The insurtech phenomenon reached new heights at the InsureTech Connect 2016 event in Las Vegas in October. More than 1,600 attendees spent two days absorbing new ideas, connecting and making followup plans to explore working together.

I’ve participated in many of the insurtech and emerging tech (in insurance) events over the last couple years, but I have recently noticed a distinct shift. Most of the initial events included insurtech startups, investors and industry consultants and influencers. The focus was all on the “new” – exciting new ideas, developments and companies that were poised to transform the insurance industry. While a few insurance executives participated, the vast majority of people with insurance business cards were representing the venture capital arms of the companies. Recently, there has been a dramatic shift in the participants in everything insurtech. Companies and individuals representing the traditional, incumbent part of the industry are now actively participating. So, I am going to coin a term here: I’m calling this group MatureTech.

Insurance executives leading key parts of the business, driving innovation and creating strategies are now involved in force, representing all sizes of companies and all lines of business. Incumbent tech players are on the scene, as well. While there have been a few leaders involved in some of the early events and insurtech activities, there has now been a ramp-up of participation from these companies.

See also: 8 Exemplars of Insurtech Innovation  

This blending of the old and new is, in fact, a great development. Our central theme at SMA has been the need to bridge from today’s insurance company to the Next-Gen Insurer of the future. And it is really much more about transition and adaptation than disruption. This is not meant to downplay, in any way, the revolutionary ideas, new business models and innovative products and services emanating from the insurtech world. But there are some fundamental realities about the insurance business and operations that make it difficult to change overnight. Insurance is complex and highly regulated, especially once you get beyond the personal/individual products. Some of the key themes emerging that show how insurtech and MatureTech are beginning to blend are the following:

• Partnering and new ecosystems are the path forward: All types of players are looking to create value in new ways and with new types of partners.
• Core systems are called that for a reason: One way or another, there is still a need for automated solutions for policy, billing, claims and other core areas of the business. Although there can be new approaches, the reality is that integration with the existing systems that every insurer has today is important.
• The MGA model is appealing: It allows companies to create and sell innovative solutions and own the customer relationship but not have to hold the risk and raise the level of capital required to be an insurer.
• Insuring new things and offering new services are huge opportunities: Perhaps one of the greatest opportunities is microinsurance, which is now much more possible in the digital era. Offering new services in conjunction with insurance cover is enabled by the broad availability of real-time data.

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

There is no doubt that the world of insurance is changing. There is an open debate about how rapidly that will occur and what parts of the business will be most affected. But one thing is for sure. Bringing together the strengths of the existing insurance world with the emerging new approaches is inevitable, and it is beginning to happen. And as insurtech collides with MatureTech, insurers must develop bridging strategies to become Next-Gen Insurers and capitalize on the opportunities ahead.

The absence of risk profiling at the point of purchase in most commercial insurance transactions globally leads to uncertainty about how much insurance is appropriate and how to structure coverage. This uncertainty greatly magnifies the extent of under-insurance and or non-insurance, which undermines the value and reputation of the insurance industry and its advisers. Without the certainty provided by a risk profile, the divergence of interests for insureds and the insurance industry can determine whether clients are under-insured or even not insured at all. The divergent interests include:

1. Insureds will logically try and keep premium costs down, which often affects the levels of insurance and whether to even insure. This can often result in under-insurance or non-insurance in the event of a claim.
2. Insurance advisers and underwriters will often encourage higher limits and more coverage to give their clients (insureds) the best protection in the event of a claim, which is their primary purpose.

Digital risk profiling can greatly reduce the extent of under-insurance and non insurance, particularly for higher risks, by providing independent, industry-specific risk exposure, control and benchmarking guidance for insureds and their advisers. See also: Improve Reputations by Digital Risk Profiling   An extract from a sample risk profile (from the RiskAdvisor digital library) is  shown below. In this example, the client risk assessment is shown in the light blue for insurable risks and green for business risks. Independent industry and risk area specific risk benchmarks are shown ( in purple) to help provide guidance for clients and their insurance advisers to better assess potential risk exposures for their industry sector, to help reduce the potential for under-insurance or non insurance. Once a client-specific risk profile is created, then the more intelligent matching of insurance with risk can occur as a result of:

1. Higher risks being identified in a risk profile, which are usually the ones that are more likely to be considered for insurance. Without the identification of these higher risks and their consequence, under-insurance or non insurance is more likely to occur.
2. Higher risks that can be insured can be shown as distinct from uninsurable business risk, creating much clarity on under-insurance and non-insurance before any claims.
3. The inclusion in a risk profile of some form of risk consequence rating assessment creates the opportunity to better quantify the amount of coverage that is required, which again reduces the risk of under-insurance or non-insurance.

See also: Digital Risk Profiling Transforms Insurance   With low-cost online digital risk profiling now available for business insurance, there is a wonderful opportunity for the insurance industry and advisers to better match insurance coverages with actual client risk through documented risk profiles, reducing the instances of under-insurance or non-insurance and the potential for negligent advice claims.

Last week, I was excited to attend the first Insuretech Connect conference, which brought together entrepreneurs, VCs and industry insiders to focus on the innovative (and some say disruptive) developments within the industry. I wanted to get a closer view of the emerging technology and begin to hear a clearer message about how these developments are connected with the core issues facing the industry, such as: the industry in total very rarely delivers cost of capital returns; the products are complex, and structured in ways that make them not easily consumable by customers; there is aversion to new risks by the carriers given lack of credible loss information used for pricing; a third of P&C premium is absorbed in cost of sales and delivery, an unsustainable figure; etc. With the event behind us, here are my top takeaways: 1. There are fantastic stories beginning to emerge about the engagement of millennials (notoriously uninterested in insurance products) that over time could be hugely instructive for the broader industry. Both Trov and Lemonade are genuinely different, with an experience that is more akin to a social media exchange with your friends as opposed to the arduous image (and sometimes reality) of most insurance buying, servicing and claims interactions. Both appear to have genuinely rethought the product being delivered. In the case of Lemonade, the company has removed the implicit contention between insured and customer with an affinity-oriented dimension: Excess premiums not used to pay claims go to a charity of the customer's choice. These factors alone (I will cover more below) fundamentally reposition the insurance provider in the mind of the consumer. Trov is delivering an on-demand, single-item, micro-duration coverage – a genuinely innovative product concept. The takeaway here is that true innovation in customer experience is unlikely if there isn't innovation in the product. Trov also provides its user with an app that has real value to the consumer independent of the insurance cover -- effectively the app is a a super-easy-to-use personal asset register. The “value in use” delivered in this app is a launch point for an entirely different type of engagement. Metromile is doing the same thing with its free smart driving app, which helps you with  where you parked your car, with diagnostics and maintenance and with trip planning. The Metromile app has tremendous value to its users independent of the usage-based insurance the app provides. So the real question for the industry is whether Lemonade and Trov are just great ingenuity to deliver renters and single-item coverage to a segment that is meaningfully under-penetrated and uninterested in insurance, or whether these fundamental innovations will be harnessed and applied by others not just elsewhere in personal lines but in commercial and specialty lines, as well. 2. Unsurprisingly, the conference was dominated with many who are endeavoring to attack the distribution part of the value chain by changing customer experience and the cost to deliver those experiences. Many of the entrepreneurs are borrowing pages from the countless other categories that have gone through dramatic changes in distribution (financial services, travel, etc.). It is early days, but I look forward to companies such as Embroker, which is legitimately trying to re-create the entire customer-broker experience (focused on the more complex middle-market commercial risks), with technology as a critical enabler. One far narrower example is Terrene Labs, which is a really interesting play on big data that potentially flips the application-for-insurance process for commercial insurance on its head. Effectively, the company is developing the technology that combs the public domain to create a near-completed (and far-higher-quality) insurance application based on only a handful of questions. I highlight this venture led by the ex-CIO of Great American as he is seeking to improve the customer experience in small commercial while simultaneously slashing the front-end agency cost of entering the application data to carrier’s on-line systems. I suspect that the much-anticipated launch of Attune, the initiative backed by Hamilton-Two Sigma-AIG, will feature this sort of change in experience. I anticipate the developments next year on distribution are going to be far more robust and measurable. 3. While there is an intensifying discussion about the Internet of Things (IoT) and the exponentially increasing data that can be accessed to evaluate risk -- including sensor technology that can convert risk taking into a continuously monitored, pay-as-you-go model (even in liability classes) -- most of this is futurist stuff. The exceptions are usage-based insurance (UBI) in auto, some modest developments in smart home and increasingly smart machinery monitoring you find in a variety of commercial applications. Yet one company really stood out in its ambitions. The company, Understory, has been installing micro weather stations (wireless, solar-powered, etc.) to get a far more finite view of rain, hail, wind, etc. than the National Weather Service can provide. During a panel discussion, the CEO noted that the company can put 60 of these micro weather stations in a city for the cost of a single large radar system (around $200,000). It is difficult to cite the specific loss to the industry of straight-line wind and hail (it runs in the tens of billions of dollars in the U.S. alone each year), and hail loss is notoriously difficult given the sometimes long tail to discover it and, in certain cases, the high fraud rate and difficulty to empirically verify whether a hail storm that occurred during a specific period of insurance coverage caused the damage. But the sort of innovation occurring at Understory was one of the few focused on a core aspect where the risk takers can improve performance and meaningfully reduce loss costs. This is not to say that the many excellent developments around machine learning and predictive analytics applied to underwriting and claims is not similarly attacking these sorts of costs, it is just that Understory is unusual in that it is a tangible quantum improvement in data that can drive improvement in loss costs. Look out for the next wave of “Understories” and to more tangible results from the variety of vendors pushing the machine learning/big data angle for both claims and underwriting, 4. I finish with my “not so impressed” takeaway. The most obvious aspect missing at the conference was a good economic understanding of the insurance industry by many of the entrepreneurs selling their wares. In some cases, including panelists, they were flatly wrong in their assertion and some showed little regard for the facts. Even Daniel Schreiber, the CEO of Lemonade (whom I found to be thoroughly entertaining, insightful and articulate about many things, including behavioral economics), responded to a query from the interviewer/moderator in a way that indicates that some independent research suggests that the pricing of Lemonade's product is a fraction of competitors. Schreiber suggested that the 25% cost for distribution (I interpreted this as total commission) and 40% total operating costs for the industry, compared with the “20% management fee Lemonade charges its customers,” is a key contributor to the difference in costs. Underlying Schreiber’s comments was an obvious point that the cost of today’s insurance product to the customer is far too high and that innovation has to drive down costs for the insurer and prices for the consumer. At least Schreiber took on the issue in a thoughtful way. Unfortunately, though, the 25% and 40% numbers are simply wrong. I go back to the factual economics of our industry. The INDUSTRY IN TOTAL DOES NOT EARN COSTS OF CAPITAL, so the industry in total is not getting paid for the risk it is taking. In 2015, 31% of premium (not 40%) went to sales and service. In personal lines, the numbers are far lower. As a reference point, Progressive’s total expense ratio is just under 20%, and Travelers homeowners expense ratio hovers around 28% (with a large part in commissions, given their retail distribution model ). I am not suggesting that the industry is not ripe for some disruption, but that those are seeking to disrupt (or even enable) it need to understand the macroeconomics and then follow the money (kind of what Understory is doing). Back to Lemonade. I can imagine that the company has built its infrastructure in such a way that the investors will get an appropriate return from the 20% management fee. I can further imagine that the model may self-select a better class of renters than the wider population and that maybe the fundamental proposition reduces fraud-driven loss costs, so a far lower price could be justified. Yet only a few of those at the conference started with a good foundation of industry and value chain economics, an understanding of the unique regulatory and product attributes that will remain for the foreseeable future, and where and how underwriting and loss performance can be improved. As these issues come into focus, I suspect that the innovations will begin to fulfill the expectations that are building in the insurtech space.

Someone’s figured out how to bottle a great customer experience. No, this isn’t a magic elixir that, when applied to any customer interaction, turns disappointment into delight. This is, quite literally, a bottle that delivers a great customer experience. It’s called “ClearRx,” and it was developed in 2005 by graphic designer Deborah Adler. She sought to improve what is actually a pretty crummy customer experience – one’s interaction with a prescription medicine bottle.

If you think about it, prescription bottles don’t sport a very customer-friendly design:

• Childproof caps, while great for keeping medicine out of the hands of children, also make it difficult for less dexterous people (many of them elderly) to access their drugs.
• The most prominent feature on the prescription label itself is often the pharmacy’s logo, which is actually the least important piece of information for the patient.
• Reading the label requires some mental gymnastics, as the drug name, dosage and intake instructions are printed in a tiny font that meanders around a cylindrical bottle. It’s hardly the ideal platform for easy viewing.
• Color-coded warning stickers (indicating, for example, that the medicine should be taken with food) are typically printed on orange labels, which don’t stand out well on a traditional amber-colored prescription bottle.
• If your household stores prescription drugs in a drawer, good luck finding the right one. Because the drug name is printed on the side of the prescription bottle, you need to pick up and inspect each one to locate the right medication for the right person.
• Some of the most important information, such as that about drug interactions and side effects, is usually printed on a separate sheet that’s stapled by the pharmacy to a paper bag. That sheet often gets discarded with the bag and therefore isn’t readily available when people actually need to consult it.

See also: Answer to a Better Customer Experience?   When her grandmother misread a prescription bottle and mistakenly took pills meant for her grandfather, Deborah Adler decided there must be a better way. And that’s when she invented the ClearRx system, which was later licensed to Target’s pharmacies.

ClearRx essentially reinvented the prescription medication bottle, creating a far more customer-centric product. Here’s how Adler did it:

• A reshaped bottle now allows for a flat surface on which prescription information can be printed. No more reading while rotating the bottle. All the key information is clearly visible to the patient from a single vantage point. In addition, the drug name is printed on the top of the bottle, as well, so even if stored in a drawer, it’s easy to find the right medication.
• The information architecture of the label itself better aligns with what the patient needs to know. Pharmacy branding takes a backseat to safety. The top half of the label prominently displays the drug name, dosage information and intake instructions. The bottom half of the label, printed in smaller type, is reserved for less critical information, such as the quantity of pills and the name of the prescribing physician.
• The drug information sheet (describing interactions and side effects, among other important details) is now neatly tucked behind the prescription label – always easily accessible when you need it. There’s also a rudimentary magnifying glass inserted behind the label, for people who need some extra help reading the bottle.
• Essential warnings, such as whether to take the drug on an empty stomach, are more prominently delineated on the back side of the bottle (instead of crammed onto a small warning sticker).
• The bottle cap was redesigned to still be childproof while allowing for easier access by elderly patients and others with limited dexterity.
• Colored rubber rings attach to the neck of the bottle, allowing each individual in a household to choose an identifying shade so they can spot their prescriptions at a glance – even if the bottles are mingled with those of other family members.

ClearRx was a huge hit with Target’s pharmacy customers, many of whom are now lobbying CVS to embrace the design. (CVS acquired Target’s pharmacies in 2015 and subsequently converted all prescription bottles to their more traditional design, in the name of “cost efficiency.”) Here’s what you should take away from the ClearRx story: Everything has a customer experience. Yes, even the act of opening up a prescription medicine bottle is a type of customer experience. And when such seemingly inconsequential interactions are intentionally engineered, it can distinguish the experience (and the associated company) in the marketplace – as ClearRx and Target so skillfully accomplished. See also: How to Redesign Customer Experience  Think broadly about the types of interactions that constitute your company’s customer experience. It’s not just about interactions with retail store associates, call center staff or onsite sales reps. There are likely more subtle components to the experience that deserve to be managed just as carefully – for example, the act of opening a box of shipped goods, or installing a piece of software or reading an account statement. Be deliberate and thoughtful in shaping the design of all of these interactions, always incorporating the perspective of those who actually use your product or service. The brilliance of ClearRx is that it took a meaningful but overlooked touchpoint and redesigned it with the customer in mind – thereby creating a source of competitive differentiation, where before there was none. That’s a prescription for success, in any business. This article first appeared at Watermark Consulting.

Insurance companies face numerous state, federal and international regulatory obligations with customer communications and relationship management. Failure to comply can be costly to reputations and bottom lines. In fact, the vast amounts of personal and sensitive data require businesses in the insurance, financial services and other highly regulated sectors by law to archive electronic messages and ensure customer privacy across communication channels. In our hyper-connected digitized world, these security requirements extend to include interactions done via mobile messaging, which has quickly emerged as the preferred and fastest-growing communication method. There are already 1.6 billion people on messaging platforms world-wide, and projections are that, in 2017, more than 28.2 trillion will be messages sent. See also: How Chatbots Change Open Enrollment   Yet many of the most popular social mobile messaging platforms don’t meet the regulatory requirements set forth by the Securities and Exchange Commission (SEC) and other regulatory bodies. They are designed for peer-to-peer messaging instead of contemplating business communications and transactions. A case in point is the recent privacy concerns raised when WhatsApp, a popular messaging app, announced it would share customer data with Facebook. Compliance, legal and regulatory professionals shudder at the thought of "shared customer data." Consumers don't want to use the same chat app for private, business interactions that they use for friends. As a result, adoption has been slow for social chat apps for insurance, as well as banking, healthcare, telecommunications and cable-TV and related services, via social chat apps that provide real transactional capabilities has been slow. Likewise, most insurers and other highly regulated companies aren’t sold on using a social messaging service such as WhatsApp or Facebook for messaging with customers largely because of data privacy issues. So how can insurance companies embrace mobile messaging as the preferred way for customers to communicate, while still meeting regulatory, legal and internal policy requirements?

1. Adopt a messaging platform that allows secure, encrypted messaging purposefully designed for business.
2. Ensure mobile messages are effectively captured and archived in a secure filing cabinet.
3. Ensure compliance and integration of your mobile messaging solution with other customer communication channels and enterprise systems.

See also: The Case for Personalization   The insurance industry has built its foundation on managing risk and building a good reputation. By adopting mobile messaging to communicate with customers in real-time, insurers have an opportunity to create a deeper connection with customers, increase satisfaction and reduce costs while also building trust with customers. The opportunity to improve the customer experience is huge, while also successfully meeting the regulatory requirements around this next wave of change in communication.

Blue Marble Microinsurance, a consortium of eight companies established in 2015 with the aim of creating a market for microinsurance, is launching our first venture in Zimbabwe. While Blue Marble will initially pilot the venture in Zimbabwe to gain insights into how to make the insurance solution sustainable and impactful, we ultimately plan to scale the venture across Africa. Blue Marble is providing drought protection to smallholder maize farmers in Zimbabwe. The venture has three key features. First, the design of a proprietary index to support the insurance product is a collaborative innovation of data scientists and agronomists from the eight consortium companies. The second feature is the use of two-way mobile communication with customers to improve the overall proposition continuously. Third, the use of innovative point-sensor technology to measure rainfall and plant health throughout the growing season will complement traditional grid remote-sensing data to create a higher-resolution parametric insurance cover. See also: Microinsurance Model in Non-Standard Auto?   I am delighted that Blue Marble’s eight consortium companies have come together to launch this promising venture in Africa. By working together, we will bring insurance protection to the underserved in Zimbabwe, a region once known as the breadbasket of Africa but now constrained by food insecurity. Blue Marble’s venture in Zimbabwe should reveal insights into streamlining processes and building customer-centric business models. See also: 5 Innovations in Microinsurance  

The Department of Labor has issued a stinging report that, in effect, calls for a new federal commission to review how the state-based workers’ compensation system fails. The department throws down the gauntlet, challenging defenders of the current system to show how state oversight has not deteriorated in the past 25 years in the ways that matter to it —mainly, preventing financial distress to injured workers. The report’s title, “Does the Workers’ Compensation System Fulfill its Obligations to Injured Workers?”, signals that the department is interested only in increasing worker benefits. It doesn’t want to take over managing the system. The body of the 43-page report barely mentions employers and insurers. The department portrays itself as a vital stakeholder, in two ways. First, it cites a team of researchers with 70 years’ experience in workers’ comp who estimated that Social Security Disability Insurance spends $23 billion annually for benefits to beneficiaries injured at work. The SSDI enrollment rate for injured workers is double that of workers not disabled by work. See also: Time to Focus on Injured Workers Second, not large in the text but strikingly so in the press conference, speakers suggested that the nation’s entire economic safety net is out of kilter because of poor performance of the only part of the safety net run by the states. There should be no doubt that ProPublica's series of articles, which commenced in March 2015 with its initial broadside, “The Demolition of Workers’ Comp,” makes it easier for DOL to pitch its views. But DOL doesn't have much problem finding evidence, some of which is sound, some speculative and some questionable. The report’s power of persuasion is greatly enhanced by the fact that neither states nor private sector participants in workers’ comp seriously attempt to demonstrate that injured workers fare well, or even just no worse than in the past. The industry does not try to demonstrate that its immense investment in doing business, such as medical management, improves the lot of these workers. The executive summary says, “Working people are at great risk of falling into poverty as a result of workplace injuries and the failure of state workers’ compensation systems to provide them with adequate benefits.” The force of this sentence warns that if state regulators and private parties want to respond, it will take quite an effort. The risk of financial distress is rarely addressed, as WorkCompCentral did in The Uncompensated Worker report of January 2016. States need to consider the extent to which the state system is responsible, such as by barring or erecting hurdles to claims for disease and post-traumatic stress disorder. Certain workers’ compensation benefits, such as for atomic weapons workers, have already been federalized because of failed efforts deliver benefits. (Some financial distress is beyond the scope of a workers’ compensation system, such as lower incomes years after a worker sustains a temporary medical-only claim.) See also: States of Confusion: Workers Comp Extraterritorial Issues  DOL’s report argues extensively that benefits have worsened since the 1980s. That’s when state reaction to 1972's so-called Burton Commission (named after its chair, John F. Burton Jr.) began to falter. States made improvements primarily out of fear of federal take-over. Since, then, according to the report, it’s been only downhill. The report even questions how evidence-based medicine guidelines have helped workers. This worsening of benefits is a complex argument, arising from Burton himself, still in the game. For some 40 years, frequency of work injuries (the number per 100 workers) has steadily declined. This seems a spectacular gain for workers and employers.  Indemnity benefits per $100 payroll also declined by a lot. In 2010, Burton asserted that benefit payments fell far more because of restricting access to benefits than from fewer injuries. Much in the report can be picked apart by informed critics. Does anyone want to do it? The report does not end with a crisp list of action items to critique, other than a bland one for more research. But the obvious aim is another federal commission. Those who want to drown this surfacing proposal might consider what allies they have in Washington. Will either of the presidential candidates be opposed to a commission? Would congressional Republicans want to come to the defense of a state system not ready for this battle? The Department of Labor and others in Washington want, it appears, to federalize enough to increase benefits but not to be in charge of every wheel spinning every weekday at 9 a.m. To achieve change, one has to propose something that most stakeholders will see as better or no worse. And you first have to destroy the reputation of those guarding the status quo. That’s the 50 states, and that's the goal of this report. This article first appeared at WorkCompCentral.

Insurance is a complex purchase — policies are hard to understand, the reputations of insurance companies can be difficult to determine and what exactly you’re paying for isn’t always clear. Making an informed decision amid the overwhelming amount of information takes some effort, diligent research and, sometimes, a bit of luck. As it turns out, there’s an agency in your state government that should be able to help with all these things: your state’s department of insurance. But these agencies vary widely in their ability to give critical time- and money-saving information to residents, or even to answer a simple question about insurance in your state. A new NerdWallet analysis looked at insurance departments across the country, evaluating their online offerings and how helpful their websites are to consumers in their communities. We found most of these websites fall short in serving consumers by not providing key information, such as insurer rate comparisons and complaint data, as well as easy access to consumer assistance and educational materials. But we also identified states like Texas, whose insurance department website is a model of excellence that the lower-scoring states would do well to emulate. Key Findings For this study, NerdWallet examined the websites for all 50 states and the District of Columbia, looking for information that would benefit consumers the most. We also called consumer helplines and emailed each insurance department. We then graded each agency on more than 20 factors that added up to a 100-point scale. What did we find? The vast majority of departments had plenty of work to do to improve the consumer information they offer and how easy it is to find it.

• States are split on sharing rate comparisons: Twenty-seven department websites featured car insurance rate comparisons at the time of our scoring, and 24 did not. As for homeowners insurance rate comparisons, 21 websites shared the data, and 30 did not.
• Complete complaint data are scarce: Just nine department websites offered consumers the ability to compare 2015 complaint data across insurance companies for all four major lines of insurance — auto, health, homeowners and life. Twenty-three departments shared no complaint data.
• Calling for help can be cumbersome: We called all 51 departments and asked a basic, state-specific auto insurance question. Though 19 answered our question in less than two minutes and 36 in less than 10 minutes, 15 either didn’t answer the question at all or took long enough that consumers could have found another source of information during that time.

It’s important to note that state insurance departments do much more than provide help and information to consumers. They also handle licensing, monitor and regulate rates, and deal with complaints. Our analysis focused only on their websites and helplines. Spokespeople for many of the lower-scoring states said their website offerings are limited because of staffing and budget constraints. A handful of state spokespeople we interviewed said they didn’t see value in offering the things we scored. For example, Ohio Department of Insurance spokesperson David Hopcraft said the agency does “not view its website as a shopping mall for online insurance comparisons,” when asked about why the department didn’t post rate comparison data. Of the lower-scoring departments that responded to our requests for comment, several announced coming or in-progress improvements, including New Mexico, the lowest-scoring state in our analysis. See also: The Insurance Implications of Social Networking Websites, Part 3   “Your project has motivated us to improve the consumer elements of our website,” wrote Alan Seeley of the New Mexico Office of Superintendent of Insurance, whose department made several consumer-centric adjustments before publication. The Analysis In 1999, the Consumer Federation of America graded state insurance department websites and reported that three states lacked an online presence. Now, all departments have websites, catering to how Americans prefer to get information. But these sites vary greatly in their offerings, their ease of use, how well they’ve kept pace with advancements in design and how folks get information online. NerdWallet analyzed each website based on four categories:

• Insurance rate comparisons
• Complaint data
• Consumer assistance
• Consumer education and resources

For a comprehensive look at our methodology, including weightings, click here. Here’s why we chose these metrics: Insurance Rate Comparisons States accept rate filings from insurance companies, which alert the department to changes in pricing and coverage. Typically based on these filings, premium comparisons shown on insurance department websites are not meant as quotes — as numerous factors go into pricing a policy — but consumers can use them to get a general idea of what they might pay for coverage or which company offers the lowest price. Complaint Data States are tasked with accepting and investigating consumer complaints against insurance companies. Comparing complaint rates across companies can be a useful shopping tool for auto, homeowners, health and life insurance customers. Consumer Assistance When insurance customers have questions about coverage and laws in their state, they should be able to call the agency responsible for insurance regulation and receive answers. For this metric, we called all 51 departments by using the phone number that consumers would be most likely to dial. We asked a basic state-specific insurance question: “What are the minimum auto insurance requirements in this state?” Consumer Education and Resources Insurance is a complicated topic, and with so many resources online, it’s difficult to know whom to trust. People should be able to go to the state agency tasked with insurance regulation to get unbiased information to help guide their insurance decisions. Why It Matters Insurance in the U.S. is regulated at the state level. This is in contrast to many other financial service providers, such as banks, other lenders, credit card companies and debt collectors, which operate under significant federal oversight. The Consumer Financial Protection Bureau is also looking out for the interests of customers by accepting and resolving complaints, as well as serving as a liaison between citizens and financial institutions. However, the trillion-dollar insurance industry is by and large an exception. Fifty-one different regulating bodies make for a widely varied approach to insurance regulation and consumer services. Generally, however, these state insurance departments have the task of regulating the industry to protect consumers, the primary goal of state insurance regulation, according to the National Association of Insurance Commissioners, or NAIC. Robert Hunter, director of insurance at the Consumer Federation of America and former insurance commissioner for Texas, led an analysis of state insurance agencies in 1999 that was similar to this study. The motivation then: Consumers were complaining they couldn’t find crucial information, which Hunter says these department websites are in a unique position to provide. See also: ACA: Complication for Websites   “These departments are — at least you hope, and it’s almost always true — independent of insurance companies,” not subject to biases that might come from state commissions staffed by industry insiders, Hunter says. “Plus, they have a lot of information for consumers that no one else has, information that no one else can really help you with.” Departments of insurance are clearinghouses for consumer complaints against insurers in their state. Most also require insurers to file rate changes and policy form updates, making them an ideal primary source of insurance policy information. These agencies, better than any national organization, know the unique challenges and legal requirements consumers in their state face, and they can provide this information without any self-serving interests. “Consumers shouldn’t have to rely 100% on the insurance company or its salesperson for information,” says Amy Bach, executive director of United Policyholders, an insurance consumer advocacy organization. “There should be a neutral source of information available to the consumer to help them make good decisions surrounding this very complicated product.” In our analysis, we found many states’ websites rely on the NAIC for educational information and details about complaints filed against insurance companies. This trade organization was established almost 150 years ago to bring some uniformity to the patchwork that results from so many regulatory bodies, and has developed some useful consumer resources. States can save time and money by passing these resources on to their residents. But NAIC resources are no substitute for the kind of localized information that state insurance departments provide, according to Birny Birnbaum, executive director of the Center for Economic Justice. “It’s ridiculous to have an auto insurance buyers guide that lacks state specifics, that says, ‘In some states… .’ How does that help me?” Birnbaum says. “It’s wrong for a state to limit the resources that their insurance department has by simply relying on the NAIC. States need to supplement the tools that the NAIC provides.” NerdWallet contacted the NAIC for comment but didn’t receive a response in time for publication. However, the NAIC consistently refers consumers to state insurance departments for information specific to where they live, both on its website and its educational site InsureU. When it comes to complaint data, the NAIC’s Consumer Information Source does the same, directing visitors to their state agency for complete information and accuracy. The Results Here’s how each state’s department measured up. An asterisk (*) denotes a tie in the rankings. For details of what went into each score, click on your state’s name or navigate to this page.

Customer insight (CI) teams can take different forms in different businesses (partly rightly, to reflect the needs of that business). One such variation is reporting line. Some CI teams report into operations, sales, IT or even finance. However, by far the most common reporting line is into marketing. See also: 3 Skills Needed for Customer Insight   That makes sense to me, as over the years I have seen more and more applications for customer insight across the marketing lifecycle. Increasingly, marketing teams are realizing that use of data, analytics, research and database marketing techniques is part of their role. Sadly, these technical teams are, too often, still separated. But at least there are signs of collaboration. Marketing Automation: Companies and leaders also recognize different applications of insight to marketing. Some focus on early-stage roles in strategic decisions, some on proposition development and some on campaign execution or marketing measurement. Very few appear to use customer insight in all they do. Meanwhile, one of the trends of recent years has been the adoption of marketing automation systems. In some cases, the term has almost been used to replace the infamous customer relationship management (CRM) system. But, for many businesses, it is more about bringing a structured workflow, resource management and quality controls to the work of marketing teams. Talking with consultants who specialize in helping businesses implement marketing automation systems (none appear to work straight out of the box) reveals a sadly lacking focus on customer insight. This is such a missed opportunity. The marketing workflow needed by today’s business requires input, validation, targeting or measurement at almost every stage. But it seems that marketing automation designs are not routinely embedding customer insight deliverables into marketing processes. Regulation: It is perhaps surprising that more focus has not been put on automating routine use of insight in marketing, given the regulatory environment. Whether you consider certain vertical markets (like the role of the Financial Conduct Authority), or the higher hurdles coming to all data uses (with the adoption of general data protection regulation, or GDPR, principles), marketers will need more evidence. Those data marketers keeping up-to-date with their professional responsibilities will realize they need to evidence suitability of their offerings, targeting of their communications and appropriate use of data. Where’s the gap? So, in what parts of the marketing lifecycle are marketers neglecting to use customer insight? Where are the most important gaps? Based on my consultancy work, often helping companies design their customer insight strategy, I would identify the following common gaps: Participation decisions:

• Either not having a clear understanding of market segments, or not making participation (product categories or distribution channels) based on segment fit or size of appeal.

Communication design:

• The use of insight generation has grown for product design (as per our recent series), but too few marketing teams also use that same insight generation to design their communication.

Communication testing:

• Quite often this is left to ad hoc qualitative research, with insufficient use of techniques like eye-tracking or quantitative experimentation at concept stage.

Event triggers:

• Identified as important to targeting in two recent research reports, from the DMA & MyCustomer/DataIQ, event triggers deserve to be more widely used in targeting marketing campaigns. For further thoughts on why you don’t just need propensity models, see previous posts on both events and propensity models.

Holistic marketing measurement:

•  As more and more marketing directors are expected to report on their return on investment (ROI) or return on marketing expenditure (ROME), once again insight can help. Not just the traditional role of database marketing practices, in reporting incremental return against control groups, but also, increasingly, the design of holistic measurement program (converging evidence from brand tracking, econometrics and other data sources). This previous post shares some more detail on that.

Will you be insightful or ignored? In closing, I’d encourage all customer insight leaders to get closer to those leading marketing in their businesses. Marketing will become increasingly challenging over the next 12 months. CI leaders have the potential to become trusted advisers who can support marketing directors in navigating those choppy waters. See also: The 4 Requirements for Customer Insight   To return to the theme of regulation. I once more advise readers to not underestimate the potential impact of the EU’s general data protection regulation (GDPR) on their businesses. Despite Brexit, every commentator seems to agree that this regulation will affect U.K. businesses. The most eye-catching element may be the scale of potential fines (as much as 4% of global annual revenue), but the changes to consent may affect marketers more. The new hurdle will be proving positive unambiguous consent. Many businesses may conclude they need to move to opt-in for all marketing content. So, going forward, the biggest threat to marketers (those not embedding insight into their processes) may not just be losing customers. It may be losing the right to talk to them!

Carpoolers and hitchhikers were the original ridesharers. Now, ridesharing has become much more sophisticated. Riders and drivers can now be partnered through smartphone applications, which is changing how we think about insurance and liability. The promise of the sharing economy, people making money from things they already own, is a noble one. Especially during tough economic times such as the 2008 recession, flexible job options in the sharing economy provide many with a financial safety net. But what do these new collaborative marketplaces, particularly ridesharing ones, mean for traditional insurance carriers? This is a great question, and one I hope to help unpack here. The Rise of the Sharing Economy People were tired of waiting long periods for unreliable taxis and poorly run public transportation. The idea of ridesharing quickly caught on and has grown steadily ever since. There's a reason why ridesharing giant Uber has been valued at more than $60 billion; it's serving a significant customer demand. And whether we like it or not, sharing economy companies like Uber are here to stay. See also: 9 Impressive Facts on Sharing Economy   Although sharing economy platforms have caught on quickly, laws and regulations have been sorely lagging. Many sharing economy companies currently operate in the legal and regulatory vacuum as decision-makers try to figure out how to handle this new form of economic exchange. The Growing Acceptance of Ride-Sharing The insurance industry is in a different stage of acceptance, however. Recently, we have seen a growing acceptance by insurance carriers of the ride-sharing phenomenon through the development of innovative policies and products. Why is ridesharing so popular? Convenience. Instead of having to pick a taxi company, calling them and waiting an untold amount of time, ride-sharers can now log into a smartphone app to book a ride. Once a driver accepts, you can see in real-time where your driver is, and even communicate with him. An advantage of ridesharing is that you don't have to exchange cash or card information for payment. Most ridesharing apps allow you to prepay into an account and simply deduct the amount of the ride from that account. Or, even connect your credit card to your account for a seamless transaction. And insurance carriers are catching on. For instance, Aviva, State Farm, GEICO, Intact and others, have introduced hybrid rideshare specific policies for those who want to drive for Uber or Lyft. But there are other aspects of auto insurance coverage that relate to the sharing economy: car-sharing. The Growing Acknowledgment of Car-Sharing For car-sharing, instead of sharing rides, users share the use of their personal vehicles in much the same way as a car rental agency operates. The biggest car-sharing platform is Turo, which allows people to rent out their vehicle to screened drivers for a fee. Think of it as a car rental agency, but on the individual level. Both car and ridesharing platforms have built-in insurance, but many questions have been raised as to liability in a sharing world. The Issue of Insurance Coverage There are certain stages of engagement in sharing economy work like ridesharing. When you are matched with a passenger, pick her up and drive her somewhere, there is no doubt you are "working." What about when you are waiting for a passenger? Or driving around looking for one? Are you covered then? And which coverage counts, yours or the platform's? But for the most part, these issues have been settled through innovative gap coverage and hybrid policies. A problem arises, however, in the form of insurer knowledge. Many sharing economy workers don't realize that they're not covered under traditional auto insurance policies. By definition, paying for the use of a vehicle, whether it's an Uber ride or renting someone else's car, is a commercial transaction. See also: Why to Embrace the Sharing Economy   That means that private insurance won't cover you for accidents or incidents involving the vehicle in question if the vehicle is being used for commercial sharing. That can be a rude awakening. Educating ride-sharers must be priority number one for sharing economy platforms and insurance carriers. Unfortunately, the law hasn't caught up to the sharing economy. In many jurisdictions for instance, ridesharing is still illegal even if you have the right insurance coverage. That is changing, however, as municipalities ease restrictions and slowly change laws to get with the times. Remember, the sharing economy is here to stay, and we must get on board, safely of course. The insurance industry is ahead of the curve, and will be much better once municipal, state and federal decision-makers better understand and intelligently regulate this new form of economic exchange.