The 2016 HITLAB Innovators Summit and World Cup was held once again at Columbia University in New York. There were 74 technology companies that entered the competition, and five finalists were selected. All of these startups that entered the competition and others that help sponsor this annual event have the potential to help improve the way healthcare is delivered now and in the future through innovative technologies. Near Infrared Imaging (NII), based in Wrentham, MA, has developed a technology for the enhanced visualization of veins. This technology, called the Vein-Eye, is a hands-free, non-invasive hospital cart that provides real-time imaging of the veins below the surface of the skin. Michael Feeney, president of Near Infrared Imaging, said, “Vein punctures can be very painful, especially for difficult patients who may be obese, very young, very old and/or have dark skin.” Multiple attempts to puncture a vein result in a very negative experience for both the patient and the provider. The first specific successful application of the Vein-Eye is varicose vein treatment. The Vein-Eye is also targeting patients receiving dialysis, patients with severe burns, patients with Thalassemia Major Disorder and patients undergoing FLAP surgery, which is a technique involving lifting a tissue from a donor site to a recipient site. Roughly 25% of all patients, regardless of healthcare setting or illness, have delayed care due to the inability of a healthcare provider to establish an IV access to the patient’s vein. NII is also working to develop a patented technology that will detect real-time bleeding in the brain at the scene of the injury. MedLogiq, based in Hazlet, NJ is bringing technology originally developed and used by the automotive and aviation industries to testing and monitoring product quality and performance in the medical device marketplace. This proven technology comes at a time of increased concerns about product defects in a wide range of medical-devices, resulting in serious injuries to patients and massive product liability lawsuits. The FDA has expressed serious concerns with these adverse events and has significantly increased actions against medical device manufacturers. See also: 5 Apps That May Transform Healthcare   Bill Acevedo, the CEO of MedLogiq, said: “Our solution provides value from proof of concept through end of life for medical device manufacturers and any other stakeholder.” Acevedo went on to say; “Medical device manufacturers don’t know what they don’t know.” There are many key questions that need to be asked and independently verified about medical devices. Is there a design defect? Was it built correctly? Is there a potential for patient harm or product liability? What data points are needed for continued monitoring of quality outcomes? Jim Zerka, CFO, said: “Our main objective is to improve patient care and outcomes by reducing adverse events.” Acevedo closed his presentation by stating that this quality control technology was used by Ford to ensure manufacturing quality of every car coming off their assembly lines worldwide. MedLogiq, along with their technology partner MAHLE Test Systems, has been granted access to the intellectual property for the generic infusion pump (GIP) from the PRECISE Center at the University of Pennsylvania to integrate their solution as the “maintenance processor” to accurately measure and report device performance. The GIP was built by the PRECISE Center to the FDA specifications to enhance safety monitoring, performance testing and event data recording capabilities for infusion pumps designed to administer fluids and medications to patients in a precise manner. Green Sun Medical, based in Fort Collins, CO is revolutionizing the treatment of adolescent idiopathic scoliosis (AIS). AIS is a condition resulting from a curvature and rotational deformity of the spine. This condition develops in 3% of children under the age of 16. This results in the incorrect rotation of the spine and creates a prominent rib hump in these children. Most patients are diagnosed because of this rib hump, and when it progresses past 30 degrees they are prescribed a traditional brace. Current braces involve a 40-year-old technology, which is a rigid brace that the child must wear as much as 23 hours a day. Needless to say, these traditional braces are terribly uncomfortable and can create pressure sores, also known as bedsores or pressure ulcers, that can result in severe infections and must be worn until the child becomes skeletally mature. If the condition progresses past 50 degrees, surgical intervention is required, with the average cost exceeding $150,000. In addition, surgical intervention results in a 50% complication rate over the patients' lifetimes. This new solution is transforming spinal bracing technology and treatment options for spinal deformities through the use of a comfortable dynamic brace with built-in sensors linked to an iPad that provides physicians and family members comprehensive brace pressure information and compliance data in real time through a “report card.” This report card allows for corrections and adjustments to the brace. This technology will prevent children from the pain and suffering of antiquated braces and prevent needless surgeries. In addition, Green Sun Medical has created a new dynamic brace to help both adults and children with Kyphosis. Kyphosis is a forward rounding of the back and can result in a much exaggerated and very painful rounding. This can occur to anyone at any age but is most common in elderly women. Green Sun Medical won the award at the Wilson Sonsini Goodrich & Rosati Medical Device Conference in June 2016 as the #1 new medical device in the U.S. EarID, based in Cambridge, MA, screens and diagnoses ear infections with higher sensitivity and specificity than existing clinical methods by using new 3D imaging and data analytics on a cloud-based platform. EarID assists in ear infections monitoring and management by minimizing unnecessary antibiotic prescriptions and time lost from work by parents and from school by children. Ear infections are the #3 reason for absence from school by children and most likely cause a parent to also miss work. See also: AI: The Next Stage in Healthcare   Anshuman Das, a post-doctoral associate at the MIT Media Lab and MIT Tata Center for Technology+ Design, noted that the primary screening tools for ear infections has not changed since the 1800s, and his research has found that accurate diagnosis of ear infections is not currently met in pediatric care. The current diagnosis of ear infections relies on visual inspection of the eardrum, which is performed by a device called the otoscope, which gives very little quantitative information about the actual health of the ear. EarID overcomes these challenges by integrating the conventional otoscope with a structured illumination system that greatly enhances optical and anatomical information about a patient's ear drum. In addition, the technology with enhanced diagnostic capabilities helps address the overprescribing of antibiotics, which is a well-known public health crisis. (https://tatacenter.mit.edu/portfolio/earid-smart-ear-imaging/) UE LIfeSciences, based in Philadelphia, PA, is on a mission to make effective breast cancer screening accessible in the developing world and was the winner of the 2016 World Cup. Matthew Campisi, CTO and co-founder, noted that 50% of the breast cancer diagnosed today is in the developing world, with 70% in the Pacific Rim/Southeast Asia, where two-thirds of cases are first diagnosed in stage 3. The company's technology is currently being used in India, where the death rate from breast cancer is twice that of the U.S. This technology provides a battery-powered handheld wireless device that can store and send data and is accessible anywhere in the world. It is painless and radiation-free and allows for early detection of breast cancer. UE Life Sciences' first product, NoTouch BreastScan, is an FDA-cleared device and in a recent clinical trial detected early stage breast cancer with 87% accuracy. The second product, iBreastExam, is a handheld breast scanner that uses a smart phone as its monitor. The development of this technology was funded by the PA Department of Health to address the fact that 90% of the developing world and millions of women do not have access to breast cancer early detection. Exhibitors at the HITLAB Summit included several other healthcare technology companies such as AdhereTech, based in New York, which has invented a smart wireless pill bottle. AdhereTech was the winner of the first HITLAB World Cup in 2013. Its “smart” pill bottles are being used by patients in pharmaceutical and research engagements and can collect and send data in real time. This system automatically analyzes information, and, if the patient misses a required dose, he receives customized alerts and targeted interventions by cell phone, text messages, etc. This amazing technology requires zero patient setup and recharges just like a cell phone and lasts as long as 5 years. Josh Stein, the CEO, told me the entire purpose is “to see that patients are taking the correct medication at the right time. This is particularly critical for patients diagnosed with cancer.” (www.adheretech.com) Citus Health, also based in New York, has created a solution named “Call Bell” to help revolutionize how home infusion companies connect with patients. Melissa Kozak, CEO, told me she invented this technology after spending seven years as an on-call nurse for a home infusion company “to help keep my patients out of the hospital.” Kozak experienced firsthand how home infusion patients often needlessly face tremendous anxiety along with many potential adverse events such as delays in receiving antibiotics, chemotherapy, nutrition etc. when patients’ home infusion care process breaks down. The current system typically involves after-hours call centers that are inefficient and typically provide an answering service, not a certified nursing expert. Call Bell allows patients to get answers quickly in real time to address IV support questions and troubleshooting along with answers to questions like, when will my nurse arrive, or when is my next delivery? In addition, this technology provides home infusion companies with accurate patient home infusion supply counts with vastly improved patient support and communications. Call Bell was designed to address the Holy Grail of healthcare, better patient care and better outcomes at a reduced cost. See also: Consumer-Friendly Healthcare Model   It was a real pleasure once again to meet so many amazing people developing state-of-the art solutions for an array of global public health issues through new technology. I wish them all continued success and look forward to the 2017 HITLAB Innovators Summit, Nov. 28 -30, 2017 held once again at Columbia University.

By my definition, culture is the house rules. An edgier definition comes from David Balestracci: “Quite simply, culture is created by what is tolerated….Your current processes are perfectly designed to get the results they are already getting." In any case, culture is the most powerful force in your organization. It can bring greatness, or cause your failure as you move away from yesterday, through today, to tomorrow. As more and more organizations need to move to the transformational change that is tomorrow, their culture (if it is an addiction to the status quo) becomes the greatest challenge they face. I’ve been speaking on this subject for many years. Slowly but surely, I’m moving from theory to reality. Early on in my consulting career, I’d proudly state, “we’re going to change the culture.” After having my rear end handed to me after each unsuccessful attempt at cultural change, I retreated to a more realistic but no more possible approach, suggesting that to “change the culture” you must “change the people (educate, rehab, motivate, etc. each individual) or change the people (start anew – with new folks). See also: Does Your Culture Embrace Innovation?   In late 2015 and early 2016, I enjoyed an aha moment. Working to rehab a very troubled organization (its culture), filled with good and talented people who had become divided and moved to their lowest common denominator, I realized the best hope was to agree on a purpose (why), shared values and a unifying vision. With this as the starting point, progress continued as each team member individually committed to grow her skills (abilities) and as all members of the group chose collaboration (improved communication/relationships) on common goals and tasks. In the April 2016 edition of the Harvard Business Review, the cover story reinforced my theory by stating, “You can’t fix culture, just focus on your business and the rest will follow.” I now say, “Amen! Vindication!” (HBR will never quote me, but I am delighted to be able to quote them.) In 2012, a graphic artist created a cultural continuum slide that I could use to demonstrate the evolution of organizational culture. The slide was formatted on Maslow’s Hierarchy of Needs Pyramid. From the base of the pyramid, the five levels (steps) are: physiological (survival) needs, safety (security) needs, belonging (acceptance) needs, esteem (achievement) needs and, finally, at the pinnacle of the pyramid, self (actualization) fulfillment need. To facilitate the “story of culture,” I chose an individual or couple who best personified each step on the pyramid. I also added one action word that supported the culture created by the personality styles of the individuals or culture. What follows is the rest of the story:

1. Survival – Fred Flintstone – React. Fred was a simple leader right for a simple time. His goal was survival for himself and his family. Planning wasn’t important. Being able to react was. When he came face to face with a sabertooth tiger, his ability to react was all important. His family followed his lead.
2. Security – Jim Anderson, an insurance agent (played by Robert Young on Father Knows Best) – Do. Jim was the personification of the OWG (old white guy in charge) in the post-WWII business place and community. The Greatest Generation fought for our security and came home to work hard to create the economic security we all so desired. If you worked for Jim and did as you were told, you would be secure (taken care of). You could work 40 years and get a gold watch.
3. Acceptance – Archie Bunker – Think. Remember, this show came at the beginning of the social revolution where baby boomers fought the status quo -- as a group and as individuals. Remember the Vietnam war protests, Woodstock, civil rights, demands for both race and gender equality, assassinations (MLK, JFK, RFK, etc.) and the chants of “Hell no, we won’t go!” and “If it feels good do it.” Archie in the stereotype was the next generation of Jim Anderson. He wanted to be the “boss” (to think for his family). Unfortunately for Archie, his followers changed. Dingbat, Meathead and Little Girl were not compliant (they wanted to think on their own). Archie’s clan demanded freedom at the risk of security. Archie’s frustration and anger (I believe) resulted from the fact that he did not enjoy the resources nor respect that was given to Jim Anderson.
4. Achievement -- Cliff and Clair Huxtable -- Create. This was the feel-good story post the social revolution of Archie’s day. Cliff and Clair represented the hope and change of a more diverse world. Their drive was to ensure their children had every opportunity to be all that they could be regardless of place, color or gender. They were the hope that remains on the horizon of our country and world. They were creating a new social order: new culture, new possibilities. Creativity provides much greater possibilities than does discipline/compliance. A hundred years from now, people will know that Bill Gates understood technology and created computer operating systems that made him and Melinda Gates the richest and most generous people in the world.
5. Self-Fulfillment – Jane and George Jetson – Imagine. George and Jane lived in a future that we are only now starting to imagine, hoping that what their life was can be real. George and Jane, their daughter Judy, son Elroy, Rosie (their robot maid) and Astro their dog lived large in the universe they occupied. Theirs was a “futuristic utopia.” George worked two days a week about one hour a day. Travel and technology were their world. If it could be imagined, it could be done. Understand that in a century people will reminisce about Steve Jobs, who imagined the possibilities in technology and artificial intelligence and forever changed the world!

Know that your organizational culture can be the most powerful force available to you in the competitive marketplace and the world as it is going to be. If you can leverage your culture for good and change, you will enjoy great success. If you are unable to break the stranglehold that some organizational cultures exercise over their own status quo, your future will be lost in a world of transformational change. See also: How ‘Cascades’ Can Build Work Culture   The lesson, in my opinion, to be learned here – is that your culture is defined by its performance and its people. Be certain that both are the best that they can be. As a leader, one of your most important responsibilities is to keep toxins out of the environment in which you live and operate. Don’t ignore reality just because things are going well. Culture can make you or break you! Keep your finger on your organization’s pulse! When something doesn’t look or “feel right” discover the truth. Address problems. Don’t ignore the painful. Your brand and your culture can be your most valuable assets.

Encryption is a two-edged sword. Over the past few years, the tech sector—led by Google, Facebook and Twitter—has implemented a form of encryption to help secure virtually all of our online searches, social media banter and mobile apps. When you search for something or use social media online, a robust form of encryption protects your data from being intercepted. It is called HTTPS, for Hypertext Transfer Protocol, with an "S" added to indicate security. HTTPS has been used since 1994, primarily to protect online financial transactions. But now the tech giants are highly motivated to keep consumers’ trust level high in the murky internet. So they are leading the charge to spread HTTPS usage far and wide. And, generally speaking, that’s a very good thing. Many government, healthcare and media websites have now jumped on the HTTPS bandwagon, in no small part due to the post-Edward Snowden-era demand for privacy. There’s still a long way to go. But even wider business use of HTTPS to protect sensitive data is inevitable. But here is where the sword cuts the other way: Hackers have discovered that HTTPS is a perfect mechanism for helping them dodge detection. See also: When Hackers Take the Wheel   A recent report from A10 Networks and the Ponemon Institute shows that perhaps as many as half of the cyber attacks aimed at businesses in the past 12 months used malware hidden in encrypted traffic. Backdoor for criminals Because firewalls, antimalware suites and intrusion detection systems have not been tuned to this trick, the effect is that criminals are using HTTPS to subvert powerful technology that has taken decades for the good guys to disperse widely. Most advanced sandboxing technologies and behavior analytics tools are not currently configured to detect and neutralize HTTPS-cloaked malicious traffic. Thus, technology that companies have spent billions to install is being subverted by cyber criminals’ use of HTTPS. “Sadly, enterprise spending on sexy security systems is completely ineffective to detect this kind of malicious activity,” says Kevin Bocek, security strategist at Venafi, a supplier of encryption-related technologies. “A cyber criminal using encrypted traffic is given a free pass by a wide range of sophisticated, state-of-the-art security controls.” The A10/Ponemon report outlines how criminals are using HTTPS to go undetected as they carry out phishing and ransomware campaigns, take control of network servers and exfiltrate data. Of the more than 1,000 IT and IT security practitioners surveyed, some 80 percent acknowledged that their organizations had sustained a cyber attack in the past year, and nearly half said their attackers had used encryption to evade detection. Reading the contents of web traffic The good news is that there is technology already on the market that can look one level deeper into network traffic to spot malicious, or suspicious, HTTPS content. The technique is called HTTPS deep-packet inspection. “This is relatively new technology that has been out for about four or five years now,” says Corey Nachreiner, chief technology officer at WatchGuard Technologies. “There are many organizations that don’t have this HTTPS inspection capability yet, so they’re missing around half the attacks out there.” This is just one more example of why businesses of all sizes need to stay abreast of how cyber criminals innovate to stay one step ahead. Businesses must set up defense Small and midsize businesses should begin looking into adding HTTPS protection. This can be done directly on premises or via a managed security services provider. For SMBs, there are many credible security vendors out there worthy of review. But you have to commit to doing the due diligence. Large enterprises face a bigger challenge. HTTPS uses Transport Layer Security (TLS) and its predecessor Secure Sockets Layer (SSL) to encrypt traffic. This revolves around the issuing and managing of encryption keys and digital certificates at a scale that can stir confusion in big companies. See also: 6 Tricks and Tools for Securing Your Data   “The challenge of gaining a comprehensive picture of how encryption is being used across the enterprise and then gathering the keys and certificates that turn on HTTPS is daunting for even the most sophisticated organizations,” Venafi’s Bocek says. “Insufficient resources and automated controls are creating a nearly insane situation.” Again, the good news is that technology to efficiently address this emerging exposure is available. First comes awareness of the problem, followed by continual due diligence by company decision-makers to defend their organization’s digital assets.

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?