During the snowstorm that hit the East Coast in January, I took some time to clean up my office and read reasonably current newspapers and trade magazines. I quickly identified many opportunities for new insurance products, mostly around shared assets. For example, an article on Millennials and the sharing economy explained that (primarily young) people make money by sending selfies of what they are wearing every day to a website called CovetMe; they get paid based on the brands and looks they are sporting. They Uber their way to work, school or social events (when did Uber become a verb?) as a driver or passenger; they use their subscription to a shared car service such as Zipcar to take occasional trips; or they get paid for allowing advertising on their own car by subscribing to companies such as Carvertise. FlightCar gives you free parking at big airports if you let other travelers use your parked car when you are traveling. Similar sharing activities take place with homes, clothing and accessories, occasionally used tools and equipment and even medical equipment. All these shared assets need to be covered in different ways than the traditional, personal lines homeowner’s or car insurance policies. Occasionally renting out assets to third parties or shared ownership of one asset between non-family members creates a different risk profile than self-use only, both for property coverages and especially for liability. Think about deductible coverage between multiple owners in case of a claim, good driver discounts or multiple non-familial owners getting involved in the same accident, as liable parties and as claimants. The insurance market has been pondering insurance solutions for the shared economy for a while now and found ways to cover Uber drivers or Airbnb landlords or offer non-owner car insurance. As an industry, however, we defaulted to our classical model of insurance and put a commercial coverage, bought by the shared economy company for their members,  on top of individual personal insurances where needed. It works, but, as one can imagine, it is a bit clunky. Especially on larger claims, I expect delays and issues to occur concerning liability, wear and tear, acceptable use of assets and confusion around which policy should pay followed by subrogation. Now, most shared-economy companies have stated that they will reimburse their members for losses and will figure out later what is covered by which insurance. This is a good thing for their members, of course, but it doesn’t necessarily help insurers very much. We should be able to do better and create truly new insurance coverages for the shared economy. For example, why wouldn’t an insurer work with one of the new tech companies that provides people with a cloud solution to document all of their assets with pictures, videos, sales receipts or warranty documents? Why wouldn’t an insurer create a comprehensive coverage for property and liability for all these clients’ assets, under the assumption that they will be shared? Tag the key assets with a sensor and learn from usage data. Use telematics data on the car use. Limit home rentals to one or two partner companies and learn from usage analytics. Why wouldn’t a carrier try a pilot with a segment of young people with limited assets, in a single location? I know that this is not a simple proposition and that, in creating these kind of coverages, many hurdles will be encountered. I do think, however, that the market is ready, and that the sharing economy will become a force to be reckoned with soon. So, we might as well figure out how to insure and service that force. As my colleague Mark Breading stated in his recent research brief, Insurance in the Connected World: Observations on Opportunities and Threats, “Actively participating in the rapidly growing sharing economy will be critical for personal lines insurers. Asset ownership is shifting and requiring a different approach for managing and protecting the assets.” It is not going to be easy, but customers will count on our industry to develop solutions to protect their shared assets. We have successfully been supporting changing economies and technologies for centuries now – I am sure we’ll also find a solution for the new sharing economy in a connected world.

This is the first of a two-part series, by David Toomey and me, on why healthcare cost growth has historically been much higher that general inflation.  If you want to truly understand why corporate healthcare costs have risen faster than nearly anything else over the past 40 years, read this article. In 2001, David was managing large accounts for a major carrier/TPA (third-party administrator) when the largest hospital system in the market issued a notice to terminate its relationship with the carrier, to begin negotiating for higher unit prices. (When hospitals want a very high fee increase, they sometimes start the process by terminating participation in a carrier’s network.) This notice began a tumultuous series of negotiations that involved the local press. The fee increase demanded by the hospital system was high single digits, above market and highly inflationary for the area. This system was already paid a premium because of its large market presence. David moved quickly to engage major self-insured clients and educated them on the cost impact. They told him to hold firm, as they could not absorb the increases. When asked what they would do if this major hospital was not in the network of the carrier that employed David, many responded that they would turn to another carrier so as not to disrupt employees who used the hospital system! There were no questions by employers on the quality of the hospital’s care or on its commitment to process improvement. Although they realized that they could not really afford the higher prices, they felt that avoiding disrupting employees (even in a fairly minor way, by having them use a different hospital system) trumps company profits and affordable payroll deductions. That position meant David had no leverage at all in negotiating with the hospital system. As a result, employer and employee health costs ratcheted up in that market. That's too bad, but this story is the norm. We’ve seen this same scenario continuously in our careers. Even if a hospital or clinic is used by fewer than 5% to 10% of a company’s employees, getting complaints from employees—even just a few—trumps corporate profits, shareholder returns, rising payroll deductions, restraining rising deductibles and rising employee out-of-pocket health costs. Even though self-insured employers are the ultimate purchasers of healthcare, they usually just roll over when providers keep raising their charges year after year. In every market, by definition, half the providers are below average. While company benefit managers profess to want the best-quality care for their employees, they willingly accept larger fee increases from the worst providers. Why? Avoiding a few employee complaints has always been more important than deleting poor-quality providers, ones with a high rate of harming patients. (By “harming patients,” we mean providers with high rates of misdiagnoses, high rates of prescribing bad or suboptimal treatment plans and high rates of infections, some of which are deadly.) Sally Welborn, head of benefits for Walmart Stores, recently called for self-insured employers to take the lead in reforming how providers are paid and in making hard, value-based purchasing decisions. (The term “value” excludes providers that have a high rate of misdiagnosed patients and give them profitable but unnecessary treatments.) Soon, you can read Part Two on how employers can obtain value from the provider community.

Every time you breathe, you take a risk. But, usually, the potential for harm is greater if you don’t breathe. (There are exceptions, such as when your head is under water without a breathing mask.) Every time you make a decision, you take a risk; we take risk all the time, in pretty much every facet of our personal and professional lives. But, when faced with the same situation, people will act differently from one another. A person may assess the risk differently from someone else. He may make a different decision regarding whether the risk is acceptable and which fork in the road he should take to address it. In risk management, it’s fine to have defined risk criteria or appetite statements, but these rarely cover every decision a manager has to make. So, the manager has to make a decision based on what she thinks is best. A number of experts will point to risk culture as the answer to this variance in decision-making. The experts seem to believe that some organizations are more risk-averse than others. But organizations are composed of people—different people in leadership roles with different backgrounds, experiences and biases. Organizations are not homogeneous. In fact, sections of an organization are not staffed with people who are identical in their attitude toward risk. For example, on whether to select vendor A, B, C or a combination of the three, different people are likely to make different decisions. Manager X may have had a bad experience at another company with vendor A, while Manager Y used to work for that vendor. Manager Z may have lived through a disastrous experience where a sole-source vendor failed, so she will opt for a combination of two or more vendors. Manager Y may have just suffered a loss on the stock market that affects his desire to take risk, while Manager X has just heard he is a grandparent again. Even something such as a state of mind can influence a risk decision. It’s not only that different people make different decisions in the same situation but that each person may make different decisions at different times. This is important because, as risk professionals, we want decision-makers to only take the level of risk that top management and the board desires. To have consistent decisions on risk, we need to know the temperature and overall health of the organization and its decision-makers. We need to answer these questions:

• Who are we relying on to take the risks that matter most to the organization’s success?
• How can we obtain assurance that they understand the desired level of risk?
• How can we obtain assurance that they will act as we desire?
• How will we know when their risk attitude changes?

A survey will, perhaps, give you a moment-in-time view. However, people change. Managers and executives leave, new ones join and people’s perspective and desire to take risk changes, especially if they see their compensation or termination is likely to be affected by their decision. This is a complex issue that risk professionals need to understand and assess within, and across, their organization. Richard Anderson and I will be discussing this in our Risk Conversations coming up in April in London and Chicago. Details are at www.riskreimagined.com. In the meantime, how do you address this variability? How do you know that your decision-makers will take the desired level of risk?

I am fortunate to live amid incredibly smart, driven, hard-working people who care about making an impact. Sometimes, some of them trust me enough to come to me for business and career advice.

Before every such meeting, I try hard to set aside my beliefs and biases and just listen. For me, it takes genuine effort to actually listen and remember that listening to someone isn’t really the same thing as just waiting to talk. I do my best not to make someone clearly in pain feel good with the formulaic “10 steps to happiness” psychobabble.

The problem usually starts with a clear symptom : “I hate my boss,” “I don’t have faith in my CEO,” “I deserve more equity,” “I need a bigger title,” etc. Having been in their shoes as an employee, a manager, a CEO, I’ve dealt with many of these feelings myself, so I can often relate to where people are coming from. I suppose that’s the real value of talking to someone—it helps separate problems from symptoms, and knowing the problem is half the solution.

A lot of times, what I discover in these conversations—once we talk through what’s going on and dig deeper into the situation—is that these surface emotions are just really reflections of the real problem, which is larger, more corrosive and harder to admit.

Entitlement.

The problem is we all feel entitled to something. Entitlement is a subtle and implicit belief that we deserve things, that the world owes us something.

The truth, something we all know, is that the world owes us nothing. However, it is hard to remember that at the right time, when you are feeling entitled.

I am not suggesting that having expectations, desires and sometimes taking things for granted is unnatural or even bad. I am saying that if you stop for a minute and zoom out, you’ll start to realize that a lot of your pain goes away if you stop feeling entitled and that dealing with the reality of your situation becomes a heck of a lot easier.

So the next time you are feeling upset about something, try it . Zoom out and tell yourself, "The world owes me nothing," and see what happens.

When I do it mindfully, I can tell you I feel a sudden emptiness, followed by a delightful lightness. Sure, it may only last for a minute, but that little lull puts things in perspective, replacing the heaviness of “I deserve better” with “I am grateful for what I have. There will always be more I want. It will never be enough, but it will all be OK.”

Try this for a week: Every morning, tell yourself , "The world owes me nothing." See if it subconsciously affects your thoughts, alters your tone and orchestrates your actions throughout the day. Note how that sets you up for a simple but powerful call of duty, to be useful to people around you—your family, friends, co-workers, customers, investors, neighbors, strangers, everyone! Be grateful for the many, many things you have.

We begin life with a cry. In the end, the only thing that matters is how many people cry when we die. Or maybe that, too, is an entitlement.

Originally published on Medium

Things happen fast in the start-up world. Early yesterday, I wrote a post on how Zenefits’ compliance challenges in Washington state could cost the company millions of dollars in lost commissions. While noting that it was only a matter of time before someone at Zenefits lost his job over the situation, I had no idea that Zenefits CEO Parker Conrad would resign later in the day, citing the compliance problems. In a press release cited by VentureBeat.com announcing Conrad’s departure, Zenefits' new CEO, David Sacks, who had been COO, declared, ”I believe that Zenefits has a great future ahead, but only if we do the right things. We sell insurance in a highly regulated industry. In order to do that, we must be properly licensed. For us, compliance is like oxygen. Without it, we die. The fact is that many of our internal processes, controls and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.” (The entire press release is worth reading). The loss of a founder and CEO is another cost Zenefits will pay for the alleged failure to comply with states’ insurance laws. I don’t believe they’re done paying for their mistake, however. What follows is a slightly edited version of my earlier article: Washington regulators are investigating Zenefits’ alleged use of unlicensed agents selling insurance policies in the state. This is not only embarrassing for a company as brash and boastful as Zenefits, but the company’s finances could be substantially affected, too. Not just because, if found guilty of this felony, Zenefits could face a multimillion-dollar fine. The far greater risk to Zenefits is the prospect of losing commission income — a lot of it. William Alden at BuzzFeed News has done a great job pursuing the story of Zenefits’ unlicensed sales. Now Alden is reporting that, based on public records, it seems “83% of the insurance policies sold or serviced by the company through August 2015 were peddled by employees without necessary state licenses….” The potential fallout is quite substantial even though only a small number of sales are involved -- just 110 policies out of 132 sold or serviced by Zenefits in Washington between November 2013 and August 2015. “Soft dollar” costs include a damaged brand because of the bad press, distractions at all levels of the company and the need to address whether the company is ignoring other consumer protections. Then there are the hard costs. 110 policies times the maximum $25,000 per violation that Washington can impose means fines of as much as $2.8 million. Financial penalties imposed by other states could add to this figure. While paying a $2.8 million fine is no laughing matter for a company losing money every month, this represents less than 0.5% of what Zenefits has raised from investors. However, the legal fines are, potentially, just the tip of the proverbial iceberg. As Alden points out, the fallout from this investigation could result in carriers dumping Zenefits, and that could cost the company far more than any criminal fines. Carriers require agents to meet several requirements before contracting with them, and agents must continue to meet these requirements to keep the agreement in-force. Common provisions include being appropriately licensed, maintaining adequate errors and omissions coverage and not committing felonies or breaching fiduciary responsibilities. Fail to meet any of these requirements, and agents can find their contract terminated for cause. Terminations for cause usually allow insurance companies to withhold future commissions from the agent and, depending on the specific terms of the contract, from the agent’s agency, as well. If an agency or agent knows or should have known he was in violation of contract terms when executing the agreement, carriers may be able to rescind the contract and demand repayment of commissions. Being found guilty of a felony in Washington state could allow a carrier -- any carrier, anywhere in the country -- to terminate Zenefits’ agent contract for cause. Late last year, Zenefits CEO Conrad claimed the company was on track to earn $80 million in 2015. So, let’s see, millions times 50% … carry the one … yeah, this hurts. A lot. A nuclear outcome is highly unlikely. The Washington state investigation into Zenefits is continuing, and Zenefits, to date, has been found guilty of nothing. Even if Washington regulators find Zenefits committed a felony, for reasons described in a previous post, the outcome is highly unlikely to be a fatal blow to the company. Insurance regulators have considerable leeway in determining fines and penalties. Absent proof that Zenefits intentionally violated state law or that consumers experienced actual harm, the Washington State Department of Insurance is likely to conclude that this situation resulted from incompetence. The department might then impose a modest fine on Zenefits and subject the company to enhanced review of its licensing practices for a few years. Let’s put this in perspective. Richard Nixon resigned the presidency as a result of what started off as a two-bit break-in. That kind of cascading escalation is extremely rare. What we’re seeing unfold in Washington state is probably not Zenefits’ Watergate moment. Zenefits has already paid a small price for what it allegedly did. I’m guessing the whole mess has been a bit distracting to management. And the fact remains: Mishandling more than 80% of sales in a state is a sign of immense ineptitude, arrogance or both. Having this reality aired publicly is not good for Zenefits’ brand, and resources will need to be expended to make sure it doesn’t happen again. I’m not aware the company has fired anyone as a direct result of the lax licensing controls, but that could happen. As a result of this fiasco, Zenefits has already taken down its controversial broker comparison pages in which the company used carefully selected criteria to compare itself to community-based agents. (I guess the company was reluctant to add “being investigated for multiple felonies” as one of the comparison points). This is a small sacrifice as the comparison page was likely an attempt to enhance search engine optimization rather than an effort to take business from the competition. Zenefits has paid a small price. The open question is: How large a price will the company ultimately pay?

News flash! You are not an insurance agent. Yes, you sell insurance products and services for commissions, but that’s not why your clients buy from you. Every successful insurance agent today understands that they do much more than transfer risk for their clients. Today’s successful insurance agents understand that they are first and foremost marketers, publishers, creators, innovators, speakers and value providers. This may seem like a foreign concept, but it’s true. No insurance producer can help clients financially if she can’t first paint an emotional picture through words and ideas. Marketing is not about manipulation, tricks or tactics. Today’s insurance buyers are too educated and untrusting to fall for inauthenticity. Today’s marketing is about great content. Content is not limited to a website, emails or product and service descriptions. Everything a customer or prospective customer comes into contact with about you or your agency is content. Content is any medium through which you communicate with the people who may use your products or services. It could be the words on your webpage, the email sent to a client, a headline on your brochure or the words used during an appointment with a prospective client. There is no hiding from content. It will make or break you. However, most agents don’t seize this opportunity. In fact, most agents don’t even know the opportunity exists. Ann Handley, author of “Everybody Writes,” says it best: "Ours is a world where technology and social idea have given us access and power: Every one one of us has the awesome opportunity to own our own online publishing platforms—websites, blogs, email newsletters, Facebook pages, Twitter streams and so on. "I don’t use the phrase 'awesome opportunity' lightly. The opportunity to change how we communicate with people we are trying to reach—and what we communicate—is tremendous, yet we aren’t taking full advantage of it.” With this great opportunity, why are the vast majority of insurance agents still standing on the sidelines, simply watching and waiting? Some think they lack time, others say they lack of knowledge or skill, and others still believe that there is no need to change. I contend you don’t really have a choice.

• Your prospective clients have more options than ever before.
• Your prospective clients have more resources than ever before.
• Your prospective clients expect more from their agent than ever before.

Those agents who deliver on these expectations will stand out and earn business from their ideal clients. Those who don’t will continue to fight and scrape for what’s left. So, I ask you a basic question: Are you a marketer or an insurance agent? Trick question. You have to be both. One is expected, the other will make you successful. You are expected to understand policy terms, definitions, exclusions, coverage gaps, underwriting, endorsements and what all those strange acronyms mean. You get paid for providing a positive experience through your content. Providing that is not easy, and that’s why most agents are struggling. It requires that you are much more than just smart, friendly and able to ask if you can provide a quote.

• You have to help your customers achieve something that’s important to them.
• You have to provide a unique viewpoint.
• You have to put 100% focus on your customer and view the world through his eyes.

All three listed above take hard work, hustle, training, continual personal development and a passion that burns deep inside you. This passion doesn’t come from outside sources. It starts and ends with you.

• How badly do you want to make an impact?
• How badly do you want to help others?
• How badly do you want to become the industry leader?

To succeed, you must decide you will not settle for being just another insurance agent. You are a professional who earns trust through consistent and valuable content, offline and online, to your clients and prospective clients. To be a successful insurance agent today, you must first be a marketer ... and a good one.

According to patent applications recently filed with the U.S. Patent and Trademark Office, Allstate is planning a driver safety scoring system that will take into account speed laws, road signs, traffic signals, weather and possibly even biometric data such as your heart rate. These driver safety ratings would then be used to determine what kind of car insurance you can buy and how much you’ll pay. Allstate’s plans are part of a wider effort in the industry to gather telematics data from today’s advanced vehicles, smartphones and other devices. Many insurers already offer “usage-based insurance” programs that set rates based on actual driving behavior, such as Allstate’s Drivewise, Progressive’s Snapshot and State Farm’s Drive Safe. If you tailgate, speed, drive through high-crime neighborhoods or even drive at night, insurance companies might be able to justify charging higher rates, regardless of whether you get a ticket or cause an accident. You’ll probably find yourself getting a driving score for each trip, even paying different insurance amounts each time you go out. Filing a patent application doesn’t guarantee that a plan will ever be used, but, within five years, it might be hard to find an auto insurance company that doesn’t have a plan to score your driving and use that score for setting your rate, says David Lukens, director of telematics at data analytics company LexisNexis. If insurers don’t want to develop their own scoring system, they can buy one. LexisNexis, which has tracked and analyzed more than a billion miles of driving behavior based on data from insurers that have telematics customers, has developed its own system for scoring driving behavior and offers it to insurers. Allstate declined to comment on details of its patent but said it “is committed to shaping the future of insurance to add more value and best serve customers’ changing needs.” The company's statement to NerdWallet added that “Allstate treats this information confidentially, enabling customer control over the distribution of their personal information.” Allstate’s system wouldn’t necessarily operate silently while you speed and blow through stop signs. The patent application describes incorporating real-time feedback such as warnings that you’re driving over the speed limit or approaching a stop sign—much like a spouse who yells “Watch out!” from the passenger seat. This is similar to a system being developed by State Farm (first described by NerdWallet) that would measure driver emotions and respond with in-vehicle stimuli such as music and even fragrances to improve driving. Allstate’s proposed system for rating drivers could incorporate more than just data from the car. For example, the insurer is considering monitoring and evaluating your heart rate, electrocardiograph signals and blood pressure through sensors embedded in the steering wheel. According to another patent filed in 2014, Allstate is also working on a game-like system where groups of drivers would encourage each another to drive better to improve the overall driving score of the group. Allstate calls it “geotribing.” Allstate imagines this as a kind of high school scenario where the baseball team is competing with the basketball team to see which group can capture the better score to earn rewards. Real-time driving scores could be monitored remotely by all members of the group. Allstate’s hope is that this “creates a self-policing atmosphere.” The sense of always being watched should make drivers “more conscious of practicing safe driving habits,” according to the patent. Lukens says such group encouragement can make a big impact on driving habits—if done the right way. “It gets iffy when it comes [down] to allowing people to comment on other people’s behavior,” he says. “You can’t control the way people talk to each other.” Encouragement could devolve into bullying. Many consumers seem interested in getting driver scores and improving their own driving. In March 2015, LexisNexis asked slightly more than 2,000 consumers whether they would be interested in a smartphone app that measures their driving score and offers ways to drive better, without any insurance discount. Fifty-nine percent said it would be nice to know their score, and 50% liked the idea of improving their score. But only 28% said they were interested in comparing their scores to others. Although you might not be forced into a scoring program, Lukens says you should expect to pay higher rates in the future if you opt out. Allstate says, in one of its patent applications, that drivers who decline to participate might be signaling concern “that the information would demonstrate less-than-ideal [driving] behavior.” Allstate is also considering how to leverage all this data for additional business opportunities. For example, it says a person who has a specific spending and credit profile—and who refuses to share her driving data—“may be particularly receptive to an ad campaign for luxury sports cars or certain vacation travel.” Similarly, NerdWallet has previously reported that State Farm has made plans to collect customer data for targeted advertising. Driving scores aren’t on the horizon; they’re already here. Insurance companies are, right now, internally testing them. In fact, Lukens says, if you are a customer of a usage-based insurance program, you already have a score, even if your insurer hasn’t told you about it.

Last year, as Airbnb’s $25.5 billion valuation surpassed Hilton Hotels' and Uber became the world’s most valuable privately owned company, it became clear the on-demand economy is no passing fad but is, in fact, a force to be reckoned with. The on-demand marketplace is growing at a dizzying pace as new companies emerge daily, helping connect a diverse workforce of tradespeople, licensed professionals and unskilled laborers to a market of willing buyers through the company's platforms. Intuit projects the population of U.S. on-demand workers will more than double by 2020, which means that, if you can’t already summon a doctor, lawyer, babysitter or dog walker right now via an on-demand app, then sit tight—they’re coming soon to a smartphone near you. But the scale and speed of the on-demand economy’s growth also means policymakers, regulators, insurers and on-demand companies will have to huddle quickly to resolve the issues that arise with this expanding marketplace and its workforce. Here are the three key questions we need to address immediately:

1. When the safeguards of the traditional corporation no longer exist, how do we protect the on-demand workforce?

Uber is currently appealing a case it lost against the California Labor Commissioner last summer regarding whether a driver is an independent contractor or an employee. While establishing this distinction is a critical issue, we still need to address some big questions about the vast self-employed workforce in the on-demand economy. A good primer question: How do we get the information we need to make informed policy decisions? Independent contractors in the on-demand economy are classified as part of a larger pool of temporary, seasonal, part-time and freelance workforce called “contingent” workers. A 2015 U.S. Government Accountability Office report cites this workforce as somewhere between less than 5% and more than one-third of the country's overall labor pool. The big gap in this measurement is because it depends on how jobs are defined and on the data source; the broad definitions and lack of clear data on this workforce makes on-demand independent contractors and their needs tough to track and evaluate. How much of this workforce depends on this income for supplementary purposes as opposed to relying on this income as a full-time living? According to Intuit’s study, contingent workers will make up 40% of the U.S. workforce by 2020. That’s a lot of people working without the safeguards provided by the traditional corporation—guaranteed minimum wage, steady income, unemployment insurance, healthcare, workers' compensation and disability insurance. What kind of safety nets do we need to put in place to protect this workforce? And what does this growing workforce mean in terms of policy development? How does the social contract change?

2. How should we regulate hybrid commercial/consumer activities?

A sticky issue surrounding the on-demand economy is how to regulate commercial activities that are conducted by individuals rather than by traditional businesses. While some argue that an Airbnb property should be as heavily regulated as a hotel if a host is accepting payment for lodgings, drawing an apples-to-apples comparison between the two is a challenge. For example, treehouses, yurts, igloos and lighthouses were among the top-10 most desirable vacation destinations on Airbnb shopper’s wish lists last year, some fetching upward of $350 a night. Who exactly should you call about making sure the igloo is up to code before guests arrive? Some of the services and products offered by the individual through on-demand platforms have never been available through traditional enterprises; they’re unique, intimate experiences and, before on-demand platforms made them accessible, were difficult to find. We’re entering a new frontier where many tourists covet a culinary experience they can book at a local’s house via apps such as Feastly or Kitchensurfing rather than a fine dining restaurant, or they prefer offbeat accommodations booked through Airbnb to a 5-star hotel. We can’t assess how to best regulate these individual commercial activities until we have more data and understand the risks. How do we collect that data? How do we ensure the safety and protection of the individuals operating and participating in these activities until we have the information necessary to adequately regulate them?

3. How can a square peg workforce function in a round hole system?

Mortgages, loans, credit cards, leases … these are just a few of life’s niceties (or necessities) that are challenging for an on-demand independent contractor to secure. Our current financial services, systems and policies were built to work for employees who collect a regular paycheck as well as freelancers who have reliable cash flow through long-term contracts and monthly retainers. Independent contractors working through on-demand platforms tend to rely on short-term gigs often generated through multiple sources, and they have difficulty predicting their day-to-day income, never mind their annual net or gross. This isn’t a niche workforce. If independent contractors represent 40% of the U.S. working population in 2020, they’re significant drivers of the economy. They generate income and pay taxes; they need homes, cars, work equipment and all the other stuff that keeps their businesses running and makes their lives worth living. We can’t dismiss their needs, because we are measuring their 21st century income with a 20th century yardstick. How do we retrofit our round-hole systems to include this square peg workforce? If we want a thriving economy in which people enjoy the benefits of the on-demand economy, and doctors, lawyers, drivers, plumbers and everyone else serving the on-demand marketplace have equal opportunity to succeed, then the time to talk about these questions and issues is now.

Cargill, Monsanto, Wells Fargo and John Deere are officially out of the crop insurance business, according to a recent article from Bloomberg. Large companies like these expanded into different aspects of the agriculture industry over the past few years, and their debut in the insurance industry made quite an impact. With their newly acquired insurance operations, they were the market players to watch – and now we’re watching them leave the industry. Behind this exodus is the matter of profit. Large companies, especially those that are publicly traded like Monsanto and John Deere, have a different perspective on risk and profit than the typical insurer. Let’s take crop insurance profit and loss over the past couple years, which is driven by fluctuations in crop prices. As Bloomberg explained, “Bumper harvests have sent corn, the biggest U.S. crop, to less than half its 2012 peak, ratcheting down the premiums farmers pay to insure against loss. Other crops have also seen steep price declines.” At the same time, the broader insurance industry has been seeing lackluster results. The most recent numbers from the Congressional Research Service indicate an underwriting loss of $1.3 billion in 2012 and profit of $657 million in 2013. For insurers, although these are not welcome results, the reality is that there will be challenging years – and insurers are accustomed to anticipating them. They are in for the long haul. But large, diversified commercial companies such as Cargill, John Deere and Monsanto have a much harder time adjusting to these financial results. So, were these big external players a collective blip on the map, or a real disruption? A pattern visible across many industries offers a possible answer. Large companies diversify around their current offerings, and, if the results are disappointing, they realize the expanded offerings are not core to their business. Google has been extremely successful in most of its diversification, but Google+, its social network offering, never became the powerhouse the compay had hoped would challenge Facebook. If these large companies are unsuccessful, they often leave the new industry. This is not to downplay the role that new entrants have in the insurance ecosystem. They push our thinking and ways of doing business in directions that might otherwise have taken years for the industry to adopt. New players like Haven Life and Google are not attempting to be the same old insurer, only better. Their goal is to disrupt the business of insurance and to create something in a niche that the industry had not perceived. The disruption they cause can take many forms, from new solutions to new distribution channels. They can go after these markets without owning the entire process – and, in doing so, they create real changes in how the insurance industry has to operate. Driverless cars will present similar challenges. Volvo and Ford have both mentioned the possibility of covering product liability insurance. How will this affect the insurance industry? Will automakers really cover the liability, or will they front it? Autonomous vehicles will change the insurance landscape by opening doors for these new thinkers. But will the insurance industry need to step in to present new insurance products that provide the necessary coverage? What role will insurers play in the new auto world? Disrupters like Monsanto, Cargill and John Deere were not in the market for a long time, but they do have an impact. They invested in changing the claims process, and they applied data, analytics and automation in areas that were previously very manual – which causes us to rethink other processes. We can hope that their new ways of doing business opened some eyes in the industry. They did not change the game so much as establish that the game needs to be changed.

One of the common challenges insurance companies face when it comes to claims is how they can make the process more efficient for customers. Processing claims takes time and resources regardless of size, especially for claims valued at $10,000 or less, where it is not cost-effective to have an adjuster evaluate the damage onsite. Mobile changes customer expectations  Customers' today are demanding. They want instant results. Mobile technology is transforming customer expectations. Nigel Walsh, who is the head of insurance in the UK for CapGemini, stated at a recent TechUK meeting that. “Customers are getting more savvy. Expectations have gone up, but insurers are not meeting those expectations.” Traditional claim processes meet disruptive technology Using technology to engage with the customer, the InsurTech transformation is addressing the gap between self-serve applications and traditional onsite visits with video. Solutions such as SightCall Visual Claims are using mobile video to allow policyholders to file claims in real time. It is all about the customer using technology that engages them and allows them to show the damage with their smartphone. Here is a quick example of how it works. Don’t fall short of customer expectations. They are ready While starting in early stages of implementation, major insurance companies were only expecting 10% of their customers to accept this new approach. Instead, they reported receiving more than 80% positive participation. The mobile mind definitely shifted the expectation that “I can get what I want immediately.” Providing an instantaneous solution to customers has become essential in how successful insurance companies distinguish their value from the competition. Is insurance ready? Reducing claim cycle times from days to hours not only results in high customer satisfaction but also creates massive savings. The monthly cost of the technology can usually be covered by one single video session that avoids an onsite visit. Decision is a no brainer. Now the challenge resides in the change management. Insurance customers are ready, but are insurance employees ready to change their way of working?