Let me assure you from the outset that this article has nothing to do with losing belly fat, curing diabetes with cinnamon or buying real estate with no money down. And, unlike other enticing articles that make you wade through 30 minutes before they tell you about that “one trick,” I’ll get right to it. The trick is: communicate with injured workers.

This is something that most workers' comp professionals have known for a long time: Generally speaking, injured workers don't call the TV plaintiff attorneys because they want more money -- they call plaintiff attorneys to file a claim because the employer/carrier has not communicated about benefits claimants can expect to receive or how the workers' compensation process works.

I know this to be true because of what plaintiff attorneys tell me. When I have my first conversation with opposing counsel on a new claim, she will often say something along the following lines: "Brad, if your employer/carrier had just explained to my client what was going on, the claimant wouldn't have hired me to file a claim."

Once the plaintiff attorney tells the claimant about his workers' compensation rights, the claimant then believes that he has "secret" information, and that creates a lack of trust toward the employer.

Listen, you can buy a kidney and find the schematics for a nuclear reactor online these days -- and employers think that claimants can't find out about their workers' comp rights? I have one word for you: Google.

So, why do many employers and carriers insist on giving claimants the “mushroom treatment” (kept in the dark and covered with....fertilizer)?  I can think of three reasons.

First, many employers wrongly believe that communicating with the claimant about the workers' comp process will encourage more claimants to hire attorneys and file claims. While this may seem intuitively correct, it is empirically false. Claimants hire attorneys because of too little information, not too much.

Employers think: “If I have a safety meeting on what benefits injured workers receive when they file a comp claim, aren’t I just teaching them how to get more money out of the process?” Legitimate concern. But once an employer understands that the motive to hire an attorney and file a claim is more often driven by uncertainty rather than greed, this concern tends to diminish.

Second, workers' comp professionals (HR directors, safety directors, adjusters, defense attorneys, nurse case managers, etc.) know the process inside and out. We know all of the acronyms, the sequence of events and even a lot of great big medical terms that sound really cool at parties. ("Epicondylectomy" and "acromioclavicular" are two of my favorites.)

It is easy to forget that a claimant experiencing his first work-related injury has NO IDEA about how doctors are chosen, how TTD benefits are calculated or what MMI even means. Because we often fail to discuss comp rights and benefits with claimants without using the legalese and comp terminology that we throw around on a daily basis, the claimant becomes more confused than a dad reading a bicycle assembly guide translated from Chinese. 

Third, I’ve been told by plaintiff attorneys that many claimants are treated from the outset as if their claim is fraudulent. Don’t misunderstand me: I’ve seen my fair share of fraudulent claims - - most workers' comp professionals have. But not every claim is fraudulent. The challenge is spotting the fraudulent claims that are hidden within the legitimate claims. If employers or carriers treat every claimant as a fraud even before there is evidence of fraud, we’re giving free advertising to plaintiff attorneys. 

I say: Bypass the cloak-and-dagger approach, tell the employees up-front about what to expect and watch the volume of litigated claims go down. 

Now, if I could only find that “one trick” to regrow hair!

The Last Analog Generation—let’s call them LAGgards—are departing, and in their wake a fascinating new world is emerging.

I’ve been surprised lately, when meeting with the nation’s leading financial service providers and discussing the tsunami of intergenerational wealth transfer that is upon us. The generation that is now entering (or will soon enter) the work force stands to receive something like $30 trillion of personal wealth over the next 20-30 years. That’s a staggering figure by any measure, but what’s really surprising is the apparent lack of preparedness and stunning dearth of appreciation for the opportunity – and potential threat – this massive wealth transfer represents to stalwart companies and even entire industry sectors.

For context, according to research, there exists roughly $230 trillion of personal wealth around the globe. That’s both financial wealth, like cash and its numerous equivalents, and real and personal property; the figure does not include corporate or public holdings. To give some sense of perspective to the enormity of that figure, just consider that the gross world product (the combined market value of all the products and services produced in one year by all the countries in the world) totaled approximately $85 trillion in 2012. Thinking about the number another way: To accomplish the transfer of $30 trillion over the next 30 years would mean that more than $1.9 million would have to change hands every minute.

By the time the last baby-boomer has shuffled off this mortal coil, about 13% of all global personal wealth will have changed hands in one form or another. Understanding some of the techno-societal distinctions between the bequeathers and the bequeathees should be a discipline required for anyone who aspires to make sense of the opportunities or threats attendant to the wealth transfer.

Because we develop a sort of digital life for the things in our users’ lives (by collecting and digitally managing all the information about those things), Trōv is becoming a technological bridge between the LAGgards, who were born before the digitization of everything, and the emerging generations who are indisputably “born digital.” In our interactions with users and the service providers that are precariously dangling between these two distinct constituencies, we are developing a sense for both parties. A couple of the big thoughts that seem to aptly describe what influences the perspectives of two groups are at once technological and sociological: the death of privacy and the power of information symmetry.  

Privacy is dead

LAGgards are concerned that their personal information remains private. Okay, this should neither surprise nor irritate any of us. However, the norms for what is considered private are being entirely redefined by the constant revelations of breaches (both nefarious and national) – and the new (ab)normal boundaries of self-disclosure regularly displayed on the massively adopted social media platforms like Facebook, Twitter and their do-alikes.

Just take a peek (if you have the stomach for it) at Instagram’s ersatz cult of spoiled children referenced as #richkidsofinstagram. Photos are regularly posted depicting the profligate lives of a generation of an über-wealthy and unbelievably overexposed generation reveling in their latest acquisitive binge or imbibing impossibly costly libations.

As Robert Scoble, one of the oracles for the emerging generation of Digital Natives, intimated to me, privacy is all but dead, and it is no longer a core issue of the emerging generations. So what? Self-disclosure and widely available information about all connected people and institutions will make a profound impact on reputations: personal, corporate and governmental, and if you’re attempting to engage the new generation of wealthy, transparency is mere table stakes, at best.

Information symmetry -- your advisor is dead (he just doesn’t know it, yet) 

Information symmetry will be the death of intermediated businesses. When Netflix started shipping CDs and DVDs to homes throughout the U.S. in the late 1990s, the writing was on the wall for the leading distributors of home video. And, as cloud storage and high-bandwidth digital pipelines became ubiquitous and increasingly affordable, Blockbuster (as a proxy for all things analog) scuttled its storefront retail business – bowing out because its distribution channel was obliterated by technology’s relentless march.

Retail auto sales have undergone a somewhat similar coming-of-(digital) age, as well. For years, LAGgards have been subject to the demeaning process of haggling over price, because details about costs were kept intentionally opaque, giving the salesperson the information advantage. (This imbalance in access to data is sometimes referred to as information asymmetry). The sales process was successfully upended when data from the likes of Carfax and Kelly Bluebook were made instantly accessible to anyone with an interest and a browser. 

For roughly similar reasons, LAGgards have grown dependent on trusted advisers, various specialists and brokers to make decisions about many of their important investments, risk, spending and even medical choices. Data asymmetry is at the very center of the LAGgards’ dependence on these data-equipped intermediaries, and models for business -- even entire business sectors -- have been built on its expected continuation. 

But make no mistake, these intermediated, information-unbalanced businesses are (or soon will be) in trouble; their added value questionable. With massive data availability, the information-scales are being leveled, and with instant, mobile connectivity, the generation-digitalis is no longer apt to transact or make decisions through a human intermediary. The generations of Born Digitals demand immediate, hands-on, intermediary-free access to nearly all aspects of their lives. 

So what? If your livelihood assumes that your clients will be dependent on you because you alone hold the magic elixir of unique information, beware. You might need to consider embracing the new models of info-egalitarianism rather than resisting them. 

To wit, we recently began testing an in-app capability to insure a newly acquired item at point-of-sale with literally the push of a button. This action alerts the broker-of-record to information that had been previously unavailable and carries tremendous customer-retention and quality-of-service implications (not to mention risk management and potential revenue upticks).

I have been perplexed by some brokers, who appear more concerned about the incremental work that this might create than the expansion and quality of their service. Powered by data accessibility, irrespective of our entrenched operations, the march toward disintermediation is inexorable.

Although these two ideas -- personal privacy and disintermediation –- may appear to be distinct families of thought, they are much more than distant cousins. Indeed, they are utterly related and perhaps alone frame the most important distinctions between the LAGgards and the Born Digitals.  

If you depend on your intermediated services and expect them to remain relatively unchanged, you may be setting yourself up for incalculable risk (and you’re most likely a LAGgard). However, if you are comfortable with gobs of information floating around in the cloud and are adopting the tools that help you benefit, then you are likely going to survive the turbulence.

The opportunities arising from the merging of data and disintermediation are just becoming evident – and these trends will entirely reshape seemingly unassailable businesses and entire industries. 

As the fabric of personal information privacy becomes increasingly threadbare, the expectation for transparency in all segments of commercial life will be elevated to a prerequisite for any type of engagement. And as new generations of shoppers, investors and the “serviced” become less concerned about privacy and more connected to -- and facile with -- data, business as usual will be anything but.

(This article first appeared in JetSet magazine.)

Think your healthcare organization or health plan has healthcare privacy covered? Think again.

A series of supplemental guidance issued by the Department of Health and Human Services Office of Civil Rights (OCR) in recent weeks is giving healthcare providers, health plans, healthcare clearinghouses (covered entities) and their business associates even more to do. They must review and update their policies, practices and training for handling protected health information. This is beyond bringing their policies and practices into line with OCR’s restatement and update to the Omnibus Final Rule that OCR published Jan. 25, 2013.

Covered entities generally had to be in compliance by Sept. 23, 2013, but many covered entities and business associates have yet to complete the policy, process and training updates required to comply with the modifications implemented in the Omnibus Final Rule.

Even if a covered entity or business associate completed the updates, however, recent supplemental guidance published by OCR means that most organizations now have even more work to do on HIPAA compliance. This includes the following supplemental guidance concerning its interpretation and enforcement of HIPAA against covered entities and business associates published by OCR since Jan. 1, 2014 alone:

·         HIPAA Privacy Rule and Sharing Information Related to Mental Health

·         Spanish Language Model Notices of Privacy Practices

·         CLIA Program and HIPAA Privacy Rule; Patients' Access to Test Reports

·         Proposed Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule and the National Instant Criminal Background Check System (NICS)

Beyond this 2014 guidance, covered entities and their business associates also should look at enforcement actions and data as well as other guidance OCR issued during 2013 after publishing the Omnibus Final Rule, such as:

·         HIPAA Privacy Rule: Disclosures for Emergency Preparedness - A Decision Tool

·         The HIPAA Privacy Rule and Refill Reminders and Other Communications About a Drug or Biologic Currently Being Prescribed for the Individual

·         Health Information of Deceased Individuals

·         Student Immunizations

·         Model Notices of Privacy Practices (English)

With OCR stepping up both audits and enforcement and penalties for violations, covered entities and business associates should act quickly to review and update their policies, practices and training to implement any adjustments needed to maintain compliance and manage other risks under these ever-evolving HIPAA standards.

When conducting these efforts, covered entities and business associates should not only carefully watch for and react promptly to new OCR guidance and enforcement actions but should document their commitment and continuing compliance and risk-management activities, while taking well-documented, reasonable steps to encourage business associates to do the same. This documentation could help demonstrate that an organization maintains the necessary “culture of compliance” commitment needed to mitigate risks in the event of a breach or other HIPAA violation.   

When carrying out these activities, most covered entities and business associates also will want to take steps to monitor potential responsibilities and exposures under other federal and state laws, such as: the privacy and data security requirements that often apply to personal financial information; trade secrets or other sensitive data; and judicial precedent.

Insurers have always been at the forefront of responding to user needs. Direct marketing and online portals make it easier for consumers to understand and purchase insurance. Usage-based insurance (UBI) allows safe drivers, particularly those who drive less, to reduce their premiums. Even insurance company-sponsored coffee houses offer a unique way to gain financial service knowledge and one-on-one access to experts.

Today, a different type of opportunity exists that may help insurers not only meet changing consumer needs but gain first-mover advantage in the process. Called the “sharing economy,” this market involves renting privately or company-owned assets—generally cars or homes—primarily through an online, peer-to-peer network. While the car-sharing market in North America is exploding, few insurers have even begun to explore this market.

As people continue to seek new opportunities in this economy, and as Millennials begin to take control, it’s likely that this idea of “sharing” will not only thrive but expand. The question is: Can insurance companies make a reasonable profit from this market? If so, how will they adapt their models to meet the new consumer demands?

To begin answering these questions, we will take a look at three areas. In this article, the first part, we’ll define the sharing economy and examine some of the innovative models already in play. Then we’ll discuss the insurance challenges that sharing-economy companies are facing, and the insurance industry’s response. Finally, we’ll look at four steps insurers can take to begin evaluating the sharing economy as a viable business opportunity.

Access trumps ownership

The sharing economy offers a fast and efficient way for owners of assets and renters to connect through online services. Two main stars have emerged in the sharing economy: auto and home. Companies like RelayRides and Getaround can help a consumer rent a car for a few hours of errands or even enjoy an SUV for a weekend in the mountains. The other main sector, home rental, allows owners to rent out their homes or simply a room on a short-term basis through companies like Airbnb. As the sharing economy branches out, owners are renting out other assets such as parking spaces, tools and camping gear.

It’s all about monetizing unused capacity of an asset for owners. For renters, it’s about gaining quick and easy access to those assets without being bogged down by ownership. Access, in a sense, becomes a service that is paid for per time increment or by distance.

Much of this market is being driven by the Millennials who grew up with the ideas of sharing, renting and paying small transactional fees for access to things such as music and movies. This generation has been slow to move out of their parents’ houses, and many delay getting their driver’s license for a few years. They simply don’t value ownership the way previous generations have. That means sales are down for this generation, especially on large items such as cars.

As the sharing economy becomes more popular, large companies are jumping into the mix. For example, Avis paid $500 million for Zipcar to gain access to the peer-to-peer market. Daimler’s Car2Go charges 38 cents per minute including fuel, insurance and parking. And GM invested in RelayRides to allow peer-to-peer rentals of OnStar-enabled cars.

There’s a reason consumers and corporations are embracing this model. Forbes predicts that the global sharing economy will grow by 25 percent this year, reaching more than $3.5 billion. Frost & Sullivan estimates that the North American car-sharing economy alone will reach $3.3 billion by 2016, with 9 million members participating. And once self-driving cars come into play, decreasing the risk inherent in different driving behaviors, the car-sharing model could explode.

Next week, we'll explore the interactions between sharing-economy advocates and insurance companies.

In my conversations with insurers, I am frequently asked about IT investments. People want to know what the trends are around IT budgets and how their spending on information technology compares with others. To help explore these topics, we analyzed insights from our portfolio of research and did some additional analysis.

Working on this research project was illuminating. The findings validated and quantified some key assumptions about how and where technology investments are being funded. Some of the major conclusions show that:

• While there is wide variance in the percentage of premium that insurers are allocating to the IT budget, the industry average continues to run between 3% and 3.5%.
• A significant portion of the IT budget is allocated for discretionary spending. Nearly 40% of insurers indicate that 10% or more of their budget is discretionary, and more than 20% of insurers allocate more than 20% of their budget to discretionary use.
• There is major investment in technology-based solutions occurring outside the IT budget. 59% of insurers report significant spending outside the IT budget, with 5% of insurers stating that spending outside the IT budget exceeds 50% of the budgeted IT spending.

There are no hard and fast rules dictating an appropriate or normal or acceptable percentage of premium that should be spent on the IT budget. Spending levels are and should be influenced by the business climate, strategic initiatives and the competitive landscape.

It is great news that more insurers report better alignment of IT investments with business objectives and strategic initiatives. This alignment is critical to driving new collaborative approaches for addressing both challenges and opportunities. The industry is serious about investing in the modernization of systems and architectures. That investment is laying a foundation for the optimization of business processes and operations in every aspect of the environment. The result is transformation that delivers real value and the ability to drive innovation for the future.

This is a pivotal time for the industry, and technology is an essential enabler for the capabilities that will deliver needed growth and efficiencies in the coming years.

During the planning process, it is important to look beyond how the budget compares with that of peers, and to assess what funding is required to support the business capabilities that are needed to compete. Understand what the gap is. It may be necessary to exceed the traditional percentage of DWP allocation that your company has grown comfortable with. Realize that in today’s environment, the reality is that IT spending is high, and many companies are able to find additional funding in business units to help meet company goals and position for competitive advantage.

For more information from our recent report, IT Budget and Spending Realities and Trends in the North American P&C Insurance Industry, please visit our website: https://strategymeetsaction.com/.

I once saw an episode of the television show "Undercover Boss" that offered a good lesson for employers everywhere. 

For those of you not familiar with it,  "Undercover Boss" is a CBS show where a CEO who is completely unaware of what actually happens within his company dons a cheap and unconvincing disguise and spends a week working undercover within the organization. He meets employees along the way who, while turning out to be the bedrock of success for the company, have every possible malady and crisis occurring in their personal lives. The CEO learns that her company does not train, supply, support or develop employees at any acceptable level. One CEO actually found that his female employees had to urinate in a can when on the job. Ironic when you realize his company was Waste Management. The program ends every week with the CEO revealing himself to said employees, giving them each a bazillion dollars, a paid vacation to Disneyland, new teeth and a promotion to head a new department designed to do whatever they happen to be good at, like peeing in a can. I personally think the employees are being paid off to keep quiet about the CEO's inability to actually perform any job within the organization.

If you haven't guessed, this isn't my favorite show. However, my wife and I are a typical married couple and have to have something to watch, or risk having to "talk," which always gets me in trouble, so we load up the DVR.

I have often joked in the office about doing a spoof video of "Undercover Boss. The joke, of course, being that, in our small office, everyone knows me and is already aware that I am incapable of performing any job within my organization. In the real show, we always see the CEO's palatial home(s), fancy cars, private jets and drop-dead-gorgeous families. In my version, you would see a modest home with a lawn in desperate need of new sod, a Hyundai Santa Fe that hasn't been washed since 2010 and our four cats, one of whom is blind. The highlight of the home portion would likely be my mopping up the occasional accident when blind kitty is in the box but doesn't know his fanny is over the side. You would not see my wife, as she hates having her picture taken. Even our wedding photos are just of me. They came out okay, but frankly the one of me throwing the bouquet just looks staged. 

I suppose I could wash the Hyundai before we commenced filming, or try to borrow my wife's Mercedes, but she requires a hefty security deposit.

But, as usual, I digress.....

The episode about which I wish to opine featured Jose Mas, CEO of MasTec Industries, an energy transmission construction company. The company builds pipelines, transmission lines and other energy infrastructure. The company was founded by Mas' father, a Cuban immigrant who passed away in 1997, at the age of 58. By Mas' own account, his father was a "hands on" businessman, involved in every facet of the operation. This really became apparent in one segment of the show. 

Mas junior was in Oklahoma, where he had just demonstrated his complete inability to run a piece of heavy equipment while working with a field supervisor named Rich, who was from Georgia. Rich had been with the company almost 15 years and was preparing to retire. At one point, Rich said he "got hurt real bad" while working for MasTec. With the show's history of featuring employees who willingly rip the bejesus out of their employers while standing in front of multiple camera crews, I braced for the worst, but it didn't happen. Rich explained that he fell in a hole and crushed his ankle, the treatment of which involved surgery and multiple screws. He followed up by saying, after a significant pause, "MasTec treated me real good on that deal." 

And what was it that made Rich feel that way? The CEO at the time, Mas senior, personally contacted both Rich and his wife to express his concerns and offer any assistance they needed while Rich was off the job. It was a small gesture that resulted in a huge long-term benefit. MasTec likely did other things to make the process a positive outcome, but it struck me that it was the outreach to his wife that so impressed Rich.  

Communication with an injured worker from a high level of the organization is great. Communication with the worker's family and loved ones is pure gold. What a brilliant concept.

The story is even more remarkable if you do a little basic math. The accident happened while Mas senior was still alive, so more than 14 years earlier. Rich was not yet at his 15-year mark with the company when he told his story, so he was a relatively new employee when the accident happened. MasTec was a very large and successful company when the accident happened--yet the CEO made the effort for a relatively new and unknown employee.  

I am intrigued by the continuing trend of pursuing competitive advantage through early adoption of analytics, and the concept of "first mover advantage," but was taken aback by a contrary view expressed at a recent round table on compliance and risk. There, it was suggested that, because of uncertainty about the requirements of insurance regulators, it might be better to wait before committing time, money and resources.

The participants talked of "last mover advantage," and in their particular case perhaps they have a point. I wondered where else last mover advantage had been used and to what effect, and what the implication is in the insurance sector. Last mover advantage is a tried and tested strategy with our old friends, the retail sector. Own-label branding often relies on branded suppliers to invest in marketing to establish a new product, before retailers enter the market with a lower-priced version. It was suggested at the round table that "first mover advantage" is a myth. Chux was cited as an example–it entered the market ahead of Pampers but lost out.

Personally, I don’t buy into that idea. Effective innovation is no longer just about being the first to have a good idea, but being able to quickly execute on the idea in a sustainable way that meets the customer’s needs.

There's no doubt that innovation is speeding up. IHS Consulting cites a study showing that, of 46 major innovations in the 20th century, the average timespan between introduction and follow-on declined by 90%, from 33 years to 3.4 years, and that was in the pre-digital age. What does innovation look like at the speed of WiFi?

In a rapidly growing global marketplace, speed to market remains critical for insurance innovators and can mean the difference between success and failure of a new venture. Analytical accelerators can only increase that speed and provide greater certainty of a successful outcome. Incremental improvement that continuously differentiates, including customer and staff feedback obtained through social media analytics, allows insurers to keep ahead of their competition.

How insurers obtain and keep competitive advantage remains critical, and innovation is clearly a part of this. But I wonder, what is more important: the quality of the innovation, or the quality of the competition?

I am reminded of an old joke, which goes something like this:

Two hikers in the jungle came around the bend to find an enormous tiger up the trail. The tiger spies them and begins running toward them at a full speed, licking its lips. One hiker drops his backpack, sits down, throws off his boots and starts lacing up a pair of running shoes.

The other hiker says: “What are you doing? You’ll never outrun that tiger!”

The first hiker replies: “I don’t have to outrun the tiger. I only have to outrun you."