In the past, customers tended to ignore their insurance after they purchased it. They interacted with their agents only a couple of times a year — to purchase a policy or file a claim — and then they forgot about it. Now, technological advancements give consumers the ability to connect with their insurance products and services at all times, creating highly personalized services that are in high demand. In fact, 77% of consumers are willing to provide usage and behavior data in exchange for lower premiums, personalized coverage recommendations or faster claims settlements. The following five new technology trends will change the future of insurance for carriers and consumers alike. 1. Vehicle Telematics Vehicle telematics transmit real-time data directly to insurers through devices installed in vehicles. As a result, consumers receive more accurately priced premiums and better risk assessment that isn’t solely based on demographic information. Telematics can also help align your auto insurance premium with your driving usage. This is known as usage-based insurance (UBI). By 2020, it is projected that 70% of all auto insurance carriers will use telematics and some form of UBI. 2. Mobile Health Mobile health, or mHealth, refers to apps and wireless devices that can be used in healthcare for prevention, treatment and rehabilitation. Both insurers and consumers can benefit from mHealth, and its popularity is demonstrated by the fact that the industry’s revenue is expected to reach $26 billion by 2017. Mobile health allows insurance companies to sell policies that are specific to their consumers’ health data as well as their adherence to medications and treatment plans. Consumers can use mobile fitness apps to monitor and improve their health, ultimately reducing premium rates. See also: 4 Technology Trends to Watch for   3. Gamification Gamification incorporates different aspects of games to add some fun to the insurance consumer’s experience while solving real-life issues. Insurance companies recognized the lack of customer engagement and have sought to improve this through gamification. Though gamification techniques are fairly new to the insurance world, they are likely to benefit consumers. Gamification can turn formerly tedious activities — like tracking healthy habits or filling out a health risk assessment — into engaging games that result in rewards and continue to motivate consumers to live healthy lifestyles. On top of its consumer influence, gamification will be used to improve the workplace. Forty percent of the Global 1000 top companies will use gamification as an incentive and to transform business operations. Keeping employees engaged, especially during a transition, can be highly difficult. Gaming technology is pioneering this issue. In 2012, the gamification market was $242 million. According to a M2 Research study, the market will be $2.8 billion by the end of this year. In other words, we have a lot to look forward to when it comes to interactive engagement as consumers and employees in the insurance world. 4. Drones and Aerial Imagery While drones are often used as devices for personal enjoyment, they are also transforming the way insurance companies evaluate claims. In the past, insurers needed to visit a physical location to estimate damage and losses. However, drones can now capture aerial images that allow them to more quickly respond to catastrophic events and process claims. Cognizant, a consulting firm, estimates that drones will make insurance adjusters’ work flow 40% to 50% more efficient. The insurance industry’s growing use of drones will help improve safety practices in the aftermath of a disaster by having fewer people — insurance agents and consumers — on the ground taking photos. Drones also allow insurance carriers to better assess how an event occurred and the resulting damages with high-resolution images from all angles. 5. Home Automation As consumers continue to adopt smart home technology, from voice-controlled lights to sensors that detect pipe leaks, they will benefit from home insurance premiums that are more directly tied to their lifestyles. Some insurance companies offer discounts to homeowners who use smart home technology that can decrease their home’s risk of damage or burglary. Smart thermostats, smoke detectors, security systems and deadbolt locks can all improve a home’s safety and can decrease your homeowners or renter’s insurance bill. See also: How Technology Breaks Down Silos   Insurance companies will continue to adapt as this technology continues to popularize. More and more homeowners are investing in smart home technology — 45% of all Americans, in fact. New technology has paved the way for a more personalized experience for insurance customers. As a result, insurance companies are shifting away from transaction-based services and are moving toward building relationships with their always-connected consumers.

In a high-profile case that highlights the potential for insurance fraud, a Los Angeles woman who was featured in Season 4 of the “Bridezillas” television series pleaded no contest to 14 counts of submitting fraudulent documents and making false claims to receive workers’ compensation benefits. Anita Maxwell, 55, was sentenced to one day in county jail, three years of summary probation, 200 hours of community service and restitution in the amount of $11,873.79. Maxwell, a clinical partner, had alleged a neck, back and shoulder injury while assisting a patient. She lied to her medical providers in a recorded statement obtained by Probe Information Services, where she denied she had any prior injuries to her neck, back or shoulders. Maxwell’s prior medical records were located by Probe Information Services in a medical canvass, and those records were presented to her medical providers. Medical providers confirmed Maxwell had denied any prior injury or treatment, thereby concealing information in an attempt to obtain WC benefits that she was not entitled to receive. Her primary treating physician testified that, had he known about the concealed information, he would have provided a different opinion as to apportionment of permanent disability. Based on her attempted theft of permanent disability benefits, Maxwell was charged with insurance fraud for multiple counts of material misrepresentations. Maxwell was featured in the first episode of the fourth season of WE Television's “Bridezillas” in 2007, where she was humiliated after being left at the altar. She isn’t the first reality TV star to be charged with workers’ comp fraud. In 2011, “Real Housewives of Orange County” participant Devon Lynn Kile pleaded guilty to fraud charges in a $30 million premium fraud scheme. In 2012, James Frank Smith, who was a participant in the History Channels’ “Ax Men” series, was charged with fraudulently claiming he was unable to work. See also: How Should Workers’ Compensation Evolve?   Maxwell had been charged in 2014, but the case languished until she pleaded no contest this month.

Before they ever step foot in a dangerous situation, first responders get a lot of training on how to handle a wide range of potential hazards. But what about second responders? Adjusters, inspectors and other claims professionals are often the next group to visit the scene of a car accident, fire, flood or other disaster, and the area may contain debris and possibly be dangerous. But the training they get on these and other safety hazards in the field is often far from comprehensive. Here are four hazards claims adjusters should be on the lookout for and develop ways to avoid: 1. Physical attacks Adjusters encounter all types of people in the field, many of whom are going through tumultuous times in their lives. When traveling to dangerous areas, claims pros should be accompanied by partners whenever possible. It's essential that workers in the field leave a detailed copy of their day's schedule at the office and call in during preset check-in times. There are also several apps available to reduce risks when meeting new people and traveling to unfamiliar areas. These apps incorporate features such as GPS, SMS, video, alerts and alarms, all aimed to keep claims pros safe when they are by themselves. Another way to reduce risk in these situations is to meet claimants in public places when feasible, rather than in the claimants' homes. 2. Falls Whether from a ladder, roof or icy patch of ground, falls are a common source of injury for adjusters and workers in many fields. In fact, falls from heights and slips, trips and falls are the second and third most common sources of all workplace injuries. Falls from ladders are one of the most prevalent causes of these injuries, with the majority of these falls being avoidable. Follow the Occupational Safety and Health Commission's specific guidance on safe ladder use:

• Always inspect the ladder before using it.
• Avoid electrical hazards by not using a metal ladder near power lines or exposed energized electrical equipment whenever possible.
• Always maintain three-point contact (two hands and a foot or two feet and a hand) on the ladder when climbing. Keep your body near the middle of the step and always face the ladder while climbing.
• Do not use the top step/rung of a ladder as a step/rung unless it was designed for that purpose.

If the damage is extensive and complex, it may be helpful to hire an expert (such as a structural engineer). The expert can help with various safety issues, such as the presence of toxic materials while also assisting in evaluating the claim. See also: Risks of Malpractice Claims (Video)   3. Electrical hazards Damage to physical property from flooding, fire or other disasters can create electrical hazards — from exposed wiring to standing water near sources of electricity. Before heading out to a site, an adjuster should verify with the local utility company that power to the property has been shut off if a risk of electrical hazards is present. At the site, adjusters should thoroughly inspect the exterior to identify potential hazards. Inside the property, watch for potentially dangerous spots and always wear proper safety gear, such as boots, goggles, gloves and hard hats. 4. Animals Wild animal hazards — from snake and alligator bites to bee stings and mosquitoes carrying dangerous diseases — pose serious threats to adjusters, especially if an environment has been disrupted by a flood or natural disaster. But while encountering a poisonous snake might be scarier than encountering a dog, adjusters should probably be more concerned by sightings of a Fido, Spot or Rover. A seemingly friendly pet dog might be hostile to a stranger snooping around — and just because the animal was peaceful during an adjuster's first visit doesn't mean the animal will act the same way the next time around. To reduce the risk of injury, adjusters should ask claimants about pets when they schedule their visits and further ask that any animals be contained during inspections. If adjusters do encounter pets, the Humane Society has some tips on recognizing when animals might attack. If the adjuster is bitten by an animal, he should seek medical attention immediately. Even if a bite seems minor, the risks range from rabies to deadly venom. Many of these safety hazards aren't going away any time soon. But technology has already made the job of a field claims adjuster much safer over the years. Cell phones allow adjusters to be in constant contact with the home office and can be the difference between life and death in an emergency situation. See also: Power of ‘Claims Advocacy’   In many cases, technology is eliminating the need for claims pros to be exposed to the hazards in the first place. After Hurricane Katrina, many firms used GPS to pinpoint the exact location of properties and damage. As the Institutes Community covered previously, drones pose a significant opportunity for the claims industry, as well, giving adjusters the ability to inspect dangerous areas from a safe distance. This is a far-from-comprehensive list of the hazards adjusters face in the field. Others include a risk of cuts (the most common injury after many natural disasters, including Hurricane Sandy), exposure to dust and the risk of chronic illness from mold and other airborne contaminants. Whatever the hazards, adjusters should start by being prepared and, above all else, trusting their instincts. If a situation looks unsafe, claims pros should stay away until they can return with the right equipment or with a partner. No claim is worth putting an adjuster in danger.

Connected automobiles are just like any Internet of Things device, in that they have an identifying address on a network and are susceptible to being targeted. Vehicles are built with several electronic control units (ECUs) that manage such systems as the infotainment setup. These systems require connection to a back end, typically, the automaker, which will “push” patches and data to the system remotely through cellular transceiver stations (BTS). The same goes for cellular networks, where identifiers are on SIM chips. Exploitation of vulnerabilities is not limited to the mobile device, but also to the communication infrastructure. See also: Insurance and the Internet of Things   In tests of IoT devices that Brier & Thorn has performed, information technology security is lagging. Many systems seem to implicitly trust anything that communicates with them; connected automobiles can fall victim to attacks via transmitted communications that have no authentication. Many nodes for attack Like a mobile phone, an electronic control unit that uses cellular to communicate with its back end is going to automatically associate with its closest base station or cell tower, and trust it. That’s where hackers could strike in a number of ways. Of particular concern is the kill chain model of attack. This involves a pattern of transaction activities that, when linked, work together to compromise a system. In it studies, Brier & Thorn looked at an electronic control unit connected to its back end over cellular using a built-in SIM chip. The attack vectors depended on: the ECU’s communication connection with SIM chips for connections to mobile service providers’ cellular base stations; Wi-Fi for connections with its head unit within the car; Bluetooth; and the physical attack surface. An ECU within an automobile is connected to a controller area network (CAN), which is designed to allow microcontrollers and devices to communicate in an application without a host computer. Crooks in driver’s seat Unfortunately, having the ability to send or receive CAN signals in a car gives someone “root” privileges. They might gain the ability to control the car and make it do whatever they want. Such a hack also might give a system within the automobile the ability to send and receive commands with the car itself, opening another door to hackers. Vulnerabilities to connected automobiles can be found in the infrastructure and in applications.

• Infrastructure vulnerabilities: Electronic control units trust cellular base stations they associate with through cellular networks; they use the network infrastructure to communicate with any outside system. If the ECU links to a rogue BTS, a hacker could perform a “man-in-the-middle” attack by intercepting messages between the ECU and the back-end system.

• Application vulnerabilities: Many ECUs will leverage SMS (Short Message Service) to send and receive commands to back-end servers, which depends on an encryption cipher employed on the network. This leaves them open to attack via cellular networks.

Other areas of concern depend on which generation of technology a network is using. They can range from 2G to 4G, with each using a different type of encryption cipher. Keys to criminals When a connected automobile is camped on a cellular base station, it’s susceptible to numerous attack vectors, including the ability to capture the SIM chip identifier and intercept traffic to and from the ECU via SMS. Depending on which network the system uses, SMS text messages can be captured, and hackers can crack the codes, giving them access to communications between the back end (an automaker) and the ECU. Hackers have access to several tools that can intercept and decipher these messages. See also: How Safe Is Your Data? ECUs are more secure when camped on 4G LTE networks, but unfortunately, especially in the European Union, the prevalence of LTE networks is low. Because automobiles have unrestricted travel capacity to areas with spotty coverage, the probability of a car’s electronic control systems camping on a 2G or 3G network is quite high. This article originally appeared on ThirdCertainty and was written by Alissa Knight as a guest essay. More stories related to connected cars: Cheat until caught? VW hack raises ethical questions Who’s in the driver’s seat? Car hacking worries multiply Is the price of convenience loss of control?  

As a lover of all things tech, I also love science. Recently, while thinking about the future of the insurance industry, I was taken back to something I learned about in my sixth grade science class: the concept of mutualism, where two species “work together” and each benefits from the relationship. For instance, an oxpecker (a kind of bird) eat ticks off the bodies of large mammals, such as a hippo, zebra or giraffe. The concept of mutualism is being embraced by some of the world’s most successful companies. In fact, perceptive leaders at P&G, Nestlé and GE Digital have all recognized that mutuality and interdependence with partners fuels growth. So how does mutualism apply to the independent insurance channel? While huge efficiencies have been gained by insurers and independent agents who are using digital technology for internal process automation, this alone is simply not enough to grow and thrive. We live in digitally driven, hyper-connected times. Thus, it is critical for agents and insurers to extend their use of technology beyond their own offices and form an insurance ecosystem whereby everyone involved — agents, insurers, MGAs, wholesalers and, ultimately, insureds — wins. Digitally connected agents and insurers can exchange accurate data for quoting, market identification, underwriting, billing and customer service. Agents can work more efficiently with insurers to provide access to advice, product range, insurer choice and localized personal service. Ultimately, there are better, mutually beneficial relationships between agents and insurers, which increases the value of their service to insureds. As key business partners in the insurance lifecycle, agents and insurers have an irrefutable interdependence on one another and therefore have a stake in each other’s success. To fully capitalize on this mutualism and fuel growth, agents and insurers must increase their connections by using automated data exchange technologies such as download and real-time and market search tools that will reduce expenses, speed service and strengthen business relationships. See also: Why the Agent Will NOT Be Disrupted   The good news for agencies and carriers is that all of these connectivity services are available today:

1. Download: This data exchange solution enables insurers to automate delivery of information from their systems directly into an agency management system. Download eliminates the need to rekey data into multiple insurer web portals to verify information. Recent research indicates 60% of agents save at least one hour per day using ACORD eDocs and ACORD Messages download services. With more than 1.8 million download connections available and only 41% activated, there is immense opportunity for agencies to take advantage of the time-saving and customer service benefits of receiving all available download services from your insurers.
2. Real-time rating, service inquiry and claims: An automated data exchange can provide instantaneous lookup of data in an insurer system from within an agency management system or comparative rater, enabling agencies to quote; inquire on a policy, bill or claim; submit a First Notice of Loss; obtain loss runs; and more in real time. By making these requests through the management system, agencies can reduce duplicate keystrokes and respond to clients quickly and easily, without having to log into an insurer web portal or waste an insurer’s time responding to one-off requests. This not only saves time and effort by eliminating manual entry, it also minimizes errors, provides an E&O trail within the agency management system and enables agencies to deliver rapid, more efficient service to meet the expectations of today’s consumers. According to the 2013 Agency & Brokerage Technology Survey, agents recognize 53 minutes of time savings per employee per day when using real-time tools. With more insurers adopting real-time technology for comparative rating and service, they can increase the opportunity to showcase the advice and value of working with an independent agent by providing clients and prospects the best policy options and overall improved customer service.
3. Market search tools: These can enable you to find more and better markets for an insured’s risk. A long-time industry challenge has been identifying and easily communicating insurer appetite for commercial risks. The process has historically been costly both in time and money, and nearly 60% of commercial submissions are declined by insurers. Automated technology available today matches insurers and agents based on appetite for new risks and renewals using a Google-like search. Market search tools increase insurers’ in-appetite submissions and improve an agency’s productivity by reducing time spent on traditional ways of identifying market appetite, such as referencing outdated insurer risk guides, accessing insurer websites, historical agent experience or directly contacting individual underwriters.

See also: Find Your Voice as an Insurance Agent As key business partners in the insurance lifecycle, agents and insurers depend on one another and, therefore, have a stake in each other’s success. To fully capitalize on this mutualism and fuel growth, agents and insurers must increase their connections. To further explore how insurer connectivity can drive greater business success, download Applied’s Insurer Connectivity ebook now.

So many wellness industry misdeeds to expose, so little room on the internet. This posting will start out as one of my typical shock-and-awe postings featuring a wellness vendor raising the bar for dishonesty and employee harms. Uniquely, though, we will close with a surprisingly uplifting slam-bang conclusion that could change the wellness industry forever…but only with your help. The Bad News It’s that time of year again, when traditionally the C. Everett Koop Award Committee bestows an award upon a fellow committee member or award sponsor, in recognition of doing the best job of fabricating dramatic savings while making only trivial improvements in employee health. That’s par for the course, and isn’t even news any more. See also: The Yuuuuge Hidden Costs of Wellness However, this year, the Koop Award Committee apparently decided that actually improving employee health was too high a bar for a wellness program to clear, so the committee gave the award to a committee colleague, Wellsteps, for a program in which the health status of Boise School District employees deteriorated. We’ve done the arithmetic so you don’t have to. The award application below shows that 5,293 employee biomarkers improved, while 6,397 got worse. In addition to the objective failure of the program, consider employee self-reported health. The single most important question to ask to gauge the state of someone’s health is: “How is your health?” Wellsteps buried the answer to that question at the end of a long list, but squint hard enough and you can see that Boise employee self-reported health status declined, by a small but statistically significant (p=0.0007) amount: There are many other problems with this program, too. Wellsteps is shaming even the lightest drinkers, attributing massive savings to improved health despite the deterioration in health, suppressing data showing increased health spending and flouting clinical guidelines. All that is covered in this Linkedin Pulse. In all fairness, here is the response from Wellsteps’ Troy Adams (best known in the wellness industry for posting that ”It’s fun to get fat, and it’s fun to be lazy”) to my initial observations that Wellsteps is harming employees and fabricating savings. Surprisingly, I agree with both points:

1. Yes, the Wellsteps data is “rock solid;” and,
2. Yes, having just walked into from 92-degree heat, I am at least temporarily full of “hot air.”

The Good News Fabricating savings is part of the Koop Award DNA, but bestowing an award on a vendor that actually harmed employees crosses a bright red line. Rather than complaining about it (or more accurately, in addition to complaining about it), I thought it might be time to take steps to prevent this type of performance from being considered acceptable, let alone prizeworthy. So I convened a group, including WELCOA‘s respected and forward-thinking new CEO, Ryan Piccarella, and leading wellness gurus Jon Robison and Rosie Ward of Salveo Partners. Together, we crafted a very simple and minimalist Code of Conduct. (I don’t want to take more than my share of the credit. This was a joint effort. I just happened to be the one who initiated the email chain.) In full, it appears below. It is definitely “minimalist,” a Code of the first-do-no-harm variety. And yet, as low a threshold as it is, many vendors – including Wellsteps and many previous Koop Award winners – would not be able to meet it. What we would ask of ITL’s readership is:

1. Circulate this posting/the Code widely;
2. As brokers or customers, insist that your vendor(s) follow the Code of Conduct…and add it as an actual contractual term;
3. As brokers or vendors, announce that you will be following the Code. (While this blog is my own effort, I am also affiliated with Quizzify. Quizzify will be announcing this week that it intends to make this Code of Conduct a contractual term, meaning that failing to adhere to it would constitute a breach of our obligations under the contract.)

The Employee Health Program Code of Conduct Our organization resolves that its program should do no harm to employee health, corporate integrity or employee/employer finances. Instead, we will endeavor to support employee well-being for our customers, their employees and all program constituents. Employee Benefits and Harm Avoidance Our organization will recommend doing programs with/for employees rather than to them, and will focus on promoting well-being and avoiding bad health outcomes. Our choices and frequencies of screenings are consistent with U.S. Preventive Services Task Force (USPSTF) and CDC guidelines and Choosing Wisely. See also: Wellness Promoters Agree: It Doesn’t Work   Our relevant staff will understand USPSTF guidelines, employee harm avoidance, wellness-sensitive medical event measurement and outcomes analysis. Employees will not be singled out, fined or embarrassed for their health status. Respect for Corporate Integrity and Employee Privacy We will not share employee-identifiable data with employers and will ensure that all protected health information (PHI) adheres to HIPAA regulations and any other applicable laws. Commitment to Valid Outcomes Measurement Our contractual language and outcomes reporting will be transparent and plausible. All research limitations (e.g., “participants vs. non-participants” or the “natural flow of risk” or ignoring dropouts) and methodology will be fully disclosed, sourced and readily available.

The persistent, pervasive badness on the internet is made possible by the existence of a vast, self-replenishing infrastructure of botnets. Cyber criminals go to great lengths to keep their botnets running at high efficiency. ThirdCertainty asked Tim Helming, director of product management at Domain Tools, to outline how and why botnets continue to thrive—and what the good guys are doing to deter them. Here’s a summary of our discussion: Botnet basics A typical botnet is composed of tens of thousands of infected computers communicating back to a single command-and-control server, from which a human attacker issues instructions. Botnets are routinely instructed by their human controller to: • Spread malware and infect more computers • Carry out phishing, ransomware, account takeover, click fraud and denial of service attacks • Siphon crown jewel data from business networks via advanced persistent threat (APT) attacks Domain name game Each command-and-control server and each infected computer, or bot, has an IP address and a domain name. The good guys have perfected blacklisting tools tuned to quickly identify and cut off any IP address or domain name previously observed carrying out malicious activity. See also: Dark Web and Other Scary Cyber Trends   These blacklists are fed into firewalls, email gateways and intrusion prevention systems, forming a first line of defense that automatically blocks any known bad domains and IP addresses. So the criminals counter by registering new, replacement domains en masse. Botnets run domain-generation algorithms (DGAs) that spit out fresh domain names composed of random alphanumeric strings, by the hundreds. “This lets them register new domains in bulk,” Helming says. Additionally, botnets also get instructed to create domain names in recognizable word or word patterns. This is done when a domain name is needed that a human victim can read to fool someone as part of a phishing or ransomware attack. Reputation scoring Blacklists can only do so much. They are limited to blocking domains previously observed doing bad things. So Domain Tools also has come up with a reputation scoring system that assigns a risk score to each newly created domain. Very new domains with alphanumeric names, for instance, get an elevated risk score. So do domain names that are slight misspellings of the official domain names of legitimate websites. A decision can then be made as to whether to block a new domain that seems benign before it is put to malicious use. “We look at things like how old the domain name is, whether the domain name makes any sense linguistically,” Helming says. “Those are intrinsic properties that can show us domains that are tightly connected to bad ones, and also one-offs that might not have that connection.” Predicting vs. detecting Cyber criminals can get lazy. And the good guys are striving to capitalize on that trait. For instance, it still is a common practice for criminals to use quirky, bogus information to register domains—such as Superman, 123 Anywhere Lane, Anytown, USA, 11111—and then use that name and address over and over. See also: How to Measure ‘Vital Signs’ for Cyber Risk   But detection technology is continually improving. Machine learning is being applied to not just identify such patterns, but also correlate them to other data. The goal is to help network defenders more accurately predict whether a domain is likely to commence malicious activity long before it does. “Prediction is where everybody is trying to get,” Helming says. “Being able to predict badness is really important and really valuable. I call it looking back to look forward.”

Let’s have a moment of silence for the "sold, not bought" paradigm. Before anyone gets panicky, we’re not laying agents to rest, but rather recognizing that sold, not bought is about a mindset that served our industry in the past and that holding on to it for too long is now hurting us. It’s not about favoring a particular distribution method. Agents can live without this paradigm — and likely be better off for it. Learning from other paradigms If people in your company are still having arguments internally about this, let’s first look at what we can learn from other arguments that have died over time. These include:

• “the Earth is flat;”
• “the four-minute mile is impossible;”
• “HIV is a death sentence;” and
• “Pluto is a planet.”

What’s common about all these arguments? New capability. Somewhere along the line, a scientific breakthrough, a person with new knowledge or a separate discovery caused us to see the argument in a new way. Then we eventually agree on the new truth. It’s time to do the same for the sold, not bought paradigm. What’s changed? There is new capability in the hands of consumers that did not exist when the paradigm was created. The modern consumer has so much new capability that the term “prosumer” was invented by Alvin Toffler in his 1980 book “The Third Wave.” A prosumer is a very active consumer who blurs the lines between professional and amateur and controls information flow, the experience and, even, the sale. Modern companies like Amazon, Apple and Google have done a great job, both leaning into this trend and shaping it. See also: Paradigm Shift on Cyber Security As an industry, we have convinced ourselves that nobody wakes up in the morning and wants to buy insurance unless someone makes her do it. This drove the sold, not bought paradigm. It had truth to it in the days when consumers did not have access to information like they do today. However, the prosumer found this concept disrespectful and, perhaps, even arrogant. Hanging onto this notion has caused the industry to lose focus on the end consumer and shift the focus to the agent as customer. We then end up with:

• Complex products that please a few key sellers but damage the customer experience;
• A heavy push in marketing strategies that result in expensive incentives and margin pressures; and
• Compensation models that provide incentives for the wrong behavior and lead to onerous regulations, such as the DOL fiduciary rule.

Opportunity to relearn There’s a lesson here, but we need to revisit the nature of demand. Economics lessons tell us that there are several nuanced styles of demand, dictated by the nature of a product. It’s the manufacturer’s job to cultivate demand, manage demand or both. Historically, creating demand was in the hands of the agent and was fused with the sales process. Because of the prosumer’s new capability, the role of demand creation and the sale are now decoupled. See also: Taking the ‘I’ Out of Insurance Distribution   For those who think nobody wants life insurance, think again. While it isn't as highly sought after as beer or shoes, the 2014 study by LIMRA and Maddock Douglas indicated there are almost 19 million “stuck shoppers” (people who intend to buy but the current experience causes them to get stuck along the way) for life insurance. In addition, if you talk to some of the new startups/disruptors in the insurance space, they believe insurance is a bought product, and it is simply their job to cultivate more demand and create a superior experience. So if we replace the paradigm of “sold, not bought” with “bought, not sought,” we can put the responsibility back into the manufacturer’s hands to cultivate demand, deliver better on the experience and, most importantly, ask ourselves what role advice plays in the new world. Many are pointing to robots as the answer. But can an industry so deeply rooted in social purpose really operate without humans helping humans? If not, we have an opportunity to reinvent the agent role in a profound way.

So you've developed a great rapport with a potential customer. She's happy with the risk management solutions you've proposed. A sale seems imminent. Then you get to the price. Suddenly, your relationship-building efforts dissolve into a negotiation that might seem more about dollars than sense. Don't get discouraged. Cost is a sticking point for almost all customers and a common reason why deals of all kinds fail. But before you let price jeopardize your next sale, arm yourself with strategies to help customers understand that the bottom line shouldn't always be the last word when they're considering your proposals. Consider these four simple approaches: 1. Listen Listening to the specifics of the potential customer's objections is the first step in figuring out a strategy to overcome them. Two areas to which you should pay the closest attention are specifics about why the prospective customer is resisting your price and how he determined the competition's prices. This will help you empathize with potential clients. It also allows you to introduce considerations besides price, such as the value of the peace of mind that comes from a stress-free claims process, the risk management resources your agency can offer, etc. 2. Do the Math for Customers Prospective customers may not realize how producers and underwriters arrive at the price for a specific policy. That's why it's vital for you to explain it fully with concrete examples and — even more importantly — offer ways to potentially reduce costs down the road. Assure the potential customer you've personally checked for all potential discounts, keeping the fight for the sale alive while providing additional value and insight. See also: Answer to a Better Customer Experience?   3. Justify the Price Lots of sales pros will tell you to never apologize for price. It's sound advice. Your message should be that the price matches the value of what you're offering and that you assume the potential buyer will agree. For example, you can tout the benefits of your claims department and how the producer and adjusting teams will support the customer at every step of the process; give a specific example of a time when a current or past client benefited from your agency's superior value and service; or emphasize that an insurance policy is a key part of protecting and preserving life's most important purchases. 4. Stand Your Ground (or Walk Away) Everyone's idea of negotiation is a little different. In some cases, the right approach to a potential client balking at a price you've quoted is to stand your ground once you've demonstrated you believe in the value of your coverage and service. It just might be the tactic that gets the customer ready to buy. See also: Payoff From Great Customer Experience? Other times, a potential buyer will force you to really stand behind the value of your products... by giving up the sale. Some buyers have a maximum they're willing or able to spend, while others will go with the cheapest option no matter how many different ways you spell out why that might be a bad idea. One of the key elements of being a successful seller is knowing when to give up on a prospect and move on to more lucrative opportunities. Have you had success with potential customers who are only focused on price? Share your solutions in the comments section below.

Overview By 2045, as many as 6 billion people are expected to inhabit urban areas, an increase of 150% on today. With such rapid and vast growth, there are a number of key areas where the strain is most likely to be felt. Take London as an example. By 2050, demand for public transport in London is set to increase by 50% and demand for energy by 20%. Demand for water will already exceed supply by 10% by 2025, according to the office of the mayor of London. Meanwhile, half a million new homes will need to be built every year to house the rising population — but current planning restrictions mean the city is running out of space to build. If these rising challenges are not met, there is a growing danger that some cities may cease to function, which could have serious implications for the global economy. Overloaded transport systems will lead to gridlock. Energy shortages could lead to blackouts. Lack of water could lead to disease. McKinsey estimates that just 600 urban centers generate 60% of global GDP, while rising urban areas in the developing world have been driving 35% of global growth. If these economic powerhouses are hit by shortages in key areas, the world could be plunged into one of the worst recessions it has ever seen. This is not a distant challenge — many of the problems are already being felt today with overloaded public transport systems, rising urban rents and water shortages in cities across the world. With the complexity and cost of urban infrastructure projects, governments and businesses need to plan for and act on these emerging risks today to meet the needs of tomorrow. Below, we run through some of the challenges and proposals in some of the key areas where urban areas are set to feel the strain. But this is far from an exhaustive list. In-Depth Transport Without effective ways to move people and goods through urban areas, transport systems become effective blocks to, rather than facilitators of, commerce. But transport infrastructure projects are among the most complex, expensive and lengthy to undertake. In urban areas, such projects become even more difficult. Adding new (or expanding old) routes may involve buying/demolishing existing properties and serious disruption to existing infrastructure during the construction work. The London Transport network (not including private journeys by car or bike) hosts around 24 million journeys a day. Projected to increase rail capacity by 10%, the city’s Crossrail project is expected to be fully operational in 2019. Yet, by 2030, the city is expected to have a population of 10 million — an increase of 16%. Despite being Europe’s single largest construction project, costing more than $22.5 billion and taking more than a decade to complete, Crossrail still won’t be enough to meet the city’s needs. Simply building more railways and roads may not be enough to keep our cities moving. To reduce congestion, some cities, like Oslo, are thinking of banning private cars from their roadways. Through a one-day trial in September 2015, Paris found alternative types of transportation such as biking could reduce air pollution. Would the reduction in traffic lead to sufficient benefits for the population as a whole, or would it simply make cities more inconvenient for individuals? This sort of reduction may work in small, compact urban areas — but it’s by no means a solution for everyone. This is why some cities (like Sao Paolo and Athens) have also introduced systems to prevent the use of some cars on certain days. But, as cities sprawl and populations rise, limiting cars on roadways might not be a simple answer to the needs and complexity of the transportation systems of the future. Utility and Food Supply, Waste Disposal Growing enough food for a global population expected to hit 10 billion by 2050 is tough. Add in the need to get this food to the people who need it, in urban areas often far away from the food’s place of production, and the challenge is compounded. Reducing road traffic in cities by banning private cars may increase the ability of commercial trucks to deliver food to shops, but getting the food to those cities in the first place remains a serious challenge. Many major urban airports are nearing capacity, while skies are more congested than ever — despite flight path efficiency and coordination improvements such as those driven by the European Union’s Single Sky project. Larger cities will need more airports, more shipping and more (or more efficient) transport links from airports and seaports to those cities. To provide water for drinking and industry, new and bigger reservoirs and expanded networks of pipes will need to be constructed — assuming there is rainfall to fill them, which is far from certain. And it’s not just about getting material to cities; the volume of waste products will also vastly increase. Packaging will need to be collected and taken away for recycling, incineration or alternative disposal. (The increased volumes of human waste will require more sewers and more sewage treatment plants.) Some solutions aim to tackle two problems at once, turning household waste and even human waste into electricity. Meanwhile, many cities, including London, are investigating recycling water, feeding used water back into the system after treatment. Increased electricity needs could be met by efficiency improvements in energy generation or by building more power stations (projects that can take years). But some are proposing a radical rethink: moving away from the concept of urban energy grids into more localized power generation. Emerging technologies like solar roadways and solar cells that double as windows — or even maximizing the energy of waste heat from machinery and electronics, combined with improvements in battery storage — could bring energy generation to the point of use and reduce the need for nation- or citywide power networks. While many offices and factories already have back-up generators for emergencies, some hope the right combination of alternative electricity sources, including from on-site waste, could enable them to become off-grid and self-sufficient permanently. The End of the City? With cities growing at such a rapid rate, is there a simpler solution to the challenge? Moving away from the city? This could solve the added problem of the increasing lack of housing in urban areas, while creating jobs in areas that traditionally have lower costs of living. With the prevalence of ecommerce and increasingly robust home delivery options, there is no longer a reliance on the “city” for commerce as there was in times passed. This could also help meet the rising demand for better work-life balance and flexible working. As telecommuting options are embraced by more employers and workers, justifying a traditional “office” environment becomes harder. Combine this with the increasing strains on urban infrastructure and rising costs of maintaining office buildings and perhaps a shift to home offices could solve three problems at once: reduce the pressure on urban areas, improve workers’ quality of life and cut costs for businesses. There are no easy solutions. But as businesses seek to maintain their competitiveness and attract the workers they need to adapt and evolve, it is becoming increasingly essential to consider not just what your organization does, but where — and how — it should be doing it. Do you have plans in place to cope with the emerging challenges of urban living and working? Talking Points “By 2050, the world will have grown by 2.5 billion additional urban dwellers, with almost all of this growth occurring in cities in the developing world.… The world will need to invest about $50 trillion in infrastructure every year for 15 years to keep up with demand.” – Aniruddha Dasgupta, global director, World Resources Institute Ross Center for Sustainable Cities “The question of how to enhance mobility while at the same time reducing congestion, accidents and pollution is a common challenge to all major cities in Europe. Congestion in the E.U. is often located in and around urban areas and costs nearly EUR 100 billion, or 1% of the EU’s GDP, annually.” – European Commission “This is not a third-world problem alone. Nice icons of sustainability, like Portland… have combined sewer outlets. They do get floods on their streets, and sometimes they are made up of sewage as well as rainfall. It’s an under-the-rug kind of issue that people in charge don’t talk about. We’re here to say that everything is not OK.… We need to find a way to build a new approach to an old problem.” – Mikhail Chester, assistant professor, Arizona State University School of Sustainable Engineering and the Built Environment Further Reading

• Investing in Infrastructure for a Growing Economy – European Investment Bank, Oct. 9, 2015
• Water Resilient Cities: How Is Business Building Them? – The Guardian, Oct. 27, 2015
• Amid Historic Drought, Conservation and Water Innovation Investments, Patents on Rise – MarketWatch, Nov. 5, 2015
• ‘Urgent Response’ Needed for Urban Waste – Resource magazine, Sept. 9, 2015
• Urban Waste Could Supply Millions of African Families With Much-Needed Electricity, New Study Shows – Nature World News, Oct. 15, 2015
• I’ve Seen the Future City – and It’s Electric! – U.K. Government Office for Science Blog, Oct. 28, 2015
• Where Cars Fit in the Future – Information Week, Sept. 28, 2015
• 6 Big European Cities With Plans to Go Car-Free – The Atlantic City Lab, Oct. 20, 2015
• The Future of Making Cities – The Economist Intelligence Unit, Aug. 13, 2015
• Aon Infrastructure Solutions – overview