As he blazed/thrashed/insulted his way to the White House, Donald Trump constantly claimed Obamacare was not working. According to Trump, it was a “disaster” that only he could fix. His criticisms have certainly been creative, such as this tweet about one of the perpetrators of the Boston Marathon bombing. Whether Trump  can actually fix Obamacare remains to be seen, but he was right about one thing: Insurance premiums are on the rise. It’s estimated that in 2017 premiums will go up by approximately 24%. Insurance companies like Aetna and UnitedHealthcare are pulling out of some markets after reporting significant losses, and other companies are significantly reducing the plans they offer. But why exactly is this happening? What are the root causes? While the issue is certainly complex, we do know some of the reasons costs keep rising. Here are seven primary reasons why Obamacare isn’t quite what everyone hoped. Two Things You Need To Know Before we depress you and make you worry about the future, let us give you two semi-good pieces of news. It’s not all gloom and doom. The Increases Primarily Affect Those Who Purchase Their Own Insurance First, it’s important to note that the rise in premiums primarily affects those who are purchasing their own insurance, like those who are self-employed. If you live in cubicle land or work for the man, you probably won’t feel the brunt of the increase in premiums. Also, if you get your insurance through Medicaid, Veterans Affairs or Medicare, you probably won’t see much increase in your premiums. However, those who shop in the insurance marketplace will find themselves staring at steeply increasing premiums. For now, you may be able to work from a beach while sipping a mojito, but soon you may need to start drinking Bud Light. Let’s hope that doesn’t happen. You may not be working for the man, but you’ll giving more money to the man. Those Who Are Willing to Shop Around Will Probably Be Relatively Safe If you get a government subsidy to offset the cost of your insurance premiums and are willing to shop around for a new plan, you may not be hurt by the increase in premiums. There are various plans available in the insurance marketplace, some more expensive than others. If you’re willing to switch to a new plan, you can probably find one that doesn’t gouge you so deeply. But this is one of the problems with Obamacare. It usually covers a narrow selection of doctors and hospitals, and if you switch plans you may need to find a new doctor. If you’ve got challenging or complex health issues, this can be a big deal, especially if a particular doctor has been treating you for years. Unfortunately, this means that those who are in the worst health may get hit the hardest by the rate increases. If you don’t want to switch plans, you always have the option of becoming independently wealthy. Of course, this can be a bit more difficult than switching plans unless you happen to have a rich relative. See also: How to Push Back on Healthcare Premiums   Now let’s talk about why premiums are going up. Reason #1: Predictions Weren't Very Good Wait, you mean when the insurance companies and the government teamed up, they actually made some mistakes? But they both have such sterling reputations for efficiency! It turns out that the health insurance companies underestimated how much it would cost them to insure those who weren’t already covered. A 2015 report found that insurance companies lost $2.7 billion in the individual market, in part because they had to cover more claims than expected. Insurance companies aren’t really in the business of losing money, and now they’re scrambling to make up for what they lost. On top of this, those patients who are the sickest generate about 49% of the healthcare expenditures. This unequal distribution of costs complicates the estimates and means some companies are losing money. Now that insurance companies actually understand the pools of patients, they’re adjusting premiums to account for the actual costs, which are way higher than they estimated. Reason #2: Insurance Companies Are Bailing Out Leading the way in the “Things That Aren’t Surprising” category is that many insurance companies are discontinuing plans that lose money. Additionally, some companies such as United Healthcare and Aetna are completely exiting some markets, leaving very little competition. In some states, there is a single insurance provider, allowing it to raise rates without consequence. In 2017, it’s expected that the number of healthcare providers will drop by 3.9% in each state. As we all learned in introductory economics, less competition equals higher prices. Reason #3: Healthcare Costs a Lot Remember last year when the price of EpiPens started skyrocketing and people were saying, “We’ll die without them!” and the producer said, essentially, “Well, it stinks to be you!”? People got rightfully upset because that was a pretty low move to pull. Unfortunately, rising medical costs aren’t just happening to EpiPens. Generally speaking, medical costs have been rising at about 5% each year, but some think they’re going to go up even more. Unfortunately, Obamacare is at least partially to blame for this. Newer treatments tend to be very expensive, and now even the sickest people have access to health coverage. This, in turn, means that they have access to the pricey treatments they never had access to before. As their expenses are covered, overall costs for all people are increased. As Sean Williams wrote:

The reason insurers are coping with substantially higher costs for Obamacare enrollees is actually pretty easy to understand. Prior to Obamacare's implementation, insurers had the ability to handpick who they'd insure. This meant people with pre-existing conditions, who were potentially costly for insurers to treat, could be legally denied coverage. However, under Obamacare insurers aren't allowed to deny coverage based on pre-existing conditions.

Now could be the time to begin experimenting with those homeopathic cures we’ve been hearing about all these years, like rubbing cucumbers on our feet or bathing in olive oil. Purchasing hundreds of gallons of olive oil is probably cheaper than premiums will be. See also: More Transparency Needed on Premiums   Reason #4: Some Government Subsidies for Insurers Are Ending Since 2014, the government has provided some subsidies to marketplace insurers that cover higher-cost patients. These subsidies significantly reduced the cost to insurance companies and made them more inclined to work through the problems. But this program is ending in 2017, and it’s expected that premiums will go up 4% to 7% as a result. Reason #5: It’s Not Easy to Fix a Giant Market Unfortunately, fixing a giant market like health insurance isn’t simple. This should surprise absolutely no one. First, the government is involved. Fixing anything government is always a nightmare, taking years of meetings, proposals and backroom deals. Second, the healthcare industry is involved, which is only slightly less unwieldy than the government. Getting both of these entities to actually make progress is like trying to convince an elderly person that rock ‘n roll doesn’t sound like pots and pans banging together. Lots of solutions have been proposed, but a single, straightforward solution has not been adopted. Reason #6: The Market Is Smaller Than Expected Chalk this one up to yet another miscalculation by the government. It turns out that significantly fewer people are enrolled in the insurance marketplace than expected. Like, 50% less. Young adults in particular aren’t signing up, probably due to the fact that the penalty for not signing up has only been around $150. A smaller market means that insurance companies can't absorb the cost of particularly ill patients as easily. In larger cities, enough people may enroll to spread out the risks, but in smaller areas insurance companies are hit hard. This, of course, causes insurance companies to pull out, increasing the problem even more. Reason #7: The Rules Aren’t Helping Things One of Obama’s big selling points for his healthcare plan was that insurance companies wouldn’t be able to deny coverage to those with preexisting conditions. This sounds great in the public square but doesn’t always work well in reality. Currently, the government forces insurance companies to cover people but doesn’t offer the companies assistance when their costs exceed their revenues. If an insurance company doesn’t think it will make money, it will pull out faster than Donald Trump says something ill-advised. See also: A New Way To Pay Long Term Care Insurance Premiums – Tax Free!   Conclusion It’s easy to be critical of Obamacare, but we should also recognize the great things it has achieved. Many people who would never have received medical coverage have been able to get the treatments they desperately wanted. Will the problems be fixed? Let's hope. But as we’ve seen, creating a solution that works for both consumers and insurance companies isn’t easy. This article originally appeared at Life Insurance Post and has been republished with the permission of lifeinsurancepost.com.

This week will be fairly quick, because I'm touring Civil War battlefields with my daughters, the younger of whom will soon launch into a senior thesis on some aspect of the war, and I have a long drive to Vicksburg in my immediate future. But I wanted to pass on one observation that surprised me, despite my having read dozens of books on the war over the years: Seemingly small innovations can make all the difference.

We've all heard that the generals fight the last war, and that certainly showed in early tactics in the Civil War, when the lines of infantrymen firing and reloading in turn would have looked familiar to George Washington. But the generals gradually learned the value of entrenchments, and here's where small differences mattered.

When Union Gen. Ulysses S. Grant attacked the Confederates at Cold Harbor as he finally closed in on the Confederate capital of Richmond, VA, in mid-1864, he had success on the first day, when the Confederates had only had time to dig the sort of shallow trenches that were common early in the war. Emboldened, Grant ordered an overwhelming assault by his 108,000-man army the next day. His commanders couldn't bring their troops to bear in time, but Grant went ahead with the attack the morning of the day after that. By this point, though, the Confederates had time to build the better trenches that had evolved during the war, and going from two-feet deep to four-feet deep made all the difference. (Many of these trenches were so sturdy that they're readily visible more than 150 years later.) Grant's forces suffered 3,000 to 7,000 casualties in no time—the chaos made the number unusually hard to count—while throwing themselves against what turned out to be impenetrable barriers. One Confederate soldier who had been at the center of the attack wrote that it ended so fast that he barely knew anything had happened.

Mark Twain once said, "The difference between the right word and the almost right word is the difference between lightning and a lightning bug." And, in my experience, the same is true of innovation. I know a guy who almost invented the iPad (his startup was 10 years early) and almost founded eBay (his auction site took delivery of goods and shipped them, rather than just facilitating transactions, as eBay did).  

The only way to increase your odds of finding lightning, not a lightning bug, is to experiment relentlessly, with as many possible combinations as you can. All sorts of small things—product features, user experience, etc.—can mean the difference between success and failure.

Until next week, here's wishing you a four-foot-deep trench, not a two-foot-deep one, as you innovate in this season of great change in the insurance world.

Cheers,

Paul Carroll,
Editor-in-Chief 

The states do not have a constitutional “right” to oversee insurance. Clearly, insurance and reinsurance is interstate commerce, which gives federal government the oversight. There are no states rights issues involved. The McCarran–Ferguson Act, 15 U.S.C. §§ 1011-1015, which was passed by Congress in 1945, does not regulate insurance, nor does it mandate the state regulation of insurance. Section 2(b) of the act does specify that the business of insurance is exempt from the antitrust laws only if it is regulated by the states. It provides that "Acts of Congress" that do not expressly regulate the "business of insurance" will not preempt state laws or regulations that regulate the "business of insurance." What else was going on in 1945? Oh, yeah, that World War II thing. Perhaps congress then did not want more responsibility. It is time that this war-generated act is revisited. "Perfunctory" would be a kind word for how some of the states actually oversee the insurance process. I have personally experienced insurance departments that are totally unaware of the laws by which they are supposed to be regulating insurance. Regulators either do not know the law or do not care about enforcing it. While I have not witnessed the federal government’s efficiency, to continue the regulatory status quo is to argue that the demonstrated 50-plus (states and territories) individual messes are better than one big mess, while having to accept as a foregone conclusion that a federal system would be a mess. The states have clearly proven to be lacking in both integrity and self-restraint. The 2015 State Integrity Investigation shows the reality of the situation. Only three states score higher than D-plus; 11 states flunked. The State Integrity Investigation is an in-depth collaboration designed to assess transparency, accountability, ethics and oversight in state government, spotlight the states that are doing things right and expose practices that undermine trust in state capitals. The project is not a measure of corruption, but of state governments’ overall accountability and transparency. The investigation looks at both the laws in place and the “in practice” implementation of those laws to assess the systems that are meant to prevent corruption and expose it when it does occur. State foxes are guarding the henhouse. While the state insurance regulatory heads are adamant about keeping their perfunctory regulation of insurance based on the misnomer of “states’ rights,” they are by design or defect giving away that power to the quasi-private nongovernmental National Association of Insurance Commissioners (NAIC) or the private rating agencies, which may be thought of as shadow regulators. In the name of commonality of law among the states, the NAIC produces model legislation, which the states are pressured to accept, lest they lose their cherished accreditation status by the NAIC. See also: How to Bulletproof Regulatory Risk   The tactic used by the NAIC is not unlike the federal speed limit of 55 MPH in the '70s and '80s. Where does the federal government have the right to tell any state what its speed limit should be? It doesn’t. But the Transportation Department said, Do this, or we won’t give you any highway funds. So how does this NAIC model legislation thing work? Here is an example. In the NAIC’s Deceptive Trade Practices Act (DTPA) or (Unfair Trade Practices Act), the NAIC said that if a company does something (bad) with regularity, that may be considered a “trade practice.” Originally, this was NOT anything but additional ammunition for the state insurance regulator, but when Texas passed this model, it did so with two big changes:

1. A one-time act of bad by the insurance company could be considered a trade practice.
2. There was a private right of action against the insurance company for violating the DTPA -- the right didn't just belong to the insurance regulator.

Oklahoma passed the act close to the way the NAIC wrote it, yet according to the NAIC both states have passed the model. But sameness in name does not mean sameness in fact. Fighting Back: Not everyone sees this drift toward private oversight as a good thing for the insurance consumer. The National Conference of Insurance Legislators (NCOIL) -- those elected guys who actually pass the insurance legislation -- are trying to do something about the drift. At its fall meeting in November 2015, NCOIL urged each state legislature, the departments of insurance and insurance commissioners to foster competition in insurer rating. No single insurer rating agency should be allowed to position itself to supersede state regulation. The message is clear; the state is in charge of insurance regulation, not some private rating agency setting up rules as to what an insurance company must do to get a certain grade. Major intermediaries appear to favor state oversight, which is logical because reinsurance intermediaries are basically unregulated by the various states, and they are not so likely to remain unregulated if the federal government assumes its rightful place in insurance regulation. Thomas B. Considine, now NCOIL’s chief executive but previously commissioner of the New Jersey Department of Banking and Insurance, used NCOIL’s spring meeting in New Orleans as the venue to raise public concerns about states becoming subject to the authority of the NAIC, a private trade association composed of the nation’s insurance regulators. The circumstance under which lawmaking authority may be delegated to private organizations is narrow. For that reason, delegation of states' authority to a private organization (such as the NAIC) needs to be stopped. The situation makes a good argument for the Treasury Department’s Federal Insurance Office, an agency whose existence has been questioned by the NAIC, as well as some other elements of the industry. State oversight is not a good argument against federal oversight, especially when the state regulator is doing what it can to cede its power to the private industry and away from itself. See also: Investment Oversight: Look Beyond Scores!   Bigger issue This is not just a turf war; it goes to the very core of the McCarran Ferguson Act itself. An analysis of the act will determine the scope of the antitrust exemptions. History paints a narrow picture. Issues are not centered on whether Congress has the power to regulate the business of insurance but rather whether the commerce clause precludes state regulation altogether. That changes the argument and the analysis. This is also not a case of which oversight is more appropriate, federal or state, but whether the state should be allowed to continue its oversight in order for various federal exemptions to apply to the entities in the business of insurance. That is, the Sherman, Clayton, and Federal Trade Commission (antitrust laws) apply to insurance only “to the extent that such business is not regulated by state law.” If states regulate, then exemptions apply; if the states do not regulate, the exemptions do not apply. This is a very clear indication that any dismissive perfunctory attitude of some state regulators invites the application of federal law against those in the business of insurance. Analysis

1. Is the activity part of the business of insurance? (Unfortunately, the act does not define the business of insurance, and the legislative history here is not clear.)
2. If it is, then the analysis goes to the extent to which the activity is regulated by the state. § 2 (b) of the McCarran -Ferguson Act addresses the state regulation activity. (Case law shows that any uncertainty regarding the applicability of the exemption should be resolved against a grant of antitrust immunity.) Unfortunately, the U.S. Supreme Court has not defined what extent is necessary; however, lower courts hold that a statutory framework that is a mere pretense is insufficient. Perfunctory regulation won’t suffice. The legislative history indicates that Congress intended the exemption only when effective state law exists.
3. If the activity is not regulated effectively by the state, or if the activity constitutes a form of boycott, coercion or intimidation, the activity will be subject to the scrutiny of the antitrust laws.

The wholesale delegation of authority by the various states to the NAIC or deferring to select private rating agencies brings with it the very real possibility of a successful challenge to the state’s current insurance regulatory status quo.

Connected insurance is the next “big thing." It will be enabled by the IoT, big data and artificial intelligence. Health, home and motor insurance are three pillars of this connected, evolving landscape. Microinsurance comes as a transversal opportunity that can help close the protection gap while allowing carriers to propose customer-centric products and services. But connected insurance is mainly about people: how to reach and engage with them in an efficient way while connecting their risks with their insurance cover. I refer to connected insurance as: any insurance solution based on sensors for collecting data on the state of an insured risk and of telematics for remote transmission and management of the data collected. This definition can be applied in all the sectors from motor, house and health to life and industries. So you have this great capacity to register, deposit and analyze data that comes directly from the users, giving the insurer new insight into actual behaviors and lifestyles:

1. You have the impact on the insurance bottom line that comes as a result of specialization.
2. You’ve got frequency of interaction with the customer that puts the insurer much closer but is less invasive than before. In other words a new, customized and more efficient digital customer experience.
3. You create knowledge, a key issue for insurers, which have more data on risks and their customer base.
4. You get to improve lifestyles in the long run, with positive externalities for a sustainable society.

See also: 5 Innovations in Microinsurance   In this innovative landscape, microinsurance is a transversal opportunity for insurers to get closer to their clients, offering the right coverage at the right time. Above, you can see a good matrix that shows how some of the players are positioned on the market based on their sales approach and their distribution model. You’ve got the group in the lower left corner that has more of a standard pull approach regarding their customers and has stand-alone solutions, in most cases based on their own mobile app solutions. I am of the opinion that integration with partners in a plug-and-play approach is much more efficient in reaching potential customers out there. By looking at the lower right corner, you can see how there are many solutions of this type but still using a pull commercial approach. Now the interesting part is when you start to mix the two sales approaches (between pull and push) and you get the well-known Asian insurer Tokio Marine, which has been on the market with its microinsurance solutions since 2010. And finally we get to the upper right corner, where you can see the logo of Neosurance, the insurtech startup that I co-founded a little over a year ago. I personally believe that it’s really well-positioned based on the criteria that I find to be particularly relevant on the market today: selling microinsurance via push notifications that are sent to the user in an intelligent way thanks to an artificial intelligence machine learning system. Plus you’ve got great reach through the use of existing communities (they have their own mobile applications) with users that have homogenous interests. We must consider a statement regarding the industry that has proven true for the last decades: “Insurance purchase is not exciting; insurance is sold not bought!” The average attention human span has been dropping: from 12 seconds in 2000, to 8 seconds in 2013. We’re slowly transforming into pretty goldfish, happily living in our bowls. So the insurer has to address the current context, which has dramatically changed with the arrival of mobile and then smartphone technology. Get the customer’s attention by using the same channels that they use and talk to them in their language. Insurance should adapt to the customer’s habits and environment. The best way to do that in my opinion is by selling microinsurance that has a short duration with a push approach. Know what the customer needs before he or she does! Then you’ll be able to give the right insurance coverage, when the clients need it, directly on their smartphones. The trick here is being able to avoid annoying the customers with offers that do not interest them directly, in the wrong moments. To avoid that ,you would need to use a system that can give you insight into the lifestyle and preferences of the users. A good microinsurance solutions has to be able to create a seamless digital customer experience by reading and interpreting customer behaviors and emotions. The aim here is to create a win-win situation for customers and insurers alike. And push microinsurance has just what it takes. For customers: always close at hand when they need to be protected, with the possibility of buying personalized microinsurance on the spot directly from the smartphone. For the insurer, it’s still very much uncharted territory to be explored but can also raise profitability levels significantly while avoiding moral hazard. This comes as a consequence of having a digital salesforce that sells insurance in a smart way because of AI and machine-learning capabilities and can reach the connected generation right where they like to spend most of their time: on their smartphones. See also: Microinsurance Has Macro Future Recent studies reported that millennials are currently the most underinsured generation and are the least likely to have health, rental, life and disability insurance. So, what’s the magical combination for winning their attention? The key 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. Moreover, millennials are just the tip of the iceberg: The "connected generation" is the single most important customer segment. Empowered by technology, they search out authentic services that they use across platforms and screens, whenever and wherever they can. We believe in a new distribution paradigm for the insurance sector: to stimulate the emotional need of protection, when the insurance coverage is not compulsory. Our artificial intelligence engine delivers a push suggestion at the right time with the right offer to provide a simple solution to this protection need, a promise easy to understand and convenient to purchase. We work with insurers and reinsurers to create insurance propositions while developing a streamlined purchasing process.

Over the past few weeks, I had the pleasure of meeting with a number of insurtech startups. Their mission? To create a customer-first company. One team is finding that customers believe insurance has more of a transparency challenge than a trust deficit – there is an increasing desire to know how their premium dollars are spent and how an insurance company views their risk. Many of these meetings were held shortly after Evan Greenberg, CEO of Chubb, commented on broker commissions and fees in the commercial insurance market. Whether you agree with Greenberg’s comments, what really attracted customers’ attention is the lack of fee and commission transparency within the commercial insurance market. Furthermore, many insurtech articles stress that, for a long time, brokers have been able to capitalize on the industry’s lack of access and transparency. These articles rarely highlight existing customer rights, nor do they articulate how commissions and fees have evolved in the commercial insurance industry. See also: More Transparency Needed on Premiums   Regulations in a number of jurisdictions make clear that insurance buyers are entitled to request the actual level of commission and fees earned by their service provider. For those jurisdictions where customer rights are not as clear, any customer is still within his rights to request this information as he is paying for services and products. For the past 20 years, brokers have shied away from having a frank dialogue with customers about the true costs of servicing a customer’s insurance program for fear of losing business to competitors. This fear of adequately charging for broker services, combined with decreasing standard policy commissions, led many brokers to consider alternative ways to make up revenue shortfalls. Increased commissions and fees from insurance companies provided the answer via traditional placements or the creation of broker facilities. Simultaneously, customer service has been redefined over time – many brokers now focus on reducing customer premiums as a way of evidencing value to customers. This focus is not a true service, nor is it really reducing overall costs as broker commissions and fees are passed on to customers through insurance premiums. These increasing costs hurt an insurance company's balance sheet. Just a quick reminder: A healthy balance sheet is required to pay claims! Why does a healthy balance sheet matter? Have you ever experienced the insolvency of an insurer or reinsurer? Have you ever informed customers they may only receive five cents on the dollar for existing and future claims? Unfortunately, I had these experiences on a number of occasions during my early career as a claims manager -- and I hope to never have the experience again! Fortunately, insolvencies are now rare events, due in part to the prudential regulatory regimes applicable to insurers, but that does not mean there is a bottomless commercial insurance company treasure chest for ever-increasing commissions and fees. Can insurtech companies lead the way forward? Marketing materials stress that insurtech startups are “customer-focused,” and their propositions are characterized by “convenience, on-demand, personalization and transparency.” For some of the startups, the company website and buying process stress that  “the business aims to provide transparency.” Other startups list their fees on the company website and clearly evidence commissions on customer quotes. One insurtech broker has taken additional steps on the company website to 1) define profit commissions and 2) provide a schedule of profit commission schemes currently in place with insurance partners (none listed as of May 3, 2017). This level of detail provides the customer with highlights of financial arrangements and improves financial transparency in the customer-broker-insurance company relationship. The future of transparency? Even though the insurtech industry has been progressing very swiftly, not every major insurtech startup is a roaring success.  SME customers can now compare commercial insurance products and services on offer, while improving their knowledge of products and service costs. See also: Is Transparency the Answer in Healthcare?   Commercial insurance brokers can lead transparency efforts by initiating frank conversations with customers about the true costs of products and customer-specific services and negotiate commissions and fees accordingly. However, as noted in my previous operations and product development articles, brokers, insurers and reinsurers must simultaneously review existing operations to create better efficiencies, reduce costs and improve customer services. These changes can be achieved through cutting-edge transformation programs, investment in new technologies or partnerships with insurtech companies. Why is a simultaneous review important? Because customers are not only bearing the costs of current broker commissions and fees via premium payments, they are also bearing the high costs of supporting antiquated commercial insurance operations. Let’s improve all levels of service and transparency in the commercial insurance buying cycle and help customers make better informed decisions!

In the past 10 to 15 years, insurance technology, or insurtech, has been taking the world by storm. In fact, in 2016, VC investment in insurtech exceeded $1 billion. The rise of insurtech is largely due to the ever-increasing use of mobile devices and the need for quick, simple and safe insurance solutions that mobile users can use regularly. However, even though the insurtech industry has been progressing very swiftly, not every major insurtech startup is a roaring success. Here is a look at some of the lessons from insurtech's successes and failures. Successes

• Everquote – Everquote is an insurtech company that helps people compare quotes for auto insurance premiums. The company was founded in 2010, and generated over $100 million in revenue in 2015.
• Coverfox – Coverfox is a Mumbai-based insurance brokerage that enables people to easily buy insurance online. This company was founded in 2013. In 2015, it received $12 million in Series B funding. Its website currently averages 280k hits per month.
• The Zebra – The Zebra is also an auto insurance comparison platform, like Everquote. This company was founded in 2012 in Texas. The Zebra has received over $23 million in investing, including an investment from Mark Cuban.

These three companies all fill significant needs in the insurance market. Everquote and The Zebra both allow customers to shop for the lowest auto insurance rates, and CoverFox allows people to find insurance coverage incredibly quickly for a broad range of risks. See also: 5 Insurtech Trends for the Rest of 2017   Also, all of these companies were founded in the last seven years, during the period when the insurtech market really started to heat up. So, the success of these companies is the result of a combination of good timing, the usefulness of service, and also, being appealing to vast numbers of people. The Less Fortunate Most insurtech companies do not enjoy the level of success obtained by Everquote, CoverFox, and The Zebra. In fact, like most startups, the majority in the insurtech field fail. Buy why? And what lessons can we learn? Here are some of the top reasons for failure cited by insurtech founders whose companies failed.

• Timing – 5 insurtech founders said that one of the biggest reasons why their businesses failed was because of bad timing. This means either being too early or too late to market, and not meeting a consumer need that is current and strong.
• Not Getting Funding Early Enough – Delaying funding was another reason cited as a key reason why insurtech companies failed. This makes logical sense, as funding brings company resources and stability to a whole new level. It also earns insurtech startups some degree of prestige that's hard to obtain without it.
• Lack of Specialists on Staff – Often, startups do not realize the importance of having experts on staff who can take care of the complicated technical aspects of the business. Startups may be founded on a great idea, but that doesn’t mean that the people founding them have all of the required skills to make the company successful. Because of this, it’s no surprise that lack of specialists on staff was cited as another key reason why Insurtech companies fail.

See also: 10 Trends at Heart of Insurtech Revolution   Final Thoughts The insurtech industry is projected to grow steadily in the next few years. In fact, a single hedge VC firm, Aviva Ventures, plans to invest $100 million by itself in insurtech by 2020. That is just one firm! However, despite the strong predicted growth of the market, this does not mean that every insurtech startup will succeed. In fact, many will likely fail. The companies who can emulate this industry's successes and avoid the causes of failure mentioned above may have a better chance of achieving success.

Your best friend in negotiation can be your opponent—provided you put your report where your mouth is. Too often, parties withhold evidence that would support their position. Sure, your opponent’s initial reaction may be to denigrate your evidence. But your opponent may not have anything to refute it. It might even be too late for him to try to work up something. See also: How Should Workers’ Compensation Evolve? Help Your Opponent Convince the Client So why did it take so long to get to this point? Because you have been hiding the ball. If you expect large sums for a life pension or for treatment the carrier had denied. plus penalties plus fees, be prepared to show why the employer was wrong. You can’t expect opposing counsel to advise the client to change the case evaluation if you’ve been keeping secret the reports that crush the opponent's position. Of course, timing is important. There are many reasons why you might not want to show your hand too early. But by the time you are at the mediation table, you must be prepared to put your cards on the table. How Mediation Confidentiality Helps Perhaps you have a sub rosa video or some other smoking gun the other side doesn’t know about. Your mediation brief can be confidential-- for the mediator's eyes only. When you are in caucus (a private meeting with the mediator), you can discuss secret information with the mediator. If you don’t want it disclosed to the other side, it goes no further. But putting the mediator in the picture allows her to frame the issues in the case to maximize the potential for settlement. See also: 25 Axioms Of Medical Care In The Workers Compensation System   Negotiations succeed when parties are in the same ballpark. If you don’t communicate what your ballpark is, your opponent will assume that their evaluation is the correct one. It’s hard to play in the same game when one of you is at Dodger Stadium in L.A. and the other is at Angel Stadium in Anaheim. To bring everyone to the same field, you have to communicate.

In 1993, my business cards included the tagline: Risk, Insurance and Change Management. When asked for a definition of change management, I would explain that change was the transition from today through tomorrows (the "s" on "tomorrow" suggested it is a process not an event). Management was about solving problems and capitalizing on opportunities as you worked through the process. More and more people now claim to manage change. I no longer do. See also: 3 Main Mistakes in Change Management   As the term became over- and misused, I moved to "change architect." The tagline chosen was a quote from Peter Drucker, “The best way to predict the future is to create it.” I even copyrighted and added the term "carpe mañana." (Seize tomorrow.) Early in the process, I heard a speaker state correctly, “Change isn’t progress. Change is the price we pay for progress.” How true it is. Today as I was struggling to address an issue of resistance to change, I had an “aha moment.” I realized that, in most organizations and most cultures, change management is not about the change; it’s all about the management (control of change). It is not about making the future better. It is about protecting and preserving the status quo – the individual and collective comfort zones. If you are serious about the future, don’t stand in today and look back to the good old days. Instead, turn your back on yesterday and look boldly to the horizon and design and build your own tomorrow – your future. See also: Is It Time for Un-Change Management?   Remember, “The greatest risk is not taking one.” (AIG Annual Report).

Identity theft is still out there, keeping pace with the latest innovations and security measures and snaring new victims every day. With the advent of cheaper, standalone, easy-to-integrate biometric technology for authentication, is it time to buy a fingerprint scanner? What’s a biometric scanner? Biometric technology uses physical or biological information, like a fingerprint, retinal scan or heartbeat, to authenticate a person’s identity. You can currently purchase the most commonplace biometric scanner—that is, one that uses a fingerprint—starting at around $50. The scanner can be used to protect computers and other devices that support biometric scanning technology. Do biometrics provide additional security? The short answer: Yes. Authentication can effectively use three things to keep the wrong people out: something you know, something you have and something you are. We’re all familiar with the first line of defense. “What you know” takes the form of security questions, passwords and a security picture, and there are various strategies to keep it all straight. Some choose to use password managers or proprietary systems like Apple’s iCloud Keychain. Others prefer to have an encrypted personal security list (logins, passwords) stored on a cloud server. Still others put “what they know” (but couldn’t possibly remember) on a USB stored on a keychain or in a safe if the information is not encrypted. And, yes, some go a little further, choosing to use a fingerprint-encrypted drive (i.e., biometrics). How you manage what you know comes down to personal preference, but the first line of defense is not fail-safe. In fact, there are hacks and breaches all the time. (If you believe you were the victim of a hack, you can view two of your free credit scores on Credit.com for signs of identity theft.) See also: Are Passwords Finally Becoming Passé?   The second line of defense, “something you have,” could be access to an email account, a key fob or your mobile phone. You need to have your phone in hand, for instance, to receive the verification code so you can get waved through some digital security checks. This is called two-factor authentication—and, yes, it’s more secure than simply protecting accounts with an alphanumerical password. The last line of defense, “something you are,” is a really hot topic right now. As I mentioned earlier, in sophisticated systems, this might include a scan of your retina, your finger- or handprints, your body weight (including ups and downs), your height, your face or all of the above. This information is clearly specific to you—and not so easily replicated—so, again, it’s miles more secure that the old standard password or even two-factor authentication. Needless to say, were you to implement a security protocol that combined all three of the above protocols of authentication, a) criminals would have a really hard time making any money, but b) we would all be frustrated. Does it have a place in the home? Biometric authenticators have been the security mode for quite some time in the military and wherever large amounts of money or gold or drugs or weapons are stored, as seen in countless spy and heist movies, but they are slowly making their way into people’s homes. From smartphones to gun lockers to personal computers, a steady march of devices is offering a biometric element for the user-authentication process. One example comes by way of a new secure credit card being tested by MasterCard in a chain of supermarkets in South Africa. The card is able to store an encrypted copy of the user’s fingerprint, which would make it exceedingly difficult for a scammer to beat. (Would it be impossible to beat? As with all great capers, only the crooks know for sure. There was a flurry of coverage not too long ago about how photos of people flashing a peace sign could lead to the theft of their fingerprints, thanks to the proliferation of high-definition cameras. But fact-checking website Snopes listed the story as “Unproven,” and for good reason. While it is theoretically possible, no criminals have been caught doing it.) Should I buy a fingerprint scanner? Here’s the rub: You won’t really need to. Unless you were born a long time ago, you may not know what an 8-track is. It came before the cassette tape, which preceded the CD, which is the grandfather of the MP3. When you want to make a point about obsolescence, there are few better examples than those clunky old tapes. I bring them up because current standalone biometric scanners are without a doubt the 8-track of digital security devices. See also: Biometrics and Fraud Prevention: Seeing Eye to Eye   If you accept the similarity between biometric scanning devices and MP3 players, the answer to the question above will be crystal clear. These days, MP3s can be played by all the devices we use most. We’re seeing the same thing happen with biometric scanning. Whether it’s a smartphone, a computer or MasterCard’s new fingerprint-encrypted cards, all stripes of products you use on a daily basis eventually will feature built-in biometric scanners. And, if you are buying something today and prefer devices with built-in (rather than bolt-on) security, don’t despair. There already are plenty of choices out there. Case in point: Anyone with the latest generation of a particular smartphone likely has the option of locking and unlocking the device with their thumb. Personally, unless and until all devices that should be secure feature biometric scanners, I would suggest opting for those that do—much in the same way I’d advise you to refrain from using “1234” as your password. You can learn more about biometric technology, how it works (and whether it can be hacked) here. 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. This post originally appeared on ThirdCertainty.

When Chris Urmson talks about driverless cars, everyone should listen. This has been true throughout his career, but it is especially true now. Few have had better vantage points on the state of the art and the practical business and engineering challenges of building driverless cars. Urmson has been at the forefront for more than a decade, first as a leading researcher at CMU, then as longtime director of Google’s self-driving car (SDC) program and now as CEO of a driverless car dream team at Aurora Innovation. Urmson’s recent “Perspectives on Self-Driving Cars” lecture at Carnegie Mellon was particularly interesting because he has had time to absorb the lessons from his long tenure at Google and translate those into his next moves at Aurora. He was also in a thoughtful space at his alma mater, surrounded by mentors, colleagues and students. And, it is early enough in his new startup’s journey that he seemed truly in “perspective” rather than “pitch” mode. The entire presentation is worth watching. Here are six takeaways: 1. There is a lot more chaos on the road than most recognize.