(Adapted from A Manager’s Guide to Suicide Postvention in the Workplace: 10 Action Steps for Dealing With the Aftermath of a Suicide) Death jars our concept of the way life is supposed to be. That dissonance is multiplied when the death is by suicide. Following the tragedy of death by suicide, the workforce will include people whose personal struggles already leave them vulnerable and who now face increased risk for destructive behavior, including suicide. Tragedy can beget additional tragedies. Sometimes irrational blaming behavior includes violence. Sometimes suicide contagion, or “copycat suicides,” occur. How leaders respond (postvention) after death by suicide is critical to stopping that negative momentum. "Postvention" can be prevention Defined by the Suicide Prevention Resource Council as “the provision of crisis intervention and other support after a suicide has occurred to address and alleviate possible effects of suicide,” effective postvention has been found to stabilize community, prevent contagion and facilitate return to a new normal.

1. Coordinate: Contain the crisis. Like the highway patrolmen on-sight at a traffic accident, postvention aims to prevent one tragedy from leading to another and return normal progression as soon as is safely possible.

2. Notify: Protect and respect the privacy rights of the deceased employee and the person's loved ones during death notification.

3. Communicate: Reduce the potential for contagion. Communicate, communicate, communicate meaningful information. Keep it simple. Make it practical. Focus on solutions to immediate issues. Repeat it. Repeat it again.

Crisis Care Network, the largest provider of critical incident response services to the workplace, developed a crisis communication process that has been helpful for business leaders. The acronym ACT describes a means of acknowledging, communicating and transitioning amid a crisis. See Also: 6 Things to Do to Prevent Suicide Acknowledge and name the incident

• Have an accurate understanding of the facts and avoid conjecture.
• Demonstrate the courage to use real language that names what occurred.
• Acknowledge that the incident has an impact on team members and that it is okay that individuals will be affected differently.

Communicate pertinent information with both compassion and competence

• In the absence of information, people create it. Providing information reduces the likelihood of rumors, builds trust and provides a sense of order that supports moving forward.
• Although very difficult to do when affected by traumatic stress oneself, communicating with both competence and compassion demonstrates leadership effectiveness in a caring way. Employee assistance program (EAP) consultants often help business leaders by scripting and coaching their messaging.

Transition toward a future focus

• Communicate an expectation of recovery. Those affected must gain a vision of “survivor” rather than “victim.” Research indicates that humans are an amazingly resilient species and overwhelmingly bounces back from adversity.
• Communicate flexible and reasonable accommodations as people progress to a new normal. Employees should not all be expected to immediately function at full productivity (although some will) but will recover quicker if assigned to simple, concrete tasks. Structure and focus are helpful, and extended time away from work often inhibits recovery. “If you fall off a horse…..get back on a pony.”

4. Support: Offer practical assistance to the family and those affected.

5. Link: Identify and link affected employees to additional support resources and refer those most affected to professional mental health services.

How to lead effective suicide postvention was likely not part of most business leaders' education or training. When these tragedies occur, leaders often engage their EAP to deploy critical incident response experts – behavioral health professionals with unique training in response to tragedies. These consultants will:

• Consult with the organization’s leadership regarding crisis communication strategies that facilitate resilience
• Draw circles of impact and shape an appropriate response
• Let people talk if they wish to do so
• Identify normal reactions to an abnormal event so that people don’t panic regarding their own reactions
• Build group support
• Outline self-help recovery strategies
• Brainstorm solutions to overcome immediate return-to-function and return-to-life obstacles
• Assess movement toward either immediate business-as-usual functioning or additional care. Following death by suicide, they will be especially attuned to assess others for risk of self-harm.

6. Comfort: Support, comfort and promote healthy grieving of the employees who have been affected by the loss. Critical incident response consultants will guide, coach, and script leaders regarding compassionate messaging. Leaders must “give permission” for help-seeking behavior.

7. Restore: Restore equilibrium and optimal functioning in the workplace.

Sensitively resume a familiar schedule. People do best when their natural rhythms kick back in. Routine. No surprises. One foot in front of the other, just like yesterday. Facilitate successful completion of familiar tasks. Doing something tangible reduces that sense of powerlessness and helps people focus on what they can do, rather than panic about what they cannot. The structure of doing what one knows how to do is helpful in finding a “new normal.”

8. Lead: Build and sustain trust and confidence in organizational leadership. The team will never forget the leader’s response. Neither will the leader. Effective provision of both guidance and support will lead to the team feeling cared for in the workplace and result in loyalty and faith in their leadership’s abilities. People will go through the crisis with or without leadership. Lead them.

9. Honor: Prepare for anniversary reactions and other milestone dates. Mark these dates on the calendar and then respectfully acknowledge them in large or small ways. Honor those affected by the death.

• Sustain: Move from postvention to suicide prevention.

All involved stakeholders will now own the fact that “it can happen here.” Use that momentum to keep others safer. Following death by suicide, leaders all become “first responders.” Rather than being overwhelmed by the first tragedy, they can prevent others.

I am committed to helping shape a system for securities litigation defense that helps directors and officers get through securities litigation safely and efficiently, without losing their serenity or dignity, or facing any real risk of paying any personal funds. But we are actually moving in the opposite direction of this goal, and, unless some changes are made, securities litigation will pose greater and greater risk to individual directors and officers. It is time for the “repeat players” in securities litigation defense – D&O insurers and brokers, defense lawyers and economists – to make some fundamental changes to how we do things. Although most cases still seem to turn out fine for the individual defendants, resolved by a dismissal or a settlement that is fully funded by D&O insurance, the bigger picture is not pretty. The law firms that have defended most cases since securities class actions gained footing through Basic v. Levinson – primarily “biglaw” firms based in the country’s several largest cities – are no longer suitable for many, or even most, securities class actions. Fueled by high billing rates and profit-focused staffing, those firms’ skyrocketing defense costs threaten to exhaust most or all of the D&O insurance towers in cases that are not ended on a motion to dismiss. Rarely can such firms defend cases vigorously through summary judgment and toward trial anymore. Worse, these high prices too often do not yield strategic benefits. A strong motion to dismiss focuses on the truth of what the defendants said, with support from the context of the statements, as directed by the U.S. Supreme Court in Tellabs and Omnicare. Yet, far too often, the motion-to-dismiss briefs that come out of these large firms are little more than cookie-cutter arguments based on the structure of the Reform Act. And if a motion is lost, settlements are higher than necessary because the defendants often have no option but to settle to avoid an avalanche of defense costs that would exhaust their D&O insurance limits. On the other hand, if settlement occurs later, it can be difficult to keep settlement within D&O insurance limits – and defense counsel’s analysis of a “reasonable” settlement can influenced by a desire to justify the amount it has billed. At the same time that defense costs are continuing to soar, securities class actions are becoming smaller and smaller, with two-thirds of cases brought against companies with market caps less than $2 billion, and almost half less than $750 million. Although catawampus securities litigation economics is a systemic problem, affecting cases of all sizes, the problem is especially acute in the smaller half of cases. Some of those cases simply cannot be defended both well and economically by typical defense firms. Either defense costs become ridiculously large for the size of the case and the amount of the D&O insurance limits, or firms try to reduce costs by cutting corners on staffing and projects – or both. We see large law firms routinely chase smaller and smaller cases. From a market perspective, it makes no sense at all. So how do we achieve a better securities litigation system?  Five changes would have a profound impact:

1. Require an interview process for the selection of defense counsel, to allow the defendants to understand their options; to evaluate conflicts of interest and the advantages and disadvantages of using their corporate firm to defend the litigation; and to achieve cost concessions that only a competitive interview process can yield.
2. Move damages expert reports and discovery ahead of fact discovery, to allow the defendants and their D&O insurers to understand the real economics of cases that survive a motion to dismiss, and to make more informed litigation and settlement decisions.
3. Increase the involvement of D&O insurers in defense-counsel selection and in other strategic defense decisions, to put those that have the greatest overall experience and economic stake in securities class action defense in a position to provide meaningful input.
4. Increase the involvement of boards of directors in decisions concerning D&O insurance and the defense of securities litigation, including counsel selection, to ensure their personal protection and good oversight of the defense of the company and themselves.
5. Make the Supreme Court’s Omnicare decision a primary tool in the defense of securities class actions. Obviously, Omnicare should be used to defend against challenges to all forms of opinions, including statements regarded as “puffery” and forward-looking statements protected by the Reform Act’s Safe Harbor. But defense counsel should also take advantage of the Supreme Court’s direction in Omnicare that courts evaluate challenged statements in their full factual context. Omnicare supplements the court’s previous direction in Tellabs that courts evaluate scienter by considering not just the complaint’s allegations, but also documents incorporated by reference and documents subject to judicial notice.  Together, Omnicare and Tellabs allow defense counsel to defend their clients’ honesty with a robust factual record at the motion to dismiss stage.

These five changes are among the top wishes I have to improve securities litigation defense, and to preserve the protections of directors and officers who face securities litigation.

When start-ups jumped into insurance, many focused on the personal auto industry. Not surprising, considering it is arguably the least complex line of insurance and is often the first to be disrupted (going back to Progressive in the ‘90s). Now that InsurTech investment is at an all-time high, more start-ups are entering the market and have become increasingly confident in their ability to tackle complex lines of business. If recent start-ups like CoverWallet and Next Insurance are any indication, small commercial business is the next line to face aggressive disruption. If carriers want to stay competitive and grab profitable market share, they will have to adapt to today's standards for the customer experience. Small Commercial an Obvious Move for Startups Targeting the small commercial business market makes sense, given a recent McKinsey study that calls the line “one of the few bright spots in P/C insurance.” The study points out that, since the 2008 recession, the number of small businesses has grown, and 40% of sole proprietorships don’t have insurance. Unfortunately for the traditional carrier, the majority of small businesses are also open to purchasing policies online. But remember that saying you’re open to purchasing online and actually purchasing online are two very different things - especially if we use the recent past as an indicator. See Also: So Your Start-Up Will Sell Insurance Google Compare terminated operations after sluggish growth across the U.S., with many of their leads failing to purchase. This is not atypical for this insurance shopping method. Several years ago, Overstock also tried selling insurance online outside of personal auto - including commercial business - and that closed down quickly. That two business giants failed doesn’t mean online purchasing won’t eventually catch on. Start-up culture is largely a test-and-learn environment. But these initial growing pains do indicate that traditional insurance still has a chance to stay alive amid disruption if they provide an efficient, engaging consumer experience. Consumers Want Both Confidence and Efficiency It’s not that consumers don’t want to work with carriers and agents, it’s that the customer efficiency of 30 years ago is no longer an appropriate benchmark. Of course small business owners are open to purchasing online, because traditional insurance has not yet given them the experience they desire. According to a PIA study from last year, small commercial businesses would much prefer the personal attention from agents (and by extension the carriers they work with) as long as they do a better job of adapting to technologies and the Internet. From the customer’s perspective, an experience with an insurance carrier isn’t compared only with other carriers – but to other companies they do business with regardless of industry. Whether it’s Amazon, Apple, Google, etc., your customer experience will be rated against the companies leading in the modern, digital world. This explains many of the start-ups entering the space now and why they have the potential to gain the upper hand. To achieve better communication, carriers need to think more broadly about their usage of data and predictive analytics. You have to gain an incredibly detailed view of your customers, their behaviors and their responses to your communication and product offerings. We always recommend an incremental rollout of analytics to get your feet wet before diving in. At the same time, it’s critically important to be ready to build off that early momentum and develop an overall predictive analytics strategy that seamlessly merges with business goals. Recognize that this evolution to becoming more data-driven is as much about organizational change as it is about technology. When carriers understand how predictive analytics benefits them, they can confidently make data-driven decisions that improve every aspect of their business - including the customer experience. For example, using underwriting analytics to achieve real-time insights into pricing policies doesn’t just help a carrier's bottom line - it also greatly streamlines and expedites the communication chain between consumers, agents and carriers. At the recent Dig In insurance conference, a panel of InsurTech CEOs discussed how start-ups dissect insurance data – in ways that differ from traditional insurers and agents. A member of the audience asked, “Why are start-ups so combative in their approach?” It was an intriguing question that highlights the digital divide in terms of how the industry thinks about evolving versus how technology and Internet entrepreneurs think about playing in industries ripe for disruption. What feels “combative” to the incumbent is often seen as “customer-centric” to the new entrant. It’s important that carriers understand that there is a way to co-exist, but counting on new entrants to accept the status quo is a bad bet. Think of start-ups as an advocate for a better customer experience, and see those that fit your business as innovation partners. Adopt the mantra that the customer always wins, and you’ll remain relevant in the customer value chain.

A tsunami of change is poised to disrupt the life and annuity market in terms of regulation, products, distribution channels, business strategies and customer expectations. The new regulatory ruling from the Department of Labor (DoL) will initially disrupt annuity product sales related to IRA rollovers but will likely have significant impact in the medium to long term with all the products that U.S. life insurance companies provide. The new ruling places a fiduciary standard on all types of financial services companies and advisers that provide investment advice or sell insurance or other products that affect qualified retirement accounts. Unlike the previous suitability standard that applied to most annuity and other investment product sales, the new fiduciary standard will require that financial advisers be completely transparent about their conflicts of interest and compensation and will make it very difficult to justify commission payments by product companies. To help guarantee objectivity, the preferred fee structure for retirement account-oriented advice and product sales will become fees directly from the consumer. While the fiduciary standard will apply initially to qualified retirement accounts, the recent experience in other countries like the UK and Australia makes it clear that consumers will come to expect a similar level of transparency and objectivity for other types of financial advice and financial products like life insurance. See Also: 8 Start-ups Aiming to Revive Life Insurance Life insurance companies that write a large volume of high-commission, retirement-oriented products like variable and indexed annuities will experience the most significant, immediate and potentially negative impact. Traditional life insurance and other lines of business will experience the impact of the fiduciary ruling more gradually, giving life insurance companies early warning and much-needed time to evolve their products, technologies and distribution strategies. Insurers should assume that group-led individual product sales sold under something resembling the fiduciary standard will ultimately become the norm for the whole life insurance portfolio. Adding further momentum to this wave of change are Millennials, now the largest living generation. As also the most educated living generation, they expect objective advice and fees for products that represent fair value. While often very self-directed, Millennials want advice from experts in complex, important areas like employee benefits. Millennials want to receive employee benefits advice from their current employers but then often buy individual products that can follow them to future jobs at new employers. This represents another wave of change because of the dynamic, “gig” economy. Right behind, Gen Z, is a generation ‘born digital,’ with technology incorporated into all aspects of their lives. They live and breathe innovation, as noted in our Future Trends: A Seismic Shift Underway report. What does this mean to their employers and their desire to build employee loyalty? This new customer expectation is reinforced in a recent MetLife employee benefits study where nearly two-thirds (62%) of employees say they’re looking to their employer for more help in achieving financial security through employee benefits as compared with 49% in 2011.  Furthermore, the study noted that Millennials were twice as likely compared with baby boomers, 44% versus 20%, to say that their employers “ought to help them solve their financial concerns.” So what does this mean for life insurance companies? It means a new world of transparency, objectivity, fee-based adviser compensation, lower-fee products and employee job hopping will together create a wave of change to long-held business assumptions, operations and more. With the pace of change gathering strength and with limited resources, life insurance companies should seek partnerships that will help them ride this wave. This could involve partnering with technology companies to provide a single modern platform to support both individual and group needs that match the emerging customer needs. It may mean working within an ecosystem of innovative, new investment and insurance distribution platforms that were built with business and operating models that fit properly into the context of this new world. Rather than acquiring these platforms and stifling innovation, the distribution partnerships provide valuable insights to understand how the platforms connect with Millennials and Gen Z and how to provide value to them. The new “robo adviser” technology-enabled platforms act as fiduciaries and have shown strong, early success with accumulating investment assets from Millennials and other types of consumers by providing automated, institutional-style asset management. Some of the robo platforms like Betterment express an interest in implementing retirement income-oriented advice and product delivery capabilities but will need help understanding the nuances and complexities of retirement income. Interestingly, life insurance companies are in a stronger position than other types of financial services companies to explain the benefits of having a “retirement income floor” and then providing the deferred or immediate income products that can actually provide that floor. With insurance protection products, the new employee benefits distribution platforms focus almost exclusively on health insurance benefits, but will inevitably diversify into non-health employee benefits products. While technology will help with making protection products more consumer-friendly, combining technology with expert advice from people will provide the formula that Millennials will want. To provide the multi-channel employee benefits advice that Millennials prefer, life insurance companies should consider investing in dedicated agents/advisers who can act as fiduciary equivalents for employee benefits products and provide objective advice based on the employee’s particular needs. These dedicated agents will find an attractive opportunity in helping employers with fewer than 100 employees level the playing field with larger employers — providing a compelling service to Millennials and other employees that will help to retain and motivate them. Furthermore, life insurance companies should also seek to partner, tightly integrate with and learn from a few of the early self-service enrollment platforms for employee benefits like Gravie and Connecture, even though they are currently focused on health insurance products. Only by partnering with these types of companies and by understanding how they generate revenue by providing objective advice to Millennials will life insurance companies be able to succeed. For an industry that has relied for many decades on selling commission-based products through traditional, third party intermediaries, this will require a completely new way of thinking and a new business model that is currently foreign to most U.S. life insurance companies. Finally, to put this all together as a “platform” solution, insurers must look to new technology software that will provide some key elements, including:

• a core platform that supports both individual and group, to enable portability of insurance,
• a digital platform that will enable multi-channel environments and provide a compelling customer experience, and,
• a platform that will easily integrate innovative solutions and partners to differentiate the organization within its market.

It all comes down to adaptability, innovation and speed in life insurers’ ability to ride the wave. These corporate mandates are explained in greater detail in Majesco’s latest research paper, Riding the Wave of Change in Group and Employee Benefits.   Why not treat partners and new players like expert surfers that can help to ride the new  wave?

Healthcare Matters sits down with Dr. Richard Anderson, chairman and CEO of the Doctors Company. In Part 4 of the series, we ask Dr. Anderson to share his impressions of alternative dispute resolution systems, ranging from mediation and arbitration, to specialized health courts staffed by independent panels of medical experts, to “safe harbor” systems, in which physicians who showed they followed best practices would be immune from litigation.

Business is a contact sport. Some companies win, while others lose. That won’t change. There is no way to guarantee success. Make the best decisions you can, then fight the battle in the marketplace.

Yet research into more than 2,500 large corporate failures that Paul Carroll and I did found that many big decisions are doomed as they come off the drawing board—before first contact with the competition.

Why?

The short answer is that humans are far from rational in their planning and decision-making. Psychological and anthropological studies going back decades, including those of Solomon Asch, Stanley Milgram, Irving Janis, Donald Brown and, more recently, Dan Ariely, consistently demonstrate that even the smartest among us face huge impediments when making complicated decisions, such as those involved in setting strategy. In other words, humans are hard-wired to come up with bad decisions. Formulating good ones is very difficult because of five natural tendencies:

1. Fallacious assumptions: If “point of view is worth 80 IQ points,” as Alan Kay says, people often start out in a deep hole. One problem is the anchoring bias, where we subconsciously tend to work from whatever spreadsheet, forecast or other formulation we’re presented. We tend to tinker rather than question whether the assumptions are right or the ideas are even worth considering. Even when we know a situation requires more sophisticated analysis, it’s hard for us to dislodge the anchors.

See Also: Better Way to Think About Leadership

Another strike against expansive thinking is what psychologists call the survivorship bias: We remember what happened; we don’t remember what didn’t happen. We are encouraged to take risks in business, because we read about those who made “bet the company” decisions and reaped fortunes—and don’t read about those who never quite made the big time because they made “bet the company” decisions and lost.

2. Premature closure: People home in on an answer prematurely, long before we evaluate all information. We get a first impression of an idea in much the same way we get a first impression of a person. Even when people are trained to withhold judgment, they find themselves evaluating information as they go along, forming a tentative conclusion early in the process. Premature conclusions, like first impressions, are hard to reverse.

A study of analysts in the intelligence community, for instance, found that, despite their extensive training, analysts tended to come to a conclusion very quickly and then “fit the facts” to that conclusion. A study of clinical psychologists found that they formed diagnoses relatively rapidly and that additional information didn’t improve those diagnoses.

3. Confirmation bias: Once people start moving toward an answer, they look to confirm that their answer is right, rather than hold open the possibility that they’re wrong. Although science is supposed to be the most rational of endeavors, it constantly demonstrates confirmation bias. Ian Mitroff’s The Subjective Side of Science shows at great length how scientists who had formulated theories about the origins of the Moon refused to capitulate when the moon rocks brought back by Apollo 11 disproved their theories; the scientists merely tinkered with their theories to try to skirt the new evidence.

Max Planck, the eminent physicist, said scientists never do give up their biases, even when they are discredited. The scientists just slowly die off, making room for younger scientists, who didn’t grow up with the errant biases. Planck could just as easily have been describing most business people.

4. Groupthink: People conform to the wishes of the group, especially if there is a strong person in the leadership role, rather than ask tough questions. Our psyches lead us to go along with our peers and to conform, in particular, to the wishes of authority figures. Numerous psychological experiments show that humans will go along with the group to surprising degrees.

From a business standpoint, ample research, supported by numerous examples, suggest that even senior executives, as bright and decisive as they typically are, may value their standing with their peers and bosses so highly that they’ll bend to the group’s wishes—especially when the subject is complicated and the answers aren’t clear, as is always the case in strategy setting.

5. Failure to learn from past mistakes: People tend to explain away their mistakes rather than to acknowledge their errors, making it impossible to learn from them. Experts are actually more likely to suffer from overconfidence than the rest of the world. After all, they’re experts. Studies have found that people across all cultures tend to think highly of themselves even if they shouldn’t. They also blame problems on bad luck rather than take responsibility and learn from failures. Our rivals may succeed through good luck, but not us. We earned our way to the top.

While it’s been widely found that some 70% of corporate takeovers hurt the stock-market value of the acquiring company, studies find that roughly three-quarters of executives report that takeovers they were involved in had been successes. The really aware decision makers (the sort who read articles like this one) realize the limitations they face. So, they redouble their efforts, insisting on greater vigilance and deeper analysis. The problem is that that isn’t enough.

As the long history of corporate failures show, vigilant and analytical executives can still come up with demonstrably bad strategies. The solution is not to just be more careful. Accept that the tendency toward decision-making errors is deeply ingrained and adopt devil’s advocates and other explicit mechanisms to counter those tendencies.

In insurance, location is everything. It helps insurers understand where the risks are, whether there has been accidental (or deliberate) accumulation of risk and where their customers are. Location helps insurers optimize their distribution strategy, their claims services deployment, their supply chain and even how they market and advertise their services. The technologies of location intelligence and weather prediction also naturally converge to help anticipate the impact of hail and storm, and allow insurers to proactively advise their policyholders to act (although only half of policyholders who are warned of an impending event actually take action). Bringing weather and location information together creates an environment where insurers change from being reactive to being proactive. New touch points are also created with policyholders (as opposed to a single annual request for premium), with the potential both to add value to the insurance proposition and also to improve loyalty Some might reasonably argue that weather forecasts are already available from the news. Perhaps one task for insurers going forward is to create a more effective interlock between weather forecasting, policyholder behavior and premium reduction? Increasingly, location is being seen as a subset of big data rather than a stand-alone technology. In a world of data where 80% is unstructured and uncertain, do the coordinates of location provide some sort of anchor for all the new information becoming available? After all, what could be more certain than where something or someone is physically located? Imagine if location data became the golden thread that tied all insurance information together? For many, location information still equates to mapping and "flat" visualizations. It is fundamentally descriptive in nature, albeit providing effective illustrations of potentially complex issues. As location intelligence increasingly aligns to predictive and cognitive analytics, perhaps the "power of place" may start to assume new meaning? Location data is becoming increasingly pervasive in the insurance industry. The connected car, the connected home and the connected person all have a location component. Perhaps the future for insurers isn’t just around being "data-driven" but "location-data-driven"?

Competition in the auto insurance industry is at an all-time high, with carriers engaged in an aggressive battle to acquire new customers and grow market share. Massive investments are being made in marketing and advertising to expand brand awareness and drive customer acquisition. This marketing arms race has led to annual ad spending growth of 15% to 20% per year, with total auto insurance advertising spending, by some accounts, eclipsing $8 billion per year. These marketing investments are having a measurable impact at the top of the sales funnel. The total number of active shoppers looking for auto insurance quotes every year is increasing. Nearly 40% of all insurance policyholders are actively shopping to find a better deal. Likewise, brand-building efforts are having the desired effect on consumer behavior. Consumers are now more likely to begin their research by searching for brand names or visiting a brand advertiser’s site. This "brand shift" in search behavior from generic keywords (“auto insurance quotes”) to brand-specific keywords (“GEICO,” “State Farm”) is a trend. Many suspect that this trend was, in part, behind Google’s recent decision to eliminate ad placements from the right-hand side of the search results page. This move by Google increases the prominence of a few leading advertisers who can pay for premium positioning on generic terms, enabling Google to generate more revenue from the declining share of non-branded insurance searches. See Also: From Marketing Myths to Truths The corresponding impact of these marketing investments at the bottom of the funnel is not as clear. In fact, conversion rates across the industry are actually on the decline. J.D. Power’s 2015 U.S. Insurance Shopping Study summarized the market dynamics and customer acquisition challenges facing marketers:

• 39% of current auto insurance policy holders are shopping, up from 32% in 2013. With close to 200 million policy holding households in the U.S., this translates into almost 80 million shoppers.
• But only 29% of shoppers switch carriers, down from 37%.
• And the average industry close rate for auto insurance carriers has declined to 13% from 18% in 2013.

So, on the one hand, 80 million active shoppers represent a large and attractive market of consumers that are engaging auto insurance brands. On the other hand, the total number of shoppers who switch to a new carrier is declining. And the average overall close rate across the industry is just 13%. In essence, the size of the haystack is growing, while the needle is seemingly getting smaller. These are daunting statistics for insurance marketers and reinforce the importance of marketing efficiency. Additionally, the Google AdWords changes puts pressure on all but the largest brands to find creative ways to optimize budget and stay in front of shoppers. For larger brands, the increased competition for a smaller number of above-the-fold placements will likely inflate cost-per-click (CPC) pricing. In this challenging landscape, marketers need new strategies to optimize the entire sales funnel to get the most out of their marketing dollars and maintain competitive relevance. Several innovative carriers have begun to embrace a creative solution to this challenge by recognizing that active shoppers on their sites are a highly valuable asset that can be monetized. These carriers are monetizing shoppers by presenting advertising listings for other carriers as part of the quote process. These carriers deliver a significantly improved and streamlined user experience – helping shoppers compare and find the right product more quickly – while also generating substantial incremental revenue. This simple model has a dramatic effect on marketing efficiency by increasing the percentage of insurance shoppers who can be monetized from just the 5% to 15% (who buy a policy) to more than 50% (those who buy a policy or choose to compare rates on other carrier sites). The marketing departments at these carriers have found an entirely new revenue stream that can be funneled straight into the marketing budget to turbocharge advertising and customer acquisition. This new way of thinking might sound radical for some auto insurance traditionalists. Yet nothing about this strategy is radical for today’s consumers. Quite the contrary, consumers have come to expect choice and comparison when shopping online. The convergence of several consumer trends is fueling this new monetization strategy: Growth of Online Channel The first major trend is the growth of the online channel for auto insurance. Andy Serowitz’s recent article, Demographics and P&C Insurance, did an excellent job highlighting several macro trends affecting the industry, including the growth of the online channel. The online shift that was initiated by direct carriers like GEICO and Progressive has helped establish the Internet as an important acquisition channel for all carriers; the number of policies sold online has increased 400% over the last eight years. Although agents still play a significant role, the online channel now represents 20% to 25% of total insurance sales transactions and influences more than 50% of transactions. Furthermore, the younger demographic found online tends to be more price-sensitive and less brand-loyal, seeking quick results with minimal friction. Marketers have the opportunity to develop creative solutions that are better aligned with the unique perspectives and preferences of this group. Comparison Shopping Comparison shopping has simply become a way of life on the internet. Auto insurance shoppers want the ability to compare. Shoppers evaluate an average of 4.5 brands and receive an average of 3.1 quotes, a figure that increases to 3.7 for online shoppers. Insurance carriers need to embrace this reality and deliver a better consumer experience. Blurring Lines Between Commerce and Search The last few years have seen a blurring of the lines between traditional search providers and commerce companies. Amazon is an excellent example of a commerce brand that has emerged as a viable search alternative. In 2009, Amazon was the starting point for 18% of shoppers searching for products. In 2015, that figure reached 44%. Simultaneously, Amazon also built an impressive ad business. For several years, Amazon has been serving sponsored ad listings for other e-commerce sites alongside its own offerings. When Amazon cannot convert a shopper through a direct purchase, it earns ad revenue by sending the shopper elsewhere. Amazon’s ad business now generates an impressive $500 million per year that it reinvests in customer acquisition and other growth initiatives. Insurance carriers could benefit greatly by taking a page from Amazon’s playbook and recognize that consumers are coming to their sites to initiate a more targeted or vertical-specific search. These shoppers have high purchase intent, which represents a highly valuable marketing asset with significant untapped value. For years, unlocking the media value of this type of search has been the exclusive domain of the search engines. But commerce brands now have the opportunity to play a leading role here that improves consumer experience and delivers tangible economic rewards. So if the consumer need is there and the economics are significant, why haven’t more carriers already embraced this strategy? For most carriers, there are two common objections to overcome: 1) Cannibalization of policy revenue is an obvious concern for most carriers that consider monetizing more shoppers. The goal is not to replace policy revenue with ad revenue. But performance results show that cannibalization can be minimized. To begin, most carriers start by monetizing low-risk, “non-served” customer segments, including non-covered geographies or consumers who fall outside of a carrier’s underwriting parameters. These non-served segments offer pure revenue upside. Within “served markets,” carriers find the impact to policy revenue to be negligible. Many carriers, in fact, experience an increase in conversions as greater openness builds trust with consumers and translates into more policy sales. This is also where advertising technology providers like MediaAlpha play a critical role. Technology tools now exist that empower carriers to take full control of when and how ad listings are shown based upon internal metrics and desired audiences. This ensures that ads are only shown if the economic benefit of showing an ad significantly outweighs any potential impact to policy revenue. The result is minimal cannibalization that is typically offset 3-5X by corresponding ad revenue. 2) The second-most common concern is the perceived negative brand impact from showing ad listings for other carriers. Again, data collected on consumer reaction and preferences indicates no negative impact on brand perception. Shoppers are presented ads simultaneously with a quote (or instead of a quote), so the ad experience is in the context of shopping. This experience is in line with consumer expectations, and there is no data that suggests it creates confusion or negative sentiment. On the contrary, brands get a powerful opportunity to deliver value where they previously could not. Without ad listings, 85% to 95% of shoppers visiting a carrier website will end their quote search unsuccessfully. The brand experience for that individual shopper is unfulfilled. The shopper is on her own to leave the site and restart a search elsewhere. By providing these shoppers with alternative listings, carriers now have a meaningful and profitable way to improve upon this poor consumer experience and lift their brand perception in the process. For auto insurance carriers, the value proposition of monetizing shoppers is clear. In a competitive marketplace that necessitates strong marketing efficiency, the ability to generate significant revenue from non-purchasing consumers is a highly compelling economic opportunity. By unlocking this new revenue stream, incremental revenue can immediately be reinvested into more targeted, higher-value consumer segments. Brands can recapture a significant percentage of marketing inefficiency and redeploy those dollars to more effectively acquire the right customers.

The initial installment in this series expressed concern that too narrow a focus on wellness diverts companies’ attention from more compelling opportunities to save money and improve employee health outcomes. This installment starts with a related  shocker: By far the most costly inpatient diagnosis code, septicemia, is not addressed by any wellness program in the country. Here is the government’s official ranking: Septicemia due to contamination, which is just one of many avoidable hospital errors, shows that there is a major opportunity to save money by directing employees to hospitals that are most likely to avoid errors. To back their commitment to avoiding errors, such hospitals also usually offer a “never-events” policy, meaning they agree not to be paid for events that are their fault and that should never happen. So your employees will be more likely to have a safer experience—and, if they don’t, you don’t pay. (To be fair to hospitals, not all septicemia is contracted there. At the same time, many blood infections contracted in hospitals are not primary-coded as septicemia.) The opportunity for you would be to highlight hospitals within your network that agree to a list of specific items that make up a never-events policy. “Highlighting” might include waived deductibles or co-pays for employees who choose highlighted hospitals over others, thus noodging more employees to safer hospitals. What is included in a “never-events” policy? The Leapfrog Group, which is the nation’s leading arbiter of hospital quality, has a policy that requires hospitals to undertake five steps following a never-event:

• apologize to the patient;
• report the event;
• perform a root-cause analysis;
• waive costs directly related to the event;
• provide a copy of the hospital’s policy on never-events to patients and payers upon request.

Examples of never-events culled from this complete list are:

• Certain hospital-acquired infections/septicemia
• Wrong-site/wrong surgery/wrong patient
• Objects left in body
• Wrong blood type administered
• Serious medication errors
• Air embolisms
• Contaminated or misused drugs/devices
• Death

Any given never-event is rare, but in total 5% to 10% of inpatients suffer a significant adverse event during their stays. The consequences – in cost, suffering and lost productivity – could be substantial. No need to take my word for the cost: The Leapfrog Group provides a Hidden Surcharge Calculator that can be used to estimate the financial impact of hospital errors. Do hospitals in your network have a never-events policy? At the very minimum, by default they have such a policy for Medicare, which doesn’t pay extra for certain never-events. Medicare still pays the standard diagnosis-related group (DRG) case rate but doesn’t reimburse “outliers” separately if the added hospital time was caused by a never-event. Obviously, the DRG rates are set a little higher to begin with. So hospitals that do a good job – typically Leapfrog-rated “A” and “B” in the Hospital Safety Score report – embrace this payment scheme, while others would have been better off getting paid the old-fashioned way. Some hospital systems extend this policy to employers – or will, if you or your carrier ask and you are a large enough customer, and their quality is high enough that the economics work out for them. Leapfrog A-rated hospitals are therefore the most likely to be willing to negotiate a never-events policy for your employees. These hospitals aren’t necessarily the name brands in your marketplace. In Washington, for example, Virginia Mason Medical Center (VMMC) is the hospital consistently earning the highest Leapfrog scores. Not surprisingly, it was among the first hospitals in the country to offer a never-events policy to employers. The hospital was highlighted in Cracking Health Costs for its many best practices. VMMC is one of the few hospitals that Walmart, Lowes and other jumbo employers will actually fly employees into, to ensure the best care. And yet you’ve never heard of VMMC, have you? So what should you do? You still need to offer a wide local hospital network to employees. It simply isn’t worth the inevitable pushback to require a narrow hospital network. Instead, just ask existing network hospitals to offer you a never-events policy, or let you become part of a policy they already offer to employers. There is plenty of precedent of this. For years, the state of Maine has tied hospital payments for its own employees to quality and safety standards, including Leapfrog standards. And Maine, despite being among the poorest states, consistently ranks #1 or #2 in Leapfrog quality ratings. Coincidence? I think not. Particularly if you can contract in conjunction with your local business coalition, you have the chance to influence hospital safety, just like Maine did. Additionally, you can follow the lead of those other jumbo employers named above and contract with the country’s safest hospitals for any employees who wish to make the trip. Yes, I know, you aren’t a “jumbo employer.” But a firm named Edison Health helps small employers with the contracting and logistics of such arrangements. It also offers a tool, validated by the Validation Institute, to help you figure out if medical travel would be a worthwhile endeavor for you. This type of contracting requires a little work on your end, but if all you want is discounts and coverage and don’t want to put in the work, you could punt to an exchange. On the other hand, you self-administer your health benefit for one good reason: to influence employee health, and this is a clear opportunity to do so. By contrast, wellness is a LOT of work…and likely increases your costs in the short run. Wellness will take years to pay dividends, if any, whereas you can start influencing employee hospital choice immediately.

Today, innovative cost-containment solutions are helping employers "curb" the increasing cost of healthcare.  However, these solutions are only as good as the education tied to them.  A solution without effective education is useless and can even be costly. Employee education has been a sticking point in the employee benefits world.  Many employers haven't done a good job educating employees and have thus missed the boat on containing costs. According to a 2003 assessment (I know, old!) by the U.S. Department of Education, only 12% of U.S. adults have a proficient level of healthcare literacy. That is scary. The days of educating the workforce about what they have, how much it costs and how to sign up are long gone. Stop repeating the same message year after year. The focus of your education has to be around improving the healthcare literacy of your workforce. The good news is that there are consultants around the country creating some amazing messages. Folks like Jim Millaway, Gary Becker and Al Lewis are innovating the way benefit education is provided, helping employers reduce the cost of health insurance. With that, let's look at three employee education tips that can help you contain costs. See Also: On Air Traffic Control and Health Costs

1. Effective Education Is a Year-long Process

If your education strategy consists of nothing more than the annual open enrollment meeting, we need to talk and please keep reading! By the time your employees walk out of the meeting, they will forget 90% of what they heard; especially how to use a new cost-containment tool effectively. To ensure the new solution is a success, you have to keep the message in front of your employees all year long.

2. Make Sure Your Message Helps You Accomplish Your Goal

Remember, your goal is to "curb" or even reduce the cost of your health insurance, so strategic education has to be a part of your long-term plan. Do not rely on the communication provided by carriers and vendors, as they are often too vague and provide information most of your employees already know (e.g. your smokers already know they should quit as their doctor has been telling them for years). To achieve your goal, you need to make sure your education aligns with the objective, improving health literacy. Focus on the kind of education that will help your employees help your medical plan save money. Strategic education is the wave of the future. Innovative solutions like Quizzify are giving employees the opportunity to become stewards of their own healthcare journey, helping both their checkbook and the bottom line of their employer.

3. Your Message Has to Be Clear and To-the-Point

Trying to find the right avenue for educating the workforce is not easy. However, using newsletters and brochures to communicate your new cost-containment solution will not work because your employees will not read them. One way to get your message across effectively is through video. Videos only require employees to hit "play" and are short and to-the-point, and can be customized to convey the message you want. Employees like the videos because little time and effort is wasted in watching and the employer is able to craft the message (with help) to best meet its objective. A video campaign can be a very effective way of improving the health literacy of your workforce through short, focused messages. Crafting the right educational message is hard work and requires time and effort. But if it is done well, you will not only be happy about your new cost-containment solution, you will create a highly educated and empowered workforce that will have a positive impact on your bottom line.