Insurance is overweight and unhealthy. For too long, the insurance industry has accepted that it is OK for at least a third of customer’s money to be spent on admin, overheads, sales and marketing. Insurance CEOs have been announcing operational efficiency programs for years, yet the percentage of premium left for the risk pool hasn’t really changed. Thank goodness for the insurtech digital implementation strategy for insurers! Hampered by legacy technology, large workforces and cumbersome business processes, insurance is an inefficient business. But that’s changing! Insurtech is now on the corporate agenda for all insurers who wish to be around in the next five to 10 years — which means embracing digital ways of working in an age where speed of change is the defining characteristic. For this month’s “Insurtech Insights,” Rick Huckstep explores the subject of the insurtech digital implementation strategy and the impact of digital platforms as an alternative to core systems implementations. Why now for insurtech? The insurance industry has always been a technology user, so why is there now all this fuss over and attention about insurtech digital implementation? IMHO, insurance is going through a massive catch-up phase. I call this a rapid evolution, rather than use “disruption.” Nonetheless, this is about digital implementation for insurers, who have failed to keep pace with technology since the mid-'90s and the birth of the internet. You only have to consider the iPhone, already a decade old, and incumbent insurers still appear clumsy when going “mobile.” For decades, software vendors and systems integrators were the source of technology insight and innovation. Now they find themselves increasingly irrelevant in the digital age — even more so with the emergence of insurtech. That is why many are scrambling around looking for ways to engage with the insurtech ecosystem; if anyone is going to be disrupted by insurtech, it will be them! See also: Let’s Keep ‘Digital’ in Perspective   The problem is that software vendors have focused on providing all-encompassing core systems at massive expense and demand on company resources. Often, by the time these large IT implementations are finished, they are already a legacy system. It is no wonder that so much of the IT budget is spent on keeping the lights on, leaving little for internal innovation and value creation. These core insurance systems are like giant aircraft carriers. They’ve got massive capability and scale and are deep and rich functionally, are generalist and are built to last (well, at least 17 years, which is about the average for a policy admin system.) They are designed and built to do just about everything! They are also very expensive, take ages to commission and are difficult to adapt to external, unforeseen changes. Whereas insurtech's core systems are like the latest generation of robotic armed patrol boats — agile, automated, cheaper, have a shorter cycle times to commission and are task-specific. The demise of core systems In the traditional software licensing model (the way legacy systems are sold), the insurer buys a license to use the software. For this, the insurer typically pays a large one-off, upfront fee. Then, the insurer pays an annual maintenance charge that is based on a percentage of this fee (in the 15% to 25% range). Added to this is the cost of implementation. This is where the systems integrators come in, because not all software vendors provide the services needed to implement and configure the new system. These implementations become large IT-led projects that are measured in years and tens, if not hundreds, of millions of dollars. And they’re big decisions that the insurer is going to have to live with for several decades! That is why the average time to make a buying decision is also measured in years. Meanwhile, the product and sales teams are frustrated by the IT department because it sees customer opportunities and competitive threats in a constantly moving market and is powerless to respond. IT has become a constraint — not the enabler it was always meant to be. Speed-to-market has become an oxymoron! The rise of the platform By contrast, those involved with insurtech are digital natives, mobile in nature and cloud-savvy. The entrepreneurs and founders are born out of the post-iPhone world. For the insurtechs, it’s all about building a flexible and agile tech platform. There’s little need for an in-house IT department when the insurer can buy a service on a pay-as-you go basis. The insurtech digital implementation can be measured in months and thousands of dollars (instead of years and millions). Speed-to-market is the defining characteristic of these tech-enabled platforms. In the old-world model, if an insurer wanted to launch a new product or enter a new market, they’d have IT on the critical path, defining the timescale for the launch. Partnering is the new route to market In the insurtech world, it’s a different story. And the incumbent insurers have cottoned on to the new way of working: partnering. In this model, the insurer picks insurtech platforms — rather than deploying their own core systems — when launching new products. The insurer focuses on insurance. The insurtech focuses on tech. A leader in this model is Munich Re Digital Partners. Its approach is to provide its own underwriting platform as the back-end engine while the insurtech partner provides the product and customer engagement. Either way, this insurtech digital implementation strategy offers insurers speed, cost and customer advantages. The result is a significantly less expensive implementation approach with a quicker actual speed to market. Let me give you an example. Let’s say Insurer A wants to launch a health product in a new territory. Its insurtech digital implementation strategy is to partner with, for example, Sureify. If you don’t know Sureify, here’s what I wrote about them last year under the heading “Sureify, the Salesforce.com of insurance engagement.” In it, I described the company as follows: “Sureify is an insurance technology platform that allows insurers to digitally acquire, engage and up-sell with prospective and current policyholders. Part of the platform capabilities includes health, disability and life insurance products built around IoT devices to enable dynamic premium modeling. It is a platform that emphasizes web and mobile distribution channels with multiple engagement possibilities. And it is offered as a white-label platform for the carriers where they define the underwriting questions, policy terms, risk and pricing tables using a plug-and-play approach.”  Digitalization is the redirection of the company to the customer To get a industry perspective on the subject of digital implementation, who better to give me an opinion than the well-qualified Martin Pluschke, head of digitalization at NuernbergerVersicherung. We met up recently at a RiskMinds conference in Amsterdam, where we were both speaking. Martin and I first met during Startupbootcamp’s original insurtech cohort in 2015. I was mentoring, and he was the executive in residence as part of the Munich Re/Ergo support for the program. Martin has spent 25 years in the insurance industry, but he also has several years working with insurtech start-ups at SBC and Axel Springer Plug & Play Accelerator. I asked him for his POV on digital implementation. He said: “Digitalization is the redirection of the company to the customer. This means that we have to look at the whole value-chain — from product management, contract closing to claims processing. Everything we do has to be from the customer’s mindset. It’s a totally new way of thinking for the insurer. There is nothing else, it is all about the customer.” This is 21st century insurtech thinking inside one of Germany’s oldest life insurers. Formed in 1884, Nurnberger has plenty of experience adapting to challenges and changing customer behavior. The company is no stranger to technology, either. Any life insurer that has been around this long will have seen massive technology change — from tabulation to the introduction of programmable computing in the 1950s to the internet age and now to 21st century digitalization. Moving from passive risk taker to active risk manager Martin had something to say about this, as well: “The new model for insurance is tech with insurance. Insurers must change from being a passive risk taker, where they take a bet and wait for a claim. They win when no claim is made. “With the use of tech, insurers can have a new relationship with customers. They become an active risk manager. In this model, the insurer will add value through additional services to the customer, such as giving customers advice on ways to manage their risk or offering them specific support and solutions when they have a problem.” What Martin is describing is one of the key insurtech trends of engagement. This is where the relationship with the insurer is not a once a year occurrence. Instead, the insurer finds ways to continually engage with its customer through the use of tech, such as wearables, telematics and IoT. The result is enhanced customer loyalty where value replaces price as the key buying criteria. See also: Digital’ Needs a Personal Touch   Executive mindset is critical to insurtech digital implementation  I asked Martin how well prepared he thinks are insurers for digital implementation? He said: “It starts with the very top. The executive mindset is critical because they can not measure the outcome of their decisions based on a business case or ROI anymore. Never try, never learn! That is the way insurers have to think now. That is the way startups and entrepreneurs think and act. But that is very difficult for insurers who are risk-averse. Which is why the strategic commitment to digital implementation can only come from the top layer of management. In my view, this is no longer optional for insurers. The only way to stay in the market is to become totally digital. It is a matter of survival.” I totally agree with Martin on this point. When we look back at today, the winners and losers will be defined by those that did and did not embrace an insurtech digital implementation strategy. The likes of Munich Re, Swiss Re, Aviva and others are all showing a clear intent towards embracing insurtech digital implementation through partnerships and a customer centric digital strategy. They will be among the winners.  Ditching the legacy The only way insurers can fully embrace an insurtech digital implementation strategy is to take a clean-sheet approach. This means ditching the legacy! IMHO, we will start to see insurers separate out their current operations, books of business and all the legacy that goes with it. They will no longer try and re-platform, modernize, migrate their existing core systems or redirect precious resources at another operational efficiency program to take out huge swaths of costs. At the end of the day, all these programs do is shift cost from one place to another. They seldom drive truly permanent and radical change. The insurance digital implementation strategy will be to run down investments in legacy operations and start new business ventures based on insurtech partnerships. And companies will put the customer at the very heart of their thinking. That will be the insurtech legacy!

“A thing of beauty is a joy forever.” This is the opening line of the very famous poem called Endymion by John Keats, published in the early 1800s. While this line is intended to set up a beautiful story about timeless romance, the line itself in popular culture has been used in literature, movies, ads and general conversation to describe everything from nature to art to science and more. Why? Because Keats did an awesome job of extracting the nuance of something that everyone can relate to — not just love, not just beauty, but timelessness. It’s human nature to want timelessness and sometimes even take it for granted. Good innovators know when something is going to fail the timelessness test. However, great innovators look at what’s failed or failing and, like a priceless painting unrecognizable from years of dust, extract what’s timeless and work hard to put it into a modern context. Let’s look at some of the most famous modern innovators and put a label on what timeless element they extracted and modernized.

• Steve Jobs (Apple): 24/7 connection to what’s important
• Mark Zuckerberg (Facebook): Social exchange and acceptance
• Jeff Bezos (Amazon): Convenience and time-saving
• Travis Kalanick (Uber): Anything on demand, including a job

Any company that is constantly looking at its products and their applicability to new consumers is practicing good innovation. However, those that can define the nugget of timelessness have a greater advantage. See also: Innovation Challenge for Commercial Lines   Recently, my colleagues and I have had the privilege of working with the American Fraternal Alliance, and we’re in the midst of an inspiring innovation initiative for what could be considered a dusty corner of the life insurance industry. 1. Why is it dusty? For background, fraternal benefit societies are organizations of people who usually share a common ethnic, religious or vocational affiliation and may provide insurance to members, primarily life insurance. While this model dates back hundreds of years, the dustiness doesn’t come just from age. For starters, the practices and language used by these societies can conjure up outdated or inaccurate images because connotations of words and phrases change over time. More important, for some, there is a decline or weakening of the common bond that drew the group together in the first place, requiring it to be updated. 2. Why is it inspiring? The insurance industry provides a valuable utility to the public, yet consumers today have a negative impression of the industry. Recent developments in healthcare don’t help that impression. Fraternals are a special kind of insurance organization that is required to give profits back to their communities; thereby, done right, they shift the focus naturally from what they offer to why they offer it. 3. What do they want to accomplish? The American Fraternal Alliance members want to reposition the fraternal model into the modern day and help more consumers understand it. However, it’s not an exercise of logos and fonts or sexy models selling something. It’s about finding and extracting what’s timeless and then communicating that in the right way. 4. How did they start? This group started with a small investment, to determine if there was an opportunity in the first place. What was found was very encouraging. While the awareness levels in the market were quite low as a starting point, when consumers intending to buy life insurance in the next two years were provided with a simple description of a fraternal, the overall impression was very positive. Then, when fraternals were described in a new way, overall positive impression went up by another 23 percentage points. Further, the interest level in buying from a fraternal was 70% when prospects were exposed to a new positioning message. This is further validated by signals in the market. We see younger consumers favoring brands that give back to communities all around the world. In addition, the disruptors in insurance are leveraging new definitions of community as a selling point for peer-to-peer models. See also: Examining Potential of Peer-to-Peer Insurers   That’s not to say there isn’t a lot of work still to be done. However, the innovation lesson here for the life insurance industry may be that community is timeless, and modernizing it may mean more to the future of insurance than modernizing insurance itself. Extracting what community really means and working hard to deliver on that value is what will ultimately move the needle in a meaningful way. Fraternals, dustiness aside, are in a great position to do that.

Every aspect of the way we interact with goods and service providers is becoming digitized, but it doesn't work to go partway. As insurers, we have to ask ourselves, “What does a complete digital experience for our customers and policyholders look like?”

In my travels over the last year, I have run into experiences with very large companies and enterprises that have excelled in customer service in the past, but today are falling short in the new digital experience realm. I’ll share some examples, and, insurers, lend an ear. There are valuable lessons to be learned here!

Earlier this year, I took my family to Disneyland. Disney, of course, is a leader in customer experience as well as digital transformation. Disney has gone out of its way to improve a customer’s access to park information. The company has digitized the ride process with fast pass and even offer a suite of apps to improve the customer experience. What I experienced though, in my view, was a fundamental failure to plan a digitally transformed end-to-end experience.

See also: Today’s Digital Customer: It’s Me  

Most people buy their Disney passes on-line. That’s great! That’s fast and easy. But the park entry process is still highly manual. Season pass holders are mixed in with day pass holders; check-in agents manually process the passes, check IDs and passports and take photos for multi-day pass holders. Meanwhile, day pass holders wait in a line of thousands of people all corralled into 20 lines, 100 people deep. This results in confusion, frustration and many children having meltdowns in the hot California sun. It took our family 45 minutes just to walk into the park.

The point is, digitization is great, but you have to think of the holistic experience – everything from buying a pass to getting customers into the park with an easy check in to getting them out again, and everything in between. Disney is one of the best, but even Disney can fall short. The reason is because digitization changes not only the front-end buying experience but the back-end processes, as well. Disney has access to immense amounts of data, including online ticket sales, and has the power to predict wait times and improve service at check in. The lesson here? When creating a digital experience, use all the tools available to you and don’t forget about the nuances of the experience. #disneyland

Of course, I have had some great and pleasantly surprising digital experiences over the last year, too. I took a ski trip and got to experience the Vail Resorts Epic Day Pass. Ski lift tickets have been replaced with RFID-enabled cards that are read without having to wait in line to be scanned. These Epic Day passes also synch to the Epic Mix app, which tracks your runs and your day on the mountain from a number of scanners placed on the lifts and throughout the mountain. The Epic Day pass also can load your credit card for use all over the mountain, so no need to carry a wallet. This is a great example of innovation and digitization with pure customer experience in mind from start to finish.

Just as surprising is what my daughter recently told me about the new online application to sign up my grandkids for swim lessons in her tiny New Hampshire town. Gone are the days of phone calls and paper applications. She says that, because of the online application, registrations are the highest ever!

Now, back to insurance. Did I mention that we recently renewed our professional liability policy? Every year, we are required to make a formal submission. Our agent was on top of it this year, we renewed early, and we actually received our quote and policy – all electronically! And then this happened: I just received a paper letter informing me that the expiring policy is not being renewed! Old, irrelevant and confusing. This automated paper form letter is disconnected with the renewal process and status. Unfortunately, there are still many cases like this happening in insurance.

See also: Customers’ Digital Expectations

These are just some thoughts from my travels about getting digitization right or missing the mark when it comes to the end-to-end customer experience. But insurers, take note: It is important to look at what outside companies are doing to see how they are digitizing their customer experience. If a tiny New Hampshire town can do it for preschool swim lessons, there is no reason insurers can’t make some significant steps to go digital.

Recent headlines report an upward trend in “deaths of despair” among middle-aged, white (non-Hispanic) men, most with less than a college education. For the past 100 years, life expectancy has been increasing, but, among this group, that trend suddenly went into reverse. The explanation that Princeton University economists give includes an increase in suicide, overdoses (mostly from prescription drugs) and liver disease related to alcoholism. When they dug a bit deeper, they found these deaths of despair were related to a reduction of labor force participation, marriage rates and involvement in faith communities — a loss of status, purpose, community — a classic perfect storm of risk for suicide and addiction. National statistics tell us that men die by suicide at a much higher rate than women and that, unless we as a country make significant efforts to prevent suicide among this age group, suicide deaths among working-aged men will continue to increase and affect a significant portion of our population over the next 25 years. Public health and behavioral health leaders are calling for targeting services at males through innovative approaches, including community-based campaigns. Suicide prevention campaigns have been shown to be effective in helping adults in general, but few target working-aged men to promote identifying a need for help-seeking services and increasing knowledge about crisis and mental health counseling services. More research is necessary to identify the most effective mechanisms of public health campaigns and how to best target messages to at-risk populations such as working-aged men. One state is engaging in a statewide campaign to fight this trend. HealthyMenMichigan.org is a free resource designed to engage working-aged men living in Michigan, through online depression and suicide screening and through encouraging help-seeking to reduce suicidal thoughts and behaviors. Leaders are demonstrating a commitment to reduce the suicide rate among working-aged men in a state where suicide is a leading cause of injury death among men. Through this campaign, men are offered online mental health screening that can be done any time and from any location, in an effort to educate men about risk for depression and suicide and to encourage help-seeking behavior from community resources. Another men-specific resource called “Man Therapy” is also offered and is designed to provide even greater assessment and support for men on suicide risk and related issues — including stress, substance use and relationship issues. See also: Employers’ Role in Preventing Suicide The online depression screening asks men about depression and suicide using a standardized measure that taps into symptoms such as low energy and motivation; loss of appetite; interruption of sleep; difficulties concentrating and making decisions; and thoughts of and plans for suicide. Based on responses to the online surveys, men may then be invited to participate in the voluntary research study conducted by the University of Maryland. The research team expects to enroll as many as 300 men in the study by Aug. 31, 2018. Partners throughout Michigan include nearly 100 mental health and suicide prevention organizations as well as 50 health and non-health groups. “Non-health” partner organizations include employers in male-dominated workplaces such as first responder and construction workplaces, sports and recreational clubs, faith-based organizations, colleges/universities, fraternities, men’s clubs, barber shops, casinos and hunting and boating clubs. It is through these partnerships that the researchers promote HealthyMenMichigan.org and, subsequently, recruit men for the research study. HealthyMenMichigan.org can be a great free benefit to businesses, where the cost of providing health insurance and wellness benefits (particularly to small-business employees) can be expensive. By providing a free resource — such as HealthyMenMichigan.org, which can be used to check a person's mental health status and receive local resources and supports — employers can communicate care and concern to their employees while promoting good mental health practices and overall employee well-being. HealthyMenMichigan.org is working to meet men where they are at any time — at their home, workplace and in the online community. The campaign helps men learn that taking control of their mental health is a manly thing to do. See also: Blueprint for Suicide Prevention   Results from this important study will inform the field about effective ways in which to engage working-aged men in suicide help-seeking behavior — information that is sorely needed to save lives. Additionally, this study will provide evidence regarding best practices for online screening and referral to treatment that can be scaled and sustained throughout the country. For more information about becoming a partner to help promote Healthy Men Michigan or for questions about the research, contact Dr. Frey at: jfrey@ssw.umaryland.edu.

It is not a secret that I’m an insurtech enthusiastic; I have shared my view about the need for any insurance player (insurer, reinsurer, distributors, etc.) to become an insurtech-player during the next several years. This will mean: organizations where technology will prevail as the key enabler for the achievement of the strategic goals. It was only 12 months ago when I published my four Ps to assess the potential of each insurtech initiative. My approach is based on four axes related to the fundamentals of the insurance business:

1. Productivity: Impact on client acquisition, cross-selling or additional fee collection for services;
2. Proximity: What an insurtech approach can do to enlarge the relationship frequency, by creating numerous touch-points during the customer journey — a proven way to increase the customer’s satisfaction;
3. Profitability: What can be done to improve the loss ratio or cut costs without an increase in volumes; and
4. Persistence: Increasing the renewal rate, and, thus, stabilizing the insurance portfolio.

The insurtech ecosystem has shown terrific growth in the last 20 months, after many VCs complained about the absence of insurtech startups. The updated Venture Scanner’s map shows more than 1,000 initiatives, with more than $17.5 billion invested. The needs for a pragmatic approach, the ability to prioritize the initiatives and a stronger focus on innovation have become more and more relevant. See also: 10 Trends at Heart of Insurtech Revolution   I strongly believe in the effectiveness of the aforementioned four axes to evaluate a business. In the last few months, I followed this view to make investment and career choices. Several months ago, I invested in Neosurance, an insurtech startup currently accelerated by Plug & Play in Silicon Valley, and I’m supporting the company as a strategic adviser. This company developed a platform to enable incumbents to sell the right product with the right message at the right time to the right person. By using artificial intelligence, Neosurance aims to become a virtual insurance agent with the ability to learn and improve how it sells. I fell in love with its model because of its productivity angle, the first of the four Ps. Let’s consider all the non-compulsory insurance coverages. The large part of the purchases have been — and still are — centered on a salesman's ability to stimulate awareness and to show a solution. In a world that is getting increasingly more digital and is becoming less about human interaction, I’m skeptical about the ability to cover the risks with the current approaches of online distribution, comparison websites and on-demand apps. All three of these approaches require a rational act and a lot of attention. But many customers look like more to Homer Simpson than to Mr. Spock. Those are the reasons I’m optimistic about Neosurance’s business model. On one hand, its B2B2C model aims to be present where and when it matters most for the customer. And, its “push” approach is able to preserve underwriting discipline, which is the only way to continue in the middle term and distribute a product that keeps a promise to the customers. My investment choice was based on the business model evaluation, the company's pipeline and the quality of its team. I hope to be able make more investments.

It should come as no surprise that consumers prefer to shop online — for just about everything and anything. Not because they want to but because they have to. Information overload dictates that busy consumers take every opportunity to save every second possible. It's almost an imperative for young, hard-working, multitasking families. See also: How Technology Breaks Down Silos   So perhaps we should have expected McKinsey & Company to report that, soon, “Leading digital carriers will go further by digitally enabling their sales forces, interacting with consumers and intermediaries in real-time omnichannel environments and offering remote and robo-advice at any hour on any platform.” (See McKinsey & Co., Harnessing the Power of Digital in Life Insurance.) What does this mean? We are being warned by the oracle of consulting firms that life insurance consumers want to interact by computer, so insurers should immediately respond by offering them remote, real-time, always-on “robo-advice.” Where does that leave the seasoned insurance professional? Will the agent finally be replaced by the algorithm? If you think this is science fiction, think again. This technology is already here. According to a recent industry study, 88% of consumers of all ages already research life insurance online before they buy (see LIMRA, 2016 Insurance Barometer Study). Of those who buy insurance online or offline, 17% purchase directly from an insurance company after researching online, and a further 22% research and complete the purchase entirely online. In other words, of the 88% who research online, 44% of these consumers are currently bypassing any meaningful back-and-forth planning process with experienced life insurance advisers. In support of these statistics, venture capital-backed insurtech investments rose from $800 million in 2014 to $2.6 billion in 2015 — and that number continues to climb (see KPMG, Pulse of Fintech). See also: This Is Not Your Father’s Life Insurance   The fact that consumers are busy and markets are adapting should in no way imply that the result is better for either the consumer or the insurance agent. Hybrid sites such as Lifester.com may offer the best of both worlds. Like other online sites, Lifester is available to consumers 24/7. But Lifester doesn't sell insurance. Rather, Lifester instantly connects consumers and agents so that life insurance strategies and recommendations can be formulated and developed as digital “projects.” Consumers can then invite family, friends and personal advisers into their projects to contribute comments leading to important feedback and better decision-making. As the pendulum swings from multiple-meeting-based selling to online fast quotes, services like Lifester may provide the most sensible approach. Consumers get free expert advice from licensed life insurance professionals and are even encouraged to seek the counsel of other decision-making advocates. All project members can review information, post comments and communicate using their computers — at any time of day or night, when it is most convenient. Perhaps the life insurance sales process is ready for yet another change — one that taps into the expertise of the agent yet empowers the consumer.

Which is the better marketing strategy? Buying a higher volume of low-quality leads or a lower volume of more expensive leads? Purchased leads have an image problem in the insurance industry. Yes, they can be expensive. But instead of being viewed as premium, purchased leads are often associated with mediocre quality. In fact, 84% of lead buyers say that lead quality is something lead providers need to improve the most. Low-quality leads can mean wasted sales rep time and decreased productivity, as well as lower close rates. But is the amount of skepticism around the quality of purchased leads really warranted? Contrary to popular wisdom, successful insurers and other organizations tell us that purchased leads can and do yield favorable results. Velocify’s newest study, “Lead Trends Report” found that high-growth companies (those with 20%+ annual growth) are relying more heavily on purchased leads than any other lead source. In fact, purchased leads account for a higher percentage of total volume for high-growth companies, regardless of company size. Not only do fast-growing companies have a higher percentage of purchased leads compared to flat or slower growth companies, they are also less reliant on referral and direct mail leads. See also: 10 Trends at Heart of Insurtech Revolution   The discussion of third-party marketing partners and leads is especially pertinent in insurance given that most prospects (89%) who submit leads to third-party insurance sites do not visit a brand site beforehand. This path to purchase can make third-party leads a valuable option for capturing new, in-market shoppers who aren’t likely to visit an insurer’s site. You Get What You Pay For But why are high-growth companies more successful with purchased leads than companies experiencing less growth? The major difference is that fast-growing companies are more willing to invest more per lead to get high quality than are most other companies. The average spend reported by lead buyers was $42 per lead, but companies with significant revenue growth spend $86 per lead. Another difference is that high-growth companies regularly and frequently re-assess the performance of their lead sources. The study found that high-growth companies are 125% more likely than flat/declining companies to evaluate new lead providers at least quarterly. Regular performance evaluations indicate disciplined processes for measuring lead source KPIs and a willingness to change up their marketing program to optimize performance. In contrast, some flat or declining businesses even go a few years without evaluating new lead providers—a practice not reported by high-growth companies. Pro Tips Before increasing your investment in purchased insurance leads, be sure you are ready to follow these best practices:

1. Follow up as soon as you get the lead. Ensure you have a way to automate lead capture into a lead management system that can distribute the leads within seconds to an available rep. Speed is critical when responding to purchased leads. The Ultimate Guide to Inquiry Response shows that conversion rates more than double when leads are called in under one minute.
2. Be persistent. Process and strategy are equally as important to success as speed-to-contact. Make sure you are not only following up fast, but also persisting beyond the first few contact attempts with multiple channels of communication.
3. Prepare for duplicate leads. Understand the policy for duplicate leads going into a relationship with a new lead provider and have a way to report back to your lead provider when you receive duplicates.
4. Frequently monitor key performance indicators (KPIs). Take time each day, or at least each week, to better understand the quality of leads you are purchasing. Track KPIs like contact rate, qualification rate, and conversion rate and adjust your spend accordingly.
5. Meet regularly with lead providers. Keep an open dialogue with lead providers by meeting monthly, or at least quarterly, so you can tweak your program to meet lead generation needs.

See also: The Insurance Model in 2035?   Clearly, purchased leads can be a more impactful part of your customer acquisition program than conventional wisdom would suggest. The key is to invest in higher-quality lead sources like hot transfers, exclusive leads, and leads that are scored or qualified in other ways for quality. Though generating a high volume of leads from free (or near free) lead sources like referral and web channels is a good strategy, our findings show the value of purchased leads cannot be ignored.

President Trump signed an executive order this week that directs federal agencies to implement a “Buy American, Hire American” strategy and to reform the much maligned H-1B visa. No doubt, lobbyists and congressional staffers are working overtime to develop an even more complex visa system that will be riddled with new loopholes. It will benefit large corporations and immigration lawyers and do little for the American worker — and the technology startups that need the skilled talent the most. The right solution isn’t for government to set minimum wages or pick winners; it is to let the free markets do their magic. The H-1B visa is indeed problematic: It puts both American and foreign workers at a disadvantage. It ties the foreign workers to the employer and allows the employer to pay them less than they could be earning. The simple fix is to allow H-1B visa holders to work for any employer that pays them the highest wage or for the startup that offers the most rewarding work. In other words, give immigrants the same rights as American workers and cause companies to pay employees their market value. See also: The Brewing Crisis Over Jobs   Technically, any H-1B worker can change jobs by filing a petition with the government, and some do take advantage of this rule. But there is a catch. The H-1B visa allows a path to permanent residency when an employer sponsors a worker. And this is the carrot that employers offer, one that most people coming to the United States want. Once they accept this carrot, however, they are trapped in limbo. Here is the problem: For decades, the U.S. has been bringing in large numbers of workers on temporary visas such as the H-1B, but it never increased the numbers of permanent resident visas, or green cards, available for those who want to stay. There are 140,000 green cards issued per year to employment-based visa holders, and the law stipulates that each nationality may receive no more than 7 percent of the total number of employment-based green cards. Considering that Indian recipients make up 71 percent and Chinese recipients nearly 10 percent of the total H-1B visa holder pool, their green-card wait times stretch as long as 15 years. Once H-1Bs have started the process of filing for a green card, they cannot change employers or even take new jobs within their existing companies without getting pushed to the back of the queue. Therefore, visa holders are shackled to their sponsoring employer while their careers stagnate and they receive salaries that are lower than they could otherwise make. This is why opponents of the H-1B visa rightfully claim that American workers are disadvantaged, because they are effectively competing with bonded labor. The problem could be fixed if the number of permanent resident visas available for skilled workers was increased and the wait times decreased dramatically. But this is not going to happen in this political climate. The most realistic solution is to untether the visa holder from the hiring company. In other words, if a company hires someone on an H-1B visa, and the employee gets an offer of a higher salary, they can leave the company regardless of the status of their green-card application. This way there’s no cheap labor anymore, and market forces take over. Technology companies won’t support such a measure because it causes them to lose leverage over the employee. Politicians won’t propose such a simple fix because it is not what lobbyists want. Instead, we get a series of convoluted proposals that increase the role of government and disadvantage all workers. Sadly, there is unemployment in the tech industry, and there are many heart-breaking cases of Americans being displaced by cheap foreign labor. This is not an acceptable situation, and it is why we must fix the salary disadvantage. But there is another problem that needs to be recognized. Very often, the unemployed workers are not in the tech centers wherethe skills are neededor their skills are not up to date. This can be remedied by providing job training and relocation assistance. That is what the government should focus on. See also: Why Trump’s Travel Ban Hurts Innovation   Let there not be any doubt, though, that Silicon Valley is starved for talent and needs the best and brightest from all over the world to be working for it. It thrives on competition of every form, including technology and skill. Attacking immigrants and demanding that companies hire Americans over people who are more skilled, as the president is doing, is the fastest way to destroy America’s competitive advantage. It will block the flow of the very lifeblood that built the economic bone structure of this great country and deaden the nerve endings that create the next great thing. The best way to make America great again is to restore this flow.

What is your insurance company telling you about your business interruption values? In preparing annual business interruption values and exposure analysis for clients, we have noticed several red flags that indicate something may be wrong with how these values are being reported to the insurance company. It’s not so much what the insurance company is telling you about your business interruption values, but what it is not telling you. Here are three red flags insurance companies are waving by not saying anything: Great Rates – "We are paying a lot for insurance, but we are getting a great rate!” Beware, great rates for property policies have the potential to be misleading. The business interruption values are one of the many variables in determining rates. If you are over-reporting your values and the insurance company realizes it, your rate will appear better than others reporting more accurate values. Sure, a better rate may sound like a win, but it may just mean that the insurance company is calculating your values for you. Just as you wouldn’t trust a car salesman when he says you’re getting a great deal, you shouldn’t rely on the insurance company to do the same. See also: How to Assess Costs of Business Interruption Free Services – "Our insurer analyzes our values for free.” The insurance company may actually offer to calculate your values for you - for free. Everybody loves free things, right? Unfortunately, the insurance company will use a benchmark approach to underwriting your risks combined with COPE data and any other information you provide. The result will likely be a higher business interruption value that is not representative of your exposures. When your story is vague, the insurance company will make assumptions about your business based on what others are doing. Let all of your hard work creating incident response plans, business continuity plans and other contingency plans pay off where it can have a direct effect on your premiums. No Resistance – “The insurance company accepts what we give them for BI Values.” Watch out - if there are no questions or pushback on your values, that can mean one of two things: 1) you have done your values perfectly and they require no explanation, or; 2) you are reporting higher values than what your insurer is calculating. If you have done your values perfectly, congratulations on being one of a kind. More likely, the insurance company has calculated your values at a lower level than you have. If this is the case, wouldn’t you want to know? At the end of the day, no one is more qualified to value your business interruption risks than the people who run your company, but you have to know the criteria being applied and how to apply them. Underwriting is a mysterious process, so it’s better for your bottom line to take the mystery out of it by bringing clarity to your business interruption values. If you leave it up to the insurance company, chances are that the number is going to be higher than it should be. Don’t expect insurers to guide you to the answer that is best for you. They have a different agenda and process. They will categorize and group your risks based on some information, but if you do not provide what they need, they will default to general assumptions. You may get lucky and end up with a reasonable assessment of your risk. Or you can have a say in your luck by matching your opportunity with preparation.

It’s been four months since many of us vowed to stick with our New Year’s resolutions.  How is yours going?  One study showed that more than half of those who made resolutions gave up within six months, and only 9% feel they successfully met their goals by year-end.  We make resolutions because we know we can improve elements of our lives, and that doing so will make us happier, healthier or more successful. So if we know these changes would be good for us, why are we so bad at acting on that knowledge? Majesco’s recently published research report, Strategic Priorities 2017 – Knowing vs. Doing, illustrates that insurance companies are struggling with their own “resolutions” to respond to a rapidly changing marketplace, and make changes to create growth opportunities. There is a growing gap between insurers that know about the changes and insurers that are doing something about them. Responses to the Strategic Priorities survey reflect an awareness of the pace of change that is unfolding unheralded challenges and opportunities. Unfortunately, turning awareness into doing, with actionable initiatives, is elusive, creating an ever-widening gap between leaders who are taking action and those who are not. The gap between knowing and doing is a common phenomenon most can relate to both personally and professionally. Many have picked up new ideas from a conference, learned new best practices in a best-selling business book, or paid for consulting advice to improve our strategy or operations. After we return to the office, put the book on the shelf or review the consulting recommendations, we too often return to doing things the same ways we always have. See also: How to Plant in the Greenfields   Expand this individual pattern to a larger, organizational level to put our survey results in context: even though most companies know they should respond to key internal and external challenges to create promising growth opportunities – and more importantly to ensure survival – many are still only thinking about doing something, at best. Why is there a gap between knowing and doing?  How can it be overcome? A good starting point for answering both of these questions is the book The Knowing-Doing Gap: How Smart Companies Turn Knowledge Into Action, by Jeffrey Pfeffer. Knowledge unused is opportunity lost Stanford professor Pfeffer called his research and writing of The Knowing – Doing Gap, “…a quest to explore one of the greatest mysteries in organizational management: why knowledge of what needs to be done frequently fails to result in action or behavior consistent with that knowledge.” Almost as if he didn’t want his book to fall into the same lot of business books that make the best seller list but result in no action, Pfeffer hedges against the actionability of his own recommendations, saying, “We found no simple answers to the knowing-doing dilemma. Given the importance of the knowing-doing problem, if such simple answers existed, they would already have been widely implemented.” Pfeffer’s research uncovered eight recurring themes that help understand the causes of the problem and, by extension, lead to ideas on how to overcome them:

1. Why before how — Philosophy is important. Knowing why you should do something is as critical as how you do it.
2. Knowing comes from doing and teaching others how – Learning by doing, coaching and teaching can be more impactful than by simply thinking or talking.
3. Action counts more than elegant plans and concepts – Taking action before plans are fully formed can accelerate both learning and results, compared to relying on end-to-end, complex plans that rely on flawless execution.
4. There is no doing without mistakes. What is the company’s response to mistakes? – In building a culture of action, one of the most critical elements is what happens when things go wrong. Are mistakes used for learning or as a trigger for punishment?
5. Fear fosters knowing-doing gaps, so drive out fear – If failures are viewed as grounds for punishment (instead of learning) employees will avoid acting on knowledge and new ideas, and continue to take the “safe” route of old habits.
6. Beware of false analogies: fight the competition, not each other – Free markets are based on healthy competition with other companies, but competition within organizations is not healthy.
7. Measure what matters and what can help turn knowledge into action – Just because something is easy to measure (i.e. data is available) doesn’t mean it should be measured; companies have too many metrics that are backward-looking and outcome-focused and too few that are future-looking and process-focused.
8. What leaders do, how they spend their time and how they allocate resources, matters – Good leaders know it is not their job to know and decide everything, but instead create an environment where there are a lot of people who both know and do.

All of these themes are relevant to the current state of insurance companies, but four, five and six are especially relevant in a fast-paced insurance marketplace. Insurers are in the midst of profound change, fueled by trends that are converging and pushing a sometimes slow-to-adapt industry. This seismic shift is creating leaps in innovation and disruption, challenging the traditional business assumptions, operations, processes and products of the last 30-50 years. Our Strategic Initiatives research links the forces of change identified in Majesco’s Future Trends 2017: The Shift Gains Momentum report with the reality of how insurers are responding, both in terms of knowing, planning and doing. The results highlight a significant gap. In addition, those initiatives where insurers are actually doing something tend to be those that are traditional areas of priority and understanding, like security, talent and legacy system replacement. This doesn’t take account of vital areas that require transformational thinking, new approaches and different business models. See also: Innovation — or Just Innovative Thinking?   InsurTech entrants and new competitors within and outside the industry are introducing new products, processes, customer engagement, business models and more. Experimentation and innovation, with a fail-fast/learn fast approach, flies in the face of traditional planning, particularly for the risk-averse insurance industry. When a new business model or product idea does not exist, it is difficult (or nearly impossible) to prove it will work, highlighting the gap between knowing and doing. Contrast this with InsurTech startups who are at the opposite end of the spectrum – they epitomize innovation and experimentation. Many will fail, but their “No Fear” lessons will be leveraged to create a string of new ideas and approaches, eventually landing on one that achieves success and rocks the foundations of the status quo.  Just consider those that failed and eventually succeeded, but in the process disrupted the music, automotive, book, and retail businesses. Who will be the disrupter for insurance? Clearly, it will be an organization with the power to act on its ideas. Insurers need to create an environment where:

• A portfolio of new ideas is like a pot of gold, ready to be invested.
• Testing ideas is common (and fast).
• Mistakes and failures are learning tools.
• The organization is unified behind an action-oriented, innovation-led approach.

In our next blog in the Strategic Priorities series, we’ll discuss how changing some harmful habits will liberate our organizations and enable them to focus on real action. Meanwhile, you can find more transformational insights and insurer survey results in Majesco’s latest report, Strategic Priorities 2017 — Knowing vs. Doing.