Social media has become part of our daily lives, and most of us would be lying if we said we only checked our various feeds once a day. In fact, 98% of internet users spend time on social networks, according to a comScore study. Social networking has changed how we get our news, interact with companies and brands and keep in touch with friends and co-workers.

I am a sucker for new stuff. I bet many of you are, as well. If news of the iPhone 7's release date caused you to immediately organize your camping gear for a week-long sidewalk holiday at your local Apple store, then you know what I am talking about. Beyond our excitement for the next iPhone or Tesla, apparently we also get all giddy for new insurance, as well. Recently, an insurer named Lemonade has popped up on the scene and has caused quite a ripple. Here are some recent news headlines:

• Some cool insurance products are finally on the horizon – Market Watch
• Lemonade is revolutionizing risk management – Asean
• Startup P2P Insurer Lemonade Reveals How First 48 Hours of Business Went – Insurance Journal
• Insurance startup Lemonade pays claims quickly, doesn’t profit from denials – Repairer Driven News
• Insurance Startups Push Peer-To-Peer, Online Policy Tech – Law360
• Peer-to-Peer Insurance Adds a Human Touch Through Mobile Technology – Insights
• How Lemonade’s founders raised a massive seed round just by talking – Business Insider

Wow! Give that publicist a raise. That is some quality publicity. But it was when I saw this headline, “The Sheer Genius of Lemonade – A Whole New Paradigm for Personal Lines Insurance,” on InsNerds that I knew I had to speak out. Next thing I know, my good friend Tony Canas at InsNerds convinced me to write this response. To start, this article is NOT a criticism of Lemonade or what it is trying to bring to the consumer. Insurance is in desperate need of heart and soul. No, what this article will do is splash some cold water on the hype inferno that appears to have taken over the sane minds of our industry. Allow me to go point-by-point with my issues: Is Lemonade really peer-to-peer insurance? Whether it is called peer-to-peer — or fashionably referred to as P2P — Lemonade ain’t it. Lemonade is a standard insurance company. You pay premiums, and the company pays claims from the general pool of funds. There are no peer groups insuring one another. There is no distribution model of peer invitations or referrals. The only “peer” element of the business model is that you will, as a customer, be grouped with others like you for the sole purpose of dispersing any underwriting profits to a charity of the group’s choosing. Now, there is a reason for this, but, seriously, was anything I just described even remotely connotative of peer-to-peer? Want to know what peer-to-peer looks like, see Friendsurance or Guevara. Is Lemonade really insurtech? Sure, Lemonade is an online-only firm. And, yes, you can buy its insurance products through an app on your phone, where a bot named Maya will help you with your coverage selections, but Lemonade is still just an insurance company with a fancy website. I can buy insurance from other insurance companies where I can choose from dealing with a website, walking into an agent’s office or calling an agent over the phone. Lemonade has eliminated two options and given me a sole option that is little different from what I could have had before. And before you start screaming, “But I don’t want to call anyone or drive to any office,” just keep in mind that having options makes the experience better. Insurance is complicated enough that, occasionally, I would like to call someone or walk into an office and scream my head off. I deserve that option! See also: Could an Incumbent Act Like Lemonade?   What about the bot and the machine language? Isn’t that technology? It is technology in the sense that there are computer scientists engineering a robot to replace a human. But if the experience is crummier than just dealing with a human, it is a wasted effort. In an attempt to play fair, I will reverse my position on this one — if it can be shown that the robot can handle the firestorm that comes when the company is hit with its first major natural catastrophe. But isn’t it awesome that Lemonade’s underwriting profits go to charity? One of the big marketing ideas coming from Lemonade is the unique feature of aligning the interests of policyholders and the insurer by taking excess profits and donating them to charity in the name of the peer group. Fraud is a big deal in insurance, and most insurers have systems in place to detect and counteract fraud. The charity angle from Lemonade is an attempt to prevent fraud from happening by linking the monetary loss because of fraud not to the big-bad insurer but to a softer, more sympathetic victim. Fundamentally, if you are a Lemonade policyholder and your claim is fraudulent is any way, you are depriving some charity of much-needed funds. It is an interesting concept, but I don’t believe it will have much of a financial punch. The first drawback is that property insurance — being exposed to natural catastrophes (CAT) — is subjected to infrequent but occasionally massive losses. What appear to be underwriting profits in the quiet years between CATs are really opportunities to strengthen your balance sheet for the inevitable hit. As Lemonade expands to other states, its inability to build surplus because of the charity and the corporate status (see below), will really hamper the company's business model. Lemonade is now, and will fully be, reliant on reinsurance to back its entire program. That by itself is not terrible, but, with full reliance on reinsurers, the excessive profits that the company thinks it will avail itself of, in reality, just go to the reinsurer. Think about this: If the reinsurer is taking all the risk, why would Berkshire Hathaway or Lloyds of London (two of the reinsuring entities for Lemonade) not want to profit from the transaction? These excess underwriting profits will simply transfer from insurer to reinsurer. My prediction is that the charitable donations will, in most years, be nonexistent or minuscule in comparison with premiums paid. My second issue with the charity angle is that I don’t think it will bring the alignment of interest that Lemonade expects. One reason is that, if I am correct about the excess profits not materializing, then just the intermittent scheduling of charitable givings makes the whole exercise uninteresting to the insured, in my opinion. If Lemonade can’t provide a significant charitable donation in most years, the alignment will lose its appeal simply because the policyholders won’t be able to hang their hats on it. Perhaps worse, the charity angle may lose effectiveness because Lemonade is also marketing that it pays claims “super fast.”  Super fast claims handling (which, on Lemonade's website, the company touts as a check in minutes), invites fraud. I think there is a major conflict of the business model. If your marketing message is that you can get a claims check in a few minutes without having an adjuster or claims rep work the claim, then your message is music to those upon whom the charitable message will have no impact. An an insurance buyer and seller, I know that out of super low prices, super fast claims handling and excess profits to charities, I can only choose one of those angles. More than one seems difficult. Getting all three strikes me as impossible. A broker by any other name… Lemonade is a broker by another name. Another of Lemonade’s selling points is that insurers have a conflict of interest because they make money by denying claims. Lemonade purports to have absolved itself of this conflict by not actively acting like an insurer. Here’s how: Lemonade is actually two companies. It is a risk-bearing insurance company AND a brokerage firm. When you buy a policy from Lemonade, the 20% fee goes immediately to the brokerage firm. The remaining 80% stays with the insurer. The paper on which the insurer is based is a B-corporation, which essentially makes it a non-profit. So it is the brokerage part of the business that is the money maker. That is the entity that secured all that seed-funding. Sequoia Capital knows a thing or two about making sound investments. It doesn't do non-profits. And once the fee from the premiums the policyholder pays gets swept into the Lemonade’s brokerage company, it will not be used to pay claims, at all… ever. It is income, free of insurance risk. If the insuring entity ever goes insolvent, all the fees will be protected. There is nothing wrong with this. The model has already been used successfully by other insurers. But, by acting as a broker, Lemonade has shifted its risk from the risk of loss or damage of the client toward that of a trusted adviser that only has one product to sell and gets a 20% commission for selling that one product. What if its product is NOT the best choice for the client? Will Maya the bot steer the buyer elsewhere like a traditional agent would? No. How forcefully will Maya point out all the flaws and gaps of Lemonade’s ISO style homeowners policy? Will Maya give direction to the insured about the flood or earthquake policy the client really should have but can’t buy through Lemonade? Somehow, I can’t match the hype and excitement of seeing a broker selling an average product, even if it’s sold via a robot. See also: Why I’m Betting on Lemonade   Lastly, I want to challenge the major premise of Lemonade — that insurers make money by denying claims. As a professional in the business for 20 years, I find that this is the one selling point that Lemonade and its marketing keeps touting that upsets me the most. It upsets me because it isn’t true. In fact, I have seen the opposite. I have seen emails or communications from senior executives to staff adjusters onsite during a natural disaster that flat out instructed adjusters to move quickly, be fair and, if there is any doubt about the damage, settle IN FAVOR of the policyholder. I am not naive enough to believe insurers never play fast or loose with their claims handling, but, by and large, insurers pay their claims. In the property area in which Lemonade competes, those policies it sells are legal contracts. Many a court battle has been fought to word the contract so that claims can be settled quickly and fairly. Lemonade is implying that it will be different; it is almost implying that it won’t deny claims. Are there really claims that insurers have denied (and acknowledged via the court system) that Lemonade would not have denied? I seriously doubt it. Look, I like new things. You like new things. Lemonade is the new thing on the 300-year-old block. But the shiny new aspects that Lemonade is bringing to the table don’t appear to be worthy of the hype, in my opinion. I give them an "A" for effort in maximizing the hype to drive attention and sales. But insurance is all about the long game. The real key performance indicators (KPIs) are retention, combined ratios and customer satisfaction. Those will take years to sort out. Is Lemonade truly in it for the customer; does it really want to revolutionize the business model; or is the exit strategy already in place? The world is watching. I hope it succeeds.

A significant part of the insurance industry and consumers have forgotten, for the most part, about why the industry exists. The policy holder pays into a pool through the insurance company and, if a certain event occurs, expects a claim to be paid. Very simple, right? So how has the insurance industry strayed so far from this simplest of concepts? And how have so many consumers purchased insurance products that have added so many complex layers to basic risk protection? Yes, it is time for change in the insurance industry. Change is a part of life. And change is coming. The insurance industry needs to adapt to the current technological environment. At the same time, insurance consumers need to take advantage of all of the information available to them and increase their insurance literacy. Almost every single person in the U.S. has some form of insurance, but very few people have more than a general idea of what each of their insurance policies is and what it covers. See also: Which to Choose: Innovation, Disruption?   There is a constant buzz in the insurance industry about "disruption." Why disruption? Is it because the term is trendy and has happened in other industries, or is it because disruption is actually needed in the insurance industry? Is it more appropriate to say that the insurance industry needs to evolve, similar to how the investment world has already started to evolve? Let's look at the words themselves for the necessary direction, which will show why so many high-tech firms have failed in the insurance space and will continue to fail: Disrupt: to cause disorder or turmoil in; to break apart; to radically change (an industry, business strategy, etc.), as by introducing a new product or service that creates a new market. Evolve: to develop gradually or to gradually change one's opinions or beliefs. (Definitions are from dictionary.com.) High-tech firms are focused on changing insurance like they have other industries, and it's not going to work the same because they are focused on disruption rather than evolution. The insurance industry is one of the oldest industries in the world, with the concept tracing back centuries. Insurance is also a highly regulated industry. So just as it's really difficult for a huge oil tanker to change course, it is equally challenging for an industry with the size and history of the insurance industry to change course or be subject to disruption. A slow evolution is what makes sense for the insurance industry. The investment industry has evolved in many ways, and the technology firms that are entering the investment world are not focused primarily on disrupting the industry; rather, they are focused on more effective ways to provide advice, manage investments and gain greater efficiency. The investment world is already further along than the insurance industry because there is already a fiduciary standard, with a greater expectation that the investment industry act in the best interest of their clients. Partially, this is because most investment advisers are compensated through some sort of fee arrangement rather than a commission. The insurance industry has not changed in many ways and is just starting to adapt to our mobile society, new technologies, “big data” analytics and blockchain technology, among other factors. Currently, changes have been mostly limited to basic tasks like claims processing and some distribution activities. But really, most of the high-tech firms are still just selling insurance, rather than changing insurance. What is really needed is a change in the overall thought-process, including underwriting, policy servicing and home office operations.

You don’t have to look hard to find a wealth of headlines about the latest trend in travel.

• "Home sharing has real benefits for retirees" - MarketWatch - Oct. 17, 2016
• "New study claims Airbnb is good for Vancouver’s economy" - Global News - Nov. 1, 2016
• "Airbnb boosts rural Irish economy by €74m in the last year" - Irish Mirror - Nov. 4, 2016
• "Business travelers will be hit hardest by the crackdown on Airbnb" - Economist - Nov. 4, 2016

And the list goes on. For some, home-sharing is the best thing since sliced bread. For others, it’s a slippery slope to chaos and anarchy. I suppose it depends on which side of the dollar sign you are on. For those opposed to this new form of economic exchange, it's time to get real. Whether we like it or not, home-sharing is here to stay. How we as an industry react to it is a different story. As insurance professionals, we should be on the right side of this massive shift. After all, it's changing how people earn money from the largest (insured!) asset they own. Home-Sharing: a Primer Home-sharing has seen massive growth in the last few years, specifically among millennials. A survey on the travel site HipMunk found that "74% of millennials have stayed at a vacation rental (such as those available through Airbnb),” compared with only 38% of Gen Xers and 20% of Baby Boomers. The popularity of home-sharing is undeniable. Airbnb has welcomed more than 60 million guests since its founding in 2008 and is available in more than 34,000 cities across the globe. Also, did you know that Starwood-Marriott, the world's largest hotel operator, owns about 1.1 million hotel rooms? Airbnb, on the other hand, has more than 2 million listings. So, consider that in eight short years, Airbnb now has more rooms than the largest hotel chain. See also: Huge Change in Home Insurance   Oh, and keep in mind that Airbnb owns zero of those 2 million properties. Why Is Home-Sharing So Popular? There are some enticing benefits to home-sharing, both to the homeowners who rent out their homes and to the travelers themselves.

• Homeowners can transform unused spaces in their homes into assets that create alternative income streams.
• Travelers can enjoy inexpensive, convenient and local experiences.
• Travelers who prefer non-traditional holiday destinations can access well-equipped accommodations in unusual locations.

Home-sharing has taken the tourism world by storm in the last few years, and there are many in the industry who are shaking their heads in shock and disbelief. Companies such as Airbnb, HomeAway and Vacation Rentals By Owner (VRBO) are but a few of the big names in this growing industry. These platforms allow homeowners to monetize their property and rent it out to users of these platforms for a predetermined fee. No more classified ads! Airbnb Is Taking the Hospitality Industry by Storm Currently valued at $30 billion, Airbnb is commanding the attention of the global market, with annual revenue expected to reach $900 million this year. It’s no wonder the company captured the No. 2 position on the CNVC Disruptor 50 List in 2016. According to Beyond Pricing, a pricing service that assists hosts in pricing their listings, Airbnb is seeing exponential growth in the U.S. (with the greatest increase occurring in cities such as New York, up 38%, and Los Angeles, up 32%). Airbnb has also seen incredible growth in Europe and Asia, with the fastest-growing cities being Osaka, Beijing and Tokyo. The home-sharing industry has radically disrupted the $100 billion global vacation rental industry, an industry that Research and Markets analysts are predicting will reach the $170 billion mark by 2019. It’s no wonder that the hospitality industry is sitting up and taking notice. And so they should…as should other industries, such as insurance carriers, because we will be greatly affected by this change in policyholder behavior. Home-Sharers Need Specialized Insurance Coverage Allstate was the first major insurer to broach the subject of home-sharing, offering personal property protection tailored to home-sharing clients. Traditional homeowner policies don’t cover the risks that owners face when they rent out their properties on a short-term basis. Yes, many of these platforms have built-in insurance policies, but there are clearly gaps in coverage. Risks to short-term rental homeowners include:

• Damage to home/property (both the owner’s and neighbor’s properties).
• Property theft (there have been reports of owners returning to their property to find jewelry, valuables or electronics stolen).
• Identity theft: There have also been cases of hosts returning home to find passports, birth certificates or laptops stolen.
• Personal injury to third parties in the home.

Allstate has called its new product HostAdvantage, and it can be added to the homeowners existing policy for about $50 a year. Allstate currently offers this "top-up program" in Arizona, Colorado, Illinois, Michigan, Tennessee and Utah and is expected to make it available in more states by next year. Don't Forget About Travelers! Not only is there a gap in the market when it comes to homeowners insurance, but there is also an opportunity to create unique travel insurance packages for those who use this new mode of vacationing. Travelers also face unique risks in the home-sharing industry:

• Damage to persons or property.
• Loss of valuables due to flood or fire in rented homes.
• Injury due to items in the home.
• Last-minute cancellation by homeowners.
• Serious hazards such as staying in a home without a carbon monoxide detector, without a first aid kit or with safety issues created because the building is not up to code.

Home-sharing platforms do not physically inspect properties to ensure they are safe. This is something we at WeGoLook are trying to change with on-demand inspections, but that's a story for another day. Insurance carriers of all sizes should anticipate the needs of clients who require additional insurance products suitable for unique home-sharing situations. See also: Sharing Economy: The Concept of Trust   Rather than waiting to play catch-up, astute insurance carriers will adapt insurance packages for home-sharing participants on both sides of the equation: hosts and travelers. Now, I realize that we’ve only touched the tip of the home-sharing iceberg and its impact on the insurance industry. This topic could easily be a 100-page white paper. However, I trust that we’ve also provided you with food for thought toward developing strategies for enhanced homeowners and traveler insurance policies. Home-sharing is here to stay, and this is a good thing! Traditional industries simply need to adapt and accept, rather than kick and scream (think taxi industry and Uber). I trust we all fall into the former category.

After reading about the "distributed denial of service" (DDOS) attack that shut down major sites across the internet in late October, it is amazing to me that, conceptually, my refrigerator could be used by evildoers to attack servers in the cloud. I miss the old birdcage refrigerator that we had in our basement.. but I sure like looking on the internet to see just how old the milk is when I am in the grocery store. To my knowledge, this is the first such attack using internet-connected devices, or the Internet of Things (IoT). One weakness to the Internet of Things is that (as we have attached more of our home devices to the internet), there was no one overriding body responsible for creating a minimum security level to limit access by the wrong people to our microwave ovens. But if such a body is created, then it could be more difficult for small and creative companies to make anything. Another problem with a central body creating security levels is that it really would only increase manufacturing costs. And, knowing oversight bodies, I'm sure we would then be using outdated technology in all of the devices, without really making anything secure, My internet espresso maker could then cost $1,200 instead of $1,000 and still would make bad cappuccinos when I went on my phone from by bedroom and turned it on. See also: Insurance and the Internet of Things   Finance companies such as banks and credit card companies, medical organizations, the phone companies and computer companies have significant financial incentives to create secure devices. Yet they have had significant problems keeping their information and systems secure from the internet mischief makers. (A quick digression: The U.S. government severely punishes private companies when there is a breach. Not only did their data go away, not only did their sales drop because of a reputation problem, not only did their customers sue them, but then, as a cherry on top, rather than helping the victim of the data breach the government fines them. Yes, I know the company should have been more diligent with the data, but.... Note that a hack of the IRS hack has cost the U.S. government more than $30 million in payments on fraudulent tax returns, and the IRS has yet to fine itself for the breach.) Most of the people I know who have spent any time thinking about about purchasing self-driving automobiles have said they worry that hackers could take over their car (their underlying concern seems to be that it will then be driven into the San Francisco Bay, where they could not open the doors or roll down the windows to get out). There is (and should be) far more concern over the loss of control of a car than loss of control of a pizza oven, but to me it is all really part of the same problem. So my first question was: "Is there a locus or specific place where we can plug in some type of security to help stop the mischief?" Looking for insight, I charged down to Best Buy and asked one of the Geek Squad folks if there was such a place or way to limit outside access or control to my internet-connected electronic toothbrush? (I did come out of Best Buy with a brand new, three-year software internet security program for my new computer for only $49.95, discounted to $9.95 because I was going to look at the possibility of purchasing an internet-connected pet feeder) The Geek Squad person said that the best opportunity for such security is the routers in homes, but, no, there is no Ronco device ($19.99 and... if you call in the next two minutes... you can have TWO Ronco internet security devices. He also said that, fortunately, my floss is still not internet-connected, so I would not have to worry about one of my teeth being yanked out by an evildoer from Nigeria who was trying to get that pesky $25 million out of the country....) So here are some follow-up questions:

1. Should there be an oversight body for all devices that will be responsible for creating a minimum standard for security for all of the internet-connected heating systems in the world? (The NSA will still want back-door access to all of the data from your garage opener.) If there is an oversight body, and it creates a minimum security program or level, will it be enough to keep the evildoers out of my kitchen? (I think not.)
2. Who will go on Shark Tank with the next device (Ronco??) to help create some sort of security for all of the devices in your home? This seems like a great opportunity for someone.
3. Perhaps it is the cable operators (those who supply the infrastructure of the connections) who should be held responsible for identifying viruses as they go across the cables and stop them. (That is where the NSA gets all of its data, anyway.)
4. Will I ever be able to look at my internet Ronco coffee maker the same way and not wonder if it is actually a drone for a hacker in Uzbekistan? Will the hackers burn my pizza for me instead of me burning it? Or, worse, will they undercook things? Will a hacker drive my car (in two years, Uber's car) off the Golden Gate Bridge? (And will I actually be in the car when he does?)
5. Will the evildoers now open my garage door and take my Xmas stuff i have on the back wall? (There is really a serious question of personal security that will get larger as the bad guys find out how to easily get into businesses and buildings.)
6. Will the government take over my sprinkler systems and stop me from wasting water? (In California, this is a serious issue, and the underlying question of how much will or can the federal state and local government eventually do with the Internet of Everything will be an interesting battleground for the next 15 years.)
7. Who has the data, and where are all of the devices? Information is king (and queen) nowadays, and knowing where the devices are will allow the evildoers to attack the weakest links. I bet they first hacked the companies who sell the devices to find out where they are. (Should you sign up for a warranty if that information will result in telling the mischief makers where you are and how you are connected?)
8. Just how safe is the cloud? The attack in October was a distributed denial of service attack, but can the evildoers use my internet-connected fireplace to hack the cloud?
9. Will all of these security problems have anything to do with privacy issues? What if the miscreants leak my information to Wikileaks about the fact that I have peanut butter in the refrigerator?

As the saying goes: Inquiring minds want to know. There is an amazing amount of mischief that can be created if we do not have secure devices. See also: How the ‘Internet of Things’ Affects Strategic Planning   Think about it... and perhaps unplug your internet-connected litter robot until you know it will only be used by your cat for its original purpose.

Ten years ago, BlaBlaCar was founded and now is a trusted community marketplace that connects drivers with empty seats to passengers looking for a ride. BlaBla has 25 million members in 22 countries and is one of many successful initiatives using technology to bring together supply and demand. Are there successful equivalents in insurance, as well? When will the customer be served with appropriate insurance cover and services for a safe environment based on real-time individual risk profiles? See also: The Future of Insurance Is Insurtech There are a few interesting initiatives:

• trials and pilots (in car-telematics have been around for 10-15 years);
• conferences and summits where new technology is discussed as a true disruptor;
• billions of dollars reserved for fintech and insurtech initiatives;
• warnings from regulators and consultancy firms that business models are under pressure;
• studies and whitepapers from the industry;
• insurance companies setting up or expanding innovation labs.

And yet we hardly have seen any serious change in the insurance offerings in the last decades. Creativeness does not go beyond a discount on a traditional product/premium when good behavior is proven. That is good for a start but of course is a dead-end street. So will real innovation/disruption come from the inside or the outside? As a business engineer with 30-plus years’ experience in insurance innovation and digital transformation, I’m following global insurance business and all kinds of new initiatives closely. There are two important findings:

• the initiatives are often thin (scratching the surface and lacking insurance substance) and
• the initiatives are fragmented, touching only a part of the overall customers’ insurance and claims needs

It is rather obvious for me that the insurance future is in real customer-centricity and -engagement and that technology (with a personal touch) provides the means to achieve personalized, dynamic and engaging solutions in a new and sharing economy. Some of the key requirements: If you do the tick-list, the outcome will be that there is a strong reason to have clever teaming-up between startups and existing insurance companies., where a NewCo can develop at arm’s length from the insurance company but with full consent and maximum freedom (while staying compliant). In insurance, it seems that “Construct” is more promising than “Disrupt.” See also: Shift in Funding for Strategic Initiatives   Where "Bla Bla" in BlaBlaCar refers to the level of chattiness, let’s hope that there won't be too many Bla’s in insurance and that real innovation will come soon, resulting in future-proof insurance solutions with happy and engaged customers. At Intsure Technology Solutions, we are working on projects like:

• My Insurance Kit
• Pay-per-mile car insurance
• Digital Advisor and
• InConnect (Intelligent Insurance for Smart Living)

As a consultant I’m ready; as a consumer, I’m waiting. And anyhow there is so much happening and so much to learn that any delay is a waste of time.

Technology is advancing so rapidly that we will experience radical changes in society not only in our lifetimes but in the coming years. We have already begun to see ways in which computing, sensors, artificial intelligence and genomics are reshaping entire industries and our daily lives.

As we undergo this rapid change, many of the old assumptions that we have relied will no longer apply. Technology is creating a new set of rules that will change our very existence. Here are six: 1. Anything that can be digitized will be.

Digitization began with words and numbers. Then we moved into games and later into rich media, such as movies, images and music. We also moved complex business functions, medical tools, industrial processes and transportation systems into the digital realm. Now, we are digitizing everything about our daily lives: our actions, words and thoughts. Inexpensive DNA sequencing and machine learning are unlocking the keys to the systems of life. Cheap, ubiquitous sensors are documenting everything we do and creating rich digital records of our entire lives.

2. Your job has a significant chance of being eliminated.

In every field, machines and robots are beginning to do the work of humans. We saw this first happen in the Industrial Revolution, when manual production moved into factories and many millions lost their livelihoods. Jobs were created, but it was a terrifying time, and there was a significant societal dislocation (from which the Luddite movement emerged).

See also: 4 Rules for Digital Transformation  

The movement to digitize jobs is well underway in low-salary service industries. Amazon relies on robots to do a significant chunk of its warehouse work. Safeway and Home Depot are rapidly increasing their use of self-service checkouts. Soon, self-driving cars will eliminate millions of driving jobs. We are also seeing law jobs disappear as computer programs specializing in discovery eliminate the needs for legions of associates to sift through paper and digital documents. Soon, automated medical diagnosis will replace doctors in fields such as radiology, dermatology and pathology. The only refuge will be in fields that are creative in some way, such as marketing, entrepreneurship, strategy and advanced technical fields. New jobs we cannot imagine today will emerge, but they will not replace all the lost jobs. We must be ready for a world of perennially high unemployment rates. But don’t worry, because … 3. Life will be so affordable that survival won’t necessitate having a job.

Note how cellphone minutes are practically free and our computers have gotten cheaper and more powerful over the past decades. As technologies such as computing, sensors and solar energy advance, their costs drop. Life as we know it will become radically cheaper. We are already seeing the early signs of this: Because of the improvements in the shared-car and car-service market that apps such as Uber enable, a whole generation is growing up without the need or even the desire to own a car. Healthcare, food, telecommunications, electricity and computation will all grow cheaper very quickly as technology reinvents the corresponding industries.

4. Your fate and destiny will be in your own hands as never before.

The benefit of the plummet in the costs of living will be that the technology and tools to keep us healthy, happy, well-educated and well-informed will be cheap or free. Online learning in virtually any field is already free. Costs also are falling with mobile-based medical devices. We will be able to execute sophisticated self-diagnoses and treat a significant percentage of health problems using only a smartphone and smart distributed software.

Modular and open-source kits are making DIY manufacture easier, so you can make your own products. DIYDrones.com, for example, lets anyone wanting to build a drone mix and match components and follow relatively simple instructions for building an unmanned flying device. With 3-D printers, you can create your own toys. Soon these will allow you to “print” common household goods — and even electronics. The technology driving these massive improvements in efficiency will also make mass personalization and distributed production a reality. Yes, you may have a small factory in your garage, and your neighbors may have one, too. 5. Abundance will become a far bigger problem than poverty.

With technology making everything cheaper and more abundant, our problems will arise from consuming too much rather than too little. This is already in evidence in some areas, especially in the developed world, where diseases of affluence — obesity, diabetes, cardiac arrest — are the biggest killers. These plagues have quickly jumped, along with the Western diet, to the developing world, as well. Human genes adapted to conditions of scarcity are woefully unprepared for conditions of a caloric cornucopia. We can expect this process only to accelerate as the falling prices of Big Macs and other products our bodies don’t need make them available to all.

The rise of social media, the internet and the era of constant connection are other sources of excess. Human beings have evolved to manage tasks serially rather than simultaneously. The significant degradation of our attention spans and precipitous increase in attention-deficit problems that we have already experienced are partly attributable to spreading our attention too thin. As the number of data inputs and options for mental activity continues to grow, we will only spread it further. So even as we have the tools to do what we need to, forcing our brains to behave well enough to get things done will become more and more of a chore. 6. Distinction between man and machine will become increasingly unclear.

The controversy over Google Glass showed that society remains uneasy over melding man and machine. Remember those strange-looking glasses that people would wear, that were recording everything around them? Google discontinued these because of the uproar, but miniaturized versions of these will soon be everywhere. Implanted retinas already use silicon to replace neurons. Custom prosthetics that operate with the help of software are personalized, highly specific extensions of our bodies. Computer-guided exoskeletons are going into use in the military in the next few years and are expected to become a common mobility tool for the disabled and the elderly.

See also: Blockchain Technology and Insurance  

We will tattoo sensors into our bodies to track key health indicators and transmit those data wirelessly to our phones, adding to the numerous devices that interface directly with our bodies and form informational and biological feedback loops. As a result, the very idea of what it means to be human will change. It will become increasingly difficult to draw a line between human and machine. This column is based on Wadhwa’s coming book, “Driver in the Driverless Car: How Our Technology Choices Will Create the Future,” which will be released this winter.

So much is said these days about enhancing the customer experience, “delighting” customers and delivering customer service that goes “above and beyond.” For large enterprises, particularly in the insurance industry, this focus on customer experience is fast becoming a key competitive differentiator. Disruptors in the e-commerce, retail and hospitality industries have set the standard for new-age customer service. Amazon, Zappos and AirBnB are notable examples. This standard is spilling into other industries. In fact, 89% of companies expect to compete on the basis of customer experience vs. only 36% only four years ago, according to Gartner. But the question remains: Should every company try to be an Amazon or Zappos with their “whatever it takes” approach to customer service? I argue they shouldn’t. And, quite frankly, they can’t. Know what your customer REALLY wants Insurance, for example, is a low-interest, low-involvement category in that people rarely get excited about paying a policy premium or filing a claim. Can insurance carriers and providers delight policy-holders? Do policy-holders want to be delighted? I think about it like a visit to my dentist. My dentist is a great guy, very professional and takes great care of my teeth, but I always dread going and am glad when it’s over. The reality is, no matter how personable he his, how comfortable the chair is or how new the magazines are, I simply can’t be delighted. It is the dentist, after all. See also: How to Get Broader View of Customers   In the context of insurance, customers focus more on utility than on the extraneous features. It’s just like going to the dentist. Customers want to get in, get it done and get out as quickly and as painlessly as possible. The same is true for customer service. Customers just need the basics to run smoothly. They want processing their claim to be easy, and they want to move on. Everything else — any extraneous features — comes second. Despite this attitude, the insurance industry is in desperate need of innovation. In fact, it’s a $1.2 trillion dollar behemoth that’s begging for disruption. The proliferation of technology and innovation across other industries, such as retail and banking, means consumers are expecting the same level of innovation elsewhere — and insurance is in their sights. How can insurance companies approach innovation without overhauling the customer experience and over-complicating things in the process? The answer is simple: focus on utility over features. Utility over features Insurance companies need to determine what their customers' most basic demands are and must seek to fulfill them before exploring any transformative technology, additional features or new processes. When exploring new ways technology can improve business, it’s easy to get swept up in the sexiness and promise of innovation — the dreaded technology-for-technology’s-sake initiative! But to be effective, executives should approach innovation and new technology with a clear strategic and connected directive. Often, we crawl into our own heads and, with the best intentions, solve for a business problem without understanding the effect on customers. A thorough understanding from the customer’s perspective is essential, as is an understanding of how to align customer needs with the company’s overall direction. So the key is starting off small. Implement a simple process change to introduce customers to a new way of doing things and expand from there. Because while innovation is desperately needed, we mustn’t forget that change is hard. People, and especially large enterprises, are naturally resistant to change. Inertia, complacency and “that’s the way we’ve always done it” attitudes are easy and-all-too common in the insurance sector. Insurance customers aren’t ready for a revolution, either. Nor do they necessarily want one. Changes in technology mean a new learning curve, and if that curve is too steep or not thoughtfully executed with the customer in mind, the satisfaction plummets. Customer satisfaction is simple Your goal is to save customers time, save them money or simplify their experience (bonus points if you can do all three!). And at the core of any great experience is getting to the root of the customer’s problem. Customers aren’t always looking to be “delighted,” but they are looking for an answer. See also: How to Bottle Great Customer Experience   So I’m not suggesting an “Amazon-ification” of the insurance industry, but I do believe all companies should be aware of companies that are raising the bar and setting customer experience expectations. Think of it as another way to manage risk in the marketplace. There is a price tag associated with increased levels of customer service. Not all customer segments are created equal, but a more granular understanding of cost to serve, customer expectations and profitability are foundational to building the best customer strategy.

After a Sunday church service, fellow parishioners approached me with empathy about the prospect of dealing with healthcare after Tuesday’s election. I know this is just the beginning of what state insurance regulators will face as consumers bring us an array of questions regarding the future of the Affordable Care Act (ACA).

• Will it be repealed?
• Will it be replaced?
• Will it be amended?

The answer to each question is the same: No one today knows what will occur with the ACA. However, it’s important for people to understand that it will not be possible to make any changes quickly — and any changes that do occur will happen over time. This means that, because the law is still in effect today, people should take steps to obtain or maintain health coverage that meets their family's needs. There are mounting challenges in America’s healthcare system. It’s clear to me that we need a modern-day Manhattan Project to address healthcare — a focused initiative where the brightest minds come together to address the many deficiencies of the ACA and recommend changes to healthcare financing and delivery systems. This type of project would lead to a more affordable and ultimately sustainable healthcare system, something that the ACA was never going to provide. See also: What Trump Means for Health System   The ACA did not address what is driving healthcare spending. To “fix” healthcare, we must transform the entire healthcare economy with a focus on what is driving spending. Rising healthcare costs have an impact on all Americans, not just the small percentage that purchase their own coverage through the ACA. Without structural changes to our healthcare system and a focus on costs, healthcare may squeeze out all other government programs and cause employers footing a large percentage of healthcare premiums for employees to drag down wages, which stunts America’s GDP growth. President-elect Trump needs to take a holistic look at healthcare. The ACA should be his starting point as it is currently on life support and needs changes as soon as possible. If the new Congress passes a bill to repeal all of the ACA, I hope that a replacement for the ACA is stapled to that bill. An immediate repeal would lead to devastating consequences in the disruption of people’s care and would create even more uncertainty for millions of Americans. To ease the uncertainty, a transition time is required for any whole or partial suggested change. To offer immediate predictability, President-elect Trump could consider keeping transitional (grandmothered) plans in place for another 24 months. At least one state has requested CMS to allow for an extension of the transitional plans because of a severe lack of choice in the market in that state. The request was rejected. Millions of Americans are in grandmothered and grandfathered plans that they like and that are working for them. President Obama allowed the transitional plans to continue, and the new administration should consider keeping the individual and small group transitional plans. In Iowa, we have nearly 117,000 people in these plans today. To be clear, there are no easy fixes. The existence and reach of the ACA are contentious issues. Issues related to the ACA have been litigated in court and evaluated by public opinion for years now. Some parts of the ACA have merit and should be kept, in my opinion, but, on a whole, with skyrocketing premiums and insurers leaving markets, it is clear the ACA needs a lot of work. To make the individual insurance market work, it is imperative to build sustainable risk pools for individuals. Rates for 2017 are rising 25%, on average. Affordability is a major issue for Iowans purchasing their own coverage. Premium tax credits may offset and assist with affordability for those who qualify. However, for the nearly 125,000 Iowans who are above 400% of the federal poverty level that did not have access to employer coverage prior to the ACA, affordability is a major issue. The ACA exempts certain people from the requirements of the individual mandate. One of the exemptions is an affordability hardship exemption. If a person cannot secure health insurance for less than 8.16% of their modified adjusted gross income for 2017, they may qualify for the hardship exemption. This would be net of any premium tax credits. Therefore, a significant number of people will be able to “opt out” of the ACA’s insurance mandate today; as the rates continue to rise, however, those individuals will not have health insurance coverage. Many have stated that the ACA took a sledgehammer to healthcare when it was more appropriate to use a scalpel. Healthcare issues differ by state, but no matter what tool is needed to improve access to healthcare, it is clear that a number of changes should be considered immediately to help ensure that consumers have choices as they seek out coverage. Ten Points to help improve the ACA:

1. Create a mechanism for covering catastrophic claims, separate from individual insurance pools. As a parent of a child with Type 1 diabetes, I am grateful that the ACA eliminates pre-existing conditions. I know that if I ever need to buy my own insurance, I can find coverage that will still be meaningful for my family. However, it is clear that the most chronic and catastrophic conditions are the drivers for an extraordinary amount of the rate increases. In testimony I provided before Congress, I stated that looking at high-risk pools for catastrophic claims (defined as claims that cost over a certain amount) has merit. These high-risk pools could be state-funded pools like many states had before the ACA, or it could be a large federal pool. If we can keep the most expensive claims out of the individual risk pool — while still providing coverage to those families — it will lead to predictability in pricing. In Iowa, one claimant is driving nearly 10% of the 2017 rate increase for one of the companies offering coverage to Iowans. That family needs coverage but, if the coverage was provided through a mechanism where the costs are spread to society in general and not to the small pool of individuals using a single insurance company, costs for individual health insurance could be kept more manageable and predictable.
2. Eliminate the mandate. Instead, allow people to enroll in health insurance only once every two or three years, unless they have a proven special enrollment event. Let companies validate the special enrollment with an appeal available to a third party or the state department of insurance.
3. Shorten the grace periods to 30 days. There are stories all over the country with people gaming the lengthy grace periods.
4. Abandon metal tiers. There are no platinum plans in Iowa and few gold plans. Look at better ways to judge and compare plans.
5. Review the need for prescriptive essential health benefits. Require carriers to have two or three standard plans, similar to how Medicare Supplement plans are standardized. Then carriers could also design and offer non-standard plans.
6. Move the age band back to 5:1. At 3:1, the younger, healthy people feel penalized and are priced out of the market. Getting younger people into the pool will stabilize the rates for everyone.
7. Encourage innovation in the market. Encouraging innovation with limited underwriting rewards healthy people, similarly to how lower-income folks are given incentives through tax credits. Allow consumers to be rewarded with healthy behaviors, and allow companies to innovate on product design.
8. Look at health savings accounts as a means to increase consumers’ pricing awareness. If this is adopted widely, look at ways to fund health savings accounts for certain lower-income Americans.
9. Publish healthcare prices and create objective quality benchmarks and metrics for consumers to review. This will help inform consumers about price and quality. In the current market, individuals have no clue what healthcare-related procedures and items will cost us. We are more price-aware buying a refrigerator than we are when having a heart procedure. That needs to change.
10. Fix the 3 Rs. Abandon risk adjustment and risk corridor and continue a public reinsurance option.

Much has been written about selling insurance across state lines. I do not see that as a major factor to help drive down costs. Those insurers that would sell across state lines would have to comply with applicable state mandates and would still have to build a network of doctors for competitive pricing. New companies can enter states today with ease, and many companies sell in multiple states. The issue is the cost to contract with doctors in those states. More competition in insurance sounds good, but if those carriers cannot get enough scale to get competitive pricing arrangements with providers, they will be priced out of the market. See also: What Trump Means for Best Practices   This is hardly an exhaustive list, but we need to start somewhere. Many more things must be reviewed in the healthcare economy, such as the cost of prescription drugs, emerging technologies and end-of-life care. However, looking at the financing of healthcare and insurance is the logical place to start — money always is front and center. My hope is that reasonable people come together to address this challenge.