Everything-as-a service is transforming the economics of establishing and running a company. Product-as-a-service will fundamentally change insurance product design and delivery. Before recently joining insurance fintech start-up Instanda, I spent the last 15 years working within the insurance industry for U.K. FTSE 250 companies — such as Hiscox, Capita and, most recently, Xchanging. For the up-and-coming executive, there is something very comforting about working for a big, established company during the early part of your career. You are able to immediately plug in to a brand, revenue flow and customer base that is already well-established. There are lots of people with well-defined roles to support you, and you will undoubtedly benefit from a significant investment in physical infrastructure (whether that be a branch network of offices around the globe or big, heavy IT infrastructure sitting in your own data centers). But that level of comfort comes at a price for the big corporation. There is an enormous amount of capital in the business tied up in “stuff” (office furniture, leases, servers, etc.), and there is an inevitable restriction in the ability to move quickly to respond to changing customer needs. We all know, when a company gets bigger, it becomes more unwieldly and bureaucratic. What has really struck me since joining Instanda is how technology and service provision have moved on to such an extent that you can gain access to the same benefits and capabilities of the infrastructure of big companies at a fraction of the cost — and without losing your agility and flexibility to respond to the needs of the business. As a business, Instanda is a firm believer in consuming "everything-as-a-service." We are a technology company that does not own a server; all of our IT infrastructure is procured from Microsoft Azure, which gives us access to almost instantaneous unlimited storage and processing power from our desktop dashboard. For office and email suite, we use Microsoft 365, where are able to tap into the many years and millions of dollars of Microsoft's investment for a small monthly sum per employee. "As-a-service" is often thought of as being a software service provided out of the cloud, but, of course, it can just as easily be physical infrastructure. The sharing economy is full of examples where physical infrastructure is available to be purchased at a fractional cost. Uber is "transport-as-a-service," and through the good offices of property services firm wework, we are able to procure very high quality workspace as "property-as-a-service." Our newly built offices are sitting on the edge of London, close to our customer base and fitted out to the highest standards. In the past, for a small company like Instanda, these offices would have simply been beyond our means, but in the new "as-a-service" economy, we can purchase as many (or as few) desks as we like — with only a monthly notice period required to add seats or to exit the space, all while still benefiting from the full range of office facilities of a multimillion-pound company. Similarly, our accounting, payroll and CRM systems are all consumed as cloud-based services where we only pay for what we consume. Yet it was not long ago when the idea of placing your key customer data on a system and servers you didn’t own or control would have been seen as a crazy business risk. Imagine going to your CEO today and saying, “I want to build our own bespoke CRM system, buy some physical servers and store them in our own operated data center.” You would soon be shown the door. So, what was considered risky and unthinkable in the past can very quickly move to business-as-usual when the competitive advantages become undeniable. See also: How to Insure the Sharing Economy So what all this means is that a relatively new business like Instanda can purchase all the key services it needs to operate as a business on-demand  with "everything-as-a-service" and, most importantly, at an incremental cost completely aligned to the size of the business. The ability to buy all these capabilities "as-a-service" fundamentally shifts the cost dynamics of operating a business and allows a much smaller business to effectively compete with much bigger, longer-established businesses on equal footing. In fact, it gives you a strong competitive advantage because you can operate at a price point and with a degree of flexibility that bigger companies cannot match because of their past significant investment in physical infrastructure. In the insurance industry, capital is becoming increasingly commoditized as surplus capital seeks better returns in this sector. Underwriting and insurance products have become harder to differentiate because of increasing competition, so the battleground is now in distribution. Whether you are a reinsurer moving into insurance, an insurer opening new global offices or trying to dis-intermediate your broker channel by going direct, a broker establishing your own branded products or an MGA reaching into new markets, the overriding business challenge is: “How do I get my products out to my customer quickly and cost effectively?” So what we have done at Instanda is to take all the benefits and advantages of “everything-as-a-service” and applied the same concepts to "products-as-a-service," establishing a platform to facilitate the manufacture and global distribution of insurance products. The benefit of this approach is that we can get our customers to market anywhere in the world — 10 times quicker and 10 times cheaper than the traditional approach of building products within an installed back office software system. Our configurable toolkit allows our customers to quickly assemble any type of insurance product and completely control the look and feel of the online and mobile product. Our customers can build their products themselves without the need to code or deploy IT staff — combined with a commercial model completely aligned with the success of the products on our platform. See also: Is That Opportunity Calling in the ‘Sharing Economy’? (Part 2) By fundamentally changing the cost dynamics of insurance product manufacture and distribution, "product-as-service" opens up new sales opportunities that simply were not possible or justifiable before. Do you want to create a different look and feel for the same product for each of your agents or distribution channels? Do you want to launch a micro-insurance site for single items that are bought by the hour? Do you want to offer a short-term insurance product for a single event? Do you want to test the attractiveness of a new product before investing in worldwide distribution? All these become simple and cheap when utilizing a "product-as-a-service" platform. Of course, the real test is whether this "product-as-a-service" approach delivers the tangible benefits promised to the customer. Already, large insurance organizations such as Sompo Canopius and U.K. retail insurer LV, are utilizing the benefits of "product-as-a-service" to shorten time and costs to get to market. The approach also works for smaller organizations like Compass Underwriting.

Mary Meeker gave her always-anticipated, annual presentation on the state of the Internet this week, and I thought I should share with you. Here is the link to her massive, 213-slide presentation: http://www.kpcb.com/internet-trends.

You will certainly see numbers or even whole slides proliferate in coming days and weeks, but I encourage you to at least skim through this. Meeker, a partner at venture capital firm Kleiner Perkins Caufield Byers, has become an institution in Silicon Valley because of this presentation, which serves as a reference point for many innovators.

You won't find huge surprises -- unless I've missed something -- but I thought a few things were worth noting:

-- The main one for me is maturing of voice recognition, which she covers starting on slide 112. Just when you thought you were starting to figure out how to move to mobile, Silicon Valley starts to move to another disruptive technology for you to cope with....

See also: Solution to Brain Drain in Insurance?

Meeker has a chart showing that voice recognition is now about 90% accurate even in a noisy environment with speakers who have a variety of accents. That is up from 70% just six years ago. She shows essentially straight-line improvement since 1970 and says that, once voice recognition hits 99% accuracy, the human interface with computers will quickly move to voice, with all kinds of implications.

Now, she hasn't always been accurate. Back in the late 1990s, when she was a securities analyst at Morgan Stanley, she was one of the main characters pumping air into what turned out to be a bubble of valuations for Internet start-ups. Personally, I wouldn't assume that her chart will continue to show straight-line growth for voice recognition. It's a lot easier, typically, to get from 70% to 90% than it is get those last few percentage points of improvement for any technology.

I'm also a bit jaded because I've been hearing about voice recognition for a good 25 years, at least since I saw a demonstration at a conference I attended during my days as a technology reporter at the Wall Street Journal. A gentleman was supposedly chosen at random from the audience and, despite a heavy Russian accent, had his speech recognized almost perfectly when he spoke into a microphone. Yet here we are 25 years later, and uses of voice recognition are almost always part of phone trees where the choices of response are quite limited -- and where the system doesn't seem to hear you when you demand a live person, no matter how you loud or distinct you are when you say the word "representative."

Still, anyone who has used an Amazon Echo or similar device knows how great it can be to be able to just call out a question about the weather or what the score is in a baseball game. And the change caused by voice recognition will be disruptive enough that any thinking about new user interfaces should at least contain some experimenting with voice recognition. You need to figure out how close it is now to being useful for your purposes and to stay on top of developments in coming years. I don't think it'll be 25 years before I write again about voice recognition, and, when I do, I'll probably dictate to my computer.

-- Starting on slide 137, she does a nice job laying out the latest stats on the connected car. Nothing startling, if you've been following along, but lots of good material.

-- Beginning on slide 185, she offers some trend lines about the Internet that include some names you won't know and might want to note -- I certainly didn't know some of them, and I follow this stuff pretty closely.  She singles out Slack, a communication system that is becoming popular in some circles, especially the younger types. She also mentions Looker, an interesting data platform, plus Mapbox, Datadog, Ionic Security and so on.

-- The last 10 slides or so contain some good stats about cyber security.

See also: Best Practices in Cyber Security  

There is plenty of other good material, including about opportunities in China and India, but I wanted to single out the sections that touch most closely on the themes we've been hitting about innovation at Insurance Thought Leadership.

Mary Meeker gave her always-anticipated, annual presentation on the state of the Internet this week, and I thought I should share with you. Here is the link to her massive, 213-slide presentation: http://www.kpcb.com/internet-trends. You will certainly see numbers or even whole slides proliferate in coming days and weeks, but I encourage you to at least skim through this. Meeker, a partner at venture capital firm Kleiner Perkins Caufield Byers, has become an institution in Silicon Valley because of this presentation, which serves as a reference point for many innovators. You won't find huge surprises -- unless I've missed something -- but I thought a few things were worth noting: -- The main one for me is maturing of voice recognition, which she covers starting on slide 112. Just when you thought you were starting to figure out how to move to mobile, Silicon Valley starts to move to another disruptive technology for you to cope with.... See also: Solution to Brain Drain in Insurance? Meeker has a chart showing that voice recognition is now about 90% accurate even in a noisy environment with speakers who have a variety of accents. That is up from 70% just six years ago. She shows essentially straight-line improvement since 1970 and says that, once voice recognition hits 99% accuracy, the human interface with computers will quickly move to voice, with all kinds of implications. Now, she hasn't always been accurate. Back in the late 1990s, when she was a securities analyst at Morgan Stanley, she was one of the main characters pumping air into what turned out to be a bubble of valuations for Internet start-ups. Personally, I wouldn't assume that her chart will continue to show straight-line growth for voice recognition. It's a lot easier, typically, to get from 70% to 90% than it is get those last few percentage points of improvement for any technology. I'm also a bit jaded because I've been hearing about voice recognition for a good 25 years, at least since I saw a demonstration at a conference I attended during my days as a technology reporter at the Wall Street Journal. A gentleman was supposedly chosen at random from the audience and, despite a heavy Russian accent, had his speech recognized almost perfectly when he spoke into a microphone. Yet here we are 25 years later, and uses of voice recognition are almost always part of phone trees where the choices of response are quite limited -- and where the system doesn't seem to hear you when you demand a live person, no matter how you loud or distinct you are when you say the word "representative." Still, anyone who has used an Amazon Echo or similar device knows how great it can be to be able to just call out a question about the weather or what the score is in a baseball game. And the change caused by voice recognition will be disruptive enough that any thinking about new user interfaces should at least contain some experimenting with voice recognition. You need to figure out how close it is now to being useful for your purposes and to stay on top of developments in coming years. I don't think it'll be 25 years before I write again about voice recognition, and, when I do, I'll probably dictate to my computer. -- Starting on slide 137, she does a nice job laying out the latest stats on the connected car. Nothing startling, if you've been following along, but lots of good material. -- Beginning on slide 185, she offers some trend lines about the Internet that include some names you won't know and might want to note -- I certainly didn't know some of them, and I follow this stuff pretty closely.  She singles out Slack, a communication system that is becoming popular in some circles, especially the younger types. She also mentions Looker, an interesting data platform, plus Mapbox, Datadog, Ionic Security and so on. -- The last 10 slides or so contain some good stats about cyber security. See also: Best Practices in Cyber Security   There is plenty of other good material, including about opportunities in China and India, but I wanted to single out the sections that touch most closely on the themes we've been hitting about innovation at Insurance Thought Leadership.

Cyber attackers continue to exploit a significant security gap found in a familiar tool used pervasively in all company networks: the common web browser. Mozilla Firefox, Google Chrome, Microsoft Explorer and Apple Safari all use an architecture that makes it relatively easy for an attacker to embed malicious code on an employee’s computer — and then use that infected machine as a foothold to probe deeper into the breached network. Here’s the good news: There is a growing cottage industry of security vendors developing sophisticated technology specifically to plug this gaping exposure. Browser security vendors first appeared on the scene about 2010; leading innovators include Invincea, Bromium, Spikes Security and Menlo Security. ThirdCertainty recently visited with two new entrants, Ntrepid and Authentic8. Here is what each brings to the table: The morphing of browser usage Authentic8 recently introduced a service called Silo, which isolates web browser malware code from the targeted computer — and the rest of the company network — by routing all employees’ browsing sessions to dedicated servers. Authentic8 CEO Scott Petry has a long history helping companies keep intruders out of companies' networks. Petry founded email-filtering company Postini, which was bought by Google and folded into the search giant in 2007. Petry, who co-founded Authentic8 with another Postini alum, Ramesh Rajagopal, observes that the arrival of sophisticated browser security tools (like Silo) is a reflection of how web browser usage in corporate settings has morphed over the past couple of decades. In the 1990s, IT departments “would control how you compute, when you compute and what applications you access,” Petry recalls. Steadily, the web browser “became such a massive focal point or gravity center for how people consumed different web services,” Petry says. “It became extremely compelling for employees to access the web for personal use and for businesses to start taking advantage of the web as a way to perform business functions.” Amazon pioneered e-commerce, and Google got businesses and consumers accustomed to quickly searching for, and pinpointing, desired information. All of this leveraged the browser’s capacity to execute code on individual computers in response to users’ clicks. “As soon as that happened, business data that IT departments used to control in their environment was suddenly scattered across third-party websites that they didn’t control,” Petry says. Then social media, including Facebook and Twitter, appeared, and all bets were off. See also: 3 Steps to Improve Cyber Security Routing malware to silos The environment “is now a mess,” Petry says. “If you think about how the browser is used, it’s a one-size-fits-all solution. People use the same browser with a tab opened to get to Facebook, a tab opened to get to Dropbox and a tab opened to get to wherever. It’s a mix of personal use and business activity, and it’s no wonder that the browser is such a point of vulnerability.” Venture capitalists are funding tech entrepreneurs and are coming forward with new systems to lock down browsers — because, going forward, how we have come to use browsers is not likely to change. “I’m sure at some point we will move away from a monolithic browser,” Petry says. “It might change over time, but people have been predicting the death of email for 10 or 15 years, and it is still the most common form of business communication. So, no, I don’t think the browser is going anywhere any time soon.” Authentic8’s Silo product isolates all web code in a secure, remote container in the cloud, giving users a benign display of web content. Nothing reaches the user’s device except pixels. “The attack surface area is now ours, and that’s where we deal with it,” Petry says. Virtual sessions Instead of moving browser sessions into isolated servers, Ntrepid addresses the problem by inserting a virtual browser into every employee’s computer. Any malicious code arriving via a web browsing session is isolated from the hard drive or memory of the targeted computer. The machine, in essence, is inoculated against browser malware and cannot be used by the attacker as a beachhead to go deeper into the company’s network. Web browsers, by design, execute code over which network administrators have zero control. This code execution enables all of the cool, interactive things we can do on our browsers. Trouble is, criminal hackers can all too easily slip malware into this mix. Like Authentic8’s isolated servers, Ntrepid’s virtual browsers protect the organization from “all web-based attacks, including web-delivered malware, watering hole attacks, spear phishing, passive information leakage and drive-by downloads,” according to Ntrepid. Ntrepid’s technology, called Passages, enables employees to “safely browse anywhere,” providing them “the freedom to surf online without the risk of infecting their machines or compromising valuable enterprise data.” To activate Passages, a user simply clicks on it on the desktop instead of Internet Explorer, Firefox or another conventional browser. See also: How to Measure Data Breach Costs Any malware encountered on a website is "trapped” inside Passages’ virtual machine and can’t infect anything else on a user’s computer, says Lance Cottrell, Ntrepid’s chief scientist. The malware is destroyed when the browser session is over. While, for the moment, browser security technology is being marketed to small- and medium-sized businesses and large enterprises, Ntrepid and Authentic8 are both developing marketing efforts to serve individual consumers. “We’re starting off on enterprises — our early adopters — but they are always saying, ‘What about my wife, what about my kids, can I get this at home?’” Cottrell says. Cognizant of a massive data breach last year at the U.S. Office of Personnel Management — when hackers accessed personal information of more than 21.5 million employees, family members and others — Ntrepid is accelerating its marketing efforts to consumers, Cottrell says. ThirdCertainty’s Gary Stoller contributed to this report. More stories about browser security: Spikes Security isolates malware, keeps it from hijacking Web browsers More organizations find security awareness training is becoming a vital security tool Managed security services help SMBs take aim at security threats

Preserving the status quo (PTSQ) is repeatedly the cause of lost revenue, missed opportunities and even bankruptcies. The pace of innovation and change in business is accelerating at an ever-faster pace. Organizations with good leadership decide to move forward scared, rather than remain frozen with fear. Recently, I had the pleasure of spending the day with Peter Diamandis, the founder of X Prize Foundation and the best-selling author of Abundance and BOLD. Diamandis was named by Fortune as one of  “The World’s 50 Greatest Leaders.” He spoke about why we are living in a world of abundance and about how to recognize the future direction of technology and business opportunities. All of his examples and stories were directed at educating the audience on how to stay ahead of the competition and how to create disruptive innovation in any industry. (And, did I mention he graduated from medical school and has very strong opinions about the future direction of medicine? I’ll save those comments for another day.) See also: 10 Reasons Why Healthcare Varies His talk on the “6 D’s of Exponentials” was exceptional. It’s a way of thinking about how exponential technologies are affecting our world. He proceeded to describe business examples in robotics, artificial intelligence, 3-D printing, biotechnology, self-driving cars, space exploration and medicine. So, how is it, in the face of exponentially increasing change and all this business opportunity, that managing healthcare for so many organizations represents a slow, linear decision-making process characterized by rigid thinking, detached leadership and high costs? Even more confounding is that many corporate C-suites have abdicated responsibility of a multimillion-dollar division (healthcare) to internal managers who inadvertently make the problem worse each year. The typical corporate culture talks about innovation, but it only reinforces and encourages business as usual and the preservation of the status quo. Business as Usual, No Disruption Here For the majority of mid-sized organizations, healthcare is "managed" as one of the largest operational expenses on the balance sheet —instead of as a strategic asset that delivers a sustainable competitive advantage. Continuing to manage healthcare as an expense while somehow expecting a different result will continue to be costly. If you don’t disrupt your business practices, then someone will disrupt you. A study from the John M. Olin School of Business at Washington University estimates that 40% of companies in today’s S&P 500 will not exist in 10 years. The world of healthcare is changing rapidly. The Affordable Care Act was merely a catalyst that has triggered a tsunami of endless change in the future of healthcare in America. The challenge is to recognize new opportunities and to implement them effectively. In PwC’s latest CEO study, almost 75% of those surveyed said they are concerned their companies lack the skills needed to meet future competition. Think about all the job duties, responsibilities and competing demands a typical healthcare manager experiences. These day-to-day competing priorities mean a manager must focus time and energy on eliminating the tallest fire first, regardless of the schedule, all while managing the second-largest capital allocation for the organization: healthcare. Is it any wonder that incrementalism, fear of change and choosing the path of least resistance run rampant in corporate America? See also: Healthcare at the Tipping Point The C-suite needs to get involved and apply its business finance skills to healthcare. The C-suite must wake up to the fact that linear thinking — like the illusion that vendor size creates market leverage in healthcare — is as outdated as flip phones and fully insured insurers who refuse to substantiate annual billing and rate increases with financial transparency. According to an AON/Hewitt Survey of more than 1,000 companies, 77% of respondents said the actions of their peers influence their organization's healthcare strategy. Comparing your results with other organizations trapped by the same poor outcomes of legacy best practices and groupthink is like listening for an echo and expecting a different answer. The survey results should make the C-suite sheepish. If you’re a CEO or CFO, you have to ask yourself these questions: With all the evidence about increasing change in business, do you honestly believe managing healthcare to preserve the status quo is the prudent thing to do? Can your organization’s stakeholders afford the cost of doing nothing?

Employers may be considering the risk posed by the recent spread of the Zika virus and potential claims filed by employees who contract the disease. The Zika virus is transmitted to people primarily through the bite of an infected Aedes aegypti species mosquito. These are the same mosquitos that spread dengue and chikungunya viruses. Mosquitos become infected when they feed on a person already infected with the virus. Infected mosquitos spread the virus to other people through bites. The virus can also be spread through blood transfusion or be sexually transmitted. Where Is Zika Spreading? Prior to 2015, Zika virus outbreaks occurred in areas of Africa, Southeast Asia and the Pacific Islands. In May 2015, the Pan American Health Organization issued an alert regarding the first confirmed Zika virus infections in Brazil. Locally transmitted cases were also reported in the Commonwealth of Puerto Rico. As of March 16, 2016, no mosquito-transmitted Zika cases had been reported in the continental U.S., but cases have been reported in returning travelers. Outbreaks are occurring in many countries, and the virus will continue to spread, but it is difficult to determine how and where. However, researchers who tracked dengue fever outbreaks in the past predict small local outbreaks of the Zika virus in Florida and Texas. What Are the Symptoms? About one in five people infected with the Zika virus become ill. Symptoms include fever, rash, joint pain, conjunctivitis (red eyes), muscle pain and headache. The exact incubation period (the time from exposure to symptoms) is not known, but is likely to be a few days to a week. The illness is usually mild, with symptoms lasting for several days to a week. The Zika virus usually remains in the blood of an infected person for a few days, but it can be found longer in some people. Severe disease requiring hospitalization is uncommon. Deaths are rare. Cases are identified by the symptoms, confirmation of recent travel to locales with confirmed infections and blood tests. See also: Healthcare Case on Cutting Corners How Is Zika Treated? No vaccine or medications are available to prevent or treat Zika infections. An infected individual showing symptoms should get plenty of rest, drink fluids to prevent dehydration and take medicine such as acetaminophen to relieve fever and pain. Aspirin and other non-steroidal anti-inflammatory drugs (NSAIDS), like ibuprofen and naproxen, should not be taken until dengue can be ruled out to reduce the risk of hemorrhage (bleeding). An individual taking medicine for another medical condition should consult a healthcare provider before taking additional medication. What Special Precautions Should Be Taken by Pregnant Women? A mother already infected with the Zika virus near the time of delivery can pass the virus to her newborn around the time of birth, but it is rare. It is possible that the virus could be passed from mother to fetus during pregnancy. This mode of transmission is being investigated and is not yet understood. To date, there are no reports of infants getting the Zika virus through breastfeeding. The Centers for Disease Control and Prevention (CDC) recommends that women who are pregnant or trying to become pregnant use special precautions including avoiding travel to affected areas and using protective clothing and insect repellant. Women who are trying to become pregnant or thinking about becoming pregnant should consult with their healthcare providers before traveling to these areas and strictly follow steps to prevent mosquito bites during the trip. There have been reports in Brazil of microcephaly and other poor pregnancy outcomes in babies of mothers who were infected with the Zika virus while pregnant. Microcephaly is a medical condition in which the circumference of the head is smaller than normal because the brain has not developed properly. Additional studies are planned to learn more about the risks of Zika virus infection during pregnancy. See also: Healthcare Quality: How to Define It What Should Employers Do? Businesses with employees traveling to areas of infection should follow the precautions outlined by the CDC, including preventative measures to avoid mosquito bites. If a workers’ compensation claim is filed for Zika virus exposure, it should be handled the same as any disease or exposure claim would be handled. A thorough investigation of the claim and circumstances involved should be conducted, and medical tests and evaluations should be done to confirm a diagnosis. Compensability determination would follow applicable regulatory standards for determining whether exposure occurred within the course and scope of employment.

In a recent post, Joe Paduda stated, “The workers’ comp, and, for that matter, the entire property and casualty insurance industry, is chronically systems-poor.  While other industries view IT as a strategic asset, continually investing billions in IT, WC/P&C considers IT an expense category to be mined for pennies to add to earnings per share.” As one who has worked on the vendor IT side of the workers’ comp industry for decades, I know for a fact that he is exactly right. Nevertheless, both inside and outside change is affecting the industry—compliance requirements and how IT is perceived, financed and implemented. Moreover, customers are demanding more usable information. So as a way of advancing the perception part of medical analytics, seven reasons are offered here to whet the appetite for analytics-informed medical management See also: How Work Comp Can Outdo Group Health Analytics-informed medical management means collecting, integrating and analyzing all relevant current and historical data to gain insights that will improve performance and outcomes. The following are a few very good reasons to invest in analytics. You can: 1. Look forward, not backward An unfortunate, but persistent perception of business intelligence and data analysis is that reports are for looking at the past—how many claims, the trend in slips and falls, or how much money was spent last quarter. Interesting, but not actionable. Much greater advantage can be gained from analyzing the data to understand what is happening now to improve procedures going forward. Identify cost drivers and develop prompt, appropriate and consistent actions to redirect the organization. 2. Find meaning in your data The industry has been diligently collecting data for years, yet little attention has been paid to what the data might reveal. Analytics looks at the data to derive meaning, suggest direction and empower informed decision-making. Corporate leaders are often victims of their own denial, assuming all important information is known and current processes are the best they can be. Rarely is that actually the case, and analytics can be eye-opening. 3. Deliver intelligence to those who need it Analytics can be used to evaluate medical provider performance, for instance, and deliver the information in real time to those who are directing care. Because poorly performing providers are guaranteed to add cost and complexity to claims, analytics used in this manner will directly improve efficiency, cost and outcome. Similarly, information about untoward events and conditions in claims delivered to operations concurrently will add efficiency and improved outcomes. 4. Standardize procedures A rule-based approach can be used to monitor data and create alerts of high-risk conditions and events that occur in claims. Doing so inserts credibility, consistency and comprehensiveness into the medical management process. Moreover, when standard procedures and actions are established to respond to specific alerts, the entire process can be measured for organizational improvement, cost-savings, and outcome success. 5. Use data as a work-in-process tool Data can be a working tool. Analytics can be structured to concurrently tag data items that portend risk and cost in claims, then alert the person who can take action. Front-line workers will gain decision support information in time to intervene effectively and usually avoid irreversible damage. See also: Data Is Your Best Weapon in Work Comp 6. Discover unexpected opportunities When analytics are employed, newly discovered information or conditions understood differently can reveal opportunities. Interventions, priorities, and procedures might be restructured, streamlined or enhanced. New products or delivery methods may also be realized and developed. 7. Ensure the organization’s competitive advantage With standard and consistent methodologies, improved outcomes are demonstrated objectively for clients and prospects. Proof of value generates confidence in operations and outcomes, a much easier sell. The forgoing seven reasons to invest in medical analytics are not by any means exhaustive. Much more can be gained by implementing medical analytics. The data ingredients are available and waiting. The general tenor in the industry is to continue business as usual, but doing so has not produced desired results. Nor will it. As Paduda points out, IT in the WC/P&C industry is exceedingly underappreciated and underfunded. Therefore, a  little creativity may be required to obtain what is needed. Outsourcing to a company that uniquely provides workers’ compensation medical analytics is one approach. Fees can be sized to the organization, thereby making it affordable. Being analytics-poor is no longer an option.

The March 2016 opinion  in Negron v. Progressive Casualty Insurance by a federal district court was an unprecedented ruling against Progressive for filing a false or fraudulent claim under the Medicare Secondary Payor Act (MSP) and causing a governmental agency (Medicare) to wrongfully pay for benefits. The decision raises a broad issue for workers' compensation. Before MSP, Medicare and other federal programs paid for medical services even if the beneficiary was covered by another program. With increased longevity and escalating medical costs, though, the federal government could not continue to pay for medical costs that were already covered by other plans. Therefore, in 1980, Congress enacted MSP to bar Medicare payments where payment has been made or is reasonably expected to be made promptly by a primary plan. MSP also requires that certain claims-specific information be reported by liability insurance (including self-insurance), no-fault insurance and workers’ compensation insurance. The connection to workers’ compensation comes because it allows an injured worker to potentially be  entitled to receive future medical benefits. Settlement of workers’ compensation claims is either by stipulation (future medical treatment is typically left open) or by compromise and release (where future medical issues are paid out). But if Medicare pays for a work-related condition covered by future medical payments that have been settled through workers' comp, this could constitute fraudulently inducing a Medicare payment and be subject to the False Claims Act, a federal law that imposes liability on persons and companies that defraud governmental programs. See also: Whistleblower Suits: Emerging Risk on MSP Under the False Claims Act, private individuals may bring a lawsuit on behalf of the government in exchange for the right to retain a portion of any resulting damages award. Therefore an injured employee who is a Medicare recipient may bring an action against the responsible party if there was payment by Medicare for a work-related injury, and the worker would receive part of the recovery. This may seem far-fetched, but it could happen, so employers need to be prepared. See also: The Search For True Healthcare Transparency It would reduce potential overlap and complications if an employer needs pays only for conditions and treatment  that arise out of the course and scope of employment. The best approach to this is to have objective information as to what the employee’s physical condition was before an injury so he can be returned to pre-injury status. An EFA-STM program can provide that baseline for musculoskeletal disorder (MSD) claims, a leading cost driver in worker’s compensation. MSD claims are often difficult to diagnose and treat, and oftentimes the individual does not receive appropriate care. The EFA-STM program evaluates either new or existing employees with a customized evaluation that is consistent with  the job. The baseline evaluation is not read until there is reason to think a work-related MSD might have happened. At that time, a second test is conducted to not only determine if there is a change in condition but to ensure that the employee receives the appropriate care for any work-related injury.

This is part 1 of a three-part series. Artificial Intelligence (AI) is all the rage in the popular press. Even if you are an alien who just landed on Earth from a planet far away, it was impossible to miss the headlines that AlphaGo—the AI program developed by Google—beat the world champion of the game Go, Lee Sedol, 4-1. Why is there such excitement about this AI program beating the human champion? What is in fact AI, or artificial intelligence? What does this all mean to our businesses or each one of us? To be even more melodramatic – what does this mean for humanity? AI Defined (Really?) Since the term was first coined in 1956, AI has suffered from shifting definitions. The term “artificial intelligence” was first used at the second Dartmouth conference organized by John McCarthy, one of the founding fathers of AI.  Most definitions of AI revolve around "simulation of intelligent behavior by computers." However, one of the most popular AI textbooks took AI to another level. In “Artificial Intelligence: A Modern Approach,” Stuart Russell and Peter Norvig define AI as the designing and building of intelligent agents that receive percepts from the environment and take actions that affect that environment. This view of AI brings together a number of distinct subfields of computer vision, speech processing, natural language understanding, reasoning, knowledge representation, learning and robotics with the aim of achieving an outcome by the machine. As AI has evolved, it has also splintered. As soon as any subfield of AI is well understood, it gets renamed, and whatever is still to be discovered gets branded as AI. For example, handwriting recognition or voice recognition was once considered AI. However, with the availability of commercial systems that can recognize written text or recognize human speech, these areas are no longer considered AI. As a result, any precise definition of AI is fraught with the danger that the definition becomes obsolete as technology advances take place. See also: Seriously? Artificial Intelligence? Given the difficulty of defining "intelligence" and hence "artificial intelligence," the field of AI has resorted to beating humans in games where the humans exhibit a lot of thinking, learning or physical activity. As a result, over the past couple of decades, we have seen AI beat the best humans in chess, Jeopardy and now Go. There are also games like soccer where a group of robots train to beat the soccer world champions one day. While beating the best humans at their own game—thinking and learning–is a laudable goal, gaming situations differ from a majority of our day-to-day activity in significant ways. First, these games have a prescribed set of rules and well-defined and certain outcomes (e.g., win, loss or tie). Second, these games are closed-loop systems where the effect of the actions is limited to participants within the system. Third, the AI can be trained with multiple failures (e.g., losing the game) with no real consequences to participants outside the system. Needless to say, these situations are not very common outside of the games, and the hoopla surrounding AI and games perpetuates the confusion about AI’s ultimate mission. While it is great to see that what was once considered close to impossible just two years back – beating the world champion of Go – has now been achieved, the implications of this achievement for the broader application of AI needs to be kept in perspective. It is one more feather in the cap of "deep learning," the mechanism that AlphaGo used to beat Lee Sedol. However, the excitement of the win needs to be tempered by the daunting and challenging situations that AI software still needs to operate under.

I consider myself extremely lucky. I have a front row seat to a monumental shift in consumer behavior, which translates into important opportunities, and risks, for traditional insurance providers. I don't plan on sitting back and watching the show from a distance, I'm getting involved. Although for the record, I am not a good actor. Maybe I'll take a gig with the stage crew. The shift I am referring to is the so-called gig economy. Some use synonyms like the sharing economy, access economy or collaborative consumption. The list goes on. All of these terms boil down to one important reality: the ability to turn otherwise unproductive assets into income-producing ones through micro jobs, or "gigs." These assets include cars, homes, consumer items, hobbies and spare time. As a vote of confidence to this new trend, Merriam-Webster added the term "sharing economy": Sharing Economy (Noun): economic activity that involves individuals buying or selling usually temporary access to goods or services, especially as arranged through an online company or organization.  According to PricewaterhouseCoopers (PWC), the estimated value of the sharing economy sector by 2025 will be $335 billion. For 2013, that same number was $15 billion. In just more than 10 years, then, PWC predicts that the value of the sharing economy will skyrocket by more than $300 billion. See also: How to Insure the Sharing Economy A recent TIME Magazine study reports that 45 million American adults participate in the sharing economy. This is 1 in 5 American adults! Let that number sink in for a moment. You good? Okay, let's continue. The explosive growth in the sharing economy is occurring amid a backdrop of larger social, economic and demographic trends. These include:

• Increasing urbanization (people have less space)
• Aging demographics (older people have less money and need more services)
• A shift in consumer behavior from ownership to access

In an excellent 2015 Insurance Thought Leadership article, Neil Howe concluded that, "although some dismiss the gig economy as a fad, a hard look at the numbers shows it's both large and growing, with profound implications." So, business is booming, consumers are participating and socio-demographic trends support the growing sharing economy sector. What does this mean for the insurance industry as a whole? A lot. Let me explain. Today, I want to plant a seed. Well, as a matter of fact the seed has already been planted, a number of times by a number of entrepreneurs. What we are doing today is watering those seeds. The insurance industry is thirsty for disruption, and this is a good thing. Insurance Industry, Meet Sharing Economy: An Introduction In January, I wrote about my company, WeGoLook, and its applicability to traditional insurance operations. Specifically, we discussed the challenges the industry faces because its slow processing of claims can't continue in an age where customers demand immediate access to information, as well as the opportunities that the demands create for innovators like WeGoLook. Thanks, millennials! Today, I want to delve deeper into the disruption of this new gig economy, or sharing economy, in an effort to unpack some of the opportunities that are staring directly at us. The insurance industry is currently at a technological and innovative crossroads. To take the correct path, strong leadership is required. Lucky for us, you don't have to be an industry expert to be an industry leader. The founders of Airbnb quickly began competing with (and surpassing!) large hotel chains, with zero knowledge about the accommodation industry -- except being proficient at inflating air mattresses. Similarly, Uber quickly disrupted the taxi and transportation verticals with no industry experience. We live in an age where we either adapt or risk getting left behind as technology marches on. So, it's imperative that we as industry experts fully understand how to incorporate new business models in our value chain. See also: 'Gig Economy' Comes to Claim Handling That's what I hope to achieve in my business; to help lead us into a new era where innovation is understood, adopted and refined. I believe this is your goal, as well; after all, you are a subscriber to Insurance Thought Leadership. So how can the new gig economy plug into traditional carrier business operations? The Gig Economy: WeGoLook and Flexible Workers Slowly, we are realizing that the insurance industry as a whole is one of financial arbitrage, rather than logistics. Why would a large insurance firm employ thousands of boots on the ground nationwide when gig economy companies such as mine have access to a flexible and ready workforce available at the tap of a smartphone? B2B crowdworkers can quickly gather information for underwriting and claims processing. These workers also have the ability to retrieve police reports, notarize documents, pick up salvage items, deliver documents and much more. Remember, the sharing economy is about leveraging underutilized assets, including spare time, to fulfill both consumer and business requirements. Crowdworkers offer four main benefits to traditional carriers: 1. Faster Flow of Information As we all know, processing claims requires time and patience to gather relevant information, photographs and a myriad of other documentation. Getting the right information and accurate documentation can take even longer. Yet, commercial policyholders need to know how quickly they will be receiving funds from a claim so they may, in turn, inform their customers. Similarly, individual policyholders need a claim settled without delay so they can return to normal life. This is just good business practice. Digital and mobile platforms provide a faster flow of information. They also allow for the easier integration of crowdworkers while making sure that the right information flows into the right hands at the right time. For example, the WeGoLook mobile application directs our Lookers, those gig workers we were talking about earlier, to capture on-site data in the form of photos, video, measurements, answers to specific questions and more. 2. Ordering Efficiencies for Claim Handlers While carriers worry about the massive rework that needs to be done to update back-end systems for the demands of today's customers, a system like ours can be used as a front end that obviates the need for much of that work. For instance, once an order has been uploaded, WeGoLook will contact the policyholder to schedule an on-site inspection appointment, removing the task from the carrier's workflow. The claim handler at the carrier can easily make special language or expertise requests, such as the requirement for a Looker who is also a notary, and not have to worry about logistics. WeGoLook technology allows for the claim handler to view video and photos within the report -- even when the carrier's back-end does not support video. For good measure, because new systems are written from scratch and don't carry all the baggage of legacy systems, users of our ordering dashboard can place an order for a Looker within an average of four minutes, compared with 12 minutes in traditional systems used to dispatch field assignment representatives. See also: On-Demand Economy Is Just Starting 3. Customization and Security Writing from scratch also lets new companies customize reports to the needs of clients, letting them view data however they like. Nothing changes, no matter the location of the policyholder or asset. 4. Cost Efficiencies Finally, while I am the first to acknowledge that an on-demand workforce does not fully replace technical or specially certified field personnel, such as claims adjusters, a flexible workforce can be dispatched at the click of a button and can certainly augment, and in some cases, replace the need for full-time field staff. Efficiencies emerge in the form of salary costs, fleet vehicle costs, travel expenses, labor costs and much more. Yes, there will always be the need for an experienced field adjuster to be present under a number of circumstances. However, this is not the bulk of required work, and traditional carriers are wising up to this fact. Conclusion, for Now We believe that insurance should be smart and streamlined and adapt to customer needs. And these needs are changing rapidly within our disruptive environment. Insurers need to make their workforces more flexible by taking advantage of the gig economy. The seed has been planted. The question now is, will the landscape become an innovation desert. Or, can we help foster and develop a fertile growing climate, reminiscent of the Oklahoma grain farms I grew up with. I strongly believe it is the latter. I'm carrying a watering can and have my gardening gloves on. Good luck, and don't forget to water regularly!