The Southeast Asian insurance market is ripe for disruption. With a growing middle class, rising incomes and a propensity to use digital technology for real-time purchases, the market is now looking for innovative, real-time solutions for growing insurance needs. The past 15 years have truly been disruptive in SE Asia, with real regional GDP growing at an average rate of 6.5 per annum and household incomes growing to $38,000. Technology development and dissemination is equally impressive. Internet penetration is expected to grow from 260 million users today to 400 million by 2020. The overall SE Asia internet economy is expected to grow to $200 billion by 2025. Growing economic prosperity is translating directly into rapid and sustained growth in the SE Asia insurance market. Munich Re Economic Research is forecasting overall premiums to increase more than 9.5% in 2017. Life products are expected to do even better, with growth of more than 13.5% per annum. With almost two-thirds of the vast population of Asia-Pacific now using smartphones, insurtech is expected to grow quickly. For example, in Malaysia, the online life platform and startup U for Life allows consumers to purchase life insurance products instantly online. All these factors are laying the foundation for the imminent disruption of the SE Asian insurance market. See also: Insurtech Ecosystem Emerging in Asia   True disruption in SE Asia will require a blend of high-tech and high-touch approaches so that insurance companies can keep their relationship with the consumer personal while concurrently ensuring that they optimize the efficiency of the relationship. Technology will continue to develop rapidly, with an increasing use of artificial intelligence, facial recognition and telematics. Winners in the age of disruption will also maximize the use of robotics, process automation and data analytics to make the customer pleasant -- or at least not painful. True disruption will only come when we throw the proverbial book out and leverage technology to reshape insurance. What if you had the ability to purchase insurance, as you needed it, as long as you needed it and at the moment you needed it? Taking it a step further, what if your insurance provider could anticipate your needs and provide you with the opportunity to purchase a temporary policy before you had even thought of it? Let’s say that you are planning a three-day deep sea fishing trip with your friends. You receive a text from your insurance agent, who has been notified of your trip via social media. He is wishing you a great adventure and for $25 a day suggests an additional $75,000 in accident/life insurance just for added comfort. As you are spending $1,200 on the trip, the extra $75 is a small expense, but the additional comfort is significant. This is situational insurance, and to get there a number of things will need to happen. First, insurance providers are going to need to develop very robust data sets for the individuals they plan to cover. Providers need to know the basics: age, marital status, income, etc. and then they will need to dive deeper. Providers will need to know people's hobbies, aspirations, fears, passions and more. Providers then must keep building on the data and keep it timely. Of course, the devil is in the details! For situational insurance to become a reality, providers will need artificial intelligence, as they must begin to anticipate behavior so that they can begin to develop relevant products and know when a client is going to potentially need them. Getting to this point will take time, as it will require the support of behavioral scientists, statisticians, mathematicians and of course, AI specialists, all working together. At Soteria, in Hong Kong, we are actively working on this situational model with the support of Mapfre and Allianz. Actuaries like situational insurance products, as the statistical odds of death or a serious accident during a limited period are quite low, even if extreme sports are involved. However, the model will require the support of insurance carriers and regulators, even though continuity and predictability have been thrown out the window. See also: How to Respond to Industry Disruption   How close is situational insurance to becoming reality? Five years ago, did anyone really believe driverless cars would exist? Just don’t be surprised if you get a friendly text before heading out on your next scuba diving adventure.

This article is part of a series on key forces shaping the insurance industry. Parts One, Two and Three can be found here, here and here. Trend #4 and #5: Innovation in commercial lines Solutions will continue to evolve from protection to behavioral change, then to prevention — even across complex commercial insurance. Although proliferation of data and increasing transparency of both the buyer and seller will cause disintermediation for simple covers, it will also create opportunities for brokers and intermediaries to innovate solutions and channels for their B2C (non-standard risk pools, retirees/older generation, healthcare gaps) and B2B (emerging and unknown risks, cyber, global supply chains, cross-border liability, terrorism). We believe the potential for innovation in commercial lines is actually larger than personal lines. Because of the complexity of the commercial insurance ecosystem and new emerging risks, however, the level of innovation seen so far has been relatively modest. See also: 3 Ways to Leverage Digital Innovation   Demand and supply of commercial insurance solutions is evolving, driven by:

• developing markets looking for new solutions
• the digital economy driving a move away from property risks (which are decreasing as a proportion of the overall economy) to casualty
• increasing demand for catastrophe insurance (driven, in part, by increasing concentration)
• macro trends creating emerging and “uninsurable” risk classes
• new sources of structured and unstructured external data that are changing how commercial insurance is sourced, bought, underwritten/priced and serviced

The competitive landscape is also changing with large global conglomerates setting up captives to self-insure emerging market champions and the continued involvement of alternative sources of capital. Excess underwriting capacity is placing strain on profitability. In addition, new entrants and primary distributors are seeking to take greater control of the value chain, including pricing and risk selection. This impact is further enhanced by primary carriers retaining more risk as a result of global scale and balance sheet strength providing diversification and increased understanding of their own risk from solvency modeling. Many incumbents are already starting to respond. In the London market, a key component of the modernization program being driven by Lloyds is PPL, a new platform where face-to-face negotiation is supported and facilitated by electronic risk capture, placing, signing and closing. Brokers are also aggressively evolving their risk analytics capabilities through the creation of open architecture platforms that deliver a two-way information flow while leveraging knowledge to shape future risk transfer solutions for evolving needs. Many carriers are piloting monitoring technology in property (partnerships with security, pest control and energy companies) as well as casualty (sensors and wearables) to drive improvements in risk selection and risk mitigation. How innovation will drive value creation Risk monitoring, mitigation and prevention One of the key trends driving change is the move from risk transfer to risk monitoring, mitigation and prevention. Organizations are looking for risk prevention and mitigation solutions as they move away from traditional risk transfer mechanisms. We see three main areas:

• Telematics for commercial lines (for example in property and marine);
• Real-time, contextual data capture and AI for risk selection, risk mitigation and monitoring, client on-boarding as well as re-underwriting; and
• Use of preventive technologies (health tech, slip and fall, work place safety) to mitigate lost time injury and workers' compensation losses.

Insurance sourcing, buying and selling As businesses gain greater transparency into their risks, they will continue to optimize their risk management solutions. While direct SME cover, self-insurance and use of captives will continue to grow, emerging risks will provide opportunities for intermediaries and brokers to carve out and source new solutions for their customers. Examples of these will include global supply chains, cross border liability, cyber, catastrophe and terrorism. Operating model improvements The commercial market has always been very strong around product innovation, but the operating model has largely stagnated. In some parts of the market, the underlying process hasn’t really changed for more than a hundred years. System limitations further reduce the ability to leverage the data that is captured. There are significant opportunities to enhance operational efficiency in many of the basic functions, including payments and regulation and also in automating underwriting and claims. Application of technology and data to enable digitalization There are a number of risk classes where there is significant potential to harness technology and data to improve underwriting, risk selection and pricing, as well as to help businesses understand and then manage their exposure. These include cyber, flood and SME. Platform-based solutions Platform-based solutions (rather than point solutions) have the greatest potential to create value, and incumbents will need to assess how to incorporate innovative solutions based on a build, buy or partner strategy. See also: Q&A With Google on Innovation, Risk   We hope you enjoy these insights, and we look forward to collaborating with you as we create a new insurance future. Next article in the series will be about Trend #6. The ability to dynamically innovate (new risk pools, new segments, new channels) and deliver on the customer promise will become the most important competitive advantage (as known risks continue to get commoditized and moved to the direct channels).

Successfully implementing a core system — in any industry, but especially in insurance — is challenging. One of the most difficult aspects of implementation is simply knowing where the finish line is — while you’re standing at the starting line. Mapping out the course from the starting line to the finish line is impossible if you don’t know where both are. The difficulty of this task is compounded by fact that the finish line is different for each carrier. For one carrier, it might be a minimum viable product (MVP) that in turn serves as the new starting point for a broader implementation. For others, it might be a particular component, after which everything else is just icing on the cake. For others still, it may be the full solution including conversion. As such, the finish line — and the course —  should be uniquely mapped out for each program, rather than a “one size fits all” approach. Are You Ready for This? Your step into core systems transformation will benefit from a bit of scrutiny to help determine the proper location of your finish line. Where do you start? How do you figure out where your finish line is and what it looks like? A good starting point is to look at the many factors that can answer these questions for you:

• Organizational risk appetite: How much risk is your organization willing to take on at once?
• Program budget: What is the board willing to approve for the program? Will it invest the full amount or just the initial chunk?
• Organizational ability to handle large programs: Do you trust your organization to manage a long, large budget program, or is the organization better at managing a series of (or parallel set of) smaller efforts?
• Buy-in of various divisions: Do all of the potential stakeholders across different distribution channels, product lines, etc. agree to having their core systems replaced, or do some prefer a “fast follower” approach?
• Desire to process new business only/convert on renewal/avoid conversion: Is there a commitment to move off of legacy completely, or to only move portions where it makes financial sense to do so?
• Need/Lack of need to replace particular components: Can part of the solution wait? That is, do you need to do policy, billing and claims today, or can/should one or more of these wait?

See also: How to Transform Core Systems   Among other possible constraints (such as selecting a vendor that only supports commercial lines or group life) or parameters (such as a board mandate to be live end-to-end in 12 months for three lines of business), these factors can help establish where the finish line should be. While business parameters change, the finish line should not be moved — if at all possible. It would be better to instead add new phases with new finish lines. Moving the finish line once you’ve started can create a host of unintended problems, ranging from morale issues to creating a never-ending cycle of chasing moving targets. It’s best to keep that first finish line fixed. Once complete, the organization will have more confidence to build on its success. Keeping It Real In reality (and perhaps we can keep this a secret just between you and me), there is no finish line. Once you’ve achieved the first goal, there will still be much to do. Business needs tend to change from quarter to quarter and from fiscal year to fiscal year. Accordingly, changes to the system(s) will be needed, including: extending functionality beyond what was additionally planned, adding products, extending to new geographies, adding new partner integrations, upgrades and more. Rapidly changing business dynamics and needs constantly move the idea of being “finished” further and further out.  Of course, this means you may never truly be “done.” Welcome to transformation in the digital age! So, with this in mind, how far away should your first finish line really be? Beyond what’s been answered for you by organizational parameters and constraints, several factors should be considered. First, the finish line should be clearly visible to all stakeholders and team members from the beginning. Second, getting to the first finish line should be clearly achievable, real and not a “moon shot.” This is no secret. You can write this phrase in a cloud bubble on your white board: “Success begins with an ACHIEVABLE FINISH LINE.” (And maybe then you should write, “Do not erase” with one of those red arrows pointing to your cloud bubble.) Show Me the ROI Another key factor should be setting a “first” finish line that delivers measurable results. If you get to the first finish line and all that’s been delivered is a foundation, it can be easy for sponsors or others to question the ROI. Try to bundle foundational work with something functional, and try to make it something that can be deployed on its own (this could range from a single product and one module — such as term life or personal auto quoting — to implementing the end-to-end suite but with minimal configuration). However you define your minimum viable product, your first finish line should get you there. Take Me to Your Finish Line (Then Prove to Me That I’m There) So how do you know when you get to your finish line? If you defined it clearly, it may be obvious. But to make sure everyone knows how close they are to the finish line, a few important steps can help. One key is to clearly communicate what defines the finish line and what defines successfully getting there. Are there metrics for being on-time/on-budget? What about quality? Is there a benchmark for adoption? Another key is to make sure that these success criteria are clearly communicated to all stakeholders and team members. In addition, consider some sort of scorecard, scoreboard, dashboard or other very visual cue that indicates progress day by day. See also: ‘Core in the Cloud’ Reaches Tipping Point   Following these guidelines, you can help ensure that all participants are marching in the same direction, at the same speed and with the same goals. When using an agile approach, this can be especially important given the dependencies of all the moving parts. Just as important is the ability to get to the finish line and have the stakeholders and sponsors know you’ve arrived there so that success can not only be achieved but also recognized. With a clear path to completion, clear goals and a clear way to know that success will be recognized, teams can be motivated like never before!

The WannaCry attack, the biggest ransomware attack in history, is not over. It has had an impact on companies in at least 150 countries, leaving organizations around the world wondering if they might be affected by subsequent waves. It’s critical to keep in mind that effective mitigation of ransomware (and similar) attacks is accomplished with good governance and risk management, not with the acquisition of expensive security solutions. Detecting and mitigating risks effectively requires an integrated approach. It requires understanding the dependencies and overlapping activities between entities or departments. See also: Quest for Reliable Cyber Security   Technology necessary for a robust cybersecurity program already exists in most organizations. The missing piece — strong governance — is the key to putting internal policies into practice and maximizing the effectiveness of existing technology. With that in mind, there are a few fundamental steps organizations should take. Enterprise-wide risk management procedures must be used to automate the assessment and monitoring of these processes. Timeliness and frequency are key to sustaining protection. The creation of corporate policies does not assure that those policies are followed equally across business areas out to the front lines. In fact, without enterprise risk management, they rarely are. Back up data; use patches The first step is to make sure off-site backups are kept up to date. Automatic notifications should alert the security team at preset intervals, reminding them to verify that data is fully backed up at an off-site location. It’s critical to use a risk-based approach to prioritize which data needs monitoring and testing. Once data has been protected, companies should ensure approved patches are implemented. Although most organizations have approval procedures to force implementation, inconsistency causes massive, preventable vulnerabilities. Without risk-based monitoring, critical assets are left unprotected as priorities interfere with one another. Virus detection software is typically reviewed and updated in a similar manner. Security teams need the guidance of centralized governance so they can monitor systems effectively. Limit access Managing access rights — which can be achieved by first implementing internal password policies and asset management — is critical when minimizing cyber exposure. The “principle of least privilege,” by which the company grants employees only the access rights they need to perform their job responsibilities, is particularly important. This also should apply to vendors and other third parties. Conceptually this is simple, but, in practice, a risk-based approach is needed to connect process owners to the security team. This is where most access rights programs fail. Automated monitoring also should be applied to company virtual private networks. VPNs are important tools that sustain security and access, but if they are not managed correctly and don’t time out according to a preset timeframe, they create vulnerabilities that can be exploited. Once again, vendors should be held to similar standards. Business continuity and disaster recovery (BC/DR) plans, much like data backups, must be tested (and optimized) at regular intervals. If a company has a plan in place but does not regularly test its ability to implement a “clean recovery,” it’s highly unlikely it will get back on its feet after an attack within the required time period. Keep recovery time short Centralized risk management allows subject-matter experts to assess each device, application and data store. Recovery time objectives (RTOs) measure how long business objectives can be met without a particular asset. The security team, after receiving automatic notifications, should test to ensure the clean recovery timeframe is smaller than the shortest RTO. See also: 10 Cyber Security Predictions for 2017   The steps above remove cybersecurity vulnerabilities by improving governance, not by mandating the acquisition of new IT resources. Good governance enables the operationalization of security procedures, closing the gap between senior leadership and everyday activities. A risk-based approach reduces both exposure and the cost of effective security operations. This article originally appeared on ThirdCertainty. It was written by Steven Minsky.

As the weather gets warmer, mosquitos and ticks re-enter our lives, and along with them comes their larger cousin, the scam artist. There are ways to prepare for those seasonal meal stealers. The same goes for scams, as knowledge is the best repellent. Either way, some scams never seem to get old, as evidenced by the huge number of people that continue to fall for them no matter how many warnings we issue. There are always new variations that snare even the wariest consumers.Ticks and mosquitos aren’t harmless—they are well-known vectors for serious illnesses. Scam artists also are vectors for a plague that affects millions of people each year: identity theft. But sometimes a scam is of the simpler smash-and-grab variety. With that, I give you this summer’s smorgasbord of scams. 1. The summer rental scam It’s not the easiest thing to find a summer rental that has all the right elements: a reasonable distance from the beach, the right number of bedrooms and bathrooms, a pets welcome policy. So, when you do find the right one, the tendency for most people is to pounce. Don’t be most people. If you get scammed on a rental, you’re not going to know till you show up at the front door and a puzzled person peers back at you. The best thing you can do is visit the property in question beforehand. If you are working with a real estate agent, ask for his or her license number and check it, request references if there are no reviews online, and confirm that the address is real and the premises are truly available for rent. See also: Be on the Lookout for Tax Scams   2. Summer job as credit application It is sadly a common occurrence that when kids are offered a “job,” they provide their information for tax purposes, including their Social Security number, and then never hear back. The reason: The only “job” was a robbery. Their identity is stolen, and because kids will be kids, it often takes a long time for them to realize the jerk who flaked on a summer job offer gutted their creditworthiness. (Here are four ways identity theft can impact your credit.) Never provide sensitive personal information to a job site or anyone claiming to offer a job at the start of the process. Before you show up for an interview, make sure the job is legit: You can figure this out by doing an online search or making a few phone calls. 3. Door-knocker scams Summer is the time for door-knocking scams. Sometimes the knocker wants you to help save an endangered species or an embattled population far away, sometimes they are selling a lawn service, home maintenance or sustainably produced electricity—all these causes, services and products may be legitimate, but the person offering them … not so much. If a stranger comes to your door, your level of suspicion should be high from a personal and digital security perspective. If you like what a knocker has to say, tell them that you will go online to help their cause or buy a product, and send them on their way. 4. Wi-Fi scams This is a year-round thing, but people still get got all the time by phony Wi-Fi scams, and the problem is only getting worse now that more municipalities are offering free access to the internet. The problem is that free Wi-Fi doesn’t guarantee secure Wi-Fi. Always check with the network provider or someone of authority before logging on to any new wireless connection. Use a VPN, or virtual private network, to conduct any transactions that involve sensitive information. 5. Front desk, fake menu scams Hotel scams are many and various, and it’s best just to remember that you are a target whenever you are traveling, but there are two scams that are sufficiently common. The first is the front desk scam, which is pretty simple. You check in late, you’re tired and your phone rings. The scammer doesn’t know when you checked in. He or she is calling random rooms. You are told there is a problem with your credit card. Can you please confirm the number? The second scam to look out for is the menu scam. Scammers produce fake ones, and then steal your credit card information when you call to place an order. If you get a call from the front desk, hang up and call back or go in person to confirm your payment method. Use your smartphone to order food or call the front desk for suggestions. 6. Moving scams Summertime is moving time. Just make sure your relocation isn’t a moving experience of the hair-pulling kind. While there are many great services out there, there also are some fraudulent ones that could wind up costing you big time. With online services like Task Rabbit and Angie’s List to name but two, there are ways to choose a moving service that suits your needs and provides reviews. Just make sure you check out their reputation online before they show up at your door. You may have identity theft repellent If you think you might have been a victim of identity theft, it’s important to monitor your credit for anything out of the ordinary—primarily accounts and delinquencies you don’t recognize. You can get a copy of each of your three major credit reports for free once a year at AnnualCreditReport.com and you can use a free tool like Credit.com’s credit report card to check for signs of identity theft every month. It’s also a good idea to check with your insurance agent, bank, credit union or the HR department where you work. It is increasingly more common as a perk of your relationship with the institution to be offered free access to a program that provides education, proactive assistance and damage control if you become a victim of identity theft. See also: Are Scams Killing Direct Marketing?   If it’s not free, you may be able to get it at a minimal cost. (Full disclosure: CyberScout, a company I founded in 2003, provides these services to institutional clients, and they in turn offer the service to their clients, customers, members or employees.) This post originally appeared on ThirdCertainty. Full disclosure: CyberScout sponsors ThirdCertainty. This story originated as an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

The fog of war can be an excellent metaphor for the CFO in today’s rapidly changing business environment. Nowhere is change more frantic than trying to manage multiple financial battlefronts: profit margins, SG&A, FP&A, EBITDA and free cash flow. One of the largest battles in business today is the war between organizations and the healthcare supply chain that their employees and team members access for medical treatment. Investing millions of dollars in accessing the healthcare supply chain without actually knowing in advance the cost of almost all the services might as well be war, because it darn sure kills the income statements of companies and the standard of living for employees and families across America. See also: Where Are All Our Thought Leaders?   The recently released book titled “Extreme Ownership” delivers a how-to on managing multiple simultaneous risks across the organization. The lessons in the book provide a strategy outline on how to execute and eliminate risk when you have leaders and team members operating in hostile environments. For instance, ask your internal healthcare manager what the mission of your healthcare program is and see if it matches your goals and intentions. Have you communicated to the healthcare manager and his operations team the “why” of the investment in healthcare, or is health care just OpEx? As hard as it is to believe, some organizations allow non-P&L managers, or worse, operations-level administrators to dictate policy and strategy, and their decision supersedes the mission. The annual renewal process can be very reactive, and not enough effort is applied to identifying priorities. The result is the equivalent of friendly fire because the tactical plan focuses on the wrong targets and has minor impact. The enemy, the healthcare supply chain, reverse-engineers every government regulation change and cost-shifts to private employers. Not understanding this fundamental principle loses you the war in the long run and the battle every renewal. CFOs need to make sure they are not in a position where they are merely informed and not actually involved in healthcare strategy, because they will have limited situational awareness. Is there a formal process in place that requires the operations level staff to report all strategic and tactical options up to the C-suite and not just cherry pick what is disclosed? Is innovation preached but status quo and incrementalism actually reinforced? Are rate increases tolerated because they are lower than budgeted increases? CFOs need to honestly assess whether they abdicate their leadership role by avoiding the forced execution of strategic healthcare options, instead choosing to take the path of least resistance and defaulting to the ground forces that you pay to handle the details. After all that, is the question ever asked, “What is the best way to execute the mission?” Failed execution and badly supervised risk management can lose an organization millions of dollars, and now CFOs risk personal liability by not knowing the best way to execute the mission. There is a consequence for gambling with employee contributions in an ERISA plan, and not knowing with certainty that the organization’s healthcare claims will go down this year is the proof. See also: A Simple Model to Assess Insurtechs   CFOs have limited situational awareness of the unnecessary risks and poorly performing strategies being deployed by the people they believe they are paying to manage their healthcare investment. The C-suite must gain a new situational awareness of the healthcare budget risks, and ERISA compliance exposure facing the organization and potentially themselves individually. My book notes that soldiers died because of mistakes. In business, healthcare strategy mistakes crush the employees’ standard of living, waste millions in lost profits and expose the CFO to fiduciary risk because of a lack of situational awareness, the conviction of forced execution and extreme ownership.

Last week, Mary Meeker released her annual opus on the state of the digital world, and I wanted to be sure you saw it. Her massive, 355-slide deck is now the bible about the state of the internet for the next year, so you'll be seeing some of the data a lot. You should also spend some time with the presentation because some of the trends will matter a lot for insurance. 

Beyond what you'd expect about the continued growth of the internet and about our obsessions with our mobile phones, three things stood out for me.

First is the continued improvement of voice recognition. Slide 48 says the technology is now roughly as accurate as we humans are. That still leaves room on the back end for figuring out how to turn those words into a query that can hit a data base and get a useful response—try asking your Amazon Echo what the leading cause of car accidents is—but the progress means we all have to keep working to incorporate voice recognition into interactions with customers. Just when you thought that moving to chatbots and texting put you on the cutting edge, you're getting another technology thrown at you.

Second is that apps are fading as the organizing principle for mobile devices. As slick as apps seemed to almost all of us at one point, it seems they're now just too cumbersome. Now, the trend is to make things happen "in-app"—inside whatever app someone is using. Slide 70, for instance, shows capability built by Google inside the Lowe's app that leads people in a Lowe's store to an item they're trying to find. I first asked a friend, the CIO of a regional grocery store chain, for that sort of capability more than a decade ago, and I'm reminded of that request every Mother's Day when I try to find where a store has hidden the tiny yellow cans of Hollandaise sauce that I need for Eggs Benedict. I'm delighted that my wait is ending. More importantly, from an insurance standpoint, the move toward in-app capabilities creates both a challenge and an opportunity. The challenge is that you have to move beyond the boundaries of your own app and establish a presence in whatever app your customer is using. The opportunity is for what might be called a do-you-want-fries-with-that strategy: "I see that you're heading toward the chainsaws at Lowe's; do you want some additional insurance to cover yourself and your house, for whatever happens when you take that tree down?"

Third is that the trends that Meeker identifies create liabilities that insurers need to consider and risks that they can cover. Some of the issues that she discusses at length will be familiar, such as the growing cyber risks that come with our increasingly connected world and the increasing, but still quite limited, health information from wearables. I'm more intrigued by some of the smaller examples she provides. For instance, Slide 66 says that apartment lobbies are becoming warehouses because of all the package deliveries and that the landlord/super is becoming the foreman of those warehouses. Sounds like a risk that the insurer should be aware of and possibly sell additional insurance to cover.

Happy exploring!

Cheers,

Paul Carroll,
Editor-in-Chief 

Charles Darwin once said, “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” What does that mean in today's world? Humans are accustomed to creating buzzwords and hypostatizing technology advancements such that the borders between humans and machines will become blurry. Where is this all leading us? What will humans do if machines take over? Will we have no jobs left? Do we need to start building Terminators? Questions like these are common these days. And then things get more complicated when we hear that technology companies are looking to hire more people to help filter out violent content on media. What does this all mean, then? Are we ready? Does AI work? This post is not a technical whitepaper on how to create AI systems. I want my views below to explain how we have approached creating our AI system and why our employees, leaders and customers are not threatened but instead excited to be part of this change. What did we do differently, and can that be replicated across the globe for every AI implementation? That’s really a choice the leaders of companies must make. Humans are social, intelligent beings; our intelligence develops each day through repetition, observation, pattern recognition and practice. Our brains are said to have over 10 billions neurons, and each neuron supposedly is a super-computer by itself. AI is essentially when you brain-dump these patterns, learnings, observations and experience into computer models and systems so that those tasks no longer require us. The most important ingredient in this equation is: human. Without experienced humans, AI would just be computer algorithms. See  also: Machine Learning to the Rescue on Cyber?   What I found to be most useful in picking the area best suited for AI is something that can solve yesterday’s problem, make today comfortable and responsibly evolve for tomorrow’s needs. Below are the four main elements of AI truths that we kept in mind while developing our AI solution: 1. Involve human practitioners: There is no substitute to human experience. This experience is valuable when rendered to the AI models. As leaders, we need to think about how to get the best practitioners for developing these models and then how to help them become the masters of these models. Human experience is undeniably the best feeder to AI. As leaders, we must allow for people to adapt and evolve and not leave the human factor behind AI. AI models can borrow human experience, but emotional intelligence and consciousness is definitely an ethical side of us that needs to be in our control. 2. Empower learning: Technology companies and their supporting industries must work with each other to ensure the jobs being displaced will be replaced responsibly. The people being displaced must be encouraged and empowered to learn other skills and move on to better things. If we don’t think and act responsibly on both sides of technology and business, we will risk displacing many humans without direction, which causes ripple effects in our society. An idle mind is devil’s workshop, they say, and we — as creators, founders and leaders of companies — need to fold in the human element as an intangible effect and account for this all while forecasting profits and expenses. 3. Enhance education systems: As a leader, we must hire today’s talent but contribute to developing tomorrow’s employees. Leaders like us can work with local schools and offer practical programs that can involve students with our creations and help them think beyond the obvious. We need to get everyone seeking education to search for“spiritual intelligence, which is the highest form of the conscious mind, and intelligence that no one can replicate into a machine. Help kids love the learning they get from the education system, not just love getting the degree. Knowledge is power. 4. Solve problems: As leaders and entrepreneurs, we need to focus on solving yesterday’s problems — which can make today easy — while thinking about tomorrow’s path. Technology is great if we can stay ahead of it; it cannot solve problems on its own. As leaders, we need to find out what problems technology can solve while figuring out how we can enhance humans so we can stay ahead. As leaders, we must think about both the obvious and not obvious effects of every decision moving forward. We cannot resist change; it will happen. But we must consider how can we solve problems using AI systems that will replace humans while still growing the company and without losing the human element. See also: Seriously? Artificial Intelligence?   Can we create a well-planned AI system responsibly and implement it successfully? This is a question that requires leaders (not managers) who can lead with spiritual intelligence, find an undistracted vision and help their workers transform and evolve. Every action has a consequences, and every inaction can make us unadaptable.

This article is the third in a series on key forces shaping the insurance industry. Parts One and Two can be found here and here. Trend #3: Just in time: The majority of the simple covers will be bought in standard units through a marketplace/exchange, permitting just-in-time, need and exposure-based protection through mobile access. Why can’t insurance work in the same way as Amazon, easy, seamless, one-click, no hassle, managed through your mobile and regular updates? Actually, this is starting to become a reality. Insurers and start-ups have already taken up this challenge and significant progress is being made. Aviva, for example, are piloting a home insurance product where customers won’t need to answer any questions and Digital Fineprint will autofill your insurance policy application form for you by using your social media information. See also: 10 Trends at Heart of Insurtech Revolution   Data availability and technology are enabling ‘blind rating’ of risks by insurance companies, providing guaranteed acceptance and prices to customer through direct or broker-assisted channels. Insurance still has many consumer challenges to overcome, from a lack of understanding, lack of trust and lack of perceived benefits. If it’s considered at all, it’s often as a grudge purchase. The comment that insurance is sold not bought remains true in many instances. As the digital economy evolves, the opportunity to change this dynamic will multiply. The key drivers of this change are:

• Ability to interact with the customer through their mobile in real time
• Ability to offer insurance at the point of sale or time of need
• Ability to tailor the offering to the individual’s specific circumstances (location, time, activity, risk)
• Ability to leverage available information to simplify the process

Innovative start-ups like Insure-A-Thing (IAT)are reinventing the insurance ecosystem by improving customer trust & transparency, and encouraging improved behavior through retrospective premium payments, based on actual claims. Democrance is revolutionizing the distribution and servicing of micro-insurance products at POS through telcos and Uber-like shared economy technologies. Other examples of where this is already happening include, Kasko which enables consumers to purchase insurance at the point of sale/demand – it’s relevant, it’s easy and it’s digital. Similarly, Spixii, an insurance focused chatbot knows if you’re in a ski resort and willout and let you know that your travel insurance doesn’t cover extreme sports and then allow you to purchase the additional protection – again it’s relevant, it’s easy and it’s digital. Our view is that many relatively simple personal lines products will evolve over time to these types of interactive model. Rather than standard policies covering fixed periods of time, these new products will switch on and off for the period they are needed and will cover the specific circumstances/risk. This will encourage adoption at more affordable prices and importantly demonstrate that insurance is providing real value when it’s most needed. The sharing economy is a further example of how innovative insurance solutions are being developed to meet new and emerging consumer needs. Start-ups like Slice and Oula.la are looking to provide tailored insurance protection for Airbnb property owners that switch on and off to cover the period when the property is rented. See also: Insurance Coverage Porn   We also expect to see market place or exchange platforms being developed to help facilitate the process. Again, this is already happening. As an example, Asset Vault allows customers to log their physical and financial assets in a secure online repository and can then help customers find and tailor optimal insurance coverage based on their specific circumstances. We hope you enjoy these insights, and look forward to collaborating with you as we create a new insurance future. Next article in the series: Trend #4: Solutions will continue to evolve from protection to behavioral change then to prevention – even across complex commercial insurance

In the world of cybersecurity—particularly for small- and midsize businesses—progress tends to be achieved in fits and starts. Rare is the SMB that has the patience and focus to take a methodical approach to improving network security over an extended period. So when news of the WannaCry outbreak grabbed the mainstream media’s attention recently, fear among SMBs spiked and attention turned to cyber issues. However, just as quickly, it seems, the pendulum appears to be swinging back toward complacency for all too many companies. See also: WannaCry Portends a Surge in Attacks   That shouldn’t be the case. Let’s consider five prominent WannaCry takeaways businesses of all sizes should pause to consider. These notions hold especially true for SMBs that can’t afford to have their reputations gouged, much less sustain material monetary losses, from a major network breach: Patch management. WannaCry took advantage of a vulnerability in the Server Messaging Block, a particular part of the Windows operating system. Microsoft had released a patch back in March, but not everyone had applied it, particularly on older Windows XP systems. You’d have to have a substandard patch management program in place to miss a critical security patch for two months, and those were the companies affected. All organizations require a robust patch management program. Guidance is available from the National Institute of Standards and Technology, under NIST standards 800-53 and 800-60. And the SANS Institute, a private cybersecurity think tank and training center, has put together helpful pointers in SANS’ Framework for Building a Comprehensive Enterprise Security Patch Management Program. Software inventories. WannaCry pummeled organizations using old or pirated versions of the Windows operating system, since those are systems that tend not to be patched automatically. All businesses can reduce their risk by knowing what applications and versions are in their networks. SMBs need to ensure that unauthorized copies of business applications are not present. The good news is that proven applications are available that can inventory the operating systems and business software your company regularly uses. Backup, backup, backup. Want to know the top three ways to beat ransomware? Back up to the cloud. Back up to the cloud. Back up to the cloud. What’s the best way to defeat ransomware if you are uncomfortable backing up to the cloud? Back up somewhere else that is off your network. Those organizations that had a readily available backup ready to go could simply delete the encrypted files, restore the good backup, sweep their networks for malware, and get back to business. We have seen that process take 15 minutes. There are many providers who will back up your data, usually for under $1,000 per year. Consider cloud security. Trusting mission critical data and processes to a cloud service provider still makes many company decision-makers very nervous. They’ll say: “I don’t want to trust a cloud provider with my data. Those guys get attacked all the time.” While that may be true, the reputable cloud service providers, by now, know what’s at risk and have made the investment in quality defenses. If you are one of the companies unsure about whether you were patched properly, whether you had good backups, or whether your response plan was going to be effective, then the reputable cloud services providers that deliver these types of services are doing better than you are. It may be time to look into moving functions like email, office automation and customer resource management to the cloud. Breach response planning. A good breach response plan would not have prevented infections from WannaCry; but it would have speeded recovery. If everyone in the organization knows where to go and what role to play in getting the network back to normal, expensive downtime can be minimized. A robust breach response plan needs to be in place, tested and accessible to key players. See also: 5 Ransomware Ideas, or You’ll WannaCry   These notions were true well before WannaCry. And they bear repeating in the aftermath of this landmark, self-spreading ransomware attack. No doubt there will be more lessons to learn, going forward. One thing seems assured: Sophisticated attacks designed to breach business networks indiscriminately are with us to stay. This article originally appeared on ThirdCertainty. It was written by Eric Hodge.