This is the second in a four part series. To read the first article click here. To help industry players navigate the changes in the banking, fund transfer and payments, insurance and asset and wealth management sectors, we have identified the main emerging trends that will be most significant in the next five years in each area of the FS industry. Overall, the key trends will enhance customer experience, self-directed services, sophisticated data analytics and cybersecurity. However, the focus will differ from one FS segment to another. Banks are going for a renewed digital customer experience Banks are moving toward non-physical channels by implementing operational solutions and developing new methods to reach, engage and retain customers. As they pursue a renewed digital customer experience, many are engaging in FinTech to provide customer experiences on a par with large tech companies and innovative start-ups. Simplified operations to improve customer experience The trends that financial institutions are prioritizing in the banking industry are closely linked. Solutions that banks can easily integrate to improve and simplify operations are rated highest in terms of level of importance, whereas the move toward non-physical or virtual channels is ranked highest in terms of likelihood to respond. Banks are adopting new solutions to improve and simplify operations, which foster a move away from physical channels and toward digital/mobile delivery. Open development and software-as-a-service (SaaS) solutions have been central to giving banks the ability to streamline operational capabilities. The incorporation of application program interfaces (APIs) enables third parties to develop value-added solutions and features that can easily be integrated with bank platforms; and SaaS solutions assist banks in offering customers a wider array of options—which are constantly upgraded, without banks having to invest in the requisite research, design and development of new technologies. The move toward virtual banking solutions is being driven, in large part, by consumer expectations. While some customer segments still prefer human interactions in certain parts of the process, a viable digital approach is now mandatory for lenders wishing to compete across all segments. Online banks rely  on transparency, service quality and unlimited global access to attract Millennials, who are willing to access multiple service channels. In addition, new players in the banking market offer ease of use in product design and prioritize 24/7 customer service, often provided through non-traditional methods such as social media. So what?—Put the customer at the center of operations Traditional banks may already have many of the streamlined and digital-/mobile-first capabilities, but they should look to integrate their multiple digital channels into an omni-channel customer experience and leverage their existing customer relationships and scale. Banks can organize around customers, rather than a single product or channel, and refine their approach to provide holistic solutions by tailoring their offerings to customer expectations. These efforts can also be supported by using newfound digital channels to collect data from customers to help better predict their needs, offer compelling value propositions and generate new revenue streams. Fund transfer and payments priorities are security and increased ease of payment Our survey shows that the major trends for fund transfer and payments companies are related to both increased ease and security of payments. Safe and fast payments are emerging trends Smartphone adoption is one of the drivers of changing payments patterns. Today’s mobile-first consumers expect immediacy, convenience and security to be integral to payments. In our culture of on-demand streaming of digital products and services, archaic payment solutions that take days rather than seconds for settlement are considered unacceptable, motivating both incumbents and newcomers to develop solutions that enable transfer of funds globally in real time. End users also expect a consistent omni-channel experience in banking and payments, making digital wallets key to streamlining the user experience and enabling reduced friction at the checkout. Finally, end users expect all of this to be safe. Security and privacy are paramount to galvanizing support for nascent forms of digital transactions, and solutions that leverage biometrics for fast and robust authentication, coupled with obfuscation technologies, such as tokenization, are critical components in creating an environment of trust for new payment paradigms. So what?—Speed up, but in a secure way Speed, security and digitization will be growing trends for the payments ecosystem. In an environment where traditional loyalty to financial institutions is being diminished and barriers to entry from third parties are lowered, the competitive landscape is fluid and potentially changeable, as newcomers like Apple Pay, Venmo and Dwolla have demonstrated. Incumbents that are slow to adapt to change could well find themselves losing market share to companies that may not have a traditional payments pedigree but that have a critical mass of users and the network capability to enable payment experiences that are considered at least equivalent to the status quo. While most of these solutions “ride the rails” of traditional banking, in doing so they risk losing control of the customer experience and ceding ground to innovators, or “steers,” who conduct transactions as they see fit. Asset and wealth management shifts from technology-enabled human advice to human-supported technology-driven advice The proliferation of data, along with new methods to capture it and the declining cost of doing so, is reshaping the investment landscape. New uses of data analytics span the spectrum from institutional trading and risk management to small notional retail wealth management. The increased sophistication of data analytics is reducing the asymmetry of information between small- and large-scale financial institutions and investors, with the latter taking advantage of automated FS solutions. Sophisticated analytics also uses advanced trading and risk management approaches such as behavioral and predictive algorithms, enabling the analysis of all transactions in real time. Wealth managers are increasingly using analytics solutions at every stage of the customer relationship to increase client retention and reduce operational costs. By incorporating broader and multi-source data sets, they are forming a more holistic view of customers to better anticipate and satisfy their needs. Given that wealth managers have a multitrillion-dollar opportunity in the transfer of wealth from Baby Boomers to Millennials, the incorporation of automated advisory capabilities—either in whole or in part—will be a prerequisite. This fundamental change in the financial adviser’s role empowers customers and can directly inform their financial decision-making process. So what?—Withstand the pressure of automation Automated investment advice (i.e. robo-advisers) poses a significant competitive threat to operators in the execution-only and self-directed investment market, as well as to traditional financial advisers. Such robot and automatic advisory capabilities will put pressure on traditional advisory services and fees, and they will transform the delivery of advice. Many self-directed firms have responded with in-house and proprietary solutions, and advisers are likely to adapt with hybrid high-tech/high-touch models. A secondary by-product of automated customer analysis is the lower cost of customer onboarding, conversion and funding rates. This change in the financial advisory model has created a challenge for wealth managers, who have struggled for years to figure out how to create profitable relationships with clients in possession of fewer total assets. Robo-advisers provide a viable solution for this segment and, if positioned correctly as part of a full service offering, can serve as a segue to full service advice for clients with specific needs or higher touch. Insurers leverage data and analytics to bring personalized value propositions while managing risk The insurance sector sees usage-based risk models and new methods for capturing risk-related data as key trends, while the shift to more self-directed services remains a top priority to efficiently meet existing customer expectations. Increasing self-directed services for insurance clients Our survey shows that self-directed services are the most important trend and the one to which the market is by far most likely to respond. As is the case in other industry segments, insurance companies are investing in the design and implementation of more self-directed services for both customer acquisition and customer servicing. This allows companies to improve their operational efficiency while enabling online/mobile channels that are demanded by emerging segments such as Millennials. There have been interesting cases where customer-centric designs create compelling user experiences (e.g. quotes obtained by sending a quick picture of the driving license and the car vehicle identification number (VIN)), and where new solutions bring the opportunity to mobilize core processes in a matter of hours (e.g. provide access to services by using robots to create a mobile layer on top of legacy systems) or augment current key processes (e.g. FNOL3 notification, which includes differentiated mobile experiences). Usage-based insurance is becoming more relevant Current trends also show an increasing interest in finding new underwriting approaches based on the generation of deep risk insights. In this respect, usage-based models—rated the second most important trend by survey participants—are becoming more relevant, even as initial challenges such as data privacy are being overcome. Auto insurance pay-as-you-drive is now the most popular usage-based insurance (UBI), and the current focus is shifting from underwriting to the customer. Initially, incumbents viewed UBI as an opportunity to underwrite risk in a more granular way by using new driving/ behavioral variables, but new players see UBI as an opportunity to meet new customers’ needs (e.g. low mileage or sporadic drivers). Data capture and analytics as an emerging trend Remote access and data capture was ranked third by the survey respondents in level of importance. Deep risk (and loss) insights can be generated from new data sources that can be accessed remotely and in real time if needed. This ability to capture huge amounts of data must be coupled with the ability to analyze it to generate the required insights. This trend also includes the impact of the Internet of Things (IoT); for example, (1) drones offer the ability to access remote areas and assess loss by running advanced imagery analytics, and (2) integrated IoT platforms solutions include various types of sensors, such as telematics, wearables and those found in industrial sites, connected homes or any other facilities/ equipment. So what?—Differentiate, personalize and leverage new data sources Customers with new expectations and the need to build trusted relationships are forcing incumbents to seek value propositions where experience, transaction efficiency and transparency are key elements. As self-directed solutions emerge among competitors, the ability to differentiate will be a challenge. Similarly, usage-based models are emerging in response to customer demands for personalized insurance solutions. The ability to access and capture remote risk data will help develop a more granular view of the risk, thus enabling personalization. The telematics-based solution that enables pay-as-you-drive is one of the first models to emerge and is gaining momentum; new approaches are also emerging in the life insurance market where the use of wearables to monitor the healthiness of lifestyles can bring rewards and premium discounts, among other benefits. Leveraging new data sources to obtain a more granular view of the risk will not only offer a key competitive advantage in a market where risk selection and pricing strategies can be augmented, but it will also allow incumbents to explore unpenetrated segments. In this line, new players that have generated deep risk insights are also expected to enter these unpenetrated segments of the market; for example, life insurance for individuals with specific diseases. Finally, we believe that, in addition to social changes, the driving force behind innovation in insurance can largely be attributed to technological advances outside the insurance sector that will bring new opportunities to understand and manage the risk (e.g. telematics, wearables, connected homes, industrial sensors, medical advances, etc.), but will also have a direct impact on some of the foundations (e.g. ADAS and autonomous cars). Blockchain: An untapped technology is rewriting the FS rulebook Blockchain is a new technology that combines a number of mathematical, cryptographic and economic principles to maintain a database between multiple participants without the need for any third party validator or reconciliation. In simple terms, it is a secure and distributed ledger. Our insight is that blockchain represents the next evolutionary jump in business process optimization technology. Just as enterprise resource planning (ERP) software allowed functions and entities within a business to optimize business processes by sharing data and logic within the enterprise, blockchain will allow entire industries to optimize business processes further by sharing data between businesses that have different or competing economic objectives. That said, although the technology shows a lot of promise, several challenges and barriers to adoption remain. Further, a deep understanding of blockchain and its commercial implications requires knowledge that intersects various disparate fields, and this leads to some uncertainty regarding its potential applications. Uncertain responses to the promises of blockchain Compared with the other trends, blockchain ranks lower on the agendas of survey participants. While a majority of respondents (56%) recognize its importance, 57% say they are unsure or unlikely to respond to this trend. This may be explained by the low level of familiarity with this new technology: 83% of respondents are at best “moderately” familiar with it, and very few consider themselves to be experts. This lack of understanding may lead market participants to underestimate the potential impact of blockchain on their activities. The greatest level of familiarity with blockchain can be seen among fund transfer and payments institutions, with 30% of respondents saying they are very familiar with blockchain (meaning they are relatively confident about their knowledge of how the technology works). How the financial sector can benefit from blockchain In our view, blockchain technology may result in a radically different competitive future in the FS industry, where current profit pools are disrupted and redistributed toward the owners of new, highly efficient blockchain platforms. Not only could there be huge cost savings through its use in back-office operations, but there could also be large gains in transparency that could be very positive from an audit and regulatory point of view. One particular hot topic is that of "smart contracts"—contracts that are translated into computer programs and, as such, have the ability to be self-executing and self-maintaining. This area is just starting to be explored, but its potential for automating and speeding up manual and costly processes is huge. Innovation from start-ups in this space is frenetic, with the pace of change so rapid that by the time print materials go to press, they could already be out-of-date. To put this in perspective, PwC’s Global Blockchain team has identified more than 700 companies entering this arena. Among them, 150 are worthy to be tracked, and 25 will likely emerge as leaders. The use cases are coming thick and fast but usually center on increasing efficiency by removing the need for reconciliation between parties, speeding up the settlement of trades or completely revamping existing processes, including:

• Enhancing efficiency in loan origination and servicing;
• Improving clearing house functions used by banks;
• Facilitating access to securities. For example, a bond that could automatically pay the coupons to bondholders, and any additional provisions could be executed when the conditions are met, without any need for human maintenance; and
• The application of smart contracts in relation to the Internet of Things (IoT). Imagine a car insurance that is embedded in the car and changes the premium paid based on the driving habits of the owner. The car contract could also contact the nearest garages that have a contract with the insurance company in the event of an accident or a request for towing. All of this could happen with very limited human interaction.

So what?—An area worth exploring When faced with disruptive technologies, the most effective companies thrive by incorporating them into the way they do business. Distributed ledger technologies offer FS institutions a once-in-a-generation opportunity to transform the industry to their benefit, or not. However, as seen in the survey responses, the knowledge of and the likelihood to react to the developments in blockchain technology are relatively low. We believe that lack of understanding of the technology and its potential for disruption poses significant risks to the existing profit pools and business models. Therefore, we recommend an active approach to identify and respond to the various threats and opportunities this transformative technology presents. A number of start-ups in the field, such as R3CEV, Digital Asset Holdings and Blockstream, are working to create entirely new business models that would lead to accelerated "creative destruction" in the industry. The ability to collaborate on both the strategic and business levels with a few key partners, in our view, could become a key competitive advantage in the coming years. This post was co-written by: John Shipman, Dean Nicolacakis, Manoj Kashyap and Steve Davies.

After several years of having courageous leaders in the insurance industry begin to fund the flow of new ideas, it is evident that we have begun to overcome one problem and are now facing another. The old problem was a lack of game-changing ideas. The new problem is our bias against them. Result: The game-changing ideas are not getting launched. The operative phrase here is “game-changing.” The insurance industry has no trouble launching products, services and business models that are similar to the ones we already have. In fact, the industry is pretty darn good at incremental thinking — but we must do better. When inspired thinkers offer up disruptive ideas, we turn our backs on them. Why? Many think it is because their cultures are afraid to fail, and the likelihood of failure is high. The real reason for “failure to launch” is that (most of) your people are repulsed by the real game-changing ideas. Repulsed. What an ugly word. But it’s true. Why? Because those ideas are different. Natural instinct is to push it aside, try to get rid of it, or wish someone else would deal with it. GE has a fabulous commercial spot that personifies the new idea as repelling people socially. If you think about what happens to people who are pushed aside from groups, it is usually because they are different in some way. They may communicate differently, look different, eat different food or live by different rules. It’s the same for game-changing ideas. They have their own language, their own rule sets, and must be measured differently than familiar ideas because they were created to be disruptive. See Also: How to Choose a Great Coach The most successful innovation leaders are beginning to address this bias. They start by helping their teams answer these four questions: 1) How do we determine consumer acceptance? An idea must be boiled down to its core components, and the key hypotheses must be tested. This usually requires several rounds of testing because, with each test, you learn more about what’s missing and what’s not necessary. With game-changing ideas, consumers can barely articulate a need but know it when they see it. The most important skill set here is the ability to prototype so people can imagine themselves experiencing this product or service. Most insurance companies are weak at prototyping. That’s OK because these skills can be borrowed or bought. 2) What critical capability is needed to make this idea work? Take the most important benefit of the idea and determine what might stand in the way of its being realized. With game-changing ideas, believability is typically a barrier. So you need to figure out ways to help consumers trust the outcomes. This might require some proof or a creative way to tell a story. 3) Who has these capabilities? If you do not find the capability within your organization, you must look externally for pieces of that capability. For game-changing ideas, companies must almost always look externally. Entrepreneurial start-ups often have solutions looking for a home, so they are a great place to start your search. 4) What are the right measurements and milestones for this idea? The “language” of measurement is totally different for game-changing ideas than for familiar ones. If your CFO is looking for revenue numbers, the expectation needs to be reset because measuring a game-changing idea with short-term financials won’t work. Instead, measure key indicators of consumer acceptance. For example, many new start-ups get their early funding by setting up an offer that isn’t available and seeing who clicks. The clicks become the measure, and when they get to a certain number, it marks the milestone for funding. Big ideas matter. Overcoming short-term bias and becoming skillful at disrupting ourselves are the only things that will keep us from being blindsided. Now, who wants to embrace a big idea with me? This post was previously published at National Underwriter Life and Health Magazine.

A new report from the Workers Compensation Research Institute (WCRI) found evidence of frequent physician dispensing of new drug strengths and a new formulation at much higher prices. This phenomenon was observed in several states that recently instituted reforms aimed at reducing the prices for physician-dispensed prescriptions. Skirting the goals of those reforms, dispensing increased for new formulations of drugs that carried higher prices. That trend led to substantial increases in average prices for some common physician-dispensed drugs. “When prices are reduced by regulation, the regulated parties―in this case physician-dispensers―sometimes find new ways to retain the higher revenues they had prior to the reforms,” said Dr. John Ruser, president and CEO of WCRI. “The results raise questions about the effectiveness and sustainability of the price-focused reforms. The study also provides lessons for those states where physician dispensing is permitted.” See Also: Novel Controls on Physician Dispensing This report, Physician Dispensing of Higher-Priced New Drug Strengths and Formulation, is part of a series of WCRI studies that examine the effects of regulatory or legislative changes to the rules governing reimbursement for physician-dispensed prescriptions. In the past decade, many states in the U.S. have enacted reforms to cap prices paid to physicians by tying the maximum reimbursement amount to the average wholesale price (AWP) set by the original manufacturer of the drug. However, new strengths and formulations of drugs are labeled as being made by generic manufacturers, not merely as being repackaged, a technical distinction that lets the new strengths and formulations avoid the new reimbursement rules -- the generic "manufacturer" gets to set its own, much higher AWP. The study reported several drugs that exhibited this phenomenon and highlighted several states where physician dispensing of these new drug products was prevalent. Take cyclobenzaprine, a muscle-relaxant. The 7.5-milligram new strength was not seen in the market until 2012. For many years, the most common strengths were 5 and 10 milligrams. The manufacturer of this new strength assigned a new AWP, which was much higher than the AWPs for the 5- and 10-milligram products. Below are some examples from the study of the frequent physician dispensing of higher-priced new strengths.

• California: The average prices paid to physicians for cyclobenzaprine of 5 and 10 milligrams ranged from $0.38 to $0.39 per pill in the first quarter of 2014. The 7.5-milligram product, introduced in 2012 and almost always dispensed by physicians, cost $3.01 per pill in the same quarter. The percentage of physician-dispensed cyclobenzaprine prescriptions that were for the 7.5-milligram strength increased from 0% prior to 2012 to 55% in the first quarter of 2014.

• Florida: The average prices paid for physician-dispensed cyclobenzaprine of 5 and 10 milligrams were $1.75 and $1.29 per pill, respectively, in the first quarter of 2014. The 7.5-milligram new strength was seen prior to Florida’s 2013 reform, but the frequency of dispensing increased substantially post-reform—from 16% in the pre-reform second quarter of 2013 to 49% in the first quarter of 2014. When physicians dispensed the 7.5-milligram new-strength product, they were paid an average of $4.11 per pill.

• Illinois: The average prices paid to physicians for cyclobenzaprine of 5 and 10 milligrams were $1.55 and $1.25 per pill, respectively, in the first quarter of 2014. Prior to Illinois’ 2012 reforms, the 7.5-milligram new strength was rarely seen in the market, but, by the first quarter of 2014, 22% of all physician-dispensed cyclobenzaprine prescriptions were for the new strength. When physicians dispensed the new strength, they were paid on average $3.86 per pill.

• Tennessee: Ten-milligram cyclobenzaprine was the most-commonly dispensed drug strength by physicians in the state, which cost $1.08 per pill on average in the first quarter of 2014. The 7.5-milligram product was not seen in the initial post-reform quarters until the fourth quarter of 2013. By the first quarter of 2014, 19% of physician-dispensed cyclobenzaprine prescriptions were for the 7.5-milligram new strength. When physicians dispensed the new strength, it cost $3.97 per pill on average.

The data used for this report came from payers that represented 31–70% of all medical claims across 22 states studied and covered detailed prescriptions based on calendar quarter from the first quarter of 2012 though the first quarter of 2014. The 22 states in the study are Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Missouri, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Virginia and Wisconsin. To purchase this study, visit here.

Telematics-fitted cars, cars with cruise control and emergency automatic braking, driverless cars and what not… the era of continuous innovation in this industry keeps on permeating our day-to-day life. While the underlying theme is reducing the number of accidents and promoting comfortable/safe driving, car manufacturers keep adding “features” that will transfer operational control of the vehicle significantly from the driver to automated systems. The car industry doesn’t preclude a futuristic scenario (though not necessarily in the near future) when we will be travelling in Uber & Lyft without drivers! Anyone who is associated with insurance will find it very interesting to look at how these innovations might affect car insurers. In today’s world, where the car insurance line of business is already stung by shrinking margins (due to competitive pricing on one hand and increasing claims payments on the other), these auto innovations are, in the opinion of many insurers, bound to further reduce written premiums. As we leverage automation to reduce human driving errors, customers are also going to expect car insurance premiums to go down and shop around for the cheapest insurance premium rates, further triggering price wars. See Also: A Word With Shefi: At Smart Drivinc However, innovations are going to affect the car insurance industry in various ways – which might force insurers to think of newer business models (products, services, partnerships, etc.). Four key areas within the value chain that have the potential to alter the future game plan for auto insurance are:

• In case of an accident (though expected to be highly improbable) who will assume the liability?  Will it be the owner/driver of the car or its manufacturer or the equipment or software manufacturer? How is the claims management ecosystem expected to evolve? Will we need specialized adjusters to handle claims involving damages to the supporting equipment?
• Rating and underwriting for car insurance will focus more on the security and safe functioning of the vehicle along with its set of software and hardware that enable the driverless capabilities -- such as onboard software, cameras, radar, altimeters etc. -- instead of the human driver. Though the frequency of accidents will come down rapidly, the loss expenses per accident is bound to go up due to enhanced cost of the supporting equipment.
• There will be new coverage developments relating to third-party collision damage due to high cost of equipment as well as the cyber risk to software that governs the driving functions of the next-generation cars.
• There will be opportunities around data analytics to harness the huge amount of data made available for better risk analysis and rating, loss development, location analysis, etc.

Do auto insurers need to fear that the next-generation cars will sound the death knell for their business? Or will they see newer opportunities to engage with their customers and enhance their market share? We are all set to witness lot of action in this space in the coming years as new-era cars continue to evolve and auto insurers attempt to match these developments with newer strategies around products, distribution and policy services!

As more primary insurers use a formal risk appetite statement, their reinsurance buying habits have evolved, according to reinsurance brokerage Willis Re. And with reinsurance becoming a greater priority for many firms, there could be an opportunity for insurance-linked securities (ILS) to expand their global footprint. Increased regulation across the insurance and reinsurance industry—underlined by the implementation of Solvency II in Europe and combined with a desire for greater risk and transactional transparency from investors—has caused a “fundamental shift in reinsurance purchasing,” Willis Re says. In its recently published 2016 Global Risk Appetite Report, Willis Re highlights that reinsurance is moving up the priority list of global insurers. Purchasers are adopting different approaches, a trend that could result in the greater use of ILS capacity to optimize reinsurance programs. The report says, “With rising regulatory and shareholder demands, increased pressure on insurer margins and a growing desire for a strong performance measurement framework, the dramatic shift towards risk quantification and management is clear." See Also: How to Understand Your Risk Appetite At Artemis, we have previously discussed the notable changes in insurers reinsurance purchasing habits, particularly in light of the growing trend of centralized buying strategies to increase efficiency and drive potential organic growth opportunities, something that’s been limited in the softening landscape. As some primary insurers look to retain more business, essentially keeping more risk on their books, the establishment of centralized reinsurance purchasing units has increased. Furthermore, a need for greater capital levels under Solvency II regulation has also seen some insurers retain more business, something that could result in greater demand for reinsurance. Potential for increased reinsurance demand, the growing trend of centralized reinsurance purchasing and regulatory advances suggest ILS has an opportunity to capitalize on the changing habits of buyers and further grow their share of the overall reinsurance market pie. The collateralized reinsurance market is one of the fastest-growing sub-sectors of the ILS space, and, as more primary players look to move their reinsurance purchasing in-house, it’s possible that collateralized reinsurance could feature more and more as insurers look to diversify their reinsurance placements with capital markets investor-backed capacity. “As an industry, we’ve observed the broad shift around reinsurance purchasing in recent years with the increasing adoption of formal risk appetite statements," said Tony Melia, Willis Re International CEO. "Those statements have proven essential to provide macro-level guidance to underwriting, global retention management and alignment of cession to wider strategies—linking ‘micro’ strategies to ‘macro’ targets." As insurers and reinsurers continue to adapt to new regulatory requirements, the softening re/insurance landscape and the resulting challenges, it’s expected that a variety of purchasing and distribution tools will be adopted and tested. ILS capacity has been growing at an impressive rate absent any increase in demand for reinsurance protection from buyers, so it certainly wouldn’t be too surprising to us at Artemis if the market evolutions highlighted by Willis Re led to greater use of alternative risk transfer solutions to increase efficiency and diversify portfolios.

Digital transformation has become a major challenge for insurance companies all over the world. In Italy, this transformation is exemplified by the adoption of vehicle telematics. According to the latest IVASS data, black box became an integral part of 16% of new policies and renewals during the third quarter of 2015. The insurance sector is now seeing the same dynamics already experienced in many other sectors, including financial services: with start-ups and other tech firms innovating one or more steps of the value chain traditionally belonging to financial institutions. InsurTech has seen investments of almost $2.65 billion coming in during 2015, compared with $740 million in 2014. Like FinTech in 2015, it’s now InsurTech’s turn to define the elements to be included in the observance perimeter, this being a main point of debate among analysts. In my opinion, all players within the insurance sector will have to become InsurTech-centered in the coming years. It’s unthinkable for an insurance company not to pose the question of how to evolve its own model by thinking which modules within its value chain should be transformed or reinvented via technology and data usage. This digital transformation can be achieved by building the solutions in-house, by creating partnerships with other players—both start-ups and incumbents—or through acquisitions. Based on this view that all the players in the insurance arena will be InsurTech—meaning organizations where technology will prevail as the key enabler for the achievement of strategic goals—the way to analyze this phenomenon is via a cross-section view of the customer journey and the insurance value chain. This mental framework, which I regularly use to classify every InsurTech initiative—whether it’s a start-up, a solution provided by established providers or a direct initiative by an insurance company—is based on the following macro-activities:

1. Awareness: Activities that generate awareness in the client—whether person or firm---regarding the need to be insured and other marketing aspects of the specific brand/offer;
2. Choice: about an insurance value proposition, which, in turn, is divided into two main groups:
   1. Aggregators, which are characterized by the comparison of a large number of different solutions;
   2. Underwriters, which are innovating the way to construct the offer for the specific client, irrespective of the act to compare different offers.
3. Purchase: Focuses on innovative ways in which the act of selling can be improved, including collection of premiums;
4. Use of the insurance product: clarifies three very distinct steps of the insurance value chain: policy handling, service delivery (which is acquiring an ever-growing significance within the insurance value proposition) and claims management;
5. Recommendation: Part of the customer journey that is becoming a key element in the customer’s experience with a product in many sectors;
6. The Internet of Things (IoT), which can be included in the category of activities—though transversal  to the activities described above. The IoT covers all  the hardware and software solutions representing the enablers of connected insurance (the motor insurance telematics is the most consolidated use case);
7. Peer-to-peer (P2P): Initiatives that, in the last few years, have started to bring peer-to-peer logic to the insurance environment, in a manner similar to the old mutual insurance.

  Based on my interpretations of the evolution of the InsurTech phenomenon, I would say:

• on the one hand, there is a tendency toward ecosystems in which each value proposition becomes the integration of multiple modules belonging to different players;
• on the other hand, the lines between the classical roles of distributor, supplier (coming even from other sectors), insurer and reinsurer are getting blurred.

In a scenario like this, the balance of power (and consequently the profit pool) among various actors is bound to be challenged, and each one of them may well choose to collaborate or compete depending on context and timing. My friends at InsurTech News represented - based on my framework described above - a map of the InsurTech newcomers and will continue to map the most interesting initiatives. Please feel free to comment adding more InsurTech newcomers you know.

Workers’ compensation has been around for more than 100 years. It was developed as a grand bargain between labor and employers to ensure that injured workers received appropriate medical care and wage-loss benefits while employers received protections against tort lawsuits arising from workplace injuries. The workplace is vastly different than it was when workers’ compensation was conceived. Workers’ compensation has also evolved in some ways, but in other ways it has not kept pace with changing workplace demographics and injury exposures. There are discussions in our industry around whether workers’ compensation is still meeting the needs of both employers and injured workers. Even the U.S. Department of Labor and OSHA have recently questioned the adequacy of workers’ compensation benefits. Some employers are actively pushing for an alternative option to workers’ compensation because they feel workers’ compensation no longer provides suitable protection for employers and injured workers. As a person who has been very actively engaged in the workers’ compensation industry, I see a variety of issues within the current system and I hear complaints from a variety of stakeholders about it. Industry groups are starting to engage in discussion about the future of workers’ compensation. With that as a backdrop, here are my thoughts around how workers’ compensation needs to evolve. Change Medical Delivery Model The single biggest flaw in workers’ compensation is the current medical delivery model. Medical costs keep rising, and outcomes are often poor. This is because, historically, the medical delivery model in workers’ compensation has been focused on two things: discounts and conflict. See Also: Workers' Comp Market Trends Too often, medical treatment in workers’ compensation claims is used as a weapon for secondary gain. Certain attorneys consistently refer injured workers to certain physicians who extend disability, perform unnecessary treatment and ultimately produce poor medical outcomes for the injured workers. These physicians producing the poor outcomes are well-known by the payers, yet they are allowed to continue to ruin the lives of injured workers so that the settlement will be larger and the attorney fee higher. This is just wrong. The reimbursement model has prominently focused on who will deliver the cheapest care, not necessarily the best care. In fact, sometimes the best physicians refuse to treat workers’ compensation patients because of the low reimbursement rates. In addition, unnecessary utilization review delays workers from receiving care. Bills are not submitted at fee schedule rates, which necessitates spending money on bill review services to ensure that the appropriate amount is paid. There is a lot of money wasted on the bill churn that would be better spent on medical care. We need to start over completely on the medical delivery model and look at what is happening in group health and Medicare for guidance. Under those models, insureds are not free to treat with any provider they choose; they must treat with someone “in network.” Certain treatments must be pre-authorized, and prescription drugs must be on an approved formulary to be covered. Both group health and Medicare are now scoring medical providers to see which of them produce the best outcomes. Those that consistently produce poor outcomes are excluded from coverage. Everyone with medical insurance, including Medicare, has operated under these rules for years. Yet, when the same rules are proposed under workers’ compensation, there is outrage that the injured worker would be denied the right to treat as he wishes. The industry and regulator needs to focus on identifying which medical providers produce the best outcomes for injured workers and also which providers follow established treatment guidelines. These physicians, and only these physicians, need to be treating workers’ compensation patients. Let’s eliminate the “plaintiff and defense” doctor mentality and just have good doctors treating our injured workers. Once we have identified those physicians, we need to get out of their way and let them treat the patient. There is no need for utilization review when an approved physician is following treatment guidelines and dispensing off the pharmacy formulary. Let’s change the focus from conflict and discounts to better outcomes and expedited treatment. These won’t be easy changes to make, but the result will be better outcomes for injured workers and lower costs for employers. Win-Win! Reduce Bureaucracy The administrative bureaucracy around workers’ compensation is complex, time-consuming and extremely costly. It also does little to enhance the underlying purpose of the workers’ compensation system, which is to deliver benefits to injured workers and return them to the workplace in a timely manner. States create a never-ending mountain of forms that must be filed and data that must be reported. These requirements vary by state, forcing carriers and TPAs to comply with more than 50 different sets of rules and regulations. Also, why are penalties for compliance errors not based on a pattern of conduct instead of being issued with every violation? If a payer is 99%-compliant across thousands of claims, it is making every effort to comply. But mistakes happen when humans are involved, so perfection is not obtainable. The focus of compliance efforts should be ensuring that every effort is being made to comply, not simply generating revenue from every error. State regulators need to take a critical look at their administrative requirements with a focus on increasing efficiency, reducing redundancy and lowering the costs to both payers and the states themselves. Tighten Thresholds of Compensability and Eliminate Presumptions The threshold for something to be a compensable workers’ compensation claim varies from 1% (aggravating condition) to more than 50% (major cause). Workers’ compensation benefits should be reserved for injuries and diseases caused by the workplace environment, not a simple aggravation. In addition, the normal human aging process should not produce a compensable workers’ compensation claim under the theory of “repetitive trauma.” There should not be workers’ compensation benefits for simply standing, walking, bending and other basic activities related to daily living. States should adopt a consistent threshold that the work injury is the major cause of the disabling condition. If work is not more than 50% responsible for the condition, then it belongs under group health. While we are at it, presumptions for certain conditions and occupations should be eliminated. These laws are based more on politics than science, and they add significant unnecessary costs to public entity employers, which, in turn, increases the tax burden on every person in this country. They also fly in the face of equal protection under the law by creating a preferred class of injured workers. If the facts of the case and the science support a compensable claim, then it should be compensable. However, a firefighter who has smoked two packs of cigarettes a day for 20 years should not automatically receive workers’ compensation benefits for lung cancer because of a presumption law. Eliminate Permanent Partial Disability and Focus on Return to Work The human body is a remarkable machine because it has the ability to heal itself. In addition, medical treatment is specifically meant to restore function. Most injuries do not result in some type of permanent impairment, yet most states have a permanent partial disability benefit. Why? This is how workers' compensation attorneys get paid. Permanent partial disability benefits represent a tort element injected into this no-fault benefit delivery system, and this is the leading cause of litigation in workers’ compensation. The goal of workers’ compensation is to return injured workers to employment. If they can go back to their regular earnings, then the goal is accomplished. If they cannot, then there should be a wage-loss benefit. This gives incentive to employers to return injured workers’ to employment, and it would significantly reduce litigation and conflict in the system. Eliminate Waiting Periods The suggestions I have provided thus far would all reduce workers’ compensation costs. The savings should allow us to increase certain benefits without increasing employer costs. Let’s start eliminating the waiting period. Why should someone have to go without pay for three to seven days because they suffered a workplace injury? This creates an unnecessary financial hardship on injured workers. You don’t have a waiting period when taking sick days from work, so why is there a waiting period for workers’ compensation benefits? Yes, a change would result in more indemnity claims, but we are talking small dollars in additional benefits when compared with the benefit this would provide to injured workers by reducing the financial strain caused by a workplace injury. Eliminate Caps on Indemnity Benefits All states cap the weekly indemnity benefits that injured workers can receive. These caps range from a high of $1,628 (Iowa) to a low of $469 (Mississippi). In 34 states, the benefit cap is less than $1,000/week. Think about that for a moment. In most states, if you are earning more than $78,000 per year, you will be subject to the benefit cap. This is not something that only affects the top 1% of the workforce. This cap affects skilled trade workers, factory workers, teachers, healthcare workers, municipal employees, police, firefighters and a variety of others. It is truly a penalty on the middle class. For workers subject to the cap, their workers’ compensation benefits will be significantly less than their normal wages. How many of us could avoid financial ruin if our income was suddenly reduced by a significant percentage? See Also: Why Mental Health Matters in Work Comp Workers’ compensation benefits are designed to be a backstop for those unfortunate enough to suffer a workplace injury. Having a workers’ compensation claim should not mean someone suffers a significant financial hardship simply because they earn a decent living. Eliminating the benefit cap would solve this problem. Define and Cover Known Occupational Diseases One area where workers’ compensation really needs to evolve is the coverage of occupational diseases. This concept was not contemplated when workers’ compensation statutes were drafted because the focus was on sudden traumatic injuries, but we know that occupational diseases are a reality. Science tells us that there are certain conditions that may be caused by workplace exposures. These conditions can take years to manifest. The industry and regulators need to work together to identify those diseases that are caused by the work environment and ensure that benefits are available to address them. This means eliminating statutes of limitations that are shorter than the latency period for the condition to develop. I refer back to my comments on thresholds of compensability. If the workplace exposure is more than 50% responsible for the condition, then it should be covered. If not, then it should be paid under group health. Reduce Inconsistency Between States Workers’ compensation is a state-based system, so there will always be variations between the states. However, there are some areas where the inconsistency increases costs and does not treat all workers equally. If states could agree on a common data template for carrier reporting, it would significantly reduce the administrative costs associated with gathering and reporting data. All the states don’t need to use the same data elements, but they could accept the feed and simply ignore what they did not need. There have been efforts in this area for years with no resolution. In addition, a common workplace poster for coverage and common forms would also significantly reduce the costs associated with compliance in these areas. As mentioned previously, the bureaucracy of workers’ compensation adds unnecessary cost to the system. We should be able to make some small changes to common templates to reduce costs and increase efficiency. Another area of inconsistency is the simple definition of who is an employee subject to workers’ compensation coverage. If two people work for the same company performing the same job in different states, one should not be subject to workers’ compensation while the other is not, yet this occurs. States vary on their definitions of employees vs. independent contractors. Some states exclude farm workers and domestic servants from workers' compensation, while others mandate coverage for those workers. Whether or not you are eligible for workers’ compensation should not vary based on your state of employment. Ensure That Permanent Total and Death Benefits Are Adequate Having a family’s breadwinner die or become permanently totally disabled (PTD) is both emotionally and financially devastating. Workers’ compensation benefits are supposed to help reduce the financial impact. Yet there are four states that have hard caps on all indemnity benefits (DC, MS, IN, SC). If you are permanently totally disabled in those states, benefits only pay for 450-500 weeks. That means, by design, those states shift PTD claims to the social welfare system. Things are even worse with death benefits. There are 19 states that cap death benefits, including the four listed above. In Georgia and Florida, death benefits are capped at only $150,000. Some would argue that there may be life insurance to provide additional funds, but there is certainly no guarantee of that. The most devastating injuries should not result in even more devastating financial consequences for the injured worker and the family. Adopt an Advocacy-Based Claims Model In many ways, workers’ compensation is a system based on conflict. We have “adjusters” who “investigate” your claim. A very small percentage of claims are ultimately denied as not being compensable, yet the claims review process is based on those claims rather than the vast majority, which resolve without any issues. Businesses stress the importance of customer service, and most employers agree that the workforce is the most valuable asset of any business. However, many businesses often fail to treat their own injured employees with the same consideration they give to their customers. That customer service focus needs to be extended not just to customers but to employees. In discussions around creating an “Advocacy-Based Claims Model,” employers adopting this approach are seeing less litigation, lower costs and greater employee satisfaction. Rather than just denying a claim and inviting litigation, workers are told about benefit options that are available when workers’ compensation is not appropriate. Changing this model is about changing attitudes, the language we use to communicate and even the workflow. It can be done. Workers’ compensation is still a valuable protection for both injured workers and employers. However, the time has come for it to evolve to better reflect the realities of the current workforce, risks present in the workplace, and advances in science and medicine. If workers’ compensation is to remain relevant for another 100 years, it needs to keep up with changes in society.

It is difficult to imagine a world without the Internet or mobile devices. They have become core elements of our lifestyle and have brought a high degree of disruption to virtually every area of business. The financial services (FS) industry is no exception; the digital revolution is transforming the way customers access financial products and services. Although the sector has experienced a degree of change in recent years, the constant penetration of technology-driven applications in nearly every segment of FS is something new. At the intersection of finance and technology lies a phenomenon that has been accelerating the pace of change at a remarkable rate and is reshaping the industry’s status quo—it is called FinTech. What is FinTech? FinTech is a dynamic segment at the intersection of the financial services and technology sectors where technology-focused start-ups and new market entrants innovate the products and services currently provided by the traditional financial services industry. As such, FinTech is gaining significant momentum and causing disruption to the traditional value chain. In fact, funding of FinTech start-ups more than doubled in 2015, reaching $12.2 billion, up from $5.6 billion in 2014, based on the companies included on our DeNovo platform. Cutting-edge FinTech companies and new market activities are redrawing the competitive landscape, blurring the lines that define players in the FS sector. Our objectives and approach This report assesses the rise of new technologies in the FS sector, the potential impact of FinTech on market players and those players' attitudes toward the latest technological developments. Additionally, the report offers strategic responses to this ever-changing environment. Our analysis is based on the following:

1. Primary data derived from the results of a global survey that includes feedback from a broad range of players in the world’s top financial institutions—For this study, we surveyed 544 respondents, principally chief executive officers (CEOs), heads of innovation, chief information officers (CIOs) and top-tier managers involved in digital and technological transformation. Our survey was distributed to leaders in various segments of the FS industry in 46 countries.
2. Insights and proprietary data from DeNovo, PwC’s Strategy& platform, composed of a 50-member team of FinTech subject matter specialists, strategists, equity analysts, engineers and technologists with access to more than 40,000 public and proprietary data sources.

In the first section, we explore FS market participants’ perspectives on disruption. Next, we'll highlight the main emerging FinTech trends in the various FS industries and the readiness of the market to respond to these trends. Finally, we'll offer suggestions about how market players should strategically approach FinTech. The Epicenter of Disruption New digital technologies are in the process of reshaping the value proposition of existing financial products and services. While we should not underestimate the capacity of incumbents to assimilate innovative ideas, the disruption of the financial sector is clearly underway. And consumer banking and payments, already on the disruption radar, will be the most exposed in the near future, followed by insurance and asset management. Disruption targets mostly consumer banking and payments In keeping with the changes already underway, the majority of our survey participants see consumer banking as well as fund transfer and payments as the sectors most likely to be disrupted over the next five years. In consumer and commercial lending, for example, the emergence of online platforms allows individuals and businesses to lend and borrow between each other. Lending innovation also manifests in alternative credit models, use of non-traditional data sources and powerful data analytics to price risks, rapid customer-centric lending processes and lower operating costs. In recent years, the payments industry has also experienced a high level of disruption with the surge of new technology-driven payment processes, new digital applications that facilitate easier payments, alternative processing networks and the increased use of electronic devices to transfer money between accounts. Asset management and insurance are also on the disruption radar Although a high level of disruption triggered by FinTech is already beginning to reshape the nature of lending and payment practices, a second wave of disruption is making inroads in the asset management and insurance sectors. Our survey found that this perception is confirmed by insiders. Nearly half of insurers and asset and wealth managers consider their respective industries to be the most disrupted. When asked which part of the FS sector is the most likely to be disrupted by FinTech over the next five years, 74% of insurance companies identified their own industry, while only 26% of players from other sectors agreed; 51% of asset managers said their industry will be disrupted, while only 31% of other players agreed. However, there seems to be a perception gap here. Professionals from other industries do not see the same level of disruption in these areas. The fact that only insiders are aware of this situation, while outsiders don’t perceive it, could indicate the disruption is in its very early stages. Even so, venture capitalists are looking very closely at start-ups dedicated to reinventing the way we invest money and buy insurance. Annual investments in InsurTech startups have increased fivefold over the past three years, with cumulative funding of InsurTechs reaching $3.4 billion since 2010, based on companies followed in our DeNovo platform. The pace of change in the global insurance industry is accelerating more quickly than could have been envisaged. The industry is at a pivotal juncture as it grapples with changing customer behavior, new technologies and new distribution and business models. The investment industry is also being pulled into the vortex of vast technological developments. The emergence of data analytics in the investment space has enabled firms to home in on investors and deliver tailored products and automated investing. Additionally, innovations in lending and equity crowdfunding are providing access to asset classes formerly unavailable to individual investors, such as commercial real estate. Customer-centricity is fueling disruption As clients are becoming accustomed to the digital experience offered by companies such as Google, Amazon, Facebook and Apple, they expect the same level of customer experience from their financial services providers. FinTech is riding the waves of disruption with solutions that can better address customer needs by offering enhanced accessibility, convenience and tailored products. In this context, the pursuit of customer-centricity has become a main priority, and it will help to meet the needs of digital native clientele. Over the next decade, the average FS consumer profile will change dramatically as the Baby Boomer generation ages and generations X and Y assume more significant roles in the global economy. The latter group, also known as “Millennials” (those born between 1980 and 2000), is bringing radical shifts to client demographics, behaviors and expectations. Its preference for a state-of-the-art customer experience, speed and convenience will further accelerate the adoption of FinTech solutions. Millennials seem to be bringing a higher degree of customer-centricity to the entire financial system, a shift that is being crystallized in the DNA of FinTech companies. While 53% of financial institutions believe that they are fully customer-centric, this share exceeds 80% for FinTech respondents. In this respect, 75% of our respondents confirmed that the most important impact FinTech will have on their businesses is an increased focus on the customer. This post was co-written by: John Shipman, Dean Nicolacakis, Manoj Kashyap and Steve Davies.

This is part of a series of interviews by Shefi Ben Hutta with insurance practitioners who bring an interesting perspective to their work and to the industry as a whole. Here, she speaks with David Dror at Micro Insurance Academy. To see more of the “A Word With Shefi” series, visit her thought leader profile. To subscribe to her free newsletter, Insurance Entertainment, click here. Describe what you do in 50 words or less: I lead a team that brings the poor in rural informal contexts into the fold of insurance. We address this challenge by acting as change agents. We do not sell a product; instead, we take communities from having no risk-management solution to adopting a mutual-aid insurance model that enables them to establish both the demand for and supply of insurance, specific to their context. And when you are not working, what do you like to do? I like to read, write, walk, socialize and rest. How did you become engaged in microinsurance? I have been involved with social insurance since the 1970s, mostly at the macro level; in India, I work with grassroots communities. My experience in India teaches me one overriding lesson, that top-down interventions, without full funding, offer very little opportunity to affect social change, and “localism” that taps into invisible resources offers some unexplored opportunities to reach results. What is the main challenge the Micro Insurance Academy sets out to address? The social challenge we address is the uninsured exposure to risks that condemns the poor in the "informal sector" to poverty, ill health and uncertainty. Insurance is broadly recognized as an indispensable tool to improve access to healthcare, agricultural production (thus food security and livelihoods) and to mitigate climate-change-related crises. However, the challenge to roll out solutions in the informal sector has proved difficult largely because the multifaceted aspects of poverty are often anchored in families and extended families, and not the individual as in the formal sector. Dealing with those social units requires innovation in business models and social engagements. This is what MIA focuses on. In a recent paper termed “The Demand for (Micro) Health Insurance in the Informal Sector,“ you write about the importance of group consensus in driving individuals' buy-in to microinsurance. Do you see insurers account for this lifestyle in their selling proposition? Our solution, which is to assist the community to establish its own insurance schemes that leverage existing relationships of trust and obligation, is based on developing associations for the purpose of efficient sharing that enable the community to be consumers, creators, collaborators, suppliers and distributors of insurance. This is P2P "sharing economy." Success means that each member becomes both co-owner and customer, with a role in business decisions of the supply chain, organization and development. Traditional selling is simply not effective in this setting, and mobilizing entire communities, not merely community leaders, is the novel paradigm. What does success look like five years from now for Micro Insurance Academy? Many insurers work with us to adopt risk-management solutions to be demand-driven and needs-based. Success in business results would mean outreach to millions of uninsured people, and success in business process adaptation would mean that we mobilize resource pools from resources that are today invisible and inaccessible. Is the talent gap within insurance an issue in India as it is in North America? Our model relies on a three-pronged approach (capacity building, governance and insurance), each of which leverages local function, purpose and culture. Developing capacity is a challenge mainly because such capacity must be available at the community level, not just in a few remote back offices. Better local capacity is the backbone that supports good governance. Best life lesson: “The greatness of humanity is not in being human but in being humane” – Mahatma Gandhi.

It seems every press release you read, every case study in the news, every session at industry conferences and every webinar on tap for the next six months will at some point mention the 100% implementation success rate of the vendor involved. That fact, in and of itself, throws serious shade on what really constitutes implementation success and dilutes the impact or validity of the concept as a whole, but should it? Depending on where a person sits, implementation success can mean different things and may include different elements, technologies or metrics. Implementation success is therefore often qualified by varying criteria that are completely dependent on the role of the individual in the project or the company. To truly guarantee implementation success, all perspectives and perceptions must be considered and incorporated. For the CEO, it’s all about the big picture. Sure, nearly all CEOs want an increased ability to process new business and grow the company organically, but time and again individuals in this role will focus on these key questions:

1. Did we implement what we set out to implement?
2. How will this implementation affect our ability to modify existing products or launch new ones?
3. Does this implementation support our construction of a future-ready technology environment?

For the CFO, everyone instantly assumes a successful implementation is simply about being on-time and on-budget, and while those factors are definitely important, CFOs additionally want to know:

1. What is the maintenance and licensing like on this new technology product, and how does it affect our total cost of ownership (TCO)?
2. Does this implementation make other downstream or supporting systems obsolete, requiring the company to make additional technology investments in the coming year(s)?
3. Does this implementation allow the company to retire existing legacy systems and recognize cost savings in maintenance and support of these systems?
4. Is support or the professional services required to implement changes included in the initial contract price, or is it an additional, and continuing, charge?

For the CIO, data conversion is a crucial, yet truly not sexy, part of the package that allows one system to be turned off and the other turned on, so to speak. It is important to understand that while CIOs are often thought to have the most interesting, cutting-edge piece of the insurance technology puzzle, these individuals are not easily distracted by solutions, tools and gadgets that turn out to be little more than bright, shiny objects. Questions CIO typically focus on when measuring implementation success include:

1. Does my internal team have the expertise today to maintain the new solution, including making simple changes without deep technology programming expertise or the ability to create and implement custom coding?
2. Will I be able to easily integrate emerging technologies as the need arises?
3. What is the upgrade path for this solution that will clearly demonstrate my company is not implementing legacy?

Other players, including the company’s heads of claims, underwriting and customer service, are counting on achieving a certain percentage of straight-through processing (STP), decreasing the time from first notice of loss (FNOL) to claim resolution, and still others are rabid about mobile access and self-service capability delivered via a portal. Alternatively, FAIR Plans, for example, are less concerned about growth and bottom line profits, but instead are focused on increasing internal efficiency and delivering a top-quality customer experience. Different strokes for different folks. So, maybe it’s time to acknowledge that the magical middle ground that will make everyone happy likely doesn’t exist. It’s back to the old saying that it’s impossible “to make all of the people happy all of the time.” The trick is knowing which stakeholders’ happiness is on the nice-to-have list and which is on the must-have list. Keep in mind, there are degrees of happiness, and incorporating even small pieces of capability can be important when it means validating stakeholders’ priorities and implying broader ownership across the enterprise. Ultimately, what composes implementation success is unique to each company and should be well-defined for each company before the start of the project. All projects should have a well-defined set of expected outcomes from both business and technology that need to be achieved to have that project defined as a successful delivery. While budget and schedule can be a part of the objectives, they should not be the primary drivers. A successful implementation is one the delivers the required business and technology outcomes. When the core system implementation itself is done right, with the right partners and a well-defined set of objectives, it leaves room for peripheral goals to be achieved at the same time with a faster ROI and the ability to get back to the business of insurance.