In 1997, the CEO of a Silicon Valley company told me I should give up on being an insurance broker and look for a new job because I was about to be disintermediated. Technology would let carriers and clients connect directly, and nothing I did could stop the movement of history. Well, I ignored his advice, and the brokerage part of the insurance supply chain has grown by a factor of 25 in the past two decades. But many people are now warning again of disintermediation. Was my friend just too early in his prediction? Will the doomsayers be right this time? In a word, no. First of all, disintermediation rarely happens as rapidly or completely as the technologists tend to think, with their binary, one-zero, on-off approach to the world. There are actually many more bank tellers today than there were when ATMs were introduced decades ago and were supposed to put tellers out of business. Remember when realtors were going to disappear, as buyers and sellers connected directly? Realtors are thriving. Even travel agents are still around despite the spread of sites like Expedia. There are only about 40% as many as there were two decades ago, but they deliver more value now, because they handle more complex problems or have developed specialties, such as exotic fly-fishing vacations that few have the expertise or confidence to plan on their own. See also: Why Aren’t Brokers Vanishing?   Insurance is even less likely to face disintermediation than bank tellers, realtors and travel agents because, if you think finding a fishing guide in Alaska is hard, try explaining how a workers' compensation “experience modification” is factored or how the Affordable Care Act will affect the buying public if the new administration has its way. Even though the rise of comparison sites suggests that policies are easily comparable, they are not. It takes sophistication, based on lengthy experience, to help a client evaluate his or her needs and to sort through all the carriers and policy options to find the right fit. Product, price and relationship all have to fall into the right place at the right time. Besides, as the founder and chairman of Insurance Thought Leadership, I have a ringside seat on the startups that are providing tools that will make the broker’s role even more important than it is now. In addition to the main site, where nearly 800 thought leaders have published more than 2,500 meaty articles on innovative ideas, we recently launched the Innovator’s Edge, which is tracking the more than 725 insurtech startups. I can say with confidence that the role of the broker will broaden for the foreseeable future. Here are just some of the companies that will help ensure that all of us brokers have a Happy New Year – and many more to come: –RiskGenius – This startup, run by Chris Cheatham, uses artificial intelligence to instantly compare and contrast policy coverage and produce a report in layman’s terms. That helps clients see what's going on. It also helps brokers keep track of changes in policies, making back offices much more efficient -- serving clients better, at lower cost. The RiskGenius solution plays into a trend that seems to be generally missed but that will be profound, in insurance and elsewhere. While some entire jobs will be automated -- look at what robots are doing to many manufacturing jobs -- the broader effect is that pieces of jobs will be automated. It used to be that every senior executive had a secretary, but as typing, some answering of phones, some scheduling and so forth have disappeared from assistant jobs, the span has become one assistant for every two, four or even larger numbers of executives. The same sort of winnowing of functions will happen with brokers, because of solutions like RiskGenius'. Brokers and brokerages will take on more strategic work as they let go of the more mundane tasks that can be taken on by technology. –Refer.com, run by Thomas Gay, likewise makes brokers more efficient as we prospect for business. While social marketing and social selling have attracted so much attention, but haven't panned out, Refer.com scours the internet 24/7 to find topics of interest to prospects and puts them in an email format. The system prompts the broker about the optimal pace at which to send the emails, providing a high-tech, high-touch approach that can build the sort of referral network that brokers crave. –Agency Revolution, whose CEO is Michael Jans, offers complementary capabilities by automating marketing campaigns -- for instance, sending out emails on clients' birthdays, as policy renewals near, etc. –Pypestream, which has the good fortune to have ITL advisory board member Donna Peeples as its chief customer officer, can greatly improve customer service for larger brokers. Pypestream's chatbots mean that customers can text queries to brokers -- a means of communication that so many prefer these days -- rather than call and wait on hold, negotiate a phone tree or face some other indignity. The chatbots filter through the texts, query any and all back-office systems that have anything to contribute and answer routine questions so fast that Pypestream sometimes has to slow the response so the client isn't tipped off that it's really dealing with a computer. Clients are happier, and brokers offload routine questions so they can handle more substantive issues. –GAPro, where Chet Gladkowski is chief marketing officer and chief information officer, also can make brokers much more efficient by providing what it calls verification as a service. GAPro addresses the huge time sink that is certificates of insurance. These are important, because they let parties to a deal know that other parties are carrying the requisite insurance -- but they're only as good as the paper they're printed on (or the PDFS that contain them). Just because someone can show he had insurance a month ago doesn't mean that certificate is still in force today, when the deal is finally coming together. Brokers spend an inordinate amount of time verifying these certificates -- but GAPro automates all that, so it's possible for everyone to know in real time the insurance status of all relevant parties. Again, this means faster and better service for clients. –GroundSpeed automates loss runs and the processing of claims data, simplifying a complex, painful process and letting clients and brokers see on a dashboard all the claims they've made under an insurance policy. –Risk Advisor, whose founder is Peter Blackmore, helps brokers extend risk management services to small businesses. These services had previously been practical only for larger businesses, because of the expense of the work involving in identifying and mitigating an individual business' risks. But Risk Advisor has automated the process so much that far smaller companies can enjoy the sort of attention and expertise that big clients have traditionally received. That change pushes brokers in the direction that both they and clients would like to move: The brokers will increasingly help prevent losses rather than coordinate payment after losses occur. –WeGoLook, whose founder and CEO is Robin Smith, provides arms and legs (and brains) to brokers for any sort of service. Her 30,000 "Lookers" across the U.S. are currently handling tasks such as taking photos and gathering other information after car accidents, but their work is really limited only by our imaginations, because they give us the sort of inexpensive, free-lance workforce that Uber has brought to transportation. How valuable is the sort of service that WeGoLook can provide? Well, Crawford just announced that it was buying 85% of WeGoLook in a deal that puts a $42 million valuation on this young startup. See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections This list of seven companies is just the start, as a visit to the Innovator's Edge will show you. So, my bet is that if my Silicon Valley friend and I reconvene in 20 years, we'll see that the role of the broker has become even more strategic and has moved by leaps and bounds beyond where it is today.

Even though Metromile was groundbreaking with its pay-per-mile insurance, it certainly wasn’t the first to provide usage-based cover. In fact, the earliest documented paper insurance policy, a commercial policy, was a pay-per-use policy and was dated Feb. 13, 1343. It covered 10 bales of linen on their trip from Pisa to Sicily on the Santa Catalina —right in the midst of the Italian Renaissance. Fast forward 673 years, and we are entering an era where usage-based insurance and pay-as-you-go (drive-live-travel-ship-and more) coverage is coming into vogue. The big difference with this Renaissance, however, is that technology and insurance coverage is unlikely to trend back toward aggregates and is highly likely to trend permanently toward individualized, contextualized, point-in-time-based, data and analytics based pricing and use. There’s no going back … only forward. If the sharing economy with collaborative consumption expands, the on-demand model continues to grow and the pay-as-you-use model continues to create innovative options, then there are long-term, dramatic insurance implications — and almost all of them are positive when looked at in the light of insurtech advancements. So, let’s briefly consider what usage-based insurance means to consumers, what it will do for insurers and how insurers need to prepare their enterprises to take advantage of it. The Consumer and the Economics of Pay-As-You-Use Pay-as-you-use is a common economic principle, couched in today’s technology solutions. The only way it becomes profitable is for the consumer to see the benefit of variable use, the ease of use and variable expense. When Metromile introduced pay-per-mile coverage for drivers, it naturally appealed most to low-mileage drivers, who felt that they could now be treated fairly. They benefited from less-wasted premium dollars, and they were rewarded with a personalized experience that made them feel known. (Metromile even goes so far as to warn individual San Francisco drivers about potential parking tickets during street cleaning days.) See also: Insurtech: One More Sign of Renaissance   Today’s consumers have constructed, through their preferences, a digitally savvy, relationship-valuing, on-demand, sharing economy. AirBnB, Zipcar and Snapgoods are turning wasted downtime into productive uptime and revenue. These companies and others have transformed the mobile device into a powerful marketplace of options with stellar and simplified ease of use, standardized quality of service and transparency of price. These same trends will drive some consumers to only do business with those who can provide usage-based coverage. The Insurer and the Economics of Pay-as-You-Grow Insurers may lament that they are losing premium when the need for insurance is not in use, but that isn’t actually the case. In most cases they are just lowering premium at times when there is very little or no risk … the basic fundamentals of insurance. Insurtech startups are providing ideas to help insurers turn the sharing economy into new market opportunities, revenue and profits. Digital connectivity, relevant data streams and new product models will continually allow insurers to prove their pricing and help their customers lower their risk. The irony of the insurer discomfort is this: Many insurers are taking advantage of the same pay-as-you-use principles as consumers themselves. They are sharing system solutions with cloud-based technology. They are paying as they grow, with agreements that allow them to pay per policy or pay based on premiums. They are using data on demand relationships for everything from medical evidence to geographic data and credit scoring. They use technology partners and consultants in an effort to not waste downtime, capital, resources and budgets. They are rapidly moving to a pay-as-they-use world, building pay-as-they-need insurance enterprises. This is especially true for greenfields and startups, where a large part of the economic equation is an elegant, pay-as-you-grow technology framework. They can turn that framework into a safe testing ground for innovative concepts without the fear of tremendous loss, while having the ability to grow if the concepts are wildly successful. The Window of Opportunity It’s open again. The window of opportunity is open to insurers that wish to prepare their business models, products, processes and systems to embrace the Pay-As-You-Go culture. In a recent Majesco Thought Leadership report on insurance consumers, we found that consumers are far more interested in receiving a fair price than they are in gaining the lowest price. We also found that across all generational groups, auto insurance based on miles driven showed that 30%-50% of the surveyed respondents were willing to look at Pay-Per-Mile auto insurance and a similar percentage were interested in on-demand insurance for a specific event, item or time of day across all generational groups and led by Millennials. Each of these jumped to 60-80% when the “swing group (those that could shift) were added.  (See The Rise of the New Insurance Customerfor more information.) The statistics are stunning, considering that those respondents are all current insurance customers — willing to stay or switch based upon their feelings of fairness, service, value, and need.  Insurers that aren’t already preparing, need to prepare now … and quickly.  There is no question that the convergence of consumer opinion and the innovative business models and capabilities of InsureTech will either steer consumers toward an insurer or away from it based on the insurer’s ability to accept non-traditional, tech-enabled products.  Just look at the high interest and investment by reinsurers and venture capital firms in companies like Lemonade, Slide, Root and TROV … and the buzz and excitement their brands are generating in the marketplace. Preparing isn’t terribly difficult, but it requires a look at long-held insurance assumptions … business model, products, processes, and systems that may be outmoded and built for a previous era and generation. How does a quoting engine handle a sporadic driver? How does a policy administration solution handle coverage that may turn on and off with a switch, or coverage that may only have a duration of two hours? Is an insurer’s data warehouse prepared to handle the data deluge of millions of telematic devices? For some insurers, these questions may seem like tall hurdles to jump over, but the answers are well worth the time and investment. See also: 6 Charts on Startups, Greenfields, Incubators InsureTech is proving its potential by fueling innovation and disruption to the insurance industry, through new technology startups … and insurance and MGA startups.  S&P even noted in a recent report that InsureTech has a complementary place in the traditional insurance world, despite remaining uncertainty in the industry about how it will function on a wide scale.  If you prepare for new insurance models, such as Pay-On-Demand, Pay-As-You-Use, or Pay-As-You-Need, you will be moving your organization toward the place where consumer needs, expectations and demands are heading — particularly with the new generation of Millennials and Gen Zs that are embracing digitally superb, on-demand, sharing economy options in all parts of their lives. It is the dawn of the insurance renaissance. Digitally-connected, innovative and analytically-informed insurers will thrive there. Those who are determined to focus on the customer will grow there. Preparing your business and the underlying systems keeps the windows of opportunity open and the breeze of market potential flowing into a healthy organization.

First, a definition. Distributed ledger/blockchain technology, increasingly abbreviated as "DLT," transfers value in a decentralized, consensus-based and immutable manner using cryptographic tools and is different from technology today because it offers transactions occurring between unknown counterparties that are mathematically trusted in real time. DLT is at once a network and a database that can host applications like Smart Contracts, with the potential to be interoperable across trade ecosystems. This technology seems tailor-made to help administer the claims end of insurance. Let’s talk about claims. It is well known that insurance claims are the storefront of an insurance business. Claims processing and resolution provide touchpoints for extended customer engagement, and a bad experience can poison an insurer in a customer's mind, which can affect policy renewal. The claims experience should be seamless and easy to manage for all. Imagine if you could smooth out your claims process so that it is more accurate, frictionless and cost-efficient and can even provide easy access to data for benchmarking and analysis to improve your customer's digital experience. See also: What Blockchain Means for Insurance   I had my "aha" moment when I first learned about DLT technology. I was struck with an immediate vision of how things could be made better within the insurance industry. As a prior general counsel of an insurer, and now a consultant specializing in the strategic use of this technology, I understand how it can be implemented (once fully developed) and can envision how it can change and improve business from end to end. Practically speaking, on the claims side, at the very least, the industry would never again have to suffer "the dog ate my homework" excuse for lost documents, duplicate or other document mishaps and related lawsuits. Claims provenance could be automatically established and adjudicated by so-called “smart contracts” (in the most general sense, they are protocols that have deterministic outcomes) in real time with an easily auditable and immutable trail. Identity proof would be less onerous. Those developments alone go a long way to reducing fraud and risk and their associated costs. While modernizing claims processes is not a "sexy" thought, it is one that directly affects all insurers and their bottom lines by reducing risk. A small shift in the actuarial calculation based on a risk reduction goes a long way. There is not a business person on earth who does not want to increase revenue. While there is a lot of hype, I believe we are only seeing the beginning of its potential. Education is needed. Imagination is needed. And innovation and execution are needed. The financial services industry has looked at this technology over the past year and is engaging with it, and some practical applications are expected to go into production in 2017. Insurers/asset managers should take notice. For instance, Delaware will begin using blockchain technology for UCC filings powered by Symbiont. Financial industry regulators, both domestically and internationally, are evaluating this technology and are listening and learning. In part, we owe the financial services sector a debt of gratitude for creating awareness overall. Generally speaking, insurers have been slow to the table to learn about this technology, but it is imperative that they engage as early as possible because DLT has the potential to be very valuable for them. Some reinsurers already understand this and are experimenting. The diamond industry understands this and is experimenting with digital representation of hard assets on a blockchain for asset management and insurance purposes through Everledger. Other insurers have made some attempts to test similar concepts. Indeed, the insurance industry can benefit on more than just the claims side. We all know customer acquisition is the most uncertain and expensive part of the process in any business. Well-designed digital processes can prove invaluable in customer acquisition and retention. On the front end of the insurance industry, smart contracts can aid in creating easy-to-manage customer policies, which can be fed into databases and tailored and segmented in any way that makes business sense. Data management and security can be enhanced using blockchain technology. In fact, the Estonian company Guardtime has embraced the cyber security end of this technology and evolved a keyless signature infrastructure (KSI) that DARPA is verifying. See also: Blockchain: What Role in Insurance?   Blockchain/DLT technology is not a panacea for all. But it is worth exploring as the technology evolves. We are at an inflection point in the development of this technology—a point in time where insurers and others can have a say in how it evolves. Once standards emerge and practical applications are in production, it may be too late. Time to get on board, insurers, and weigh in! All you need do is participate to make sure your interests are heard and accounted for. To the insurance industry, I ask you: How do you see this technology affecting insurance?

Dear Insurtech, It was nice getting to know you in 2016. You served your purpose, but now it's time for RiskGenius to move on. It’s time for me to move on. There were a series of events that helped me realize that you, insurtech, and me, well, we can’t really be friends anymore. I can’t be conference guy  Recently, I was in San Francisco meeting with some insurance professionals who are plugged into the insurtech scene. One of them brought up a recent insurtech conference and commented, “You are everywhere, Chris!” I shuddered. I have never wanted to be “conference guy,” but I got sucked into being just that this year, and there are way too many insurtech conferences. Little comes out of insurtech events  I often attended insurtech events this year and wondered at the end, “What will come out of that?” And very little developed. As the year progressed, it started to dawn on me what was going on. And then, finally, everything crystalized after one phone call on Dec. 13. A wonderful insurance professional called to let me know he was leaving his firm at the end of the year because he was frustrated by the lack of engagement by his firm with insurtech companies. See also: The Future of Insurance Is Insurtech    It hit me: Insurance companies are simply trying to understand what the heck it is we insurtech companies are doing. Often, there are no real plans for insurance companies to actually engage with insurtech companies. I need to focus on the doing, not the talking  This year, we have found a tremendous partner in an insurance carrier that I hope to tell you about soon. There are also pockets of people focused on insurance technology innovation -- but I need to find these people because they often aren’t at the conferences, or aren't on Twitter or LinkedIn. Some of the best events I attended were intimate gatherings. Insurance Thought Leadership invited me to a cyber insurance conference I loved. Marsh invited me to an executive retreat that was incredibly insightful. And an insurance carrier allowed us to participate in an innovation challenge with internal employees that changed the trajectory of our company. But none of these three events focused solely on “insurtech.” RiskGenius is ready As I look toward 2017, I am going to remove both myself and RiskGenius from the insurtech scene. Instead, we are going to be actively seeking out those partners that can use our software right now. It’s no longer about tinkering and building algorithms; RiskGenius is weaponized and ready to go. Two areas have emerged where RiskGenius fits perfectly. First, RiskGenius is primed for policy automation. We can take an entire library of policies, show you similarities and differences and then serve up the correct policy based on what the user needs. See also: 4 Marketing Lessons for Insurtechs   Second, RiskGenius analytics has people really excited. We are now able to take an insurance policy that a user provides us and compare it with all the policies we have previously collected and stored. Soon, I will write about how we have evaluated more than 400 cyber insurance policies. This is awkward, insurtech. But we can’t be a “thing” anymore. I’m sorry — it’s not you, it’s me (and RiskGenius). We want more for our future. Thanks for the memories, Chris Cheatham CEO, RiskGenius

The insurance industry is a $4.6 trillion market worldwide that lags when it comes to digitization and providing consumers with a great experience and service. We are looking at the five main challenges that startups face. We have covered Challenge No. 1 here, Challenge No. 2 here, Challenge No. 3 here, and Challenge No. 4 here. In this article, we will look at Challenge No. 5. Challenge No. 5: Tuning the economics to achieve profits will require time and capital We expect that the time to profitability will be 10 to 15 years. And many startups will never reach that point as there are two competing challenges: growing revenue and generating profits. Furthermore, flaws in the underlying economic models cannot be pivoted away from as easily as with other digital startups. After all, there is no such thing as a beta insurance policy, and it is more difficult to find additional or new revenue streams in insurance. See also: Shark Tank Secrets for Startup Success   Insurance is, at the end of the day, a high-volume business with challenging economics. Margins are small, especially on new sales. Typically, customer prices and broker commissions have been falling, with the advent of online insurance. And, with a raft of competitive startups, the long-term trend can only continue. In addition, maintaining a healthy underwriting margin is challenging, with premiums changing due to claims rates and industry competition and capacity. Startups must deal with dynamic pricing and claims forecasting, coupled with upfront acquisition costs that are paid back over a long time and with a complex operational structure, given the need for multiple partners and service providers. Insurance is such that claims because of unforeseen events, fraud and mispricing can potentially have a major detrimental impact, especially with fast scaling of customers and growing revenue. Companies require robust systems and experience and large insurance portfolios to manage and the capital and time to get right. Insurance is different than many industries, where you can achieve a positive gross margin with increased sales and expect that to continue because of improvements in production and scale economies.  The cost of acquiring an insurance customer is relatively high given that insurance is a low-turnover product. After all, you don’t buy more insurance than you need just because you see a good advertising campaign or you are targeted on social media. This means that the relationship between marketing and sales is different than in other consumer products, and it can result in a longer conversion funnel. Typically, the time between when a person first gets attention and the purchase could be three to 12 months or longer. In addition, retaining a customer is crucial for the profitability of the business, and digital solutions make it easier to switch. Regulations may constrain pricing options and in some cases raise hurdles to dynamic pricing. Regulatory and consumer legislation can also affect the scope for upselling of ancillary products and cross selling of other insurance and products. Traditional retail car insurance targeted a 60% to 80% claim ratio (as proportion of premiums) and 40% to 25% operating and acquisition cost levels, compensating with additional investment income to target an overall profit of 8% to 15%. The insurers were helped in improving profitability by a large and static pool of customers who rarely switched carriers and required minimal administration support. With the emergence of direct telephone insurers in the 1980s and 1990s and online insurers in the 2000s, premiums fell 15% to 30%. The new models could bring operating and acquisition costs down to 15% to 20%, with loss ratios still in the 60% to 90% range. The challenge was that initial acquisition costs for new customers could be at least 20% to 30% of premiums, and the rate at which existing customers switched to new carriers each year rose from the historic rate of 5% to 10% to a churn rate of 20% to 40%. Can new digital startups create as much as 30% savings for consumers, which normally is considered sufficient to encourage switching? And will savings on claims be sufficient to support this sort of cost cut? Can the startups build an efficient operating platform to reduce costs to around 5% to 10% of the premiums and still improve services? Takeout Working on building the team, data analytics, pricing engines, processes and systems to ensure in-depth control on not only revenue generation but profitability will be critical. Just as a low-cost airline has to have in-house expertise in capacity utilization and pricing, this ability to both generate revenue and profit must eventually be a core function of most digital insurance startups. This will be an important differentiator for successful startups. Providing new services and rewards for certain behaviors will be critical to avoid competition on price only. See also: Should Incumbents Ally With Startups?   In addition, further reducing claims frequency and costs by enhanced data analysis and focus on prevention will be one of the success factors. Customer service and retention will become even more important to recoup upfront acquisition costs. Best that this focus is embedded in the business model! Having a low-maintenance cost platform covering the complete value chain is an important factor. The platform needs to be robust and agile enough to provide the relevant information and easily adjustable for dynamic pricing, marketing and services. Although there are many off-the-shelf solutions, will these be sufficient? We are curious about your perspective.

Can you imagine a world where everyone was inspired to go to work? Do you inspire your team to greatness as a leader, or are you one of those leaders who are quite comfortable with your staff coming to work every day without any sense of purpose? The No. 1 problem facing many organizations today is leadership. A Simon Sinek YouTube video titled “Why Good Leaders Make You Feel Safe” tells the story of a group of Marines that came under heavy fire from three sides in an ambush in Afghanistan, when one Capt. William D. Swenson repeatedly ran into the line of fire to bring injured men to safety and saved at least a dozen lives. A GoPro on one of the medics captured Swenson and a comrade carrying a wounded Marine to a helicopter for evacuation. After putting the man down, Swenson gave him a kiss on the forehead and then ran back into the kill zone. I said to myself, wow, if a man is willing to give his life for me, I will follow him to the ends of the earth. (Swenson received the Medal of Honor.) While a business environment is obviously not a war zone, even though we sometimes use war as an analogy, the sort of deep-seated love that Swenson showed needs to be present in a workplace, and it is missing in many organization today. People don’t feel safe, and they do not believe their leaders will have their backs when they are in the line of fire. The greats of leadership have a persuasion style that allows them to sell their ideas and inspire people to follow their vision. One of the most critical skills in the repertoire of any leader is the power to inspire and influence people by their words and actions rather than coercion. See also: How High-Performing Salespeople Persuade   In a fascinating book, The Art of Woo, Using Strategic Persuasion to Sell Your Ideas, by G. Richard Shell and Mario Moussa, the authors discuss five different leadership personality approaches to persuasion: Driver, Commander, Promoter, Chess Player and Advocate. Some people are comfortable using three or four of these styles, while others prefer to play only one or two. This book draws from many other brilliant authors and expertly highlights the value of authenticity and self-awareness in your ability to persuade and influence. The book says you need to make two basic choices: Are you other-oriented or self-oriented? (In other words, are you going to tailor your messages for your audience, or are you going to make unmodified announcements rather than spin them for each audience?) And, will you be loud or quiet? The book then goes through five styles; one of the keys to great leadership is understanding your unique persuasion style. While you are reading, consider your present environment, your employees, values, etc. and ascertain which communication approach is best aligned to your natural persuasive leadership personality. Driver (Higher Volume and Self-Oriented Perspective) According to Shell and Moussa, when individuals are high-volume and prefer to announce their perspective without a lot of adjustment for their audience, other people are likely to experience them as demanding. They can be overly one-dimensional and prefer to persuade people by saying things like "Do this my way, the right way or you can hit the highway." I remember working as a plumber’s assistant in my younger days, and all the employees called the founder of the company Frank Sinatra -- because he liked everything his way. But if drivers are dedicated to the organization mission, they can be effective persuaders. The book mentions former Intel CEO Andy Groves, who personified a high-volume, self-oriented CEO and was hugely successful. Grove kept a wooden bat near his chair. One day, just after a meeting had gotten started, several executives slipped into their seats. Grove fell silent at their arrival, then grabbed the bat, slammed it onto the table, and shouted, "I don't ever, ever want to be in a meeting with this group that doesn't start and end when it is scheduled!" Intel was subsequently famous for on-time meetings. See also: Should You Use a Coach/Mentor?   Grove wasn't a nut; he was very aware about his communication style and the culture he wanted to create at Intel. Commander (Low Volume and Self-Oriented) A commander speaks from a position of quiet confidence and authority, using expertise combined with finesse to make a point in an understated way. The book highlighted J.P. Morgan as someone who conducted himself from a position of quiet confidence and credibility. You don't have to be an aggressive Driver when you want people to know exactly what you think. Indeed, a quiet, understated demeanor can often be much more efficient. People listen. The Commander keeps his counsel and puts a premium on maintaining as much control over decisions as possible. In a financial panic in 1895, Morgan played the Commander with finesse, saving both America and his financial empire from a fiscal catastrophe. The Promoter (Higher Volume and Other-Oriented Perspective) Promoters are outgoing, optimistic and assertive. They are friendly. When played well, this role features a gift for gaining and maintaining a wide circle of relationships. The CEO of SAP, Bill McDermott, immediately comes to mind. During his 17 years at Xerox, where he became the youngest divisional president, he was assigned to turn around the Puerto Rican unit, which was ranked 64th out of 64 divisions in the world. The following year, that same division was No. 1 in the world. When asked about the spectacular turnaround, Bill McDermott said that he listened to the people, because they know why things aren’t working. McDermott said people told him two things:

1. They wanted a vision, so they could be inspired when they came to work.
2. The staff wanted their holiday party back.

When the division went from 64th to 1st in the world, they got their holiday party back, at the Old San Juan Hotel. The Chess Player (Lower Volume and Other-Oriented Perspective) The Chess Player style involved plotting a set of moves that brings about the desired outcome. Leaders with this type of personality prefer to operate in more intimate settings, quietly managing strategic encounters behind the scenes. A Chess Player is an effective strategist who is less extroverted than the Promoter but shares with the Promoter a keen interest in what makes other people tick. Shell and Moussa point to John D. Rockefeller. In 1865, Rockefeller wanted to end a partnership with four men, but the firm could be dissolved only if all the partners consented. Rockefeller went to work behind the scenes, lining up support from some banks. When he got the support required, Rockefeller provoked a quarrel over an oil industry investment and quietly extracted himself from the unsavory business partnership. If Rockefeller was more prone to a driver personality, he may have engaged his partners in a shouting match or threatened litigation, demanding they release him so he could follow his dreams. However, Rockefeller took the path of the Chess Player by carefully plotting a set of moves behind the scenes. The Advocate - Moderate Volume and a Balance Between Self-Oriented and Other-Oriented Perspectives. The Advocate uses a full range of tools to get her points across. The Advocate strives for balance -- persistence without shouting, being mindful of the audience without losing perspective. A classic example used in the book is the founder of Wal-Mart, Sam Walton. Walton visited one of his stores and noticed someone at the front greeting customers. Walton was fascinated with the idea and told his team that all the stores should have greeters. Now, Walton could have simply ordered people to do what he wanted. But he was seldom the Driver that Andy Grove was and instead relied on a more moderate combination of vision, persistence, relationships and reason to get people to see things his way. There was a lot of conflict over this new initiative, and Walton went to lengths to explain why this greeters program would be good for the company. He let the debate go on in an attempt to fully explore all the ideas. After 18 months of discussion and experiment, Wal-Mart finally adopted the practice company-wide. Walton did not dictate or say things to his executives such as “Don't you trust my judgment?" or "Don't you think I know a thing or two about what is good for Wal-Mart?" Instead, Walton sold his vision, and his team eventually brought into the concept. As a leader, you need to be aware of your strengths and weaknesses in persuasion. You need to understand your preferred communication channels, and likewise, you must take into consideration the dynamics of your environment, your organizational values, culture, people, etc. Some companies are fierce guardians of their business values, and if there is a misalignment it can cause havoc within the company. For example, you cannot be an Andy Grove in a culture that promotes family values, teamwork, collaboration, etc. The culture is completely different. See also: Systematic Approach to Digital Strategy   Woo-based persuasion is all about aligning interest, values and relationship as people find it easier to say yes rather than no. Regardless of your personality, when your team trusts you, when you figure out which channels of communication your counterparts are best attuned to, your will gain tremendous credibility within your company. My personal persuasion style is more of a Chess Player. I prefer to quietly managing strategic encounters behind the scene. What is your personal persuasion style?

Combining the resources of one of the world's largest TPA firms with one of the world's largest sharing economy platforms will result in true innovation within the insurance industry during a time when most carriers continue to operate in a legacy manner. - Forbes, December 8, 2016 The writer was describing the announcement last week that Crawford will acquire 85% of the equity in my company, WeGoLook, which I believe will be the precursor both for other mergers and for other types of deals that will drive innovation through a merger of the gig economy and the insurance industry. Let me explain. Traditional Supply Chain Disruption Simply put, the traditional supply chain is being disrupted. Hugely. Digital technology and innovation have altered the traditional supply landscape in a number of ways. Technology has decentralized and democratized the supply chain, removing the need for traditional intermediaries. This digitization has resulted in the rise of gig economy platforms, which can use mobile technology to organize cost-efficient labor in a connected supply chain ecosystem. For a long time, insurance carriers have tacitly acknowledged the need to adjust business models and consumer delivery processes. The time has come. The WeGoLook-Crawford partnership is only the beginning. Customer Experience Is Changing Forbes contributor Steve Olenski noted that "the [WeGoLook-Crawford] merger is making the customer experience even better than before by adding key benefits for insurance company customers." These advantages include a more streamlined claims process, the addition of flexible workers to supplement field staff and powerful mobile technology. See also: The Sharing Economy and Accountability   It goes without saying that the younger generations love mobile. When it comes to business-to-consumer interactions, mobile is becoming even more important than traditional communication pipelines. Simply put, the customer experience is now one of on-demand. WeGoLook, and other gig economy platforms, are premised on on-demand asset delivery through mobile technology. The Workforce Is Changing The world is becoming more freelance. By 2020, one study predicts that 50% of the U.S. workforce will be independent contractors. This has significant implications that move beyond the insurance industry itself. WeGoLook and the gig economy are using technology to redesign work process flows for enterprise clients. This, combined with the ability to dispatch on-demand workers who possess the proper skill-sets, helps to augment and supplement existing, full-time workforces. This augmentation can be indefinite, or during times of peak demand. Perhaps even more importantly, gig workers can easily act as field personnel for platforms that don't yet have a nationwide footprint. For insurance carriers, this results in a much faster and cost-effective way of providing inspections, or performing low-complexity tasks. Gig companies including WeGoLook are more than just vendors; we easily become part of traditional business processes through partnerships and acquisitions. What happened last week, was a perfect example of this integration in its infancy. Expediting Claims Processes The Crawford-WeGoLook acquisition solves one of the most persistent challenges in the insurance industry: how to get claims processed faster. Today, insurance inspections may take anywhere from a few hours to a few weeks to schedule and execute. With the acquisition of WeGoLook, Crawford is fast-tracking the entire process and streamlining the claim process workflow by leveraging “gig economy” workers, already in the field"

• Crawford will be able to send out claim requests in real-time, tapping into WeGoLook’s workforce of 30,000 Lookers, and growing.
• Crawford will be able to assign experienced agents to high-priority tasks, allowing Lookers to handle simple inspection requests for a fraction of the cost.
• Crawford will experience extensive data capture efficiencies. All inspections sent through WeGoLook will be funneled through a secure, mobile platform. No more paper trails, and no confusion over what an inspection does or does not entail.
• Crawford can leverage WeGoLook’s custom inspections capabilities. For special requests, such as needing an agent who is proficient in a specific language, Crawford can simply include the request in the order to WeGoLook’s workforce.
• Crawford can quickly scale its workforce up or down to match demand for inspections.

Indeed, according to Crawford's press release, this strategic acquisition will enable "Crawford to revolutionize, automate and expedite the claim handling process by utilizing a large mobile workforce for automotive and property inspections." See also: A Mental Framework for InsurTech   These are exciting times for the insurance industry, with innovative technology ingraining itself in this centuries-old industry. The above thoughts are simply my observations, and time will certainly tell the full story. But I can assure you, the marriage between the insurance industry and gig economy will be a lengthy and prosperous one.

Dr. David Dantes, a retired ER doctor in his 70s, still manages to work six hours a day starting at 6:30 am and sees about 20 patients per day. His lifetime of medical experience would be ending if he hadn’t joined a telemedicine platform earlier this year. Meanwhile, after a long day of flu-season patients, Dr. Linda Anegawa also uses a telemedicine system to talk to three more patients who couldn’t meet in person. As a doctor on a virtual platform, she’s been able to build amazing trust with many patients who keep coming back for her. Both Dr. Dantes and Dr. Anegawa are Stanford-trained physicians who believe in providing quality care and convenience to patients. Primary care is often not accessible for seniors and busy patients, and a visit to the ER can be traumatic and expensive. Telemedicine can solve these pain points by bringing care to patients wherever they are and whenever they need it, while smoothing out the logistics of scheduling and traveling, so doctors can focus on their top priority of delivering care. Similarly, health AI holds the promise of increasing efficiency in the care process for improved care outcomes and better time management. Telemedicine – Bringing Top Quality Care to Patients Conveniently and Efficiently Telemedicine is not new. There are a large number of companies including Teledoc and other well-funded private companies such as American Well, MDLive and Doctor on Demand that offer telemedicine solutions. Many of the hurdles facing these companies are related to lack of focus on physician quality and low utilization due to patient education, and rolling out services through employer insurance programs doesn’t help. Multiple research and studies have shown that only two out of every five consumers have heard of telemedicine. Utilization rate is even lower at less than 5% across the industry and less than 2% in many companies. If telemedicine truly delivers on the promise of bringing quality care and convenience to patients, why are adoption rates so low? This past summer, I conducted a survey with 561 participants across the U.S. and found that although 95% of respondents have never used telemedicine, 57% are interested in trying if key concerns could be addressed. Topping the concerns is the quality of physicians, which suggests that telemedicine providers with high-quality physician networks are much better positioned to have high adoption and utilization rates. PlushCare (GGV portfolio company), the telemedicine platform where both Dr. Dantes and Dr. Anegawa operate, has addressed this issue by building a physician network that only includes doctors from the top 50 medical schools in the U.S. This patient-centric approach with an emphasis on physician quality is seeing a dramatic uptick in both adoption and repeat visits. See also: Telemedicine: Fulfilling the Promise   Now that we’ve outlined the needs and primary adoption barrier of consumers, let’s look at what motivates doctors to use telemedicine, because ultimately doctors are the key to the quality of the service. Beyond the scheduling flexibility, companies like PlushCare also offer a suite of tools to help doctors operate more efficiently -- from handling the back-end administrative work to streamlining the front-end patient visits -- so doctors can focus on what they do best and enjoy doing the most, delivering care to patients. That’s why we see physicians like Dr. Dantes bringing his years of experience back to practice through telemedicine, and others like Dr. Anegawa taking online patient visits beyond her practice. A common misperception about telemedicine is that the primary target audience is either those who live in rural/underserved areas, or millennials who seem to do everything online. In reality, telemedicine has much broader applications for consumers beyond these groups. Most telemedicine users fall in the age of 35 to 45, with busy work and travel schedules and families with multiple kids. Telemedicine can provide a hassle-free way of seeing a doctor with a lot of flexibility in time and location. The use cases can even be extended to schools, which are often understaffed with onsite medical professionals, or nursing homes when the seniors have acute symptoms. Instead of sending the patients to ER or waiting for a family member, telemedicine can address many of the problems within 10 to 20 minutes and involve family in the discussion in a three-way call. Most importantly, the convenience doesn’t need to come at the cost of quality. AI – Doctor’s Silver Bullet to Boost Productivity and Improve Outcome While telemedicine drives the much needed efficiency to healthcare by simplifying logistics around the care process, health AI targets the care process directly to increase productivity. At the current stage, health AI may not be able to displace doctors and originate treatment plans independently, but it’s more than ready to help doctors allocate time more efficiently depending on individual patient needs, and keep tabs on patients post-visit to improve outcomes and lower readmission rates. For example, start-up company Lemonaid Health provides a “traffic light” system using an AI model developed by physicians to do the first round of screening on patient cases. Cases are categorized into three pipelines upon screening: “Green,” or straightforward, cases account for 80%; “yellow,” or complex, cases account for 15%; and “red,” or extreme, cases account for the remaining 5%. This categorization allows doctors to spend less time on straightforward cases and focus on patients with more complex situations. Another example is Carbon Health, which leverages AI to examine and triage patient cases pre-visit through a chatbot interface. Based on the complexity of the cases, Carbon’s AI assistant books an appropriate amount of time for the visit and shares the pre-visit synopsis with the doctor so he or she can dive right into the problem during the visit. The AI assistant also follows up with patients post-visit to keep track of key indicators and resurface cases to the doctor when anomalies are detected. See also: It’s Time to Embrace Telemedicine   I am excited to see consumer-centric digital health companies that are providing broader access and better quality of care, and bringing efficiency to the process. Consumers are increasingly engaged in issues about their health and are expecting healthcare tech improvements. Meanwhile, tech innovators are continuously disrupting the status quo. I believe consumers are at the forefront of these changes, and innovators behind consumer-centric digital health companies can win big in this market. If you are a healthcare founder making solutions to transform consumer experience, I’d love to talk to you.

Imagine an insurance industry without paperwork, a system where some claims are verified and handled almost instantly and applications/renewals are approved nearly as fast. Imagine being able to minimize fraudulent claims or loss adjustment expenses with a massive, decentralized database that leverages real-time data sources of almost unimaginable size. Imagine the cost savings to your company of improving efficiency across the insurance value chain (from product management, to underwriting, to claims, to customer service), all while potentially increasing the security of your policyholders' data. Now imagine that the technology to do this already exists. It does. The hot name right now is “blockchain technology.” It’s no secret the world is changing faster than ever before, with the “Internet of Things” promising to connect billions of people and technologies to the Internet in the next few years. As more and more people (and more and more things) are connected to the Internet, it’s important to focus on the risks but also important to focus on the opportunities. Emerging risks such as cyber liability, and more traditional risks such as catastrophic natural disasters, are affecting people in ways never seen before, simply because of their connections to the world. The insurance industry as a whole needs to take the lead on global risk management, and to do so the industry needs to leverage data. Lots of data. Big data. As of 2012, 2.5 exabytes of data was being created daily (that's 2.5 billion gigabytes), and that figure has certainly increased since then. Blockchain technology is one of the tools being used to manage these massive, real-time data sets, pledging enhanced security, increased innovation, automation of key functions, more utilization of peer-to-peer insurance, easier identification and prevention of fraud and many more opportunities that may not have even been conceived yet. Emerging risks lead to emerging opportunities, and blockchain technology is a key component in helping the industry take advantage of these opportunities. See also: Blockchain: What Role in Insurance?   But first, a step back. When the world is changing as fast as it is, it’s very easy to be sucked in by buzzwords and overwhelmed by the vocabulary. Let’s go back, gain a basic understanding of what this technology is and how it may revolutionize the insurance industry in the years to come, and determine if it is more than just the latest industry buzzword. Put very simply, blockchain is the platform on which bitcoin (the world’s most popular digital asset and payment system) operates. It is a distributed database that maintains a continuously growing list of data records secured from tampering and revision. For bitcoin, the technology ensures that financial transactions remain secure and "pseudo-anonymous." While originally developed for bitcoin, blockchain technology has been in use as an open source code since 2009. Recently, other industries are working to adapt this technology for their needs. Secure and pseudo-anonymous data sets sure seem like something the insurance industry could get behind, right? The basics of the blockchain At its core, the blockchain is a ledger of transactions and data that is stored on multiple machines. The key component of this technology is that the data is validated and confirmed in multiple “nodes.” Each computer (node) that stores the data runs an algorithm to confirm that a transaction is either valid or invalid before appending it onto the previous chain of data. This use of multiple nodes storing the data is known as a “distributed network,” which can take many forms. A network can include every computer connected to the internet, in the case of a public ledger, or a network of private computers that limit the access to the blockchain, in the case of a private ledger. The construction of the chain is made by “miners” who run algorithms to validate and store the latest ledger of data, the blockchain. The basic principles of the chain imply that, once a transaction is validated, it is “glued” on to the existing chain that includes all past valid transactions. As the data is stored on multiple machines, it cannot be changed. The “valid” blockchain is the longest chain of transactions that the majority of the nodes agree is valid. With the addition of time-stamps for the transactions and cryptology applied to the information, this makes hacking in and changing the blockchain incredibly difficult. A hacker would have to break into a majority of the nodes to create a fraudulent transaction. This major security innovation of the blockchain sounds like common sense when you talk about it but has only been made possible with technological advances in the last few years. For decades, an organization's data has been stored in a centralized data repository. With these systems, a hacker only has to infiltrate the firewall and protocols of a single entity to change the information and defraud the data. If you’re running an insurance company, would you rather a hacker need to break into one system to ruin your firm or thousands? Another positive aspect of the blockchain is pseudo-anonymity. Data is encrypted at the transaction level to preserve anonymity. This is only pseudo-anonymous because theoretically you can gain the knowledge of the past transactions of an individual, and, as such, may be able to identify that person's blockchain. In reality, identification is extremely impractical because a hacker would have to break through the cryptographic protocols of the entire transaction history. Anonymity in transaction data is desirable to guard against data breaches that lead to fraud or identity theft. Enhanced security? Blockchain technology comes with many inherent benefits. The main purported benefit of the blockchain is a direct result of the security: the ability to provide a stream of data that can be “trusted” for accuracy. Users will be able to quickly identify the movement of assets from one party to another. Let’s visit a somewhat common transaction, buying a house, in a blockchain environment. A mortgage lender needs to verify that the owner of a property for sale has the right to sell it and that the buyer has the right to purchase it. Currently, this process can take a day for a “clean” title and possibly weeks for a title that has had prior liens on it. With the blockchain technology, this process can be done in a few seconds and save considerable cost because all of the property data can be stored in a blockchain. The data stored in a blockchain can readily identify whether the seller still owns the property and has not already sold it, and it can identify any liens on the property. The blockchain technology does the work of the “middlemen” in the transactions. However, this doesn’t mean that the blockchain is bulletproof. As with any emerging technology, a parallel effort to undermine and manipulate the system has emerged alongside it. In August 2016, 120,000 units of the bitcoin digital currency, valued at $72 million, were stolen from a bitcoin exchange in Hong Kong. Vitlay Kamulk, a researcher at Kaspersky Lab (an international software security group), stresses that we need to understand the vulnerabilities before widespread acceptance. While Kamulk’s comments were focused on bitcoins, his is an important lesson to keep in mind for all new technologies, including the blockchain. It is important to remember that no system should be considered “invulnerable,” and to continue researching advancements in security, even in something as locked down as the blockchain. Just as an insurance company must perform due diligence when entering a new market or changing its claims philosophy, companies must consider the potential risks from adoption of blockchain versus the potential efficiency gains. Insurance industry blockchain benefits Security vulnerabilities aside, it doesn’t take much imagination to see how this new technology could completely change the way insurance companies work. With this technology, claims costs can be lowered through the use of “smart contracts.” These are contracts that automatically enforce terms when certain conditions arise. As a very basic example, consider a smart insurance contract for trip insurance. After the airline posts a cancellation of a covered flight, it can automatically trigger payment to those who have purchased insurance without the need to use a claims department to verify the loss. This has the potential to save the insured the hassle of filing a claim and waiting through the claims process for payment. It saves the insurer the hassle of verifying the claim. This cost savings would be passed to the policyholder in lower rates. Another insurance example is crop insurance. When insured crops are damaged by weather, a smart contract built on blockchain technology can use meteorological data to pay claims automatically. Wind speed data, precipitation levels, hail size and frequency and other weather-related data can be used to identify areas that are affected and trigger the payment of claims without the need of a claims adjuster. This would drastically reduce the loss adjustment expense that is related to these types of claims. Blockchain technology also has the potential to limit fraudulent claims. False billings and tampered documents are less likely to “fall through the cracks” if the data is decentralized and immutable, which will reduce the amount of erroneous claims payments. Using this technology will enable insurers to lower their loss-adjustment expenses and pass on that savings to consumers. Furthermore, if this technology becomes widely used, it can help mitigate identity theft and other cyber liability losses. Identity theft is the fraudulent acquisition and use of a person’s private identifying information. Usually this is done to realize a financial gain. Because the data is encrypted at the financial transaction level, the technology minimizes the amount of identifying information available in the blockchain, thus minimizing the risk of identity theft. The encryption protocol used by the blockchain technology has the capability to limit cyber liability, as well. Cyber liability is the risk that personally identifiable information will be compromised by a third party storing an individual’s data. Current practice is to store this data in a central location with software to protect against hacking. Blockchain technology enables data to be run and stored based on the current blockchain without unencrypting the underlying data because the chain itself can be independently verified through separate nodes. Though this technology may not revolutionize the manner in which insurance operates, it has the potential to introduce new models of business and increase the capacity of insurance. This technology could change the way insureds interact with their insurers. Limitations of the blockchain As with any emerging technology, these potential benefits do not come about without a few potential limitations, in addition to the security concerns. The most problematic of the limitations is scalability. For the insurance industry to use blockchain technology would take a remarkable amount of infrastructure. Currently, blockchain technology is limited by the amount of computing power available. For data to be decentralized, each node must be able to process the requisite data for each transaction for a growing number of participants. While smaller blockchains are currently successful with a limited number of participants, the insurance industry has a much larger population of participants that will need to have their data validated in a timely manner. This will mean not only more storage space but also enough computing power to quickly be able to validate each new transaction or data point. Another stumbling block that needs to be overcome is the expertise. The expertise and experience needed to create the blockchains and implement the necessary systems to use this technology are still in their infancy. A few digital currencies use this technology, but it is not widespread enough to support the needs of scaling the technology to a point that can be used by most industries, especially insurance. The speed and stability of this technology will require a substantial investment of capital. There may be further concerns with regard to data privacy. The most prevalent user of this technology is the bitcoin system, which operates a publicly available blockchain with open source code. Implementing this type of network into a “permissioned” or semiprivate network to protect personal information might pose significant roadblocks. This will include the implementation of standardization in the protocols used to verify each and every transaction, which is a crucial component of creating the blockchains. The total metamorphosis of the way that data is verified and stored will not come without a considerable cost. See also: How Will Blockchain Affect Insurance?   The most problematic challenge that may delay this technology being implemented in the insurance industry is regulation. Insurance needs to be a highly regulated industry to protect policyholders and the integrity of the companies that provide coverage. The use of blockchains to offer new insurance services, such as peer-to-peer insurance, will leave questions regarding who the regulatory authority is, as the transactions will be conducted over a widely diversified geographic space. Which regulatory body will ensure that policyholders will be protected in the case where a peer-to-peer contract holder does not have sufficient funds to pay a claim? Currently, regulation in the U.S. is on a state-by-state basis, which does not lend a great deal of flexibility when dealing with new products that may be funded by those overseas using this technology. The issue of regulatory governance seems to be the largest hurdle that the insurance industry will face if it embraces this technology. The first industry adoption efforts It’s not difficult to see the potential efficiencies that blockchain technology can introduce into the insurance industry in broad terms. However, this sort of technology really can’t shine unless it’s implemented in a consistent and compatible way, based on minimum standards to exchange data and transactions. To that end, a number of insurers and reinsurers have launched the “Blockchain Insurance Industry Initiative” or B3i, to “explore the potential of distributed ledger technologies to better serve clients.” The member companies tout the speed and efficiencies that blockchain may bring to the insurance industry and are exploring using the technology for inter-group retrocessions. The ultimate goal of B3i is to “explore whether Blockchain technology can be used to develop standards and processes for industry-wide usage and to catalyze efficiency gains in the insurance industry.” With major players in the insurance market exploring the use of the blockchain, it’s important for all insurers to monitor the situation. The B3i is the first major effort to implement the technology into solutions across the insurance value chain rather than isolated use in individual companies. It’s a big development, and insurers should keep their eyes on it. Closing Blockchain technology has many benefits that can aid the insurance industry, but they come with some large question marks. The structure of the blockchain can help to save claims costs and even open up new avenues of marketing insurance as well as the potential for offering new products in a timely manner. The insurance industry has usually lagged behind other industries when it comes to implementation of emerging technologies, and this will most likely continue with regard to blockchain technology. Insurers will likely wait until a larger-scale version is “tried-and-true” for other industries before embracing it themselves. Download the full PDF here.