When the question of whether ERM is a success or failure comes up, it raises a further question: Why aren't companies doing a better job of measuring the value it generates?

The reasons that the value of ERM is not quantified by companies include:

• It is extremely hard to know when a loss did not happen because of ERM.
• It is just as hard to quantify the cost of loss that did not happen.
• It is difficult to quantify the "soft" benefits of enhanced reputation because ERM is practiced or because of improved strategic alignment in the organization; ERM requires an understanding of the company's strategic goals and objectives to identify the risks that might derail their achievement.
• It is often hard to justify the time and expense of measuring something that is not easy to measure.

Having acknowledged some of these obstacles, the only way that companies will know if their ERM efforts are successful is to create some measurement scheme that makes sense for their particular situation. Without measurement, how would a company know not only if it wants to continue an ERM implementation but also how much to invest in it.

Let us look at a few possible approaches to measuring the value of ERM:

Before-and-After Approach

Once an ERM process has gained some level of maturity in an organization, this approach would take the form of looking at fairly common and reliable metrics on a before-ERM and after-ERM basis. (There are ERM maturity models, developed by experts, that can be used to evaluate how far along the path to full or optimal implementation a company has progressed.) In fact, each of the approaches described would only be reasonable if the ERM process had been in place and well-executed for some period.

Naturally, there will multiple variables, not just the practice of ERM, that play into these metrics, but that is true for most metrics, and explanations can and should accompany the numbers to explain such variables.

Such metrics would include: 1) number of insurance claims, 2) number of worker injuries, 3) number of lawsuits related to a risk/loss events, 4) number of days or hours production is lost because of a risk/loss event, 5) cost of insurance and 6) total cost of risk (TCOR). Thus, when reviewed before and after ERM, the metrics can be charted to show absolute changes in value as well as trend lines. It might even be possible to notice on a relative basis that there are fewer risk-related surprises brought to management’s attention because ERM effectively identified risks while there was still time to deal with them.

Each company will be able to come up with its own unique metrics based on what it is currently capturing, what it could capture and what is important to its business operations.

The value of ERM would be evident or could be computed from the before-and-after metrics.

"What If" Approach

In the "what if" approach, one or more of the most significant risks in the risk register, which did not materialize when expected because of mitigation by the company, would be selected. Perhaps this was a regulatory change that would have harmed a product line, but the company took lobbying efforts or did product redesign because the risk was appropriately identified, prioritized and mitigated.

The amount of the loss that the risk would have likely have produced would be computed. Even if it were an insured loss, the estimate would take into account such things as the potential increase in insurance rates, management time and all other attendant expenses not covered.

Since the risk did not produce a loss, the amount of the "what if" loss is the value of ERM.

Alternatively, a significant loss event that affected key competitors but did not affect the company using ERM could be used to assess value. Perhaps it was a natural catastrophe that the company was better protected for or a demographic shift that the company anticipated and reacted to because of ERM.

To get at ERM's value, the company would have to approximate what the risk, if ignored, would have cost.

Lacking Any Other Explanation Approach

In "The Valuation Implications of Enterprise Risk Management Maturity," a wholly independent and peer-reviewed research project conducted by Mark Farrell of Queen's University Management School and Dr. Ronan Gallagher of University of Edinburgh Business School, pub­lished in The Journal of Risk and Insurance, using data from the RIMS Risk Maturity Model, the case is made that, failing any other explanation, the companies with greater maturity have higher valuations because of it. Specifically, the study found that there was "clear and significant statistical correlation between mature enterprise risk management practices and a firm's value." Organizations exhibiting mature risk management practices-as assessed with the RIMS Risk Maturity Model-realize a valu­ation premium of 25%.

Discretionary Approach

Yet another approach that does not rely on metrics, per se, is a discretionary approach. In other words, the board, CEO or C-suite could attribute a value to ERM that is based on the recognition that the ERM process has, for example: 1) created a risk aware culture, 2) helped to identify and ameliorate risk, 3) made recovery from risks that have materialized much faster and more efficiently and 4) enhanced the brand among stakeholders.

The discretionary approach does require that management is involved in the ERM process, has an open mind about its contribution and will articulate its conclusions about ERM's value so that the entire organization is aware of this assessment. Without management's giving voice to its success, the question of whether it is a success or failure will haunt ERM.

Conclusion

There are undoubtedly other approaches that could be used. The key point is that companies that have invested in introducing ERM should do so in a vigorous way and should measure and communicate its value. This will ensure that the entire organization maintains a commitment to this important process.

Option programs in Texas and Oklahoma produce substantially less litigation than workers' compensation systems do, which provides a powerful endorsement for states considering such programs.

A look at litigation for workers' compensation and option programs must consider three main exposures: (1) claims for employer liability, (2) claims that the law violates the particular state's constitution and (3) claims for wrongful denial of benefits.

Claims for Employer Liability

Public policymakers have long understood that it is not fair to require employers to pay a high level of statutorily mandated injury benefits and also be exposed to legal liability damage claims regarding the cause of injury. There are several approaches available to state legislators in striking that balance in a workers' compensation system or an option to workers' compensation, but each approach must reflect this inverse relationship between the extent of an injury benefit mandate and the extent of employer exposure to liability.

Employer exposure to liability has been almost entirely removed from workers' compensation systems because of extensive benefit mandates that include medical coverage for life. However, the option to Texas workers' compensation takes the opposite approach. It has no injury benefit mandates but exposes employers to broad liability for negligence.

That formula will be pursued by few, if any, other state legislatures because of the risk that certain irresponsible employers would provide no injury benefit coverage to their workers. However, the Texas option liability exposure does provide an additional incentive for employers to focus on workplace safety. It also provides employers with an incentive to make a strong commitment to take care of the injured employee’s medical and indemnity needs.

Employer liability exposure under the Texas option is real. There have been more than 80 liability settlements or judgments of $1 million or more. This unlimited risk of liability is ever-present.

However, option programs experience less than half as many disputed claims as the Texas workers' compensation system (which is widely acknowledged as the one of the best-performing systems in the U.S.). The tiny percentage of disputed option claims is, primarily, because of legal requirements to fully communicate all rights and responsibilities (at program inception and continuing) in language that employees can understand -- a requirement that is quite hard to find within any workers' compensation program.

Option programs are also legally required to use claim procedures that ensure a full and fair review of benefit claims, including access to state and federal courts.

Yet only 1.5% of Texas option claims have any attorney involvement, and less than one in 1,000 liability claims actually go through formal litigation. So, this liability exposure has a positive impact on workplace safety, while still proving to be manageable and fully insurable in a highly competitive option marketplace.

It took more than a decade for the insurance industry and case law development to create the current balance that is delivering injury benefits to more than 95% of Texas workers through either workers' compensation or option injury benefit plans. The existing Oklahoma option and the proposed Tennessee and South Carolina options all mandate some level of injury benefits and reduce employer exposure to liability to simplify the public policy debate and avoid this long period of industry maturation.

Constitutional Challenges

In existence for more than 100 years, the Texas option has never faced a challenge on constitutional grounds. Texas courts have long respected an employee's right to work, employer rights to tailor employee compensation and benefits and the legislature's right to determine an appropriate balance between mandated injury benefits and employer liability exposures.

The Oklahoma Supreme Court has now twice rejected lawsuits challenging the constitutionality of the Oklahoma option in 2013 and 2015. Oklahoma trial lawyers have filed more than a dozen lawsuits at the Oklahoma Supreme Court challenging the constitutionality of the 2013 workers' compensation reforms. Oklahoma courts may further consider different provisions of the option law, but attorneys from the claimant and defense bar now agree that the Oklahoma Employee Injury Benefit Act is here to stay.

Oklahoma and Texas employers can freely move into and out of the workers' compensation system at any time. So, even if the Oklahoma option is ever stricken down on constitutionality grounds (as unlikely as that prospect is), the law provides a 90-day grace period for employers to move back into workers' compensation, without penalty. Similar provisions are in the pending Tennessee and South Carolina legislation.

Claims for Wrongful Denial of Benefits

Day-to-day legal challenges by injured workers regarding their rights to benefit payments are a normal feature of all workers' compensation systems, and the same is true of option injury benefit systems. It is an unfortunate fact of life that, as with any line of insurance business, not every claim will be handled well. But as we have seen in Oklahoma over the past year and in Texas for more than two decades, dramatically fewer claims are disputed by injured workers under option programs.

Twice as many Texas workers' compensation claims for benefits are disputed as compared with Texas option claims. This is true even when combining all injury benefit plan disputes and employer liability disputes under the Texas option.

Option opponents love to allege these programs only save money by failing to fully compensate injured workers. But, if this were true, why do we see fewer disputes in option programs?

Option program savings are achieved through more employee accountability for injury reporting, earlier diagnosis, persistent medical care from the best providers and more efficient resolution of fewer disputes. Option programs help ensure that employers and injured workers are communicating, engaged at the table (with or without legal counsel) and working together for better medical outcomes and return-to-work. This model must be contrasted with employers and injured workers routinely fighting through the complexity contained in thousands of pages of workers' compensation statutes, regulations and case law that necessitate attorney involvement for basic system navigation.

A large cadre of workers' compensation claimants and lawyers can be found in the hallways and hearing rooms of the Oklahoma and other state workers' compensation commissions and courts on any given day. But there have been few day-to-day Oklahoma option benefit challenges. Oklahoma option programs now cover more than 22,000 workers, and almost every claim that has arisen over the past year has been fairly and efficiently resolved through the injury benefit plan's claim procedures -- essentially the same claim procedures that have applied to private employer group health and retirement plans across the U.S. for more than 40 years.

Over the span of 26 years in Texas and the past year in Oklahoma, not one state or federal employee has ever been hired to specialize in the oversight or administration of the approximately 50,000 option injury program claims that are successfully resolved every year. In contrast, tens of millions in taxpayer dollars are spent in many states every year to oversee and administer day-to-day workers' compensation claims.

As further testimony to employee appreciation for the full disclosure of their rights and responsibilities under option injury benefit plans and the customer service they receive, not a single workforce in the past 26 years has organized a union as a result of the employer electing an option to workers' compensation in Texas or Oklahoma. For workforces that are already unionized, their members and leadership appreciate the fact that option programs routinely pay a higher percentage of disability benefits, with no waiting period and no (or a higher) weekly dollar maximum.

Plus, disability benefits are paid on the employer's normal payroll system, which allows employers and injured workers to seamlessly continue deductions for group health, retirement, child support and union dues. Successful Texas option programs have been in place for many, many years that cover textile, communications, food and commercial workers, teamsters and other collective bargaining units.

Conclusion

With liability exposures clarified and injured workers clearly more satisfied and getting better, faster under option programs in Texas and Oklahoma, legislators and employers in other states no longer need to "wait and see." Single-digit annual cost savings can still be achieved through traditional workers' compensation reforms, but option-qualified employers are seeing strong, double-digit cost reductions. Option programs support tremendous productivity, reinvestment and economic development gains for injured workers, employers and communities.

So, in spite of rhetoric from trial lawyers trying to survive and from their allies in the workers' compensation insurance industry who fear free-market competition, there is no reason why workers' compensation option legislation and program implementation should not be pursued by state legislators and employers as fast as their other priorities permit.

Do you know one of the large drivers of your insurance costs may be something you will never see listed as a line item by your agent or insurer? This is not a hidden fee the industry masks. It is not one you could ever find or have disclosed. It is the cost we all share for insurance fraud, which is the second largest financial crime in America (behind tax evasion).

In Iowa, the crime of insurance fraud happens when a person or business provides false information to an insurance company in a claim for benefits or in an application for insurance, with the intent to defraud the insurance company. Federal laws also contain provisions related to insurance fraud.

Before being appointed insurance commissioner, I do not recall thinking about insurance fraud much. Because of my experience in the insurance industry, I certainly knew that there was insurance fraud.  I recall stories I heard second- and third-hand of people who filed claims on boats that became ruined and then were insured after the fact, or of healthcare providers that billed health plans for procedures that never occurred. But I admittedly did not think about insurance fraud much.

People often think of these types of acts as victimless crimes, because no one is hurt except big insurance companies. However, we are all victims of these acts because fraud affects how much we pay for our insurance.

Insurance regulators see all types of fraud and know the cost is great. According to the Coalition Against Insurance Fraud, nearly $80 billion in fraudulent claims are made annually in the U.S. This figure encompasses all lines of insurance. The Federal Bureau of Investigation estimates that fraud costs each insurance consumer in the U.S. between $400 and $700 annually in increased premiums. These are calculable costs, which probably are far less than the total cost we all pay as insurance consumers, because a lot of fraud is not reported.

In Iowa, we would like to think that there is no insurance fraud. However, the statistics demonstrate a much different picture. On average, the Iowa Insurance Division receives 1.97 referrals each day of potential insurance fraud. From Jan. 1 to Sept. 17, 2015, my team processed 532 referrals with a reported financial impact of $3.7 million. However, only about one quarter of the 532 referrals reported what the financial impact was. Therefore, the $3.7 million is far less than the total financial impact.

Fraud prevention and elimination is a major effort for insurance regulators and insurance companies. It is an area where regulators and companies collaborate. In 42 states and the District of Columbia, fraud bureaus receive and review potentially fraudulent insurance claims. States have robust laws in place to protect consumers and the insurance marketplace from insurance fraud. Companies are required by state statutes to report insurance fraud.

Although these reporting requirements and laws help protect our markets and mitigate the cost of insurance fraud, it is far from eliminated. The need to mitigate or eliminate fraud presents huge opportunities for insurance companies and entrepreneurs to develop innovative tools to combat insurance fraud.

As we all now recognize, insurance companies are big data companies. They possess vast data on their policyholders. This puts insurance carriers in an evolving position to better help deter and eliminate fraud. With advancing data analytics, predictive modeling and simply more data, catching and possibly preventing fraud should become easier.

State insurance departments operate within tight budget constraints. In Iowa, we see innovation and technological developments as very helpful in aggregating data and identifying trends and issues. We are looking to these developments to help us increase efficiency in our investigations so we can combat insurance fraud and protect our consumers.

However, I have no false hope that all fraud will be eliminated. I have every belief that those who want to continue to do damage by committing insurance fraud will also be innovative and adapt to change. In other words, while technology and innovation will help find fraud, the scammers will soon figure out how to get around the new detection methods, too.

Fraud is a fact in every industry, and insurance is no different. However, I believe in the insurance industry there is more opportunity and incentive to commit fraud because of the value of the items insured and the amount of money in play. In addition, because insurance fraud is seen as a victimless crime, it may even be viewed as justifiable. Insurance regulators and companies are improving the capabilities to combat fraud using more technological tools. Credit card companies made tremendous strides in cutting down fraud, and insurance is working toward that goal, too. Innovators and companies that figure out how to succeed in this area will have lower prices and increased market share, and in the end that rewards consumers.

Distribution channels may be the most tangible part of most consumers' experiences with insurance. While the details of the product are obviously important, once the policy is purchased, most people file it away and forget about it. Many consumers couldn't find their policies if you asked them. And how many consumers do you think have actually read their policy?

In today's digital world, an insurer's success depends more on how customers interact with insurance than on the product itself. Increasingly, consumers' expectations are being set by the Amazons, Apples and Googles of the world than by similar insurers. Insurance has the unfortunate distinction of dealing in a product that most consumers only own because they have to, not because they want to. So, insurers start perceptively behind on the product side compared with Apple, Google and Amazon. People use/shop/buy from these places because they LOVE to, not because they must. The experiences that insurers deliver through their channels are no match for digital retail giants. At least, not yet.

What can insurers do?

As insurers, we can copy pages from the Google playbook and get better at using data and analytics to improve our distribution channels - the experiences we deliver and their effectiveness. Majesco's recent research report, A Path to Insurance Distribution Leadership: New Channels and New Data for Innovative Outcomes, provides some insights, drawing on the first-hand experiences of CIOs who shared their thoughts at a roundtable discussion this past June.

On the consumer side...

Insurers can use data and analytics to segment customers and develop the right products for their needs and, crucially, offer these products through the channels that best meet the preferences and needs of each segment. Predictive models can be used to further the precision with which to target prospects and customers for new purchases, cross-selling or increasing the stickiness of relationships. By tracking customers' paths across channels and collecting the data they've provided and consumed, insurers can ensure that consumers have a seamless, connected experience, no matter what path they take.

On the insurer side...

Insurers have a wealth of data! They just need to use it like Google! Insurers have details on sales, retention, costs and profitability that they can track down to the channel and individual producer level. While most companies have always used this data to track performance, they can go even further and get additional insights on their producers by applying the same techniques we just discussed for customer data - namely segmentation and predictive modeling. Segmentation allows insurers to more efficiently apply training/development resources and match producers to markets/customer segments that best fit their potential. Predictive models can be used throughout the producer lifecycle to forecast performance and future success of individual producers as well as to anticipate future commission and incentive costs. Analytics can also be used to steer prospects and customers to the sales and service channels that optimize business outcomes like new business, retention or lifetime value.

While the benefits of using data and analytics in insurance distribution are obvious and compelling, it is easier said than done. There are at least three components that must be solidly in place for any effort to have a chance to succeed. Companies should first identify their top priorities and opportunity areas and use these to define an overall data and analytics strategy. After the strategy is secured, the focus can turn to the acquisition of internal and external data that will be needed to fuel the analytics and modeling identified in the strategy. A distribution management system can be a key enabler here, by providing rich, granular data on channel and producer performance. At the same time, a sound data governance strategy must be put in place to ensure the quality, integrity and comprehensiveness of the data.

A final important consideration is how the analytics will be operationalized. Again, a distribution management system can play a key role here by being configured to gather and track the needed data and execute business rules created through analytics and models built by using the data.

The insurance industry may currently lag behind the Apples, Googles and Amazons of the world in both product engagement and distribution experience and effectiveness. Insurance, however, has an enviable amount of data, talent and technology at its disposal. Leading companies in our industry are leveraging these assets and may very likely be the next ones pointed to with admiration by consumers and other industries for their excellence in distribution.

What is common between Uber, Amazon, EE, Vodafone, Netflix and Progressive? All these companies have recently faced issues because of fraud.

In insurance, ghost brokers often target young drivers who want to cut the cost of their car insurance. Even though it is the ghost brokers who commit the fraud, the customers lose their cash and also risk a criminal record. And fraudulent claims from customers is a much bigger concern for insurers.

How big is insurance fraud?

The Coalition Against Insurance Fraud, America's anti-fraud watchdog, estimates that nearly $80 billion in fraudulent claims are made in the U.S. annually. Fraud increases insurance premiums, raises the cost of goods and services and boosts spending on investigation and fraud-prevention programs by insurers.

Fraud is one among the many business challenges that insurance industry is facing, as I have outlined in my previous blog. IDC estimates that insurers spend approximately $100 billion on IT, of which $3.3 billion is spent on information security and to counter financial crimes. Four of the five biggest property & casualty (P&C) insurers have formal anti-fraud programs.

Analytics to detect insurance fraud

Though application fraud, underwriting fraud and premium fraud are also significant threats for insurance business, claims fraud has been the industry's main focus. Major insurers started deploying new platforms to transform their claims management and minimize fraud. There is a spectrum of vendors from big IT players to niche analytics players that is providing claims fraud detection solutions. Zurich's UK general insurance business recently deployed end-to-end claims management transformation in association with a major insurance vendor, which minimizes losses associated with fraud.

Manual detection of fraud is next to impossible in the insurance industry, as it is costly and the sheer volume of claims is too high to handle for any insurance company. Also, the velocity, the variety and the veracity of data generated in the claims handling process made the use of statistical models based on sampling methods obsolete.

Because analytics integrates data from diversified channels and combines internal data with third-party data, effective fraud detection can be made possible. Many insurers have started using analytics techniques such as reporting, descriptive analytics, predictive analytics and prescriptive analytics to detect fraud. For example, CNA, the 8th-largest commercial P&C insurer, implemented analytics and predictive modeling to identify claims fraud. In two years of implementation, CNA reportedly saved $6.4 million, attributed to recovered or prevented fraudulent claims.

In this post, we will see how insurers have started adopting innovative technologies along with analytics to detect insurance fraud, beyond traditional analytics techniques.

Social network analysis

A recent AM Best survey found that more than half of the companies surveyed use social media. Life insurance companies appear to be most likely to use social media (65%). Company size is also a driving factor for social media. The larger the company, the more likely it is to use social media. Insurers have also started using social media data of policyholders to investigate and detect claims fraud. For example, if a non-smoker applicant lights up even occasionally and if his social pages has the traces of that information, it can be detected via social network analysis (SNA) tools. SNA tools scan large amounts of data from business rules, statistical methods, pattern analysis and network linkage analyses to uncover possibilities for fraud.

Drones

Insuring drones and wearables is going to be difficult for insurers, as there are a multitude of insurance liability and coverage issues. However, insurers have started using drones for their benefit by adopting them in claims adjusting. USAA appointed its first drone pilot for claims handling. With drones in place for claims handling, insurers would no longer need to climb dangerous chimney or to visit catastrophe sites. Also, the data analysis from drones is used to detect insurance fraud. A British company, Air & Space Evidence, detected a fraud case after Hurricane Katrina with the help of drones. A couple who claimed that their home in New Orleans was severely damaged by wind and water was found to be committing fraud when aerial photos showed that the house was intact.

Wearables

One third of the insurers surveyed are already using wearables for customer engagement, according to Accenture's 2015 technology vision report. We all know that disruptive technologies such as telematics and wearables (Oscar's Misfit, Fitbit and the Apple Watch) have also begun to be used for calculating customized premiums. What's new is, in Canada, data from a Fitbit wristband was used by a personal injury lawyer to support his client's case. Soon, these technologies will also be used to detect insurance fraud as the data collected from these devices will become fodder for criminal and civil litigation. Insurers now have many reasons to turn to innovative technologies and analytics to protect themselves against fraud.

Please share your thoughts on how you have seen innovative technologies and analytics helping insurers to combat fraud and transforming the insurance industry. In the next few blogs, I will try to explore analytics' role in the insurance industry in further detail.

It has been fascinating watching the progression of the forecasted path for Hurricane Joaquin -- what a perfect example this is of the importance of a modern data and analytics platform!

The big news is that the hurricane is not expected to make landfall on the East Coast of the U.S., but the new forecast depends as much on analytics and big data as it does on actual changes in the storm's path. The spotlight is now on the European Center for Medium-Range Weather Forecasts (the European model) vs. the Global Forecast System (GFS) run by the National Weather Service. The New York Times has a great article discussing the reasons for the changing forecast and, crucially, the differences between the two models.

This is an excellent lesson for insurers to see the power of modern data and analytics in action and what happens to models when they are not using the advanced capabilities available today. Fortunately, investment in analytics continues to rise, as detailed in SMA's recent report, Maturing Technologies in Insurance. Almost three in four insurers are increasing their investment in analytics over the next three years. 48% of P&C insurers, in fact, are planning to increase their analytics investments by more than 10% annually during that time.

In recent conversation with key CAT modelers, we have learned that they are working to use their weather data and insights at a more granular level than ever before in coming releases. The advance of these CAT model tools creates opportunities for insurers in search of better predictive capabilities on weather events. An upgrade to the GFS model has been planned by the end of the year, taking advantage of soon-to-be-available computing capacity. Once it is up and running, it will be interesting to see how the upgraded GFS model compares with the current European model, especially when applied to future CAT events.

Insurers can take the continuing story of Hurricane Joaquin as a wake-up call -- not only is analytics a critical area for investment, but the quality of the information and the computing capacity available have a major impact on how useful predictive modeling can be.

Unless you've been frozen in carbonite for the past 15 years, you're probably aware that the insurance industry is facing two imminent HR crises:

1. A Brain Drain- Twenty-five percent of the industry workforce is expected to retire by 2018, according to Insurance Business America. But wait! It gets better. In addition to filling vacancies caused by attrition, companies will have to recruit workers to staff the 200,000 new jobs the Bureau of Labor Statistics expects the industry to create by 2022.

2. An Enthusiasm Gap- Even today, the industry is struggling to attract young talent. According to a 2012 study by the Griffith Insurance Education Foundation, only 5% of Millennial students describe themselves as "very interested" in working in the insurance industry. When it comes to considering a career as a claims adjuster, the "Y" in Generation Y stands for "yawn."

Two Problems, One Solution

I believe new and emerging information technologies will play a critical role in overcoming both the Brain Drain and Enthusiasm Gap.

Many young people would rather view an endless loop of piano-playing cat videos on YouTube than work as a claims adjuster. Or so they think...

With the imminent arrival of usage-based insurance, there is a lot of excitement developing in the underwriting sector, and I believe the same level of enthusiasm will also attach to technologies such as cognitive analytic computing. These new technologies are innovative. They're challenging. They're fun.

More important: Technologies like cognitive computing will change the very nature of the claims adjuster's job - from one that requires a fair amount of dull administrative tasks to one that places much more emphasis on analysis, creative problem-solving and people skills.

Skills Will Trump Experience

In the future, we'll see fewer claims adjusters in the workforce, but this smaller pool of talent will be trained in a different ways and in different skillsets than previous generations. Tomorrow's adjuster will not possess - and will not need - the wealth of experience, knowledge and (to some extent) skills as today's adjuster. Instead, new technologies will provide them with the tools to instantaneously obtain that knowledge, experience and skill.

The future adjuster won't be trained in many of the manual and repetitive tasks his predecessor had to learn. Tasks with little or no value will be automated. Rather, the adjuster will have to be tech-savvy. She will have to know how to analyze information because, even with the help of cognitive computing, she'll still need to analyze reams of information - data related to vehicles, collision-avoidance technology and event data recorders.

She will also have to be familiar with product liability issues. When self-driving cars become commonplace, adjusters may not be dealing with losses involving driver fault. Instead, they may encounter instances in which the vehicles malfunctioned - product-liability claims - and will have to know how to process claims with vehicle manufacturers and the suppliers of advanced collision-avoidance systems. Future adjusters will need to tap skills and knowledge that their forbears never dreamed of.

Tech-Savvy and People-Savvy

Future adjusters will have to be much more tech-savvy, even though they'll be responsible for performing fewer tasks. At the same time, they'll need superior people skills to ensure that customer service isn't lost amid increasingly automated processes. Although the industry will automate many tasks, and many customers will be pleased with this development, customers are already demanding higher levels of customer service. The "personal touch" isn't just a side benefit: It's often the main driver behind a consumer's decision to choose one carrier over another.

So adjusters of the future will be people who are very customer-oriented, very tech-savvy, very intelligent and very skilled at interpreting mountains of data. They won't have to perform a lot of clerical and administrative tasks. Automation will virtually eliminate that work. But they will have to know how to optimize new technologies to deliver superior customer service and the best possible outcome to every claim.

We in the claims industry have to find ways to inspire, energize and interest young people in careers as claims adjusters. Currently, this isn't a vocation many Millennials seek. With the help of new and emerging technologies, however, we can be seen as a fun, innovative and inventive sector that adds value to the lives of ordinary people. After all, getting into accidents causes a great deal of stress for most vehicle owners. For that reason, our industry needs adjusters who are adept at a wide variety of claims-processing and customer-service challenges.

There is a silent epidemic taking a toll on the American workforce. This illness affects 9.5% of the adult population and is to blame for 200 million lost workdays each year. Those lost workdays cost employers an estimated $17 billion to $44 billion. Despite these staggering statistics, only one-third of those affected by this common illness will ever seek professional help. What is this cause of disability, absenteeism and productivity loss? Depression.

There are many reasons an employee may keep concerns about his mental health private. Stigma, fear of losing his job and lack of awareness can prevent an individual from seeking help. Despite these hurdles, there are strategies employers can implement to not only connect their employees with the help they need but to also improve productivity. Employers that address mental health issues have happier, healthier employees and see increased productivity and profits.

Confidential online depression screenings are a proven way to reach those in need and help direct them to appropriate assistance. For more than a decade, the WorkplaceResponse program has worked with organizations to address mental health issues in the workplace. Developed by the nonprofit Screening for Mental Health, WorkplaceResponse is a mental health education and screening program that easily integrates into existing employee assistance programs or enhances existing wellness initiatives hosted by human resource departments or employee assistance programs.

The program offers screenings for common mental health concerns, including depression, bipolar disorder, generalized anxiety disorder, post-traumatic stress disorder, eating disorders and alcohol use disorders. Screenings are anonymous and engage employees in becoming active participants in their own well-being. Upon completion of a screening, employees are provided with immediate results and linked back to employee assistance program (EAP), local or company resources.

Health promotion programs can also have positive effects in the workplace. These programs serve as excellent tools to increase mental health awareness and educate workers on the signs and symptoms of depression. Managers and employees who can identify these symptoms can assist at-risk individuals with receiving the help they need.

National Depression Screening Day (NDSD), held annually on the Thursday of the first full week in October, is dedicated to raising awareness and screening people for depression and related mood and anxiety disorders. NDSD is the nation's oldest voluntary, community-based screening program that gives access to validated screening questionnaires and provides referral information for treatment.

Oct. 8 marks the 25th year of the revolutionary campaign. This milestone allows for opportunities to begin the conversation about mental health in the workplace. Identifying workplace risk factors, taking action to reduce employee stress and initiating organizational wellness programs can be productive first steps.

Employers can make a difference by encouraging employees to take a quick, anonymous mental health assessment at http://helpyourselfhelpothers.org/ or by launching a 25-day wellness challenge. To encourage employees to take care of their mental health, a 25-day wellness challenge provides ideas and actions individuals can take to relieve stress, boost mindfulness and foster healthy behaviors. Examples include walking, cooking with family and taking a break from technology. Simple methods like the challenge can help increase awareness in the workplace.

It is time to address workplace depression. Effective screening tools are available, and treatment works. The early detection and prevention of mental health conditions can improve the lives of individual employees as well as the health of an organization.

These remarks were delivered at the United Nations Sustainable Development Summit on Friday, Sept. 25, 2015.

Good afternoon, excellencies, ministers, ladies and gentlemen. My name is Mike Morrissey, and I'm president and CEO of the International Insurance Society. We are a nonprofit research and idea exchange organization representing life and non-life insurers, as well as regulators and risk management scholars, from nearly 100 countries.

Professor Shawn Cole of Harvard, a world-leading expert in development economics, has said, "Risk is one of the greatest challenges faced by poor people around the world."

This can be seen as the risk of flood, earthquake, hurricane or cyclone. It can also be experienced as crop failure, livestock mortality, illness or death of a family member or in food or water security. The ability to manage and finance risk is therefore a key element in the development of societies, and thus in alleviating poverty and hunger.

The insurance industry has played a key role in this effort by expanding access to risk protection and risk management advice, for centuries in the developed world, and now very broadly in Sub Saharan Africa, South Asia, Latin America and in other less-developed areas. With nearly one billion people living on about one U.S. dollar a day, this form of social protection is vital, since the poor are often those most exposed, just one loss event away from calamity for themselves, their families and their possessions.

At the UN Insurance Sector Summit, which took place at the ECOSOC Chamber here last June, I sat next to Secretary General Ban Ki-moon as he complimented the insurance industry for its vital role in mitigating and reducing risk and thereby raising living standards where help is needed most. But he also called for the industry to do more in the future, and so the industry continues to innovate in ways that offer more protection for more people, and makes a major contribution to reducing poverty and hunger.

A few examples are worthwhile to make the insurance industry's role clear.

German Insurer Allianz is a world leader in microinsurance, the protection of low-income people. Allianz provides crop, livestock and other coverage for 125 million farmers in India and China, and participates in the Africa Risk Capacity pool to insure governments against natural catastrophes. Peruvian insurer La Positiva has tailored agricultural coverage for rural farmers who have limited access to communications and healthcare. A new Bermuda-based venture called Blue Marble Microinsurance has developed savings and protection products, among them some linked to poor women's key life-cycle triggers.

These efforts, and many more like them, link the worlds of finance and development, expanding access to protection from the unique set of risks faced by the world's poor. Through our industry's efforts, and through public private partnerships with governments and international institutions to capitalize on both the risk assessment and long-term investing capabilities of insurance organizations, the sustainable development goals of ending extreme poverty and hunger can and will be achieved.

Step back and consider how simple workers' comp should be.

If every professional from all corners of our industry took time away from their narrow daily focus and considered the big picture in general terms, we might all experience a collective re-setting of the communal respect we should carry for the essence of workers' comp's intent.

One evening in 2005, my daughter, then six years old, was "helping" me do work in my office. (As my good clients know, on any given day Risk Acuity might run a robust second or third shift!) I was reconciling a monthly pile of client first-reports, and she was making sure my finished stack was in date-order. At one point, she decided to create a report of her own on a blank paper, mimicking the lines, boxes and random numbers.

When she showed me her finished product, I was puzzled. In one area, she wrote "Jhon Elbort." Near the top, she wrote "Broke hes legs." Every other line was either blank or filled with a scribble. I asked if she wanted to know the kinds of information she could make up for other boxes (like the date, doctor's name, birthday, address, etc.). She replied, "If he broke his legs, why do you need to know anything else?"

If only every aspect of our industry had such simple respect for this essence. In a perfect world of integrity, we would all uphold our ends of the bargain. Imagine employers, claim providers, doctors and employees making honest efforts to support what the system should be and make reasonable expectations about the limits of what the system owes. This would obviate most of the other tactical, legal and profit-driven "busy work" we all do that has no direct impact on an injured person's recovery.

We should never forget that WC is all about the employee experience.

Needless to say, Jhon Elbort's first report remains framed on my wall.