Paul Harvey used to say, “We’re not one world.” He was right. When I started in the business, it wasn’t one world. But that didn’t matter to the old guy who owned the place. The only opinion that mattered was that of the owner, and, if you didn’t like it, you could leave. That’s the way it was. Today we’re a more diverse world. Mark, a friend of mine and the leader of a very successful organization, reinforced that message. He’s wise beyond his years. He’s not young enough to be my son, but I’d be proud to have him as a younger brother. At a planning session, some of his senior employees went on a rampage about what was wrong with the Gen Xers and the millennials in his organization and in other companies. When asked his opinion, Mark said, “I think they’re bright, creative and very much the future. I think the rest of us are stuck in a rut and only want to criticize the new — we’re the past.” Did I say Mark was wise? See also: Selling to Millennials Is Easy!   Then, the other day, I saw an impeccably dressed white-haired gentleman heading into his boutique for another day of selling designer clothes to his upscale clientele. He wore a seersucker suit, white shirt and a colorful tie. He was dapper, or, as they said in the good old days, “dressed to the nines.” Not two blocks down the street I saw a young man in full urban wear. His pants were hanging to his shoes. He wore a baseball hat that was crooked on his head (either that or his head was off-center for his body). Around his neck hung more gold than my momma, wife and mother-in-law own collectively. He wore shoes that included more colors and probably cost more than all of the shirts in my closet. His look was capped off by a smile and a full “grill.” He was “dressed to it.” My first reaction was to shake my head, but the wisdom of Mark and Paul surfaced in my psyche. I realized that both the young man and the old must have had some success and some sense of style to dress as they were. Both had dressed perfectly for their audience. Yesterday, I finally saw “Bourne Ultimatum.” I anticipated a modern-day James Bond, but I saw more action in five minutes than in all the James Bond movies ever filmed. Bourne moved too fast for me, but I realized how bored most of this audience would be with Bond, James Bond. Much of today's audience is wired by seven hours of video games and three cans of Red Bull. I watched after taking a short nap to make sure I’d stay awake. We’re not one world. Success depends on meeting the needs of the niche you’re in. Don’t expect the marketplace to adapt to your style and values and needs — you must meet theirs.

First, there was science... Some sources suggest probability theory started in gambling and maritime insurance. In both cases, the science was primarily used to help people and companies make better decisions and, hence, make money. Risk management used the mathematical tools available at the time to quantity risk, and their application was quite pragmatic. Banks and investment funds started applying risk management, and they, too, were using it to make better pricing and investment decisions and to make money. Risk management at the time was quite scientific. In 1990, Harry M. Markowitz, Merton H. Miller and William F. Sharpe won a Noble Prize for the capital asset pricing model (CAPM), a tool also used for risk management. This doesn't mean risk management was always always accurate — just see the case of LTCM — but managers did apply the latest in probability theory and used quite sophisticated tools to help businesses make money (either by generating new cash flows or protecting existing ones). Then, risk management became an art... Next came the turn of non-financial companies and government entities. And that's when risk management started becoming more of an art than a science. Some of the reasons behind the shift were, arguably:

• Lack of reliable data to quantify risks — Today, certainly, there is no excuse for not quantifying risks in any type of an organization.
• Lack of demand from the business — Many non-financial organizations of the time were less sophisticated in terms of planning, budgeting and decision making. So, many executives didn't even ask risk managers to provide quantifiable risk analysis.
• Lack of qualified risk managers — As a result, many risk managers became “soft” and “cuddly,” not having the skills or background required to quantify risks and measure their impact on business objectives and decisions.

Many non-financial companies quickly learned which risks to quantify and how. Other companies lost interest in risk management or, should I say, never saw the real value. Today, it's just a mess... What I am seeing today, however, is nothing short of remarkable. Instead of being pragmatic, simple and focused on making money, risk management has moved into the “land of buzz words.” If you are reading this and thinking, “Hold on, Alex. Risk velocity is important; organizations should be risk resilient; risk management is about both opportunities and risks; risk appetite, capacity and tolerances should be quantified and discussed at the board level; and inherent risk is useful,” then, congratulations! You may have lost touch with business reality and could be contributing to the problem. See also: Risk Management, in Plain English   I have grouped my thinking into four problem areas: 1. Risk management has lost touch with the modern science. These days, even the most advanced non-financial organizations use the same risk management tools (decision trees, Monte Carlo, VaR, stress testing, scenario analysis, etc.) created in the '40s and the '60s. The latest research in forecasting, modeling uncertainty, risk quantification and neural networks is mainly ignored by the majority of risk managers in the non-financial sector. Ironically, many organizations do use tools such as Monte Carlo simulations (developed in 1946, by the way) for forecasting and research, but it's not the risk manager who does that. The same can be said about the latest development in blockchain technology, arguably the best tool for transparent and accurate counterparty risk management. Yet blockchain is pretty much ignored by risk managers. It has been years since I saw a scientist present at any risk management event, sharing new ways or tools to quantify risks associated with business objectives. That can also be said about the overall poor quality of postgraduate research published in the field of risk management. 2. Modern risk management is detached from day-to-day business operations and decision making.  Unless we are talking about a not-for-profit or government entity, the objective is simple: Make money. While making money, every organization is faced with a lot of uncertainty. Luckily, business has a range of tools to help deal with uncertainty, tools like business planning, sales forecasting, budgeting, investment analysis, performance management and so on. Yet, instead of integrating all the tools, risk managers often choose to go their separate ways, creating a parallel universe that is specifically dedicated to risks (which is very naive, I think). Examples include:

• Creating a risk management framework document instead of updating existing policies and procedures to be aligned with the overall principles of risk management in ISO31000:2009;
• Conducting risk workshops instead of discussing risks during strategy setting or business planning meetings;
• Performing separate risk assessments instead of calculating risks within the existing budget or financial or project models;
• Creating risk mitigation plans instead of integrating risk mitigation into existing business plans and KPIs;
• Reporting risk levels instead of reporting KPI@Risk, CF@Risk, Budget@Risk, Schedule@Risk; and
• Creating separate risk reports instead of integrating risk information into normal management reporting.

Risk management has become an objective in itself. Executives in the non-financial sector stopped viewing risk management as a tool to make money. Risk managers don't talk, many don't even understand business language or how decisions are being made in the organization. Risk analysis is often outdated, and by the time risk managers capture it, important business decisions are long done. 3. Risk managers continue to ignore human nature. Despite the extensive research conducted by Noble Prize winners Daniel Kahneman and Amos Tversky (psychologists who established a cognitive basis for human errors that are the result of biases) and others, risk managers continue to use expert judgment, risk maps/matrices, probability x impact scales, surveys and workshops to capture and assess risks. These tools do not provide accurate results (to put it mildly). They never have, and they never will. Just stop using them. There are better tools for integrating risk analysis into decision making. Building a culture of risk awareness is critical to any organization's success, yet so few modern risk managers invest in it. Instead of doing risk workshops, risk managers should teach employees about risk perception, cognitive biases, fundamentals of ISO31000:2009 and how to integrate risk analysis into day-to-day activities and decision making. 4. Risk managers are too busy chasing the unicorn Instead of sticking to the basics and getting them to work, many are busy chasing the latest buzzwords and innovations. Remember how “resilience” was a big thing a few years ago? Before that, there was “emerging risks,” “risk intelligence,” “agility,” “cyber risk” — the list goes on and on. It seems we are so busy finding a new enemy every year that we forget to get the basics right. See also: Key Misunderstanding on Risk Management Lately , consultants seem to have too much say in how modern risk management evolves. The latest installment was the new COSO:ERM draft, created by PwC and published by COSO this June.  The authors sure did “innovate” — among other “useful ideas,” they came up with a new way to capture risk profiles. That is nice, if risk profiling was the objective of risk management. Sadly, it is not. Risk profiling in any form does little to help executives and managers make risky decisions every day. For more feedback on COSO:ERM, click here. To be completely fair, the global team currently working on the update for the ISO31000:2009 also has a few consultants who have a very limited understanding about risk management application in day-to-day decisions and in helping organizations make money. I think it's time to get back to basics and turn risk management back into the tool to help make decisions and make money. I am interested to hear your thoughts. Please share and like the article and comment below.

As Bruce Buffer, voice of the UFC, would say, "IIIIIIIIIIIIIIIIIIIIIIIT'S TIME!" In this case, it's time for big pharma to stop just defending its prices and to start to tap into the consumerism that is transforming healthcare. Check out these stats (mostly from Google and Decisions Resources Group):

• One in 20 online searches is for health-related questions.
• According to comScore, health topics are the No. 1 search category on mobile.
• 72% of people with pre-existing conditions searched for medical info online.
• Half of all patients and caregivers already turn to digital channels to look up formulary or dosing information.
• After a diagnosis, 84% of patients searched for options.
• In a report by Decision Resources Group of 1,000 physicians, more than 50% reported their patients are more actively involved in treatment decisions — and these doctors called on pharma to support affordable options, provide relevant information and make online information more understandable.

The latest survey from Medical, Marketing & Media (MMM) shows 76% of pharma respondents use digital marketing, but the channel segregation below shows respondents devoted the greatest percentage of their marketing budgets to professional meetings/conferences and sales reps/materials. Digital channels — including websites, digital advertising and social media — lagged behind. More surprising is that only half of both large and small pharmaceutical companies see the growth of consumerism in healthcare as an opportunity. But that's EXACTLY where the opportunity for growth lies. To thrive in the new era of value-based care, pharma companies will need to change their marketing strategy toward partnering and will certainly need to focus far more on the individual consumer. See also: Checklist for Improving Consumer Experience   Trying to scare politicians away from lower-price reforms with the “It will kill our R&D” excuse is becoming the “BOO!” that no longer scares the grown-ups. Both 2016 presidential candidates, Hillary Clinton and Donald Trump, plan to stimulate price competition through imports — and there is bipartisan pressure to lift the ban on Medicare's negotiating drug prices. Apart from trade groups and shareholders, high-priced pharma doesn't have many friends. Payer pressure is bad enough, but if you don't get into the value-based care game, you are going to be on the wrong side of a very emotional equation. Patients have greater financial burdens because of higher deductibles and greater cost-sharing requirements, with varying medication tiers. Providers are ever-burdened with less time, and, now, a greater level of risk is being put on them to deliver higher-quality care, better outcomes and greater patient satisfaction — all at a lower price. Patients are not just seeking advice from providers. They are increasingly online, and at all hours. Plus, we're going to start to see greater levels of patient-generated healthcare data with wearables and digital technology. And, as we have seen, half of consumers spend their online time on social media. (HINT: Tap into consumers' behaviors and beliefs, show that you genuinely care and engage them in ways that let them feel as though you are part of their health team.) The writing is on the wall. Consumers are practically screaming out what they want and need from you. Partner with wearable and EHR companies. Start developing ways to capture and interact with your customers — specific to individuals, at the best times to engage. Find ways you can partner with hospitals, physicians and affordable care organizations (ACOs) to get into their care pathway in ways that help them lower costs to patients and payers. See also: Stop Overpaying for Pharmaceuticals   Say “yes” to predictive modeling, big data, analytics, lots of testing and customer segmentation. “Yes” to retaining some of the traditional marketing. Most of all, become human in your approach. Put yourself out there and let people know that you are no longer on an island, separate from everyone else. Let them know your port and beaches are open to more boats and more people than ever before.

Get used to it. The Internet of Things is here to stay. In fact, IoT is on a fast track to make all manner of clever conveniences part of everyday commerce and culture by the close of this decade. Tech research firm Gartner estimates IoT endpoints will grow at a breakneck 32% compounded annual growth rate over the next few years, reaching an installed base of 20.8 billion IoT units by 2020. See also: Insurance and the Internet of Things   Tiny, single-purpose sensors designed to collect rich profile data on individual behaviors — as well as on company systems — can already be found in all manner of medical devices, automobiles, TVs, gaming consoles, webcams, thermostats, utility meters, household appliances, manufacturing settings and wearable tech. Much more is coming. It is incumbent upon the businesses that deliver both the IoT devices — and the new internet-connected services that IoT sensors make possible — to address the security exposures that are part and parcel of this rapid scale-up. Fortunately, cybersecurity vendors are stepping up innovation to do just that. Gartner projects that worldwide spending on IoT security will reach $348 million in 2016 — up 24% from 2015 spending — and will climb steadily to $840 million by 2020. I recently sat down with Johnnie Konstantas, director of security solutions at Gigamon, a supplier of network visibility technology, to discuss what’s on the horizon. The following text has been edited for clarity and length. 3C: What is the core security challenge accompanying our rapid deployment of billions of IoT sensors? Konstantas: IoT sensors are quite small and pretty cheap, too, and they don’t have a lot of memory on them. Their whole point is to store a little bit of information and then just forward it on to the cloud. If you think about how we traditionally use things like encryption and a firewall to secure a mobile phone or laptop, that’s very hard to do on a small IoT sensor. So what you have is a conduit into the corporate network deployed for the purpose of receiving intelligence, and you can’t really push perimeter protection out to these IoT devices. There’s no question IoT sensors can potentially be a way in. The IoT endpoint could get infected with malware, or it could be used as a lily pad to jump in deeper. 3C: What defensive approaches look promising? Konstantas: A lot of it comes down to continuous monitoring. These devices are going to always be on, transmitting intelligence. The idea is to continuously understand what the IoT device is forwarding or receiving 24/7. Sounds like a tall order, but doing that allows you to essentially perform analytics on IoT-generated traffic. And with the proper kinds of security analytics in place, you will be able to surface anomalies. See also: How the ‘Internet of Things’ Affects Strategic Planning   3C: Sounds like big data analytics with an IoT twist. Konstantas: Yeah, exactly. Big data analytics is nothing new. Security analytics is nothing new. But both are actually seeing a resurgence. Call it SIEM (security and information event management) 2.0 for lack of a better word. This time, SIEM is not so much about collecting large volumes of data; it’s more about getting the right kinds of data. It’s about pruning my data feeds to figure out whether I have any risks associated with my IoT deployments. 3C: What key developments are on the horizon? Konstantas: I’ve been in security since ’98, so I’ve seen a few patterns play out. The one constant has been that when cool technology emerges — like our ability to do commerce on the web or virtualized storage and computing — adoption tends to be a lot faster than the arrival of the technology to secure it. So it’s fair to say that our desire to take advantage of sensor networks and IoT is going to outpace our ability to roll out security infrastructure to secure them as well. More stories related to the Internet of Things: Technological armor evolves to keep IoT devices safe from attack Ripples from Internet of Things create sea change for security, liability Consumers should brace for home network intrusions in 2016 This post originally appeared on ThirdCertainty.

A combination lock relies upon multiple numbers to match in order to release the catch. You can have three of the four numbers correct, and the lock will remain closed. Is this what is happening to the promise of group insurance sales? Are some insurers just one or two details away from unlocking the market? Many organizations would claim to have tried it all. Some have added auto enrollment capabilities, which did help. Some have improved service portals. Many have products and packages that likely meet the needs of today’s employers and their employees. Sales are happening, but if the research surveys are right, group insurers still aren’t scratching the surface of the market, particularly a fast growing new segment seeking something new. Employees still have every reason to want to purchase additional protection products through their employers (e.g. ease, security, underwriting, price). Employers still have every reason to want to carry the best selection of protection and wellness products administered on an easy-to-use platform. Providers, then, need to create and promote an ecosystem that sells itself to employers by selling through to employees. See also: Group Insurance: On the Path to Maturity Fortunately, the market has plenty of opportunity.  We are seeing healthy, steady growth, especially within the new health and wellbeing products offered as flex benefits. Insurers that hit on the right combination of product selection, digital readiness and market relevance, are going to find themselves tapped into a free-flowing market. How do providers create this win-win-win? Add health and wellbeing products One of the innovative ideas considered by a number of providers is focused on the health and wellbeing of employees. New health and wellbeing products are being developed and offered in different insurance segments. The first ones to enter the market were in South Africa with Discovery’s Vitality program and last year in the US when John Hancock teamed up with Vitality. This trend is now emerging in the UK, being replicated by the Private Medical Insurance (PMI) and group protection provider segments. A number of employers are offering a monthly benefit amount, which employees can use to select different products (a smorgasboard or flex approach) based on their unique needs and life-stage. Health and wellbeing products are part of the offerings in conjunction with traditional group protection plans. These health and wellbeing products provide standard PMI coverage to employees as well as significant auxiliary benefits and incentives. These include discounted gym memberships, reduced Eurostar fares, food discounts and more. To effectively provide these benefits, the insurer must build an ecosystem of partners who provide these benefits and services as a core part of the group protection product. Introduce education and gamification tools Benefits, no matter what kind, can be confusing. If the coverage is unclear, the product is unlikely to sell. When it comes to health and wellbeing offerings, gamification can proactively engage employees in selecting and using the right benefits, helping them achieve their well-being goals. An alternative approach for some group protection providers is to partner with health and wellbeing product providers (many of whom already have these educational tools in use) to market and offer a joint product to the employees. Regardless of approach, it is important to make these products easy for employers and employees to understand, select and use. Add and promote self-service functionality A digital portal to enrol, service and engage employees on a regular basis is a must.  The ability to quote and bind online as well as provide online service is of paramount importance to capture the small and medium enterprise market. Extending these capabilities to brokers and employers will not only improve the experience significantly, but also ensure that such books are profitable for the insurance company. Improve system robustness, speed and flexibility A number of companies are struggling with their IT applications, to support the level of flexibility required by the complex flex and voluntary business. A robust, configurable policy system can streamline the design and launch of these risk products and services rapidly into the market. Competitiveness starts with the agility provided by this foundation. Prepare relevant package types Insurers are reactionary by nature. When it comes to consumer and employer demand, product development and coverage packages should be timely and relevant. The insurer who is closely watching benefits trends and anticipating new offerings will be in a prime position to proactively capture more of the market. Smart insurers will also pay close attention to common differences between SME needs and large enterprise concerns when developing packages that fit. See also: How to Set Benefits in Different Nations   PROMOTE, PROMOTE, PROMOTE From marketing to sales to channel development, group risk insurers need to ramp up distribution efforts across the board. During this season of opportunity, it would be a crime to be prepared, yet not aggressive enough in pursuit of the many companies who still desperately need a group risk partner. Gather relevant data. Use it in yearly promotion. Once you are covering a particular group, the job is only half done. Use data gathering to know your clients and understand their employees. The details on how coverage improves within a client company will come in handy during contract negotiations and review the following year. In addition, many of the fine details will help your teams to improve take up rates with certain products and improve products that may need changes to improve utilization. This article was written by Vinay Nagwekar.

Faced with maturing markets and increased competition, many companies are seeking to differentiate themselves by enhancing their customer experience — but those efforts might be misguided. That’s not because customer experience is a poor source of competitive differentiation (on the contrary, it appears to be a compelling driver of shareholder value). Rather, it’s because companies tend to overlook key components of the experience — elements that may appear mundane but actually exert a meaningful influence on customer perceptions.

Documents often represent one of the most frequent and prominent touchpoints that companies have with their customers.

Part of the problem is that executives are easily enamored with customer experience improvement tactics that are buzz-worthy: big data predictive analytics, artificially intelligent chatbots, transformational customer relationship management (CRM) or mobile-friendly digital engagement, just to name a few examples. Less “glamorous” initiatives — such as billing statement redesigns, correspondence rewrites or sales proposal reformatting — struggle to garner much attention. That’s an issue, because these static documents often represent one of the most frequent and prominent touchpoints that companies have with their customers. See also: Payoff From Great Customer Experience?   Many businesses, however, view such documents as mere administrative communications. From the customer’s perspective, though, these documents are the experience — or, at least, a significant part of it. A classic example of this dynamic comes from the “explanation of benefits (EOB)” statements sent out by health insurers. Every time an insured receives medical care, an EOB is triggered. In theory, EOBs are meant to explain what a practitioner charged, what insurance covered (and didn’t cover), how much the insured is responsible for paying and why. In practice, many EOBs are practically indecipherable (just look at this example, which was recognized by the Center for Plain Language as one of the most confusing customer statements on the planet.) EOBs confound rather than clarify, generating more questions than they answer. They make IRS tax forms look like the most elegant communication pieces ever devised. EOBs are widely ridiculed and deservedly so. What’s fascinating, though, is that for most consumers, the EOB is the face of their health insurer. It is, by far, the most frequent touchpoint they have with the company that covers their medical expenses. Yet few insurers treat it as such and, instead, continue to issue EOBs that cement health insurers’ position at the bottom of most customer experience industry rankings.

Businesses discount the power that the written word has in shaping customer perceptions.

This is an issue that transcends any one industry. Businesses in virtually all verticals simply discount the power the written word has in shaping customer perceptions. As a Yale and Stanford study documented, something as simple as the readability of a font in product marketing materials can drive significant changes in consumer purchase behavior. Subconsciously, people see a difficult-to-read font as a cue that the purchase decision itself is difficult, so they defer making a decision. See also: How to Redesign Customer Experience   Yes, you read that right: Use a clean, readable font in your marketing materials and you’ll start converting more prospects into customers. However, it goes beyond font choice. It’s about overall cognitive fluency in written communications. The way our brains are wired, we prefer things that are easy to think about rather than things that are difficult to think about. When faced with a printed document, an email or even a webpage that exacts a high cognitive load, our brains essentially get paralyzed — and just tell us to walk away and not deal with it. That’s hardly a good recipe for engaging prospects or customers. Conversely, when written information is easy to interpret (meaning it’s clear in visual design, language and architecture), people are attracted to it. We’re more inclined to trust it (and the company sending it). We’re more likely to view the communications experience as a positive one. Clarity also means we’re less likely to have questions about the communication, which helps lower operating expenses by reducing stress on a firm’s infrastructure. Imagine how many unnecessary phone calls companies could preempt if their correspondence, bills, and statements were so clear that they actually obviated the need for customers’ inquiries. The development of crisp, clear and cognitively fluent communications should be a central component of any customer experience improvement strategy. Excelling in this regard enables companies to not just deliver a better brand experience but to do so at a lower cost. While these communication projects might appear mundane, monotonous, perhaps even boring, don’t be misled. They are an extremely practical and effective means of differentiating what may be one of the most common touchpoints you have with your customers. With every letter, email or document, companies have a chance to either enhance customer loyalty or erode it. Don’t squander this opportunity to shape your organization’s brand experience, capitalize on it by focusing on the “write stuff.” This article was originally published by Document Strategy.

New entrants—more customer-centric and digitally sophisticated than most established carriers—are transforming the way insurance is bought and sold. Their scalable, digital platforms, augmented by analytics, threaten the traditional distribution model. And at the core of the new operating models, powerful multi-industry partnerships are redefining the insurance distribution ecosystem. In short, they are taking the “I” out of distribution, and replacing it with the “we” of effective, broad-based partnerships. Established carriers urgently need to form such partnerships— and Accenture research shows that 72 percent have already done so, or plan to. But attractive alliances are, by definition, limited in number. Leading players are already inking the best deals, leaving the laggards with fewer options.

In short, it’s essential to move quickly—and gaining a first-mover advantage starts by understanding the new entrants’ true intentions.

They don’t want it all—but they are taking more and more. Approximately US$4.9 billion has been invested in 196 insurance tech companies since the second quarter of 2011, with no less than $2.6 billion coming in 2015. Targeting the lucrative distribution portion of the insurance value chain is a no-brainer for the new entrants. According to CB Insights & Accenture Analytics, 56 percent of the recipients of these investments are focused on the distribution part of the value chain (see Fig. 1). For the most part, these players aren’t interested in underwriting and taking on risk—it’s just too commoditized, requires too much capital, and is too heavily regulated. But they do want to own the customer experience. In fact, they promise to deliver a much better one—more attuned to the personalized service and tailored product offerings that 76 percent of consumers say they would switch providers for and 38 percent would even pay more to receive. Delivered at low cost via digital channels and convenient, point-of-purchase touch points, the new entrants’ value propositions not only appeal to insurance consumers hungry for a simplified, transparent and personalized buying experience. They also provide an opportunity to gather a wealth of customer data, build customer loyalty, and establish robust residual revenue streams. Consider, for example, how many auto dealers and manufacturers now offer insurance as part of a car-buying or car-sharing package, or the number of retailers that link insurance purchases to reward programs. As customers’ shopping habits shift from a linear to a non-stop path, the savviest new entrants are steadily raising their game (see Fig. 2). Some are leveraging their superior understanding of the customer base to influence product design to align with their overall Brand. Case in point: the UK retailer, John Lewis— whose insurance products are underwritten by a panel of leading British carriers—now incorporates the famous John Lewis brand promise: “never knowingly undersold.” Others are using their platform models to disrupt existing markets. The online US broker insureon, which serves more than 800 industries, can give customers a personalized quote in 15 minutes —a fraction of the time it takes traditional commercial brokers. Still others are forming powerful, cross-industry partnerships. BMW, for instance, has worked with Allianz to form a truly integrated partnership in which Allianz-designed products are tailored to fit BMW’s brand promise. BMW advertises the high-end performance of their vehicles. Driver behaviorbased telematics are not consistent with BMW’s core message. Instead, BMW and Allianz partnered to create a usage-based insurance product true to BMW’s brand promise. BMW Aftersales is also part of the agreement, which aims to generate global synergies by distributing some 50 joint products across 27 markets.

You won’t win tomorrow by continuing to do what you do today.

The industry is starting to rise to the new entrants’ challenge. Accenture research shows that 59 percent of carriers are prioritizing a more customer-centric distribution model, and 48 percent have already built a customer-centric hub that leverages data and analytics for an improved service experience (or plan to do so in the near future). But the established carriers still hesitate to take bolder steps. Fewer than half (43 percent) are planning or have completed the acquisition of startups or innovative competitors, for example. Carriers that have partnered with new entrants are already reaping the rewards, leveraging their natural advantage as underwriters to strengthen their own customer relationships. Since the start of their global partnership in 2009, Allianz and BMW, for example, have tripled their customer insurance business. Furthermore, the recent inclusion of a telematics tracking package for BMW’s electric cars—the hardware is pre-installed but only becomes operative if the driver also takes out Allianz insurance—puts the big German carrier at the forefront of digital innovation in the auto market. AXA, similarly, has significantly boosted its digital capabilities by forming a strategic partnership with Facebook. The deal gives the French multinational insurance firm access to dedicated Facebook resources in innovation, analytics and mobile, thus furthering its ambition to become what AXA Group COO calls “the leading digital and multi-access insurer.” Facebook, for its part, furthers its ambition to build major partnerships with international companies, and expands its footprint in the French market.

Act now, or lose out.

So how can you create customer experiences that are at least as good as those the new entrants are offering—ideally, better? The experience of the leaders suggests that you need to develop more customer-centric business and operating models, execute multiple models simultaneously for both the core and the digital businesses, and integrate the lessons learned about customer centricity from new partners, broadly, across the enterprise. The following considerations will help get you started:

• Pick your spots in alignment with your overall market approach. Determine your strategy and start by defining which customer segments are most attractive to you. Develop tailored value propositions and identify new product or service offerings, and then evaluate which non-traditional partnerships and business models will complement them. If your target customers are high-net-worth individuals, for example, you might seek out a luxury goods retailer.
• Rethink your product design approach to enable personalization at scale. Develop capabilities that enable faster product deployment, tailoring to specific partner value propositions, and modular product architecture supported by analytics at a granular level.
• Develop a supporting digital strategy that aligns to customer expectation, business vision and IT platforms to fulfill 4 fundamental objectives of customer experience:
  • Execution of fully-informed and real-time interactions
  • Expansion of awareness and extension of reach
  • Delivery of highly personalized experiences
  • Creation and distribution of rich, interactive content

• Build cost-effective and flexible back- and middle-office operations. Support them with a flexible technology infrastructure to make the economics work.
• Define a win-win partnership model. Define the role you want to play in the ecosystem. Align on the key success factors upfront through clearly articulated success metrics, well-defined customer segments, and one brand promise.

This article originally appeared on Accenture.

Often, it seems like the insurance industry moves slowly when it comes to technology improvements. The way insurers manage data and leverage analytics capabilities is no exception. But steady progress is being made. SMA’s recently released research report, Data and Analytics in P&C Insurance, highlights the progress as one of the key themes. The progress is observable in three areas: organizational changes to increase the focus on data/analytics, enhanced technology capabilities and the breadth of usage across the enterprise. On the organizational front, more insurers are treating data, business intelligence and analytics as a functional area of the business, akin to finance or human resources. One-third of P&C insurers now have centralized units at the enterprise level outside of the IT function. These units are increasingly being staffed with a blend of business and technology professionals who are focused on the disciplines of data and analytics. Chief analytics officers, chief data officers, data scientists and others are becoming more common, as quantified in our research report. See also: Data Science: Methods Matter (Part 4) Technology capabilities also continue to advance — with significant investments continuing to be made in traditional business intelligence — while more companies invest in advanced analytics and big data. Big data is a game-changer for a number of business areas, with significant percentages of insurers now citing applications such as pricing, customer segmentation, actuarial analysis, fraud, etc. as big opportunities. BI and analytics usage is now penetrating every area of the business. Pilots and projects from the 2014 time frame are now in production — with areas such as customer segmentation, underwriting profitability and new business analysis now implemented. The next wave of business projects are in progress in areas like customer lifetime value, underwriting operations and CRM. See also: Analytics and Survival in the Data Age   The trends, projects and investments featured in this research report are important for insurers to consider because data and analytics are increasingly becoming a primary source of competitive advantage. Data has long been considered a strategic asset by insurers, but now the scope of the data is expanding, the technologies and tools are becoming more sophisticated and the expertise of individuals is advancing.

As Brazil copes with the Zika-virus outbreak, political turmoil, civil unrest, crime, water sanitation and the looming threat of terrorist attacks, thousands of athletes, fans and officials are making their final preparations for the Summer Olympics. While none of the crises look likely to derail the Rio 2016 Games, the list of concerns reads like the list of covered exposures in a well-designed cancellation of event insurance policy. The International Olympic Committee is not alone in struggling to cope with the world of extreme events. Just look at some major sporting events that have recently been canceled, relocated or postponed:

• National Football League (Buffalo)
• English Premier League (Manchester United)
• Major League Baseball (Pittsburgh and Miami)
• Southeastern Conference Football (LSU and Tennessee)

If the list were to be expanded beyond sports, the number of concerts, events and conventions suffering the same fate is too large to compile. So, what should be considered when planning an important event, whether large or small? Infectious diseases: Zika is the latest of many infectious diseases to result in global travel advisories, the banning of large concentrations of people or implementation of public health control measures Communicable disease resulting in quarantine or restriction in people movement by a national or international body or agency is simply one exposure that concerned parties can eliminate through effective use of insurance solutions. See also: How to Think About the Zika Virus Extreme weather: In today's world of extreme weather events, once remote weather-related possibilities are becoming more and more frequent. Previously safe geographic areas have experienced hurricanes, earthquakes, wildfires, snowstorms, hailstorms, etc., all of which can leave event planners madly scrambling to determine the extent of damage incurred and whether their carefully choreographed event can go on. Even if the adverse weather does not damage the venue(s) of the event itself, the mega-facility guidelines of the nation may require the requisition of the venue by emergency personnel or evacuees in the event of a hurricane, wildfire, dam-breaking or some other catastrophe. Terrorism: Despite recent World Health Organization warnings, foremost in the worries of most risk managers for large-scale events is the rise of terrorist actions worldwide. Protection against terrorist acts can be included in cancellation of event policies for an additional cost. Such coverage would typically exclude the use of nuclear, chemical or biological materials, or radioactive contamination post-Fukushima, but even these eventualities can be covered if a thorough market analysis is conducted. Many policies do not require that a terrorist event actually take place; they can be designed to protect an entity's financial interest if the event is affected by the mere threat of terrorism, if the threat is confirmed by a recognized competent authority on the state, national or international level. Key person coverage: For events that rely on the attendance of certain personnel, performers or speakers, organizers can buy coverage specifically protecting against the non-appearance of key people. Public sector strikes: Public sector strikes, particularly those involving transportation services, and damage or loss of utility service to a venue also lead to many events being canceled, relocated, postponed or interrupted and are all insurable exposures. Business interruption coverage: Contingency insurance exists to provide protection for the expenses an entity occurs in organizing an event as well as the revenue the event should generate for the organizers, promoters, municipalities, etc. There is no "boiler-plate" solution for a specific event. It is essential that the event organizers and insurance representatives spend time evaluating the actual financial exposures the entity has. Expenses are normally the easiest to determine because they are fixed costs. However, many streams of revenue are often ignored if too much attention is given to the largest items, such as ticket sales, instead of supplementary income generated from merchandise sales, concessions, sales, lost sponsorship monies or even parking fees for attendees. See also: The Defining Issue for Financial Markets It is equally essential to determine who the financial responsibility ultimately rests with. Sponsorship contracts serve as a good example of complex obligations. If a corporation has agreed to spend millions to be the signature sponsor of an event, and the event is moved to a different venue where companies other than the sponsor already occupy desired signs and exposure, it should be determined if the expense is a sunk cost to the sponsor or if the hosting party has to reimburse the sponsor. This contract clause should dictate who receives the insurance policy benefit. Experience in determining financial exposure that each party incurs when events are in their initial planning stages is invaluable when custom-designing insurance policies to cover all possible financial liabilities. It is only a matter of time before a global spectacle of an event is canceled due to an unforeseen peril. While the emotional loss experienced by the participants and attendees is high, the financial impact can be mitigated or completely eliminated through the insurance market.

In upstate New York, a distracted driver crashes into a tree. Elsewhere, safety officials warn of an uptick in pedestrians walking into stationary objects, and even traffic. The connection, according to news reports: the latest gaming sensation, Pokémon Go. The game connects the digital and real worlds through augmented reality (AR) technology, and downloads are skyrocketing in the U.S. and globally. But for all the fun, risk professionals need to keep in mind that AR and other “disruptive technologies” can create safety risks and potential liability issues. Distractions Increase Risk Pokémon Go players seek to capture “Pocket Monsters” in real-world locations, from homes to businesses. However, as with other engrossing technologies, players can become so focused on their mobile devices that they lose track of the real world. Regulators have even posted signs to warn drivers of potential dangers. See also: An Eruption in Disruptive InsurTech?   For risk professionals, distractions are no game. If you haven’t already, consider assessing the potential impact from mobile apps in such areas as:

• Employee safety: Gamers can put themselves and others in harm’s way.
• Visitor/customer management: If your establishment is tagged as a Pokémon Go hot spot — with or without your consent — you may see increased traffic.
• Fleet safety: Gaming apps bring much the same risk as texting.
• Cyber risk: Data privacy and related risks stand out.

As you assess AR and other disruptive technologies, lean on basic risk management steps, including a review of insurance coverage in such areas as:

• Workers’ compensation: Although an injury suffered while playing a game would generally fall outside coverage, an employee may hide that game-playing was involved. Any spike in claims could affect how much you pay for coverage.
• General liability: If a customer or other person is injured on your premises because they are distracted, there could be a claim against your general liability policy. If you invited people to play the game on-site, could that affect the claim?
• Automobile liability: Distracted driving is a known factor in auto accidents. How will your policy respond to an accident in which game-playing was involved?

But don’t wait for an insurance claim before taking action. For example, remind employees to pay attention to their surroundings. Review and update driver safety programs, pointing out the dangers from mobile phones, navigation systems and other distractions. Remind drivers of the risks from other drivers and distracted pedestrians. See also: A Mental Framework for InsurTech   Additionally, it may be worth specifically mentioning Pokémon Go and other distractions in workplace safety programs. Be sure to include remote workers, for whom the lines between occupational and non-occupational injuries may be especially blurry. Disruptive technologies promise many benefits, but risk professionals can’t be distracted from managing the accompanying risks.