It just makes sense. When an injured worker has an underlying medical condition, recovery is compromised in one way or another. The case will be more complex, and it is likely to have a longer duration, higher severity scores and cost more. A recent article published by Denise Johnson in Claims Journal describes how identifying comorbidities early can help control workers’ comp claim costs. Johnson identifies common comorbidities to watch for, including obesity, diabetes, hypertension and depression. There are many more, too. For instance, a pregnant injured worker will require careful medical management. Pregnancy should be considered a comorbidity and followed closely. Other examples include HIV, hepatitis C, cardiac disease and chronic pulmonary disease. The important thing is to identify the comorbid conditions in claims so they are monitored carefully and referred to nurse case management early. See also: 25 Axioms Of Medical Care In The Workers Compensation System   Comorbid diagnoses can be found in the data—usually. Treating doctors can include the comorbid diagnosis in the list of diagnoses on the bill, but sometimes they do not. They might consider a general health problem irrelevant to a workers’ comp claim, while it might be critical. Reviewing diagnoses in a claim by the date they were added can be revealing. A diagnosis of diabetes or obesity can appear weeks after the injury date and well into the treatment process. Moreover, when in the course of treatment a diagnosis appears can be enlightening and deserves attention. Some comorbid diagnoses appear late in the data because they are newly discovered or the treating doctor becomes aware of them later. An example is discovering a diagnosis for a mental disorder in the data long after the actual injury. A mental disorder diagnosis might result from delayed or unsuccessful recovery as the patient acts out in frustration. Or the late diagnosis might imply previously unrecognized psycho-social factors. Nevertheless, the data should be monitored continually to tag any diagnosis that creeps into the claim picture at any point. When comorbid or any apparently unrelated diagnoses appear later in a claim, it could be a pre-emptive signal of poor response to treatment or even impending litigation. Monitoring the data continually to uncover new diagnoses is essential to avoid missing subtle issues. Data can be made smarter by the form and mechanism in which it is presented to those managing the claim. The manner in which diagnostic data is portrayed for claims reps and medical managers can be not only informative, but actionable. An example is portraying all diagnoses by the date they were added to the claim in bills. Such views can disclose subtleties about what is occurring in the treatment process and inform those managing a claim of ensuing problems. See also: Even More Tips For Building A Workers Compensation Medical Provider "A" Team   Identifying comorbidities and other troublesome conditions in claims using predictive analytics and continuous data monitoring leads to early intervention and best results. For additional perspectives on this topic, please see, “Analytics-Informed Early Intervention Drives Best Outcomes.”

Recent actions by the U.S. Department of Labor (DOL) are causing insurance and other financial services brokers to rethink their business models and how they communicate with their customers. That's because the DOL recently finalized a controversial new standard broadening the definition of who constitutes a "fiduciary" under the Employee Retirement Income Security Act (ERISA). Essentially, the rule, with an applicability date of April 10, 2017, heightens the duty of financial advisers for 401(k) plans and IRAs who are considered "brokers," defined as registered representatives of a broker dealer paid commissions by the investments they recommend. Before the new rule, brokers were held to a standard of suitability, which meant that, when a broker recommended that a client buy or sell a particular security, the broker must have a reasonable basis for believing that the recommendation is suitable for that client. That standard allowed brokers to recommend an investment product that paid them a higher commission as long as it was suitable for the client, even though it may not be the best choice. Under the new fiduciary standard, brokers must put their clients' interests ahead of their own in recommending investments. See also: Do Brokers, Agents Owe Fiduciary Duty?   The new standard for brokers puts them on par with investment advisers registered with the Securities and Exchange Commission or individual states, who were already required to meet the fiduciary standard. The change presents a challenge to the business model of brokers, who typically get paid from commissions, unlike registered investment advisers, who are paid a percentage fee based on the amount of plan assets under management. New challenges for broker customer communications The challenges the new rule poses for brokers don't end with compensation. The new duty will directly affect any information brokers provide to customers in print or digital form that might be deemed a "recommendation" under the rule. A fact sheet provided by the DOL describes a "recommendation" as follows: “A ‘recommendation’ is a communication that, based on its content, context and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action. The more individually tailored the communication is to a specific advice recipient or recipients, the more likely the communication will be viewed as a recommendation.” A holistic view of the customer communications ecosystem In short, every broker customer communication will now need to be audited to determine whether it constitutes a recommendation and modified if it would violate the new standard. This could be an onerous task. Customer communications management (CCM) processes will be essential for complying with this new rule. Adding personalization to communications is a huge advantage to the adviser, but it is now critical to have a process for reviewing these personalized communications to confirm that they conform to the new legal reality. CCM becomes even more critical considering the efficiency and control that can be gained by centrally managing this content. Scattered, decentralized communications processes will make it far more likely that an adviser will send noncompliant content to a customer, exposing the company and the adviser to considerable risk. Many insurance agencies and other brokers use legacy systems to generate their customer communications, which makes it costly and time-intensive to modify them to ensure compliance with the new rule. IT departments have the skills to make the needed changes, but not the time or full expertise to review and audit the updated customer communications. Insurance organizations should give careful consideration to the following to identify potential obstacles to compliance:

• Determine where customer information is stored. If it resides in multiple departmental systems, there is greater risk that advisers will send noncompliant communications to customers unless these systems are coordinated.
• Consider whether existing CCM processes and systems are flexible enough to incorporate compliance review for today's wide range of communications channels, including mobile, email, web pages and social media.
• Analyze how customer activities are supported by different channels in the organization. Channel communications may be intertwined from a customer's perspective, but managed separately within the organization. Achieving compliance will require understanding how communications appear to the customer.
• Ensure that compliance officers and other regulatory personnel are engaged early in communications creation and automate approval processes to speed time-to-market and create audit trails.

With the new DOL rule, brokers want to know what constitutes a recommendation, and they want to know how to effectively communicate with customers in a compliant way. Ideally, insurance organizations will find strategies that allow brokers the freedom to personalize their customer communications so that they can differentiate from the competition, while at the same time receive the timely guidance they need to avoid making an unintentional recommendation. See also: Fiduciary Liability Insurance in the Nonprofit Sector – What You Need to Know   Accomplishing this will require a careful look at the current customer communications ecosystem and taking the necessary steps to ensure that compliance review is integrated into workflows in the most effective, yet least intrusive, way.

For insurers and technology partners, this is a fun question to ponder: How smart can insurance get? Perhaps an even broader question might be: “What is smart insurance?” What does it look like to apply analytics-based decisions to the process — from underwriting through claims? More importantly, what does it look like to apply penetrating data knowledge to individual people and individual risks? I think these answers may lie in a closer look at our human relationships, and how they closely parallel what insurers are trying to do with a wide and growing array of risks. As the insurance industry shifts its concerns, adds digital connectivity and mature data analytics to its portfolio, it may come to look, sound and act much more like your mother. After you’re done thinking about that picture, let’s consider it a moment. Insurance technology is striving to become cognitive and connected. The cognitive part will be forecasting problematic issues and preventing claims events. It will be asking who your friends are and wondering where you hang out. It will seem like it cares about you, and in some ways it will. The connected part will be deriving relevant insights from everywhere. See also: 4 Steps to Ease Data Migration   “Smart insurance” will be insurance that knows its insureds well, and the insurers that survive and thrive will be INCREDIBLY smart, powerful and successful. The only way insurance will become smart, however, is through data. Data is the gatekeeper to future insurer success. The long-term competitive advantages to be found in data will be found by those who are collecting data across long periods. Data is like calculus or learning a foreign language. It is a building-block science that requires hands-on learning and manipulation to grow its usefulness. Insurers that are dealing with data well today, are going to have a long-term advantage. To illustrate my point, I’d like to look at three aspects of data that we will probably be thinking about for however long insurance is in existence. These three are: patterns, volume and experience. All three play into an insurer’s data capabilities. Analytics is all about patterns or lack of patterns — finding the signal in the noise. In one of my previous blogs, I discussed my affinity for Pandora. Just as my Mom could tell you my first word, Pandora can tell me the first song that I ever listened to on its service. With every song I listen to, it learns more about me. We’ve grown close. It knows what I like and what I don’t, so it is able to identify the signal data and tune out the noise data. How does it do this? It takes my personal data and cross-references it with its 100 million other users to find patterns. As amazing as that is, pattern analysis in insurance has far greater implications and far more exciting applications. With it, we’ll be able to home in on signal indicators within the data and tune out the noise, identifying what’s unnecessary. This will result in an insurer’s ability to make “on the fly” decisions based on patterns that have been learned through cognitive systems, such as IBM’s Watson. Recently, IBM and Majesco announced a partnership (you can read the press release here) to bring cognitive capabilities to cloud insurance offerings and insurance capabilities into the cognitive sphere. Data gives a cognitive learning system the food it needs to accomplish well-rounded learning and growth. The more relevant data it can consume, the better it can find patterns and separate good risks from bad. Data volume is a crucial aspect of the long-term data advantage. While some companies worry that they have too much data to structure, organize and store effectively, many simply don’t have enough. They are either letting data streams sift through their fingers like sand, or they are not seeking the relevant data streams that will empower their risk selections. When they are thinking of data, they may be thinking about the three or four traditional data sources that normally point to good risks or bad. In underwriting, for example, a common point for data scoring, insurers may only pull from a few common sources for information on applicant history. Yet, the future of data decisions may look more like Mom than we know — weighing the big picture and all of the little details. There may come a point where insurance companies shy away from questionable risks on a sort of “data-formulated hunch,” based not on any one large factor but on a hundred tiny hints. Applicants with previous similar profiles turned out to be bad risks for no apparent reason. Maybe we’ll call it insurance intuition. But insurance intuition will only be possible with large volumes of long-term histories, combined with relevant real-time data streams. The difference between insurance decisions yesterday and those of the future will look like the difference between a handwritten description and a hologram. Insurers are beginning to crave the transparency that data can provide. To prepare, insurers need a well-planned and well-structured data organization. They need definitive data knowledge across the enterprise, knowing where they are generating data and which data streams are currently being used. How is the data structured for usability? How is the organization archiving the data for later use? Then insurers need an understanding of what new data streams may exist outside the organization that will add value to their analytics. All of these considerations require insurers to continuously build their volume of usable data. Experience unlocks data’s long-term value. Insurance is about experiences. The more experiences that insurers can record and analyze, the better they will be positioned to accept risks. But the future of experiences and modeling likely outcomes is so much more than that. For an excellent example, let’s look at Google’s work with autonomous vehicles. Google can’t just place a car on the road and let it drive. It needs the system to learn about hazards, driver behavior, traffic patterns and sensing the unexpected. It needs millions of hours of experiential data — far more data than it can acquire with daily driving. What Google has done, is to use real data as the seed for simulations. These simulations model thousands of possible outcomes to any given situation, “teaching” and rewriting the software to adapt without road time. In this way, the Google car is gaining experiences without experience. See also: 3 Types of Data for Personalization   Think of what insurers could do with similar simulations. Using experiences to build new experiences and model thousands of different outcomes to the same event will make insurers better equipped to predict, prevent and protect their policyholders over the long term. As insureds approach a likely claims scenario, data’s cognitive déjà vu will kick in and avert a claims event. For insurance to grow smarter, it needs to reframe what it means to model scenarios based on experience. Experience of a different kind is also a key factor in data’s long-term value. Insurers simply need time to grow their data mastery. Analytics requires testing and validation. Experience, as well as tools, approach and data sources, is what will allow insurers to mine the best analytics from the data they own. There is no time like now. Now is related to the future. It’s the future’s history. If you would like to build an effective data organization or plan your company’s vital data strategy, there is no time like now.

Everywhere you look, companies are using video as a major part of their marketing strategies. And while it is true that many videos are uploaded simply for entertainment purposes, the momentum around video is simply incredible, and top marketers have taken notice. There’s no denying video’s effectiveness in attracting and informing viewers. In fact, according to Brainshark, 52% of marketing professionals worldwide name video as the type of content with the best ROI. That’s why, for agency owners, it’s critical that you pay attention to this medium as a way for you to attract, engage and retain clients. But without a plan, your video content may not hit the mark. This list will provide four great ideas for implementing video in your marketing strategy. Create a “Why Work With Our Agency” video, or staff introduction videos These videos, when produced effectively, can provide an excellent primer for both your current and prospective clients alike. This is your chance to boast, whether it’s your work for local charities or church groups, or your 40 years of providing local service or anything else you may think is noteworthy. Our advice is to keep these videos short and sweet (we recommend 90 seconds or shorter), and answer the question: “What is my unique selling proposition?” Here are a few examples:

• CCW Insurance - Top 10 Reasons to Choose CCW
• Mark Anthony Group - Why Choose an Independent Insurance Agent
• Klinger Insurance - Introduction to Klinger Insurance

See also: Why Video Will Pervade Insurance   Use video to create customer testimonials Hearing your current customers speak about their experience with your agency will provide assurance to prospective customers. Try to have the topics and benefits presented between the testimonials, so any prospective buyer can see all the ways you’ve helped your clients. Again, be sure to keep these videos short and sweet (aim for under one minute!), and make sure there is some specificity -- vague statements like “they’re the best” don’t offer much insight to prospective clients. Here are a few examples:

• Sampson Insurance Testimonial
• W.J. Wheeler Insurance Testimonial

Birthday and Holiday Videos Remember, you are in a relationship business. Everyone loves to be celebrated on their special day, and birthday and holiday videos are a simple and cost-effective way to do just that. Be sure to express your personality, and make it fun. Singing is not a requirement, as long as your tone otherwise is upbeat. Tip: Most email service providers (and even some agency management systems) enable you to set up “birthday campaigns” that will send your birthday videos automatically. Here are a few examples:

• Happy Birthday from Paradiso Insurance!
• Happy Birthday from AltaVista Insurance Agency!
• Happy Birthday from the Stromsoe Insurance Agency! (disclaimer: this video is from MyInsuranceVideos.com)

Create videos that answer FAQs and explain coverages If you’re feeling ambitious, you can flex your insurance expertise with a video that answers frequently asked questions and explains coverages. How many times have you been asked how an umbrella policy works, or whether a flood insurance policy would be a good investment? With video, you’re able to leverage the power of storytelling to better communicate the value of insurance. A good video can also help you sell more, as an informed client is more likely to make a purchase decision. Once you’ve made the video, it can be used again and again -- when quoting, on your website, in your email newsletter and even on social media (a smart way to work!). Tip: Keep these videos to two to three minutes in length. Consider using visuals to help reinforce your message. Here is an example:

• Spivey Insurance (North Carolina): How Much Homeowners Insurance Do You Need?
• Neckerman Insurance Services: Liability for Fitness Centers & Personal Trainers
• The Dickinson Agency: Renter’s Insurance
• Benefits of Umbrella Insurance (disclaimer: this video is from MyInsuranceVideos.com)

See also: Do You Really Have a Digital Strategy?   Those are just a few tips to help you integrate video into your marketing strategy. Video is a powerful and growing medium that cannot be ignored. Whether you’re attracting clients with Facebook, LinkedIn or YouTube videos that establish credibility and trust, engaging them while quoting and cross-selling with videos that show your polish or retaining them with periodic video touches for birthdays and holidays, video is a versatile tool that can be used at any stage of the customer lifecycle. According to Brainshark, 74% of all internet traffic in 2017 will be video, so there’s no better time than now to get started.

Call me old-fashioned, but I believe we have forgotten that technology is not a “what,” it's a “how.” Technology is intoxicating, because it comes complete with millennial attraction, new vernacular, hip-looking office space and sometimes a lot of money. However, keep in mind that the cool new app, acronym or buzz phrase is only as valuable as your vision. Innovation has so rapidly become the most urgent skill set to develop that many new innovation leaders are skipping over the basics and are thrust straight into the "tech" side of their industry. They are left thirsting for and examining every new technology and looking for a place to apply it. In fintech and insurtech, particularly, this list of technologies is long, as many startups jump on the bandwagon of opportunity. For the untrained eye, this can result in a lot of time and money spent on the wrong things. Let's get back to the how versus the what. "What" means the offering and experience you want to deliver. "How" enables that experience. When you are crystal clear about the what, it is much easier to find the technologies you need, and, more importantly, deploy them effectively. See also: Do You Really Have a Digital Strategy?   Becoming crystal clear on the “what” takes careful examination of the current offering, consumer feedback and trends shaping the future. These insights can be quantified so that you know which ones are the most important to focus on. In insurance, for example, some might be focused on price comparison as the consumer need. While this was a strong need years ago, the market is now flooded with comparison sites. This is the reason why even the great and mighty Google couldn’t scale its first attempt. Less obvious — but emerging — in our industry are the ways to make insurance more transparent. This can include everything from the decision process to approve an insurance application, all the way to rate-making and even company profitability. Insurance startup Lemonade has interesting approaches to satisfy this need, and the area of transparency is rich with opportunity. After all, it is the flip side of trust, and we know that the insurance industry is not trusted. However, just because others are going in a specific direction does not mean it's right for your company. It's important to spend time thinking about your own true core competencies and then match them to unmet needs and emerging trends. After six years working in innovation, I have seen that more companies need to spend time choosing the strongest insights that are a match for their power. Then they should hunt for startups and partners based on those insights. While on the surface this approach may appear to narrow the field of choice, it actually widens it because it will help to uncover the non-obvious companies that don’t list themselves as serving a particular industry, and are more clearly just about the “how” that you are looking for. So, back to digital as a “how.” Yes, digital experience, digital interface, digital platform, digital communication, but no, not just plain digital. If you need to kick that habit, imagine yourself managing dinosaurs in Fred Flintstone’s town of Bedrock. What would you do? You wouldn't just focus on how cool dinosaurs are; you would  find the right dinosaurs that could work very hard behind the scenes to create the “what” that the customer expects. See also: 5 Accelerating Trends in Digital Marketing   Watching that show as a kid, I remember some small dinosaurs fit nicely under Wilma’s sink, eating scraps like a garbage disposal. Others were large, and used their mouths to haul rocks like a crane. Some flew with chairs tied to their backs to get people from place to place. We just need to replace those dinosaurs with the modern digital technology, or whatever is next after that, keeping in mind what the consumer demands now and, more importantly, what they will be demanding in the future.

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 and Challenge No. 3 here. In this article, we will look at Challenge No. 4. Challenge No. 4: How do you create an entrepreneurial insurance team that can build an operating system and avoid risk management errors? Today, most founders have limited knowledge of the insurance industry. Meanwhile, most insurance industry experts have only second-hand knowledge of startups, knowledge gained in consulting or large corporate initiatives that are completely different environments than the pressure and decision-making dilemmas of insurance startups. People who understand working in an entrepreneurial environment, know the insurance mechanics and can use startup methodology as it applies to insurance are rare. See also: Should Incumbents Ally With Startups?   Most startups will need to work closely with traditional insurers and reinsurers. Although these organizations have made themselves startup-friendly, the question remains: How long is their patience? In addition, startups will need to build and manage a network of service partners. Third-parties administrators may offer to take this burden off a startup's hands, but, for quality service, full operational control and direct relationships will be needed. Building the full stack technology platform requires extra experience. Startups need to connect to traditional systems and service providers, where the challenge and delays will be more organizational than technical. Over time, the startup will come under increasing regulatory and consumer protection scrutiny. That makes the operations more challenging, as does the need to manage large amounts of sensitive data. Experience in managing the inherent risk in insurance products, managing and developing the operations and getting to profitability in a startup environment where the organization, systems and revenues are growing and evolving is only learned by doing. Fraudsters often target new insurers, which many will argue is combated by new technology but also requires human intelligence. All team members will need to be educated and kept up to date on managing data privacy and security and claims handling and the associated reputational risks. If the startup has ambitions to provide multiple products or act multinational, then dealings with different insurance and consumer laws and regulatory bodies will multiply. Takeout Building teams of people with varied skill sets will mostly overcome the issues. The key will be to combine startup, growth hacking, service, data analytics, insurance and mobile expertise. Creating an international team early will also provide benefits over time for those with global ambitions. F1 teams can be sponsored and technically supported by the large car manufacturers. However, they mostly have their own culture, experts, capacity and environment for innovation. So they can adjust and fine tune quickly based on performance. Startup insurers will need the same performance and service level culture, organization setup, capacity and freedom. Insurers and reinsurers have recognized the challenges for startups and have created suborganizations to work with startups in a friendly and less cumbersome way. In addition, regulators are looking to provide an easier process for approvals and support. See also: 6 Charts on Startups, Greenfields, Incubators We are curious about your perspective.

In our hyper-connected world, it’s no longer just our phones and computers that are connected to the Internet; our homes, our cars and even our own bodies are, too. Voice-activated smart-home systems, wearable fitness trackers and drones are becoming more and more commonplace, showing the profound impact of the Internet of Things (IoT) on our everyday lives – and our businesses. With global spending on IoT devices and services expected to reach $1.7 trillion by 2020, digital disruption is infiltrating every vertical market, including the insurance industry. In the wake of this disturbance, we are seeing a dramatic rise in investments in innovative digital insurance startups, also known as “insurtechs.” Just as “fintechs” are disrupting the financial services industry, insuretechs are challenging traditional broker-based insurance business models. Now, to meet the needs of today’s consumers who expect anytime, anywhere service and support, incumbents are faced with two options: digitally transform their organizations or go out of business. Driving disruption: Insurtechs and IoT behind the wheel In 2015, insurtech investments more than tripled, from $700 million to $2.5 billion, as venture capitalists embrace creative, new business models that reimagine insurance by leveraging Internet-enabled devices, self-serve technologies and peer-to-peer (P2P) platforms. For example, Sequoia Capital recently provided U.S. P2P startup Lemonade with $13 million in initial funding to offer consumer insurance based on self-serve technology. In addition, some of the world’s largest insurers, such as Aviva and MetLife, have formed their own, internal venture capital funds to invest in startups that could propel their digitization efforts. See also: Insurance and the Internet of Things   Despite these efforts, the insurance industry is actually one of the least-prepared for the changes that IoT, sensors, big data sources and other disruptive technologies will bring. In fact, a 2016 survey showed that only 36% of respondents from insurance companies said that their organization can use insights from new data sources to boost company value. The good news is that insurers seem to understand the impact that digitization will bring, and the speed and scope of the disruption. A BI Intelligence survey reports that 75% of insurance executives expect to feel pressure to innovate from new data sources, such as IoT devices, within three to five years. Unlocking new capabilities, new markets with IoT Insurers must embrace insurtechs and consider the many ways that IoT can help them differentiate themselves in a rapidly changing landscape. With IoT, insurance companies can leverage big data analytics to better understand and underwrite risk, improve loss prevention and even predict consumer behavior. In the home insurance realm, security systems, video monitors, smoke detectors and other “connected home” appliances allow carriers to obtain significant data to help mitigate homeowner risk. Or, car insurance carriers can provide users with applications that monitor driving habits, allowing them to predict risks based on the collected data (as well as give users discounts for safe driving records). We even see property insurance companies using drones to quickly and accurately assess damages, and simplify their adjusters’ workflows. In addition, the visibility into risk allotted by IoT and internet-enabled devices allows insurers to tap into opaque and difficult-to-serve markets, like cyber liability insurance. This is great news for both insurers and clients. Still, fewer than 10% of companies have cyber insurance, and just seven insurers control about 80% of the entire market. Instead of relying on questionnaires and limited data for underwriting cyber risk, insurers can use IoT technologies and in-depth threat analytics to perform more detailed assessments – and gain a bigger slice of the market. The customer experience is still king All this talk about digitization, self-serve technology and changing customer expectations raises a huge question: Where does the agent fit? Will customers be more inclined to rely solely on mobile technology and new types of devices to conduct business, and forgo traditional, “face-to-face” interactions? Rest assured, that is not the case. Rather, insurers can use digital transformation as a means to develop more personalized, engaging experiences that strengthen customer relationships and serve as a competitive differentiator. In many situations, insurers in the midst of digital transformation are employing agent and digital business models. With “agent and digital,” consumers have the best of both worlds – quick, convenient access to information and purchase of products through mobile devices and other channels, as well as one-on-one, real-life service when they need it. Moreover, these technologies allow insurers to obtain a 360-degree of the client and use analytics to evaluate their behavior, anticipate their needs and offer the best products with the right price, at the right time. Plus, insurers can better connect customer journeys across channels, from new customer acquisition to on-boarding, to service, to claims and more. Mobile tools are especially useful for agents working in the field. They can quickly consult their carriers’ experts for real-time advice on complex transactions, and even directly connect the customer with the carrier to help close deals and resolve issues faster. The result is a happier customer and a more informed, productive agent. See also: How the ‘Internet of Things’ Affects Strategic Planning   As we embark on a new year, the heat is on for insurers to digitally transform themselves, or they will undoubtedly fall behind. However, bringing their digital strategies to life involves more than simply investing in insurtechs and acquiring new technological capabilities. Successfully implementing digital transformation requires insurers to effectively align those technologies to their business strategies and scale them across their entire enterprise. In the end, the insurers that do so will find themselves with greater market share and, more importantly, happier, lifelong customers.

While large aggregator sites and a few notable direct insurers are trailblazing ahead, on the whole the insurance industry is lagging behind other industries in user experience (UX). Why? Dock9 hosted a roundtable earlier this year with experts in the insurance space to find out. Even though many attendees wanted to change aspects of their website and back office systems, some sticking points meant that even small changes took a long time. One was underwriting rules. A lot of information is mandatory, so forms have to be long, and new requirements for Treating Customers Fairly limits how questions are presented to users. Overall, the view was that systems are functional but rarely built with best-in-class UX in mind. Another sticking point was IT systems. In many cases, delivering instant quotes and allowing self-service is purportedly either not possible or prohibitively expensive and complicated to implement. But in an increasingly competitive market, these sticking points can no longer be excused, There are tried-and-tested strategies for delivering best-in-class UX layered on top of legacy systems that don't require a full "rip and replace" of core systems. For example, Optimizely can enable changes to be made and A/B testing done, unencumbered by the restraints of your CMS or back-office system. Here are four ways to improve your UX: See also: Keen Insights on Customer Experience   User Testing It was noted that the most successful insurance websites are driven by strong development processes that include prototyping and user testing during development and optimization after launch. But most on the roundtable agreed that this process is still rare within the insurance sector. Insurance websites, quote and buy processes, My Account spaces and back offices are largely driven by the functional requirements from IT and underwriting. Those that have instituted early testing and user testing into their process understood the difference that good UX can deliver, both in actual improvements that the customer sees and feels and in a shift in mindset within the business if key stakeholders are involved in the process or presented with the results. User testing can help get management buy-in and build a business case for changes to websites and systems. The video output from user testing sessions can be used to demonstrate the difference the changes will make and ensure that what is ultimately passed to developers to implement is a proven idea that has already been tested with real customers. If lab-based testing is out of budget, lower-cost alternatives such as WhatUsersDo offer cost-effective ways of instituting some measure of user testing into your process. Thinking beyond the online purchase journey Who ultimately owns or has oversight and vision of the end-to-end UX? This question cropped up as we discussed how insurance UX is much more than the initial journey from quote through to purchase. Making a claim is the time when customers truly experience the value of their insurance policy. Often, claims are outsourced and serviced separately from other parts of the journey, but they are the critical experience that can make or break your reputation with the client. Self-service portals (for mid-term adjustments and renewals) available on all devices, along with ready access to schedule documents, are increasingly expected by users as we see the new generation of on-demand customers. However, the My Account space on websites was often an after-thought or controlled by IT or an external software supplier. Telephone vs. online In the same vein, although some had launched online self-service products in the expectation that call centers would act as a backup for small amounts of customers, as many as 70% of quotes are still processed over the phone for some products. This includes customers calling up at the beginning of the process, and the call center following up on incomplete quotes. To deliver the best telephone experience, it is important that call center staff are aware of the online interactions that a user has undertaken across all channels. The same is true for Live Chat operators, which many cited as being successfully implemented in their user journeys. Analytics Ultimately, to truly deliver the best UX for their customers, insurance companies first need to understand how their users are actually using the existing live platforms. This presented technical challenges for some, especially tracking from a main "brochure" website all the way through to the end of a quote and buy journey, which is often on another subdomain. See also: 4 Hot Spots for Innovation in Insurance   Tools such as Hotjar enable cost-effective field-level analytics to see where your users are really experiencing pain points in the journey. Hotjar screen recordings of live website user interactions can deliver unrivaled insight into your actual users. It's a perfect opportunity for insurers to now start thinking about how they operate and ask themselves the following questions: Has anyone taken ownership for the complete, end-to-end user experience within your organization? Have you shifted to rapid prototyping and testing with real customers before proceeding to develop any new features? Are we remaining innovative and attracting the new generation of customers? ls your company culture going to enable the change required to keep ahead of the pack? Most importantly, how can we steer clear from being left behind by failing to adapt to changing times?

The intersection of humanity and robots is being transported from the human imagination and formed into a tangible reality. Many books and movies like iRobot and Her have analyzed various potential impacts of that intersection, but the complete intersection will actually be that of humanity, robots and liability. It is insufficient, however, to know that advanced robotics and liability will intersect. Advanced robotics is going to thrust upon insurers a world that is extremely different from the one they sought to indemnify in the 20th century. Already, drones and autonomous vehicles are forcing some parts of the insurance sector to try to determine where responsibility exists so that liability can be appropriately assigned, and those efforts will continue for at least the next decade. The liability created by the combination of robots operating with humanity now falls on commercial, and especially professional, insurers to engineer robotic liability products to provide clients and the global economy with stability, while providing insurers a valuable stream of revenue. There are some ground rules that must be considered before bringing robotic liability to life. First, what is the definition of a robot? For the purposes of this paper, Professor Ryan Calo’s definition of a robot will be used. According to the professor, a robot can sense, process and act on its environment. There is also the realization that currently it may be beyond human ability to create a unified robotic liability doctrine for insurance purposes. This is largely due to the environments in which robots will exist, as well as the ramifications of those environments from a legal, physical and practical standpoint. After all, drones capable of sustained flight are inherently going to exist in a different realm from ground-based autonomous vehicles, and the same is true for robots capable of sub-orbital and intra-planetary flight. Therefore, this paper is going to focus on a discrete part of robotic liability: those robots used in agricultural fields. Another reason for focusing on one area of robotics is to keep things simple while exploring this uncharted part of the insurance sector. See also: Here Comes Robotic Process Automation The farmer, the field and the harvest, the most commonplace of settings, provide an area where dimensions of robotic liability can be easily analyzed and understood. Plant husbandry draws on thousands of years of human knowledge, and it is already using aerial drones and big data analytics to maximize crop yields. Additionally, the agricultural arena has a high likelihood of being an area wherein robots cause significant shifts in multiple areas of the economy. Within the next two or three years, a robot, like this paper’s fictional AARW (autonomous agriculture robotic worker), will be created and sent to the fields to begin to replace human labor when it comes time to harvest a crop. There are multiple reasons for this belief, starting with the advance of robotic technology. In 2015 the DARPA Robotics Challenge was held, and it demonstrated the deployment of an array of robots that will be the ancestors of a robot like AARW. In that competition, robots were required to walk on uneven terrain, accomplish tactile tasks and even drive a traditional vehicle. While the robots in that challenge were not largely or fully autonomous, they are the undeniable major step toward productive autonomous robots. There are already simple machines that can perform a variety of functions, even learning a function by observing human movements, and the gap between the drawing board and reality is being quickly eroded with the tremendous amount of computer hardware and software knowledge that is produced by both private and public institutions each month. Moreover, there are strong labor and economic incentives for the introduction of robots into the agricultural field. Robots are able to work non-stop for 12 hours, are free from any form of health and labor laws and can have life expectancies in the five- to 15-year range. Crops are, more often than not, planted in fields with straight rows and require only the robotic ability to pickup an item, like a watermelon, take it to a bin, deposit the melon in the bin and then repeat the same steps on the next watermelon. All this requires only a modest amount of know-how on the robot’s part. If AARW is built to industrial quality standards, then it will only require a minimal amount of maintenance over the course of each year. And if AARW is powered using solar panels, then the cost of its fuel will be included in the robot’s purchase price, which means that the minor maintenance cost along with a possible storage cost will be the only operating costs of AARW. With its ability to work non-stop and with no overhead costs for complying with human health and labor laws, AARW will be a cheaper alternative to human workers, providing a strong economic incentive for farmers to use robots in the field. An agricultural robot will, however, create unique exposures for a farmer, and those exposures will cultivate the need for robotic liability. Arguments can be made for completed operations/product liability and technology E&O exposures with AARW in the field. However, there are multiple reasons why it would be unwise to try to relegate liability for AARW to any current product. First and foremost, there is a strong expectation among scholars and legal experts that robots are going to do unexpected things. Imagine: At harvest time, the farmer brings AARW to the field to collect the crop of watermelons. The field happens to be near a highway on which big rigs travel, and part of the field lies next to a blind corner in the highway. As AARW successfully harvests one row after another, the farmer’s attention drifts, and she begins talking with a neighbor. Suddenly, there is a screech of tires and a loud bang as a big rig slams into AARW, which, for an unknown reason, walked into the highway. Who should bear responsibility for the untimely demise of AARW? If AARW were a cow, then the insurer of the big rig would have to reimburse the farmer for the loss of one of her cows. In certain respects, AARW and a cow are the same in that they can sense, process and act upon their environment. However, a cow has what is often described as a mind of its own, which is why insurance companies and the law have come to place the fault of a rogue cow on the unwitting vehicle operator instead of the aggrieved farmer. AARW, though, is not a cow. It is a machine created to harvest produce. Does the software that controls the robot’s actions equate to the free will of an animal, like a cow? The farmer who lost the cow does not demand her money back from the rancher who sold her a reckless bovine product. Why should the creator of the robot be expected to reimburse the farmer for the loss of AARW? How does it make sense for product liability to come into play when the rancher shares no blame for the indiscreet cow? Technology companies have been extremely successful at escaping liability for the execution of poorly crafted software, so the farmer is unlikely to find any remedy in bringing a claim against the provider of the software, even if it is a separate entity from the one that assembled AARW. Regardless of where blamed is assigned, the issue would be awkward for insurers that tried to force the liability for the robot’s actions into any current insurance product. At worst, the farmer would not be made whole (technology E&O), and, at best, changing existing laws would likely only partially compensate the farmer for the loss of AARW. See also: The Need to Educate on General Liability   The liability waters are already murky without robotic liability. Machine learning will likely create situations that are even more unexpected than the above possibility. Imagine if AARW imitated the farmer in occasionally giving free produce samples to people passing the field. In the absence of robotic liability insurance, who should be responsible for a mistake or offending action on the robot’s part? It would be unfortunate to place all of the blame on AARW or the farmer. The situations also call into question the quality of programming with which the robot was created. In the paper by M.C. Elise and Tim Hwang, “Praise the Machine! Punish the Human!” historical evidence makes it unwise to expect liability to be appropriately adjudicated were a farmer to sue the creator of AARW. With an autonomous robot like AARW, it is possible to bring into consideration laws related to human juveniles. A juvenile is responsible if she decides to steal an iPad from a store, but, if she takes the family Prius for a joyride, then the parents are responsible for any damage the juvenile causes. Autonomous robots will inherently be allowed to make choices on their own, but should responsibility apply to the robot and the farmer as it does in juvenile law for a child and a parent? From the insurer’s standpoint it makes sense to assign responsibility to the appropriate party. If AARW entered a highway, the responsibility should fall on the farmer, who should have been close enough to stop it. Giving away produce, which could be petty thievery, is wrong and, because AARW incorrectly applied an action it learned, it remains largely responsible. To more fairly distribute blame, it may be worthwhile for robotic liability to contain two types of deductible. One would be the deductible paid when 51% of the blame were due to human negligence, and such a deductible would be treble the second deductible that would apply if 51% of the blame were due to an incorrect choice on the robot’s part. This would help to impress on the human the need to make responsible choices for the robot’s actions, while also recognizing that robots will sometimes make unexpected choices, choices that may have been largely unforeseeable to human thinking. Such assignment of responsibility should also have a high chance of withstanding judicial and underwriting scrutiny. Another disservice to relegating robots to any existing form of liability is in the form of underwriting expertise. Currently, most insurers that offer cyber liability and technology E&O seem to possess little expertise about the intersection of risk and technology. That lack hurts insurers and their clients, who suffer time and again from inadequate coverage and unreasonable pricing. It would be advantageous to create robotic liability that would be unencumbered by such existing deficiencies. By establishing a new insurance product and entrusting it to those who do understand the intersection of humans, liability and robots, insurers will be able to satisfy the demands of those who seek to leverage robots while also establishing a reliable stream of new revenue. A 21st century product ought to be worthy of a 21st century insurance policy. Another aspect of exposure that needs to be considered is in how a robot is seen socially, something that professor Calo discusses in his paper “Robotics and the Lessons of Cyberlaw.” Robots are likely to be viewed as companions, or valued possessions, or perhaps even friends. At the turn of the last century, Sony created an experimental robotic dog named Aibo. Now a number of Aibos are enjoying a second life due to the pleasure people in retirement homes experience when interacting with them. One of the original Sony engineers created his own company just to repair dysfunctional Aibos. While that particular robot is fairly limited in its interactive abilities, it provides an example of how willing people are to consider robots as companions instead of mechanical tools with limited value. It is more than likely that people will form social bonds with robots. And, while it is one thing to be verbally annoyed at a water pump for malfunctioning and adding extra work to an already busy day, mistreatment of a robot by its employer may be seen and felt differently by co-workers of the robot. Some people already treat a program like Apple’s Siri inappropriately. People to tell Siri that it is sexy, ask what it “likes” in a romantic sense and exhibit other behaviors toward the program, even in a professional setting, that are inappropriate. While such behavior has not resulted yet in an EPL (employment practices liability) claim, such unwarranted behavior may not be tolerated. Consequently, the additional exposures created by a robot’s social integration into human society will more than likely result in adding elements to an insurance claim that products liability, technology E&O and other current insurance products would be ill-suited to deal with. See also: Of Robots, Self-Driving Cars and Insurance Advanced robotics makes some of the future murky. Will humans be able to code self-awareness into robots? Are droid armies going to create more horrific battlegrounds than those created by humans in all prior centuries? Are autonomous vehicles the key to essentially eliminating human fatalities? However useful those kinds of questions are, the answer to each, for the foreseeable future, is unknown. What we do know for sure is that the realm of advanced robotics is starting to move from the drawing board and into professional work environments, creating unexplored liability territory. Accordingly, the most efficient way to go into the future is by creating robotic liability now because, with such a product, insurers have the ability to both generate a new stream of revenue while at the same time providing a more economically stable world.

As the insurtech industry continues to boom, the importance of data cannot be overstated. Data analytics is essential for success as the traditional model of insurance evolves and modernizes. Data analytics allow you to test, measure and implement changes to your digital processes—on your website, email or mobile platform. These adjustments and modifications are also important in a way that people often don't recognize, because they are the insurance industry equivalent of “compounding interest.” Remember, compounding interest is essentially interest on top of interest. As the months and years go on, the total sum will increase as the interest continues to accumulate and compound. While the original amount may not be significant, the value grows impressively over time. See also: Why Exactly Does Big Data Matter?   All of the small changes you make to improve your digital processes and platforms operate in a similar manner. The modifications build on each other, leading to greater success and profits. Of course, all of these changes require careful analysis, hard work and innovative thinking but don’t underestimate their resulting value. Keep the big picture in mind and remember the worth that will accumulate. Compounding Interest in Motion If someone has an idea for new copy on an advertisement, and it tests well, you may decide to implement the change widely. Perhaps the stronger copy better resonates with consumers and results in a 1% higher arrival rate. If you currently have 10,000 arrivals each day, and each arrival is worth $100 to you, then over the course of a year you will see an additional $3.7 million. That could be invested in new employees who are able to identify further improvement opportunities. Imagine if you could then make more changes and achieve an additional 1% to 2% higher arrival rate. The possibilities and resulting returns are endless. These small changes can truly compound over time and make a real impact on your growth. Individuals Are Not Representative When determining changes to test and implement, remember that individuals are not representative. Despite an individual’s broad experience, expertise and skill set, he or she does not accurately represent a total set of people. Your mind will be blown by how an individual’s assumptions may be wrong when extended to an entire set of people. While an idea or process may seem undoubtedly logical or appear to be common sense, don’t assume a way of thinking is fact. For example, one person may truly believe that a color is ideal for a website when in fact, once it is tested, only 10% of the population agrees. Another color may be a better match, one that 80% of consumers agree to. To overcome this tendency to rely on your assumptions, implement a data-driven culture that eliminates arguments and assumptions. You can remain welcome to any and all ideas as inputs and then let the data decide. You may be surprised by the ideas that return successful results. An Infinite Amount of Possibilities As technology advances and devices evolve, there will be a near infinite amount of opportunities for optimization. Invest in data-backed initiatives, and don’t hinder your success because you think small changes are too insignificant to be valuable. A better site or form layout could improve your click-through rate, which could lead to a more positive consumer experience. This could then lead to more return visits from consumers, who also tell their friends about you, which could lead to a bigger pool of satisfied customers and an overall stronger digital experience. You never know where small changes will lead or what their return will be. See also: 4 Benefits From Data Centralization These small changes are the compounding interest equivalent in this digital age of insurance. Receive input from multiple sources, remain open to ideas and continuously test modifications to improve on current processes. Thanks to technology’s continuous advancement, there will always be more that you can do. If you’re looking for more advice on how to determine ideas and test changes, take a look at the previous articles: Give Consumers the Experience They Want and 3 Types of Data You Need for Personalization.