It’s time for the 2017 Deplorables Awards, lovingly bestowed on those vendors who do the best job making other vendors look good.  The good news is that you don’t have to actually win the Deplorables Award to sue me.  Runners-up are eligible, too. Here is my address for hand-service delivery most of the year: 890 Winter Street #208, Waltham MA 02451 In case you decide to sue me between June 22 and Aug. 8, use: 8 Paddock Circle, Chilmark, MA 02535 And don’t leave out my attorney: Josh Gardner, GARDNER & ROSENBERG P.C., 33 Mount Vernon St., Boston, MA 02108 I don’t know how much more I can do for you, other than lick the envelope. So go for it. Don’t make me beg. But, remember, unlike with your usual business model, in court you are required to actually tell the truth (I would be happy to explain to you how that works), meaning there is no chance of your winning — or likely even avoiding summary judgment, because none of the evidence is in dispute. It’s all your own writings. Oh, and I do my own cross, which means you won’t be able to find an expert witness. Anyone who knows enough about wellness to be an expert witness also knows enough about wellness to know that attempting to defend you would be a humiliating, on-the-record experience. And there is always the chance that some annoying jerk might blog about it… The 2017 Runners-Up Springbuk and Fitbit As many of you recall, earlier in the year we analyzed the study done by Springbuk that was secretly financed by Fitbit. Or maybe I need new glasses, because I just couldn’t find the disclosure in the Springbuk report that this paean to Fitbit was financed by Fitbit, much as Nero used to have the judges award him Olympic medals. Coincidentally, the study showed Fitbit saving gobs of money because employees taking more than 100 steps a day spend less money than those taking fewer. However, a simple tally of one’s own footsteps shows that it is impossible not to take 100 steps a day unless you are both:

1. in a hospital bed; and also
2. on dialysis.

This 100 steps-a-day threshold was repeated many times in the study, with no explanation of how that number came to be. However, it turns out we owe these two outfits an apology. Fitbit and Springbuk have told a number of people privately (not publicly, to avoid an embarrassing news cycle) that they didn’t really mean to say that 100 steps a day constituted activity. They meant to say that taking 100 steps a day implied you had your Fitbit on. My apologies for failing to read their minds that their conclusions were based on reading people’s minds to determine whether they wore the Fitbit deliberately, or simply forgot/remembered/cared to put their Fitbit on. Springbuk and Fitbit never did explain — privately or publicly or to anyone — how employees who took an average number of steps during the baseline year could show huge savings by taking an average number of steps in the study year, too. They also never explained how these two statements didn’t completely contradict each other, even though I specifically asked them to in a personal letter, excerpted here: Third, can you reconcile this statement…: “The materials in this document represent the opinion of the authors and not representative of the views of Springbuk, Inc. Springbuk does not certify the information, nor does it guarantee the accuracy and completeness of such information.” …with this statement: “This demonstration of impact achieved by integrating Fitbit technology into an employee wellness program reinforces our belief in the power of health data and measurement in demonstrating ROI,” said Rod Reasen, co-founder and CEO of Springbuk.  National Business Group on Health Next up is the National Business Group on Health. Last year, they made the list for criticizing the U.S. Preventive Services Task Force for not demanding enough screenings, in a country that is drowning in them. Not content to rest on those laurels, this year they earned an Honorable Mention for inviting Dr. Oz to keynote on the role of quackery in corporate wellness, and perhaps tell us about his latest lose-weight-by-eating-chocolate miracle diet. See also: How Advisers Can Save Healthcare   Health Enhancement Research Organization HERO, of course, also earns a runner-up award. 2017 will be remembered as the year they finally came to grips with the realization that a business model based on fabricating outcomes requires that perpetrators possess that critical third IQ digit. Without that extra “1”, an organization trafficking in math that can at best be considered fuzzy is going to be outed. This year’s set of lies?  By way of background, their 2016 poison-pen letter insisted they had fabricated that data set showing that wellness loses money without disclosing that it was fabricated — and also never reviewed their fabricated data before publication. Early in the year, I had the insight that, wow, this “fabricated” chapter in their guidebook is so much better than the other chapters that something is amiss. No one at HERO can analyze data competently…and yet, here it was, a competent data analysis. I did something I had never thought to do before, which was look up the actual author of that chapter. It was Iver Juster, MD. He was a great analyst even before he read all my books, took all my courses and achieved all my certifications in Critical Outcomes Report Analysis. So I called Iver. Here’s what I learned:

1. Whereas Paul Terry and Ron Goetzel had insisted that Iver fabricated the data, Iver said that, of course he didn’t — whatever made me think that?  (“If it wasn’t real, I would have disclosed that,” he observed. Of course, he would have. Iver has tremendous integrity.)
2. The board discussed and reviewed his chapter at length and made helpful suggestions, for which he was quite grateful. This review process required “countless hours,” just as the HERO document says:

The number of  transparent lies HERO tells could make a president blush. In the immortal words of the great philosopher LL Cool J, they lied about the lies they lied about. Even though 2017 was an off-year for them in terms of the number of lies, they still told enough to be named a runner-up. Wellness Corporate Solutions Next is Wellness Corporate Solutions, famous for its crash-dieting contests. WCS now offers a water-drinking contest. The idea is to set up a “challenge” for your team to drink more water than other teams. They call this a “healthy competition.” I guess they didn’t get the memo that forcing yourself to drink when you don’t want to drink, just to make more money, is anything but healthy. Here is a novel idea: Drink when you are thirsty.  Evolution 1, WCS 0. Perhaps as an encore, WCS, Dr. Oz and the National Business Group on Health could team up to offer a chocolate-eating contest. I looked into this outfit to see where they get their ideas. The CEO previously ran something called the Washington Document Service. That qualifies her to run a wellness company. As Star Wellness says, to run a wellness company successfully, your background needs to be in sales, or “municipality administration.” After all, what is more central to administering a municipality than documents? Wellsteps What fun would a list of runners-up be without Wellsteps, the  proud recipient of the 2016 Deplorables Award? While their streams of consciousness weren’t as memorable in 2017 as in 2016 (“It’s fun to get fat. It’s fun to be lazy“), they get credit for trying. Their 2017 weight-loss campaign was headlined: “This campaign is not really about weight loss, it is about helping you apply the behavioral secrets of those who have lost weight.” So if your kids ever want you to teach them how to ride a bike, say: “It’s not really about riding a bike. It’s about helping you apply the secrets of people who have ridden bikes.” And what secrets are we talking about? What person who has lost weight doesn’t brag to everyone or even write a book?  If there is a secret to weight loss, like eating chocolate, Wellsteps owes it to the country to tell them. Don’t make us beg. See also: Should Wellness Carry a Warning Label?   Odds and Ends No Koop Award winner this year, but an honorable mention to past winners and runners up for their commitment to wellness:

• McKesson, for flooding the country with opioids;
• Pepsi, for flooding the world with sugar.

Sounds like in 2018 the logical winners would be Philip Morris, or maybe the Asbestos Corporation of America. Veering briefly into the public sector, kudos to Rep. Virginia Foxx, (R-NC5) for introducing the Required Employee DNA Disclosure Act. Even HERO thought it was a dumb idea…and their threshold for thinking something that increases wellness industry revenue is a dumb idea is quite high, having all rallied behind the Johnson & Johnson fat tax, in which companies would be required to disclose the weight of their employees. Next up…the winner of the 2017 Deplorables Award

The emergence of insurtech has reshaped the strategic insurance agenda. Here are the top 10 insurtech trends as we enter 2018. Insurtech Trend #1 – Automation will replace human effort across the entire insurance value chain This is a trend that is not unique to insurance. But it is a trend that will significantly affect the insurance sector. This is because much of the insurance industry still operates in pre-internet ways. It is also because many personal lines are being atomized. Small parcels of insurance protection cannot be packaged and sold with human input and remain cost-effective. It is also because customers demand it. They want a purely digital experience that does not require human contact when a machine will do nicely, thank you. One to watch: ZhongAn Insurtech trends article: Is the Rise of the Digital Advisor the new InsurTech Game Changer? Insurtech Trend #2 – Insurance premiums will become highly personalized based on greater tech-enabled insight on customers and their individual risk When you add together the massive growth in new sources of data together with tech-enabled data science, it is inevitable that premiums will become highly personalized. This will be enabled by tech such as wearables, telematics, IoT and smartphone apps. Not to mention the ability to build insights through relationships that exists across data sets. Gone will be the days when people of the same age and gender, with identical cars or homes living on the same street, will pay the same premium. In the future, other factors will apply to reflect greater granularity in their individual risk profiles. Data science will become a key set for underwriters and actuaries. One to watch: Sherpa Insurtech trends article: Insurance distribution is about to get personal Insurtech Trend #3 – The blockchain era has begun, and there will be a rapid shift from pilot to production of distributed ledger technology It is hard to find a major insurer that is not involved one way or another with a blockchain initiative. This will only continue as this disruptive tech continues to prove its ability to provide a viable solution. Of course, there are still some big questions to answer in terms of scale, performance and security, but those answers will come. The big breakthrough in insurance for blockchain will be in the back office for the complex and global world of wholesale, commercial and reinsurance (which is desperately in need of moving into the internet age). One to watch: ChainThat Insurtech trends article: R3’s partnership with ChainThat is one giant leap for insurance See also: Insurtech: The Year in Review   Insurtech Trend #4 – The lines between the old and new will blur as insurtech becomes mainstream by 2020 The defining characteristic of the Fourth Industrial Revolution is speed of change. This certainly applies to insurtech and its impact on the world of insurance. The rate at which insurtech startups are popping up all over the world is not surprising. Everyone wants a piece of this $7 trillion cake. The incumbents have responded, too. By investing in, partnering with and acquiring insurtechs, the incumbent insurers have wholly embraced the movement. This will lead to the creation of whole new digital brands, designed to cannibalize traditional business. And because it is simply too expensive and takes too long to transform legacy operations, the incumbents will ring fence and run them down. One to watch: Munich Re Insurtech trends article: Digital transformation is the strategic imperative no insurer can ignore Insurtech Trend #5 – Digital engagement through lifestyle apps will change the relationship dynamic between insurer and insured Lifestyle apps are the norm. It is hard to find anywhere in the world where this is not the case, so lifestyle apps are the perfect vehicle to provide the peace of mind that customers want when they buy insurance. Instead of the annual chore of hunting for the lowest-priced insurance then having nothing more to do with it unless you suffer a loss, lifestyle apps offer value on a daily basis. This makes them sticky, which, for insurers, means less churn. They also give insurers greater insight into their customers’ behavior, which means better-informed risk assessments and personalized premiums. And they build brand loyalty, which, if you believe in behavioral economics, will result in lower levels of claim embellishment and fraud. One to watch: Metromile Insurtech trends article: Metromile, the pioneers of digital engagement Insurtech Trend #6 – The all-in-one insurance policy is here to stay It has taken longer than I predicted back in 2015, but the all-in-one insurance policy is here. From a customer’s perspective, the all-in-one policy makes perfect sense. Especially for the millennials and Gen Y's. Why can’t they simply have one relationship with one insurer and have everything covered in one go? And it’s not just for younger generations. Imagine giving the insurer the details about your car, home, health, travel, pets and possessions. The insurer gives you one overarching policy, a fair price and the ability to flexibly adjust the cover as needed. Operating on a membership model, the platform can provide safeguards and advise the customer on good and bad decisions. This is AI territory and relatively straightforward to automate. IMHO, this is a winner; watch this space! One to watch: Getsafe Insurtech trends article: Getsafe take the Lemonade model one step further Insurtech Trend #7 - New models will challenge the traditional insurance value chain  In the digital economy, where insurance is embedded into lifestyle products or distributed through ecosystems, the traditional insurance model doesn’t work. The inherent inefficiency in a highly intermediated value chain, too dependent on human effort, makes insurance products expensive. When as much as 80% of premium is lost on distribution, leaving barely a fifth for the risk pool, you know something has to change. In the words of Jeff Bezos, “your fat margin is my opportunity.” These new models will see the carriers squeezed as the reinsurers provide risk capital directly to digital brands. Regulatory frameworks will be reworked to reflect these shorter value chains that don’t require the many layers they have today. One to watch: Amazon Insurtech trends article: Redefining the insurance value chain Insurtech Trend #8 – Lemonade has set the pace in Insurtech 2.0; copycats will follow The first phase of insurtech was all about distribution and data. Then came Lemonade. In September 2016, they launched in New York, and a year later they cover around 50% of the U.S. population with their renters and home insurance products. For me, Lemonade have defined Insurtech 2.0. Many insurtech startups claim to redefine or reinvent insurance, but they simply don’t, whereas Lemonade has. It is inevitable that the copycats will appear. Some will be insurtech startups, although they will need to be as well-marshaled, experienced and funded as the Lemonade team to have any chance of success. And some will be the incumbents, which will have a go at creating a Lemonade model from within. These will almost certainly fail! One to watch: Lemonade Insurtech trends article: Lemonade really do have a big heart, killer prices and instant everything See also: Top 10 Insurtech Trends for 2018   Insurtech Trend #9 – Claims settlement will become an automated, self-service and quick-to-pay experience for customers Insurers spend too much of a customer’s premium on handling the claims process. This is because the process is manual. And because the carrier wants to double-check the claim. And because customers don’t always tell the truth. And because there is too much time in the whole process. And and and and and. The insurtech solution is to put the claims process in the hands of the customer. This sounds counter-intuitive, but it isn’t. Taking a self-service approach, the customer provides video and images at FNOL and is in control of the claims process. Automated reviews of claims handle the vast majority of cases and award instant payouts. The money can be with the customer in a matter of hours. No long processing cycles, no time to embellish the claim and high levels of customer satisfaction. Those that fail the automated review are the exceptions handled by the carrier, which is what they’re looking for anyway! This will become the norm for claims management, once the fears and resistance of the lifelong claims directors can be overcome. One to watch: Rightindem Insurtech trends article: Democratizing insurance claims restores trust for customers Insurtech Trend #10 – Tech-enabled loss prevention will become a key feature in the insurance product Advances in everyday technology are increasing the ability to predict the likelihood of an event or outcome occurring. In home and motor, tech is being used to model behavior and identify exceptions. Sensors and phones and devices are all collecting data that define our individual norm (as opposed to a collective norm). As a result, any deviation can be instantly assessed, and action can be taken. To handle scale, this is 100%-automated, driven by AI and machine learning. Which means the opportunity for insurance is immense, because, instead of being a passive risk taker (which carriers are today), insurers will become active risk managers. One to watch: Surely Insurtech trends article: Digital implementation is the strategy insurers have been looking for Insurtech prediction lists from previous years  Looking forward with insurtech Insights – 10 predictions for 2017 Daily Fintech’s 2016 predictions for InsurTech Sign up for more insurtech Insights here

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

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

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

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

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

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

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

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

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

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

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

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