HHS is carefully evaluating how we can best serve the American people who continue to be harmed by Obamacare’s failures.” Navigators from multiple states are reporting issues with the online training certification videos. See also: 10 Ideas That Could Fix Healthcare   According to Sheila Quenga, director of the Palmetto Project, software programs are occurring more frequently than in the past, and it can take weeks before CMS resolves an issue. This is the Latest Snag In ACA Sign-Ups: Those Who Guide Consumers Are Hitting Roadblocks. What to consider when reviewing your options:

• If you are getting a subsidy, it is recommended that you review alternatives on healthcare.gov or your state health insurance exchange.
• Find out if you qualify for the APTC here.
• Review the total costs of premiums and deductibles and estimate co-payments and coinsurance.
• Make sure the plan covers your medical providers and medications.
• Use the optimal insurance deductible calculator to find the deductible that provides the most value to you.

Here are some resources to help you with open enrollment:

• healthcare.gov — Check it out before open enrollment to review your options so you can be prepared.
• State insurance departments. Find a link your state insurance department here.
• Private groups, consumer advocacy groups and insurance companies. For example, a new campaign, “Get America Covered,” is going to run digital advertising and will partner with employers, community organizations and other entities. Its staff and co-chairs draw heavily from people who worked on ACA enrollment in the Obama administration's HHS. The campaign draws on a mix of health-policy wonks, celebrities and political figures: Democratic activist Van Jones, actress Alyssa Milano, actor Bradley Whitford, ousted health insurance CEO Mario Molina and former Obama health care official Andy Slavitt. Other advocacy groups include Out2Enroll, Young Invincibles, Community Catalyst and the Get Covered Coalition. Unfortunately, HHS is the only entity that has access to records of who’s insured, so the lack of data will lessen the impact.
• PolicyGenius has put together the comprehensive “Your state-by-state guide to the 2018 health insurance open enrollment period.”

If you have group health insurance through your employer, be aware of your open enrollment period and options. What’s next? The best outcome is that this might finally spur a true bipartisan effort. Trump’s actions can be remedied by Congress acting to guarantee funding the cost-sharing subsidies. And while a bipartisan deal, the “Bipartisan Health Care Stabilization Act,” has been reached by Senators Lamar Alexander and Patty Murray, President Trump has repeatedly switched from supporting it to not supporting it. The other question is whether Senate Majority Leader Mitch McConnell will do the right thing and put this deal up for a Senate vote, with the speculation being that he won’t. Currently, the bill has 22 additional co-sponsors (11 Republicans and 11 Democrats), so it seems feasible that it could actually pass in the Senate. Then the question becomes getting the bill through the House, where Speaker Paul Ryan has come out against it and may not let it be put to a vote. House members have already approved an Affordable Care Act change bill, H.R. 1628, that would continue funding for the cost-sharing reduction subsidy program for two years. The other likely scenario is that with budget talks coming up, an Obamacare fix could end up in year-end package. Either way, this would not remedy any cost-sharing subsidies not paid and may come too late for insurance companies to change their 2018 premiums. So, please start early and be prepared. As you should always do with any type of insurance, it’s important to understand what your health insurance options are and obtain coverage accordingly. To get the best plan at the optimal price, shop and compare the different tiers. The bottom line to get the best plan at the best price: shop and compare all plans, even if you currently have a policy.

Digital technologies have the power to re-design insurance. A host of benefits lie within the front-end customer experience, but insurers stand to gain just as much from the digitalization of the back-end operations, including the claims process.

• According to the Insurance Information Institute, 64% of insurance premiums (nearly 2/3 of every dollar) are used to pay claims and adjustment expenses.
• Digital answers to loss reduction and loss prevention stand to yield the greatest profit for insurers.

This is critically important in an era where catastrophic claims seem to be more important and subsequently have the potential to do significant damage to an insurer’s bottom line. In our last blog, we looked at the impact of digital technologies on the claims value chain. The hurricanes, hail storms, tornadoes and fires of 2017 have given all insurers a wake-up call to claims preparedness. We listed out many of the ways that technology has the potential to improve catastrophe management and claims experience. In this blog, we’ll look more closely at operations. How can operations look at catastrophic events differently? How can it prepare for both internal and external impact? Can our redesigned claims experience create real value? A holistic approach to catastrophic claims From Aug. 12-23, Hurricane Harvey was tracked and classified between a tropical storm and a tropical wave. It suddenly started gaining strength as a tropical storm on Aug. 24. Overnight, it rapidly became a Category 4 hurricane, making landfall at Rockport, TX, on the 25th. In the days prior, NASA and many U.S. insurers shared a concern. What would happen to the city of Houston? Hurricane Harvey was not only going to do catastrophic damage, displace thousands of people and potentially disrupt many businesses, it was going to hit the Johnson Space Center, home to the operations for the International Space Station (ISS). The ISS receives as many as 50,000 different commands from Houston in any one month, making corrective maneuvers and steering the station away from harmful debris. Systems could not go down without safety concerns for the ISS. See also: Using Catastrophes to Rethink Claims   NASA is adept at preparing for anything. When they aren’t launching rockets, monitoring rovers and steering the space station, they are running through scenarios to improve their ability to handle any situation. In this case, they did have a plan. They remained vigilant, and they rode out the storm. Insurers now have NASA-like capabilities to use data and digital technologies to their advantage. They, too, can look at the entire sphere of a catastrophic event and find ways to protect themselves and their insureds while optimizing every asset. Pre-Crisis Efforts Insurers are known for standing by their clients in the aftermath, but what about standing by their clients before crisis hits? Last month, in one of the biggest evacuations ever ordered in the U.S., roughly 6.3 million people in Florida — more than one-quarter of the state’s population — were told to clear out from areas threatened by Hurricane Irma. Another 540,000 were directed to move away from the Georgia coast. Insurers can wait for the government to issue general warnings, but they can take control of communications with their customers by adding digital capabilities. Insurers are armed with ever-improving risk models. They have unprecedented access to customer-specific, property-specific and economic-related data as well as other types of valuable data, including climate and location data, traffic data and telematics data. Insurers are increasingly pulling this big data together for real-time analysis, cognitive learning, insight and decision-making … including to minimize or eliminate claims. Insurers are also in a better position to help properly categorize storms and crises, leveraging digital technologies such as analytics and artificial intelligence. Using this data, insurers can personalize communications through digital channels that can reach the people that are in the risk zones with highly specific loss and risk prevention measures. Texts, e-mails, automated phone calls with clear directives can greatly help customers who are often panicking, lack detailed information or can be indecisive. This is the trending wave of insurance transformation at its best. Preventive communications can be targeted individually, giving insureds all of the vital information they need to protect themselves and their property, an area of increasing interest and expectation by customers we identified in The Rise of the New Insurance Customer and The Rise of the New Small Medium Business Customer research. In Majesco’s recent white paper, Changing Insurance for the Digital Age, we discuss how the future is not only becoming more foreseeable, but it is also becoming more volatile. The result is that insurers will be shifting from risk coverage to risk prevention. The most sought-after portion of the claims value chain may be the network of data and technologies that prevent or reduce claims. These prevention services will soon be new sources of revenue.  During the Catastrophe During the 2016 Ft. McMurray wildfires in Alberta, Canada, an estimated 88,000 people were displaced from their homes. Most had no idea where to go, and many refugees found themselves without adequate short-term housing. The digitally enabled insurer can help direct insureds to likely locations of refuge and even offer housing discounts or pre-paid lodging to those who are displaced. This kind of communication and service will build strong loyalty among insureds, while providing marketing with a host of compelling stories with happy endings. What happens, however, when the insurance organization itself is in the same line of storms, fires or earthquakes? NASA, during Hurricane Harvey, had contingency plans in place. Should ground teams need to be evacuated, they would be moved temporarily to Round Rock, TX, then for a longer term to the space center in Huntsville, Alabama. Many insurers had their claims adjuster crews prepared, and drone capabilities in place, but were less prepared if their systems and operations were affected, primarily due to their large on-premise operations.  While many insurers have disaster recovery plans, they must ask themselves if their operations can scale rapidly to handle the onslaught of calls, claims and needs. How will operations be managed remotely if staff are unable to get access? Which customer service centers may need to be relocated, and how will they handle the potential of consecutive catastrophic events … like what we saw in Houston and then Florida? See also: Catastrophes and ‘Do Little’ Syndrome   Cloud business platforms are perfect for handling claims operational requirements. They are always on, most often are located off-site, are easily scalable and often are managed by someone outside the organization … providing access to critical resources. While systems are attempting to handle hundreds of adjusters at once, customer service may also be handling thousands of customer inquiries. Insurers need the capacity and stability that a cloud platform can supply. Cloud platforms are the perfect foundation for constructing a catastrophe-proof claims value chain. Post-Crisis Restoration In addition, the right cloud platforms can handle the plug-and-play technologies that are increasingly used by claims departments for post-claim services. They can handle images and video from drones, photos from mobile phones and tablets, simulation data, cognitive computing decisions (with speed) and a high volume of communications — automated, human and chatbot. These same technologies will aid in adjuster mobilization, prioritization and routing. In the next blog in this series, we will look specifically at how digital technologies will help claims to build relationships with customers. Where are the effective touchpoints in the claims process? How can an insurer “take control” in the relationship and gently guide policyholders into best practices and safer circumstances? What can insurers do to stand by their policyholders during the restoration or rebuilding process? At the same time, we will look at how insurers in the future will use data and AI to spot fraud and cut costs. For a deeper look into the data strategies and predictive analytics that are having an impact on the complete insurance value chain, be sure to read Majesco’s report, Winning in a New Age of Insurance: Insurance Moneyball.