Today, my (snail) mailbox contained a postcard from Verizon offering to turn my car into a connected car. To be more precise, the offer was to my 22-year-old daughter -- neither my wife nor I got the same offer. In essence, Verizon provides a device that plugs into the OBD port, a second device that clips on the visor and a smartphone app to control the service. This is an excellent example of other industries seizing on opportunities that should be prime territory for insurers.

Verizon's hum service (www.hum.com) includes capabilities in six areas: roadside assistance, diagnostic alerts, a vehicle locator, a certified mechanics hotline, maintenance reminders and hotel/car rental discounts. It's being pitched as a great holiday gift -- just plug it in, and you are ready to go!

This is by no means the only offer of this type. Other companies such as Automatic Labs (www.automatic.com) sell OBD devices that provide a variety of services. Automatic has a "Do not disturb" app (Androids only) that keeps the phone quiet while someone is driving, to minimize distractions and reduce the urge to text. The Automatic device/apps will also alert the driver when she is exceeding the speed limit, track when the ignition is on/off, send help if you crash and trigger actions like closing the garage door when you leave the house.

At SMA, we've been advocating more varied value propositions for telematics for some time. Some insurers outside the U.S. have ventured into value propositions that have included vehicle location, vehicle performance and some of the other services offered by Verizon. But, in the U.S. today, the primary value proposition for personal auto is the potential to reduce premiums; a few companies are providing other services, such as encouraging safe driving.

What is frustrating is that the insurance industry was the pioneer in telematics and experimenting with the use of OBD devices, car navigation systems and mobile apps based on real-time vehicle data. These efforts stretch back to the late 1990s, with pilots by UK-based Norwich Union, then Progressive and others. Unfortunately, most insurers have been thinking about the potential in the context of current insurance products -- a coverage-based view.

The connected world is emerging rapidly, presenting many opportunities to provide services to homeowners, businesses, vehicle owners and other segments. Many of these services are aimed at improving safety and providing peace of mind to individuals and businesses.

Hmmm... sounds curiously like the core mission of the insurance industry.

Republicans stated goal is to "repeal and replace" the Patient Protection and Affordable Care Act. That hasn't happened and won't at least through the remainder of President Barack Obama's term. So a secondary line of attack is to undermine the ACA. And Sen. Marco Rubio has had success in that regard.

As reported by The Hill, Sen. Rubio accomplished this feat by weakening the ACA's risk corridors program. Whether this is a long- or short-term victory is being determined in Washington now. We'll know the answer by Dec. 11.

President Obama and Congress recognized that, given the massive changes to the market imposed by the ACA, health plans would have difficulty accurately setting premiums. Without some protection against under-pricing risk, carriers' inclinations would be to price conservatively. The result would be higher than necessary premiums.

To ease the transition to the new world of healthcare reform, the ACA included three major market stabilization programs. One of them, the risk corridors program, as described by the Kaiser Family Foundation, "limits losses and gains beyond an allowable range." Carriers experiencing claims less than 97% of a targeted amount pay into a fund; health plans with claims greater than 103% of that target receive funds.

The risk corridor began in 2014 and expires in 2016. As drafted, if payments into the fund by profitable insurers were insufficient to cover what was owed unprofitable carriers the Department of Health and Human Services could draw from other accounts to make up the difference.

Sen. Rubio doesn't like risk corridors. He considers them "taxpayer-funded bailouts of insurance companies at the Obama administration's sole discretion." In 2014, he managed to insert a policy rider into a critical budget bill preventing HHS from transferring money from other accounts into the risk corridors program.

The impact of this rider has been profound.

In October, HHS announced a major problem with the risk corridors program: Insurers had submitted $2.87 billion in risk corridor claims for 2014, but the fund had taken in only $362 million. As a result, payments for 2014 losses would amount to just 12.6 cents on the dollar.

This risk corridor shortage is a major reason so many of the health co-ops established under the ACA have failed and may be a factor in United Health Group's decision to consider withdrawing from the law's health insurance exchanges. (United Health was not owed any reimbursement from the fund but likely would feel more confident if the subsidies were available).

The Obama administration certainly sees this situation as undermining the Affordable Care Act. In announcing the shortage, HHS promised to make carriers whole by, if possible, paying 2014 subsidies out of payments received in 2015 and 2016. However, the ability to do so is "subject to the availability of appropriations." Which means Congress must cooperate.

That brings us back to Sen. Rubio's policy rider. It needs to be part of the budget measure Congress must pass by Dec. 11 to avoid a government shutdown. If the policy rider is not included in that legislation, HHS is free to transfer money into the risk corridor program fund from other sources.

Sen. Rubio and other Republicans are pushing hard to ensure HHS can't rescue the risk corridors program, claiming to have already saved the public $2.5 billion from a "crony capitalist bailout program." Democrats and some insurers, seeing what's occurred as promises broken, are working just as hard to have the rider removed.

By Dec. 11, we'll know whether the ACA is further undermined or bolstered.

Sleep deprivation is an issue that is often overlooked, yet frequently the cause of decreased productivity, accidents, incidents and mistakes that cost companies billions of dollars each year, reports Circadian, a global leader in providing 24/7 workforce performance and safety solutions for businesses that operate around the clock.

Often, the experts at Circadian say, employers are unaware of the impact fatigue or sleep deprivation is having on their operation until a tragic accident occurs. Only then do managers ask the question: "What happened?"

Sleep deprivation is much more dangerous than you might realize. It's not just annoying, like when an employee snoozes in a meeting or yawns during a conversation. Here are 10 real dangers associated with the overlooked problems in a sleep-deprived workforce:

1. Decreased communication: When workers are tired, they become poor communicators. In one study, researchers noted that sleep-deprived individuals drop the intensity of their voices; pause for long intervals without apparent reason; enunciate very poorly or mumble instructions inaudibly; mispronounce, slur or run words together; and repeat themselves or lose their place in a sentence sequence.
2. Performance deteriorates: Performance declines frequently include increased compensatory efforts on activities, decreased vigilance and slower response time. The average functional level of any sleep-deprived individual is comparable to the 9^th percentile of non-sleep-deprived individuals. Workers must notice these performance declines, right? Not quite. In fact, sleep-deprived individuals have poor insight into their performance deficits. Also, the performance deficits worsen as time on task increases.
3. Increased risk of becoming distracted: Sleep-deprived individuals have been shown to have trouble with maintaining focus on relevant cues, developing and updating strategies, keeping track of events and maintaining interest in outcomes and, instead, attend to activities judged to be non-essential. In fact, research suggests that there is a symbiotic relationship between sleep deprivation and attention-deficit hyperactivity disorder (ADHD) because of the overlap in symptoms.
4. Driving impairments: Because of federal regulations, the trucking industry is well aware of the driving impairments associated with sleep deprivation. However, plant managers are unaware of the ways in which sleep-deprived workers may be dangerously operating machinery (e.g. forklifts or dump trucks). In fact, 22 hours of sleep deprivation results in neurobehavioral performance impairments that are comparable to a 0.08% blood alcohol level (legally drunk in the U.S.).
5. Increased number of errors: The cognitive detriments of sleep deprivation increase concurrently with a worker’s time on a given task, resulting in an increased number of errors. These errors include mistakes of both commission (i.e., performing an act that leads to harm) and omission (i.e., not performing an expected task), which can wreak havoc at any work facility. Errors especially are likely in subject-paced tasks in which cognitive slowing occurs and with tasks that are time-sensitive, which cause increases in cognitive errors.
6. Poor cognitive assimilation and memory: Short-term and working memory declines are associated with sleep deprivation and result in a decreased ability to develop and update strategies based on new information, along with the ability to remember the temporal sequence of events.
7. Inappropriate moodines: Inappropriate, mood-related behavior often occurs in outbursts, as most sleep-deprived individuals are often quiet and socially withdrawn. However, a single one of these outbursts can be enough to destroy the positive culture of a work environment and cause an HR nightmare. These behavioral outbursts can include irritability, impatience, childish humor, lack of regard for normal social conventions, inappropriate interpersonal behaviors and unwillingness to engage in forward planning.
8. Greater risk-taking behavior: Brain imaging studies have shown that sleep deprivation was associated with increased activation of brain regions related to risky decision making, while areas that control rationale and logical thinking show lower levels of activation. In fact, sleep deprivation increases one's expectation of gains while diminishing the implications of losses. What does this mean for your workers? Sleep-deprived workers may be making riskier decisions, ignoring the potential negative implications and taking gambles in scenarios in which the losses outweigh the benefits.
9. Inability to make necessary adjustments: Flexible thinking, preservation on thoughts and actions, updating strategies based on new information, ability to think divergently and innovation are all hurt by sleep deprivation. A worker may be unable to fill a leadership role on request when sleep-deprived, resulting in a frustrated management team.
10. Effects of sleep deprivation compound across nights: Four or more nights of partial sleep deprivation containing less than seven hours of sleep per night can be equivalent to a total night of sleep deprivation. A single night of total sleep deprivation can affect your functioning for as long as two weeks. To your brain, sleep is money, and the brain is the best accountant.

According to Circadian, when you have sleep-deprived or fatigued workers, productivity levels and quality of work will be compromised. Furthermore, you create an environment where it becomes not a matter of if your workplace will have an accident or incident but a matter of when, and to what magnitude.

Sleep deprivation is no laughing matter, no matter how frequently our society treats the issue light-heartedly. Eventually, our biological drive to compensate for sleep deprivation wins, and the loser might be your workers, your employer or even you.

The expectation is that employees return to work in January feeling recharged and ready to perform their best. In reality, one in every five workers is sleep-deprived, and those who sleep poorly are 54% more likely to experience stress in their job, according to a new study from international employee health and performance organization Global Corporate Challenge (GCC).

The report, "Waking Up To the Sleep Problem Every Employer Is Facing," also found that 93% of poor sleepers were more likely to display workplace fatigue, a common symptom of excessive daytime sleepiness (EDS) - the condition proven to increase risks of absenteeism, accidents and injury in the workplace.

"Independent research undertaken on GCC participants in the 2014 challenge demonstrates that sleep improves with increased step count in a linear fashion," said Dr. David Batman, director of research, FCDP. "There are significant increases in productivity and reduction in fatigue and stress levels at work and home. Extrapolation of these results leads to an obvious conclusion that simple exercise improves sleep, and the combined result will be an increase in personal and business performance."

The results come from the health and performance leaders' first series of GCC Insights papers, based on aggregate data drawn from employees in 185 countries. With more than 1.5 million people having now been through the program, the data sample is one of the largest, most diverse of its kind.

This GCC Insights paper also provides practical recommendations for employers who recognize that their workers' mental and physical health inextricably is linked to business success - a realization that, for many, signals a need to rethink outdated well-being strategies in exchange for a longer-term commitment to employee health.

"The cost of poor sleep habits among employee populations has been grossly underestimated; it is having profound consequences for productivity and health," said Glenn Riseley, founder and president at the GCC. "Luckily, enlightened employers are now changing their cultures so that sleep is no longer seen as a luxury but as a priority."

I recently attended an outstanding industry conference. It really was one of the best-produced conferences I have attended since I started presenting at conferences (too) many years ago. The keynote speakers were all insightful celebrities, and the swag was better than what Santa has delivered to my house for the past two Christmases. Oh, yeah, and the presentations weren't bad, either.

During some of the breakout sessions, I overheard some conference attendees discussing their overarching strategy for usage-based insurance (UBI). I heard a couple of the usual comments, "We're waiting for all cars to have embedded connected car technology," and "We're looking for a smartphone solution."

However, I did hear a new comment that a couple of attendees admitted their companies have employed: the "me, too" strategy. I was a little caught off guard when I heard it. It is not an ideal strategy for deploying a UBI program. But it is plausible that those trying to minimize policyholder attrition would make the attempt.

In a "me, too" strategy, company X creates its own version of a product that already exists in the market, so that, when it is mentioned that competitor Y has this product, company X can say, "Me, too!"

This strategy might be more effective when selling hammers. Obviously, UBI is much more dynamic and should be part of a much larger strategy of improving risk management, pricing accuracy and policyholder intelligence. The data and analytics created from gathering valuable driving data have a wealth of utility.

Forgive me, I got lost in my own UBI infomercial...

Let's get back to the harmful impact of the "me, too" strategy on UBI. Typically, products launched under this strategy are not properly funded beyond product launch, as the program goal and the launching of the product are one and the same. Any long-term goals do not include improvements to the product, and any real value of the product is rarely realized.

The immediate negative impact of employing a "me, too" strategy is seen in the lack of resources to properly distribute, manage and improve the product. The approach also relieves anyone of responsibility for the product (or program), thus no one is required to show results or improvement.

In the long term, policyholders must endure the brunt of the "me, too" strategy. Their experience with an insufficient UBI product is poor, at best. Participation in the program steadily decreases, or stagnates. Either way, participant numbers never come close to those listed in the business case. Moreover, the product and program are disparaged in the market, and the company and ecosystem all receive negative marks from policyholders.

There are certainly better strategies that offer greater returns in the short and long term. I encourage those considering a UBI program to take a long-term approach. Gather information from multiple sources and pay just as much attention to the back-end management system for the overall program as you do the bells and whistles. It is the back-end management that will ultimately deliver a best-in-class UBI product as well as the data analytics, and more of the true program value.

Here is a bit of information that will be helpful when comparing back-end management systems. Look for the following:

1. Responsive dashboards that provide visibility into key performance metrics so you can make informed decisions about your program.
2. Data visualizations and program analytics embedded within the product to help you understand month-over-month program growth and analyze impacts of marketing campaigns, seasonal effects and geographical adoption.
3. Program diagnostics that provide you with detailed business intelligence to manage program health and identify areas for follow-up, such as potentially fraudulent behaviors.
4. Flexible reports that support online viewing, scheduling and exporting to fit within your best practices and business needs.
5. Flexible enrollment capabilities that support all stages of program growth with enrollment interfaces that support single to bulk enrollments, all backed by fully automated enrollment integration.
6. Integrated device tracking tools that provide full insights into shipping and the cadence of devices reaching your customers.
7. Comprehensive logistics tracking that is available throughout the account lifecycle -- from enrollment, shipping, delivery, installation and continuing data reporting for each user.

I hope this is helpful information. If you have attended any high quality connected car or UBI conferences, please drop me a note, as I am doing my own planning for 2016.

The number of brokers considering a human resources insurance system (HRIS) to handle compliance with the Affordable Care Act is staggering. It's the No. 1 topic of conversation at every industry function I attend. I just left a top producer event for a carrier, and when I shared with a group of attendees that we we not only have fully embraced a tool for this, but make it mandatory for doing business with us, some jaws dropped.

Certainly, the number of options have proliferated as of the last couple of years. But let me say, and please excuse me for being blunt, if you are considering an HRIS now, you are way too late! If you don't already have a single system you work with AND the people in-house to manage and build that system, you are way behind.

Many brokers I talk to think that picking and paying for a system is a big decision and a big investment...well, in my experience, that's the easy and far less expensive part. By far the bigger piece is having the in-house experts needed to build the tools for each client, educate each client and get the employers and employees dependent on it for their day-to-day concerns related to benefits (and those little things called IRS codes 6055 and 6056). In my agency, our in-house lead, Joan, can get me from employer decisions to open enrollment-ready in less than four hours!

In my humble opinion, this tool is not something you use for your biggest and best clients. After all, there is a huge learning curve for most of us on this technology, and that curve is only elongated if you use the system sparingly. Instead, if you embrace it fully, wrap your arms around it and give it a big hug, it becomes more valuable to you and your clients in a far quicker fashion.

If you are already an expert in a particular system and have in-house resources to build it and use it, you are light years ahead of your competition. And if you do this, doesn't this put you on par with Silicon Valley start-ups the technology front while blowing them away on the solutions side? Some industry gossip puts start-ups' retention around 60%!

A little advice, if I may, on which system to go with:

1) Make sure there is no per-user, per-month (PEPM) charge.

2) Make sure the system is not tied to a particular carrier.

3) Make sure the employee interface is beautiful.

4) Make sure it can handle all clients, large and small.

5) Make sure it has very terrific ACA capabilities -- which should be obvious.

6) Most importantly, make sure you get behind a system that you have 100% confidence will stay ahead of the rapid changes, and will always be dedicated to brokers.

Cyber attacks are escalating in their frequency and intensity and pose a growing threat to the business community as well as the national security of countries. High-profile cyber incidents in 2014 reflected the expanding spectrum of cyber threats, from point-of-sale (POS) breaches against customer accounts to targeted denial-of-service (DoS) attacks meant to disable a company's network. Businesses in ever-greater numbers sought financial protection through insurance, buying coverage for losses from data breaches and business outages.

Boost in Cyber Insurance Demand Drives Insurers' Response

Healthcare facilities, universities and schools continue to be on cybercriminals' radar, but attacks in the hospitality and gaming, power and utilities and other sectors reveal that no organization is immune to a cyber attack or failure of technology.

Healthcare and education clients had the highest cyber insurance take-up rates in 2014, followed by hospitality and gaming and services. Universities and schools present attractive targets because they house a vast array of personal information of students, parents, employees, alumni and others: Social Security numbers, healthcare information, financial data and research papers can all be compromised.

The broader scope of hacktivists contributed to the increase in cyber insurance purchases in 2014. Sectors that again showed notable year-over-year increases in the number of clients purchasing cyber coverage included hospitality and gaming and education. Other areas that stood out in 2014 included the power and utilities sector, with more clients buying standalone cyber coverage. Power and utilities companies frequently cite the risks and vulnerabilities associated with the use of supervisory control and data acquisition networks -- which control remote equipment -- and the cost of regulatory investigations as driving factors behind their cyber coverage purchases.

The reasons for purchasing cyber coverage vary from board mandates seeking to protect corporate reputations to companies looking to mitigate potential revenue loss from cyber-induced interruptions of operations. Insurers responded to this demand by offering broader cyber insurance coverage in 2014, including coverage for contingent business interruption and cyber-induced bodily injury and property damages. They also expanded availability of loss-control services, including risk-assessment tools, breach counseling and event response assistance.

Cyber Limits Rise

Companies with revenues of more than $1 billion have increased their cyber insurance limits worldwide by 42% on average since 2012, according to Marsh Global Analytics estimates. Over the same time period, healthcare companies have bought 178% more cyber insurance, and power and utilities firms have expanded their coverage by 98%.

Rising spending on cyber insurance

Cyber Rates and Coverage

Increases in the frequency and severity of losses and near-constant headlines about attacks and outages kept cyber insurance premiums generally volatile in 2014. Average rate increases at renewal for both primary layers and total programs were lower in the fourth quarter than in the first. The increased loss activity prompted pricing challenges for some insureds, particularly retailers, where renewal rates rose 5% on average and as much as 10% for some clients.

Market capacity also varied according to industry. Most industries were able to secure cyber coverage with aggregate limits in excess of $200 million, while the most targeted industries, like retailers and financial institutions, faced a challenging market.

Insureds also face heightened due diligence from underwriters seeking to drill down beyond simple reviews of the company's general information security policies. For example, insureds in the retail sector are being asked about their deployment of encryption and EMV (credit card) technology. And all insureds are now routinely asked whether they have formal incident response plans in place that outline procedures for protecting data and vendor networks and, more importantly, if such plans have been tested.

A Growing Concern

In 2015, managing cyber risk is clearly a top priority for organizations. For example, business interruption (BI) drew a lot of attention in 2014, a trend likely to continue throughout 2015. While BI has historically been thought of as the effect of a critical system going down for an extended period, technology failures and cyber attacks can create far-reaching outages affecting secondary systems, clients and even vendors. Such events can also lead to higher recovery costs, which are becoming a concern for boards of directors and senior management.

There is also concern stemming from the expansion of regulation and litigation. Regulators were active in policing cyber risks in 2014, and oversight is likely to expand significantly in coming years. With cyber risk seen as a critical issue on both sides of the aisle in Washington, D.C., companies will face regulatory challenges in 2015 and beyond.

Sectors that have already seen significant regulatory activity -- for example, healthcare, financial services and education -- will likely face more stringent regulations and larger fines. All industries should pay attention to existing and impending regulations, tighten controls and prepare to present and defend their compliance regime. Civil litigation in the wake of a breach or disclosure of a cyber event also escalated in 2014, with class actions at times following the disclosure of a breach by mere hours.

As demand for cyber insurance grows, remember that risk transfer is only part of the solution. Enhanced information sharing between industry and government is another step toward having a comprehensive risk-mitigation strategy. Insurers and brokers are expanding the availability of loss-prevention and risk-mitigation services such as risk-assessment tools, breach preparation counseling and breach response assistance. The expanded roster of services and enhanced coverage can provide additional value from policies, usually without a specific added premium.

Zenefits has hit a rough patch. Given the insults the company's CEO, Parker Conrad, has heaped on brokers, the schadenfreude percolating through the broker community is understandable. Yet declarations of Zenefits' demise are premature.

Zenefits raised $500 million in May at a valuation of $4.5 billion. At the time, Conrad claimed the company was "on track to hit annual recurring revenue of $100 million by January 2016." That was then.

Now, the Wall Street Journal is reporting that Zenefits is falling short of its earlier revenue projection. According to the Journal and Business Insider, through August Zenefits' revenue came in closer to $45 million, and the $100 million annual revenue figure is likely out of reach. In response, Zenefits is reportedly instituting a hiring freeze and imposing pay cuts. The latter step is cited as a reason at least eight executives left Zenefits.

In light of the news, in August or September Fidelity Investments reduced the value of its Zenefits investment by 48%, estimating the company was now worth about $2.34 billion. That's a seismic event: In May, Fidelity thought Zenefits was worth $4.5 billion. Just five months, later Fidelity thinks this was being a tad optimistic... if by "a tad" we mean "$2.16 billion."

In an interview with Business Insider, Conrad admits Zenefits is unlikely to keep his promise of $100 million of recurring revenue this year. However, he claims Zenefits continues to hire (although not as fast as in the past) and is happy with its revenue growth -- "more than $80 million of revenue under contract" (which, it should be noted, is not the same as saying "we've taken in $80 million so far this year," but maybe that's what he meant). Conrad also asserts that Zenefits is getting "closer and closer" to being cash flow-positive, although he doesn't expect it to get there until 2017 at the earliest.

Missing his $100 million commitment and having to address the subsequent fallout is no doubt adding to Conrad's stress levels. Because Conrad went out of his way to insult community-based benefit brokers on Zenefits' way up, the joy that brokers are taking in his discomfort now is to be expected -- and is arguably earned.

Should brokers assume Zenefits is no longer a threat, however? No. It is still bringing in tens of millions of dollars in revenue. According to what I've heard, only about 60% of this revenue comes from commissions. An ever-increasing portion of Zenefits' revenue flows from fees earned by selling third-party services or its own non-commission services. Zenefits launched its own payroll service, so its non-commission revenue will continue to climb. Zenefits may not be valued at $4.5 billion any more, but it is still valued at more than $2 billion. And while no CEO is happy when a serious investor marks down his company by nearly 50%, Conrad says Zenefits won't be out raising money anytime soon. As a practical matter, the impact of the devaluation on Zenefits is minimal.

In short, Zenefits is sticking around.

But I predict Zenefits is in for a rough time. Direct competitors like Namely and Gusto are raising money and stepping up. Community-based brokers are increasingly leveraging technology. (Full disclosure: Im co-founder of the company launching NextAgency, software that will help brokers level the playing field against Zenefits, so I'm delighted to point out this trend.)

While new initiatives like the payroll offering will create revenue streams for Zenefits, they also carry significant risk. Current partners will view Zenefits as a potential competitor. Management will be distracted from the company's core business. New skills and expertise need to be acquired. There's something to be said for focus, and Zenefits may be losing its.

Schadenfreude is German for deriving pleasure from the misfortunes of others. That Zenefits' current problems generate this impulse in the brokers they've insulted should surprise no one. That Zenefits will face challenges, problems and setbacks moving forward is inevitable. That community-based brokers should continue to take the threat Zenefits represents seriously is wise.

Judging by the reported 11,000 attendees at the Smart City Expo World Congress in Barcelona, representing companies and cities from around the world, there is great interest in governance, mobility, society, sustainability and technology. The trade show was very crowded even with sunny Barcelona beckoning with a perfect 71 degress Fahrenheit. The event gave me the opportunity to see many interesting technologies.

Many innovations focused on smart traffic routing and parking supported by sensors. Solutions in this category address the need to decrease traffic congestion or enable drivers to find available parking spots - problems afflicting many cities. Car-sharing initiatives by city communities were shown and explained. Autonomous vehicles were on display and got a lot of attention while raising questions about financing and insuring some of these new developments.

With the tragic events in Paris fresh in people's minds, city officials were very interested in any offerings dealing with crisis or incident management. One example was IOmniscient's 3D high-accuracy cameras that count people present in a specific location in real-time (very handy for crowd management). Other solutions include facial recognition capabilities to locate lost children or people of interest to law enforcement. These, and other applications, can assist local governments and citizens in preventing, managing and mitigating incidents.

"Gamification" got significant interest. Virtual reality environments supporting driving education or enabling urban planning were in high demand. There were also long lines for learning how to drive a real tram in a virtual city (not as easy as it looks). And Microsoft partner Geodan NEXT demonstrated how children were educated in smart-city development and how kids assisted in real-life design of schools and playgrounds by use of a Minecraft-based solution. In a more adult world, this same tool is being used for collaboration between professionals and citizens working together around a big touch table to address urban planning issues.

It is not often that I get to attend conferences outside of the insurance or technology space. It was refreshing to see the enthusiasm of professionals for innovation in a different industry. And many of the technologies that we frequently discuss, such as driverless cars, resource sharing, gamification, drones or Internet of Things, are equally relevant for smart cities.

I was also pleased with the balanced approach the people I spoke with took regarding opportunities for innovation and risk mitigation. Assisted by big data and technical developments, historically more disconnected industries such as technology, insurance, government, health or energy will quickly become more connected to each other, and the people of the world will collaborate in smart communities to capitalize on innovations.

The show in Barcelona was an uplifting experience, even with the sun beckoning.

The number of tests for prostate cancer has dropped, according to an article in the Wall Street Journal by Melinda Beck, but it's not for the reason that first jumps to mind.

The article says, "The declines follow the U.S. Preventive Services Task Force's recommendations against routine testing for prostate cancer, first for men aged 75 and older in 2008, and then for men of all ages in 2012, on the grounds that the benefits likely don't outweigh the harms."

I repeat: The benefits of prostate screening likely don't outweigh the risks.

In short, the diagnosis rate is down because, apparently, more doctors are following new guidelines on prostate screening. At last...at long last.

But there is a joker in the deck. Every wellness program I've looked at has not adopted the USPSTF's prostate screening guidelines. (There may be some that have adopted the new recommendations, but I haven't seen them.)

It’s worse. I asked a wellness vendor why the company was persisting in promoting prostate over-screening. His reply made my stomach churn. He said that, if his wellness company changed the guidelines, it would have to admit it was wrong in the first place. So it is keeping flawed recommendations to save face. I'd name the vendor, but I agreed to keep what he told me in confidence. Alas.

If you have a wellness program, and the vendor is not following that guideline on prostate screening, you need to give it a big nudge.

P.S. Years ago, I asked my primary care doctor to stop doing PSA tests on me.

There is a long road ahead before the full potential of telematics is reached, but, from an international perspective, it is clear that the Italian market has already accumulated the greatest experience in the use of telematics within the auto insurance value chain. One of the key characteristics of the Italian experience is the capacity of certain companies to innovate the way in which they deal with claims-thanks to the data collected from the black box.

The benefits of telematics data for handling claims are significant and can be divided into three main categories: a proactive approach, objective information and loss prevention and mitigation.

First, telematics offers insurance companies the unique opportunity to assume an active role that starts immediately after the incident. Traditionally, the company would wait to hear from the insured person that a crash has occurred.

Based on my experience, one aspect that turns out to be key to setting up the telematics approach is that it provides real-time data about the incident to the people in charge of claims management. Usually, this information only reaches the insurance company's assistance department. This data is crucial for two subsequent processes:

1. Provide a great customer experience after the crash. Think of how much information can be gathered directly from telematics data without having to ask the client for it. The whole experience delivered to the customer when interacting with the company is becoming more and more important; recent net promoter score studies show that the economic value of a "promoter client" is more than two times higher than a "detractor."
2. Anticipate activation of claims management. For example, the insurer can guide the client toward the preferred auto repair centers right after the accident. This maximizes the capacity to achieve savings within the context of an optimized customer experience that is meant to solve the customer's issues.

Second, telematics makes it possible to gather a structured set of objective data that can improve the understanding of the dynamics of the claim. The data can also provide an estimate of the damage. This information improves the decision-making capacity of the claims management process. It also assists the claims manager in searching for detailed information (such as additional inspections), which further reduces the time required. The information extracted from telematics data is the main factor that improves the efficiency and effectiveness of the liquidation process. Last but not least, this information is highly valuable from a legal point of view.

These two characteristics combined allow a significant reduction of the time spent in managing the different phases of the claims process-time that has proven to be directly related to the amount the company pays. Separating the knowledge supplied by the telematics (regarding the dynamics of the claims event in the case of minor damage) and combining it with the final claim cost by car brand and model will allow the company to make a liquidation proposal just a few hours after the crash. On the one hand, there is a clear benefit in terms of costs; on the other hand, there is a significant improvement of the driver's user experience.

Third, loss prevention and mitigation was the first area explored when telematics pilot projects began in Italy, with the focus on recovering stolen vehicles. Big data analysis has enhanced this capacity by allowing the automatic identification (based on data received from the telematics device) of a driving style that differs from that of the car's owner.

This mitigating capacity no longer concerns only the professionally installed solutions. It has now partially extended to new self-installing solutions: The act of uninstalling the device activates an alert. Similarly, there is the value-added services option that mitigates the risks linked to the driver and his car. For example, weather condition alerts or vehicle maintenance notifications could help influence client behavior and lead to a lower risk rate for the driver.