The use of urine drug testing (UDT) for injured workers raises challenges and questions for workers’ compensation stakeholders. Who should be tested? How many tests are too many? Too few? How often should the tests be performed? And, perhaps most importantly, what — if any — action should be taken in response to test results? These questions have been brought to the forefront with the rise of opioid-related challenges — the same challenges that led a large workers’ compensation insurer to turn to experts for help. The carrier saw a significant increase in opioid use among injured workers. Claims adjusters did not have the expertise on their own to aid in the problem. See also: Opioids Are the Opiates of the Masses Over the past several years, the insurer has aligned with Optum (its pharmacy benefit manager) and Millennium Health (a health solutions company that specializes in medication monitoring) to create a program that identifies and works with injured workers who are potentially at risk for poor recoveries. The insurer has reported impressive results, with reductions on spending for opioid analgesics and decreases in the number of supply days of the medications. Using the clinical experts and toxicologists of Millennium to help interpret test results has helped the clinical pharmacists at Optum provide recommendations to the adjusters and providers. Medical treatment guidelines increasingly include UDTs for injured workers who are prescribed opioids; however, the decision of how often to test is largely left to the medical provider’s discretion. Experts say UDT, used in conjunction with other tools, can provide objective information regarding current medication, as well as illicit substance use. The results can help identify injured workers who may be abusing, misusing or diverting prescribed opioids. “The clinical utility of UDT has been well established and is promoted in several medical guidelines. However, in some segments, there is still an underutilization for various reasons,” said Maria Chianta, director for clinical affairs and managed markets at Millennium Health. “It could be a lack of awareness or a lack of time — it takes time to perform the tests and interpret them.” (Chianta will lead a discussion at the National Workers’ Compensation and Disability Conference & Expo on Dec. 2 in New Orleans. The discussion will cover the use of UDT in workers’ compensation; explain what led the insurer to enlist the help of its pharmacy benefit manager and Millennium Health; and show the results the company has achieved.) Non-adherence to guidelines The latest research from the Workers’ Compensation Research Institute bears out the inconsistent use of UDTs in workers’ compensation. A study of 25 states showed that the percentage of injured workers with longer-term use of opioids receiving drug testing was lower than recommended by treatment guidelines. At the same time, however, the frequency of drug tests was unusually high among the top 5% of injured workers who received opioids on a longer-term basis and had drug testing. A lack of understanding of what actions to take based on UDT results is perhaps one of the major barriers. “It takes time to walk through those results," Chianta said. “If you get something unexpected, you have to try to get to the cause of that, which takes time. Some providers may not know the best ways to respond to the test results.” Follow-up is among the key issues for the effective use of UDT. Depending on the results of the tests, the insurer, for example, may engage the services of a telephonic case manager or conduct a pain management program review. See also: Urine Drug Testing Must Get Smarter Another area of confusion over UDTs concerns the types of tests available. “Primarily, there is immunoassay technology and mass spectrometry,” Chianta said. “Immunoassay is a presumptive screening, and mass spectrometry is a definitive or confirmation test.” Chianta will discuss the types of tests in more detail. Some people on the health plan side may be seeing drug tests coming in and paying for them — and that’s the end of the process. The speakers aim to give session attendees an appreciation of the value of becoming more involved with the outcomes of the tests and follow-up actions that are necessary.

Who can forget Don McLean’s iconic “American Pie”? Released in 1971, it was a four-week No. 1 hit in the U.S. It is listed as the No. 5 song of the century by the Recording Industry Association of America (RIAA) and the National Endowment for the Arts. The original 16-page manuscript sold for $1.2 million last year. For me, the most memorable line in the nearly 800-word, eight-and-a-half-minute song is: “The day the music died.” It marks Feb. 3, 1959, where there was a seismic shift in music. The senseless and untimely deaths of rock-and-roll legends Buddy Holly and the Big Bopper (J.P. Richardson) are interpreted in highly symbolic and blurry verbal pictures. After the recent presidential election, the question before us is whether Tuesday, Nov. 8, 2016, will become known as “the day the data died.” No matter your political or ideological viewpoint, no one predicted what happened at the polls. Even with mountains of data and 21st century technology, mainstream media and academia completely missed the mark — and not by a little. We now know that the data wasn’t just slightly off track; it was a couple of interstate exits away from reality. See also: Some Things Are Too Important for Paper To try to figure out where we in the insurance industry should go from here in terms of thinking about how to use data and of projecting trends, I revisited a number of new technologies that either did not live up to the hype or just never achieved the projected dominance. Here are some of my favorites and their potential insurtech applications: Quadrophonic Sound Debuting in 1971, it had four-track sound instead of a stereo’s two. And everyone knows more is always better. Quadrophonic sound was portrayed as not just sitting in front of musicians but sitting in the middle of them. I actually bought a quad system with four speakers and some tapes. The problem was that there are about a billion ways to produce recordings, and no single format was ever agreed on. Implications for Insurtech Standards are vitally important for insurance data exchange and widespread blockchain deployment and success. But, as a McKinsey report noted, the insurance industry is not known for its cooperation, its creation of standards, its adoption or its enforcement of standards. The Segway Steve Jobs said it would be bigger than the PC. Time magazine called it “reinventing the wheel.” Venture capitalist John Doerr (who backed Netscape and Amazon) said it would be bigger than the internet. Jeff Bezos spurred huge hype, saying the Segway “is one of the most famous and anticipated product introductions of all time.” With pre-orders from the National Park Service and the U.S. Postal Service and with more than $90 million in venture capital funds, the Segway’s inventor, Dean Kamen, said it would be to the car what “the car was to the horse and buggy.” All original 6,000 Segways were rapidly recalled because of customer injuries when the battery was low. While it has bounced back a little bit, the Segway never lived up to its hype. Implications If you Google "insurtech," you get more than half a billion hits. With more than 800 insurtech startups and almost 150 deals worth $3.5 billion of investment since 2015, insurtech is a force to be reckoned with. There is more than enough hype to go around. Remember that just because an analyst, consultant or media outlet writes about a company or technology does not mean it is destined to take over the world — or even survive. Microwave Ovens Everyone reading these words probably just about blew a gasket when they saw microwave ovens on this list of technologies that have not lived up to their promise. With more than 100 million units shipped in the past 10 years, how could microwave ovens be declared a failure? Well, microwaves were originally advertised as the death knell of traditional ovens. It’s not that microwaves are a failure, per se, it is that they never lived up to the hype. More than three million traditional ovens are still being sold annually, with a full 33% increase in sales over the past five years. As microwave radiation (yes, radiation) is used to heat water inside of food, it cooks from the inside-out. While microwave ovens are great for popcorn and reheating, they still cannot brown or fry, nor are they terrific for baking. I once caused a minor event (a fire) at work when I reheated some chicken in the microwave. I had failed to notice that the paper wrapping from the grocery store where I bought the chicken was lined with foil. While the ensuing fireworks and smoke were entertaining, my coworkers were less than thrilled. Implications While I keep count of the number of times I’ve ridden Pirates of the Caribbean in Walt Disney World (42 as of this article), I have completely lost count of the number of times the death of the mainframe was pronounced with great fanfare and assurance. The tablet was supposed to replace the PC, but, like the microwave, it has become a complementary device. We all need to exercise patience and caution whenever the next “bright shiny object” is set forth. Razor Phone No, this is not a spelling error or an April Fools’ prank. Not only did someone actually think it was a good idea to combine two wildly different technologies in a single device, someone else approved and financed it. I find it hard to understand what a cell phone and electric razor have in common other than they are both battery powered and operate next to your face. Having a similar name to Motorola’s Razr phone turned out to create colossal confusion; the bottom line is that consumers were not at all attracted to this “cutting edge” device. Implications Putting together different technologies may make some sense or add value on the surface, but it may also have unintended consequences. I once worked for an insurance company that built a 40-story headquarters. It aggressively employed all the latest safety designs and technologies. One Monday morning, I woke up to discover that I could not go to work because of a significant fire on the fourth floor. It was later discovered that an office machine caught fire and burned undetected for about eight hours, causing considerable damage and disruption to the company. How could a fire burn that long without being detected, you may ask? The problem was the same as the Razr Phone: two technologies that seemed to make sense but had results that were problematic (at best). Smoke detectors were imbedded into the ventilation system and, to conserve electricity, the ventilation system had been turned off over the weekend, disabling the smoke detectors' sensors. With no smoke detectors, the fire was allowed to burn until an overnight computer operator happened to open the door to the 25th floor stairway. With smoke billowing out, the operator manually pulled the fire alarm. One other note: With its reliance on all the latest technology and fire resistant materials, the building did not have sprinklers, much to the chagrin of the insurance company, the architect and city officials who approved the plans. A state-of-the-art sprinkler system was retrofitted, costing much more than if it had been installed during the original construction. See also: The End of Leadership as We Know It?   While no one should boast about the outcome of the recent elections, we all should question what is going on when it comes to the media and “the experts” who proudly boast they know the truth because they have the data. In these cases, their feet were firmly planted in the air.

Just as the industrial era changed every aspect of life, the digital economy era will bring tremendous change to the insurance industry. With the rise of the Internet of Things and the wealth of data it could potentially produce about the lives and assets of the insured, carriers need to consider where they might face new competition so they can take a defensive position. Platform-based ecosystems can provide insurers access to the data and customer interaction points that will enable them to offer personalized, real-time outcomes—including offerings beyond insurance—on a massive scale. But to take advantage of these new ecosystems, insurers will need to improve their capabilities in areas such as big data, analytics, service design, personalization and the customer experience. See also: The Formula for Getting Growth Results   Watch this Insurance Insight of the Week video to learn how platform business models will bring a profound disruptive change to insurance. The platform economy is transforming every dimension of life—and the insurance business   Whether the insurer “owns” a platform ecosystem or is plugging into another company’s, what matters is having a platform strategy and the business know-how to exploit it. Progress will start from a clear understanding of those parts of the business that are primed for platform business models, and those that are most vulnerable to unforeseen attacks from other platforms. Learn more:

• Register to download Accenture Technology Vision for Insurance 2016 (PDF).
• View other Insurance Insight of the Week videos.
• Email me to discuss how Accenture can help insurers take advantage of the platform economy.

Confused about change management in your organization? You are not alone. Transformation is difficult. But some companies have succeeded throughout the length and breadth of their organization. So, what is the secret? 1. Adopting a long-term vision Vision is critical. Companies that commit to the process are more likely to experience a greater acceptance than those that implement short-term or damage-control practices. See also: Can Insurers Move at the Speed of Change?   To create that great place to work, the CEO and senior management must show a strong commitment to active communication and to the company vision and values. Equally important, there must be a commitment to ensure that the vision and values of the company are lived and experienced throughout the entire organization. 2. Accepting responsibility The CEO and other senior individuals have to take the responsibility and lead by example. 3. Communicating the change The team must plan, execute, evaluate and monitor the change initiatives to ensure the strategy of the organization is aligned with the vision, mission and structures of the company. It is important to note that the change team must understand what needs to be planned and what can emerge. Additionally, a communication plan must be developed. Communication is that vital link to ensure that an organization change process is successful. 4. Understanding the organizational culture Although changing an organization’s culture continues to be a highly challenging and often elusive endeavor, according to Levin and Gottlieb, the team must be aware of the people issues because they can enable or block change. Focusing solely on the hard factors and totally neglecting the softer issues can render the whole change process useless. Any new CEO trying to change the culture of the organization wholesale will run into difficulty. It will be more feasible to get groups of people to change their way of work and teach others how to enact such behaviors. Any other approach can prove to be very unproductive and even destructive to the entire change process. See also: Building A High Reliability Organization  

When I recently moved to a new state and had to switch my auto insurance, I thought it would be quick and easy. I was wrong. The process was complicated, and included multiple pages of paper documents that had to be signed, scanned, re-scanned, re-scanned again and ultimately shipped overnight. Only after completing this process and waiting several days did I have my new insurance cards. For someone who is the ultimate online consumer (if I can buy it online, I will), this was a hassle, to say the least. But maybe I shouldn’t have been surprised. The property-casualty insurance industry is a complex one, marked by long-term agent-carrier relationships, regulations that vary state-to-state, processes and legacy technology. In a world in which you can order a car service, buy food or clothing with one click, or access any aspect of your banking or investment accounts 24X7, much of insurance is still different. See also: Incumbents, Insurtechs Must Collaborate   The opportunity to do better has given rise to insurtech, the insurance-focused version of fintech. Through our work with the Insurance Digital Revolution, an industry initiative formed to advance digital technology adoption in insurance, and our partnerships with VCs and entrepreneurs, we’ve seen that many CEOs are focused on technology and solutions, but fewer are getting the most out of marketing. So we’ve pulled together these four lessons to help the B2B players break through:

• Keep asking yourself, so what? Have you ever been presented with a long list of features for a new product and said to yourself, so what? Some features, like easy-to-use, flexible, secure, fast, SaaS-based, are so common they lose meaning with buyers. The best companies don’t just talk about features, they talk about benefits ⎯ in very specific ways. These companies understand their customers and speak to them in terms that have real meaning. To get to the true benefits of your solution, after every feature, keep asking yourself, so what? Keep going until you can’t go any further. For example, a new analytics software solution might be easy to use. So what? You can create models instantly. So what? Your underwriters can see the effect of a rate change based on market conditions today. And there’s the benefit.
• In a market where everyone has a better way, say something different. Most solution providers come to market because they really do have a better way. But as a marketing and sales message, "we have a better way" is not enough. It only has meaning for prospects who are extremely frustrated with the current way, and doesn’t help your solution stand out. The same can be said for "we’re fast" or "we’re easy to use." If you look around, you’ll see that many technology companies say the same things. Test yourself by substituting another solution provider’s name into your sales presentation. If it still makes sense, you have work to do to differentiate your message. And while it’s okay to make bold claims (as long as you can back them up), don’t focus on too many. One tech company I know used a revolving list of 10 big claims about its solution. The approach not only diluted the message, but the company lost credibility by using so many superlatives, like "best" and "most powerful." It can take discipline, but focus on only one or two things that have real meaning to your customers.
• Fear doesn’t motivate people to buy. For many insurtech businesses, disruption is part of the value proposition: Some are clearly built on the idea of disruptive business models, and others on empowering carriers and agents to avoid being disrupted. But focusing on fear, and too little on the vision or the opportunity to improve business, won’t get you very far. When you’re selling to insurance carriers and agents, you’ll need to build trust into your solution. That means demonstrating not only how it works, but the results your customers achieve. One of the easiest ways to do this is let your customers tell their stories, on video. And you don’t need a big production ⎯ this is an area where authenticity trumps sophistication.
• Let your community work for you. While customer testimonials and case studies are important in establishing credibility, they’re only the first step. Not only must you convince prospective customers that your solution works, you must give them compelling reasons to change. Building community can take many forms, including creating and working with user groups, holding customer meetings and using social media, such as closed networks on LinkedIn, to discuss questions and ideas. In one example, a technology company implemented a sandbox and feedback loop, for customers to make suggestions and test new versions of the solution. This created a core community of customers who were clearly vested in helping the company grow.

See also: The Future of Insurance Is Insurtech   The P&C industry is on the cusp of major digital transformation that will advance how insurance products are developed, priced, sold and serviced. The investment flowing into insurtech businesses highlights the scale of the opportunity. But more dollars flowing creates a more crowded field of solution providers. While many entrepreneurs get into the business with a vision backed by technology, basic marketing can be an important tool for growth. We’ve seen first-hand that not every new company is doing this well. There’s a real opportunity for those who do, to stand out.

Marvin Minsky, the cognitive scientist and cofounder of the MIT artificial intelligence laboratory, used to say, “You don’t really understand something if you only understand it one way.” This is especially important to remember if you’re trying to understand the potential of information technology, one of the most powerful amplifiers for human endeavors in history.

Many books have been written about the internet and other emerging technologies as a force for good. In a gripping new book, Mike Dover is depressingly thorough at showing us that the internet’s capacity for good is matched only by its capacity to empower evil. In Dante’s Infinite Monkeys: Technology Meets the Seven Deadly Sins, Dover writes about how “the internet, and technology in general, have provided new ways for wrath, lust, gluttony, sloth, pride, envy and greed to insert themselves into our lives.” He dives deeply into the worst of humanity that technology can serve up.

See also: Technology and the Economic Divide 

n this interview, Dover and I discuss how technology is amplifying evil—and the implications for consumers, inventors, innovators and policy makers.

Chunka Mui: Why write a book about evil?

Mike Dover: I’ve spent a significant part of my career working at a think tank that mostly studied the impact of technology on business and society. Generally our sponsors were interested in how they could leverage technology to improve profits or in the case of governments how to improve life for citizens. While our clients were interested in dangers and pitfalls, most of what we produced focused on the positives. This project gave me some balance and license to really dig into the dark stuff.

Mui: Your book offers compelling evidence that bad actors are harnessing technology to commit every deadly sin. From a personal standpoint, what dangers that could directly affect you and your loved ones worry you the most?

Dover: Greed will directly impact regular people in the developed world. The division between rich and poor will grow as more jobs get automated. Even with a guaranteed minimum income, a society with a small trillionaire elite and a massive underclass will be devastating to our idea of society. In the case that a guaranteed income, emboldened by laboratory-created protein, inexpensive 3-D-printed goods and rich immersive entertainment made life carefree, many people in our society require a vocation to feel useful.

Mui: What do you do to safeguard yourselves against those dangers?

Dover: A combination of things: Look for work that is less susceptible to robot replacement, and constantly retrain and reinvent yourself. Also, build parts of your identity that are not reliant on your profession. Write poetry, even if it is bad poetry.

Mui: You write that technological change can alter ethics and morality. Give us examples of things that we might consider “evil” today but acceptable in the future.

Dover: I point out in the book (although I am far from the first person to address it) that sexuality drives technological innovation. Beta was a better format than VHS, but the latter thrived because it embraced pornography. Same deal with video streaming, online payments, etc. Sex with robots enhanced with AI and customized pharmaceuticals will be viewed as recreation rather than perversion.

Mui: Some evils, however, are inherently evil. From a long-term, societal standpoint, what keeps you up at night?

Dover: Wrath—not as manifested through online bullying (although that certainly is troubling) but via technology-infused warfare. Biological weaponry at a molecular level can be incredibly devastating and does not require the resources of a superpower to develop. At the same time, using robots and AI as soldiers will have a huge ethical and philosophical impact.

Mui: Is there anything individuals can do against these broad threats, other than hunker down and hope that it doesn’t happen?

Dover: I touch on that in the final paragraph of each chapter, but some threats are easier to address than others. Certainly, people should realize that Wikileaks and its ilk can publish everything you type, and criminals will become more sophisticated at stealing from you. You need to more critical and more careful.

Mui: How should inventors of new technologies and applications think about the potential evil uses of their inventions?

Dover: Absolutely they should, although sometimes curiosity and human innovation can turn benign inventions evil. If a terrorist loaded up 20 drones with plastic explosives and flew them into a packed football stadium, at least some of them would detonate causing massive injury and loss of life. It’s hard to blame that on people who develop drone technology.

Mui: How should companies that can choose to commercialize such technologies, or not, think about the ethical implications of their business decisions?

Dover: Technology producers should operate ethically. As much as possible, they should think of safety and safeguards and work with authorities (where that makes sense) to address bad actors.

See also: How Technology Breaks Down Silos  

Mui: What is the proper trade-off between forestalling evil before it is enabled versus, potentially, stifling innovation?

Dover: This is tricky because there is no trade-off that is acceptable to everyone, and the concept of evil (and certainly content standards) varies widely across jurisdictions. What is considered obscene by one culture is laughably innocuous in another.

Mui: What is the role of policy makers and regulators?

Dover: Two ways that policy makers can improve is to move faster and include a greater breadth of voices. If it takes a year to write legislation about mobile surveillance or the chemical composition of bath salts, then it will be obsolete before it can be enacted. And, please…if a Supreme Court justice has never used email, have his or her grandchild give a tutorial before ruling on online privacy.

Mui: Can you offer any hopeful parting thoughts?

Dover: Even in the face of evil, we can still be good. Technology offers great benefits, and knowing about evil can help us combat it.

What is the difference between Sheryl Sandberg, Melinda French Gates, Cinderella and Elsa from Frozen?

Well, each is worth billions, each commands an immense global platform and each has dedicated her life to capturing the hearts and minds of girls and inspiring their dreams. Whether she knows how to code or whether she has magic powers, those are distinctions without a difference.

In fact, these four figures are all the same: They are princesses.

What I mean by that is we have changed the look and feel of the characters put forth for girls to admire, but we haven’t moved past the stage of fueling fantasies to the stage of creating change. We gave the princesses a makeover, but we didn’t address the core issue.

We are solving the wrong problem.

We decided we wanted girls to embrace heroines who are strong and fearless and can do anything boys can do. We want girls to admire women who code and who are scientists and gymnasts and world leaders. To put it bluntly, we want to see girls dress up as Olympic gymnast Simone Biles or Olympic swimmer Katie Ledecky for Halloween instead of as Disney princesses Ariel or Belle. If we succeed, if fairies and mermaids are a thing of the past, we will still be in exactly the same place: asking ourselves why women aren’t leading companies; why girls aren’t pursuing careers in technology; and why, when they graduate from college, women enter the workforce at the same rate as men but leave it at a much higher rate.

Sandberg and French Gates are shining examples of people we should admire and attempt to emulate. They are making tremendous contributions to everything they become involved in. Gates is literally eradicating diseases and lifting entire populations out of poverty. I do not mean to demean her or Sandberg or to devalue the work they do. But becoming them is just about as unattainable as becoming a real-life Disney princess, and we should recognize that.

Research published by LeanIn.org and McKinsey in 2015 concludes that, at the current rate of change, it will be more than 100 years before we see equality in the representation of women in corporate leadership. The technology industry alone spent a combined half a billion dollars or more on gender bias training, and it resulted in no measurable change whatsoever. Enrollment in technology majors at Stanford rose as much as 93%, but the number of women graduating from those majors dropped from 40% to 18%.

The 2016 update to the LeanIn.org/McKinsey study concludes that employees are not convinced that gender diversity is an imperative, despite compelling data demonstrating that companies with women in leadership significantly outperform their peers. Perhaps most important is the stark assertion that men and women are not having the same experiences at work; this impedes women from developing as leaders and from accessing the opportunities that will get them promoted.

The conversations we are having and the training we are sponsoring is not working to create change. Women will not pursue careers in technology, will not stay in those careers and will not be promoted into leadership positions in those careers if we continue to spend our time, energy and money on efforts we have proven will not make a difference in their experiences at work.

The companies whose leaders today decide to side-step the need to eradicate hidden gender bias, who decide to stop worrying about whether princesses are strong enough, who figure out how to inspire women to bring their ideas to the conversation and to contribute their perspectives in the innovation lab will not only benefit from improved business results but will be the beacon that draws the most talented women leaders to join them.

There are no princesses here.

The insurance industry is a $4.6 trillion market worldwide but lags on digitization and providing consumers great experience and service. In the coming three weeks, we will look in some depth at the five main challenges that startups are facing. Today, we will tackle Challenge No. 1. Challenge No. 1: Creating a dominant position in a big — but slow-growth — and competitive market Finding “Blue Ocean” is challenging in a low-growth large market such as insurance — especially compared with the impact of Google creating online advertising or Easyjet giving access to low-cost travel. These companies grew whole new markets using technology. By contrast, digital startups are unlikely to make the insurance market grow significantly in developed countries. After all, existing insurance penetration is high in both Western Europe and the U.S. This is different in markets such as India and China, which have relatively low insurance penetration among the growing middle classes, and in other underinsured markets in Asia and Africa. See also: 6 Charts on Startups, Greenfields, Incubators Although certain multinational brands are global, there are hardly any transversal insurance products. The reality is that insurance is consumed country by country. Even with harmonization of regulations across Europe or across U.S. states, there are critical differences. In addition, large companies such as car manufacturers, tech companies, energy providers and telcos with easier access to customers, more sophisticated data capabilities and continual customer engagement may find it easier to integrate insurance into their offerings themselves. BCG predicts that, with driverless cars and a move away from car ownership to car sharing and renting, between 20% and 40% of car insurance revenues from private individuals could potentially disappear by 2020. Takeout The opportunity centers on reacting to changing demographics and lifestyles that affect consumer behavior. New generations such as millennials (18- to 34-year-olds) have different lifestyles, expectations and attitudes regarding risk as compared with their parents. Millennials own less, have more flexible career paths, are likely to be more mobile (living in different cities or countries) and do not care about financial protection as much as previous generations. Can startups make insurance more personalized and specific for life changes, whether for an individual, household or business? Leverage the creation of parallel markets where insurance can be an integral part of the service. New disruptive technologies and services — such as driverless cars and smart living — create an opportunity for new agile insurance startups working with a white canvas. Traditional insurers will find it extremely difficult to grasp this because it involves internal transformation and new technologies. Other players could decide it is better to work with a specialist startup with a compelling solution covering customer engagement and data analysis as well as the requisite insurance services rather than develop their own full insurance offerings. See also: Startups: How to Find the Right Partner Identify and explain the benefits of insurance covers that are currently under-insured. In markets with high insurance penetration, there exists unlocked potential of uninsured people. For example, today, 20%  to 30% of insured persons in Germany do not have a private general third party liability cover. The challenge is to explain the benefits and to make it affordable. This could work by integrating these covers into other services or finding a better way to distribute such products. Go international with offerings and operations in multiple countries. A startup can operate in several markets and leverage its offering and platform. If there are any ambitions for startups to go international and operate in more than one country to reach scale faster, consideration of the following factor is important: recruiting an international team and setting up the technology. Can startups go further and allow easier insurance switching while moving countries? We are curious about your perspective.

Insurance technology spending is high. In April 2015, Celent estimated that global insurance technology spending would top $181.6 billion by the end of 2016. This spending will include a combination of standard modernization, keeping legacy systems alive and well, supporting infrastructure projects and (increasingly) building digital and data frameworks. Many insurers remain focused on upgrading or maintaining their core systems. The common internal debate is whether the insurer should maintain the legacy system or start over by adopting a modern solution. This debate almost completely ignores the proper approach to determining the answers to technology decisions, placing the cart squarely ahead of the horse. If one accepts the basic premise that core new business, policy, claims and billing management systems are really just table stakes, why not focus on the business — improving growth, increasing market penetration and improving both the combined ratio and profitability? If we do this, we are likely to achieve all of these things AND construct a technology framework that fits now and is flexible for the future. For the sake of conversation, I have come up with three areas where business focus will lead to the right kind of modernization and transformation. The first two are concrete business goals: reduce the cost per acquisition (CPA) and increase customer retention. The third is less concrete and more philosophical: embrace change by improving an understanding of the opportunities it may provide. Reduce Cost Per Acquisition The CPA is the largest cost in the current insurance business model (outside of claims). It is currently under pressure because of the rise in aggregators and comparison sites that are forcing insurers to sell standardized products for the least amount they can. The result is a market designed to churn because of a continual focus on price. See also: 4 Benefits From Data Centralization   How can insurers break out of this cycle, reduce the cost per acquisition and use the savings to remain competitive? Here are a few ideas:

• Insurers should consider a cloud solution for core systems/back-office administration. U.K. insurers have, unfortunately, been slow to adopt shared services and technologies when they are proving themselves in other industries and geographies. Now is the time to consider cloud solutions if they fit with cost reduction objectives and if they can sustain or improve service levels.
• The industry should use a permission-based consumer data storehouse. Churning policyholders benefits no one and costs all of us a great deal of time and effort. What is needed is a true permission-based marketing model, where consumers grasp the benefit of letting insurers see relevant profile information. This would enable the direct-to-consumer or small-business framework where insurers would provide a digital front-end that “pre-fills” the quote with existing data on the customer or other third party data, streamlining the process. It would also enable insurers to better match tailored products to prospects, instead of having to offer standardized products.
• Insurers should hone data-driven target marketing. Today’s data sources and analytics allow for much more granularity and fine-tuning in the marketing process. With the right tools, insurers can now use consumer-provided data and detailed third party data to provide qualified offers to only those consumers and small businesses that fit a certain product’s risk profile. This would reduce CPA and improve risk selection.

Increase Customer Retention With a high cost per acquisition, customer retention becomes an increasingly critical metric for insurers, particularly because initial acquisition costs are recouped over multiple years. The increasingly price-sensitive market has reduced the number of multi-year policyholders. Industry studies have shown a clear correlation between a customer having multiple policies with a single insurer and their retention rate. Yet with the exception of multi-car policies, there has been little effort in creating an overarching combined personal lines product with auto, homeowners put forward by U.K. general insurers. This is in stark contrast to insurers in the U.S. market that have been focusing on the customer relationship with a goal of a multi-policy environment and customer retention business processes. Most U.K. insurers’ core insurance systems are legacy systems built around the product, not the customer. Realigning technology choices, process reengineering and customer-centric product development will result in the ability to offer multi-risk and multi-year policies (and discounts) and preventive risk management services. These will help to build loyalty and retention. Embrace Change and New Ideas Technology is enabling exciting changes in insurance. Whether it is innovative new products, new customer relationship business models, implementing modern core insurance solutions, leveraging new data sources or embracing new technologies — each offers an opportunity to begin the journey to a new future that is rapidly unfolding in the industry. New technologies will give insurers improved data, better analytics and lower transactional costs through self-service. Consumers will benefit with services closer to an “Amazon experience” with a greater level of insurance understanding. See also: How Technology Breaks Down Silos To capitalize on the opportunities presented right now, insurers must embrace new ideas and change before new entrants do so and disrupt the industry. Insurtech is the conceptual umbrella containing insurance ideas and technologies that are rewriting the rules of insurance and helping insurers succeed. Internal education on the highlights of today’s insurtech landscape may be an excellent catalyst for change within your organization. Preparing for change should still include conversations about the core insurance solution. The core can serve as a catalyst for change instead of an inhibitor to market potential. Discussing even a small part, such as the financial benefits of core change, can fuel both creativity and a desire to create and capitalize on a new model. Nothing will pull leadership together faster than a plan for real growth and solid change where efforts are directly tied to outcomes. Those are healthy approaches to core conversations. So where do we begin? To begin, focus on business priorities. If you do this, your organization will end up with the right technology solutions and a core system that fits and supports the business. You’ll make technology investments, not expenditures. Your costs will be lower. Your customers will be more loyal. You’ll recruit better businesses. And you will keep the horse in front of the cart, enjoying the way systems and processes and people work in unity to accomplish goals.

The landscape for customer service is changing. New platforms are emerging that change how consumers seek service and engage with brands. In doing so, these platforms are disrupting the traditional call center model. Today’s call centers range from the ancient and decrepit to the ultra-modern and technologically streamlined. Despite the differences in capability, though, they still rely on the telephone to call and connect with customers. As we shift into the messaging era, this is going to change. The maturing millennial generation is sparking a mobile messaging revolution across all age groups. Text-based communication is fast becoming the most-preferred communication method. And to attract, engage, acquire and retain customers in the text-based era, businesses need a customer communication strategy that incorporates mobile messaging. Executives are facing three key challenges:

1. Offering a mobile-native, text-based customer service solution to keep up with changing communication preferences of consumers.
2. Satisfying the demand for always-on, 24-7 responsive service.
3. Maintaining cost-efficiency in the call center.

A solution comes in the form of new technology: chatbots and intelligent automation. Chatbots allow businesses to automate the 80% of general inquiries that are repetitive. This leads to a smaller volume of inquiries requiring live assistance from agents and reduces operational costs while maintaining -- or even improving -- customer satisfaction ratings. It’s this combination of chatbots and human agents that can usher businesses into the messaging era while reinventing the call center model. The Current State of Customer Service Every business strives to provide exceptional experiences that increase customer satisfaction and raise their Net Promoter Scores (NPS). The reality, however, is that executing an effective customer communication strategy is challenging. Often, exceptional customer service is limited by the capabilities of traditional service channels: email, social media and call centers. By 2020, customer experience will have a such a significant impact on business success that it’s expected to play a bigger role in competitive differentiation than price and even product quality. Customer experience and NPS are fast becoming the new business battlegrounds. Providing experiences that meet or exceed the ever-increasing demands of customers could be the difference between success and failure. Call center performance has a significant impact on a company’s NPS and customer satisfaction ratings. Given the direct and personal connection a call center enables between a business and its customers, the overall experience of the interaction can have a major influence on how that person perceives a brand on the 1-10 Net Promoter Score scale. And while call centers work positively by enabling direct connections between businesses and consumers, there are endemic problems for both sides. Businesses are faced with high operating costs and are vulnerable to changing communication trends. Meanwhile, consumers often have to deal with long hold times, outdated Interactive Voice Response (IVR) systems, inter-departmental transfers and inefficient service. See also: 4 Hot Spots for Innovation in Insurance   As new technology such as chatbots and intelligent automation emerges, any business that relies on strong customer service can benefit from innovation. There is a significant opportunity to gain competitive advantage and lead the market by developing call centers that are not only technologically advanced, but also resolve issues with far greater customer satisfaction. The ideal result is customer service that improves the relationship with customers while maintaining cost efficiency for the business. What follows is an outline of the current state of customer service in today’s fast-moving, on-demand and customer-driven world. We also detail how the call center can be reinvented through mobile messaging and intelligent automation to deliver a win-win solution for both businesses and customers. Connected and Demanding: Generation Z, Millennials, Gen X and Baby Boomers There is a reason why there is so much buzz around millennials: Their generation is one of the largest in U.S. history, and they are maturing into their prime spending years. Starting in 2017, they will have the purchasing power of more than $200 billion annually. The opportunity for businesses to drive revenue and gain market share with this generation is unprecedented. The driving force for new technology and communication trends Millennials are driving mobile and instant messaging adoption. Because they have grown up with technology and information at their fingertips, millennials are highly connected and expect 24/7, on-demand access to the businesses and brands in their lives. Gen X, baby boomers In addition, the millennial obsession with mobile messaging is influencing older age groups, with text-based customer service now an increasingly popular choice for generation X and baby boomers. Generation Z Millennials have also set the precedent for generation Z. Mobile messaging use is even higher among the first true digital natives; they place even more emphasis on personalization and relevance when interacting with companies. The Challenge of Delivering What People Want The adoption of mobile messaging as the preferred communication channel is forcing companies to change how they approach customer service. Today's call centers no longer meet customer expectations. From long wait times to frequent departmental transfers and ineffective IVR systems, customer service can be a frustrating experience for consumers. Now, in 2016, with the proliferation of new technology and 24-7, on-demand services, the shortcomings of customer-contact centers are even more apparent. The competition is fierce, and customers have no forgiveness for poor service. A sub-par experience can destroy a consumer's relationship with a business. Key Business Challenges Affecting Call Centers and Customer Loyalty The shortcomings of the current call center model and its inability to effectively meet the needs of today’s customer also represent a significant opportunity for businesses. There has never been a more appropriate time to dissect the call center and explore new ways to increase its effectiveness. Executives and business owners need to address the following three business challenges to ensure the future success of their contact centers:

1. Offering a mobile-native, text-based customer service solution to keep up with the changing communication preferences of consumers.
2. Satisfying the demand for always-on, 24-7 responsive service.
3. Maintaining cost-efficiency  in call centers.

Each of these areas needs to be explored to maintain, or even improve, customer loyalty and Net Promoter Scores. Challenge 1: Offering a mobile-native, text-based customer service solution One of the drawbacks of telephonic customer service is the limit imposed by the phone on call center agents; they can only answer one customer inquiry per call. This limit drives costs up. In comparison, using mobile and web-based chat, agents can effectively manage as many as five inquiries simultaneously. This significantly reduces operational costs while providing a better experience for customers. Fortunately, thanks to mobile messaging’s rapid rise in popularity, it’s now easier than ever to incorporate mobile chat into an existing customer communication strategy to better engage consumers. Mobile messaging is the modern vehicle for businesses to deliver great customer service at significantly lower costs. The result is a better customer experience that drives loyalty while improving the bottom line. See also: How Chatbots Change Open Enrollment   Using an intuitive interface familiar to more than two billion people, businesses can effectively engage with customers and fans using simple decision trees for fast and convenient issue resolution. Benefits of mobile messaging solutions:

1. On-demand customer service that allows consumers to get the information they need, when they need it, without having to look for it.
2. Faster issue resolution thanks to an agent’s ability to manage more inquiries simultaneously.
3. Reduced, or potentially eliminated, hold times.
4. Real-time conversational connections with customers.
5. Improved customer experience with greater omni-channel service capability.
6. Secure identity authentication and user verification.

Challenge 2: Satisfying the demand for always-on, 24-7 responsive service The role of automation, bots and artificial intelligence in customer communication has become an increasingly popular topic. And as the technology continues to develop, more businesses are starting to realize the benefits of automated customer service and how it can drive customer service ratings higher. Chatbots are virtual agents that operate through natural language processing, meaning they are able to absorb, identify and react to a number of different queries. These sophisticated programs and targeted automated strategies provide an efficient solution to handle the high-volume, repetitive inquiries that overwhelm call centers. Businesses are then freed to devote more time and resources to customers who need one-to-one conversations. They can deliver a far better customer service experience at a far lower cost. As with any emerging technologies, automation and chatbots need to be approached with tact. Currently, the best strategies use both human agents and chatbots. Businesses can test bot technology and assess what’s right for them without drastically affecting customer satisfaction. A good starting point is a website’s frequently asked questions. Today, people are more inclined to seek information themselves than engage with a human agent. Using chatbots to automate FAQs is a cost-efficient test that can form the foundation for larger automation plans as the technology develops. Chatbots can be used as the front-line customer service interface to answer the majority of repetitive inquiries. This combination helps businesses improve efficiencies without compromising customer satisfaction ratings. Challenge 3: Maintaining call center cost efficiency Businesses can improve customer communication and drive customer satisfaction ratings by following a simple five-step process to automation: 1. Opportunity Analysis

• Review customer service data
• Examine IVRs and CSR scripts
• Conduct Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis
• Identify all opportunities for automation

2. Chatbot Design

• Sketch blueprints including flow designs for all areas
• Identify integrations needed to enable bots

3. Engineering and Integrations

• Receive blueprint approval
• Develop bots for intuitive user experience.

4. User-Acceptance Testing

• Demo bots in test environment
• Adjust as necessary

5. Activation and Optimization

• Conduct marketing efforts for Phase I onboarding
• Track usage analytics and fine-tune
• Benchmark performance against key performance indicators.

With this approach, businesses are able to automate as much as 80% of low-level, repetitive inquiries, saving call center agents for the complex and uncommon issues that require the nuanced knowledge of a live agent. This results in faster issue resolution and more efficient service. Chatbots: An Emerging Technology Other technologies may help improve call centers incrementally, but chatbots offer the best, most revolutionary opportunity to scale their capacity and ensure future success. If archaic call center models can’t innovate and keep up with changing consumer trends, they’ll fast become obsolete. See also: Mobile Messaging: How to Meet Rules   As with any emerging technology, chatbots are still experiencing growing pains. They’re not perfect; key development issues must be overcome to improve the flow of conversation. Increased investment in chatbots and NLP will help the technology mature fast. And as it does, chatbots will increase in capability and become more common, providing new opportunities for businesses across all industries.