It seems all the talk and all the buzz around insurance these days is how insurance is being disrupted; that insurance disruption is the hottest and newest area of tech startup focus and of venture capital. While all of this is true, it’s my belief that insurance is not being disrupted. Here’s why… Insurance is a several-hundred-year-old phenomenon. Without boring you with all those several hundred years of history, suffice to say, it is a massive global industry – many estimate it to be $5 trillion globally! So, the first question is how do you disrupt a multitrillion-dollar industry? The answer can be found in the adage that goes, “How do you eat an elephant?” Answer: “One bite at a time.”  See also: Which to Choose: Innovation, Disruption?   This “one bite at a time” analogy is appropriate for what is happening in the insurance startup ecosystem. Don’t get me wrong, I believe insurance startups and innovation are transforming insurance. But to say that insurance is being disrupted seems a bit strong from my vantage point. The real truth lies in the difference between incremental innovation and disruptive innovation. Disruptive innovation is the game changer. It is what most think of when they hear that an industry is being disrupted. It means very large, old, stodgy and outmoded businesses will fail because a disruptive innovation has changed the game. Incremental innovation means just that, smaller bets with less risk. I often refer to this approach as innovating on the margins. It is much like the “one bite at a time” approach to innovation. The insurance industry is much like this – slow and steady wins the race. It always has been and in my opinion likely will be for many years to come. When we think about all of the startups and innovation that are working to innovate in insurance, most everyone is focused on building incremental innovations. Most are not focused on building all new types of insurance companies. Why? Because the amount of capital required to start a new type of insurance company is a very large barrier to entry. Most estimate that to start an insurance company today would require several hundred million dollars, if not a billion dollars or more. That’s why. So where does that leave us? It leaves us with incremental innovation, not disruptive innovation. And that’s okay. It’s quite a good thing, in fact. Many new solutions will be developed in the years ahead that will move the insurance industry forward in ways that even five years ago we could not have imagined. It’s an exciting time in insurance. But for now, one bite at a time will have to do. See also: FinTech: Epicenter of Disruption (Part 1)   I’m interested to hear from you. Do you think insurance is being disrupted or is it being transformed through incremental innovation?Leave me a comment below or take the conversation to social media with the hashtag #denimrivet. This article originally appeared Denimrivet.,/em>

Goldilocks entered the house of the three bears. The first bowl she saw was full of the standard, no-frills porridge. She took a picture with her smart phone and posted it to Instagram, with the caption #same. Then she came to Papa Bear’s bowl. It was filled with organic, locally grown lettuce and kale, locally sourced quinoa, farm-fresh goat cheese and foraged mushrooms. The dressing base was olive oil, pressed and filtered from Tuscan olives. It was presented in a Williams Sonoma bowl on a farm table background. She posted a photo with the caption #goals. By the time Goldilocks went to bed, she had 147 likes. The End. Enter the era of the exceptional, where all that seems to matter is what is new, different and better. When Twitter came out, it didn’t take me long to pick up how to use hashtags. But then hashtags took on a life of their own and spawned a new language of twisted usage. Now we have #same — usually representing what is not exciting, new or distinctive. And we have #goals — something we could aim for (think Beyoncé’s hair or Bradley Cooper’s abs). See also: Data and Analytics in P&C Insurance   Despite their trendy, poppy, teenage feel, #same and #goals are actually excellent portable concepts. When it comes to your IT and data strategies, are they #same or are they #goals? What do your business goals look like? Are you possibly mistaking #same for #goals? Let’s consider our alternatives. Are our strategies aspirational enough? If you are involved in insurance technology — whether that is in infrastructure, core insurance systems, digital, innovation or data and analytics — you are perpetually looking forward. Insurance organizations are grappling daily with their future-focused strategies. One common theme we encounter relates to goals and strategies. Many organizations think they are moving forward, but they may just be doing the work that needs to be done to remain operational. #Same. When thinking through the portfolio of projects and looking at the overall strategy, it is common to wonder, “Isn’t this just another version of what we did three months ago, even three years ago?” Is the organization looking at business, markets, products and channels and asking, “Are we ready to make a difference in this market?” No one wants the bowl of lukewarm, plain porridge — especially customers. Are we aiming one bowl too far? On the flip side, our goals do need to remain rooted in reality. It’s almost as common for optimistic teams to look at a really great strategy employed by Amazon, only to be reminded that the company isn’t Amazon and doesn’t need to be Amazon. It just needs to consider using Amazon-like capabilities that can enable the insurance strategy. Data lakes can be a compelling component in modern insurance business processing architectures. But setting a goal to launch a 250-node cloud-based Hadoop cluster and declaring you’ll be entirely out of the business of running your own servers is not a strategy that’s right for everyone. If the organization is pushed too far on risk or on reality, it creates organizational dissonance. It’s tough to recover from that. Leaders and teams may pull back and hesitate to try again. Our #goals shouldn’t become a #fail. Finding the “just right” bowl. Effective strategies are certainly based in reality, but do they stretch the organization to consider the future and how the strategies will help it to grow? When the balance is reached and the “just right” bowl full of aspirations is chosen, there is no better feeling. Our experience is that well-aligned organizational objectives married to positive stretch goals infuse insurers with energy. This example of bowls, goals, balance and alignment is especially apropos to data and analytics organization. It is easy for data teams to lay new visuals on last year’s reports and spin through cycles improving processing throughput. To avoid the #same tag, these teams also need to evaluate all the emerging sources for third-party aggregated data and big data scalable technologies. With one foot in reality and one stretching toward new questions and new solutions, data analysts will remain engaged in providing ever-improving value. See also: How to Capture Data Using Social Media   Even if an organization could be technically advanced and organizationally perfect, it would still want to reach for something new, because change is constant. Reaching unleashes the power of your teams. Reaching challenges individuals to think at the top of their capacity and to tap into their creative sides. The excitement and motivation that improves productivity will also foster a culture of excellence and pride. We are then left to the analysis of our individual circumstances. If you could snap a photo of your organization’s three-year plans, would you caption it #same or #goals? Inventing your own scale of aspiration, how many of your goals will stretch the organization and how many will just keep the lights on?

There are some large anomalies in the business insurance market, including:

• Small to medium-sized (SME) business spend billions of dollars on premiums globally, yet a detailed risk profile is rarely developed to ensure that insurance producers and carriers are seen as trusted risk advisers rather than just sellers of product.
• The absence of risk profiling, and risk control information, makes it very difficult for insurance carriers to recognize and reward businesses that commit to improving their risk management and lowering loss ratios.
• There are very few cost-effective risk management services that can assist the millions of SMEs around the world to reduce their costs of risk.
• Underinsurance continues to hurt the reputation of the insurance industry.

The capture of client- and industry-specific risk exposures and controls in a risk profile could be the key to correcting these anomalies, resulting in a decrease in claims, improved insurance industry returns and enhanced industry reputation. See also: Do You Really Have a Digital Strategy?   Until now, risk profiling through consulting has generally been unaffordable and inefficient for most SMEs, but RiskAdvisor now provides a pre-populated, online risk platform that enables affordable, client-specific, industry risk profiles to be produced in a matter of minutes. The platform library currently contains more than 160,000 risk exposures, controls and treatments, 6,000 benchmarks across more than 600 industries and 60 risk areas. The automated capture of risk exposure and control information by insurance carriers, producers and brokers has numerous positive effects:

• If insurance buyers, producers and carriers capture a client’s industry-specific risk profile, more intelligent and efficient buying, selling and underwriting would occur.
• The strategic aggregation and analysis of risk data is important in helping carriers and producers maintain relevance in the marketplace.
• Data-driven product development helps carriers and producers bring new risk products to market faster and with greater chance of success.
• Data holds the key to improvements in risk management, which is integral to pricing risk.
• Sharing risk data with all stakeholders will make everyone involved in the insurance value chain more customer-centric.
• There can be a greater focus on more comprehensive customer services and specialty products.

See also: Customers’ Digital Expectations   Through digital risk profiling, insurance buyers, producers and carriers can easily understand a business's industry-specific risk profile and controls to enable more intelligent buying, selling and underwriting of insurance globally. Advantages to carriers of accessing a digital risk platform include:

• A competitive advantage through superior risk selection, enhanced granular underwriting assessment and more accurate pricing of risk in a highly efficient and cost-effective manner.
• Having risk information in a timelier manner, before binding acceptance.
• Obtaining risk control information and data on a far greater proportion of a carrier’s books at much lower cost.
• Interrogation of risk control data by individual risk or at portfolio level. This allows the carrier to obtain valuable insights on the performance of the portfolio, including developing trends and mitigation strategies.
• Enhanced portfolio management through the ability to analyze risk controls at an individual and portfolio level.

The strategic aggregation and analysis of risk data promises to alter every part of the industry value chain. A customer-centric view powered by new forms of data, analytics and automation offers the ability to better price risks. Digital risk profiling can deliver benefits to insurance buyers as follows:

• Risk profiling helps support better decision making when managing risk.
• The risk of being underinsured, or not insured, is reduced through improved risk assessment.
• Resilience greatly increases for insureds to recover from loss events.
• Governance and compliance outcomes improve.
• Security and confidence are enhanced for key stakeholders such as financiers and equity providers.

Digital risk profiling can transform the insurance industry’s value proposition from insurance product sellers to trusted risk and insurance advisers. Capturing risk information at the point of client engagement can have a profoundly positive effect through the entire insurance value chain.

Catastrophe bonds are an increasingly important form of risk transfer for insurers. Cat bonds are a peculiarity of the U.S. reinsurance market, where about 125 to 200 natural disasters occur a year. They were first sold in the mid-1990s after Hurricane Andrew and the Northridge earthquake highlighted the need for a new form of risk transfer. The cat bond market has been growing steadily for the past 10 years, and more than $25 billion in catastrophe bond and insurance-linked securities are currently outstanding, according to Artemis. Many insurers have moved away from managing their ceded reinsurance program with spreadsheets, which are time-consuming and error-prone, in light of current regulatory and internal demands. More carriers have installed — or are planning to install — a dedicated ceded reinsurance system that provides better controls and audit trails. See also: Is P2P a Realistic Alternative? Besides enabling reinsurance managers to keep senior management informed, a system helps carriers comply with the recent Risk Management and Own Risk and Solvency Assessment Model Act (RMORSA). It also generates Schedule F and statutory reporting, an otherwise onerous job. And technology prevents claims leakage (reinsurance claims that fell through the cracks). Cat bonds add a layer of complexity. The cat bond premium is a “coupon” the insurer pays to the bond buyer. There are many potential losses behind each bond, and the potentially huge recovery amounts to as much as hundreds of millions of dollars for some insurers. Other complexities include a priority deductible, an hours clause, lines of business reinsured or excluded and attachment criteria to automatically identify subject catastrophe amounts. Without technology, tracking all this can be overwhelming. The ceded reinsurance system can also be used to manage cat bond premiums. From a system perspective, it’s not terribly different. The same analytical split (per line of business and per insurance company in the group) applies to bonds just as it does to reinsurance treaties. With a little tweaking, a solid ceded reinsurance system should be able to handle cat treaties and bonds equally well. While ceded premium management for cat bonds shouldn’t be difficult, claims present bigger challenges, especially when trying to automatically calculate the ultimate net loss (UNL) because additional factors and rules are often used to determine it. For instance, it may be necessary to apply a growth-allowance factor, determine the number of policies in force when the catastrophe occurs and calculate growth-limitation factors. This allows the calculation of ceded recoveries in case of a catastrophe. Additionally, the calculation of UNL may be specific for each cat bond — and even for each corresponding peril. See also: Insurers: the New Venture Capitalists   Automating all this isn’t necessary because few events trigger those complexities. Once a manual workaround incorporating the audit trail and justification of the subject amounts is done, the reinsurance system can handle the remaining calculations. While it’s not necessary to fully automate all steps to calculate the UNL, it is still better to handle the whole process with an integrated information system than with multiple spreadsheets that are unwieldy and labor-intensive. Without the right technology, managing cat bonds is daunting. With automation, they can be managed far more effectively.

On Sept. 21, 2016, at 7 a.m. EDT in New York, Lemonade issued a press release. Paraphrased, it said: We’re open for business! Only time will tell the true impact that Lemonade can have on the insurance industry. Or if we will look back at 2016 in the same way we trace the origins of insurance to 1688 and the birth of underwriting in London. I’m convinced. The launch of Lemonade will go down as a defining moment in the history of insurance. And, after today, this industry will never be the same!  I trust you, you trust me. Insurance didn’t start out badly. When you look back in history, there are many examples of civilizations and societies supporting each other. Looking out for each other is natural behavior. This is what insurance is meant to be: mutuality in the pooling of shared risk. Sadly, the industry has lost its way with the evolution of mass scale personal lines in the 20^th century. The profit motive has gotten in the way of trust; the insured and the insurer are both chasing the same dollars. And now, their interests are no longer mutual but are misaligned. The insured wants a helping hand and to be “made whole.” The insurer wants to satisfy its duty to shareholders. With a very high cost of sale and administration overhead (and little that can be done to reduce it), the insurer is motivated to minimize the amount it pays in claims. See also: Be Afraid of These 4 Startups It’s an unfair relationship from the customer’s perspective. The customer has paid the premium and yet has to prove a claim to get what is rightfully hers. No amount of technology can obviate this fundamental failing of today’s insurance business model. And that is why the launch of Lemonade is so significant! Insurance reinvented    About a month ago, it was my privilege to have some time with Daniel Schreiber, the CEO and co-founder of Lemonade. We talked about the launch of Lemonade and the reasons for taking the hardest route to get a license in New York. We discussed the things that needed to change in the industry, and Daniel explained the philosophy and motivation behind Lemonade. Next month, I plan to write a longer piece with Daniel on the company's business model and tech. With his permission, I will share some of the detail behind Lemonade, which is, quite frankly, awesome, mind-blowing and game-changing! And if that doesn’t whet your appetite, take a look at these videos on YouTube:

• Lemonade in 60 Seconds
• Lemonade App Demo
• The Science Behind Lemonade

The thing to know about Lemonade is that it has built a full-stack insurance model from the ground up. This is NOT a mobile app sitting on top of traditional insurance. That’s what you get when you ask a bunch of people to find a new way to drive a nail into a piece of wood. If those people have only ever used a hammer, the chances are their solution will be kind of like a hammer. See also: The Insurance Renaissance (Part 1)   This innovation dilemma is not a problem unique to insurance. The incumbents in all industries have shown it’s difficult to innovate from within. That's why it took an Amazon to reinvent shopping, PayPal to change the game on payments and AirBnB and Uber to disrupt in their respective markets. (See this great article on Daily Fintech about the seven acts in the creative destruction play.) Lemonade is truly different Here's why:

• It’s a platform.

The way Lemonade has addressed conflict of interest between insured and insurer is inspiring — the company has simply eliminated it! Operating as a platform that enables the insurance engagement, Lemonade doesn't make any gain from the non-payment of claims. It takes a flat fee for running the platform. It makes its profit from the fee. If Lemonade doesn't pay any claims, it doesn’t increase its bottom line. Lemonade has taken out the “winners and losers” dynamic that today’s insurance model is built around. Like all great ideas, it’s simple and bleeding obvious.

• It’s peer-to-peer insurance.

Unspent premiums are put to good use. As a signed-up member of B-Corp, Lemonade groups its customers by affinity to good causes. This means that, for example, everyone who cares passionately about local youth development or finding a cure for cancer is grouped together. Unspent premiums from the risk pool are donated to the good cause at the end of each term. When a customer makes a claim, he or she knows any embellishment will be taking money away from the good cause they support, not the so-called “fat-cat insurers.” This is pure genius. Now you have a dynamic where the insurer’s job is to pay claims, and the insured’s motivation is to help others.

• It’s a pure-play tech stack.

The tech behind Lemonade is pretty special. It’s a 21^st century platform built on 2016 technology. It uses artificial intelligence to communicate through a mobile platform with its customers. From quote and buy to making a claim, the customer journey is simple, automated and immediate.  Underwriting is quick and easy and automated. Lemonade is more likely to ask how many friends you have than how your roof is constructed! Claims are the same. You tell the app what you’ve lost, make a short video testimonial and the company pays out. Immediately. There is no claims submission. There is no approval process. You state your loss, and they pay you what you’ve asked for.

• It’s all about trust and behavior.

Lemonade's secret sauce is Dan Ariely, the company's chief behavioral scientist. Dan studies behavioral economics and has written a series of books, including “The (Honest) Truth About Dishonesty.” Daniel explained to me why trust and behavior are so important to the fabric of Lemonade. He said, “People are generally honest. We all have a trust self-image that we might push from time to time. It’s like speeding; that doesn’t make us  feel like bad person when we do it. The same goes for insurance. People don’t feel aligned to the insurer, but they do feel the relationship is adversarial. This gives people a sense of entitlement and leads to embellishment and even fraud.” A great example of how trust can improve human behavior can be seen at Grameen Bank in India. This is a bank for poor people. It is trusted to repay unsecured loans without reliance on credit scores or enforcement through debt recovery agencies. And the repayment rates are higher than those of the traditional lenders who won't lend into these mass markets for fear of default.

• It’s about the greater good.

Lemonade is a public benefit corporation. This means it balances the needs of shareholders with a social responsibility to make decisions for the greater good. Like a government department, Lemonade has a corporate duty to make decisions that do not put profit and returns to shareholders first. Insurtech comes of age Out of all these characteristics, it is this last one that I think will be the most enduring and the most significant. It fundamentally cements the alignment of trust between the insured and the insurer. This is not paying lip-service to satisfy a corporate social PR agenda. Lemonade is putting its money where their mouth is. In the age of the 4^th Industrial Revolution, trust is the defining characteristic of the modern era. See also: InsurTech: Golden Opportunity to Innovate   Now, for the first time in the insurtech era, we are about to see a true game-changer come into the market. Of course, a lot will depend on consumer adoption. Will they “get it”? Do they want it? But one thing is for sure — up until now, no one has come this close to addressing the fundamental issues in personal lines. And if Lemonade succeeds (and I think it will), we will look back to 2016 and New York as the birthplace of 21^st century insurance.

Insurance companies across a wide range of offerings (health, auto, home) report they can benefit from investing in their mobile strategy — and yet they are not all prioritizing their digital transformations. According to the 2016 The State of the Mobile Experience report, 89% of insurance decision makers understand the need for a mobile experience and plan to invest in mobile this year. To date, 89% of insurance companies have a mobile website, and 74% have a mobile app. However, 20% of companies with an existing mobile presence rate their existing experience as a six or below on a 10-point scale. It is time insurance decision makers look the issue in the face and get emotionally committed to making some serious (and potentially hard) changes to create new value. With a rising millennial generation primed to make insurance choices for the first time, providers must have a digital mindset with a high emphasis on mobile. Millennials lack strong loyalty for one provider over another. Though millennial customers are the generation most likely to be disengaged from their primary carrier in general, they are more than twice as likely to purchase insurance policies online. In other words, if you want to capture user engagement from millennial customers, the only strategy that is likely to work is digital. It’s not just millennials, either. While younger generations may have a clearly expressed desire for mobile solutions, older generations have also become accustomed to these offerings. All insurance customers benefit from the ease and efficiency of a well-designed mobile experience. The time for your digital transformation is now. What’s the Deal with Insurance Providers? As an industry, insurance has been historically slow to adopt mobile technologies — for a wide variety of reasons. See also: What Millennials Demand as Customers   For agent and business-to-employee (B2E) scenarios for account management, insurance decision makers list an aversion to change (65%) and a lack of comfort with mobile devices (39%) as major barriers. They also fear losing customer touchpoints (43%) if they enable their workforce to interact through a mobile app. Insurance providers report that major obstacles with technology (34%), budget (24%) and prioritization (21%) prevent them from providing their policyholders with a strong mobile experience in their B2C scenarios. As the industry evolves and customers expect faster, more tech-friendly customer service and user experiences, industry leaders cannot afford to live in the past. Though insurance is an age-old industry, companies looking to outpace competitors and find long-term success must offer a strong digital and mobile experience — fast. Turning Obstacles Into Opportunities (Mobile Solutions) The best way to offset the industry’s aversion to quick change is to clearly articulate mobile’s unique ability to address common insurance pain points and build a consistent experience across all digital platforms. For all parties involved in the insurance equation — customers (policyholders), employees (insurance providers) and third-party agents and contractors — a well-crafted digital experience that is focused on the user journey is the key. When asked about their customers, insurance decision makers most commonly note issues of speed and information. 60% say customers lack access to necessary information when they need it, and more than half (55%) feel customers are not receiving assistance in a timely fashion. Adding to these pain points, 30% of insurance influencers feel customers have no way to retrieve the status of a claim or policy, and 26% lack communication from agents. See also: Maturing Use of Mobile in Insurance   Employees face similar roadblocks, in terms of accessing information as well as internal and customer interactions. Insurance providers believe their employee’s biggest pain points are working across departments to sell and manage policies (45%), handling too many different policies and claims (42%) and not having access to information in the field (42%). Not being able to register new customers or submit claims from the field (28%) and a lack of communication from policyholders (26%) were other top perceived concerns. All these problems are easily remedied with the right strategy. For example, mobile offerings like processing a payment, account management and alerts/notifications make it easier for policyholders to manage and update their existing insurance policy. Likewise, a strong mobile app and website enable customers to access claims and assistance, policy quotes and live chat with customer care departments from anywhere, at any time. The same can be said for insurance providers. Armed with mobile technologies, agents and claim representatives can expedite their administrative duties and access needed content and information in the field. Mobile solutions also give insurance employees better access to predictive sales and customer demographic information, both of which enable stronger, more targeted insurance outreach. With the right digital solutions providing better communication channels and more value, the touchpoints that insurance firms are concerned about losing can instead become strengthened relationships between agents and policy-holders. Kicking Mobile Adoption Into High Gear Mobile apps and websites can make both customers' and insurance employees’ lives easier. Yet, just because something is good for us, it does not always mean we use it. That seems to be the main struggle for insurance companies today. Insurance providers know that mobile solutions work and that customers want them. In fact, of those companies planning to invest in mobile in 2016, 77% will do so in reaction to customers' expressed desire for mobile experiences. Similarly, two-thirds (62%) plan to invest in preparation for a mobile-driven future. Yet there’s still resistance to mobile adoption. To abet concerns and misconceived reservations, insurance companies must engineer their digital and mobile offerings to provide value to their users throughout their journey while maintaining the needed security and compliance restrictions built into their legacy systems. See also: How to Protect Your Mobile Data   Luckily, insurance companies can address most employee and user concerns in tandem. By providing agents with greater utility via mobile capabilities, insurance decision makers can, in turn, improve the experience and satisfaction of everyday users. It is time for insurance firms to be active, rather than reactive, about their digital strategies and to stop waiting for customers to tell them when they are dissatisfied. Instead, put mobile at the top of the list for investment and start taking advantage of all the new opportunities digital can create in the insurance industry.

Irrespective of your sector of interest or whether you are in the market for insurance, take a few minutes to watch this video, Science Behind Lemonade, and the App demo. There has been so much hype about the Lemonade launch over the past months, but this is the real deal in insurance disruption. It offers lessons for any innovator, as well as any incumbent thinking it can somehow sidestep the possibilities of technology. See also: InsurTech Boom Is Reshaping Market   A few specific stand-out attributes and accomplishments: According to PropertyCasualty360.com, 66% of 18- to 29-year-olds rent their homes (vs. 37% overall), and 70% do not have renters insurance. What a smart move to make renters core to the V1.0 offering. Lemonade is introducing itself to a receptive market with a large unmet need in an easy-to-understand experience. This will, no doubt, be Step One in a longer relationship as the younger generation's insurance needs become more complex. Lemonade has broken the win/lose basis of traditional insurance. When I conduct research interviews with people who own or seek to buy insurance, it's not uncommon to hear things like (literally), “when I win, they lose,” or vice versa. Aligning interests between the person buying insurance and the insurance carrier reframes the relationship, and can reinstate trust in one of the least trusted of all sectors. Lemonade takes the sector back to the original concept behind insurance as it first appeared, all the way back in the 19th century — pooling funds so members of a community can cover for each other in times of crisis. The intelligent use of UX + data + virtual agent to have a truly personalized, relevant conversation results in giving people something they need. This is as far from product-pushing as one could imagine is possible. (Note: Renowned behavioral economist Dan Ariely is part of the Lemonade team.) Lemonade is surely an exemplar that will be studied — with attempts to imitate — within the insurance sector and beyond. But be warned that simply putting lipstick on a pig won't work. The fact that Lemonade has been built from the ground up, driven by authentic purpose, will make imitation hard. See also: Be Afraid of These 4 Startups   A stat shared at a conference yesterday, which you may have already heard: 70% of millennials would rather do business with Google, Facebook or Amazon than with a traditional financial institution. Insert “Lemonade” into that sentence. Kudos for a true disruptor for having the tenacity and focus to make a statement about what insurance can be. I'll be shopping as soon as the company offers coverage in my state!

The winners of the SMA Innovation in Action Awards are Figo Pet Insurance, Meteo Protect, Motorists Insurance Group and Texas Mutual Insurance, among insurers, and Baseline Telematics, Life.io, Octo Telematics and Pristine, among service providers. SMA launched this awards program five years ago to recognize projects and solutions that have reshaped one or more of the foundational areas for the Next-Gen Insurer: business model, customer, innovative culture and technology and data. See also: Innovation — or Just Innovative Thinking?   The insurer winners of 2016 SMA Innovation in Action Awards, in alphabetical order, are:

• Figo Pet Insurance, for its unique approach to the pet insurance business model through the innovative use of emerging technologies. The proprietary Pet Cloud platform offers policyholders real-time pet GPS tracking, cloud storage for medical records, mobile claims filing, social pet profiles, a pet-friendly business locator, texts and alerts for coming shots and appointments. Figo’s reimagination of the pet insurance value proposition is focused on making life easier for people and their pets. Figo's holistic approach offers a meaningful example of how the insurance industry can reinvent its business models and customer engagement strategies for the digital world.
• Meteo Protect, for offering customized, data-driven agricultural insurance for weather-related risks. Customers can choose each parameter of their weather policies, including crop, period of coverage, specific weather event and intensity and payment amount. Meteo Protect’s Vivaldi platform aggregates huge volumes of weather-related data from 40 years of climate history; current readings from satellites, sensors, gauges and other global weather data sources; and commodity prices and crop yields. Meteo Protect’s focus on the changing nature of weather risks and emphasis on the uncertain future expands the possibilities for the personalization of insurance products and services.
• Motorists Insurance Group, for creating an innovation space as part of the cultural shift necessary for its 10-year vision of organizational transformation. This vision hinges on Motorists’ reinvention as an “85-year-old startup” designed for innovation and collaboration. The Intersection, the company's new collaboration space, represents a complete redesign of a 1940s space to prioritize natural light, bright colors and transparency. It facilitates global collaboration through the use of cutting-edge technology, enabling work to shift seamlessly across time zones and continents. Motorists demonstrates that no company is ever too established to change, and that vast and intangible changes like developing an innovative culture can start small and still have a big impact.
• Texas Mutual Insurance, for “Safety in a Box,” a groundbreaking virtual-reality app designed to teach construction workers the value of following safety procedures. The app is available for download to a user’s phone, which can be inserted into a Google Cardboard virtual-reality viewer for an interactive, 360-degree viewing experience in English or Spanish. The user can experience the four most dangerous construction site accidents, including a collapsing trench, and see how safety choices determine the outcome of each scenario. Texas Mutual is distributing the boxes for free at construction industry events to promote workplace safety and reinvent the company's role as a workers’ comp insurer.

A compendium of case studies detailing the success stories of the four winners and the 16 other insurers that participated in the SMA Innovation in Action Awards program is available here. The solution provider winners of 2016 SMA Innovation in Action Awards, in alphabetical order, are:

• Baseline Telematics, for its BaseDrive telematics solution, which leverages a mobile app and in-car Bluetooth dongle to give insurers everything they need to create their own usage-based insurance (UBI) programs.
• Life.io, for its policyholder engagement platform for physical, emotional and financial health, which uses behavioral economics, predictive analytics and personalized content to drive high levels of sustained policyholder engagement and the achievement of personal goals.
• Octo Telematics, for its telematics offerings that deliver behavioral, contextual and driving analytics, enabling insurers to provide value-added services for policyholders such as UBI pricing, loyalty programs, vehicle diagnostics, location-based services, mobile connections and more.
• Pristine, for Pristine Eyesight, a video communication platform for smart glasses (e.g., Google Glass) and mobile devices that enables long-distance collaboration between field professionals via real-time audio and video connection.

A collection of case studies profiling the four solution provider winners, with details on the rest of the 27 solution provider awards submissions, will be released in early October. See also: Insurance Innovation: No Longer Oxymoron  

Weeks ago, Jim and I met for coffee to solve all the world’s problems. We didn’t, but he did hand me an article about Sudoku and said, “There may be a story in here.” He was right. I just didn’t realize how quickly it would appear on my computer screen. Later that day, when I was driving down Main Street in New Iberia, La., I saw mobs of “geeks” (the politically correct term is “millennials”) playing Pokémon Go. My wife works Sudoku puzzles. I had read about Pokémon Go, but I have never even seen it played before. See also: Pokémon Go Highlights Disruptive Technology   I was impressed with the marketplace’s embrace of Pokémon Go. One hundred million devotees in less than a year is a game-changer. If, like Sudoku, your business is manual, local- and pencil- and paper-dependent, your universe is limited to yesterday. If you are global and virtual like Pokémon Go, there are no boundaries — only opportunities. Your future depends on the choices you make, local or global, manual or virtual. Now let’s quit playing around and get serious about the insurance industry and your place, if any, in tomorrow’s world. Whether you prefer the metaphor of revolution or evolution, our world is changing. The change is going to be structural, revolutionary and transformational. The reason is that when one thing is different it's change; when everything is different it's chaos. In terms of natural disasters, think 9/11, Hurricane Katrina and New Orleans, the Japanese tsunami, etc. For economic crises, consider the 2008 economic collapse, the stock market crash, the GM bailout, the demise of AIG, Lehman Brothers, etc. — and then remember the past and current reshuffling of the retail and distribution systems in our world (Amazon, Uber, Airbnb, Expedia, WebMD, Netflix, etc.) I could go on, but I won’t. I can’t remember all the changes, nor can I outrun the pace of change. These changes from yesterday were triggered by systems, big data, technology, global competition and corruption, the internet and a marketplace that has evolved over time — from the corner store, to Main Street, to strip shopping centers, to malls, to box stores and even to a virtual presence in cyberspace. The big change now and tomorrow is not place but rather people and pace. See also: Look Up, Look Out, Think New! Our industry was built for a “father knows best” world. The youngest of the Greatest Generation are now 70 years old. Their progeny are the Boomers, who are 52 and older. Those in Gen X are age 32 and above, and the Gen Y and millennials are somewhere between 12 and 34. In tomorrow’s market, age doesn’t matter — wiring does. Every preceding generation was born to analog; these Gen Yers/millennials are digital natives. What we “old” folks see as aberrations, they see as the norm — and they and the market ain’t going back ever again. By 2025 (which is nine years away) millennials will be 75% of the working people. The next nine years may bring more technological advances than we’ve seen in our collective lifetimes. Our options are simple: We can go enjoy a smoke and a Sudoku on the bank of the nearest tar pit and wait for a meteor to end our pain and frustration, or we can shift into high gear and catch up with the roaming hordes of Pokémon Go folks and play in — and with — the world as it’s going to be! THE MARKET IS CHANGING BECAUSE BUYERS CHANGE! Change or die! Carpe mañana!