Did China orchestrate the massive hack of Anthem, the nation’s No. 2 healthcare insurer, to steal intellectual property it needs to jump start a domestic healthcare system? That’s one scenario being discussed by the security community and would fit the pattern of not just China, but other nations, stepping up cyber attacks to pursue geo-political goals. CrowdStrike's 2014 Global Threat Report details how China remains by far the most active nation conducting cyber espionage campaigns. Hot on China’s heels, in terms of executing concerted hacks for nationalistic gain, are Russia, Iran and North Korea, the nation President Obama blamed for the Sony Pictures hack. “China is a giant vacuum cleaner for intelligence,” Adam Meyers, CrowdStrike’s vice president of intelligence, tells ThirdCertainty. “They’re targeting dozens and dozens of organizations, going after intellectual property and trade secrets.” 3C’s  newsletter: Free subscription to fresh analysis of emerging exposures One particularly active Chinese hacking collective, dubbed Hurricane Panda, specializes in cracking the networks of Internet services, engineering and aerospace firms. Hurricane Panda uses "an arsenal of exploits" and has pioneered ways to slip into a network, then stealthily escalate privileges to roam deeper. While some of the data stolen by nation state-backed hackers most likely gets sold for profit, these attackers exist primarily to pursue strategic goals -- in China’s case to accelerate the development of domestic infrastructure to serve its massive population, which is rapidly becoming more Westernized. CrowdStrike’s threat report follows news pointing to Chinese hackers, referred to as Deep Panda, as the culprits behind stealing healthcare personal information for 80 million Anthem plan members and employees. CrowdStrike is not directly involved in the Anthem investigation. That said, Myers tells ThirdCertainty that his firm has monitored Deep Panda targeting other healthcare organizations in the past. China is dealing with a rising middle class for the first time in its history, he says. Smoking, drinking and poor eating habits are on the rise, with associated medical conditions sure to follow that are all too familiar in the West. “They are dealing with diabetes, heart conditions and cancers at a large scale for the first time,” Meyers said. Rather than import healthcare services, China prefers to rapidly build a homegrown system and appears to be willing to steal intellectual property to do so. “They want to be able serve their own domestic market for heart splints, diagnostic equipment and the like,” Meyers says. Hacking healthcare organizations could give China “the ability to leapfrog the design, test and build phases.” New attack model While China may run the most focused cyber spying operation, smaller nations, like Iran and North Korea, are discovering how cyber attacks can tilt the balance in geo-political disputes against a much more powerful adversary, namely the U.S. In response to economic sanctions imposed by the U.S. to stem Iran’s development of nuclear capability, Iran-backed hacking groups heavily targeted the financial sector in 2013, and in 2014 turned their focus to U.S. aerospace, defense and energy targets, CrowdStrike reports. And North Korea appears to have derived a model that could stir smaller nations to develop cyber attack strategies to gain political leverage on the global stage. The Sony Pictures hack embarrassed a Fortune 100 company and compelled President Obama to chastise North Korea. Cyber attacks have become a kind of twisted diplomacy. “It’s a viable way to coerce an adversary into doing something,” Meyers says. “I think we’re going to see this practice continue.”

Plaintiff lawyers can teach us something about the limits of predictive modeling when it comes to workers’ comp claims processing. Simply stated, it is better to presume than to predict. Lawyer advertisements blatantly tap the mindset that employers, insurance companies and adjusters cannot be trusted to pay benefits. Notice that the advertisements do not have to prove this as factual because the advertisements correctly presume this notion is a societal norm. In fact, the mindset is so prevalent that the advertisements do not even have to depict a claimant’s current frustration, but only need to describe what might happen if claimants don’t hire a lawyer. Essentially, the ads address a void of employee confidence that causes concern even though there has not been any direct harm yet. Consider an injured employee who hires counsel right out of the gate. No advertisement is required. The employee is already in a “fight back” frame of mind. What makes that employee different from others who, weeks or months later, might be swayed by advertisement to retain counsel? The difference is that the employer had a chance to act on the employee’s natural concerns in a positive way but lost it. The lesson here is that lawyers do not need predictive analytics or predictive models to screen for complicated claims. Lawyers presume that every injured worker has doubts that can be transformed into feelings of pending injustice. Making the claim complicated is easy once they get the claimant roped in. Everybody knows that attorney representation often increases claim complexity and potential dollar value simply because the claimants often accept a dark notion of fairness and are willing to do more than what common sense and medical research supports to maximize their claim. I contend that there is a stark vulnerability in today’s industry reliance on analytics and predictive modeling. Automated models seek to assess new cases and save resources by assigning low-level indicators to a fast-tracked category. The models assume a claimant is emotionally fine. Instead, we should realize that every fast-tracked claimant is subject to lawyer advertising and cautionary comments by relatives or co-workers that agitate the claimant’s natural fears and suspicions. We must also accept the poor societal image of insurance adjusters as a reality. We all experience claims that start as medical-only, then turn bad. I contend that the aggregate cost of these missed opportunities obviates any argument that predictive modeling is good for WC claims. Quick Tip: Presume and Act, Don’t Predict and Wait Presume: Like plaintiff lawyers do, consider that each and every injured employee, even with the smallest injury, is a potential litigation candidate. They all have some degree of caution, low confidence, confusion and fear. Be First: Strive to be first in exposing and defusing even the most minor employee concerns. At the outset of an injury, all employees should know they will have an open forum and a direct line of communication in the course of their claim should any concerns arise. Take Responsibility: The employer, not the adjuster, should provide this open forum and line of communication. The employee must be confident because of some historical degree of trust established with the employer. The adjuster is simply not capable of creating that atmosphere. Straightforward Methods: Creating a proper forum is not complicated. Immediate meetings with relevant parties such as the supervisor, WC coordinator, human resources, safety, etc. should investigate the claim as well as alleviate any employee concerns. Nurse triage, as a vendor process, can add a powerful layer of assistance and confidence. Bottom line: It might take all of 15-45 minutes to make sure an injured employee feels his WC claim is being handled fairly and is very important to the company. This added effort is peanuts considering the cost of claims that go rogue. The Only Prediction That Counts: While claim vendors perpetuate the false notion of efficiencies in predictive modeling, you only need to make one prediction: that your injured employees need to be satisfied so they won’t be sucked in by presumptive lawyer advertisements.

At WCRI 2015, the panel of Vennela Thumula (Workers Compensation Research Institute), Dongchun Wang (WCRI) Alex Swedlow (California Workers' Compensation Institute) and Artemis Emsilie (myMatrixx) tackled physician dispensing. Eighteen states have made changes to their rules regarding physician dispensing, with a focus on pricing. Four states (Pennsylvania, North Carolina, Tennessee and Florida) also put limits on the timeframe in which physicians could dispense. According to WCRI studies, the prices paid for medications dispensed by physicians decreased significantly after regulations were reformed. However, the prices paid after reforms were still significantly higher than for the same drug from a retail pharmacy. The exception was Ilinois, which saw the costs of physician-dispensed medications increase after reforms. This appears to be because of a change in prescribing patterns as physicians shifted to reformulated medications, which reimbursed at a much higher rate. So, it was this change in prescribing patterns that caused the cost increase, not the reform bill. Another study focused on whether physician dispensing increased opioid use. The results were somewhat inconsistent. There was an increase in pharmacy-dispensed stronger opioids, but overall the number of prescriptions for stronger opioids dropped. However, the frequency of physician-dispensed nonsteroidal anti-inflammatory drugs (NSAIDs) and weaker opioids increased slightly post-reform. Overall, there appears to be a drop in the total opioid prescriptions after physician-dispensing reforms, but not as significant as you would expect. A study by CWCI focused on whether injured workers had adequate access to retail pharmacies. Access was clearly not an issue, as almost all injured workers had multiple pharmacies within a short distance of their homes. The CWCI study also showed a greater delay in return to work and an increase in overall claims costs when there were physician-dispensed medications. This increase in costs was not simply the increased cost of medications but also increased disability and more frequent office visits. The final speaker focused on differences between workers’ compensation and the commercial marketplace with regard to physician dispensing. The biggest difference is that on the group health side the process is integrated. The focus is on speeding the care to the patient, not increasing the overall costs. The group health physician checks the insurance formulary and drug utilization protocols prior to dispensing. In workers’ comp, these different processes are siloed. The main reason for physician dispensing in workers’ compensation is the increased profits to the physicians, not integrated speed of patient care. Audience members reminded everyone that the focus around management of opioids needs to be mostly on the appropriateness of the medication, not who is doing the dispensing. There was a recent New York Times article on this subject that I encourage readers of this blog to review.

American employers will dispatch hundreds of staff members to an April gathering in Washington, DC, on corporate compliance issues. In all likelihood, hardly any CEOs in the workers’ comp industry are fluent in these issues, even though by the end of this decade they may change the direction of the workers’ comp businesses, separating the successful from the laggards. A change for workers’ comp leaders hides in plain sight. 

Claims have been declining in frequency by about 3.5% a year. It’s prudent to expect continued decline, as jobs become safer every year. Average claims costs, which used to bump up by more than 5% a year, aren’t growing beyond a few percent. Meanwhile, the typical employer’s agendas of employee leave, disability management and wellness have been surging in scope and complexity.

A few workers’ comp companies have already repositioned themselves to provide a broad array of solutions for these agendas. Most workers’ comp CEOs appear to think these burgeoning workplace concerns have little to do with their company’s future. They may be right. Or they may be whistling past the graveyard.

Since the beginning of the Great Recession, demographic, technology and legal trends visible in recent decades began to accelerate in the direction of smaller work injury risk and larger non-occupational employee risks. Frank Neuhauser of the University of California at Berkeley estimated that for most workers it is more dangerous to drive to work than to be at work.

And notice the rise in employee leave benefits and the greater emphasis on wellness (despite deserved criticism of overselling that concept). Perhaps this is how Occupy Wall Street ends: not in a revolutionary bang, but a paid parental leave benefit and a worksite yoga studio.

The Disability Management Employer Coalition puts on the April conference as its annual problem-solving exercise for the Family and Medical Leave Act and Americans with Disabilities Act. In addition to these federal mandates, states and localities have been promulgating leave-related mandates by the dozens. In January, for instance, Tacoma, WA, enacted a law requiring employers to offer at least three days of paid sick leave come January 2015. ClaimVantage, which sells absence management software, reports there are about 140 federal and state family leaves across the nation. When adding ancillary leaves like jury duty and blood donor leaves, the numbers rise to about 400.

Paid family leave is gaining momentum to become a mandated benefit. The U.S. is the only high-earning country that does not offer paid leave after the birth of a child and only one of eight countries in the world that doesn't mandate paid leave for new mothers.

According to the Integrated Benefits Institute, workers’ comp accounts for a mere 11% of all work absences involving a medical condition. Legally mandated and voluntary benefits, disability accommodation, wellness and other employee-centric programs have by intertwining themselves raised their visibility in corporate C-Suites. No single, memorable descriptor today captures them successfully.

Phrases such as “health and productivity management” and “total health” are bandied about. I suggest a simple term, “absence management,” in a report I wrote called “Seismic Shifts: An Essential Guide for Practitioners and CEOs in Workers' Comp,” which WorkCompCentral published in February.

The absence business beckons

Although the labels will evolve, the need of employers for expert outside assistance to address their agendas is bound to grow. Will workers’ comp companies deliver solutions?

The employers most ready to ask for help include those with relatively large workers’ comp costs to begin with: middle- to large-sized employers. Workers' comp claims payers today will process about $65 billion in workers' comp benefits this year. Perhaps 15% of these benefits involve very large employers. A further 25% involve employers that are not that large yet incur workers’ comp losses of about $200,000 a year or more.

Combined, these employers account for 45% of workers’ comp benefits. In other words, about half of the workers’ comp business today is with employers big enough to know they have a complicated absence management problem on their hands. Their human resource executives and legal counsel have been telling CEOs that the compliance risks of government mandates can’t be ignored. The mandates have grown into an elephantine mass so thick that without expert outside assistance an employer has a high probability – say, 100% -- of violating some law or other.

The more alert and early-adapting segment of employers tends to affiliate with the San Francisco-based Integrate Benefits Institute. Their individual staff members join the San Diego-based Disability Management Employer Coalition. These membership organizations feed the demand for training, resource networking and applied research. Broadspire, ESIS, Sedgwick, York and perhaps other third-party administrators already market services to manage at least some aspect of non-occupational absences. Workers' comp claims payers can manage non-occupational absences because they already possess the needed core competencies.

Pared down to the essentials, the workers' comp claims payer does six things:

• It processes claims.
• It assists at some level of intensity in reducing the rate of incidents that end in claims.
• It coordinates medical treatment and vocational recovery
• It understands return to work.
• It prices its product.
• It complies with pertinent laws.

Absence management does basically the same things. Further tying together workers’ comp and non-occupational absences in a workforce is the vital role of health behaviors of employees. The workers’ comp claims executive is acutely aware that health behaviors of injured workers often drive up claims costs. It is increasingly clear that smoking can be a more costly unsafe act than, say, distraction. Not that smoking precipitates an occupational or non-occupational injury (there’s scanty evidence of that), but that smokers are at more sharply higher risk to heal slowly and to become dependent on opioids in treatment.

The Integrated Benefits Institute has for years carefully analyzed patterns in non-occupational absences. It says that employers can and should use a coherent master plan for absences of all kinds, wellness initiatives and claims management.

In a phone and email exchange, IBI President Tom Parry suggests that workers’ comp claims payers think through their strengths in medical care, disability management and return to work.

“These all are key parts to an employer’s strategy in taking a comprehensive approach to lost work time management,” he says. Also, he advises, be prepared to benchmark and compare. Get hold of industry-specific benchmarking data across lost time programs, workers’ comp, FMLA and short and long-term disability. Become fluent in plan design terminology on the non-occupational side. Review the research literature on the cross-program impacts of health and a total absence management approach. IBI just published research on claims migration across programs, “Crossing Over -- Do Benefits and Risk Managers Have Anything to Talk About?”

Why companies may hold back

A workers’ comp claims payer might not enter the absence business because it does not believe that the workers’ comp industry is shrinking. For instance, the average cost of claims may, as it has in the past, grow faster than the reduction in injuries, leaving claims payers with an ever-larger pie.

But in recent years average indemnity and medical costs have greatly slowed their growth and in some jurisdictions declined. And the incidence of lost time compensable claims continues to decline, the one clear exception being the island of all exceptions, Southern California.

Also, workers’ comp executives might say there is no apparent demand from their clients for non-occupational services. This sort of flies in the face of the experience of TPAs that have launched non-occupational service units. (True, they focus on the higher end of the employer market.) But the observation also doesn’t jibe with the workers’ comp industry’s experience with emerging services in the past.

In instances of innovation, from medical bill review to pharmacy management to Medicare set-asides, large-scale and profitable services emerged after initial years of puzzlement. The fog banks eventually lift.

Then there are impediments in the broker community. It’s almost inevitable that absence management involves insurance products sold through benefits brokers and products sold through property and casualty brokers. They don’t talk a lot, even when working under the same roof. This complicates the work of product design and marketing.

Another reason to say no to opportunity is the challenging learning curve that absence management brings. But look at how the TPAs handled that. Those that have expanded their service offerings beyond workers’ comp claims all appear to forge alliances with, or acquire, servicing partners already steeped in some aspect of absence management.

It may be too harsh to equate workers' comp claims payers with the railroad industry, which 60 years ago asserted that it was in the railroad, not the transportation, business. Perhaps too harsh, but there may be a lesson in that story.

The decline of work injuries

Injuries requiring at least 31 days away from work

year	1993	2015	2022 (projected)
injuries	450,000	250,000	175,000
Total employment	110 million	133 million	148 million

   

What’s the big deal about big data? Big data is an enormously appealing subject these days. However, many companies miss the big picture when collecting it -- or drowning in it. There is an idea that the more data, the better. In fact, the focus should be on determining the right data to help improve the overall customer experience. Raining Big Data Big data is like the weather -- we’re talking about it, but we haven’t quite figured out how to do anything about it. Even fewer know how to leverage it. There are lots of questions but few answers. For example, who’s familiar with the 3Vs? But don’t be afraid to get wet. Data can be used to improve many things for many people – including your employees and customers. I say “can” because, before you do anything, you need to make sure you are using the right data -- and not just the random troves collected throughout the years. Mining the right data can lead you to the right customer problems, which can then be solved, creating a better customer experience. Background Checks Always define before measuring. What does great customer experience look like in your industry? Figure out what you need to do to wow customers and then compare that with the reality of your business as it stands now. I’ve utilized customer journey mapping, net promoter scores and voice of the customer metrics with great results. You can even provide customers incentives to help you out with input. Here’s a smart way to do that. Start by checking the leading survey on customer experience, the Forrester Customer Experience Index, to see where your organization lands. It might surprise you. Reliable Friends Are Powerful Friends Right data helps organizations do many things, including: • Anticipate what customers want before they ask for it • Identify customer pain points and resolve them • Create new business value • Improve customer service interactions • Develop more effective marketing and better products • Improve operational efficiencies Take Southwest Airlines. It's using speech analytics to extract data-rich info from live-recorded interactions between customers and personnel to get a better understanding of customers. Or read about Avis Budget’s data-driven growth model. It uses big data to identify the most valuable customers today and tomorrow. How, you ask? By examining a broad range of data sources, including structured information like purchase histories, CRM data and intelligence from industry partners, as well as unstructured information like social media, blogs and videos. Sorting through the data has helped all customers be treated like VIPs. These are only two examples of forward-thinking leaders using the right data to create actionable insights that monetize their data. There are many more. What about your competitors? How far along are they down the big data road? And are they using the right data?

Avoiding the ever-growing early 20^th century fear of the growth of socialism in the U.S., fueled by author Upton Sinclair’s The Jungle, the federal government was eager to shift the passionate, muckraker sentiment for a Marxist-designed social insurance system (aka workers comp) to the states -- only federal and certain interstate commerce employees are covered by federal statutes. Workers' comp relinquished an employee’s right to sue an employer for tort negligence and provided, in return, medical benefits and a wage replacement benefit. Dubbed “the grand bargain,” in the early 1900s, this tradeoff scheme has resulted in an ever-changing seesaw struggle between employers and employees that has wide disparity from state to state. The uneven playing field of each state and the District of Columbia has resulted in a pendulum effect fueled by work comp reform measures and case law that tends to only widen disparities among states as special interests battle for changes in state laws. Meanwhile, the insidious growth of work comp fraud fuels the call for additional reform measures, and some feel they have gone too far. Yesterday, ProPublica published with NPR a major article making just that case. Some facts from the article: In the past 10 years, 33 states have passed workers' comp laws that restrict or reduce benefits or benefit eligibility. Severely injured workers are the most likely to experience diminished benefits, as states like Florida have cut such benefits by 65% or more during the past 20 years. In California, insurers are able to re-open old cases and deny medical care based upon physicians who have never seen the patient. The percentage of workers' comp premium or self-insured dollars destined for injured workers has gradually diminished to where the majority of costs go to medical providers, drug companies and attorneys. Keep in mind: Workers' comp was touted and designed as a no-fault, lawyerless system. Workers' comp administrative law judges in California used to called “referees.” In August, a Florida circuit judge ruled that the state’s workers' comp law is unconstitutional, saying that benefits had been “decimated” and that the law “fails miserably” as to health, safety, welfare and morals. If the ruling is upheld, it is quite possible that workers in Florida may be able to sue their employers to force the legislature to enact new workers' comp laws. These issues have drawn the attention of Sen. Bob Casey, D-PA, who introduced the Payroll Fraud Prevention Act, aimed at reducing employee workers' comp misclassifications ,and is now working to have Congress make laws for basic protections for injured workers. Adding more fuel to the fire, the states of Texas and Oklahoma have workers' comp "opt-out" provisions for employers, with Tennessee and other state pondering this option, as well. Is this abandonment of the 1911 workers' comp model a sign that disruption is a likely outcome for this century old system? The burning question is whether the U.S. workers' comp system should be rebuilt from scratch. Should Medicare and workers' comp be woven into a federal system of benefits that doesn’t distinguish between injured workers from one jurisdiction to another? Is federalization of workers' comp an inevitable outcome of these events? Join the conversation…

Gradually, over the last four-plus years, several management liability insurance (MLI) carriers have shifted their underwriting appetite and guidelines nationally, most dramatically in California. These changes have included some combination of: ·         Increased rates ·         Increased retentions ·         Reductions in coverage ·         Reductions in total limits offered ·         Reductions or removal of wage and hour defense cost sub-limits ·         Non-renewal of insureds based on industry, asset size, financial condition or loss experience. This is quite a change, as for the previous 10-plus years there has been a surplus of capacity and MLI carriers were eager to write accounts at very attractive rates and terms. While there are still numerous MLI carriers with significant capacity, including some new entrants, the marketplace appears to be reaching a point where this capacity will no longer be use to offer the terms and pricing that we had been accustomed to seeing. This raises the question, “Why?” Based on our conversations with MLI carriers in this niche, here are a few of the reasons: ·         Poor economic conditions five to seven years, ago leading to a significant spike in the frequency of employment practices liability (EPL) and directors and officers (D&O) related claims ·         Dramatically rising EPL claims expenses (even if a claim is without merit -- remember, these policies cover defense costs) ·         Significant and continual increase in the filing of wage and hour claims (wage and hour suits are up 4.7% in the last year and 437% in the last decade) ·         Uptick in D&O claims involving bankruptcy-related allegations, breach of contract, intellectual property, federal agency investigations and judgments, family claims  and restraint of trade ·         The duty-to-defend nature of the policies, forcing carriers to provide a wide expanse of defense coverage for what might be arguably uncovered claims or insureds What can our current (and new) non-profit and privately held management liability insureds expect as a result of the changes in the marketplace? Our recommendation is to set expectations as follows: ·         There will be increases in retentions and premiums. ·         Smaller clients will need to absorb bigger percentage increases in premium and retention (as well as possible reductions in coverages), although in many situations the incumbent carrier will still be the best option if the increases are not outrageous. ·         A reasonable degree of competition and capacity will still be available for the larger management liability client. This may help mitigate increases in premium and retention. ·         Increases will be felt by insureds located in major cities (carriers generally still like risks in smaller cities and outside of states such as California, Florida, Illinois, New York and New Jersey). ·         Coverage for the defense of wage and hour claims will be more difficult to obtain and, when available, likely more expensive to purchase and with possibly lower limits or higher retentions. ·         Non-renewals by some carriers, based primarily on class of business or location. Some of these classes of business include: o    Real estate o    Healthcare o    Restaurant/retail o    Social media o    Pharmaceuticals o    Tech/start-ups ·         Carriers are asking for much more underwriting information than they have previously, especially if the insured has challenging financials, the insured is seeking additional funding or the insured has a challenging loss history. Since 2010, Socius has been advising our clients that the MLI market appeared to be trending toward a hardening, following on the heels of numerous years of softness. As we get deeper into 2015, we continue to believe that this is the case.  The gradual transition that we initially described has, in fact, taken firm hold. We hesitate to pronounce the market as officially “hard” only because we hear rumblings that suggest that market conditions could very well deteriorate further, making what we consider hard today even harder. For the moment, the watchword to agents and brokers is: “Manage expectations!  Difficult news is coming, so let clients know early – and often.”

Bryan Adams of @PhCreative recently wrote a great piece on the insurance brand here. Dare I say it's an outsider's perspective on the insurance world, provocatively titled: "Imagine if Insurance Brands Started Marketing Like Red Bull." He really got me thinking, and I wanted to share my perspective: 1. This is a hugely exciting idea, with lots of disruption to come, but you could argue that what we're experiencing is evolution, in the same way that Pixar was an evolution to Disney -- Disney is still about. The insurance industry is changing, general insurance quicker than life or health (as general insurance is what most of us see or experience), but all will evolve over time. 2. The insurance industry is one of the oldest; you have to go back to Edward Lloyd in 1688 to see the wonderful tradition of the coffee shops of London and how it all began. In many ways, we are returning to this tradition and bias toward the customer. It's great to see, but many industries are doing or have done the same. Anyone want to talk about the rise or fall of bank branches? 3. We are steeped in tradition, and like many industries need to have the old guard making way over time to the new guard. We will always have the traditional guys, the new guys and the bleeding-edge guys. From life policy to telematics and so much more in the middle, it's an exciting space. Many new CxOs are from industries outside of insurance, bringing in new ideas tried and tested in other industries that resonate well. 4. We have some amazing brands in the UK and worldwide from Direct Line, Churchill (yes, the dog), Legal & General (the bowler hat), LV=, Zurich, Allianz, Geico (the lizard), Prudential (the man from the Pru) and so much more, each with its own catchy strap line, just like those guys who are never knowingly undersold -- and you know who I mean without even looking it up (for the UK guys, anyway). In fact, I think brands are one of the biggest investment areas over the last few years, and are paying off. We can engage and resonate better with a new breed of savvy consumers with a limited and reducing attention span (regardless of the product or service). 5. Our brand is key (to most folks who care). We are generally trusted, irrespective of the line of business; we are long-term rather than short-term. Can you name the brand if I said:.

• Every day matters
• Drive like a girl
• With you ever step of the way
• Redefining standards
• Where you mean more
• It’s about time.

These brands, to me, say core values, vision, purpose and belief. We are not a sugary soft drink; we are the guys who help when your house is flooded, when your kids have written off the car, who help you through a hospital visit, who keep you well in retirement. We don't want to be a sugary soft drink. And we are doing all of this without our customers really ever wanting to engage regularly with us -- if they do engage, you know something is changing or, worse, has gone wrong. Apparently we now look at our phone more than 200 times a day. Your insurer, you call perhaps once a year, at best. You could argue that this makes the brand experience even more important. As for goosebumps, you are right: The insurance industry doesn't sell goosebumps. In days gone by, the insurance provider was there after the event. More recently, insurance has been there with you. Because of technology and brand disruption, insurance will be there ahead of your need -- from the crashed car creating a claim, to the water leak in the office block that sensors detect, turning off the mains and notifying the insurer and loss adjuster. When it comes to insurance, I'll pay extra to know I'm safe and will avoid the goosebumps.

If you think that the analysis you use to identify the strengths, weaknesses, opportunities and threats (SWOT) in your business is adequate, beware. It is intended to provide a 360-degree view of your risks and opportunities but often fails to fill that requirement because of superficial applications and failure to look at risks from connected systems. If your risk and opportunity analysis techniques are lacking, you could be very unprepared for the next recession, disruptive technology or game-changing way of thinking that could soon affect you. Too often, the last domino that struck in the last crisis is the main focus of all future risk-mitigation efforts. The whole string of triggers and threatening signals that led up to that last publicized tipping point and bursting bubble are ignored. Here are the 10 most common shortcomings for SWOT analysis:

1. Underestimating the role that vertical and lateral cascading human factors can play and having fragile back-up plans
2. Absence of war gaming, stress testing and disruptive failure mode analysis testing of your leadership mindset, strategy, work culture, processes, products and services
3. Lack of focus on disruptive innovations; you respond to them but do not create them with proven innovation-on-demand techniques
4. Assumptions that cyber security and patents are safe, so they aren't stress tested with advanced cyber-circumvention and patent-busting techniques
5. "Taboo talk rules"; uncomfortable discussion topics are avoided or not identified with focused and anonymously solicited inputs from employees
6. Ignoring "Trojan horse" risks that are secretly lurking in the hearts and minds of your employees or piggy-backing on purchased technology, software, products or services
7. Lack of use of "gamification" techniques to address the most sensitive threats in a disciplined, humane, engaging and effective manner
8. Failure to include effective strategies to attract and retain key human talent
9. Failure to identify low-profile threats that create unstoppable cascading risks -- from leadership to culture to processes to bad performance to weak responses to critical situations
10. Lack of use of external perspectives to challenge group-think assumptions of perceived safety and robustness

Simple SWOT analysis and risk-management techniques will not offer the protection required to survive the next economic crisis or disruptive technology. KISS concepts (keep it simple, stupid) have lost their ability to identify and protect against complex cascading risks. The world is a fragile, hyper-connected and cascading system full of surprises that will punish casual optimists and reward those who hope for the best but seriously plan for worst-case scenarios. The World Economic Forum's 2014 World Risk Report describes the global risks that can quietly cascade across borders and affect organizations in unsuspecting and surprising ways from a variety of threatening and linked factors. The complex dynamics that exist between developed, developing and emerging world markets is further complicated by the fact that many organizations know very little about the cascading system dynamics within their own four walls. Classic methods that attempt to describe the risk and opportunity landscape for individuals and organizations have not kept pace with the rising complexity and interactions between highly networked workplaces, global economies and internal and external threats. We have now entered a new era where we need new ways to describe and understand the complex world we have created, which has outgrown the simple tools we like to describe it with.