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!

Banking and insurance chief executive officers (CEOs) think it’s time for their chief financial officers (CFOs) to shine. But many also have deep misgivings about whether the finance function — and its leadership — is ready to deliver real value to the business strategy. Winds of change keep blowing Anyone that thinks that the financial services industry has been slow to change has clearly not spent much time in the finance function. Indeed, the last decade — the past 5 years in particular — have been all about change for finance executives. Change has been driven from all sides: new accounting standards, increased capital adequacy and/or solvency rules, heightened reporting requirements, new regulatory directives and the recent shift towards more integrated reporting are just part of the change sweeping through the financial services industry and flowing into the finance (and risk) functions at financial institutions. At the same time, bank and insurance CFOs also need to support the organization and its business strategy. New products are being introduced, businesses are being sold or acquired, non-strategic assets are being divested and new markets are coming into scope. And with each change, the finance function has needed to respond. Rise above the fray While bank and insurance sector CEOs seem to sympathize with the plight of the finance function, most clearly expect their CFOs to rise above the challenge. In a recent global survey of more than 370 CEOs commissioned by KPMG International, 67 percent of financial services respondents said they expect the role of their CFO to increase in significance over the next 5 years, the highest percentage among all c-suite executives. The problem is that few of these CEOs seem to think their finance leadership is currently ready to take on this high profile role. The same survey found that just 53 percent of the financial services CEOs thought their CFO was viewed as a valuable business partner by the business. Only around a third of respondents believed that their CFOs truly understood the challenges they face as CEOs. Just 19 percent thought that their CFO was currently playing a critical role in supporting the CEO and the board. Simply put, the data suggests that CFOs of financial institutions still have a long way to go if they hope to live up to their CEO’s expectations. Taking an enterprise-wide view of performance A number of CFOs at the top global banks and insurers are now starting to focus on developing and improving their enterprise performance management (EPM) capabilities. Essentially, they are starting to recognize that — by combining financial data with operational and customer data through the latest wave of integrated EPM solutions — CFOs can start to take a leading role in helping to dynamically manage the planning and execution of the business strategy. EPM delivers benefits across the organization. At the finance level, improved EPM capabilities enable finance functions to optimize their finance operations and dynamically generate more value-adding reports, allowing the finance function to become a more vital business partner across the enterprise. It can improve the speed, relevance and access to the type of performance reporting and analysis that creates real business insights when and where it is needed most: in the business. And it can help create better alignment between the organization’s diverse back-office functions (such as risk, capital management, compliance and operations) to drive better end-to-end decision making based on a single set of balanced key performance indicators (KPIs). Improved EPM capabilities also allow the finance function to become a better — and more strategic — business partner. In some cases, this is achieved by driving valuable forward-looking analysis and planning through the EPM’s integrated business and financial planning features. Using these advanced EPM functionalities enables finance functions to better anticipate and even predict business outcomes, leveraging sophisticated ‘what-if’ scenario-based analysis capabilities based on key business drivers, events and relationships. And, in doing so, it can help the finance function become more integrated with the organization’s sales and operations planning processes. This forward-looking EPM feature is especially important for financial institutions, as new accounting standards like IFRS9 for financial instruments and IFRS4 Phase 2 for insurance contracts (both life and non-life) forces them to disclose fair market values and net present value (NPV) calculations on their financial assets and liabilities. This, in turn, will likely make results more volatile and more transparent, which will lead organizations to demand even greater control than they have today. Many financial services organizations are also seeking to improve their end- to-end performance in key areas such as customer performance. Some have even defined new roles specifically to support improvements in their end- to-end processes. As a result, some organizations are finding that EPM helps deliver a consistent end-to-end framework that ensures consistency in definitions, improves connectivity to show correlations and encourages the reuse of data to improve reconciliation. Aligning the Risk and Finance functions of insurance companies with EPM For insurers, one of the big benefits of EPM is closer alignment between the finance and the risk functions. Creating this alignment is more important today than ever. The finance function is critical to measuring and reporting financial metrics such as gross premiums, investment returns, claims paid and overall profitability, while the risk function needs to estimate the technical reserves based on a complex array of actuarial models covering insurance, market and operational risks. Together, these two form the basis for the all-important equity and solvency ratios of the company. The latest generation of insurance- specific EPM systems can bring both worlds more closely together. Not only are they able to generate the usual financial and certain regulatory reporting requirements, but they can also support the integrated business planning and management reporting needs of the company through innovate data cubes, on-the-fly dashboard generators and real-time analytical capabilities. From discretionary to mandatory Perhaps most importantly, a strong EPM capability can enable management to make better business decisions. It can help improve speed and access to information. Leveraging new technologies (such as those on offer at the KPMG Data Observatory), EPM can deliver improved visualization and analytics capabilities, thereby empowering the organization with competitive insights. And it can make sure everyone is looking at consistent data from the same source, improving decision- making confidence. Essentially, it can help management answer the big questions that they are struggling to answer today. This is exactly what CEOs say they want from their CFOs. Indeed, when we asked CEOs of large financial institutions what their CFO could do to deliver more value, three initiatives boiled to the top: 1. applying financial data analysis to help the organization achieve profitable growth; 2. using financial data analysis to create and implement new operating models; and 3. finding ways to turn the regulatory environment into a competitive advantage. All three can be achieved through improved EPM capabilities. As a result, most CFOs are starting to recognize that investing into EPM is no longer a discretionary activity. It is a source of potential competitive advantage, a way to better manage regulatory requirements and a path to improved efficiency and cost savings. As such, EPM is quickly becoming a mandatory capability for finance functions in the financial services industry. More than just a reporting tool We have used words like ‘discipline’ and ‘capability’ when we refer to EPM, rather than ‘software’ or ‘solution’. That is because EPM is much more than simply a tool or software package that is ‘bolted-on’ to consolidate and analyze global data from existing ERP systems. In fact, the real value of EPM comes only when the organization — led by the finance function — starts to turn that data into real, reliable and actionable insights. And that requires a holistic approach to EPM that spans the enterprise and the whole operating lifecycle (as illustrated in Figure 1). To start, organizations may want to consider flipping the historical ‘plan-do- check-act’ approach on its head. Indeed, creating a robust and appropriate EPM program requires finance functions to start with the ‘act’ (i.e. what insights does the business need in order to act), and then ‘check’ what information is required and whether it is available. Only then should finance functions move onto the ‘do’ of building the solution and, ultimately, the planning that can be achieved once the information is available. Once EPM programs are in full swing, finance functions can then go back to the traditional and continuous ‘plan-do-check-act’ lifecycle process and culture. Become a value player: Solve the business’ problems Securing ‘buy-in’ from the business for a new approach to EPM is not easy; fatigue with new change programs is high and executives are competing fiercely for resources for their own programs. But buy-in is critical, not only at the executive level but throughout the business and across the enterprise. In this busy environment, CFOs may want to start by helping the business answer one specific (yet critical) management question: “How can I best help you achieve your business goals?” Maybe it’s about finding the optimal pricing mix for their products and services. Maybe it’s about identifying the right acquisition targets to drive profitable growth. Or maybe it’s about identifying the most profitable customer segments and channels. The key is in working collaboratively with the business to solve their problems and then using that opportunity and outcome to drive greater appetite for more advanced EPM capabilities within the business. Bank CFOs leverage EPM to become more strategic Most banking CFOs are already well on their way to moving from being a scorekeeper to becoming a business partner. But EPM enables CFOs in the banking sector to move one step further by allowing the finance function to combine multiple sets of data — financial, customer, risk and operational, for example — to provide the organization with deeper, more valuable and more strategic reports. Our experience suggests that the ability to leverage and adopt new technology and approaches will be key. Some of the leading banking CFOs are already using data visualization and predictive analytics to collect, analyze and communicate key data sets. And early adopters are now investing into robo-advisors and other automated technologies that can reduce or eliminate manual intervention. A business-led approach When we work with banks and insurance CFOs to create stronger EPM lifecycle discipline and improve their EPM capabilities, we focus on creating a holistic enterprise performance management model and approach that recognizes the transformation that is required in process, people and technology to allow CFOs to drive real value from their finance teams. In doing so, we lead our clients through a business-led technology transformation that instills the necessary EPM awareness, capabilities and skills across the enterprise and throughout the business, helping CFOs meet the evolving and increasingly sophisticated demands of their organization. Questions to evaluate if your organization needs improved Enterprise Performance Management capabilities ...

1. Doesyourexecutiveteamhave real insight into the group’s true profitability by product, service/ channel, country/region and customer?
2. Is your organization combining financial, operational and customer data to make better decisions and create a competitive advantage?
3. Are you able to anticipate future regulatory changes and use those insights to gain entry to new markets using innovative channels faster than your competitors?
4. Do you know which channels currently provide the best growth and profitability and do you have a plan for optimizing them?
5. Are you able to conduct collaborative planning across all of your business functions to optimize investment decisions and improve shareholder return while at the same time maximizing capital efficiency?

Reprinted from (Regulatory Challenges Facing the Insurance Industry in 2016,) Copyright: 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name and logo are registered trademarks or trademarks of KPMG International. All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the facts of a particular situation. For additional news and information, please access KPMG's global web site.

More than 50 research studies worldwide have found that certain types of news coverage regarding a death by suicide can increase the likelihood of additional suicide deaths in vulnerable individuals. The magnitude of the increase is related to the amount, duration and prominence of coverage. Business leaders can learn from these media studies and shape written and oral communication in a preventive way. Media Lesson: Risk of additional suicides increases when the story explicitly describes the suicide method, uses dramatic, graphic headlines or images, and repeated/extensive coverage sensationalizes or glamorizes a death. Use non-sensationalized language and life-giving terms. Avoid images that glamorize the death such as photos or videos of the location or method of death or grieving family and friends. Headlines such as “Kurt Cobain Used Shotgun to Commit Suicide” should better be drafted as “Kurt Cobain Dead at 27.” Business Application: Talk about suicide in a way that assumes the recipient will handle the information in a mature, responsible, life-giving way. Often, leaders avoid any reference to suicide when speaking with their teams. The rationale can be wanting to avoid any power of suggestion. “We didn’t want to give them the idea.” This belief is highly inaccurate. They already have the idea…especially immediately following a death by suicide within their social circle. Avoiding the topic lends it negative power. Discussing suicide carefully, even briefly, can change public misperceptions and correct myths, which can encourage those who are vulnerable or at risk to seek help. See Also: A Manager's Response to Workplace Suicide Media Lesson: Avoid reporting that death by suicide was preceded by a single event, such as a recent job loss, divorce or bad performance review. Also, avoid describing a suicide as inexplicable or “without warning.” Reporting like this leaves the public with an overly simplistic and misleading understanding of suicide. Application: Suicide is complex. There are almost always multiple causes, including psychiatric illnesses that may not have been recognized or treated. However, these illnesses are treatable. Refer to research findings that mental disorders and/or substance abuse have been found in 90% of people who have died by suicide. Most, but not all, people who die by suicide exhibit warning signs. Identify a list of usual “Warning Signs”. Consider quoting a suicide prevention expert on causes and treatments. Fully acknowledge the horror and the loss but emphasize what is being done to support those who are impacted. Change your language from “committed suicide” or “successful/unsuccessful suicide” to “died by suicide” or “completed suicide.” Media Lesson: Do not cite the content of the suicide note or any “manifesto.” Better would be “A note from the deceased was found and is being reviewed by the medical examiner.” Application: Communicate, communicate, communicate but determine what content is shared on a “what is helpful/need to know” basis and always prioritize respectful adherence to the needs and wishes of the family. Media Lesson: Use your story to inform readers about the causes of suicide, its warning signs, trends in rates, and recent treatment advances. Include means of accessing resources. Application: Knowledge offers healthy power. Have a hopeful, caring, life-giving tone. Focus the major portion of your remarks upon resilience and health rather than details about the death. Talk about available treatment options, stories of those who overcame a suicidal crisis, and resources for help. Emphasize faith practice and spiritual strength. Include up-to-date local and national resources where people can find treatment, information and advice that promotes help-seeking. Business leaders can change the conversation and help keep people just a little bit safer.

At the end of 2016, some CEOs are going to be happy about their results. Others? Not so much. Underlying both the good and the bad will be a clear bifurcation between those that get and execute modern IT and those that don’t. The outcomes will be stark and the penalties brutal. This bifurcation will just be beginning, and the gap between the haves and have nots will continue to grow. This article will talk about what the bifurcation is, how it came about and how you can end up on the right side. But first, here’s a snapshot of how your organization will behave if you’re a winner in 2016. You’ll be better at customer acquisition, retention and growth than your competition. You’ll be far faster and more effective at integrating and leveraging acquisitions and faster than your competition in introducing new products, services or features. Revenue-per-employee will be better than your peer group, and return on capital assets will be better than average for your market segment. You’ll have advantages in decision cycle time and decision quality as well as better talent management and broad collaboration enablers. Your BPM layer will have near-perfect compliance and cost-efficiency. You’ll quickly respond to new entrants, ideas and attacks. And your marketing spend will be two times more effective per unit dollar than your nearest competitors. This translates into segment-leading profit, share and growth numbers and the best shareholder return. But seriously, how can you do all the above — and more — to put a serious hurt on your competitors? Clearly, you must have the right strategic focus, the right goal alignment across the firm, the right talent matched to task and the right structure to mission. But even with that, it is simply impossible to achieve the above in today’s world without being excellent at IT and having the CEO/CIO be his or her own lock-step mini team. Those that don’t, won’t succeed. The big bifurcation is beginning. What led to the current IT bifurcation? In the early 2000s, after the Y2K fog cleared, smart, well-funded startups began to leapfrog current technology. Even some established big players made great leaps forward (often by acquisition). The foundations were set back then for things like Enterprise Architecture, SOA/Web Services, next-gen analytics, cloud(s), Business Process Management (BPM), virtualization, enterprise grade KM/collaboration platforms, modern portfolio management, analytics (think metadata) and agile development to really make a difference. Around 2007 and 2008, a lot of the first-gen players were killed off by the second generation, which was born advantaged by having seen the stumbles of the first generation. At the same time, the size and value of networks increased, and the mobile layer began to take on critical mass, helping spawn the emerging big data field with its own thick fog. This spawned a hockey-stick growth curve for the massive and massively complex “social” layer, which, in turn, fuels more big-data plays. It’s now 2016, and these areas (and more) have matured into extremely viable, high-impact opportunities for IT. On top of that, emerging areas like SDN, SDDC, DTM, TBM, algorithmic solutions, next-gen visualization, real IT asset management, social tools and new construction tools have created a split — the big bifurcation — in the IT world. The firms that leverage a decent amount of the modern tech mentioned above and figure out how to do that while whittling away at legacy overhang are simply better armed for the competitive fight than their opponents. They are the ones at the knife fight with the gun. It shows up in concrete results. It generates the happy CEO or CIO I described above. What are your odds of landing on the winning side of IT bifurcation? Like golf, poker, raising a teenager, hiking to the South Pole and writing haiku, undertanding next-gen IT stuff is conceptually quite simple — but it’s wickedly hard to do really well. Like those examples, in IT, there will be a long wake of wreckage from ugly, failed attempts. May the odds always be in your favor. Unfortunately, they are not. Less than 10% of the Fortune 1000 IT teams will be on the winning side of this by the end of 2016. The rewards for landing on the winning side will be great, as will the unprecedented churn in CIOs and CEOs. As results become apparent and, in part thanks to increased media buzz, the board-level understanding of the bifurcation becomes clear, heads will roll. Taken as a whole, the changes I described above are new, drastic and high-impact. We are entering a new epoch, one that makes the advent of the two past big network changes in U.S. business (railroads and telegraph) look like child’s play. This is not an acceleration or concentration of an existing case. This is a new scenario. Tips for how to land on the right side of IT bifurcation So what are the prescriptions? Here are 10 to get you started. 1. The genius of “and” versus the tyranny of “or” This IT game would be easy if the business, the market, the competition and the invention would all just pause for 18 months while we go tools-down, clean up the inevitable legacy quagmire and get all the new cool stuff. Of course, that’s not happening. It's hard to look at a bubble spend to enable judicious clean up, change and construction. Clean up the legacy mess, change the underlying IT factory to make it modern and construct using the new methods. For example, jump in at the deep end and do an existing funded program with BPM instead of whatever it was you were going to use. Yes, you must spend to do this. But you must also eliminate cost structure. What you really want to do as you change and construct is reduce the cost structure. Cost structure is your factory cost of production — your unit cost of output. For example, in my experience, BPM applied well is three times faster, qualitatively superior and 30% cheaper right off the bat — a good cost-structure impact. So, spend more and reduce the cost structure this year, and a couple of years out, your multiyear spend will have a favorable return (IRR for example). It’s about the genius of delivering and shrinking the cost structure, not just delivering or just reducing costs. One small test is to see if you can identify the director in charge of targeting and shutting things down. I know you have many folks tasked with building and adding new things to your IT estate. Where’s this other person? 2. Get clarity of mission, and match talent to task and structure to mission There is not a chance your current structure, talent map and set of guardrails (rewards/punishments aligned to mission) just happen to already match the new mission. You need to move fast and rip off that Band-Aid. 3. Be humble, get help Find and engage external been-there-done-that help. Make sure knowledge transfer is a key focus and time-box these engagements. Run away from any external "experts" who seek to be semi-permanently embedded in your world. 4. Get “journey talent” Cricket players can play rugby; they can adapt to a new game. Get some journey talent and get rid of those who should not make the journey. The existing team can generally be taught to play the new game — the one the new competitive landscape mandates regarding the bifurcation. Your existing team has very valuable knowledge and is a supporter of the positive parts of your culture, which is equally valuable (I hope). IT is a special case, and the new cool stuff appeals to the IT masses. IT talent generally likes to learn, and its job content has more value when it works on “the new stuff.” It is, however, hugely important to get some journey talent, people who have been on that journey before, down in the trenches where the real work happens. Some people just will not have the skills. For example, great command-and-control leaders often are not very effective in influencing organizations. Most of today's effective IT groups live in a partnering/influencing world. More importantly, there will be people who verbally get on board but, in reality, are in the back of the boat not rowing, are rowing the other direction or are not in the boat at all. Get rid of these folks. Get rid of a few publicly. 5. The art of change Almost no one wakes up and says, “Wow, I hope I see a bunch of change today.” Change is often hard and uncomfortable. The best balm is reward — reward for being in the boat and pulling your weight, for results and for progress. The two things you have to worry about are making sure the entire team knows what change management model you use and keeping a close pulse on the organization to make sure you don’t add too much change. The latter is simply an art; there is no specific way to measure this. You have to feel it, you have to listen and you have to hear it. If you want to see an organization spin out-of-control and do weird stuff, overload them with change. On the model side, there are, broadly speaking, only four change models. One of them works three times better than the others. Most companies cannot verbalize which one they use. Once you believe in bifurcation and see the benefits on the other side of the fence, there is a huge gravitational pull to do too much too soon. It requires great leadership and pattern recognition to not do that. I wish I had an easier answer for you. Yep, again, IT is conceptually simple just wickedly hard to do. 6. Program Management The only thing the top 7% of IT shops of any significant size have in common is that they are all great at program management. Can you name your PM guru(s) and top PM talent? 7. Architecture Great ideation and construction skills — coupled with a lack of focus on architecture or a deficiency in that area — leads to spaghetti-esque disaster. It leads to more and more of your costs going to keeping the beast humming and less to delivering stuff that helps the P&L. Great architecture coupled with just B+ construction leads to greatness. Can you name your EA/Arch guru(s) and top architecture talent? You need a well-architected view of your destination if you are really going to land on the right side of bifurcation. 8. Finance Make sure you serve the CFO team and partner where needed. It is not a peer relationship. In IT, you are their supplier. Having said that, it's a good idea to argue with them constructively — quite a bit, too. Get them plugged-in/embedded, get their help and support. Learn their language, learn to listen in their language. Implement a TBM solution. Get obsessed about moving spending out of the “keep the lights on” column and into the delivery column. It’s a business. Sure, other measures are important, but we keep score in units of money. 9. But our culture won’t let us … Culture — at a national, geographic or ethnographic level — is hard to change. Generally, it takes a good part of a generation (or more or forever) to change it. Culture inside a company is not the same thing; it's a simpler subset. In a company, behaviors are a function of what employees get punished and rewarded for, and they are a function of how clearly those are communicated, executed and sold (yes, sold) to the employee base. The sum of the behaviors is the culture at a company. I would be surprised if your current culture is a perfect fit for the next few years. Think through this, execute the right changes and stick with it. The changes may not be drastic, but they are important. 10. The war for talent and cumulative IQ Quite clearly, there is a war for talent, and it’s getting worse. Think of the talent needed for all the new stuff mentioned above to execute. There are three things you need to do.

• Launch an enterprise-wide KM/collaboration platform. I have done this at three G500 firms. The impact: Decision-quality goes up, decision-cycle time improves, resistance to innovation decreases and continual improvement efforts have a better chance of working. Un-innovation is the work all over your firm where people are working through a new problem/challenge or are implementing something for the first time, even though it’s been done before (sometimes many times) somewhere else in the company. So you don’t get bifurcated in a bad way, this will be key for the IT business journey you are heading on.

• Make HR strategic. One of the two Pareto root causes of failure for strategic change is the lack of appropriate and matched talent. Your strategy is really an optimizing play of the money, stuff (computers, buildings, IP, etc.), people and information you have. Your stuff and money are not as differentiated from your prime competitors as you think. The talent is the lynchpin. It is strategic. Get external help to help map this out well.

• Become more diverse. Where do all the white male IT superstars work? Pretty much wherever they want in the jobs they want. How hard is it to get that talent? It’s very hard. Many of them occupy their Peter Principle position and will never move. Where does the top minority and female talent work? A lot of them work in underutilized positions in IT sub-cultures inside companies where they are disenfranchised and subjugated to some degree.

If only you had an IT sub-culture where you were working on cool, new stuff, had a great compelling mission and had an environment where those talent segments were fully ensconced, appreciated and valued. The icing on that cake is that retention goes up. That impacts output per unit dollar and cost structure in good ways. The sprinkles on that icing is that the cumulative IQ is a sum of your IQ plus a kicker for the diversity of ideas. Think about it. One hundred smart guys who all think alike aren’t really that much smarter as a group than any one of them individually. Visualize three new tech hires: Web developer, social media wizard and big data scientist. Were any of your visualizations 57-year-old balding white men? Probably not. One world-class tech guru I know personally, who is the best I have seen at driving Agile at scale, labors away in a high-pressure consulting firm. Why hasn’t anyone just grabbed him? I believe that is a segment with some hidden gems, too. Conclusion – 80 extra IQ points I hope all that helps. I hope you don’t end up on the wrong side of bifurcation. It’s just beginning, but it is coming fast. Lastly, remember what Alan Kay said: “Context is worth 80 IQ points.” That means a lack of context subtracts IQ points. Lack of contextual understanding may be IT’s biggest problem, historically. Buckle up, and step on the gas. This article was previously published on SandHill.com. The story can be found here.

In the article "40 Hours and I'm an Insurance Agent," we caught a glimpse of the dismaying reality that it takes 15 times the education to be a manicurist in the author's state than it does to be an insurance salesman.

In Texas, to be eligible for a hair-weaving specialty certificate or a wig specialty certificate, an applicant must submit a form, pay a fee, spend at least eight weeks taking 300 hours of instruction and pass a written and practical exam. To be an insurance salesman in Texas, one must pass a written examination, be fingerprinted and undergo 24 hours of continuing education semiannually. So the reality is that, as far as many states are concerned, it is more important that your wig is styled correctly or your nails are shapely than it is that your home, car, business and life are insured properly — and for the right price.

Now comes the additional shocker that to sell reinsurance and to operate under the reinsurance intermediary's license, the individual selling this reinsurance needs to have zero education, zero testing and zero personal proficiency licensure. There is no educational requirement, no testing, no continuing education requirement and no ethical code. There is not even a floor for reinsurance salesmen's professional requirements, much less any lofty standards. How, then, are they to be taken seriously or considered professionals?  

Willie Nelson's song should be changed. His advice to mamas in an old song was, "don't let your babies grow up to be cowboys/let 'em be doctors and lawyers and such." No, what mamas should really do is tell their kids to sell reinsurance.

Medical school and law school are both incredibly expensive and time-consuming, and both lawyers and physicians must be licensed to practice - after years of post-graduate work and after passing very comprehensive tests. In some areas of the country, a major intermediary broker pays its reinsurance salesmen a salary of between $146,000 and $158,000, according to Glass Door; this amount does not include any bonuses, stock options or benefits, which are definitely provided.  

See also: The 13 Oddest Aspects of Reinsurance

Salesmen of any sort can earn a great deal. The average annual income for an average sales representative is between $26,950 and $133,040, according to 2008 figures from the U.S. Department of Labor's Bureau of Labor Statistics. Reinsurance salesmen are definitely well compensated. Reinsurance salesmen handle and sell millions - or perhaps billions - of dollars worth of reinsurance, costs that are ultimately paid for by you as part of your policy's insurance premium.  

The top-5 highest-paying jobs in America (according to CNBC) are: 

1. Surgeon (median base salary: $352,220)
2. Psychiatrist (median base salary: $181,880)
3. Physician - general practice (median base salary: $180,180)
4. Corporate executive - senior level (median base salary: $173,320)
5. Dentist (median base salary: $146,340)

The top 5 highest paying jobs in America (according to Glass Door) are: 

1. Physician (median base salary: $180,000)
2. Lawyer (median base salary: $144,500)
3. Research & development manager (median base salary: $142,120)
4. Software development manager (median base salary: $132,000)
5. Pharmacy manager (median base salary: $130,000)

Reinsurance salesmen can definitely clear those hurdles and find themselves making more than the median salary of one of the five highest-paid jobs in the U.S. 

The State Will Protect Your Wig but Not Your Wallet 

For your supposed protection, the National Association of Insurance Commissioners (NAIC) has promulgated a series of "model" acts that address various issues, including topics related to reinsurance intermediaries, which, on paper, various states have adopted. However, the NAIC Annual Financial Reporting Model Regulation, (Section 7 D (1)) demands that the same CPA may not oversee the financial audit of an insurance company more than five consecutive years. It is well-known that becoming a CPA demands rigorous educational criteria and has extremely comprehensive ethical standards. There is no requirement to be a reinsurance salesman employed by an intermediary, yet almost every state focuses on the well-educated, well-trained and ethically bound CPA and virtually ignores protecting the citizens of its state by not properly overseeing the reinsurance salesman.

Perhaps the National Coalition of Insurance Legislators (NCOIL) needs to take up where the NAIC has failed.

Clearly, reinsurance itself is not magical and it is only really esoteric because the reinsurance industry and the intermediary brokers want it that way. The industry makes up its own words and has its own jargon, but the concepts are not difficult - and it certainly is not rocket science. The reinsurance industry (and those who sell reinsurance) have worked very hard to keep reinsurance nebulous and away from any scrutiny. Reinsurance is not insurance on insurance, it is insurance on the claims made against specified individual (facultative) or a group (treaty) of insurance policies. Reinsurance has no premium tax, is lightly regulated, has favorable accounting for its sale, isn't generally faced with lawsuits from its purchasers, is able to argue the same issue over and over, punishes the purchaser and not the seller and is simple. The parties have unequal bargaining power - yet the law punishes the weaker. Reinsurance also has a lower overhead, meaning reinsurers can make a profit at a higher loss-level than insurance companies.

See also: Disjointed Reinsurance Systems: A Recipe for Disaster

Reinsurance represents one of the largest year-in and year-out expenditures of many insurance companies. It affects the costs of everyone's insurance as it is part of rate promulgation. Any excess charges or incompetence by the reinsurance salesman in what is charged to the ceding company is also passed on to the unsuspecting policyholders of the ceding company.  

As long as state insurance regulators believe it is more important that a wig is braided correctly or that someone's fingernails and toenails are well-filed than it is that someone's insurance is correctly priced, expect to overpay for your insurance.

From all aspects of professionalism, any reinsurance intermediary that considers its front-line staff to be more than just salesman or that advertises its advantages over other intermediaries (beyond just selling reinsurance), should welcome, and, in fact, push for change, including a switch to federal regulation, if they are advertising that they have better qualifications than competitors. It is one thing to advertise and promise your professionalism, it's quite another to actually prove it.

A developing trend in the workplace is to eliminate traditional performance ratings and rankings, a process that is almost universally derided by managers, employees and human resources professionals alike. Finally, executives are capitulating to overwhelming evidence that rating people not only fails to improve their performance but also actually lowers productivity and destroys morale. An added benefit of the trend will be improved mental health among employees. Author Garrison Keillor famously described his fictional hometown, Lake Woebegone, as “a place where all the women are strong, all the men are good looking and all the children are above average.” That description is not terribly different from the way American businesses and employees perceive themselves—above average. As a company recruiter, I always strove to attract and hire the “best of the best,” “A-players” and “superstars,” those who fit the company’s image as a place with only the very best employees.   And yet, the typical performance management system in America forces managers to rate employees on a scale of one to five, and suggests—strongly suggests in some companies—that those ratings be distributed on a bell curve. That means fully 70% of employees are rated simply “average.” The result? Conflict and stress. Many of the most emotionally charged conversations I’ve had with employees as an HR professional emerged from their distress over the numerical rating that their supervisors had assigned them during a performance review. Rating people is fraught with stress for everyone involved. In their 2014 article in Strategy + Business, David Rock, Josh Davis and Beth Jones, researchers at the Neuroleadership Institute, explained that giving employees a numerical rating produces a “fight or flight” response in people, “the same type of ‘brain hijack’ that occurs when there is an imminent physical threat like a confrontation with a wild animal.” Not only is rating and ranking employees difficult, it’s expensive. An estimated $14 billion are spent annually on leadership development, which includes training managers to assess and differentiate employees’ performance. Despite that investment, managers are notoriously bad at conducting performance reviews. In one study almost half of the employees surveyed stated they did not believe their managers were being honest during the performance review. One oft-quoted manager at Adobe called it “a soul-crushing exercise.” As business leaders seek to stop wasting time on a failed system, the trend to reengineer performance reviews is gaining momentum. The number of Fortune 1000 companies that have ditched ratings has risen from just 4% in 2012 to 12% in 2014, according to CEB. The goal of performance reviews, as it always has been, is to improve the company’s business results. Eliminating ratings will succeed on two fronts: alleviate a key source of workplace stress, and in turn, improve company performance.