Insurance may be facing an existential threat about its relevance. Throughout my career, I’ve witnessed the insurance industry overcome stresses such as low interest rates, a soft market and reserve inadequacy — among other things. But with evidence abounding that this sector is not respected — or even liked very much — insurance is facing a burden that may prove to be too heavy to handle. Traditional insurers are burdened with centuries of development that got them to this point. See also: Lemonade: A Whole New Paradigm   As I leave more than a quarter of a century within the traditional insurance industry and embark on a new chapter as chief compliance officer and general counsel of Lemonade, I realize that, although this is a late career move, this is anything but sudden. I have been working with Lemonade since its inception and through to its launch in New York a few weeks ago. I have come to know the people and the vision — and both are remarkable. But beyond the people and the vision, I’m betting on Lemonade because it is unburdened by legacy. It has been purpose-built to fulfill the traditional role of insurance while mitigating the conflicts that threaten the relevance of traditional insurance companies. This problem is routinely parodied in traditional insurer advertising. Lemonade set out to solve the problem instead. Innovation carries its own existential challenges, of course. Chief among these is having to exist within a regulatory environment designed for a different time. The challenge for Lemonade and its regulators is ensuring financial solidity and fair treatment of policyholders and claimants, without making Lemonade into just another traditional insurer. The positive experience of getting licensed in New York illustrated that is possible to strike a balance that allows for innovation while putting the consumer — and the law — first. Obstacles are never greater than when trying to create something, especially in an industry as deeply regulated and tradition-bound as insurance. But the founders and people of Lemonade have managed to create something unprecedented: a peer-to-peer insurance company. This would not have been possible without the unique combination of technology and insurance expertise that Lemonade has assembled and that it continues to build. The challenge is to marry the cultures of regulation and innovation. I’m convinced Lemonade will bring insurance to 21st century consumers who have learned to shun insurance and insurers. Lemonade will make insurance relevant to the times and will create an experience that is not only transparent and easy, but carries with it social good. In some cases, this will require changes in the law, but, in most cases, it will not. In all cases, it will require regulatory officials of vision, skill and courage — just as was demonstrated in one of the fintech capitals of the world: New York. Both personally and professionally, I see Lemonade as both a challenge and an opportunity. The high points of any lawyer’s career are those exhilarating moments when obstacles are overcome; the greater the obstacle, the greater the exhilaration. See also: It’s Time for Some Lemonade   The opportunity is to meet this challenge and to help create a new paradigm for an industry in which I have spent three decades. In private practice, I have been privileged to advise many creative business people. With Lemonade, I have the opportunity to be a principal in change and help make insurance relevant again.

A monstrously great haunted house is often one that projects an aura of terror! But managing the haunted house doesn’t have to be a nightmarish experience. What spooky challenges could you face? Take a tour of Aon’s haunted house video… if you dare....  

The third annual HITLAB Innovators Summit and World Cup Competition will be held at Columbia University in New York on Nov. 29 to Dec. 1. This outstanding summit brings together the best and the brightest from the emerging healthcare technology industry, academia, medicine, public health and healthcare business leaders. This year’s summit is titled; “Opportunities and Obstacles in Digital Health Diffusion,” and it will include a panel of experts who will also serve as judges when the summit culminates in the HITLAB World Cup global health innovation competition. Five finalists will be named, and they will present their vision for an emerging technology innovation to help address global public health issues. An overall winner will be named at the close of the summit. As we wait to see what this year presents, let's look at how last year's five finalists are doing. In a word, they are thriving. Ceeable Last year’s HITLAB World Cup winner, Ceeable, has developed a digital vision care mobile app designed to help prevent blindness and other eye diseases. Since last year’s competition, Ceeable has had an incredible year, including winning multiple national awards. New patents for this automated detection and analysis of visual field test results for optic nerve and retinal disease have just been issued in the past few weeks to Caltech. Ceeable now has an exclusive license to this technology from Caltech. “These patents are a powerful application of machine learning and offer an ability to aid in the automated detection of eye disease on a digital platform,” says Dr. Wolfgang Fink, chief technology officer and inventor of the Ceeable technology. Ceeable was among the top-3 finalists at this year’s American Medical Association’s Healthier Nation Innovation Challenge as one of the “Best New Ideas for Creating a Healthier Nation” and has been profiled in Ophthalmology Times. There are more than 300 million people worldwide who suffer from retinal disease. This technology platform -- known as the Ceeable Visual Field Analyzer (CVFA) -- has the potential to reach more people in need than ever before. All you need is a laptop, or tablet and connection to the internet. See also: Virtual Reality: A Role in Insurance?   This technology is now in use in some of the leading medical centers in the U.St. Ceeable is now actively establishing sales and marketing channels for the commercial launch this quarter. Rubitection Rubitection, based in Pittsburgh, has won many healthcare technology awards and placed second in last year’s competition. Sanna Gaspard, PhD and CEO/founder, has developed the technology to modernize early bedsore detection and management to help reduce the risks and improve patient care through a reliable, low-cost handheld diagnostic tool. Bedsores, also known as pressure ulcers or pressure sores, have been a patient safety issue dating back at least to Florence Nightingale in the 19th century. In the U.S. alone, bedsores affect approximately 2.5 to three million adults each year, with related complications and infections leading to 60,000 deaths and a cost of $11 billion. One alarming study found that 60% of elderly patients with a diagnosis of bedsores die within one year of discharge from the hospital. At that rate, an estimated 160 people a day in the U.S. will die from complications caused by infections because of bedsores, making these pressure ulcers one of the most prolific dangers facing an elderly patient today. Many medical researchers believe the problem is actually getting worse because of the aging population and a nursing shortage, along with our continued fragmented healthcare system. Many nursing professionals believe that bedsores developed after patient admission are a sign of negligent nursing care, or, as Florence Nightingale said in 1859, “If the patient has a bedsore, it’s generally not the fault of the disease, but of nursing.” Modern nursing professionals call the development of bedsores post-admission to a hospital or nursing home “inexcusable.” Rubitection is supported by Carnegie Mellon University through the Project Olympus incubator program. The current goal of Sanna Gaspard and Rubitection is to help raise awareness and to continue to build relationships with nursing homes, hospitals and insurance companies looking for solutions to prevent bedsores from occurring in the first place and early detection to prevent infections and complications that can have devastating results. Ristcall Ristcall is another 2015 HITLAB finalist that is supported by Carnegie Mellon University through the Project Olympus incubator program. Srinath Vaddepally from Ristcall has created what I refer to as a “mobile smartwatch nursing station.” Ristcall has now upgraded and tested both the hardware and software involved with this very promising wireless wearable technology. It is designed to help nurses more effectively handle the multiple tasks of providing quality patient care and to better prioritizing their precious time. Vaddepally came up with idea when, as a hospital patient, he fell and could not reach his call button to get help. See also: 5 Apps That May Transform Healthcare   Slips and falls in hospitals and nursing homes are a major patient safety issue and major liability issue. It is estimated that 700,000 to 1 million falls occur every year among patients, visitors, nurses and facility support staff. These facilities face both liability issues and reduced payment from Medicare as a result. The Ristcall smartwatch allows nurses to respond and prioritize patient care in real time. As I have said before, nurses rock! They are the heart, soul and backbone of our healthcare system. And I think nurses are going to love this technology. The Ristcall technology is now being used by patients and nurses in both a nursing home and an acute-care hospital in Pittsburgh. Noninvasix Noninvasix, another 2015 HITLAB World Cup finalist, is pursuing simply remarkable technology with the potential to reduce brain injuries in premature newborns by 90%. Graham Randall, PhD, the CEO of Noninvasix, and his medical research team have made a major pivot this year to focus this technology solely on monitoring oxygen levels in premature babies in neonatal intensive care units. Noninvasix is now developing a final version of this technology that will undergo a FDA 510k clearance review within three years. Noninvasix commissioned a third-party value analysis, which estimated health insurers could save between $2.4 million and $6.2 million in annual costs to care for children with cerebral palsy resulting from the lack of sufficient oxygen in the brain by using this technology. More importantly, Randall states the entire key to preventing birth defects such as cerebral palsy is being able to monitor premature baby oxygen levels in the brain in real time to allow prompt intervention to dramatically reduce the risk and number of brain injuries caused by the lack of oxygen. Gary Hankins, MD, the vice chair of the American College of Obstetrics and Gynecology Task Force on Neonatal Encephalopathy and Cerebral Palsy, stated: "This technology has the potential to eliminate 90% of the cases of hypoxic ischemic encephalopathy and subsequent permanent injuries such as cerebral palsy." This new technology will, I hope, replace current technologies such as fetal heart monitors that obviously monitor heart rates but do not accurately measure the levels of oxygen in the brain and produce results that are indeterminate or unknown 80% of the time. The lack of oxygen, or hypoxia, is thought to be responsible for nearly 25% of neonatal mortality in the world. Now all the extraordinary work from these 2015 finalists is exactly the type of technological innovation the HITLAB World Cup is all about. Wellopp Wellopp has had a remarkable year. Wellopp is focused on the major problem of hospital re-admissions and ineffective discharge planning. It is estimated that $26 billion is spent annually in the U.S. because of hospital readmissions. The reduction of readmission rates is a major initiative both within HHS and Obamacare and the Joint Commission on Accreditation of Hospitals. Wellopp has designed interactive software for hospital patients, health plan payers and hospital discharge planners. Joe Gough, the CEO and founder, mentioned last year that most hospital discharge plans are thrown in the wastebasket. This digital discharge technology requires the patient to take ownership and help design his or her own shared post-discharge recovery goals through a patient dashboard that provides a daily care path in a real-time, three-way interactive process. In addition, this patient-centric program includes the Wellopp rewards program, where patients get points toward a tangible prize (such as a smart phone) depending on their risk level and adherence to medication and other recommended post-discharge recovery regiments. This three-way, interactive digital approach, which sends patient care messages regarding achieving and rewarding goals, has already achieved incredible results. Wellopp is working with the largest health system in Michigan and has reduced readmissions 48% for pneumonia patients covered under the health plan. Next, in the first quarter of 2017, Wellopp will be working with a large regional health insurance plan in Ohio and will be conducting a pilot and joint venture with an Ohio Accountable Care Organization (ACO). (Note: Gough rebranded the original company, “Homeward Healthcare,” after a major launch this year for this consumer-directed brand.) I have spent the past 35 years attending and speaking at conferences around the country and have enjoyed virtually every one of them — but there is nothing like the HITLAB summit. Most conferences discuss current events and vendors/sponsors showcase their current capabilities. At HITLAB, you will have the opportunity to see where healthcare is going to be 10-20 years from now and how emerging technologies can help address global public health issues like never before. See also: Not Your Mama’s Recipe for Healthcare Lauren Alviti McGlade, the director of the HITLAB summit, stated, “We are searching for original ideas to improve healthcare access, delivery and outcomes through technology.” HITLAB will be accepting applications for the World Cup competition through Nov. 11. For more information, contact worldcup@hitlab.org. My goal is to continue to try to help promote this amazing collaboration surrounding the HITLAB Summit, the sponsors, medical researchers, emerging technologies and the startup companies presenting. Some technologies may be 10 to 20 years down the road, but others, like last year’s finalists, are available now or in the very near future. Why wait?

Incumbent insurers have taken decades, and, in many instances, hundreds of years building a business and creating a book of business (almost entirely through the hard work of agents, brokers and MGAs). Why should they share their customer information with startup insurers (regardless of how or why the startup insurer is using technology)? Potentially invest in the startups, yes. Give away customer information -- not so much. Two triggers for the question There are (at least) two triggers that formed the question of whether incumbents should partner with startups:

1. Discussions with a CEO of an insurance startup on how technology-dependent startups insurance firms can scale; he mentioned the possibility of looking at the pharma/biotech industry dynamic (i.e. startup biotech firms partnering with traditional pharma companies to achieve scale)
2. Thinking about what's in it for traditional insurers to partner with startup insurers that are coming to market using new technology. If the technology-dependent startup insurer believes it is primarily "a tech firm that supports/offers one or more parts of the value chain (distribution, underwriting, or even customer service)," then what really differentiates the startup insurer from a traditional technology company?

See also: Insurtech Has Found Right Question to Ask Left to their own devices Might technology-dependent startup insurance firms, if left to their own devices, succeed on their own? Possibly, but there are several hurdles:

1. They must comply with insurance regulations (at least state and possibly federal)
2. They must be and remain financially viable. Unlike technology startup firms, the state insurance regulators can't allow the startup to generate loss after loss. Firms like Salesforce and Amazon can go years without profit, but that situation is not true in the insurance industry.
3. They need scale (and profitable scale, at that), and, as the CEO mentioned to me, the startup has to "get the word out" and become known. How much is in the technology-dependent startup insurance firm's marketing/advertising budget (and how is the company spending the money)?

If the technology that the technology-dependent insurance startup uses is its "secret sauce," then an incumbent insurer can:

1. Test the technology itself
2. Invest in the startup to accelerate the lessons of using the technology
3. Acquire the startup

See also: Insurtech: One More Sign of Renaissance But my advice to each incumbent insurance firm is to never give away or share your customer list with any technology-dependent startup insurance firm. It makes no sense to do that.

Every three years, the U.S. Environmental Protection Agency (EPA) identifies certain national environmental problems where it believes it can make a difference by dedicating direct enforcement resources. Starting on Oct. 1, 2016, and for the next three fiscal years, these “National Enforcement Initiatives” (“NEIs”) include two new ones, an expanded one and four existing initiatives. These seven enforcement priorities offer insights into how the EPA plans to allocate its enforcement resources to specific environmental hazards concerning water, air, hazardous chemicals and energy extraction. As the EPA moves forward with these priorities, businesses need to be cognizant of the increased enforcement potential, especially to avoid non-compliance, and thus mitigate the associated environmental risk. Here is a recap of the initiatives: 1. Water Pollution Pollution of waterways from raw sewage systems, storm drains, underground storage tanks, runoff and waste disposal continues to be a high priority for the EPA. Recent attention from the lead- contaminated water in Flint, MI, and the Gold King Mine wastewater release have underscored the need for heightened enforcement. The EPA’s “new” water enforcement focus is keeping industrial pollutants out of the nation’s waters. The EPA will be directing enforcement resources on certain industrial sectors identified as “disproportionate contributors” to pollution, including chemical and metal manufacturing, mining and food processing. Concentrated Animal Feeding Operations (CAFOs) and Animal Feeding Operations (AFOs) will also continue to be enforcement priorities. See also: Minding the Gap: Investment Risk Management in a Low-Yield Environment   Water-related enforcement initiatives are:

• Industrial pollutants (new initiative): The EPA will rely on water pollution data to target facilities in industrial sectors like chemical, metal manufacturing, mining and food processing to cut illegal discharge of nutrient and metal pollution into lakes, rivers and streams.
• Raw sewage and contaminated storm water: The EPA is targeting municipal sewer systems, using Clean Water Act violations to reduce pollution and volume of storm water runoff and to prevent unlawful discharges of raw sewage. Sources for this pollution include industrial runoff, fertilizers, fossil fuels and general human activities.
• Animal waste: The EPA will use innovative monitoring and targeting techniques to reduce and control chemicals and waste from controlled animal feeding operations.

2. Air Pollution Primary contributions to air pollution come from large industrial facilities like coal-fired power plants, acid, glass and cement manufacturing operations. Ensuring that these facilities comply with the Clean Air Act and reduce emissions has been a focus of the EPA since 2005. EPA investigations have found that many of these facilities failed to upgrade or install pollution-control devices during modification and construction of new plants. The results have prompted new and continued focus on air-enforcement initiatives:

• Reducing air pollution from large sources: This new initiative aims to ensure that large industrial facilities install state-of-the-art air pollution controls when they build new facilities or make significant modifications to existing facilities.
• Cutting hazardous air pollutants: This expanded initiative is focused on accurate reporting for refineries, chemical plants and other industries that emit hazardous air pollutants or air toxics. The initiative has now been expanded to include large product storage tanks, hazardous waste generators and treatments, as well as storage and disposal facilities.

3. Hazardous Chemicals This year's new hazardous chemical enforcement priority targets chemical plant pollution for causing large volumes of hazardous substances and having a high frequency of catastrophic accidents (150/year). Because many of these facilities are located in low-income communities, activists' calls for environmental justice have made this a priority. Mining and mineral processing operations continue to generate more toxic and hazardous waste than any other industrial sector. Through its continued enforcement efforts, the EPA has reduced the risk of mining waste contamination of drinking water, rivers and streams, and is working to clean up mining sites across the nation. The areas of priority are:

• Accidental releases: This new initiative attempts to step up scrutiny of pollution sources (i.e. chemical and manufacturing plants), ensuring that these facilities reduce the risk of accidental releases through innovative accident prevention measures and improving response capabilities.
• Mineral processing operations: Focus is on discharges from mining operations and cleanup of point sources that the EPA believes are threaten drinking water, rivers and streams.

4. Energy Extraction Referred to as a “bridge-fuel," natural gas serves as a lower-CO2 alternative to coal, as the country tries to refine and expand its renewable energy sources. However, the extraction of natural gas poses risks from improperly maintained wells that can leak natural gas into waterways and water sources. Combustion of methane produces a potent greenhouse gas, and communities in and around these operations can also be exposed to carcinogens like benzene and other smog-forming pollutants. This initiative aims to ensure that natural gas extraction and production is done in a way that minimizes these risks. In the past three years, the EPA has settled a number of high-impact cases under this initiative and will continue to address noncompliance through greater use of advanced pollution monitoring and reporting techniques. Past Enforcement Highlights: The EPA's enforcement highlights for 2015 provide a constructive snapshot of the breadth of the agency’s enforcement authority:

• $7 billion by companies in equipment upgrades and clean-ups;
• $404 million in combined federal administrative, civil judicial penalties and criminal fines;
• $4 billion in court-ordered environmental projects resulting from criminal prosecutions;
• 129 combined years of incarceration for sentenced defendants;
• $1.98 billion in commitments from responsible parties to clean up superfund sites; and
• $39 million for community environmental mitigation projects.

According to the latest EPA enforcement statistics, more than 98% of cities with large combined sewer systems, and more than 90% of cities with large sanitary sewer systems, are under enforceable agreements. About 59% of individual power generating units at coal-fired power plants have installed the required pollution controls or are under a court order to do so. Meanwhile, the agency says it has settled with 217 concentrated animal feeding operations for regulatory violations and issued enforcement actions to 196 natural gas extraction and production sites. See also: Developing A Safe Work Environment Through Safety Committees   Meanwhile, the focus on larger cases is expected to continue, with the EPA stating that it will specifically target facilities that operate in multiple states to support “a consistent national strategy.” Consider the following recent EPA enforcement settlements: Water: A large farming cooperative and processing facility that manufactures refined sugar, liquid sugar and other products from sugar beets will pay $6 million in an agreement to resolve Clean Water Act violations at its processing facility. Under the terms of the settlement, the company will model the volume of its wastewater ponds, audit its wastewater piping systems, drain lines from spray irrigation fields and use automatic cut-off valves to prevent further discharges. Air: A large cement manufacturer will invest $10 million to cut emissions of harmful air pollution at five of its manufacturing plants to resolve alleged violations of the Clean Air Act. As part of the agreement, the company will install and operate modern pollution controls for nitrogen oxide (NOX) emissions at its kilns, conduct detailed diagnostic energy audits and spend $150,000 in mitigation on energy efficient projects that reduce nitrogen oxide emissions. Hazardous Chemicals: Under an amendment to a 2012 agreement, a large petroleum company will spend $319 million to install state-of-the-art flare gas recovery systems (FGRSs) that will capture and recycle gases that would otherwise be sent to flares at facilities in Illinois, Kentucky, Louisiana, Michigan and Ohio. These efforts are projected to reduce emissions from flares by 896 tons per year. Energy Extraction: A large oil and natural gas exploration and production company will pay $5 million to resolve federal and state violations of requirements for the installation, operation, maintenance, design and sizing of vapor control systems at condensate storage tanks. The company will make necessary modifications to ensure that each vapor control system is properly designed and operated, and will spend at least $4.5 million on environmental mitigation projects that will reduce volatile organic compounds and nitrogen oxides. With evolving environmental standards, businesses need to remain well-informed of these EPA enforcement priorities.

Physical therapy can be one of the biggest cost drivers of a workers’ comp claim. In addition to the treatment itself are the expenses for travel and the employee’s time away from work. Onsite clinics can reduce the expenditures. They are cost-prohibitive for all but the largest companies, but many organizations are starting to turn to an alternative that combines the need for easily accessible PT at a cost comparable to or lower than clinic-based therapy. Called therapy on demand, onsite PT involves a physical therapist going to the injured worker’s worksite -- or home, in some cases -- setting up equipment he brings and spending an hour focused solely on a single injured employee. Contrary to what some industry practitioners fear, the logistics are fairly simple. “All we really needed to provide was a room that looks like a big closet; a room big enough to fit a massage table,” said Sandra Palacio, a claims adjuster at Royal Caribbean International. “We had several meetings before we put this in place. We tested it out for the first week or two, got great feedback and have continued to use it. It’s been a great experience.” See also: Therapy Charges Are Being Inflated   Royal Caribbean teamed up with OnSite Physio, a mobile physical medicine company, to treat injuries sustained by the cruise line’s newly hired dancers and actors who train at a Miami-based facility. With the need to keep the entertainers away from work as little as possible, onsite PT has been a natural fit. “The dance studio is a unique system where they are only here for four to six weeks, so we need to have medical appointments on a fast basis,” Palacio said. “OSP has been great in that they come to us, get the person treated with PT, and injured workers are back doing their normal daily activities within an hour.” The fact that the workers can stay at their workplace for treatment eliminates the costs for travel and lost work time. Some companies have reported savings of as much as 30% by using onsite PT services. One, Marriott International, will discuss the results it has seen during a session at the National Workers’ Compensation and Disability Conference & Expo, Dec. 2, in New Orleans. (For a reduced registration rate, visit www.onsite-physio.com.) Focused PT Among the cost savings reported are fewer PT appointments needed. The one-on-one attention given to each injured worker — often by the same therapist for the duration of the treatment — and being at his workplace allows the therapist to target each patient’s unique problems and job tasks, which can result in quicker recoveries. “In a clinic, I might work with Mrs. Smith for 10 minutes, then Mr. so-and-so, then Mr. Brown. It’s this constant juggling act while you are in the clinic because, unfortunately, that’s just the model of outpatient PT,” said Daniel Sanchez, a physical medicine expert and a founder and VP of operations for OSP. Working onsite, “there is an ‘aha’ moment, when you realize you can do so much more with this injured worker than you ever could in a clinic. You have that one-on- one time with the patient so we get to really see and put into practice our treatment alongside what it is they do. We can perform therapy that is more meaningful, treatment that is work-related and more transferable to the real world. In a clinic, you have to simulate those things.” RTW A key difference between clinic-based PT and onsite is the focus on returning the employee to work. Sanchez makes the analogy of treating an athlete. “If the quarterback for the Jets gets a sprained ankle...what do they have onsite for the injured worker?" he asked. "They have people who specialize and treat them to get them back to their job. They are worried about whether the quarterback can get onto the field and do specific things. All of his treatment is around that.” That same type of thinking is at play with onsite PT companies such as OSP. One of its clients, for example, is a solid waste disposal company. While the workers in that industry no longer do as much manual labor as they did years ago, workers nevertheless sustain injuries. Repetitive motion injuries to the hand or elbow are typical, as are twisted knees and sprained ankles from getting off a truck improperly. See also: Employers Solving Healthcare Crisis One Onsite Clinic at a Time   “If I say, ‘this is a garbage worker,’ and I am in a clinic, I used to think I knew what that meant. Not until I did a ride along and looked at how they are pushing, pulling, spending time sitting in the heat, did I understand what the job entails,” Sanchez said. “In a clinic, I might have that worker going up and down steps. Onsite, I can train him right on that step. It’s the actual piece of equipment he uses, so his treatment is 100% functional. We’re taking the time to really understand what they do and tailor the therapy to it.” While onsite PT is not necessarily the best option for every injured worker, advocates say it offers many advantages over clinic-based therapy. “I definitely see this as a great benefit to companies that have a lot of workers’ comp claims because they can have the worker at the office, have OSP come and within an hour that worker can be back to work instead of the worker having to leave the job early just because he has to travel early and probably is not able to return that day,” Palacio said.

InsurTech Week 2016 hosted by the Global Insurance Accelerator in Des Moines was a great experience. It is quite interesting to see the energy, excitement, new ideas and investment in the insurance industry. Brian Hemesath and his team at the GIA have done a great job of harnessing this activity and being a positive force for change in the industry.

There are two themes I would like to highlight. The first is that the ingenuity and sheer variety of the startups is astounding – and will ultimately be a great thing for the industry. The second theme, and perhaps the more subtle one, is that there is a collegial atmosphere and a common sense of purpose about the role of insurance in society and business.

See also: Insurtech Has Found Right Question to Ask  

Variety and Ingenuity

The 11 insurtech startups participating in this InsurTech Week are a microcosm of the larger movement. A few examples are illustrative.

• Abaris – an innovative, direct-to-consumer solution for retirement planning, starting with income annuities.
• Insure A Thing – an idea for a revolutionary new business model for insurance that includes making payments in arrears (post-claim).
• Denim – a social media ad platform for insurance with a vision to ultimately reimagine marketing and distribution.
• ViewSpection – a mobile app for DIY property inspections to help to inexpensively provide more information to agents and underwriters.

The other participants also had innovative solutions for various lines of business and addressed key business issues in insurance today. They are: Ask Kodiak, Gain Compliance, Montoux, InsureCrypt, Elagy, CoverScience and Superior Informatics.

Some are in the early stages. Some originated outside North America and may or may not enter the market here. Some may not even be approved by regulators in their current form. But that is true of the broader set of the hundreds of insurtech companies that are active today.

The main point is that there is a great deal of innovation here, and many of these companies will play a role in the evolution of insurance, one way or another.

Collegial Atmosphere

The founders and investors in insurtech companies certainly desire to make money. Insurers that are engaging with these firms hope to gain competitive advantage. But in keeping with the culture of the insurance industry, there is also a great atmosphere of collaboration and even a sense that there is a higher purpose.

I don’t want to sound too dramatic, but there is a sense of altruism here – a sense that there are great opportunities to make the world a better place. Many of the insurtech companies see opportunities to improve safety in homes, in businesses, in factories and on the roads. The potential to significantly reduce accidents and deaths is tangible. Providing new services and capabilities to enhance lifestyles, improving individual well-being and just making it easier for customers to do business with the industry are also common purposes.

There is a spirit of cooperation among insurers, insurtech and other industry players, even in cases where companies are competitors. Not to criticize other industries, but insurance is about a lot more than selling a widget and making a buck.

See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections

A Bright Industry Future

Overall, I believe this is cause for optimism for the insurance industry. It is not easy to transform from today’s business models, processes and systems into a future that embraces all the new ideas coming from insurtech. But many in the industry are now actively involved in building strategies, experimenting with new ideas and technologies, launching ventures and generally being willing to think differently.

While many industries are being disrupted, insurance is more likely to morph into a better version of itself, with incumbent players learning from and partnering with new players.

Here is the answer, in 100 words or less: ACA permits people to sign up even if they are already sick. Real insurance cannot work that way. Imagine an Accountable Fire Insurance Act that required insurers to sell you fire insurance after your home had burned. Homeowner insurance rates would skyrocket. Anyone who carefully read the ACA would have seen that coming. The big insurers knew this would happen but played along in the beginning to avoid attracting political fire. When 75% of Americans get a taxpayer subsidy under ACA, it isn’t really insurance but more of an income redistribution mechanism…for better for worse. There it is, 96 words.

Our nomination for word of the year is, by far, “uberization.” This term is used to describe the growing deluge of companies that offer on-demand services from cars to homes to labor, and much more. Many commentators view this economic transformation as a revolution that will see our entire economy shift from one of consumption, to one of access. And we think they're correct. The Rise of On-Demand The key to an "uberized" economy is where on-demand services meet crowdsourced labor solutions. You see it everywhere. Even traditional businesses are learning new tricks from an avalanche of high-profile acquisitions. Whether it's Expedia’s purchase of Homeaway, GM’s buyout of Sidecar or Ford's investment in Lyft, this shift is becoming more undeniable. On-Demand for Insurance Now, on-demand services are coming to the insurance industry, the most risk-averse industry, by its very nature. The insurance industry has become more nimble--mostly out of necessity, but that's a story for another day. See also: How On-Demand Economy Can Prosper   Insurance carriers are learning quickly that they need to adapt to the demand of, well, on-demand services. And the integration of the gig economy is the next step in the business evolution of the traditional insurance sector. Tough Questions for the Insurance Industry What does the “uber of insurance” mean? What opportunities and challenges does it bring to the industry? The gig economy, sharing economy, 1099 economy, on-demand economy or whatever you want to call it isn’t going away, and consumer participation continues to grow. Earners, consumers and the old guard of the supply chain are eager to find ways to diversify and optimize business solutions. How do you satisfy the demand for on-demand data gathering? Claims handling and processing? How does the insurance industry gather the data it needs effectively, efficiently and accurately? Uber, Lyft, and Airbnb have not only demonstrated that they fill a need in the marketplace, but often they do it better than the traditional options - as uncomfortable a thought as that may be for the old guard in the supply chain. Can this model work for the insurance industry? It can, and this is how. Hug Your Smartphone, Save a Tree Mobile technology is your new best friend when it comes to data gathering for claims handling and processing. The insurance industry is traditionally paper-intensive. Paper is no longer a security blanket, but a wet blanket weighing down processes and impeding efficiency. Candy Crush and Capturing Data It’s easy to marvel at the innovation of smartphones from the most addictive apps to the most useful. I won't get into my Candy Crush addiction; I'm seeking professional help. The point is to make smartphones work for you and your business processes. Today, smartphones are essential to the daily lives of most of us, providing communication, connectivity, schedules, entertainment and even our wallets. Think about how you can leverage people’s familiarity and affinity for their smartphones by merging it with your smart application development and deployment. Capturing data has never been easier than point and click...Oops, I mean a finger swipe. Now more than ever data can be captured, optimized and automatically entered into your data systems and processes. This new process can facilitate the seamless flow of data into business processes without risking it getting stuck to the bottom of someone’s shoe, misfiled, misplaced or eaten by the proverbial dog. For the notepad next to your computer: seamless data integration at the point of data capture. It sounds like a dream, doesn’t it? Sharing Is Caring First referred to as the sharing economy or the gig economy, the "uberization" of the workforce didn’t originate with Uber. But I'm still voting for “uberization” for word of the year. Merriam-Webster is next on my contact list. People have always done odd jobs that fit their skill set, hobby, or need. Uber, Turo, Airbnb and WeGoLook through mobile technology have taken this tried-and-true individual entrepreneurship spirit not only to the next level, but to a measurable impact on the economy. Just consider recent sharing economy industry projections made by PwC. I won't spoil it for you, but you'll soon be acquainted with the word "mega trend." See also: Uber’s Thinking Can Reinvent the Agent   Crowdsourced labor solutions not only provide diversified earning opportunities, but they also provide options to workers, consumers and businesses alike. Remember our talk about being nimble? All parties can scale up or down as they choose. They can also select where and how they participate in the gig economy and leverage it to provide for their financial or business goals. As these on-demand solutions grow, expand and diversify, companies and consumers will have the opportunity to test and identify the best solutions for them, all with a swipe of their smartphone. Free Market for Solutions Some will argue the gig economy is the free market at its best, others will argue it’s at its worst. Like anything, it comes back to how individuals and companies strategically apply these solutions to their business challenges. In the insurance industry, data gathering and claims processing will always resolve around how you can do it faster and better and with fewer mistakes. As the saying goes, “time is money.” With the help of technology, the reach of smartphones and crowd labor -- insurance companies can standardize and streamline data gathering, claims processing and other simple tasks while controlling costs. For instance, why dispatch an employee across the metro, county, state or even country, incurring all the related expenses, time delays to gather data and take pictures when you can dispatch someone who’s already there? Not only do you save time travel, and employee productivity, but thanks to the near-universal familiarity with smartphones and standardized mobile apps, you don’t have to train workers. What if there was an Uber of Insurance? It’s not really a matter of “if” anymore, but of “when” and “how.” The when is now, and the how is through the growing relevance of the insurtech disruption.

In the insurance industry, there are often multiple people who need to access company data to do their jobs well. However, having multiple databases can harm the data’s integrity and result in redundant work or low consumer satisfaction. Streamlining data storage and availability is the ideal solution to these issues as it increases efficiency and maintains data accuracy, all the while improving the consumer experience. Here are four essential benefits of data centralization: Facilitates collaboration Keeping data centralized speeds processes and facilitates collaboration, allowing for more accurate and insightful analysis. The creative team may learn of a downstream underwriting change and adjust their acquisition tactics and copy. Similarly, a traffic team may note an ad that has a high conversion rate and collaborate with the advertising team to improve other marketing materials and advertisements. Such collaborative effort may also increase productivity, as there is greater flexibility without digital walls or a “paper prison.” Information is shared, and the central data hub creates transparency in business operations, enabling cross-silo analysis and further opportunities for innovation. Eliminates unnecessary touchpoints and reduces inefficiencies Centralized information enables insurers and agents to offer additional services to meet their customer needs. Instead of calling and waiting to speak to an agent or customer service representative, consumers may be able to access their own policy information through a mobile app or website. Their questions may all be answered digitally, eliminating the need to contact their agent or insurer. This added service saves consumers time and reduces inefficiencies. See also: 3 Types of Data for Personalization   Streamlining data will also eliminate unnecessary touchpoints with your consumers and result in more effective processes. Whether a customer enters information on your website, returns a mail-form or replies by email, all of his data will be collected and maintained in one central location. Consumers will never have to answer the same question twice. Improves data accuracy Smart data acquisition improves information accuracy and quality. Instead of having key data in multiple department databases, it is all centralized. This ensures that anyone accessing important metrics has the latest information. There is a smaller margin of error, and this improves the consumer experience, while helping underwriters and agents do their jobs. For example, if a customer has moved to a new location, underwriters can learn of the change at the same time the marketing department does, and both can update their processes to match the updated information. This eliminates redundant communication with consumers and allows departments to adjust immediately. Furthermore, centralizing allows you to heighten security measures in your company. Instead of implementing and maintaining security for four or five platforms, you can focus on securing one central data hub. Prepares for the future The insurance industry, like many others, is becoming integrated with the Internet of Things. Streamlining data acquisition will prepare you for the future of insurance, regardless of your sector within the industry. Insurance will likely undergo a paradigm shift as technology changes the way business is done. Whether it’s data flowing from telematics apps, in-home device sensors or life insurance wearables, centralized data will enable richer experiences for your consumers. Knowing of changes instantly will reduce costs and claims and allow insurers and agents to provide better services for their consumers. One central information hub that is flexible and adaptable will only become more useful as the way we insure continues to evolve. See also: Data and Analytics in P&C Insurance   Smart data acquisition and warehousing will improve customer satisfaction and make your business more efficient. Opt for the process that improves accuracy, eliminates unnecessary touchpoints, enables collaboration and prepares you for the future of insurance.