If attorneys and judges really want due process with regard to workplace injuries, then they should endorse the workers’ compensation (WC) alternative in Texas that we call nonsubscription. They won’t, even though nonsubscription is consistent with the Fifth, Seventh and Fourteenth Amendments to the U.S. Constitution — the amendments that identify due process as a key component of our national identity. The Fourteenth Amendment is very clear: “[N]or shall any State deprive any person of life, liberty or property, without due process of law . . .” In this legal context, employers are considered persons, so WC statutes mandating them to pay insurance premiums — regardless of fault — are violations of due process. That argument was so powerful it nearly prevented the original enactment of WC laws around the country a century ago. Unlike WC, Texas nonsubscription never required employees or employers to fully surrender their legal rights to a system of special adjudication, so when employees sue their nonsubscribing employers, the cases are of the big-boy variety: tort. In Texas nonsubscription, we’ve seen about 100 judgments/settlements at or over the $1 million mark — much bigger than what WC constituents are used to. Moreover, our lawsuits in nonsubscription are processed in the civil court system, which is both a hallmark of due process and a reminder of what a day in court really looks like. By contrast, WC disputes are typically relegated to administrative systems, where attorneys are sometimes tutored on procedure during hearings by administrative law judges. If this sounds like due-process-with-training-wheels, it's because training wheels are necessary for everyone involved in the system (from lawyers and judges to regulators and legislators) to keep their balance as they attempt to negotiate two types of terrain at once. Due process can be thought of as a reasonably smooth legal pathway that’s been cleared for centuries by lawyers and judges. The special adjudication reserved for WC can be thought of as a smooth but abbreviated fast track that’s subject to change at the will of a legislature. But the fast track to fairness within the confines of WC is now littered with bumps and potholes because judges have permitted lawyers to drag due process procedures into a system of special adjudication that was never designed to accommodate them. See also: Back to the Drafting Table on Work Comp   To fans of due process, the nonsubscription system in Texas does say: “We will not deprive our employees and employers of their life, liberty or property unconstitutionally.” To fans of special adjudication, the WC system in Texas (and everywhere else) should say: “We understand why an expedited process for solving problems related to workplace injuries appeals to both employers and employees, and we can reduce costs, save time and improve outcomes for injured workers by minimizing attorney involvement.” So if you are an employer or an employee committed to due process in the world of workplace injury, you should do everything possible to support Texas nonsubscription. But if you are committed to foisting due process concerns onto existing WC systems, you're probably just a lawyer looking for a payday. These Aren’t the Droids You Are Looking For The lack of due process in unconstitutionally seizing property from employers is the obvious and gaping flaw that attorneys and judges don’t want to discuss when promulgating due process in all other areas of WC. They certainly don’t want to alter the funding of WC. Strict due process was a hurdle that WC couldn’t clear when the Grand Bargain was struck in the early 20th century. Due process almost destroyed WC then — and it threatens to destroy it today. Simply stated, strict due process and WC do not mix. This critical warning continues to fall on deaf ears as state Supreme Court Justices from New Mexico to Florida apply due process wherever it is convenient for the legal profession (but not necessarily where it is most critical for injured workers). When forced to address this unconstitutional seizure issue, the legal community has, thus far, successfully used mind tricks akin to the one made famous by Star Wars' Obi-Wan Kenobi. Lawyers want us to forget that reduction of legal friction was a key incentive for employers to abandon their due process concerns and accept the Grand Bargain in the first place. Each time a new generation of entrepreneurs asks, “Why do employers have to foot the bill for this whole sprawling WC system?,” legal spokespeople respond, “Everyone already agreed to this,” deftly deflecting through a sort of Jedi mind trick. And when the business owners who have done their research press the matter by asking, “But didn’t everyone also agree to bypass other areas of due process in favor of special adjudication within the confines of WC?” the legal spokespeople wave their hands and shake their heads very convincingly as they chant in unison, “No. That is not the argument you are looking for. ” As with Kenobi's lie, there's no substance to the lawyers' falsehood beyond the confidence with which they assert it, but the mind trick continues to work. “Well, I guess that isn’t the argument I am looking for,” you might hear from an exasperated CFO. “These attorneys have been trained in the law, so they must know. Carry on.” Those who lie about due process’ historical place within WC need to know that we are on to them. Their flawed arguments need some work. See also: What Happened on the Oklahoma Option?   Texas nonsubscription has provided a robust case study in what due process looks like for employers and employees alike. WC worked well under special adjudication for decades. But over the past half century, as layers of procedural due process have been added to WC’s inner workings, the legal community has cried foul about the lack of substantive due process — except it selectively disincorporated that whole funding-by-the-employer component from its argument. I support due process in Texas nonsubscription. And I support special adjudication in WC. Let the legal community dictate what happens in nonsubscription. But let the legislature dictate what occurs in WC — which was the original deal. Mixing them has never worked.

Like many others, I took two days out of a busy week, flew to Las Vegas (why not?) and joined the standing-room-only crowd at the inaugural InsureTech Connect 2016, recognizing that Dreamforce, the HR Tech Conference and my day job of serving my clients were all competing for my attention. I'm glad I did! Not only did I reconnect with old friends/colleagues, meet new ones and conquer the Stratosphere, but I also spent two days surrounded by some of the best and brightest in insurance. It left me feeling that one immutable fact is clear: Change is in the air. In that spirit, here are some of the things I took away and the questions I'm going to keep in mind to help move my clients and the insurance industry forward. [One note: I’ve resisted the urge to call out specific examples of startups that support my points. That's not because I don’t have those examples. It's because I didn’t meet every startup, I didn’t hear every panel and story, and there are too many great examples of creative work being done to solve some of the biggest challenges this industry faces. So I’ll err on the side of not creating potential bias. If you want to put me on the spot, feel free to call me and ask me who impressed me the most.] “What’s Your Problem?” The first time I heard that question, I did a double take. The second time I heard it, I understood. And the third time, I decided it’s the right question to ask. See also: Insurtech: One More Sign of Renaissance   Maybe it’s the fact that I spend most of my time talking to incumbents, but I'm not used to hearing the problem statement first. At the conference, every conversation I had with a startup began quite clearly with the problem that the startup is working to solve and the (potential) solution. It's core to their introduction but, more importantly, it's core to their DNA. It’s refreshing. We should all wake up every day with the simple goal of solving one problem — a small one. Think about how much an organization could accomplish with that orientation. Think about the impact it could have on customers. Sure, not all problems can be solved in a day, and some, perhaps, can't be solved — period. But think about the potential for idea generation, or, dare I say, innovation. Start with the problem. Sure, I was interested in each person’s background. Where he/she was before, what experiences shaped his/her journey, etc. These are important questions that help qualify my impressions of whether that person can solve the problem. But all too often I hear people introduce themselves with their role/title, company, responsibilities, etc. I, for one, plan to remind myself to talk about what problem I’m solving — and how. Product? Or User Experience? There was also healthy debate at the conference as to whether a better experience was worth a premium and whether it could the answer to breaking the cycle of price commoditization. The startups surely believe it to be the case, and they aren’t wrong. An elegant experience is a compelling source of differentiation. There was quite a bit of discussion, though, as to which comes first, user experience or the product. Is the user experience the key? Will product rule the day? The consensus was that both are necessary. No matter how great the product is, if you can't sell and service it, it's unlikely to be sustainable and successful. If the experience stinks, no one is likely to buy the product, no matter how much that product is wanted, is necessary or is great. Both are critical. Neither, alone, is enough. This is nothing new. But, as I frequently discuss with clients, being great at everything (product, distribution and service) is hard, expensive — or both. I liken it to being the best “all-around athlete.” How many people wake up one day, decide “I’m going to be a decathlete” and execute? That would take too much time, too much effort and, in all likelihood, could result in being mediocre (or worse) at all 10 sports. Pick where you want to be great, and be outstanding at it. Do it effectively, elegantly and unlike any other. Be good in most other areas. And where you have issues, start to solve one problem at a time. Rome wasn’t built in a day. Incremental or Transformative? How many times did we hear the word “incremental”? 10 times? 100 times? More? I lost count. My point is that small incremental changes can add up, potentially even to something big. Piece together a bunch of small ideas, small successes and now you’re beginning to talk about a meaningful and achievable plan. Piece together a few startups each solving a different problem — and maybe now you’ve veering into the realm of transformation. See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections What is so bad about incremental change? Small problems are easier to understand, to dissect, to solve. It's easier to gain support for small projects. It's easier to measure the effect of small changes to measure the return on small investments. Maybe most importantly, it's easier to stomach the loss on a small failure. Is Failure OK? I’ve spent my whole career avoiding failure, afraid of failure. I’ve even avoided the word. It was not an option. But, let’s be honest, there are very few places where failure is catastrophic. Sure, I’d like to avoid it entirely when it comes to flying, but, otherwise, is it so bad? It was liberating to hear open and honest talk of failure. How many startups are going to make it? Not all of them; that's for certain. Does anyone want to fail? Of course not. But learning from failure is part of the startup culture. Looking out of my hotel room window, I was struck by the hulking darkness of a hotel north on the strip. Surely it was too large to be empty. A little research later, I came across the story of the Fontainebleau Las Vegas, a $2.9 billion, 3,889-room, 68-story, unfinished resort and casino development. Construction topped out in 2008, and it still stands as the second tallest structure in Las Vegas (second only to the Stratosphere, but more on that later). Yet at 70% complete, it fell into bankruptcy and sits unfinished to this day, nearly a decade later. It's only one example of failure on the Strip — there are several unfinished hotel projects. But all of the other failures are smaller and less complete. The Fontainebleau Las Vegas stands as a lesson to me: if you're going to fail, fail small, fail early and learn as much as possible from the experience along the way. Days, Months or Years? I'm not known for my patience. Startups aren’t either. Insurers, on the other hand, aren’t known for their agility. I’m reminded of the fable of the tortoise and the hare. What struck me throughout the stories I heard in the two days was the need to quickly demonstrate value or to die trying. Startups have no choice; their business model depends on it. Insurers aren’t all that different, beholden to their stakeholders or Wall Street, but they tend to measure the horizon of projects in quarters or years, not days or weeks. Insurers with their “endless capital” don’t have the looming fear of running out of cash. But maybe that motivation would be beneficial. I heard numerous stories of how startups proved possible in weeks what insurers might have otherwise spent months or more trying to build. Was the result production-strength? Probably not. Will it need to be? Sure. Nothing can be more frustrating than watching a great idea die on the vine because the overall effort necessary is too big, too long, too costly and, therefore, impossible to justify, to start and to finish. Take a use case, prove it works in weeks, implement it, expand on it and move on to the next test. Success begets success. Small successes can compound. Projects shouldn’t take months or years. No Risk, No Reward My time at the conference ended with a personal test. In my last meeting, just as we were wrapping up and I was starting to think about settling in for a couple of hours to catch up on the better part of two days’ worth of missed email, I was posed a simple question: “Did you know there are rides on top of the Stratosphere?” Um, no. OK, I’ll bite. “There's a ride that shoots you up in the air a couple hundred feet and then lets you free fall back down. Want to go with me?” Normally, I’d squeeze every minute of productivity I could out of a business trip. Normally, I’d miss out on an opportunity to stop, smell the roses and have a personal experience worth telling about. Normally, I’d say no. But instead, I asked only one question: “Do I have to sign any waivers that make it clear that, if I die, my insurance policies won't cover me? Because I’ve got a rule against any activities that nullify my insurance coverages.” I got a laugh but not an answer. (I was serious — that's a rule of mine.) But I said yes. And I’ve got the views, the pictures and the story to remember as a result. See also: 8 Exemplars of Insurtech Innovation   The organizers of InsureTech Connect took a risk. Would speakers line up? Would people register? Would the panel discussions be enlightening? Would people stand on the little squares and make Brella a success? The answer was an unambiguous — and resounding — yes. And I'm thankful the organizers took this risk, because we all benefited greatly from the two days, from the healthy debate, from the new connections and from the experiences we collectively had. I, for one, am counting the weeks (not months) until the second annual InsureTech Connect. What will we accomplish between now and then? I can't wait to find out. These are just my impressions. If you agree, please let me know. If these are trivial or obvious to you, please share your thoughts. If you disagree, tell me why. And for those of you who are in Vegas, did you know there are rides on the top of the Stratosphere?

According to the U.S. Small Commercial Insurance Study, after three years of declining rates, insurance providers are no longer able to compete primarily on price and are now focusing their efforts on ways to please their customers. The payoff is a significant increase in satisfaction among their small business commercial customers, with a 30-point improvement in overall satisfaction in 2016, to 823 on a 1,000-point scale, up from 793 in 2015. The study, now in its fourth year, examines overall customer satisfaction and insurance shopping and purchasing behavior among small business commercial insurance customers with 50 or fewer employees. Overall satisfaction is composed of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. This marks the third consecutive year when satisfaction has improved. The study finds that interaction improved the most among all study factors, increasing 32 index points from 2015. Within that factor, website performance showed the largest jump year over year (up 36 points), followed by agent/broker (up 34) and call center (up 28). Interaction is driving the overall increase in satisfaction. This is the only J.D. Power insurance study in which Gen Y is the most satisfied generation. As expected, Gen Y businesses have been operating for a much shorter time, but they typically have higher revenues than the businesses of their baby boomer counterparts (51% of Gen Y business customers report annual revenue of more than $500,000, compared with 42% of baby boomers). The study found that American Family, Allied and Nationwide hold the top three positions in terms of satisfaction. Find more on the study here.

One thing I learned early on in my tenure as CEO of WeGoLook is that if I wanted to improve the productivity and profitability of my team and business, then I needed to take a closer look at the principles of the sharing economy. How did Uber generate a $60 billion valuation while owning zero cars? How did Airbnb become the most-valued hotel chain in the world without owning a stick of furniture? Why are complete strangers agreeing to exchange services and assets with little, or no, formal regulation? And how could traditional industry players benefit from the underutilized assets of others? These are all great questions, the answers to which will help you as a decision-maker understand why the sharing economy is poised to grow from a $15 billion industry in 2013 to $330 billion by 2025. The sharing economy is based on the principle that people can achieve more when they work together and share (for a cost) their assets. These assets include cars, homes, labor, expertise and much more. Rather than status and ownership, the sharing economy focuses on access and collaboration. The idea has been gaining a lot of traction in recent years, but some people still object to this shift in consumer behavior. No matter where you stand on the issue, you as an insurance thought leader can learn from this concept, as I did. So let's get down to the business of sharing! Access Over Ownership The old baby boomer ownership mentality is quickly shifting to one of access. Instead of owning a bunch of consumer items you might use once a month, you can now access the excess of others. Or, if you own a car and have spare time, people will pay for access to that asset. The new business model of the sharing economy isn't really about sharing, it’s about access. See also: 9 Impressive Facts on Sharing Economy In the workplace, encouraging an access mentality -- "what's mine is yours," over "what's mine is mine" -- can reduce overhead expenses and increase collaboration. Albeit slowly, many leaders are accepting the access mentality over clinging to the individualistic frameworks we are accustomed to. Trust and Accountability The sharing economy couldn't exist without the pillars of trust and accountability. Without them, new access marketplaces would be a fad. I'm thankful that sharing platforms have developed innovative ways to encourage trust and accountability through P2P evaluation and rating systems. Instead of a simple review, users and sellers in the sharing economy rate each other. This is a powerful tool that allows buyers and sellers to increase their reputation capital based on performance and service delivery. In other words, you are in charge of your destiny in the sharing economy. This type of ownership has changed the way we consume and interact with one another because it has given us ownership over our reputation capital. In the workplace, similar techniques can be encouraged and implemented to devolve traditional and out-dated hierarchical management frameworks. Using a system of trust, accountability and flexible work options will help motivate each member of your staff to improve on a daily basis. Give them ownership over their professional destiny. Do you think Uber and Airbnb became industry behemoths by making people work 9 to 5? In fact, these companies only employ a couple of thousand employees each, despite the fact that hundreds of thousands of people earn income through their platforms. Community and Collaboration Collaboration is one of the pillars on which the sharing economy is built, and it inspires everyone to work together to solve problems and move forward. When it comes to traditional insurance carriers, people often get so caught up in their individual work that they work together less and less. Each worker has knowledge and skills that are useful to someone, and your staff will experience increased efficiency when they share their skills with each other. Consider the platform and marketplace model to give your employees more work flexibility and the ability to collaborate with one another on a daily, and even hourly, basis. Unlocking Value of Unused or Underused Assets If you are like most people, you probably have tools, equipment and other items that don't get used much. Everything you own has value, and you need to find new ways to leverage your underused assets. Still have the circular saw in your basement, still in the box? I can totally relate to that! Large corporations are no different. The sharing economy allows individuals and businesses to leverage the underused assets of others in ways we never dreamed of 10 years ago. In business, finding ways to make better use of company assets -- both physical and labor -- will be a key factor in your growth in a world of online marketplaces and access consumption. See also: What Gig Economy Means for Insurers   As many are finding out, dismissing an idea before fully exploring it is a mistake that can harm profitability and productivity. Keeping an open mind can help your business more than you might suspect. Rather than worrying about status, ownership and hierarchy, think about the benefits of access, collaboration, trust and sharing. Adjusting to any new form of business takes time, but teams will work better together when they know that they are valued and have control over their professional trajectory. The underlying principles of the sharing economy can help everyone unite and work toward common goals. I would know, because this is exactly what I have done with my company.

Enrollment season is fast approaching, and shopping for insurance – especially for the first time – is overwhelming. That’s why individuals, families and businesses turn to brokers for help -- the industry experts who are the front-line access point for understanding, purchasing and using health insurance. Unfortunately, brokers are burdened by outdated technology, manual processes and complex new regulations that make the process of helping small businesses and individuals inefficient and impersonal. The digital revolution in all other things e-commerce allows products and services to go directly to the consumer at the click of a button. How can brokers adapt to the increasing complexity of the business, attract more customers and grow their businesses? These growing pains can be met with technology. But this can only happen as long as the end user is kept in mind, and the tech giants and startups that have flooded into the insurtech space to streamline and simplify the shopping and enrollment process have forgotten an important end user: the broker. See also: Improve Reputations by Digital Risk Profiling   The way we see it at Wellthie is that the health insurance broker business remains strong, and, for those who have embraced change and technology, it is only getting stronger. Individuals and small businesses aren’t just looking for answers at their fingertips, they are looking for service: a process that is transparent, trustworthy and efficient. However, unlike traditional goods and services, health insurance requires the skillful assistance of an expert. This indicates that unlike industries that have seen a decline in the use of brokers, such as the travel industry, the health insurance broker is an invaluable piece of the complex health care puzzle. Here’s why:

1. Small businesses are the most reliant on brokers and spend a huge sum on health insurance. There are currently more than 5 million small businesses in the U.S., representing 90% of all U.S. enterprises and a total of 40 million employees. A small business with 10 employees would have to pay on average $50,000 per year for coverage, assuming 70% contribution. This is a large sum, and businesses will want to make sure they are spending their dollars wisely. This is why 74% of small businesses today rely on hundreds of thousands of licensed health insurance brokers.
2. Regulation and compliance is a big deal. ACA, ERISA, HIPAA are just some of the acronyms of the complex body of regulations that govern what small businesses and individuals must keep in mind when offering coverage. These regulations continue to change and have many state-based nuances that require brokers in a given market who can navigate the waters.
3. The products are complicated. Health insurance selection is a multivariable decision with many considerations and stakeholders. According to a Harris Poll survey, nearly three out of every four 18- to 34 year-olds said they are often confused about all the benefit options available to them. Although technology can make great strides at improving the process, buyers want to make sure that they didn’t make a mistake. Sellers also rely on brokers to ensure that the buyers follow the appropriate guidelines and underwriting rules of who can and cannot purchase benefits.

See also: 5 Accelerating Trends in Digital Marketing   In health insurance, where the role of the broker is essential, technology provides the access point to improve the process for buyers, sellers and intermediaries. Brokers of the future who embrace technology will make health insurance more approachable and valued.

After several mass shootings across the U.S. – in Orlando, San Bernardino, Charleston and elsewhere that, whatever the motivation, created terror – the insurance industry is responding with new “standalone terrorism” coverage. Does this reflect a level of acceptance of such incidents, and of gun violence, as a “new normal,” something we’ll just need to live with? I don’t think so. In fact, the responses of insurers illustrate their key role: helping individuals, businesses and other organizations deal with unforeseen harm and tragedy, and recover from it. As cited by Carrier Management in August, the FBI’s “Study of Active Shooter Incidents Between 2000 and 2013” reported that 70% of incidents took place in either a commerce/business or educational environment. The findings establish an increasing frequency of incidents, the report said. Until this year, insurance didn’t respond to “lone wolf” shooting incidents because of two factors. One is the parameters set forth by the Terrorism Risk and Insurance Act (TRIA). Staggered by the massive losses from the 9/11 attacks, Congress passed legislation that provided for similar, large events. To qualify for coverage through the act, losses from a terrorist event must total at least $5 million – far exceeding the property damages that have resulted from shootings and similar attacks. See also: How to Develop Plan on Terrorism Risks   The other factor is the lack of clarity regarding what’s covered by commercial general liability insurance. In the same article, John Powter, president of GDP Advisors in McKinney, Texas, says the general liability part of a commercial policy doesn’t clearly cover or exclude active shooter incidents. “There is a concern, or gray area, with the general liability policy – in reality, it was never designed to cover an active shooter incident,” he said. The shift in the nature of terror Earlier this year, Insurance Business reported on research by KPMG that noted that the changing nature of ideologically motivated crime has yet to be addressed by insurance coverages. “There is a shift in the nature of terror,” the publication quoted KPMG partner Paul Merrey as saying. “In the 1990s, it was about property damage. The incidents we’re seeing now are about maximizing casualties. There is a gap between what insurers are providing cover for and what customers actually want.” He added that the gap will “go from a gray area to excluded,” as was the case with cyber risks – which, in turn, led to entirely new cyberrisk insurance. In a similar response, insurers introduced new standalone terrorism insurance earlier this year. Bermuda-based insurer XL Catlin introduced an “active assailant” policy in February. The policy provides “time element” coverage, which includes business interruption and extra expense coverage. Ben Tucker, head of U.S. terrorism and political violence insurance for the company, told Insurance Business that “the level of awareness is increasing quite dramatically, and it’s not limited to large-risk management types of exposures.” The company has received inquiries about the coverage from agents and brokers representing school districts, public buildings and small hospitality firms. The policy, the publication reported, is triggered when an event involving a handheld weapon affects three or more people. In this policy, “affects” has a broad definition: a person affected could simply be a witness to such an event. GDP Advisors in February introduced an Active Shooter Insurance Program underwritten through Lloyd’s of London. Powter told Carrier Management that the coverage originally was intended for educational institutions, but soon after it was launched GDP received inquiries from banks, hotels, sports venues, amusement parks and other businesses. The real value: preventing injuries and losses Powter added that the “real value of the policy” is in its provision of risk management and crisis response services. Those are important, he said, because many businesses and educational institutions are now learning how to best respond if an incident occurs at their facility. And that’s perhaps the most important response by insurers. When they insure any organizations, insurers take steps -- risk management services -- to help prevent losses from occurring. Those services are especially valuable to businesses and other entities that have purchased active assailant coverage. Students and teachers at schools where shootings have occurred said that the safety drills and procedures they practiced helped to minimize injuries and losses and, perhaps, save lives. Does coverage for such attacks imply an acceptance of them? Only in the same sense that other types of insurance imply an acceptance of fires, storms or other natural disasters. They’re incidents that could happen, and require specific safeguards, preparation and insurance. See also: How to Find Coverage for Terrorism Risks Society must address the threat of terrorism, whether via large attacks or the actions of one individual. Anyone who follows the news is familiar with the many options being discussed and debated by policymakers. But as those threats persist, insurers must deliver both preventive measures and coverage for damages, whether to property or the psyches of survivors and witnesses. That’s the type of response we expect from insurance companies.

I read a lot of articles about consumerism and how employees need to be better consumers. As one who implements technology, I am very familiar with most of the decision support tools in the market and all the online symptom checkers. So let me make a bold statement: It is all garbage. I have always thought that individuals will never have enough knowledge to make educated healthcare decisions. Healthcare is too complex and always changing, so how am I ever going to have the time to keep my knowledge current? I don't want to, trust me. And the last time I needed healthcare, I was driving very quickly to the emergency room. Not a lot of time to think there. I recently listened to a presentation that Aetna CEO Mark Bertolini gave a few years ago at Stanford. (You can find it here.) The final question asked of him was: “How do you create a more educated consumer in a marketplace where they are directing their own healthcare decisions?” The answer surprised me: “Trying to educate everybody on how the healthcare system works and the level of detail isn’t going to work. Sorry to say. And the reason is that, unless the amount of information I can gather is immediately available and that when I act on it has an immediate response, I am not going to pay attention to it.” See also: Consumerism: Good, Bad, Future   With all the articles out there about consumerism and directing one’s own healthcare, I thought I was the only one that had such a view. Every time I have my car fixed, I am wondering whether I am getting ripped off. I don't know enough about cars to shop the market for service. I remember watching 60 Minutes or one such TV show where auto mechanics are shown taking advantage of everyday consumers by doing things people don't need. That's me. I wish I had a trusted auto consultant who would tell me whether I really need the services some mechanic is saying I need. You get my point. If I don't know whether my car is getting the proper treatment, how the heck am I expected to figure out whether my doctor is doing the right thing? Just last night, my wife and I had a debate about the value of multivitamins, and we couldn't agree on whether they worked or were a waste of money. So I Googled the topic, read a bunch of articles — and I still don't know whether multivitamins work. Let's not confuse choosing healthcare versus choosing health insurance. When choosing health insurance, is one supposed to be predicting what their needs are going to be in the next 12 months to essentially “game the deductible”? Insurance is supposed to protect one from an unanticipated event that may cause financial duress if one were not insured. Anything that doesn't fit into this category is simply a reimbursement plan. Dental insurance is almost not insurance. It is a prepaid reimbursement plan for most. There should be two types of insurance plans — one that runs like dental and is simply discounted reimbursements, and another that is real insurance. It is for this reason that health savings accounts should rule the day. So what is the solution? I don't like it when people run around talking about the problems without giving viable solutions, so I won't do that myself. I always say stating the problem is easy; it is the solutions that are tough. Let me start with who I would want as a consumer. I would want someone who would give me sound advice as to what proper treatment is. I want someone who has an incentive to do the right thing for me. I want someone who would spend my money as if it were their own. See also: Consumer-Friendly Healthcare Model   I think the solution requires properly placing incentives. I want to live a healthy, happy, long and financially viable life, just as I want my car to last long, be healthy and be financially viable. (I am not sure what a happy car would look like.) I want someone advising me who understands my goals, which I will safely say are more than likely shared by many. I am all about incentives. It is funny how, when you have the right incentives, you get better outcomes. That requires having someone who wants me to be healthy and not just fix me when I am broke. There are emerging models out there that will provide this type of service. And making consumer-based decisions around the small stuff may become common. But, as a means of controlling healthcare costs, no way. We all know the majority of healthcare costs come from a few people with chronic conditions. If I need to have my oil changed, maybe I can shop the market. But if I need a new engine, I would hope to have a very educated mechanic at my side to help me make the best possible decisions.

You might want to take a mental snapshot of what insurance looks like, because children born today could make up the first generation that won’t know what insurance is. That’s not because insurance won’t be a thing; it will just look a lot different in 20 years. “Insurance will be much bigger, and there will probably be more — because there will be many more risks,” said SAP Global Head of Insurance Bob Cummings on Thursday during his keynote at the SAP Digital Insurance Innovation Summit near San Francisco. Cummings realized this as he imagined how much technology would change by the time his niece’s newborn daughter, Aliénor, reaches the age of 21. By then, Cummings predicts vendors might only sell insurance when it’s packaged together with other services. Bundle Up for Protection ADT Security Services and insurance provider State Farm have already paired up to safeguard customers against burglary, flooding, fire and more. The same protection package is available from each company’s website, with a single app to control it all. And more technological improvements for Aliénor and her cohorts are sure to follow over the next two decades. “The company at that time will probably tell her, ‘We’re so convinced of our burglary protection that, if you do get burgled and we don’t manage to stop the burglar, we’ll pay you up to $200,000,’” Cummings said. “And the RFID tags and batteries will be so advanced that there will even be theft protection for where her things go.” See also: Not Your Father’s Insurance Industry   Customers of the new insurance company Tr­­­ōv can already protect their valuables by turning coverage on and off of individual items whenever they like via their mobile device, as demonstrated in a video Cummings shared during his keynote. Users can also file loss or damage claims simply by answering a few questions on the mobile app. Staying a Step Ahead This kind of industry fluidity, in which different organizations join forces to offer something greater than the sum of their parts, also happens right now with data. Applications currently available to insurance companies can combine historic customer data with real-time insights, such as a person's online searches for a car or home. “This is all very relevant, very time-critical information because, by the time he actually contacts us, he will have done a lot of comparisons,” said SAP’s Roland Bloesch at the summit Thursday. “And if we can engage with the customer before that — earlier in the customer journey — we will be able to talk about the price and value-added services.” This bundling of different data is also critical for predictive analytics, which can forecast the customer’s next priorities, according to Bloesch, SAP’s insurance customer engagement head. Brokers, agents and advisers can use that information for active outreach instead of just waiting for the customer to call. Digital Picture of Health Aliénor and her cohorts will probably travel more than young 20-somethings today, Cummings predicted. And travel guidebook publisher Lonely Planet is already trying to make travel safer and easier for them by digitizing its vast repository. See also: 8 Things to Know About Insurance   “They see a world where you’re walking around in Vietnam, and they say, ‘Turn left over here because there’s a cool temple,’” Cummings said of Lonely Planet’s efforts. “And they’re already including insurance.” Beyond helping Aliénor and her friends safely see the world, new insurance products could also help them mitigate risks to their wealth and business — and even their health, according to Cummings. Biotechnology company Livongo and the Vitality wellness program use high-tech to offer consumer-style experiences in healthcare, providing feedback, encouragement and incentives to people who keep their fitness up and health insurance costs down. A Picture Will Last Longer “A lot of those models are already emerging,” Cummings said. “I don’t think we have to wait until Aliénor is 21 years old to start imagining these kinds of things.” So make that mental note of what insurance looks like today. Because it might not look that way for much longer. This story originally appeared on the SAP Community.

According to one published report, (WorkCompCentral, March 4, 2016, “$100 Million in Workers Benefits Sits Unused”), only 3,955 checks have been issued to injured workers from the Return to Work (RTW) Fund established in Senate Bill 863. The checks total slightly less than $20 million, leaving an additional $100 million untapped by injured workers. According to regulations of the Department of Industrial Relations (DIR) that administers the fund, workers receive a $5,000 allowance if they have been issued a Supplemental Job Displacement Benefit (SJDB – commonly referred to as a “voucher”). The voucher is issued if the employer at injury fails to make a qualifying offer of employment to the worker. While the provenance of the RTW Fund has been criticized – largely by those not in the room to witness its birth – there are more fundamental issues with the fund and its administration. First, the RTW Fund really has nothing to do with return to work. It can be fairly assumed that the use of that particular section of the Labor Code – Section 139.48 – was a legal accommodation because there was existing statutory reference to the RTW Fund in Labor Code Section 62.5 – specifically Sec. 62.5(a)(1)(B). Section 62.5 is the Workers’ Compensation Administration Revolving Fund statute. That reference, in turn, was to the RTW Program that was originally created more than 15 years ago in Assembly Bill 749 as a mechanism to partially subsidize certain employers who brought injured workers back to work. The employer subsidy as originally enacted was for wages and worksite modifications. Later, Senate Bill 899 further revised the RTW Program to limit the reimbursement to worksite modifications and to expend funds on an “as available” basis. The RTW Program sunset on January 1, 2010, but while Labor Code Sec. 139.48 was taken out of the code, the reference to the RTW Fund in Sec. 62.5 remained. See Also: A Physician's View of 'Return to Work' Once one gets past the title of “Return-to-Work Program,” however, there is no evidence to suggest that Sec. 139.48 has anything to do with returning a worker to employment with the employer at injury – or anyone else for that matter: “139.48. (a) There is in the department a return-to- work program administered by the director, funded by one hundred twenty million dollars ($120,000,000) annually derived from non-General Funds of the Workers’ Compensation Administration Revolving Fund, for the purpose of making supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss. Moneys shall remain available for use by the return-to-work program without respect to the fiscal year. "(b) Eligibility for payments and the amount of payments shall be determined by regulations adopted by the director, based on findings from studies conducted by the director in consultation with the Commission on Health and Safety and Workers’ Compensation. Determinations of the director shall be subject to review at the trial level of the appeals board upon the same grounds as prescribed for petitions for reconsideration. "(c) This section shall apply only to injuries sustained on or after January 1, 2013.” The history of Labor Code Sec. 139.48 is also influenced by the Commission on Health & Safety & Workers’ Compensation (CHSWC) publication, “Report on the Return-To-Work Program Established in Labor Code Section 139.48” (2009). The most telling aspect of that report was the “alternative” recommendation to the Legislature: “California may wish to consider eliminating the program. California may wish to consider a program that more directly assists injured workers who are unable to return to their previous jobs.” (p.7) Given that the program sunsetted roughly eight months later, the commission’s recommendation is almost prophetic. Three years later, as required by SB 863, the DIR conducted an independent study to determine how best to structure the RTW Fund in the new and improved Labor Code Sec. 139.48. That responsibility fell upon the ubiquitous RAND Corporation, whose 2014 report, “Identifying Permanently Disabled Workers with Disproportionate Earnings Losses for Supplemental Payments” is the foundation for the current RTW program. Among its recommendations were to make eligibility for the program dependent on receiving a voucher. According to RAND, approximately 20% of injured workers receiving permanent disability benefits receive a voucher. (p. 12) Under RAND’s scenarios, and anticipating utilization of the RTW fund at the same approximate levels as the vocational rehabilitation program repealed in 2004 by Assembly Bill 227 rather than their observed voucher utilization figures, RAND estimated roughly 24,000 injured workers would access the RTW Fund, thus resulting in about $5,000 per recipient to exhaust the $120 million annual assessment. So while that explains where we are today, it also raises questions about whether the current RTW program suffers from the same lack of awareness that caused its statutory predecessors to go quietly away. But that also raises the bigger issue: What has happened to re- employment as an objective of the system over the past 20 years? The history of vocational rehabilitation in California’s workers’ compensation is a long one – culminating in the repeal of the mandatory vocational rehabilitation program in AB 227 and the repeal of vocational rehabilitation as a compensable benefit with the amendment to Labor Code Sec. 3207 in SB 899. Legislative efforts trying to suggest that return to work is still important in the workers’ compensation system have largely been limited to the voucher, an at-best-meager program that is intended to try to put the injured worker on the path toward gaining skills to find new employment. In no way, however, is it as robust as the former vocational rehabilitation program. It is, regrettably, a $6,000 check, with some restrictions, that is intended to finalize the severing of the tie between an injured worker and the employer at injury. See also: Return to Work Decisions on a Worker’s Comp Claim   To paraphrase Will Turner in Pirates of the Caribbean, “That’s not good enough!” As we move forward and discuss a whole host of issues in the workers’ compensation system, such as utilization review, the use and abuse of opioids, prescription drug formularies, independent medical review and permanent disability ratings, perhaps someone, somewhere, likely in either Oakland or Sacramento, should talk about re-employment of disabled workers. Not some resurrection of vocational rehabilitation and what became its abuses but, rather, simply how to help workers unemployed due to a disabling injury at work to have the same access to re-employment assistance as disabled or otherwise unemployed workers whose access to re-employment assistance is defined by multiple state and federal programs and not by extracting some form of payment from the employer at injury. There is no shortage of programs that could provide such assistance. And perceived unintended consequences that expanding the scope of re- employment assistance beyond the employer at injury would increase the number of workers unemployed after a workplace injury are unlikely given the protections of the Fair Employment and Housing Act (FEHA), the Americans with Disability Act (ADA) and Labor Code Sec. 132a. According to the Workers Compensation Insurance Rating Bureau (WCIRB), in calendar year 2014 roughly $29 million was spent on vouchers. Labor Code Sec. 139.48 assesses $120 million annually. One should ask whether that money would be better spent providing access and coordination to the host of re-employment programs offered by the Department of Rehabilitation, the Employment Development Department (CalJOBS), non-profit private companies, such as Goodwill Industries, that offer re-employment assistance, and a host of federal programs, including those offered from the U.S. Department of Labor, Office of Disability Employment Policy and the Social Security Administration’s Plan To Achieve Self-Support (PASS). In today’s complex world we simply cannot expect the employer at injury – especially the small to medium-sized employer – to provide all the resources necessary to facilitate meaningful re-employment for injured workers who are permanently disabled. Expanding the concept of re-employment and coordinating programs designed to create jobs for the disabled is a logical step forward to address this problem. No amount of vouchers or RTW fund disbursements will ever be a viable substitute for a job. The sooner we realize this and look to Sacramento and Washington to break down the barriers created by the workers’ compensation system to full access to re- employment resources for disabled workers, the better.  

Just before the Italian Renaissance, guilds were formed in Florence and throughout Italy to bring together people of like occupations under a social network. Their purpose was to agree upon standards and rules, represent the group to government, improve upon their art, science or trade and provide support services to families and widows when needed. Working together, these guilds fostered Renaissance attributes. They were patrons of the arts. They contributed to the advancement of medicine and technology. They advanced construction methods and learning in all spheres. In fact, the end of many guilds was brought about when they were merged into universities. The Renaissance created a cultural bridge from the Middle Ages or past to modern history. However, the Renaissance didn’t just sprout up overnight. It was spurred on by a convergence of factors, the greatest of which was increased wealth. Trading in Florence had produced a new class of financier who was willing to fund artistic and scientific endeavors. Wealth created ease. Ease allowed time for thought and innovation.   Innovations in practical sciences, such as mathematics and architecture, benefited from broader thinking. Fast forward to today, and the comparison to that time is striking, with a similar influx of money and a new class of insurance technology investment via insurtech. Insurtech as a concept has grown to become, not an official organization, but a collaborative movement. It has become a bridge from the old to new being created in the insurance industry today. Insurtech:  A New Era of Innovation Insurtech as a movement branched out from fintech (financial services focus) earlier this year following reports of significant capital entering the market for insurance startups … from insurers and MGAs to technology providers. Significant capital investment in insurtech for new insurance greenfield or startup companies is fueling massive innovation in products, services and business models and de novo options. These de novo options are a driving force underpinning the insurtech movement and why new and existing companies are looking to new business models to innovate, test ideas and bring new products and solutions to market. See also: The Insurance Renaissance (Part 1)   A host of venture-backed startups have propelled property & casualty insurance tech investment deals to a new high in 2016, with total funding to insurance tech startups topping $1 billion in the first half of 2016, according to CB Insights. 63% of deal activity to the insurance tech market went to U.S.-based startups in the first half of 2016.  Startups that distribute policies or provide software and services across the P&C insurance value chain have risen 50% compared with all of 2015. And life insurance is now also ramping up. We saw an innovation movement in spades last week at the much awaited InsureTech Connect Conference in Las Vegas, which brought together more than 1,500 entrepreneurs, technologists, venture capitalists, insurance executives and startups. The energy, engagement and enthusiasm were infectious. It had the feeling of the “dot com” era… but with more substance. This gathering sent a clear message to the insurance industry, that we have rapidly entered a new era that is more profound and important… a renaissance. It has placed the importance of innovation and technology on a stage and signaled that, from here forward, insurance must and will be innovating. But like the forming of guilds, insurtech demands cooperation and conversation. InsurTech and Insurance Renaissance Just like the original Renaissance, today’s Insurance Renaissance is spurred by the converging factors of people, technology and market boundaries. Insurtech is powered by all three. Within insurance, this new Renaissance represents a real shift with significant business impli­cations beyond legacy modernization. It represents a whole realm of new opportunities via greenfields, startups and incubators to cover a fast-changing market landscape. In our view, based on our Future Trends – A Seismic Shift Underway thought leadership report in January 2016, and picked up by many in the insurtech movement, there are three main areas of impact:

• People – Expectations, products and business models that were built around the silent and baby boomer generations, do not meet the millennial and Gen Z expectations or needs. More importantly, Gen X is the “swing group” tipping with millennials and Gen Z. These changes in people’s lives drive changes in their expectations and their risk profiles/needs, reflected in our coming primary research on customer expectations for individuals and small business owners.
• Technology – How often do you use your smartphone in your daily life for researching, buying, servicing and convenience? Think Amazon, Uber, news and music. These new expectations drive businesses and institutions to use technologies and processes to develop new business models and channels, which give customers the capabilities they’re seeking.
• Market Boundaries – Market boundaries are being erased. New competitors and new channels are at the forefront of the insurtech movement. Consider how the largest number of startups are build around new distribution options. Then think about how existing and new businesses from Tesla, Ford and Trov are looking to offer insurance as part of an auto purchase. These new business models and capabilities will drive additional changes in people’s lives, leading to new needs.

Insurtech Leadership and Options As we have tracked, observed and talked to our customers and other influencers/leaders in the industry this year, we are convinced this is not a “new fad” but a movement with substance that is just getting started. Unlike the “dot com” era, many of the insurtech participants have real capabilities, real business plans and real substance in how they can enable the industry through our renaissance to meet and exceed the expectations of our customers. But it requires leadership, vision and active collaboration/participation.  Standing on the sidelines waiting to be a fast follower or thinking you can do it yourself will likely not work this time.  What is different?  Chunka Mui reminded our customers at the Majesco Convergence Conference, just before InsureTech Connect, that the industry is moving at such a rapid pace that the gap between today’s technology and future technology possibilities is being filled by insurtech active participants. From here forward, tech advancement won’t slow to allow followers to catch up. See also: The Insurance Renaissance, Part 2   It is an exciting time for the industry…a time of great change, challenges and opportunities.  While insurers have different strategies and paths to their future, we are convinced that insurtech will be a big part of that future and are committed to helping shape, embrace and engage in the movement to enable the renaissance of insurance.