By now, you might be getting tired of hearing the term Insurtech. You may also be annoyed at everyone telling you about industry disruption. But there is no question that there is a high level of buzz, excitement, investment and activity in the insurtech space. The question is – does it really matter? Or is this just a phase that will fade away?

At SMA, we believe that insurtech definitely does matter. However, the implications are vastly different by industry segment and for different parts of the insurance business. Sorting out what it means for your little (or big) corner of the insurance industry can be daunting. But you must, whether you are an insurer looking for investment or partnering opportunities, an incumbent tech company assessing new competition or new partners, an insurtech company seeking success or an investor trying to gauge where to focus.

See also: InsurTech Need Not Be a Zero-Sum Game  

You need to create short lists of the insurtech companies most relevant to your particular situation in specific domains. This is imperative, given that there are now well over 500 insurtech companies, and that number is growing every day. Did you know that there are well over 100 companies focused on disrupting distribution alone? Or that approximately 10% of the companies are specifically focused on new solutions or models for the claims ecosystem?

You might believe that these companies don’t really understand insurance and are destined to fail. That will certainly be the case for many. Some have already fallen by the wayside. But making the assumption that it doesn’t really matter to your business would be a serious mistake. The insurtech companies that are successful are bound to make an impact, and no part of the industry is immune to the potential implications of the insurtech movement. Every company, regardless of size or market position, must take a proactive approach to assessing insurtech to understand the both the competitive threats and the opportunities to offer new products and services, improve operations, or even introduce brand new business models.

See also: Matching Game for InsurTech, Insurers  

Does insurtech matter? History will be the judge, but all the signs point to an industry on the verge of disruption, and the many insurtech companies are bound to play a major role in industry transformation.

More information on the new research report, The InsurTech Universe: Understanding Company Positioning and Maturity, is available at this link.

Identity theft and countless other scams often are among the first life lessons learned by newly minted college students. As summer draws to a close, members of the Class of 2020 face an unimaginable number of potential pitfalls. Be prepared to meet the specific challenges ahead. Most incoming college students, at some point, will find themselves feeling overwhelmed by their newfound freedom. With the exception of camp, it will be longest stretch of time many kids have been away from home. And for the majority, it will be the first time they are in charge of getting three square meals a day while staying on top of a busy schedule with a host of deadlines, something that can get away from them in the blink of an eye. On top of all that demanding stuff, it is also the first time many will have to deal with the nitty-gritty of personal finance, health care and all the other facts of life that involve the trafficking of personal identifying information. And these deliverables, if they aren’t carefully tended to, can create major havoc. This is where it becomes important to make sure that your children are aware of the dangers they will confront on a daily basis. See also: Identity Theft Can Be Double Whammy Bottom line: There they are, completely independent, free to study or not, stay out all night at the coolest venues (or not), and free to give their personal information to the first identity thief that comes along asking for it—or not. So, how do you keep them safe? A good place to start is with an actual or virtual sit-down, where you have a serious conversation about the dangers they face. Here are a few not-fun-at-all hot spots that come to mind. 1. Credit cards: real and make-believe While not at the fever pitch of the years preceding the enactment of the CARD Act, when banks littered college campuses with sign-up tables offering every inducement imaginable from free pizza to free T-shirts to extra points toward plane tickets and hotels for spring break, your kids are going to be offered credit cards. Managed correctly, a credit card can help them build the kind of low-risk profile that inspires mortgage and auto lenders to say yes to young people looking to finance their purchase of a home or a car. Credit is their first portfolio. (They can monitor their progress toward building good credit by viewing two of their credit scores for free each month on Credit.com.) But credit also can be bad. There are scams out there that look like credit card offers but are actually nothing more than fraudsters collecting personally identifying information to be used to open accounts in your child’s name. The best way to avoid this is to counsel your child to get a credit card on a reputable site or call the number on the back of one of your credit cards. There will be representatives who can steer them to the credit product that is right for them. (Keep in mind, they may need you to be involved in the process anyway, since the CARD Act prohibits banks for lending to anyone under 21 unless they can demonstrate an ability to repay or have a willing co-signer.) 2. Fake textbook sites Textbooks can be very expensive. If an online book vendor offers deals that look too good to be true, it could well be a scam. Counsel them to never trust, always verify and only use sites that are recommended by people they know or that have been thoroughly reviewed. 3. Scam scholarships There is no such thing as a scholarship that requires an application fee. Tell your kids to discuss all matters regarding scholarships and financial aid with you. 4. Phish ahoy! Often deals or study aids come in the form of a link texted, emailed or floated as a post on social media. The basic rule here should be, When in doubt, check it out. Google is your child’s friend, as is a moment’s hesitation to decide whether this or that offer makes sense. Once again, if it’s too good to be true, and if they take the bait, the joke could be on them. 5. Everything new If it is new to you, you might just hesitate and wonder what the catch is. For your kids—digital natives that they are—nothing new is suspect. It’s expected. Spotting frauds whether they are services, new ways to move money around or apply for jobs, credit or scholarships will all seem like the same old thing to them. Teach them to make phone calls and do background checks on new things before using them, because there are myriad “killer apps” out there. There is no way to fully prepare young people for the threat culture they are about to enter, but with some wise counsel they can be pointed in the right direction, which is a good place to start. Hopefully they’ll listen. This post originally appeared on ThirdCertainty.

What is pain? According to Merriam-Webster, it is "the physical feeling caused by disease, injury or something that hurts the body." Which is different than suffering: “to become worse because of being badly affected by something." Often, these words are treated as synonyms (or as a single word, "painandsuffering") when they are actually quite different. Pain is what happens to you. Suffering is how you handle it. The confusion of these two terms can create issues. The American Pain Society in 1996 described "pain as the fifth vital sign" (giving it equal status with blood pressure, heart rate, respiratory rate and temperature). The phrase created a perfect storm because it coincided with the message being delivered to medical schools and the healthcare industry that doctors had an opioid phobia and were under-treating pain. That was followed in 2000 by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) establishing standards for pain assessment and management. Then the Veterans Health Administration incorporated the new emphasis into its national pain management strategy. So, regardless of where a patient was treated and by whom, the (subjective, patient-driven) assessment of pain was one of the first questions asked and often drove treatment plans. Then the new approach began to be questioned. A 2006 study by the VA found quantifying pain "did not increase the quality of pain management." In June 2016, the American Medical Association recommended removing "pain as the fifth vital sign" and connected the idea to the beginning of over-prescribing of opioids. Opponents of the change say it will "make it even more difficult for pain sufferers to have their pain properly diagnosed and treated." Proponents of the change say "pain is not a vital sign, but more of a symptom, and cannot be measured." So far, pain is still the fifth vital sign. See also: Health Startups Go After 3 Pain Points   The biggest problem is unrealistic expectations - patients often are told or come to believe they will be pain-free. When they're not, and their condition becomes chronic, it sows doubt in the mind of both the patient and clinician. The second biggest problem is that often the circumstances beyond their physical pain is ignored. I am convinced that dealing with what happens between the ears and at home is as important as what is physically wrong with the body (i.e. the biopsychosocial model). So how is "pain as the fifth vital sign" measured? Sometimes it's a scale of frowny face to smiley face. But often it's a comparative pain scale, from 0 to 10. The Health Organization for Pudendal Education (HOPE) offers the best description:

• 0 - No pain - Feeling perfectly normal.
• 1 - Very mild - Barely noticeable pain, like a mosquito bite or a poison ivy itch. Most of the time, you never think about the pain.
• 2 - Discomforting - Minor pain, like lightly pinching the fold of skin between the thumb and first finger with the other hand, using the fingernails. Note that people react differently to this self-test.
• 3 - Tolerable - Very noticeable pain, like an accidental cut, a blow to the nose causing a bloody nose or a doctor giving you an injection. The pain is not so strong that you cannot get used to it. Eventually, most of the time you don't notice the pain. You have adapted to it.
• 4 - Distressing - Strong, deep pain, like an average toothache, the initial pain from a bee sting, or minor trauma to part of the body, such as stubbing your toe really hard. So strong you notice the pain all the time and cannot completely adapt. This pain level can be simulated by pinching the fold of skin between the thumb and first finger with the other hand, using the fingernails and squeezing hard. Note how the simulated pain is initially piercing but becomes dull after that.
• 5 - Very distressing - Strong, deep, piercing pain, such as a sprained ankle when you stand on it wrong, or mild back pain. Not only do you notice the pain all the time, you are now so preoccupied with managing it that your normal lifestyle is curtailed. Temporary personality disorders are frequent.
• 6 - Intense - Piercing pain so strong it seems to partially dominate your senses, causing you to think somewhat unclearly. At this point, you begin to have trouble holding a job or maintaining normal social relationships. Comparable to a bad non-migraine headache combined with several bee stings, or a bad back pain.
• 7 - Very intense - Same as 6 except the pain completely dominates your senses, causing you to think unclearly about half the time. At this point, you are effectively disabled and frequently cannot live alone. Comparable to an average migraine headache.
• 8 - Utterly horrible - Pain so intense you can no longer think clearly at all, and have often undergone severe personality change if the pain has been present for a long time. Suicide is frequently contemplated and sometimes tried. Comparable to childbirth or a really bad migraine headache.
• 9 - Excruciating, unbearable - Pain so intense you cannot tolerate it and demand pain killers or surgery, no matter what the side effects or risk. If this doesn't work, suicide is frequent because there is no more joy in life whatsoever. Comparable to throat cancer.
• 10 - Unimaginable, unspeakable - Pain so intense you will go unconscious shortly. Most people have never experienced this level of pain. Those who have suffered a severe accident, such as a crushed hand, and lost consciousness as a result of the pain and not blood loss have experienced level 10.

How many times have people said their pain is a 9 or 10 (or a 47) when they're conscious, sitting upright and drove themselves to the doctor's office? I have seen that manifold times in hundreds of chronic pain workers' comp claims since 2003. But it's easy to succumb to that kind of self-assessment ... I had the flu in February and went to a CVS Minute Clinic. One of the initial questions the nurse practitioner asked me (having been prompted to do so by her practice management software) was my level of pain. I truly felt miserable -- body aches, high temperature, sneezing. For a brief moment, because I wanted to ensure a prescription of Tamiflu, I wanted to catastrophize ("an irrational thought a lot of us have in believing that something is far worse than it actually is") and say I was a 9 or 10. But then I remembered all the times I had argued against that approach. And I remembered exactly what a 9 or 10 meant. So I resisted the urge and gave myself a 5 rating. I still got the Tamiflu that started the journey to recovery. See also: Better Outcomes for Chronic Pain   Pain is complicated and individual, so there is not a single answer for quantifying and treating it appropriately. However, I have three high-level suggestions:

• Re-calibrate the scale. The clinician should educate patients on the true meaning of 0 through 10 and help them decide on a lower number that better describes their pain. That would require an actual dialogue between the clinician and patient. I understand that pain is unique and personal. But if patients can convince themselves their pain is a 6 instead of a 10 (or a 47), then managing it seems much more achievable.
• Be honest. If there is going to be residual, chronic pain, the patient should know it. And own it.
• Manage the pain. In my opinion, "pain management" is a term that is often misused. You can't manage your pain if you're comatose (i.e. sedated on opioids, benzos, muscle relaxants, et al.). Yet we often see "pain management" as a series of pills or injections that are passive and repetitive (in some cases, I think pain management clinics have become "addicted" to the repeat office visits). At some point, patients need to manage their pain rather than allowing the pain to manage them, and be taught how to do that. That could mean yoga, an active lifestyle, better nutrition, biofeedback, proper sleep hygiene, deep breathing exercises, mindfulness, volunteer work or any number of other methods in combination or isolation that work for the patient. The key is an internal locus of control ("he or she can influence events and their outcomes").

I'm not saying pain isn't real. For those dealing with chronic pain, it is very real. But I've chatted with and observed too many people with significant chronic pain who overcome it on a daily basis to live productive and happy lives. I know that chronic pain does not have to win. Instead, we need to re-define pain, re-define suffering and help people take back control of their lives. I will finish with this wisdom from Dr. Stephen Grinstead:

• Thoughts cause feelings
• Thoughts + feelings = urges
• Urges + decisions (choices) = actions
• Actions cause reactions
• Reactions could help or hurt management of pain

In other words, how you think about pain influences how much power pain has over you. So think differently.

Once disaster strikes, the first priorities are always safety and preservation of property, but there are priorities to consider ahead of a loss to avoid unexpected surprises. Disaster mitigation and restoration is a critical service after property damage, and how you manage it may affect the outcome of your claim. Though there are many capable firms that specialize in property damage clean-up and restoration, there are some that will make mistakes, and others may even take advantage of the situation. When it comes to recovering the cost of mitigation and restoration services for an insurance claim, any mishaps can create big problems that may leave you stuck with the bill. See also: Are You Ready for the Next Disaster?   Here are five techniques to prevent potential problems before they arise:

1. Vet your emergency response team prior to loss -- Preparation is the key in any endeavor, and with property damage claims you cannot be too prepared. Recovery service providers should be identified and interviewed. Make sure the company you choose will be able to handle your potential issues. Involve your insurer during vetting. There are “approved” vendors that insurance companies recommend; however, just because they are “approved” does not mean there will not problems. Notify the insurance company of who you plan to use, as well.
2. Clarify and document scope of work -- Be clear on scope of work with the recovery firm and make the adjuster part of that conversation. Often, emergency response does not follow the normal protocols of a typical project. There likely won’t be time for detailed estimates, so try to get the adjuster to approve work in real-time to avoid second guessing.
3. Take a hands-on approach -- Your property may still be underwater, but once access is granted you must be hands-on. No one should have access to your facility without the presence of a company representative. Assign a property supervisor to the affected site to keep track of who is there and what they are doing. It’s your property and your responsibility. The bigger the loss, the more people there will be coming in and going out, so it is vital to have a company representative onsite to observe and answer questions.
4. Audit contractor charges before approving -- The first weeks after a loss are chaotic. It’s important for policyholders to put controls in place to monitor activity and to verify that work has been completed to specifications and according to the terms of the agreement. Reimbursable insurance expenses should be separated and audited prior to payment for proper detail and accuracy. This needs to be done efficiently in real-time. If you don’t have the resources, this step can be completed by your claim preparation accountants, i.e. forensic accountants. Having forensic accountants on your team, along with your technical experts, can let you process this information in the context of insurance recovery. Don’t assume your forensic accountants will automatically audit invoices. Identifying errors or, worse, fraud is critical to avoid delays in payment or project completion.
5. Address issues immediately -- When the first invoice arrives, insurance companies may act surprised and even deny coverage, especially if the steps above have not been followed. Make sure to get the parties together to discuss the issues. Don’t procrastinate and don’t assume. It is important to be proactive with any potential discrepancies. The policyholder is responsible if there are unresolved differences. If the adjuster disagrees with the work performed and the invoices are paid, it may be difficult to recover all your expenses.

See also: A Real Checklist for Real Disasters   The immediate aftermath of a disaster is stressful and hectic. Preparation and communication can help you weather the storm and minimize unwanted surprises when you’re looking for claim payment. Having an experienced and independent forensic accounting team will reduce the stress, the workload and reimbursement issues. Per the tagline for one of the largest restoration firms, in the end you want it to be “Like it never even happened.”

During my tenure at both British Petroleum and Walmart, I tried various forms of wellness, but to no avail. There were never any savings, participation was low, employees didn’t like it, and administration was complex. I’ve continued to follow the wellness industry but could never see any genuine success stories. The gratifying news is that I’m not the only one to notice any more. The Los Angeles Times called wellness a scam while Slate just recently called it a sham. And Al Lewis, my co-author on Cracking Health Costs, would say they’re being polite. Most recently, he has noted that the 2016 Koop Award is going to a vendor whose own data shows they made employees unhealthier. See also: The Yuuuuge Hidden Costs of Wellness   Speaking of Al Lewis, he has now entered the employee health field directly with Quizzify, which transforms the boring but long-overdue task of educating employees about health, healthcare and their health benefit into an entertaining trivia game. As a colleague and co-author, I have an obvious conflict of interest as I describe my impressions below, so don’t take my word for any of this. Just go play the sample short game right on the website, and ask yourself if you’re learning anything useful, right off the bat. Click here for a link to Quizzify. Do you think your employees already know this stuff? It’s doubtful. Americans vastly over-consume healthcare; it’s almost free at the point of service once the deductible is satisfied, and they are being bombarded with ads and marketing, as are their doctors. Nothing can solve this massive problem, but Quizzify can help, and is about the only vendor even trying. Backed by doctors at Harvard Medical School and a 100% savings guarantee, Quizzify provides a plethora of shock-and-awe, “counter-detailing” questions-and-answers (with full links to sources) that will educate even the savviest consumers of healthcare and entertain even the dourest CFO. Nexium? Prilosec? Prevacid? You wouldn’t believe the hazards of long-term use. Then there is the sheer waste and possible harm of annual checkups, well-woman visits, PSA tests and so on. Speaking of hazards, CT scans emit as much as 1,000 times the radiation of an X-ray. Uninformed people are going clinics that will give them a “preventive” CT scan. If a doctor suggested patients have a series of a thousand X-rays for “preventive” reasons, there would be a stampede out of the office. On the other hand, there are instances where people should go to the doctor but don’t. Swollen ankles? Painless, perhaps, but you may have a circulation problem, possibly a serious one. Blood in your urine, but it goes away before you even make an appointment? That could be a bladder tumor tearing and then re-attaching itself, especially if you smoke. And show me one health risk assessment that correctly advises people over 55 or 60 to get a shingles vaccine if they had chicken pox as a kid. Then there are the health hazards of everyday life. Those healthy-sounding granola bars are full of sugars cleverly hidden in the ingredients labels. And whoever says vaping is safer that smoking better not be pregnant, because for pregnant moms, incredibly, vaping could be worse for the unborn baby. Just as with the shingles vaccine, chances are your HRA is silent on the texting-while-driving (TWD) issue while obsessing about seat belts, but TWD is by far the more underappreciated hazard. See also: Wellness Promoters Agree: It Doesn’t Work Your HRA is probably also silent on the health risks of loneliness, poor spending habits, boredom and most of the other major health risks Robert Woods, PhD, and I describe in our book, An Illustrated Guide to Personal Health. Quizzify has many questions on spending habit, but, if I had one complaint, it would be that (at least in the questions I’ve seen) Quizzify doesn’t address these risks we’ve described in this book. One of the largest health risks that workers have is being in a job you hate. You won’t see that question on anyone’s HRA either, or in Quizzify. That issue could lead to mass resignations in some pressure cooker companies. Scores and scores of people have told me they fudge answers on HRAs, anyway. Interestingly, they feel they are on the ethical high ground to do that because of the goofy, nosy and intrusive questions they are asked to answer, e.g., asking about your pregnancy plans in the future. Quizzify, on the other hand, encourages people to cheat. Quizzify wants you to look up the answers because that’s how you learn. So instead of denying human nature, Quizzify channels it. Conclusion: if you offer old-fashioned wellness, walk, don’t run, to the nearest exit. If you want to look at something that shows huge promise, check out Quizzify.

In my post last month, I discussed why the insurtech revolution should be focusing more on addressing the protection gap, thereby growing the pool of insurable risks, rather than figuring out how best to eat the insurance incumbents' lunch. A

t a conference in February, Tom Bolt of Lloyd's noted that an increase of 1% in insurance penetration can lead to a 13% drop in uninsured losses and a 22% drop in taxpayers' share of the loss. The key to increasing penetration is lowering distribution costs to make products more affordable. That is where insurtech can come in.

Many recent startups have business models looking to tackle the excessive intermediation costs that exist in the current insurance value chain. Sadly, when a catastrophe strikes areas of low insurance penetration, those communities not only suffer from the difficulties of having to seek aid—which can take three-plus months to reach affected zones—but also face the prospect of a significant drag to economic growth.

It is unsurprising, therefore, that governments in vulnerable countries are keen to improve their “resilience” and seek solutions to better prepare themselves for catastrophes by working with the likes of the World Bank, the UN and the recently established Insurance Development Forum (IDF). Interestingly, AIR Worldwide announced recently the Global Resilience Practice, which will be led by former U.S. presidential adviser Dr. Daniel Kaniewski.

See also: InsurTech Need Not Be a Zero-Sum Game  

As well as providing low-cost distribution models in new markets, a related opportunity I see for insurtech is working together with the insurance industry in the growing field of resilience analytics. As Robert Muir-Wood recently pointed out on RMS' blog, the claims data gathered by insurers — which historically has been used for the pricing and managing of risk — have the potential to also be used to reduce the potential for damage before the event.

Insurtech companies could work with government authorities to pool this claims data, leveraging it with other key data from external sources and then using the results to influence urban resilience strategies. There are inevitable doubts over the willingness of insurers to share their data, but agile and thoughtful startups are likely better placed to be able to find insights in a world of abundant unstructured data than the more technologically challenged incumbents.

The current size of the protection gap is a failure of the insurance industry, and any companies that can help address it will not only be first movers in new markets but will also be adding social value and much-needed resilience to vulnerable communities all over the world.

Building on T.J. Geelen’s blog post about the thriving fintech ecosystems in Asia, I’d like to share with you some insights relating to the emerging insurtech ecosystem in the region. Although insurtech in Asia is in its infancy, since 2015 we’ve seen a surge of interest. By the way, I’m a big believer that Asia has a real potential to power the next wave of global insurance innovation.

[The other three parts of this series can be found here and here.] “Power is the ability to define reality and to have other people respond to your definition as if it were their own.” – Wade Nobles “Words are powerful. Old and inaccurate descriptors, and the inappropriate use of these descriptors, perpetuate negative stereotypes and reinforce an incredibly powerful attitudinal barrier.” – Kathie Snow Workplaces are microcosms of society and can be powerful change agents when they create caring cultures through attention to how suicide and mental health are discussed. It is difficult for us to write about language and mental health in a simple “Say this” and “Don’t say this” way, but we must strive to do better. Generally, clinicians dominate the discussion, but thoughtful language about mental health and suicide does not rest on diagnostic categories. Rather, it tries to communicate more clearly, accurately, individually and holistically about the experience. We must constantly look to find language that is dignified, empowering and inclusive as well as being as descriptive as possible. See also: The Daily Grind Is Good for the Mind   It is not easy to find “the best” language, but we can do better. 1. The terms that are used are often clinically based and clinically biased. The term “mental illness” puts the descriptor of a person in medical language, even though the person may not always wish to be identified based on a medical perspective. The medical model contributes to rampant oversimplification that looks like this: “All that has to be done is to get these ill people to seek treatment; they take a pill, and they are fixed!” Diagnosis serves the medical practitioner in treatment planning, but it does not provide good information or understanding about the whole person and encourages us to see a person only in terms of a medical condition. And diagnosis is often incorrect, so it should not be the focus of how we educate. Although it is very common for people who have received a label regarding mental health or substance use to have a significant history of trauma, the correlation is ignored in the language, and often in treatment too. Only the set of “symptoms” currently seen is addressed. The trauma is not. 2. The choice of words is not mindful. The word “suffering” is used often, as in “people who suffer from depression.” This paints a pathetic picture of nothing but suffering, which is a fallacy, while suggesting passive inaction. Another common term is “the stigma of mental health.” In fact, the stigma is an attitude of prejudice toward a group of people. See below for suggested alternatives to the term. 3. Terms promote “other than” thinking. The words “disorder” and “disability” inform us that those who fall into these categories are other than “ordered” or “able.” “Order” and “able” are the givens, the desirable things. “Dis” implies that a person described this way falls short. Consider this: the term “non-white” is not used to name a person who is other than Caucasian, because it would be deemed to be disrespectful. Unfortunately, we do not have a wording solution for mental health. 4. Better terms require more words. We are forced to use terms that represent dominant culture mindsets, even though they are just labels, not the “truth.” For example, a better way of saying “a person who has a mental illness” could be to say: “a person who has the experience of having been assigned a medical label in the category called ‘mental illness.’“ But this makes writing and speaking very cumbersome. 5. We do not have consensus around best language. Inside what is known as the recovery movement, we do not have consensus on best language, and that is okay. Let’s all keep thinking about this, talking to each other and pushing collectively toward better communication. The chart below provides some principles of progressive language. The suggestions that appear in the right-hand column are far from perfect, and we hope that they will continue to adapt and improve. To fulfill our desire to support self-determination, please note that if a person with the lived experience of a mental health challenge wishes to identify himself using language from the left-hand side of the chart below, we support that choice. (This is not an exhaustive list, and for reasons of space does not hold all the terms and usage that we wish would change.) Portions of this chart have been adapted with permission from Each Mind Matters, California’s Mental Health Movement, funded by counties through the Mental Health Services Act (Prop 63). See also: Why Mental Health Matters in Work Comp Words matter, especially where there is such a long history of marginalization, misinformation and mystery around daunting topics. When it comes to language related to mental health, we may not have all the right answers, but many of us are in the struggle to do better.

The definition of insanity is doing the same thing over and over and expecting different results, right? The reality behind, and perhaps even the origin of, this statement is the simple fact that change is hard. This is especially true in the antiquated, paper- and process-laden insurance industry, which has resisted any kind of fundamental upgrade for decades. In the meantime, other industries have raised the bar of consumer expectations to a level where it is now unreasonable for the insurance industry to not respond. In identifying what is needed to improve self-service opportunities, access, prices, personalized product variations and, in turn, the entire customer experience overall, insurers inadvertently shone a spotlight on the industry’s enormous technology gap. And, having made significant money in fintech, the investment community is driving considerable interest in insurtech. See also: The Formula for Getting Growth Results   Insurers are ramping up to take back control from the mentality of the “way it’s always been done” and “if it ain’t broke don’t fix it.” There are three things that insurers can do to change the insurtech definition of insanity, including evaluating and overhauling processes, establishing a transformation team and doing a little mythbusting. Reinventing the Wheel First things first. Take a good hard look at your processes, keeping in mind that, without a change in process, there will be no change in results. It’s time to reject, revamp and reinvent processes that were created as workarounds for things legacy systems can’t and won’t do. The insurance industry has accepted changes already in the last several years that no one could have predicted 10, 15 or 20 years ago. And, the on-demand economy is pushing further changes in product definition – what is billable and in what increments, who owns information, where it should be stored and who should have access. The processes that drove the insurance industry yesterday do not have a carte blanche license for tomorrow. Rubber, meet road. Empowered AND Accountable Second, choose the right transformation team. This may be made up of internal insurance domain subject matter experts (SMEs), of IT professionals with a working knowledge of the existing infrastructure and even of external insurtech vendor partners offering expertise with emerging technologies. But be aware that, as important as the makeup of the team is the mandate of the team; the transformation team must be both empowered and accountable for decisions and results. The right people will rise to this challenge instead of shying away from it. The insurance industry must collectively do a better job of creating an innovation environment where failure is a learning experience and not a cause for dismissal. Shiny Bubbles? Third, insurers must become futurists, fortune tellers and mythbusters. Sound unlikely? Admittedly, this is probably not going to happen, but in the absence of true foresight (or ownership of a Ouija board), insurers must avoid getting enamored of the next big thing or shiny object. In the past, technology vendors have been criticized heavily for throwing big advertising and marketing dollars behind vaporware, or going to market with half-finished products and using insurer customers as unsuspecting development partners. This trend is no less prevalent in the new insurtech revolution or among startups, as opposed to incumbent insurance technology vendors. Desire to take advantage of the latest technology trend or to jump on the insurtech bandwagon should not outweigh prioritization of technology initiatives with tangible business value, or due diligence to determine if a product is actually present behind the marketing and advertising curtain. See also: Matching Game for InsurTech, Insurers Resistance is Futile Maybe the industry is taking the first step in a recovery program. Insurance has recognized there is a problem to be solved, and, by and large, there is acceptance that “resistance is futile.” Few insurers will maintain that the status quo must stand, technology advances must not be incorporated, products must not be made more flexible and processes must not be changed. Technology can help the industry meet the demands of modern consumers, attract new talent, protect policyholder data, provide mobile access and on-demand products and relate better to Millennials but only if evaluated and implemented quickly and responsibly, and in conjunction with substantive process change. Those who don’t believe this to be true, and who are insistent on continuing to resist change, are likely to be victims of their own insanity.

“Workplace Wellness Programs Are a Sham“ is a good article in Slate by L.V. Anderson. This is a must read for people who remain true believers that workplace wellness will improve worker health. “The idea behind wellness programs sounds like a win-win," Anderson writes. Alas, history is full of “win-win” ideas that were destructive, costly or ineffective. She describes the infamous “doublespeak” of Safeway CEO Stephen Burd’s description of success with Safeway’s wellness program. Anderson writes, “As it turns out, almost none of Burd’s story was true.” (Regular readers of my blog will know I’ve written about the Safeway nonsense before.) For decades, everyone knew that an annual physical was a great way to stay healthy, but various studies, including the famous New England Centenarian Study, have exposed that as a myth, too. See also: A Proposed Code of Conduct on Wellness   Antibacterial soap, anyone? Sounded like a great win-win, no? The FDA finally outlawed it. In my book, An Illustrated Guide to Personal Health, written in 2015 with UNLV Professor Robert Woods, Chapter 4 was titled, “Avoid Antibacterial Soaps and Gels.” Why? “Overuse of antibacterial soaps and gels can reduce the effectiveness of antibiotics you may need someday…. They are helping create antibiotic-resistant germs.” Back to wellness failures. Companies in the U.S. have spent huge dollars trying to keep employees healthy through methods that are shams. It’s time to move on. I immodestly include the following quote from Anderson’s article: “You might think of Al Lewis, Vik Khanna and Tom Emerick as the Three Musketeers in the fight against wellness programs.“* Al and I are co-authors of the Amazon best seller, Cracking Health Costs. It describes flaws in typical corporate wellness schemes, which while profitable to wellness vendors are useless at best and can actually be harmful to workers health at worst, not to mention the inconvenience and costs of going to doctors for all that screening. Concerns about wasted productivity, anyone? How can wellness programs harm worker health? One way is by promoting gross over-testing and excessive screening by tools that have very high error rates and rates of false positives, e.g., PSA screens. One good byproduct of dumping your wellness program is to avoid all the costly and burdensome reporting ACA requires. Yet another good byproduct is letting your employees do their work at work instead of spending non-productive time every year in wellness lectures, filling out health risk assessments, reading wellness-related emails and brochures, etc., etc., ad nauseum. How can “wellnessophiles” in companies truly believe that their employees don’t already know that smoking, overeating, lack of exercise and excessive consumption of concentrated sugars are not good for them? Do wellness proponents truly believe that the employees’ doctors haven’t already addressed those issues…not to mention public service announcements, health classes in high school and so on? Do proponents think their employees who smoke have never noticed warning labels on cigarette packs? I meet a lot of people from various walks of life. Occasionally, I ask them if their employer has a wellness program and, if so, what do they think about it. The typical first reaction is they roll their eyes. The most common comment is that the company’s wellness program is “just another [insert unflattering adjective here] HR program.” That’s usually followed by comments best described as lampooning the programs, as in “you’re not gonna believe this but…” type of comments. Interestingly, I meet HR executives who admit their wellness program are ineffective and costly, yet they cling to them. They usually give one of two reasons. One is that they don’t want to admit that their program is a big waste of money. Another common rational is some version of “Too many of our employees are unhealthy; we gotta do something.” (I put that in roughly the same category as, “the beatings will continue until morale improves.”) That line of thinking is bureaucracy at its worst. You would never spend your own money that way…or maybe they would?  Hmm. I get asked, if not wellness then what? My reply is anything that might actually save money or get better care for your workers, e.g., centers of excellence and direct contracting with providers. There is some promising work on reference-based pricing and better pharmacy management. Also, I believe we may have a surge of international medical travel in the future, too, especially to places like Health City Cayman Island (HCCI), about an hour’s flight from Miami and one of the best-quality hospitals and clinics in this hemisphere. I have visited HCCI a number of times and met a number of their surgeons. They are excellent. See also: EEOC Caves on Wellness Programs   I tried various forms of wellness in my career of running large sell-insured plans. I tried to make them work, but in the end none of them were effective, and some actually drove up health costs in a way a steely-eyed CFO would quickly understand. For about half my career, I reported through the CFO chain, not HR. CFOs really get the numbers and ask the tough ROI questions. HR executives, take note: You can increase your status and respect if you just get out of wellness. Again, it’s time to move on. While wellness at work was a noble notion and one that made sense to many on the surface, it’s time to “fess” up to your bosses. They will appreciate your message and appreciate the reduction of wasteful spending. Tom Emerick’s latest book is An Illustrated Guide to Personal Health. For further information on this topic, see the They Said What blog by Al Lewis and Vik Khanna.