Over 50 years ago, Edward Thorp, considered the "father of the wearable computer," discovered a tiny computerized timing device that could effortlessly beat opponents in a game of roulette. Since then, the popularity of wearable technology has always been on the rise. Today, we have smart devices like Apple smartwatches, Fitbit fitness bands, Google Glass and Nike Fuelbands that could do some pretty cool things to help improve the quality of our life. Wearable technology refers to tiny electronic gadgets that are worn on the body or clothing. They are capable of monitoring our physical and mental activities and generating stats to help us understand our health and fitness condition better. Whether it’s keeping track of your eating, exercising, or sleeping habits, there is always a smart device to provide you the right data. Insurance companies are taking wearable device reports seriously. You can get up to a 15% discount on your insurance plan by presenting your wearable report to your insurance agent. See also: The Case for Connected Wearables According to The Wearable Future, 20 percent of Americans are using wearables to monitor their day-to-day activities, and the number is expected to grow over the next couple of years. The study suggested that millennials are the biggest users of wearables. It’s estimated that 50 percent of millennials in America will own fitness bands by 2017. Why is the insurance industry paying attention to wearable technology? Here’s an Infographic that presents some interesting stats and information on how wearable technology is influencing the insurance industry. [caption id="attachment_19451" align="alignnone" width="177"] Credit: LifeInsurancePost.com[/caption]

Insurance carriers looking to better market and manage risks should use social media as a rich component of a robust analytics platform. By augmenting existing big data projects with social media feeds, carriers can identify key information about their insureds that would otherwise be difficult to gather in a timely manner. Social media data analytics can be a competitive advantage leading to greater sales, lower claims and increased customer satisfaction. However, insurers should be careful with the data or risk crossing the “creepy line.” With more than one billion users on Facebook and two billion total social media users across all platforms, the data shared is immense. The data that can be extracted from social media varies by platform, but in general the information goes far beyond pure text. Social graphs describe connections and relationships; profile updates highlight life change events such as marriage and the birth of children; geolocation tags highlight travel; and continuing communication can be parsed for activities and attitude. Modern carriers looking to leverage analytics for a competitive advantage should already have a big data capability that pulls data from policy, billing and claims systems, call center logs, portal and app usage, third party enhancement tools such as Dun and Bradstreet and other sources to build a robust picture of each insured. This data can be mined using machine learning and neural networks to identify risks that should be exited, opportunities for cross-selling and best marketing opportunities to insureds and prospects. Social media is not a replacement for this data, rather a rich addition to it. By augmenting known facts with machine processing of social data, insurers can enable a more detailed and nuanced analysis that the same analytics routines can use to further refine analysis. See also: Should Social Media Have a Place? Examples of enhanced capabilities with this more robust analysis include:

• Prescriptive marketing: Asses the marketing mechanisms and messaging that will be most effective in converting the prospect to an insured through analysis of social graphs, profile data and language usage. By parsing the semantics of a user’s language and analyzing their social graph for the type of language they are accustomed to seeing and, importantly, that they have chosen to see, marketing can be best tailored for the prospect.
• Life event based cross-selling: Identify changes in relationship, location, job or family structure that enable marketing or sales to proactively contact the insured to recommend additional products or services. An example is increasing term life coverage for a new parent. By contacting insureds with relevant products at the moment of a life event, agents can be highly effective at converting new sales.
• Continuous risk assessment: Continuously assess insureds’ risk profiles by expanding the analysis of an insured beyond their behaviors with the carrier to their behaviors with all other parties as evidenced in their social media communications. Updates about employment, travel, family circumstances or other items can impact how a framework understands the facts of an insureds’ interactions with the carrier. By understanding this, a carrier can better tailor reserve models or reevaluate whether to renew the policy.
• Claim fraud detection: Identify potential claim fraud activity by monitoring geolocation, language and other data elements to confirm reported stories and check for telling language used in public communications. For example, a claim for workers compensation could be identified for potential challenge if a system identifies geolocation data from a golf course.
• Customer sentiment: Be proactive with alerts of customer dissatisfaction with claim handling or price adjustments through text mining, allowing for remediation prior to losing a customer. By identifying dissatisfaction, the carrier can take better next steps in communication and outreach to maintain a client’s goodwill and business.

These aspects of insurance sales, risk management and claim management are beneficial for carriers. However, there are risks and challenges associated with social media data:  

• Language is complex data: Because social media is so dependent on written words, language analysis is a common basis for analysis. Semantic assessment is useful in identifying underlying emotions and intent. However, words have different meanings in different sub-cultures, geographies, friend groups and even in different transmission medium. As such, language parsing should often be used to augment existing analysis, not to serve as a primary source of facts.
• Usage of social media varies: In general, social media has widely different usage by age group and other demographic segments. Uptake rakes are not the same across all demographic groups, as demographic analysis of Facebook vs. Snapchat bear out and actual usage of the tools varies by group. The amount of data shared by younger users typically, but not always, dwarfs that of their parents. Analytical frameworks need to be configured to account for these differences and not draw unwarranted conclusions from different behavior patterns.  
• Usage of social media starts and stops: Users of social media will start, stop and potentially resume use many times. Details of usage may also change as users’ needs or privacy concerns change. This requires analytical tools to be flexible in analysis — to understand that lack of data, limited data or infrequent posting is not necessarily an indicator of underlying behaviors of the prospect or insured.
• Security is tricky: In the post-Snowden era, concerns about data privacy and usage are increasingly spotlighted by the media. Insurers should be cautious about how they collect, how they store and how they take action based on social media information. De-identification and storing only the analysis of the underlying data are potential paths among others. This should be continuously evaluated.

See also: 2 Concepts on Social Media and Analytics A final note on risks: In 2010, then-Google CEO Eric Schmidt said, “Google policy is to get right up to the creepy line but not cross it.” This brought about much criticism from the public and watchdogs as many took it to mean Google would use the data it had in ways customers were not comfortable with. Insurance is as much about trust as it is about financial contracts. Therefore, insurers should be careful in using data that some may consider private or semi-private rather than public. They should also be cautious in drawing inferences and interpretations from data in a manner which would cause insureds to question them as warranted and justifiable. The use of data to further the carrier’s understanding of its customers must be approached as a relationship that can benefit both parties, and insurers must avoid being seen as “big brother” looking to squeeze extra premium from insureds. Customers may not embrace the concept of their behaviors being analyzed. However, good analytics programs within insurance companies should be doing that today. By combining the facts of policy, billing and claims systems along with behavior evidenced in call center data, portals, digital apps and through other mechanisms, carriers should be analyzing customers robustly. In this framework, social media data becomes an enhancement layered on top that adds new dimensions and nuances to existing analysis. By leveraging neural networking and other machine learning approaches, carriers can better market, rate and manage risk and claims. These are net positives for insurers and potentially positives for customers. But, there are some substantial risks that must be managed as part of the total analytics strategy. By focusing first on the known facts and actual behaviors and only then expanding into the nuances of social media carriers, insurers can better enable robust and sound analysis that generates a return on investment for all parties.

LIMRA and Maddock Douglas embarked on a study that unveils significant findings among mass-market consumers and their attitudes about “retirement.” Retirement is in quotes because the notion of traditional retirement, that is, the stoppage of work at a set age, and saving up enough in advance to prepare for it is likely passé, perhaps even irrelevant. There is significant opportunity for providers who can crack the code in the mass market, also known as the “middle class.” This study aims to learn about the middle class, not from a demographic point of view but from an attitudinal one. Some significant findings include: Middle class is a state of mind, not an asset or income level. Interestingly, 36% of people in lower income ranges and 81%of people in upper income ranges consider themselves middle class. So that state of mind is quite widespread, and 74% agree middle class values are worth protecting. We found out only 25 % of the people who define themselves as middle class are thinking of retirement in the traditional sense (stopping their current work at the age of 65). Another 22% are thinking retirement will be after the age of 70, and 39% think it will be by age 64 or earlier. A full one-third say they very well may not retire at all. See also: 75% of People Not on Track for Retirement In addition, the notion of retreating on beaches and sailboats is also passé, as many report they aspire to a lifestyle that is more down to earth, that makes more time for family, or even for pursuing modest hobbies, health and faith. And the notion of retirement in general is being replaced by the notion of a lifestyle change, but one that is firmly rooted within a middle-class mindset. It’s not about a life of leisure; it is about being active with a different purpose. And this can happen in any timeframe and with many different catalysts. We should stop thinking about retirement as a bright line goal and be more fluid in our ways of helping people navigate their path to “jubilescence,” a new word coined by combining the Spanish translation of retirement (jubilación) and the idea of adolescence, a transition to a future self. Some people may have several jubilescence phases in their lives; some may have one. Some may be brought on in a positive and proactive way; some may be thrust upon people unexpectedly. Either way, the opportunity for professional advice is abundant. And perhaps the planning time horizon should be shorter and make room for more than one transition. In addition, jubilescence is highly individual; we cannot use demographics as an indicator of what people need or want. In an analysis of individuals in the same demographic class and circumstance, we found high degrees of individuality, even uniqueness, in terms of priorities and needs. One size does not fit all. See also: Why People Don’t Save for Retirement About one-third admit they don’t have an advisor and believe that’s appropriate. This suggests that we have a lot of work ahead of us to change the model and change the outcomes for consumers and ultimately the industry. If the current incumbents of the industry don’t, then disruptors will because the new Department of Labor rule will force some players out of the game, making opportunity for others. Finally, this study opens up spaces for new kinds of expertise beyond current products. We should be thinking about developing and delivering expertise that addresses needs that go beyond saving, investing and insurance, and assist in skilling up for new work opportunities, maximizing the value of living spaces and managing crises. This could be a transition opportunity for the advisors of today or a recruiting opportunity for the advisors of tomorrow. So the question is … Can this industry commit to serving the middle class in a way that is attractive, unbiased and also profitable? With the right work, analysis and innovation, the answer is yes.

In an age of increasing technological disruption to business around the world, almost every organization is looking for ways to keep on top of innovation. A classic Forbes study found workforce diversity and inclusion to be a key driver of internal innovation, as alternative perspectives challenge assumptions and lead to new approaches.

Numerous other studies have had similar findings. Diversity has also been proven to be good for business, with a recent McKinsey study finding that gender-diverse companies are 15% more likely to outperform their competitors, with ethnically diverse companies 35% more likely to do better.

However, simply hiring people from different backgrounds — or setting quotas for the number of women or people of different ethnic backgrounds — is not enough to benefit the company. If your company culture ends up treating all employees the same way, they will soon become assimilated into your existing working patterns, and the benefits of their diverse perspectives can be lost.

How do you encourage the continuance of the alternative approaches that diverse teams bring while sustaining the advantages of diversity for the long term? Getting the balance right is increasingly a challenge — efforts to support diversity, if implemented poorly, can seem at best patronizing, and at worst insulting and discriminatory.

In Depth

The work world is changing fast. The concept of a job for life has disappeared, with employees more likely to switch jobs than ever before. Generations are shifting as baby boomers retire and millennials seek rewarding work. The rise of the internet has made the world — and our workforce — more globalized than ever. New technologies continue to disrupt and threaten further disruption to a broad range of industries. Emerging markets are growing fast, and their rising businesses could overtake previous industry leaders in the developed world.

As the business world has become more global, so too has the value of workforce diversity increasingly been recognized; a broader mixture of employees has demonstrated to have multiple benefits in terms of productivity, innovation and adaptability in an ever-shifting economy. But how can we maximize the advantages of a diverse workforce?

The different types of diversity

The Society for Human Resource Management, a global professional organization operating in 140 countries, notes that while most people will think of gender and ethnicity when they think of diversity, there are plenty of other traits that should be factored in. They can be split into two types: visible diversity traits and invisible diversity traits, with some falling into either category depending on the individual.

• Visible: Skin color, gender, age, body size/type, physical abilities, physical traits

• Possibly invisible: ethnicity, religion, socio-economic status, marital status

• Invisible: Sexual orientation, native-born or non-native, nationality, parental status, level in organization, education, work background, culture, functional specialty, beliefs, values, habits, personality, military experience, geographic location

Each of these diversity traits can give their owners alternative perspectives that can be valuable for business — but some approaches to diversity and inclusiveness have sought to downplay rather than acknowledge differences.

The importance of differences

As the concept of diversity has gained traction over the last couple of decades, many companies around the world have made concerted efforts to avoid discrimination and embrace the hiring and promotion of people from less traditional backgrounds.

Much of the language has been around emphasizing similarities, rather than differences — trying to create harmony by encouraging employees to see what they have in common. However, the benefits of diversity come from the very differences this approach can seek to downplay.

“As hard as getting the mix in the workforce is, most companies have gotten used to the idea that we need the mix,” says Andrés Tapia, author of The Inclusion Paradox: The Obama Era and the Transformation of Global Diversity (and the former chief diversity officer at Aon Hewitt), “but they have not been ready for making the mix work, or how difficult it is. Because the more diverse a workforce is, the more difficult it is to manage … It’s not just about people looking differently, but thinking and behaving differently.”

Diversity of thought

This is why we are increasingly seeing an emphasis on encouraging and accepting diversity of thought as the most important aspect of diversity initiatives, rather than the traditional focus on simply opening up the workplace to people from different genders, ethnicities and disabilities.

“Diversity is the mix, and inclusion is making the mix work,” Tapia says. By adopting an inclusive approach to diversity, where cross-cultural differences as well as similarities are celebrated, the advantages of a diverse team can be sustained over the long haul.

Building trust

Of course, encouraging employees to express their different opinions presents another challenge: building the trust needed for them to feel comfortable to speak up. The key is to encourage acceptance of and respect for differences in approach, which can be incredibly complex and nuanced depending on the mix of visible and invisible diversity traits that make up your team’s background.

Rewarding ideas, praising suggestions and cross-cultural team-building exercises can all play a part, and there are too many approaches to fostering inclusiveness and acceptance of diversity to list here (see further reading, below, for a few overviews). However, absolutely vital to success is ensuring there are clear feedback channels to help shift approaches to encouraging inclusiveness of diversity if any employees feel them to be inappropriate. Because, while it’s unlikely you’ll ever be as excruciatingly bad as Michael Scott of The Office in his attempts to celebrate diversity, the delight of appreciating and encouraging diversity of thought is that you can be sure that you won’t be able to please everyone all the time.

The key is to ensure that you acknowledge and learn from this and use any inadvertent missteps to progress. The biggest benefit of workplace diversity, after all, is in learning from and adapting to alternative viewpoints.

Talking Points

“Employing people from different backgrounds and who have various skills, viewpoints and personalities will help you to spot opportunities, anticipate problems and come up with original solutions before your competitors do.” – Richard Branson, founder, Virgin Group

“Ideas from women, people of color, LGBTs and Generation Ys are less likely to win the endorsement they need to go forward, because 56% of leaders don’t value ideas they don’t personally see a need for… the data strongly suggest that homogeneity stifles innovation.” – Center for Talent and Innovation

“Multi-cultural teams produce different results depending on the level of inclusiveness. When a company has diverse talents but leaders ignore or suppress cultural difference, the cultural differences become obstacles to performance… When a company has diverse talents and leaders acknowledge and support cultural difference, the cultural difference becomes an asset” – Park Gyone-me, CEO, Aon Hewitt Korea

“The world is evolving at an unparalleled pace… The most successful leaders will be those who possess cross-cultural competence, a deep understanding of various peoples and a sincere appreciation for diversity.” – Donna Shalala, President, University of Miami “

This article originally appeared on TheOneBrief.com, Aon’s weekly guide to the most important issues affecting business, the economy and people’s lives in the world today.” 

Further Reading

• How Can You Ensure That Diversity Starts at the Top? – Entrepreneur, June 10, 2015
• Diversity of Thought is the Key to Global Competitiveness – IndustryWeek, July 16, 2015
• The Importance of Diversity of Thought for Solving Wicked Problems – Forbes India, July 8, 2015
• The Business Cast for Building a Cross-Cultural Workforce – Inc., June 1, 2015
• How to Create a More Inclusive Workplace for Your Diverse Employees – Forbes, June 11, 2015
• Diversity and Inclusion: Making the Mix Work – Aon white paper

Chief information officers (CIOs) are responsible for decisions and implementations that promise to deliver on enterprise goals. A CIO’s job is not only to invest in projects that are going to improve and streamline a company’s internal processes but to keep an eye out for initiatives and capabilities that will keep them ahead of industry shifts — shifts that can potentially challenge the company's core business. Increasingly, improving customer engagement to promote loyalty and drive growth is becoming important to most insurers. Understanding the scope of the process, where to begin and how to monitor progress remains problematic, so here’s a quick checklist of things CIOs can focus on today to start improving the consumer experience: Start from the customer’s perspective —

• Know who your customers are comparing you against:

Keep in mind (and remind your colleagues, whether they are in senior management or in the mail room) that consumers are not comparing you solely with other insurance companies. They are also comparing you with the other places they do business — and that includes online businesses (Amazon, for example).

• Understand what their expectations are.

Here is a reality check: No consumer will be thrilled to fax a wet-signed renewal application. Although there are good historical and legacy system justifications for demanding it, this is no longer acceptable for today’s consumers, who rightly demand immediacy.

• Meet them where they are… or will be.

Online is outdated; mobile is the new norm. You need to be thinking about how even mobile devices will be replaced by something newer and greater. In an age where cars can drive themselves and televisions are ”smart,” how much harder do you think it will be to sell insurance? See also: Tips on Improving the Customer Experience Follow up by looking at things from your employees’ point of view.

• What skills do your product development and marketing teams possess?

They most likely know a whole lot about insurance — its concepts, how to make it work from a business perspective and even how to present it to customers. Chances are, however, they are not versed in software engineering and technical concepts or tools.

• What tools are employees familiar with and which do they use in their daily work?  

Can tools like Word, spreadsheets, email and interactive shared drives or repositories be leveraged?

• How much IT engineering goes into translating a product vision into actual products (forms and online/offline interactions, whether direct or through agents and brokers)?

If you are like most carriers, once an insurance offering has been defined on the business side (product, marketing, claims, legal), IT steps in. How much time and money do you spend recreating what was already done in Microsoft Office? Would it not be more efficient if the subject matter experts were able to handle more of the load on their own? See also: Keen Insights on Customer Experience Take it all in from a systems and processes perspective.

• What core systems do you have in place today?

It is a safe bet that you have many systems in place, many of which overlap or are similar in features and purpose.

• When — and how — are you going to consolidate, upgrade or replace those systems?

Realistically, this will take time. A long time. Probably too long to afford waiting for it to be done.

• Look for plug-and-play capabilities and opportunities for an enhanced experience that do not force you to throw away all of your investments.

At the end of the day, you have a lot of smart people in your organization. Listen to what your customers are telling you, empower your people by removing extraneous and overly technical steps and look for ways to enhance your company’s communication capabilities without having to start everything over from scratch.

This is Part 3 of a 3-part series. Part 1 can be found here; Part 2, here. In our first blog post on artificial intelligence (AI),  we outlined the challenges of defining AI, and in our second blog post, we described how ubiquitous AI is becoming, defining it as "ubiquitous intelligence." In this post, we define the continuum of AI as "AAAI": assisted, augmented and autonomous intelligence. AI as Assisted Intelligence Over the past couple of decades, AI has replaced many of the repetitive and standardized tasks done by humans. For example, industrial robots are tackling many manufacturing tasks. Similarly, many administrative tasks such as taking meeting minutes, answering phones and searching for information are all done by some form of an automated system. We call this type of automation — where the AI is assisting humans to do the same tasks faster or better — assisted intelligence. The humans are still making some of the key decisions, but the AI is executing the tasks on their behalf. The decision rights are solely with the humans.  AI as Augmented Intelligence We are just now moving to the next stage of augmented intelligence, where humans and machines learn from each other and redefine the breadth and depth of what they do together. For example, in a recent client engagement, we carried out 200,000 go-to-market scenarios generated by an AI system for a service introduction. This provided the human decision-makers with a high degree of granularity and specificity regarding the assumptions, future projections and impact of the new service. While the system learned a lot and modeled the ecosystem, the humans saw the sensitivities and feedback involved in market adoption. Under these circumstances, the human and the machine share the decision rights. In addition, unlike assisted intelligence, in augmented intelligence, the nature of the task fundamentally changes. On a spectrum ranging from no automation to total autonomous operation, each sector, company and individual will set the appropriate level of machine augmentation. Over time, the dial might move more toward totally autonomous, or it might stay somewhere in between. AI as Autonomous Intelligence Lastly, we see autonomous intelligence, in some cases, where adaptive/continuous systems take over. They will do so only after the human decision-maker starts trusting the machine (e.g., fully autonomous self-driving cars), or when the cycle time of decision making is so fast that having the human in the loop is a liability (e.g., automated trading). In autonomous intelligence, the decision rights are with the machine and are fundamentally different from assisted intelligence. See also: Of Robots, Self-Driving Cars and Insurance The decision to move from augmented intelligence to autonomous intelligence will largely be in our hands and will be made based on a number of different factors — including the speed of human decision making, the technical feasibility of making autonomous decisions, the cost of building solutions and the trust we place in these solutions. As enterprises contemplate the introduction of AI across their functional areas, it helps to clearly articulate which stage of AI they are aiming for. Are they merely automating repetitive tasks and providing assisted intelligence? Are they fundamentally changing the nature of work by having humans and machines collaborate with each other to make decisions with augmented intelligence? Or are they delegating all decision making with autonomous intelligence?

Remember the classic '80s film “War Games,” where the computer system (named War Operation Plan Response, or WOPR for short) asks Mathew Broderick in a See’n Say computer voice, “Shall we play a game?” The movie was a tense thriller that was topical for my Cold War childhood, but it showed, among others things, that not all games are fun. Insurance claims should not be a game — where one side is playing games as a tactic to delay or reduce claim payment. Unfortunately, I see this sort of ambush all too often when preparing property and business interruption claims for my clients. My client is usually struggling to recover from a major loss to its business. My client has done its best to protect itself via loss control, insurance procurement and a proper claim filing. So when the client documents losses and presents the claim, the client should not have to battle bullying, stall tactics and misguided theories. As an example, a chemical company client's business depended heavily on the supply of raw materials from specific international locations. The exclusive relationships with these international suppliers and their governments took decades to forge and represented a distinct competitive advantage. The company's business was cyclical, and, during a low point, a hurricane devastated its manufacturing plant. If it was not able to get back up and running quickly, the long-term contracts with suppliers would be canceled, undoing years of supply chain efforts. The CEO recognized the real possibility that his company would not recover if its insurance didn't reimburse the company for its losses in a timely manner. The CEO knew he might have to lay off more than 1,000 employees. The insurer chose to overwhelm the client with requests for information, including sending a large group of insurance investigators that my client had to accommodate at his chemical plant while it was still under water. Contractually, the insurance company has the right to gather information. However, tact and decency should be observed. The insurer leveraged the policyholder’s crisis to establish reasons not to pay the claim based on misguided theories about the business. Because of the chaos, when the insurance consultants arrived to survey the damage, the client was not prepared. The company did not have a proper escort for the consultants, who made incorrect assumptions about the damaged equipment that formed the basis for a theory on the valuation of replacement equipment and lost production. See also: Power of ‘Claims Advocacy’   The client was not informed about these conclusions until some months later. The company was ambushed and had to disprove the incorrect information. All the while, claim payment was being withheld. This tactic is common. While the insurance team may just be doing its job as instructed, a company’s existence is at risk. Adjusters are often cavalier about this process and will hide behind the “duty” or policy wording while, in reality, just playing games with the money owed to the policyholder. I am happy to report that we were able to secure advanced payments to stabilize the client’s operations, maintain supplier relations and create an equitable settlement. The success required an effective strategy and careful execution. Here is the approach we know works best:

1. Take Control — You do not want to put off the insurance company too long, but it is okay to let the company know you are going to control when its people get access and whom they can interview. Claims are often derailed in the first week because of uncontrolled access and miscommunication. 
2. Agreements in Real Time — One of my favorite risk managers uses this mantra during claims: “We make decisions in real time.” What he means is that when confronted with a decision — say the rebuilding or replacement of equipment — you must use all the information you have at that time to make a decision. As long as the adjuster is aware of the decision and your reasoning, he should not second guess what you have done once more information is known. For example, immediately after a loss, you think you need two cranes to move equipment and debris. After the fact, you realize you could have gotten by with just one. You made a decision based on what you knew; if the adjuster does not object at the time of the decision, he has no grounds to object after the fact.
3. Clarify Requests — The insurance company is going to ask for information — a lot of information. In general, these requests are broad and may even be used to fish for something that can be used against the claim. Don’t let this happen. Ask that requests be specific. If they are not specific, send the request back. Ideally, claims are presented with supporting documentation, and that should be the focus of requests. I often filter this information down to what is really specific to what is being claimed. Extraneous information can create confusion and can lead to more requests. Your loss accountant, if she is experienced, will help interpret requests and focus on what is relevant to the claim.
4. Recruit Experts  — Adjusters and their team work on claims every day. It’s their full-time job. For you, it is an infrequent part of your job. If you want a smoother process and a positive outcome, you need experts working on your behalf. In addition to your internal team, your broker's claim experts (as well as independent forensic accountants, engineers and outside counsel) are critically important. Ensure that those on your team are working on your behalf and match up well against the insurance company representatives. In my claim example above, we were not engaged from the onset; it is vital to have your independent team vetted and agreements in place ahead of a loss. Remember, as in my example, many claims are hindered by mistakes made in the initial weeks after a loss. Immediately after a loss is no time for shopping.
5. Don’t Play Games — In other words, focus on the claim, not the games. Prepare an accurate claim from your perspective; be up-front with relevant information; and be reasonable in final negotiations. Just because insurers may play games doesn’t mean you need to do the same. You are much better off being prepared, professional and confidently in control of the process.

See also: The Future of Insurance [Infographic] If you follow this advice, you will stand a much better chance succeeding with claim recovery. As WOPR realized in the movie, with claims war games there are no winners.  Avoid this ambush by being prepared and informed.

Bob Kaplan deserves our respect. Famous for his contribution to management with the balanced scorecard, he is now senior fellow and Marvin Bower professor of leadership development, emeritus at the Harvard Business School. (I have never had the privilege of meeting him.) His colleague, Anette Mikes, was with him at Harvard, and she is now professor of accounting and control at the University of Lausanne (HEC). I am in a network of risk practitioners and thought leaders that includes her. (I have heard her speak but have never met her one-on-one.) She has made important contributions to the academic study of risk management that includes a case study of John Fraser’s Hydro One and a similar case study on Lego. I have shared my thoughts with her on the narrow and highly limiting view that risk management is about mitigating potential harm from adverse events. Unfortunately, I have not been persuasive. Kaplan and Mikes recently published a Harvard Business School working paper, "Risk Management – the Revealing Hand." While there is some value in the paper — such as its insistence that risk management must be continuous as well as its discussion of overreliance on models — it demonstrates very clearly why so many board members and executives do not see how the management of risk enables their organizations to set and deliver on objectives and strategies. For example, the ERM Initiative at North Carolina State University, in its 2016 survey of the state of risk management, found that only 4% of organizations feel their risk management is very mature (up from 3.4% in 2010). In 2013, a Deloitte survey found only 13% of executives believe risk management supports their ability to develop and execute on business strategy very well. See also: How to Remove Fear in Risk Management How can risk management practitioners demonstrate value and significantly contribute to the success of an organization when they:

• Focus on a list of potential harms;
• Don’t focus on enabling intelligent and informed decisions from strategy to tactics; and
• Talk in technobabble instead of the language of the business?

I see risk management as about the following:

• Enabling informed and intelligent decisions that consider what might happen, both good and bad. Those decisions include setting the vision for the organization (including its strategy, plans and objectives) as well as the decisions made every day across the extended enterprise as people at all levels direct and manage the organization toward its objectives.
• Thinking about what lies between where we are and where we go, how it might affect our ability to achieve or exceed our objectives and what (if anything) we need to do about it.
• Taking the right level of the right risks. We cannot survive, let alone thrive, if we do not take risk. The concept that we must mitigate all risks is absurd. Risks need to be assessed in the context of achieving objectives, not in a silo.
• Knowing how to evaluate the potential for any event or situation to have good, bad or a combination of good and bad effects — and providing a structured process for making decisions about the path forward.
• Promoting intelligent and effective management that enables the organization to succeed.

Kaplan and Mikes say there has been no credible academic study that demonstrates that risk management delivers tangible value. (Note: EY and Aon have released studies that say that organizations with better risk management obtain better long-term financial results.) Is the conclusion by Kaplan and MIkes because they don’t understand what risk management should be, that it is not about managing a list of potential harms (what Jim DeLoach calls "enterprise list management")? Focusing on what could go wrong will not help you do what is needed for everything to go right. If you were greeted at your front door by someone with a list of all the bad things that might happen, would you ever go out, or, would you dismiss the pessimist with disdain? Here are just a few quotes to support my view:

• “Enterprise risk management helps an entity get to where it wants to go.” – COSO (the acronym for the Committee of Sponsoring Organizations of the Treadway Commission, which published "Internal Control—Integrated Framework" in 1992).
• "[Risk management enables] a greater likelihood of achieving business objectives [and] more informed risk-taking and decision-making.” – COSO
• “The purpose of managing risk is to increase the likelihood of an organization achieving its objectives by being in a position to manage threats and adverse situations and being ready to take advantage of opportunities that may arise.” – National Guidance on Implementing ISO 31000:2009 from NSAI in Ireland
• “We believe a paradigm shift in risk management is beginning, which is tied to the increasingly complex world in which companies now operate; based on the awareness that uncertainty is embedded in [and affects] everything we do; [and] focused on both capturing upside opportunities as well as protecting the business.” – EY
• “You need [risk management] to become part of the rhythm of the business — meaning within the flow of strategic and business planning, operations, oversight and monitoring that runs from the board to the line.” – EY
• “The job of risk (management) is to make … executives more confident to take strategic risks; to demand objectivity in decision-making; and to focus on value added, not just value preserved.” – Deloitte

I can tell you that the risk management programs at Hydro One and Lego do not limit their work to potential harms. They consider the potential for reward as well as harm and work to help management succeed. See also: Moving to Real-Time Risk Management So how is it that Kaplan and Mikes have such a narrow view? Perhaps it is because the great majority of practitioners limit risk to the negative and their practice to a periodic review of a list of top risks (enterprise list management). That narrow view inevitably creates a disconnect with the desire of management to lead their organization to success. How do you expect a CEO to believe risk management enables success when all the chief risk officer (CRO) gives him is a list of what could go wrong? The CEO needs help to see what might happen, both good and bad, and what to do about it. In other words, the CEO needs to see risk management as helping him or her get where he or she needs to go. Do you share my view? If so, how do we convince both the practitioner and academic community? How can we move the practice forward so that it is recognized by leaders of every organization as contributing to their success? I welcome your views. This article was originally posted here.

“Who is that guy, and what’s he doing?” Shaun called me, laughing. He explained that he had just heard about a teenager who was at his friend’s house. As they walked through the den – he saw an older man reading a newspaper in a recliner and asked the question above. The man’s son said, “That’s my dad, and he’s reading a newspaper.” The next question was, “What’s a newspaper?” followed by, “Where does he get it?” The son apologized for his dad’s eccentric behavior by explaining that there are stories about news, politics and sports in the paper. It's like what we can read on Google, Facebook, Twitter, Snapchat, Instagram or WhatsApp, or view on YouTube. Every morning a man drives by the house and throws a paper (usually in a plastic bag) out of his window and into our yard. Rain or snow, sleet or shine, dad walks outside to get it. Then he comes in and reads it like he’s doing now. “Why doesn’t he have a smart phone? What’s wrong with him?” the friend asked. These questions may shock those of us who walk to the curb at 5:00 every morning, anxiously awaiting our daily delivery. The newspaper is important to me. It is more than news or journalism. It is a ritual in my life, a daily ritual I’ve enjoyed for more than 50 years. To the teen above, my ritual probably is crazy. To me, he seems stupid. In yesterday’s world, I’m right. In tomorrow’s world, he is. Consider the profits made by the publishers of newspapers in yesterday’s world. Consider the Big 3 broadcast channels, CBS, NBC and ABC, and their dominance in the media world. Now recognize that they are dinosaurs – smoking around the tar pits while awaiting their demise. Is your agency or carrier or brokerage selling yesterday’s products to a population that is the past, or is your agency a living system that is growing with the marketplace as it will be and adapting what you sell and how you sell it to the buyers of the future, or are you focused on your reminiscences? What populations/niches will you serve in tomorrow’s world? What will they be buying? How will you deliver it to them profitably? I can promise they will be different than I am, and you must be different than you are – if you don’t want to go extinct! Will your model be paper or virtual? Think new! Act now!

Healthcare Matters sits down with Dr. Richard Anderson, chairman and CEO of the Doctors Company. In Part 5 of the series, we discuss with Dr. Anderson the most effective provisions of the Medical Injury Compensation Reform Act (MICRA) and how MICRA has shaped the medical malpractice insurance climate in California since 1975.