Safety performance can either make or break a project and help or hinder one’s future career prospects. It can both positively or negatively reflect on a company’s reputation and affect its financial health. Front-line supervisors hold the key to unlocking your company’s potential for high safety performance. Supervisors are responsible for directing the allocation of your company’s key assets of people, equipment, machinery and tools that affect the execution of projects and financial results. They are either the vital link or the missing one in a successful construction safety program. Many construction companies hold supervisors accountable for safety compliance, training, performance and results. Proper safety supervision is the byproduct of defined roles, specific responsibilities, clear expectations and measured accountabilities. Not all companies fully equip supervisors with the tools or resources needed to effectively lead safety in the field. This leads to an unnecessary, yet preventable, safety performance gap. Understanding the Safety Performance Gap The safety performance gap is the difference between what is expected versus what is accepted. In other words, the safety performance gap is the difference between what behaviors a company says it expects employees to adhere to and what behavior it actually allows to occur. Put even more bluntly, the safety performance gap is the delta between defining and driving superior performance standards and condoning and excusing less-than-target safety performance. For construction companies, the performance gap applies to other key performance areas beyond safety, including accounts receivable, contract management, IT outages, quality defects and rework and labor costs. See also: How to Understand Your Risk Landscape Closing the Gap How do company owners and senior leadership teams close the safety performance gap? Leaders can alleviate this gap by changing how safety is conceived, defined and actively communicated within the company. Is safety a core value in your company, or is it regarded as a top priority? Many construction companies say safety is a priority, and they mean it, until push comes to shove against an impending schedule or sequencing change, and safety is compromised. Safety must be conceived as a core value. Priorities shift over time and rise and fall based on perceived urgency. In contrast, values endure the test of time and withstand the changing pressures of project scope, schedule, sequence, quality and budget. When company leaders view safety as a core value, the proper commitments can be made and, more importantly, kept. This approach leads to a more proactive culture because safety is woven into every aspect of the project life cycle. Clarifying the Vision, Commitment & Mission After clarifying that safety is a core value and not just a priority, it is vitally important to provide front-line supervisors with a clear understanding of the vision, commitment and mission of the company’s safety program. This drives and reinforces alignment on safety throughout the organization. It also helps close the safety performance gap by establishing baseline expectations for performance. The following is an example of how this is done.

• Safety vision—Your company should aim to not only get employees on projects home safely at the end of the shift, but to also get employees back to work safely for their next shift. This is built on the foundation of promoting safety at work, home and at play.
• Safety commitment—Your company should be committed to protecting the safety and well-being of employees, customers, subcontractors, engineers and inspectors and the traveling public.
• Safety mission—Your company should create a culture of safety leaders who are empowered to identify and correct unsafe conditions and behaviors and who accept personal responsibility and shared accountability for safety.

Ideally, all supervisors will receive specific instruction in supervisory responsibilities and tools to help effectively implement the safety strategy. A simple way to involve supervisors in the safety strategy is to develop a series of safety objectives or special emphasis programs. These actions will help reinforce the development of a proactive safety culture. Unlocking Improved Supervisory Safety Performance Use the 10 questions below as a needs assessment or gap analysis to determine how your company can expand the level of effectiveness of safety supervision.

1. Does your company clearly communicate the expectations for safety responsibilities to supervisors?
2. Do you consider safety competencies for supervisors in your hiring decisions?
3. Does your company consider the core safety competencies for supervisors in your promotional decisions?
4. Does your company’s performance review process consider safety supervision as a performance criterion?
5. Does your company’s discretionary compensation or bonus system align with safety performance such that safe work is incentivized and poorly executed performance is not rewarded?
6. Does your company provide training to supervisors in safety skills?
7. Do your company supervisors provide job- and task-specific safety instruction to new hires?
8. Do your company supervisors lead or oversee daily safety huddles or toolbox talks for pre-task planning?
9. Do your field supervisors and front-line workers have stop-work authority to address safety challenges encountered in the field in real time?
10. Do your field supervisors and front-line workers actually exercise stop-work authority in the field to address safety challenges and determine appropriate corrective actions?

See also: Why Workers’ Comp Claims Stay So High Although this is an unscored assessment, the questions and your responses will help guide your company to leverage supervisors in your company’s safety program and processes. Too frequently, supervisors are an underutilized resource in achieving your company’s safety strategy. Supervisors who understand their role, responsibilities and expectations can be a force multiplier as your company builds a proactive safety culture. This article is the first in a six-part series about supervisory safety responsibilities, which will discuss leveraging supervisors within your company to build a stronger safety plan. Visit www.constructionbusinessowner.com/supervisory-safety to learn more.

After Opening Day of baseball season last week and the release of SMA’s new report on core systems buying trends, I realized that you could equate the progress being made in core modernization with that of a baseball game. Could it be that that we have entered the seventh inning stretch of this phase of the core modernization journey? Are we preparing to start a new game? Our latest research, published in Core Systems Purchasing Reaches the Tipping Point: What’s Hot – And What’s Not, has identified a definite slowdown in the purchase of core systems in the U.S. market. P&C insurers purchased 38% fewer new core systems in 2016 as compared with the year before. The flurry of new purchases that we saw in earlier “innings” (over the past five to seven years) is wrapping up as insurers focus on implementing those new systems, improving their existing core environments and looking ahead to understand the new requirements driven by the changing insurance market. See also: How to Transform Core Systems   The changes throughout and around insurance are pressing the industry toward a new perspective: a new ballgame. This game is just beginning and will play out over three to five years as the trends we are studying in insurtech and emerging technologies take hold. Insurers must evolve to promote the ever-expanding interaction with external data, investment in a more engaging customer experience and new product constructs shaped by the shared economy. This creates a set of capabilities from core systems that are considered the future-ready "MatureTech" solutions for the industry. Each insurer needs to assess how its products and services align to the shifting market and the advances it will have to make to respond to the new opportunities. We are witnessing changes that are substantial enough to advance the capabilities that insurers require from in their core systems. And in the world of core systems, as in the industry at large, we need to start preparing for this new game.

In my previous article, I stressed that a new commercial insurance model is about breaking down existing operations and rebuilding a collaborative and innovative model. The rebuilt model would improve operational efficiencies, control costs, create innovative products, improve customer engagement experiences and produce sustained profitability. But, if you think operational silos are challenging, I suggest you suit up and put on your protective gear because I’m about to tackle the cold reality of commercial insurance product silos! Should the market simplify risk management solutions? Duh!!! The role of a corporate risk manager is to protect the employees, clients and balance sheet of his or her company. The manager looks to the commercial insurance markets for risk management solutions but, instead, receives product responses that create a patchwork of protection. When the markets can only provide products in lieu of risk management solutions, a variety of customers' risk exposures are left uninsured -- they must now consider self-insuring or creating alternative financing vehicles, including captives. Creating risk management products and simplifying risk management solutions for corporate customers should be the goal of any commercial insurance broker or company. See also: Leveraging AI in Commercial Insurance If companies eliminated product and service silos to create a collaborative risk solutions environment, big data collection and analysis could be implemented across all existing products and customers' uninsured exposures. This collaborative environment would also minimize current big data challenges, including:

• Unstructured data identification
• Weak processes to capture and manage data
• Poor data quality and accuracy
• Unused data

By eliminating product silos, I’m not suggesting that you eliminate your product experts. On the contrary, each product expert has a vital role to play in challenging and supporting how new and existing products will function. The removal of internal product silos broadens products expertise and knowledge, thus enabling product experts to further comprehend the risks that corporate customers manage every day. You already have the clients – start implementing the tools to create risk management solutions! Currently, commercial insurance brokers and companies are better placed to respond to insurtech competition as, unlike most insurtech startups, they have a large pool of existing customers and the ability to access or create extensive risk management data. When combined with additional imported data such as ISO, ERC and AAIS, an integrated dynamic financial model (IDFM) can be easily created to capture industry, claims, exposure and risk management patterns. Capturing and codifying risk management data is absolutely crucial, as it elevates existing industry claims and exposure models. In addition to creating new risk management products, the IDFM data outcomes can also create a variety of new risk management services, thus creating additional revenues. I’m not a data scientist, but I have always been fascinated with risk identification. Many years ago (more than I care to remember!!!), I created an IDFM model with the crudest of tools. The model outcomes enabled me to create risk management products and services that customers want to buy and eliminated the “one-size-fits-all” product response embedded in the commercial insurance market. Now, by incorporating new technologies such as AI, machine learning, bots and smart sensors to improve risk management analysis, this model becomes even more dynamic! These technological additions to the IDFM model, along with the use of blockchain, enhance the model's ability to:

• Gather and store even more data elements;
• Improve decisions based on that data; and
• Provide relevant answers to improve the company’s abilities to create risk management products.

Additionally, the IDFM model enables the creation of revenue streams such as usage-based and peer-to-peer commercial insurance. These opportunities will be further examined in future articles. All geographic regions are not the same! Expand your mind and create something new! The ability to capture and codify the elements noted in the IDFM model, including the client risk management review, is particularly important for global commercial insurance companies and brokers expanding into Africa, Asia and Latin America. See also: Innovation Challenge for Commercial Lines   Risk managers in these regions continue to express their frustration with market responses as local agents, brokers and insurance companies are not expanding their product portfolios. Global companies are extremely slow in creating products that are specific for the risk management needs of these diverse local markets - instead, companies aggressively sell Europe-centric or North American-centric policies while supporting low margins. These diverse local markets would benefit from improved innovation and increased investment in technology and will be explored further in future articles. And finally …. Commercial insurance brokers and companies must stop viewing insurance through the prism of products and, instead, recognize its true potential as a service. Remember, it is all about the customer! Or, simply put, no customers, no business. Cutting renewal prices and watching margins decline every year is not a sustainable business plan for incumbents or insurtech companies. Instead, the commercial insurance market must break down and rebuild product and operational silos to create a collaborative and innovative model to improve their abilities to package complex risk management products and services. Products and services can be presented in a simpler/intuitive manner, with plain language and processes that clearly manage customer expectations and increase customer satisfaction. Breaking down existing products and operations and rebuilding a collaborative and innovative model will also improve operational efficiency, control costs, increase revenue streams and produce sustained profitability. Let's break down these barriers!

According to a PWC Global State of the Information Security Survey in 2015, the number of cybersecurity incidents has been increasing at an annual rate of 66%. Both the range and complexity of cyber threats are expanding—from ransomware to compromises of critical infrastructure. Yet, when those threats materialize, too few businesses and government entities have developed the protocols needed to escalate resources, coordinate support and respond to an attack. While the need for these strategies has spanned more than a decade, it is even more imperative now as we confront a growing array of threats. Ten years ago, Norwich University Applied Research Institutes (NUARI) launched the DECIDE Platform, with support from the Department of Homeland Security, to challenge leadership to engage across their organizations and respond to crippling cyber attacks. It is critical that the entire firm be prepared to respond in the event of a cyber breach. See also: Quest for Reliable Cyber Security   While DECIDE was initially developed to engage the financial markets and support critical infrastructure, the platform has migrated to engage leadership across continents, supporting their teams’ and individuals’ cyber preparedness. To do this, DECIDE offers a wide array of cutting-edge threat scenarios, ensuring entities can test their decision-making capabilities and enhance strategic communications. Organizations can develop comprehensive response plans that address previous vulnerabilities head-on. Simulation pays off When a cyber threat hits, there is no time to lose. Firms must have identified the gaps and needs that otherwise lead to business disaster. DECIDE offers firms the chance to simulate a particular scenario time and again to ensure they make the right decisions in the heat of the moment. However, that is not enough. DECIDE also offers evaluation tools and after-action reports for each exercise, both of which contain insights that become the core elements of a firm’s optimal response playbook. And the playbook grows over time, containing plans to deal with supply chain hardenings or ransom demands. In turn, organizations can use those plans to deal with the triad of cybersecurity threats to confidentiality, integrity and availability. Such a road map also ensures individuals across an organization understand their role in the face of an attack. From the operations and information security analysts to those in the business office, every employee must be aware of how to better counter cyber threats. No weak links Those threats also can escalate and extend beyond the contours of a particular organization. It is why each of those individuals must be at the ready to coordinate with partners and entities across sectors, seamlessly coordinating a response to mitigate the impact of an attack. DECIDE provides large-scale exercises in which to perfect that response. Consider the Quantum Dawn series, which, over three iterations, has helped the financial sector develop effective response strategies and market mechanisms. Then, there is the Critical Infrastructure Protection Exercise series, where organizations from across sectors can ensure they know how to act in the face of an escalating threat. See also: The Key to Survival in Wild West of Cyber   Beyond DECIDE, NUARI builds customized education products for military, academia and private sector firms. These courses, focused on cybersecurity and critical infrastructure, get to the core mission, ensuring organizations can build resilience across their teams and support individual preparedness against the next cyber threat. Even though both the range and complexity of cyber threats continue to expand, stakeholders across sectors can now build the toolkit and develop the protocols to effectively respond in turn. This post originally appeared on ThirdCertainty. It was written by Phil Susmann.

The insurance claims process is rapidly being transformed from analog to digital as industry economics and customer expectations demand it and as technology enables it. Not only does digitization provide impressive cost savings and satisfy the expectations of a growing number of “always connected” consumers, but it delivers a host of other benefits. Insurtech providers of many types have emerged seemingly overnight to provide a dizzying array of new technologies to support claims innovation within established carriers and enable new insurance entrants at the same time. See also: Let’s Keep ‘Digital’ in Perspective   Examples include:

• CCC Information Services, a leading U.S. information provider to the automotive, insurance and collision repair industries, is working to combine auto injury causation software with telematics expertise and overlaying casualty claims management assets to meet the needs of the rapidly transforming auto insurance claims industry.
• DropIn provides an on-demand, live video platform for more precise underwriting, speeds claim resolution, enhances damage estimate accuracy and reduces indemnity and loss adjustment expenses. Users can access streaming video and high-resolution photos captured directly by customers or via a crowdsourced independent contractor network using commonly available insurtech tools, such as smartphones and drones, to achieve insight into the complexities of auto and property damage for enhanced decision-making.
• EagleView provides aerial imagery, data analytics, property data and GIS solutions related to millions of residential and commercial properties for local and federal government agencies as well as the infrastructure, insurance, solar and construction sectors.
• Livegenic provides cloud-based, real-time patented video solutions to property and casualty insurance organizations connecting every part of the claims ecosystem. The Livegenic platform streamlines communication between in-house and external adjusters, appraisers, contractors and policyholders, provides field video loss documentation capabilities, and delivers customer self-service solutions.
• OnSource provides insurance companies with claims and underwriting photo inspections through intuitive smartphone apps and a mobile website. Policyholders and claimants use self-inspection apps, Instant Inspection’s chat website or its managed network of thousands of photo field inspectors and quality assurance analysts.
• PartsTrader, an automated repair parts bidding and procurement platform, connects thousands of collision repair shops with repair parts suppliers of all types to reduce the cost and cycle time in the $15 billion U.S. repair parts market segment. The PartsTrader platform allows repair shops to search and compare multiple suppliers at the same time and to work with suppliers competing for their business.
• Snapsheet uses proprietary technology to optimize virtual auto physical damage claims operations, giving insurance adjusters the tools they need to provide a seamless experience to their claimants.
• WeGoLook, in which Crawford recently acquired a majority interest, provides on-demand field inspection and verification services. Using its web and mobile platform the company empowers a 30,000-plus mobile workforce, known as Lookers, to collect and verify information and fulfill custom tasks for businesses and consumers alike in insurance and other verticals.

While this is all good news – and inevitable – what is at risk of being overlooked in this rush to a more efficient, streamlined claim process are the individuals who buy and use insurance services and at critical times require the reassurance and comfort of a personal touch. Auto claims are a case in point. Many claims processes, mainly those that take place in the background, are well-suited to the cold efficiency of technology, automation and digitization. But the auto claim is frequently preceded by a totally unexpected, disorienting and sometimes traumatic accident. This is the moment when the consumer most needs and depends upon the insurance carrier….and a human touch. In 2016, there were about 190 million registered passenger vehicles on the road in the U.S. More than 15 million auto accidents occurred involving 18.5 million vehicles. Stated another way, about one out of every 10 cars on the road was involved in an accident. On average, every driver can expect to experience an auto accident once every 10 years, most minor in nature but others involving serious injury or even death. Sadly, there were 40,200 traffic fatalities in 2016. We are never fully prepared, nor do we know exactly what to do when involved in a traffic accident. The experience is unfamiliar and confusing. A battery of questions immediately come to mind – how much is this going to cost me? – was this my fault? – could I have prevented it? – how will I get where I was going? – who should I notify first? – is anyone hurt, including me? And so on. Historically, a police officer would typically show up, review the scene, ask the drivers several questions, make some notes and direct the vehicles off the roadway to a safe location or if necessary call a tow truck or an emergency vehicle. Then you would need to follow an often frustrating, protracted claims and repair process; call your agent or carrier; get the car to a body shop, arrange for a rental car; make numerous calls to the shop and the adjuster to see when your car will be ready; and then reach into your pocket to pay your deductible even after paying your insurance premiums faithfully for all those years. But this scenario will soon be a thing of the past. For one thing, police in many urban markets are no longer responding to auto accident calls. Law enforcement budgets are shrinking, and police officers are busy handling higher-priority tasks such as criminal investigations. We can’t rely on the police always showing up in the future. Insurance companies are addressing some of their challenges by using new technologies to make the auto claim and repair process simpler and faster. Many carriers offer smartphone apps that include claim-reporting capabilities enabling drivers to take photos or videos of the accident damage at the scene (or later from home) and upload them to the carrier, which assesses the damage and schedules the repair, often in minutes. Some companies are paying drivers electronically on their smartphones and closing out the claim in mere hours. However, for those who believe that younger policyholders prefer technology to human contact, the recent J.D. Power 2016 U.S. Auto Claims Satisfaction Study reveals that only 7% of millennials prefer digital channels to report their claims and concludes that technology cannot fully replace humans during the claims process, even among millennials. The one missing piece is what happens immediately after an accident occurs and before your insurance company starts to process your claim. Not everyone has a smartphone, is tech-savvy enough or understands the importance of reporting the accident immediately to the insurance company. Auto accidents can be traumatic. Many people can be involved, in your vehicle and in other vehicles. Differences of opinion between drivers about the facts or what caused the accident are not unusual. Without the presence and authority of a police officer, people are left to cope with all of these issues on their own. And, because almost 80% of vehicles damaged in auto accidents are safely driveable, there’s no logical reason to have to stay at the scene once your information is exchanged with the other driver(s). See also: Do You Really Have a Digital Strategy? To address these new realities, innovative programs have emerged to bridge the gap between the accident and the claim report. One such solution is the Collision Reporting Center (CRC). These facilities provide drivers with the assistance, advice and support they need at the critical time following an accident. The CRC is a partnership between local police departments and privately managed reporting centers. The model initially emerged in Canada 20 years ago when the insurance industry and police joined forces to solve a mutual challenge. Today, the operation manages 32 Collision Reporting Centers in partnership with 53 police departments across Canada and serves 80% of the Canadian auto insurance industry. Recently, the operator expanded into the U.S., opening its first Collision Reporting Center in Roanoke, VA, in the fall of 2016, with plans to open several more centers soon. At the Collision Reporting Center, drivers involved in an accident provide their individual accounts of what happened and other information while professional staff take digital images to document damage. The information is reviewed by an on-site police officer at the CRC and is immediately sent to the driver’s insurance company, where a claim is initiated and processed. Drivers are provided with a customized instructional guide from their own carriers describing what to do next and a private room where they can make a phone call to their insurance company or family members. The Collision Reporting Center provides a comfortable and safe environment, eliminating the need for drivers to wait on the roadway. As we move toward self-driving automobiles and the elimination of most accidents,, we will see many innovative accident and claim management programs emerge that can bridge the gap between the auto accident and resolution of the claim process. Collision Reporting Centers are an excellent solution to these needs – they provide personalized customer service and a human touch with the power of technology making the auto accident reporting process as non-intrusive as possible into our busy lives.

If you just landed your first job in the insurance business, chances are that you’re focused on that new position, not necessarily on what comes next in your career. You’re probably plenty busy doing what’s necessary right now—learning the new job, adjusting to a new company culture and hustling to prove yourself. You’re giving 100% to succeeding in your new role. That’s smart, especially considering that most new hires have less than two weeks to prove themselves on the job, according to new research from Fullbridge and Harris Poll. One in four executives say that employers take only two weeks to decide whether an entry-level new hire will be successful. Other executives say that it will take longer, but all agreed that it takes less than three months. With stats like that, it makes sense that long-term career goals take a back seat to making a great first impression. But while you’re settling into the rhythm of your new gig, you should make time to outline a basic road map for the rest of your career. As your early career moves away from entry-level positions and into more specialized roles with more responsibility, giving some thought to your future goals and plans can have a huge impact on your overall career trajectory. See also: The Many Paths to a Career in Risk There’s plenty of traditional advice available for people early in their career. A lot of that information is good, but there’s also more current insight applicable to young professionals. Here’s our breakdown of four ways to chart a course early in your career and figure out what makes you happiest on the job. 1. Don’t job hop—department hop Young professionals today have a reputation for switching jobs a lot more often than previous generations do. Recent research shows that this characterization is largely unearned. Young people tend to switch jobs more often than older workers, but millennials aren’t switching at a higher rate than young adults of past generations did. Changing jobs early in your career has its benefits, including a chance to earn more money and exposing yourself to more aspects of the industry. But there are downsides, too. Switching jobs is hard work, and some of it may be unrelated to learning the insurance business. You’ll need to learn to adapt to a new company culture. You may need to relocate. You may have to build your network of work friends and go-to leaders all over again. In short, you’re almost starting from scratch each time you switch organizations. Many young professionals have found a happy medium in department hopping. With the right organization, young insurance pros can gain hands-on experience in a variety of insurance disciplines through shorter stints in different departments. This gives you an opportunity to talk to different managers about salary ranges and your career priorities, and you can learn more about the industry without starting over at a new organization. If you’re interested in switching departments, take a look at Lifehacker’s advice for having that conversation with your boss. 2. Don’t find just a mentor—find a sponsor There’s no doubt that finding a mentor early in your career is extremely important. Many of the insurance professionals profiled on The Community cite finding a mentor as one of the most essential components of their early-career success. Mentors play a key role in career growth, but the Harvard Business Review argues that there’s another supporter you need in your corner: a sponsor. While mentors take a comprehensive look at your career (and often your personal life), a sponsor is someone within your current organization who can act as your advocate. It should be an executive or another leader who offers career guidance “by making important introductions to senior leaders, expanding the perception of what you can offer the organization and offering powerful backing to help you soar and protection when you stumble,” according to author Sylvia Ann Hewlett. 3. Don’t just network—learn more about the industry So much of the focus on early career development is on networking. Make no mistake—growing your professional network is important. But for young professionals, pure networking events like happy hours and meet-ups aren’t the most efficient way to meet other insurance pros and find new opportunities. Early in your career, there are plenty of ways to learn about the industry that also offer networking as a key secondary benefit. Look into industry designations. (AINS is a great way to get a comprehensive look at the insurance industry to figure out which elements of the business interest you most.) Or you can register for an industry conference and bring a stack of business cards. You also have a much better chance of getting your employer to chip in for these kinds of experiences. As you work to gain greater industry insight and expertise, forging relationships with other soon-to-be designees or conference participants will come naturally. And those relationships will be rooted in the pursuit of industry knowledge and career interests rather than personal ambition and cocktail-party chatter. See also: Work/Life Balance … Your Tightrope to a Rewarding Career   4. Don’t just think about goals—write them down One last small piece of advice for charting your career: once you determine some concrete goals, write them down. Recent research from Dominican University of California found that individuals who write down their goals and share them with others are far more likely to achieve them than people who didn’t write them down or tell others about them. Writing down your goals and sharing them—perhaps with your sponsor or growing professional network—go a long way toward making you accountable for achieving them. As you advance in your career and take advantage of new opportunities in a quickly changing industry, make sure to refer to your written goals and update them regularly. Have you found success charting your career goals? Let us hear your best tip in the comments section below.

Some life insurers now use data from fitness trackers to lower premiums. But does a policyholder’s number of steps really improve his or her mortality? Despite the link between a sedentary life and the risk of heart disease or cancer being well known, there is no consensus on how many daily steps reduce this risk. A popular daily target is 10,000 steps, but just a couple of thousand, when taken at a brisk pace, confer health benefits. There’s a good chance that a combination of positive lifestyle factors (maintaining a low BMI, avoiding tobacco, limiting alcohol and getting adequate sleep) improve mortality when combined with regular moderate exercise. Perhaps people who walk 10,000 steps or more every day already have this positive combination. See also: Wearable Technology: Benefits for Insurers   However, not everyone will find appealing the request to use a tracker to monitor their progress toward the step target. One reason is data security. Also, cheap devices are inaccurate, and it’s not always clear how the data can be interpreted or integrated within existing processes at reasonable cost. Besides, not everyone can maintain or reach the target levels of physical activity. [caption id="attachment_25326" align="alignnone" width="500"] Concept of connected health and fitness tracker and devices such as smart phone, tablet and wearable for a digital lifestyle[/caption] In the U.K. in 2015, gym memberships grew to 8.5 million. While the fitness sector expanded that year, the number of people in England engaged every week in physical activity fell, and the keep-fit and gym sectors suffered the biggest drop. People stop attending the gym due to lack of motivation, time or just feeling out of place. There is also evidence that wearable tech is losing some allure. Analysts reported that by November 2016 smartwatch sales declined 50% year-on-year. Several manufacturers of fitness bands are rethinking their participation in the consumer wearables market while others are laying off staff. Insurers may be wary of attaching themselves to fads, such as the use of fitness trackers, but the concern about long-term health isn’t going away. The growth in popularity of consumer technology suggests the industry faces more fundamental change. Technology is affecting consumers' empowerment, making them better informed and more demanding. People accustomed to using smartphone apps to order taxicabs and manage their bank accounts expect insurance propositions to offer similar levels of simplicity, service and convenience. While most people may not care about life insurance, they do care about having a long and healthy life. See also: The Case for Connected Wearables   This explains why insurance programs linked with fitness tracking have proved popular. But individuals with mental health problems, poor mobility or chronic illnesses, such as diabetes, may not care to link their coverage with physical activity. Insurers can harness technology to add value for these customers as well -- by prioritizing their emotional and wellness needs. Providing policyholders with practical support in the form of tutorials and online help could help prevent their health from worsening and mitigate the impact when it does. © Reproduced with the permission of General Reinsurance AG, 2017.

I started my career in insurance at the same place where most of our millennials are starting theirs, in the call center. In my case, it was a Farm Bureau claims call center in the beautiful suburban campus in West Des Moines, Iowa. I didn’t know it at the time, but I got really lucky. That call center was very well run by enlightened leaders who realized they were training the future leaders of the company. As early as the interview, managers told me that this call center was different. They understood that most of the new talent coming into the company would start in this department, and they had been instructed to engage and train those young professionals, so they would grow into productive employees not only during but after their time in the call center. They said they wanted me to spend two to three years in the call center, while learning as much as possible about the company and the insurance industry in general. After that, I’d be expected to start applying for positions beyond the phones. The department also required each individual to obtain the Associate in General Insurance (AINS) and the Associate in Claims (AIC) within the first two years. Failure to comply with the educational requirement could lead to termination. The way the call center functioned on a day-by-day basis was also quite engaging. Reps were trained well and supported in their efforts to grow their career (even when it meant time away from the phones for a class). The call center answered all first notice of loss calls for both personal and commercial lines claims, so it was not overly specialized; there was lots of variety on the day-to-day work. You’d get to keep the simple claims and work them to completion, acting as real claims adjusters. This resulted in great customer service, as roughly 40% of all calls would be answered by the person ultimately handling the claim. The approach also resulted in lots of employee growth. Even the way that managers measured performance was not bad at all for a call center. While they did measure the amount of time you spent on “After Call Work” and “Unavailable,” it wasn’t the main thing they cared about. To the best of my knowledge, they didn’t measure the dreaded “Time on Call” that most call centers use as their main measure of productivity. The main thing that counted in this particular call center was the number of new claims you took and the percentage of those that you kept. At the end of every week, management would send out a list of the top 10 reps who answered the most calls and kept the highest of those calls. I was almost always in the top two for both categories, and enjoyed the friendly competition. Because the list only included the top 10, not the bottom ones, people weren’t offended by it; it was a very positive thing. Management also included in the weekly newsletter a congratulatory mention of everyone who had passed an insurance designation test. While at times the call center could get hectic, the overall environment was very supportive of employee growth, and nobody seemed to hate the job. Eight years later, most of the people I worked with in that call center are still in insurance, and none of them are still call center workers. Many stayed in claims. Many are still in the same company. That’s a successful insurance call center in our book! It was such a great place that I was sad to leave when I got an offer for a better claims position at Nationwide, which ended my call center days. Sadly, I would find out as I met many other young insurance professionals that great insurance call centers that focus on developing their people are rare. Most are simply awful places to work, and, while nobody seems to be keeping statistics publicly, we have found 20 horror stories for every positive one. There are many conferences about insurance, and none seem to be talking about our call centers. The CPCU Society Annual Meeting and Leadership Summit has not had a single session about call centers in at least the six years I have been involved. It’s almost as if those call centers didn’t exist! Or, more likely, the leadership just doesn’t view them as really being insurance. It’s like the call centers are the black sheep of the insurance family that nobody wants to talk about! A huge portion of young insurance professionals in the 2010s started their insurance careers in a call center type environment. Most of them already had college degrees (and the associated student loans). Like previous generations, they fell into insurance by accident, but, unlike previous generations, they won’t stay out of loyalty or out of having found great careers. If we do our job right and engage them in the industry, they’ll grow. If we don’t, they’ll leave the industry, and we’ll continue having a huge talent gap. We’re not saying that we should close all the call centers and go back to doing business exclusively in the old-fashioned way. We understand that our expense ratio will not allow us to do that in the age of price transparency and incredible competition for every insurance customer. What we are saying is that we need to realize that, in many cases, the call center is our only touch-point with the customer, and we should be making them love their time with us. Maybe even more importantly, the call centers are our new entry level point for new talent, and given the talent crisis, our bad reputation with younger generations, and the high expense of replacing any employee, we need that talent to grow with us. See also: How to Reinvent Call Centers   Based on the horror stories we’ve collected from conversations with fellow young insurance pros who survived some time in the call center and lived to tell the tale, here’s what many (but  not all) of the insurance call centers are like to work in: You have to be logged in to the phones every minute you are in the office and are not allowed to even be in the office outside of your work hours. There are rows after rows of grey cubicles, packed with unhappy 25-year-olds with their college degrees hanging precariously from the cubicle wall and the headset making a semi-permanent mark in their ear. Engagement is so low that it could better be measured in level of desperation. Turnover is high, with the great majority leaving not only the company but the industry and swearing they’ll never work in insurance again. The reps who haven’t quite given up on the industry yet are applying desperately to any open entry-level position that’s not a call center. It doesn’t matter if it's claims, underwriting, processing or subrogation. Anything will do just to get off the phones! There’s so many applying for the same jobs with essentially the same resume, college degree and one to two years of insurance call center experience, that’s it’s very hard to differentiate among them, so hiring managers mostly just reject them without an interview. Some have been told directly that “we don’t hire from the call center." They are measured on 50-plus different characteristics, so many that it’s impossible to actually focus on improving. Who can control that many different minor factors during each phone call? The most important measures tend to be Time-on-Call and Availability. The first one measures the length of the average call, with the goal of keeping it as low as possible, and the second one measures the percentage of the time they’re available to take calls. In some extreme cases, even mandatory team meetings count against you the same as time spent in the restroom counts against you. Performance evaluations are focused 100% on metrics and very little on your own growth or what you need to do to get out of the call center. Most of the supervisors are former call center reps themselves who only know the call center life. They often don’t know anything else about the company or the industry and can’t serve as good mentors even if they wanted to. Professional development is encouraged by the company, but development time allowed by the department is very limited or completely non-existent, leaving it to  the employee to do all growth activities outside work hours. A case could be made that a motivated employee can grow by investing his own free time into activities like insurance designations, Toastmasters and networking, but most have no previous insurance experience and no advice on what they should be spending their time doing to grow with the company. The only thing they know is that they don’t want to be on the phones, and they don’t want to become call center supervisors either. We have even heard stories of call center employees being denied support in getting their basic insurance designations because they’re not required for the call center job the employees are doing. Some are denied even the ability to participate in activities such as Toastmasters or a young professional group because those meetings are in the office, and Human Resources doesn’t want employees to be in the office outside of work hours. There are better ways to run a call center. Not only should others learn from the example of the Farm Bureau Financial Service center where I worked, but there’s even more that we can learn from the best-run call centers outside the industry. Look at Zappos, which was founded on the crazy idea of selling shoes online. Think about that one: Shoes are the kind of thing that absolutely has to be tried in person, and, when you go shoe shopping, chances are you try multiple shoes before you find a pair that fits just right. Zappos succeeded selling shoes online by doing two things differently: The company will ship you as many shoes as you want, and then you can try them and keep the ones you want, returning the rest. Zappos will cover the shipping both ways. The second thing Zappos does is provide amazing customer service. To provide that service, Zappos runs large call centers staffed by very happy employees. How does it keep call center employees happy? By doing things diametrically differently from most other call centers (including insurance call centers). The hiring process consists of several interviews, mostly looking for personality fit. The HR rep conducting the first interview tries to simply figure out if this is a person he would want to work next to for 40 hours a week. Skills are much less important -- skills can be taught. During the hiring process, Zappos makes it very clear that the great majority of positions are at the call center, and, if you take the job, you’ll be answering the phones for a long time. Every new employee, regardless of position, must go through the call center training. You can be hired for a vice president role and on day one you get to go to your new office to set your stuff down, and then you come back down to train for the call center with everybody else. After finishing training, everyone gets to work the call center for a couple of weeks before going on to the job they were hired for. This guarantees that all the leadership knows what the call center is like. Currently, in insurance, there are very few, if any, senior executives who came from the call center, partially because those call centers didn’t exist or were much smaller when those executives were starting their careers. After their first couple of weeks on the phone full time, all new Zappos employees get called into a huddle room with their manager. The conversation includes giving the employee real feedback about her performance in the call center. Then the manager reminds the employee that most jobs at Zappos are at the call center level and that it’s hard to move to a different area. Finally, the manager says something like “Charlie, I’ve got  a check in your name for $2,000. I want to pay you to quit. If you don’t love the job, take the money, and we can part ways, no hard feelings.” Zappos does such a good job in hiring, orientation and training that only 2% of people take the offer. The way Zappos measures performance is very different from others, too. It doesn't measure Time-on-Call at all. All Zappos cares about is making the customer happy. That may mean ordering a pizza for a customer who is traveling and doesn’t know where to get a pizza or chatting for seven hours with a customer about which shoes to buy for her prom. Zappos understands that happy employees lead to happy customers, and that, in a world where your only interaction with the customer is when she visits your website or calls your call center, a call is a huge opportunity to connect with the customer. Zappos understands that a call center is NOT a cost center; it’s a key touch-point with our customer. What could be more important than that? The insurance industry has a lot to learn from Zappos. As millennials become a bigger and bigger part of our customer base, and they are not fans of visiting an agent’s office, the call center becomes our touch-point with the 95% of our customers who didn’t have a claim in any given year. Also, if the majority of your new employees are starting at the call center level, it’s our only chance to get them to fall in love with the industry and to convince them to make a career here. See also: Insurers’ Call Centers: a Cyber Weakness?   For more about the Zappos way, I highly recommend the book Delivering Happiness by Tony Hsieh, the CEO of Zappos. This amazing book will give you a great intro to how Zappos runs its business, especially its call centers. The company also provides guided tours of its offices in Las Vegas. The company provides training and consulting for other companies through its consulting arm Zappos Insights. You can learn more here. We are strong believers that the first large carrier to figure out how to turn its call centers into talent mines will have a major competitive advantage in the talent wars. Combine that with student loan aid and maybe with opportunities to take sabbaticals every few years, and you’ll create an unmatched employee experience that millennials will not want to leave. This article originally published at InsNerds.com.

Softening prices, little or no organic growth and increased competition have characterized most of the commercial insurance environment in recent years. These factors and a relatively benign cat environment continue to attract new types of capital providers (e.g., hedge funds, pension funds, foreign investors, capital markets) looking to diversify their investment portfolios with uncorrelated insurance assets. Limited organic growth opportunities also have led to a broad consolidation of distributors, with an increasingly large number of private equity-backed brokers looking for short-term gains and opportunities to reduce systemic inefficiency. In turn, this has led to significant carrier investments in automation to facilitate effective and efficient straight-through processing (STP). More specific responses to market conditions from commercial insurance constituents include:

• Distributor response – Distributors are increasingly looking for ways to (1) negotiate more aggressively on individual transactions (e.g., appetite exceptions, non-standard terms and conditions, pricing), (2) operate more efficiently (e.g., customized processes, only partial completion of applications) and (3) exert their bargaining power to gain higher commissions and other sources of revenue (e.g., access to market intelligence).

In addition, brokers are becoming increasingly organized. They are looking to 1) reduce the number of carriers with whom they place business in favor of ones that have a broad underwriting appetite and are easy to do business with and 2) exit the service arena, especially on small commercial accounts where margins are already extremely thin.

• Carrier response – Carriers are intensifying their efforts to compete for a “top three” position with distributors by attempting to (1) be easier to do business with (both in terms of technology and personal relationships), (2) increase product specialization and related underwriting expertise, (3) increase their appetite for more hazardous risk and 4) (as a less favored option) lower rates and pricing.

Although more and more carriers have invested in automated underwriting and pricing, broker/agent expectations are only increasing. They not only want to clearly understand a carrier’s underwriting appetite, they also want to get near-real-time quotes on the majority of standard risks without extensive manual data entry on their side. For now, carriers have avoided being “spread-sheeted” by using proprietary agent portals to increase ease of business interactions, rather than directly integrating with agency management systems and comparative raters. Distributors have not yet increased their demands for the latter two, recognizing that they could lead to a commission squeeze or even losing their appointment if the portability of their book declines with a given carrier.

• Customer response – Last but not least, customers’ behaviors and expectations are changing, too. They are becoming more comfortable researching business insurance online, and expect their shopping experience to reflect what they see in personal insurance. However, they are still turning to an agent (whether digitally or in person) to confirm their purchase decision and complete the deal. This is especially the case when businesses mature and risk management becomes more critical to their success.

See also: Seriously? Artificial Intelligence?   As all this has been happening, artificial intelligence (AI) has matured significantly, demonstrating that it can markedly improve existing STP. We describe below the AI technologies – including robotic process automation, natural language processing and machine learning – that can increase commercial insurance’s efficiency and effectiveness and thereby benefit investors, distributors and carriers themselves. Availability and access to large volumes of data, increasing processing power, cloud computing, open-source software and advances in algorithms have fueled the rise of AI from academic curiosity to commercial viability. The next generation of straight-through processing Although many carriers are already heavily automated, their initial focus has largely been on automated underwriting and pricing. This has left considerable manual intervention in the issuance process, post-bind audits and other downstream transactions. All of these can be streamlined to further drive down costs. Once carriers move to truly mechanized underwriting, the next step will be to embed third-party data feeds and advanced analytics to drive straight-through processing (STP) of risks. For example, imagine a small business owner being able to enter just four pieces of information (e.g., business name, business address and owner’s name and DOB) on a policy application and receiving a real-time business insurance quote with the option to immediately purchase and electronically receive policy documents. Furthermore, imagine this approach having no impact on underwriting quality or manual back-end processing requirements for the carrier. Integrating AI techniques and additional internal and external data sources into small business processing have the potential to make this a reality. A combination of leveraging internal data from prior quotes and policies, integrating external structured data feeds and mining a business’s website and social media presence could provide carriers with enough information to determine a business’s operations, applicable class codes, property details, employment and payroll and other key risk characteristics to underwrite and price low-complexity risks. In cases where more information is needed, dynamic question sets with user-friendly inputs could streamline the application process without sacrificing underwriting quality. How AI can improve straight-through processing In addition to immediate cost improvements, commercial carriers that leverage internal and external data resources and apply AI to commercial processing can benefit from reduced turn-around time, better and more consistent decision-making and improved agent/customer satisfaction. The carriers that are the first to adopt the latest in AI-enabled straight-through processing will be preferred by their existing agencies, as well as be able to pursue alternative distribution channels that feature a more streamlined, user-friendly acquisition process that accommodates less sophisticated users. Some of the most promising AI techniques that can help insurers improve STP include:

• Robotic process automation (RPA) is an area of AI that could increase STP efficiency and bring down costs at acceptable level of increased risk. RPA automates data entry, third-party data integration, form filling and data validation. More advanced process-mining techniques use machine learning to infer business processes from transaction logs, web and call center logs, email, and workflow logs. They profile the time it takes for different steps of the quote-to-issue process to be fulfilled and, to streamline the process, plot a distribution that enables the identification of outliers. They also track exceptions, and the reasons for them, thereby enabling greater efficiency. RPA is also tracking conformance and compliance with established standards, thereby leading to more consistent and compliant service delivery.
• Machine learning is building routing logic and underwriting-related models. For example, a detailed analysis of a commercial book of business over time can identify the need for no- touch, medium-touch or high-touch interaction models. This categorization enables better routing across multi-segment (i.e., small commercial, middle market and large commercial) insurers. In addition, machine learning can inform a wide variety of predictive models.
• Using open source technology, PwC has built natural language processing engines that continuously evaluate a large number of news and social media sources and report on key concepts.

Commercial insurers and brokers can use this ontology of “key concepts” to traverse the output, identify drivers of specific risks and refer to articles related to these risks. By indicating the relevance of articles (e.g., via a thumbs up or thumbs down) insurers can “train” the natural language engine to look for specific sources and type of articles. As the system learns over time, it can graph trending topics, the sectors and companies associated with certain risks and the underlying impacts if the risks develop adversely. We also have built a question-answer engine that allows risk experts to make natural language inquiries and retrieve relevant reports and documents to conduct further analysis. With natural language generation, the engine also can create risk profiles for senior management’s consumption. See also: 10 Trends at Heart of Insurtech Revolution   By coupling deep learning systems with natural language processing, PwC has been able to create powerful risk analysis enablers that enhance and speed up emerging risk analyses. When analyzing text from news sources or social media sources, the system needs to understand the context under which certain words are used. For example, a common word like “run” has more than 645 meanings according to the Oxford English Dictionary. “Deep Learning” or neural network-based machine learning systems can actually capture the context of words within sentences, sentences within documents and documents within a collection of documents. In closing, even with their increased focus on ease of doing business, there is still much room for carriers to improve. There currently is a clear opportunity for prescient and active carriers to separate themselves from the pack, but doing so will require a competitive mindset that has not traditionally defined the industry. Small and medium commercial carriers must find ways to improve their cost structures to compete profitably in the long term. AI-enabled solutions offer some of the most promising ways to do this. Implications

• New investors in the commercial insurance market are increasingly looking for short-term gains and greater efficiencies from the industry.
• Moreover, distributors are looking for greater ease of doing business with commercial carriers and have demonstrated a willingness to favor the ones that can meet their expectations.
• Commercial carriers have automated quoting in an attempt to facilitate effective straight-through processing. This has increased efficiencies, which has benefited investors and helped improve the distributor experience.

However, many manual processes and inefficiencies still remain. Once carriers move to truly mechanized underwriting, the next step will be to embed third-party data feeds and advanced analytics to drive straight through processing of risks. Recent developments in artificial intelligence (AI) can help carriers do this.