The trend of acquisitions of software and data providers is continuing, but with a twist that may lay the foundation for innovation in the insurance industry. 

CoreLogic closed out 2013 with a bang by announcing its acquisition of Eqecat, a catastrophe modeling firm, on Dec. 20, adding to an already impressive list of acquisitions in the past year. CoreLogic added three real estate companies from TPG Capital Decision Insight Information Group--Marshall & Swift/Boeckh, DataQuick Information Systems and DataQuick Lender Solutions (credit and flood-services units)--further extending into the insurance data and analytics space.  

On Jan. 13, 2014, SNL Insurance, which provides a range of statutory data for insurers that links with public data, announced the acquisition of iPartners LLC, a SaaS business intelligence and analytics solution for both the property and casualty and life and annuity insurance industries. SNL says the acquisition will provide its clients a robust BI and reporting tool for operational needs.  

And Verisk Analytics, a supplier of data to insurers and banks, announced on Jan. 14 the acquisition of EagleView Technology, a provider of property images for nearly 90% of all U.S. structures. The images, based on digital aerial image capture, are analyzed to provide information to estimate property size and proximity to risks to assist in underwriting and claims assessments.

While the initial reaction might be to think of these as just another series of acquisitions, these actually point to the great possibility for change in how we access and use data in the insurance industry, a real mash-up of ideas and technology. As an industry, we are intensely dependent on data. But the data we use is fragmented across multiple organizations, accessed and paid for based on 10- to 20-year-old business/pricing models, requires significant integration and is often ineffectively used because of a lack of analytic capabilities. But these acquisitions have the potential to change this landscape.

These acquisitions and others are positioning the industry to be ready to move beyond long-held traditional offerings into “pay-by-use models” for both software (SaaS) and data (DaaS). Each offers the deepening analytics capabilities and expertise that can be used to analyze and create data from all the source data acquired, offering new data points for insurance business processes. Together, these create the opportunity to completely change the business model for data providers. This will enable the provision of new pricing, ease of access and new data based on analysis for many insurers, particularly mid-sized to small insurers, that may not have the expertise, resources or technology to do this by themselves.  

As new models emerge, the implications and the opportunities will be substantial. There could be a new wave of innovation for insurance products, business processes, markets, competition and business models. The playing field could be leveled for access to traditional and new data and information for insurers of all sizes and even for new entrants to the industry.

Who will take the first step forward in creating and offering a new model? How quickly will the innovator bring value and potential to the industry? If the traditional providers don’t, then companies outside our industry who see the strategic importance of data, cloud and new models will. Does Google come to mind? 

First impressions apply to organizations as well as individuals. Employers have a short window during which to capture the hearts and minds of a new employee. Unfortunately, too frequently the window closes… about the same time that a door opens and the disappointed, disillusioned employee walks out!

We’ve all had that new employee experience. What drew you in? What pushed you away? What did your introduction to the job telegraph to you? And what long-term effect did these early messages have on how you felt about the work? The job? Yourself?

For most of us, those first precious hours and days were dedicated to paperwork, processes and procedures. Well-meaning leaders concerned themselves with "on-boarding" and "time to productivity." Right? But all of this likely did little to bond you to the organization, excite you about the road ahead or ensure your long-term commitment.

Organizations have a great opportunity to help new workers get off to a powerful and lasting start. But they need to change their approach to welcoming new hires. Best-in-class employers who enjoy high levels of satisfaction, engagement and retention among new employees do three things differently. They:

Ensure connections: One of the primary psychological needs we bring to the workplace is the need to engage in supportive relationships. So, companies must engineer relationships consciously from the start to ensure that new employees have a ready-made network that will help them through the transition. This can be as simple as a lunch rotation and as choreographed as formal mentoring. How it happens is less important than that it happens… early in the transition.

Help others contribute quickly: Protracted training programs, extensive shadowing and elongating time to productivity – this is a recipe for disengagement. Companies should help people quickly find ways to feel competent, effective and productive. Facilitate the use of their strengths early. Identify small projects and quick wins to establish a sense of momentum. Meaningful contribution builds a sense of commitment.

Begin the career-development conversation: Invest in employees, and they’ll invest in you. Demonstrate your commitment to their futures, and you will enhance their commitment to yours. Keep the initial employment interview going by continuing to learn about the new employee’s strengths, interests and goals. Take steps from the start to clarify how the employee wants to express herself and grow… then work together to find ways to make it happen.

Onboarding for genuine, long-term results comes down to this: De-emphasize the process and paperwork that is normally the (less-than-warm) welcome to a new job. Focus on connections, contribution and career development. And watch as your new employees:

• Confirm that they made a great choice in accepting your position.
• Quickly become powerhouse contributors.
• Settle in for a long and productive career with your organization.

The adage about data, “garbage in, garbage out,” has taken on magnified importance because the volume, quality, and impact of data has reached unprecedented levels. The importance of quality data is paramount.

Companies must change business practices regarding data management or suffer financial disadvantages. Unfortunately, the people who have the power to change frequently think the issue belongs elsewhere.

Not an IT problem!

The misconception is that, if there is a data problem, it must be an IT problem. However, only senior management has the power to hold people and organizations accountable for data quality.

The following is an excerpt from an email I received recently from our IT describing one client’s data:

“There is a field for NPI number in the data feeds, but it is not often populated.  When it is populated we can definitely use that information to derive the specialty and possibly to determine the individual provider rather than the practice or facility.”

This example highlights a widespread problem in workers’ compensation data. Even though a field is available to capture a specific data element, in this case the NPI (National Provider Identification) number, it is not populated. This number is derived from medical bills, and the reason for the omission should be thoroughly investigated.

The information trail

The first place to look is upstream in the information trail, to the submitting provider or entity. Standard billing forms such as the HCFA 1500 contain a field for NPI, but it may not be filled. Second along the information hand-off line is the bill review company. Is the NPI number being captured from the bill?

If the provider is submitting the NPI, is the bill review company capturing it? Then, if the bill review company is capturing the NPI, is it included in the data set transmitted to the payer? Once the source of the problem is discovered, management must require the necessary process changes.

Management intervention

If the submitting provider is not including the data needed, in this case the NPI number, the best management intervention is refusing to pay incomplete bills. Likewise, if the bill review company or system is not capturing the data or is not passing it on to the payer, management must demand the data needed.

Seemingly trivial data omissions can lead to multiple other problems.

Another common data problem is the submitting provider or entity entering a facility, group or practice name while excluding that of the individual treating physician. Management should insist upon using the individual treating physician name and NPI number rather than the entity name only. Systems should capture all three pieces of information.

Bad data comes in many forms beyond missing data in existing fields. Other kinds of bad data include erroneous data and duplicate records. Regardless of the form and source of bad data, the challenges on the horizon are significant. The simple fact is, benefits from analytics to gain cost advantages are not accessible to those with poor data quality. 

Management owns data quality

Accurate and complete data is the only affordable and practical resource on the horizon to advance to the next levels of medical management and measureable cost control. Only management can ensure data quality.

A controversial McKinsey Report, “Agents of the Future: the Evolution of Property and Casualty Insurance Distribution,” compares the impact of the Internet on travel agents to the proliferation of online insurance websites and considers whether the local agent will disappear if he continues to do business as usual. The report says: “Local agents are not in danger of extinction, but the role they play will continue to evolve. Those who can adapt to a new set of circumstances will thrive.”

The report talks about the dangers of online commoditization to our industry. From the thousands of agents and brokers I’ve coached, I know that the enemy is not technology; it is the dominance of the insurance bid … a commodity force that must be removed as the focus of the customer experience. It must be replaced by the risk-management process — a consultative and diagnostic approach founded on risk evaluation and mitigation … strategies to protect a family and business properly with the goal of reducing claim frequency and severity.

What does this mean for the insurance industry in 2014?

Insurance producers are tired and frustrated with competing in the “commodity trap” — the 90-day insurance bidding process. They are beginning to lose confidence in themselves because they are playing a game in which they have little impact on the outcome.

Commoditization is a battle that insurance agents, brokers and carriers confront each day. It occurs when the consumer perceives little or no distinguishable difference between products, services and resources — and when price has become the primary differentiator.

Picture commoditization as a disease that is eating away at insurance producers’ knowledge, wisdom and professionalism. It is so cruel and debilitating that it is stripping away the value proposition of even the most seasoned producer by reducing professional purpose to a number.

Time for a Q&A

To determine if your agency is affected by commoditization, ask yourself these questions:

1. Are you losing your passion and purpose for the insurance business?
2. Are you able to change the consumer’s perception of you?
3. Are you angry and frustrated with the 90-day bidding process?
4. When you introduce yourself as an insurance agent at a social event, do people treat you with dignity and respect? Are you perceived as a professional, trusted adviser, like a CPA, attorney or physician, or do consumers perceive you as an order taker?
5. Is the insurance transaction, the 90-day bid, getting in the way of your ability to learn the customer’s business and its issues?

Solutions to combat commoditization

You may ask, “How can I stop being caught in this vicious game?” First, I remind you that you sell an intangible product. The less tangible, the more powerfully and persistently the judgment about the product can be shaped by packaging. You must position the package in a way to enable the consumer to change his or her perception about it.

Second, I ask you to consider three questions:

1. To what degree does the small- and middle-market consumer have the time and ability to identify exposures? (0, low, to 5, high)
2. To what degree does the typical insurance agent or broker assist his or her client with exposure identification? (0, low, to 5, high)
3. To what degree does the small- and middle-market consumer enjoy the traditional insurance bidding process? (0, low, to 5, high)

Unless you’ve scored a 15 overall, your score gives evidence that you must stand out in a crowded marketplace!

Third, you must have a means to differentiate yourself by applying a consultative process focused on the identification, measurement and mitigation of risk. My personal formula is I³ (i.e., issues, implications and interventions).

When agents or brokers apply the I³ system, they improve their professional image, income and work-life balance. They discover a renewed purpose and passion for the business.

Fourth, if you are commodity-driven and chasing the 90-day insurance bid, you are headed toward extinction. Every day, consumers come face-to-face with transactional websites or agents. The surviving insurance agents or brokers of the future will transform themselves into indispensable, remarkable, trusted risk strategists.

The industry’s evolution?

Another industry study, conducted by Forbes for Zurich in 2013, supports the importance of a consultative process. In the study, 414 U.S. executives were interviewed. The study found that the majority of executives admitted that they were worried that they lacked knowledge of how to best mitigate risk; understand the sources of risk; and develop a sufficient risk-management budget. These are the same responses I’ve heard from small- and middle-market clients for years. The only difference is that most Fortune 500 organizations have fulltime risk managers, and middle-market consumers do not.

You can fill this void and serve your clients in a new, more consultative and diagnostic way.

When you serve as a risk strategist for your clients, you offer solutions that they cannot obtain if they purchase coverage online. As a risk strategist, you advocate for your client with the goal of designing and developing enterprise risk-management strategies. In other words, you find out what keeps your clients awake at night and take these worries away.

Secrets to success

Below are seven secrets to you help you implement future success in your agency.

1. Value proposition. Summarize the reasons why a potential customer should buy your particular product or service, how it exceeds that of the competition and why it is worthy of the price she pays. Your value proposition of the future should be concise and appeal to the client’s strongest decision-making drivers. It must be an irresistible offer, an invitation that is so compelling and attractive that a customer would be out of her mind to refuse.
2. Confidence. Wherever you are in your career, display the knowledge, skill and attitude to serve as a risk strategist for your clients.
3. Criteria filter. Screen out price shoppers. Determine quickly if your prospective client meets or falls below your standards. Rather than taking a random approach to prospect research and qualification, make your approach disciplined and strategic. You know what is at risk!
4. Unique process based on I³ — issues, implications and interventions. Focus on deeply engaging the client. Develop emotional connections with your clients that transcend price and product.
5. Relational capital. Build long-lasting relationships. Understand that relationships rarely are pursued and captured. Rather, relationships are rooted in rich soil, consisting of a blend of mutual trust, respect and shared values. These relationships produce bonds and connections that enhance both parties’ opportunity to succeed.
6. Servant leadership. Connect with others and find ways to make them more successful. Make your approach about generosity, not greed. Always show credibility, integrity and authenticity. The degree by which you practice relational capital and servant leadership will be evidenced by higher hit ratios, retention, referrals and cross-sell opportunities.
7. Purpose and passion. Rediscover your purpose and passion for our industry. Love what you do, and touch your clients’ hearts.

When you begin to serve clients as a trusted risk strategist, you will climb out of the commodity trap. Using the I³ process is your best, most powerful tool to escape commoditization and thrive.

This article first appeared in Professional Insurance Agents Magazine.

Global expansion into new markets represents a powerful opportunity — especially as economic performance languishes in much of the developed world. As a result, insurance executives must regularly evaluate and refresh their strategies to identify which international markets are most likely to offer the best prospects.

As regional markets around the world become more connected and complex, however, understanding how best to optimize the balance between opportunities and risks in individual countries remains a significant challenge. Even in a world linked closer together by macroeconomic trends, mobile phones and the Internet, regulatory and cultural differences persist, and even nations that share a common border may diverge markedly when it comes to future risk.

To help executives better understand the rebalancing now taking place across the insurance landscape in rapid-growth markets, we will highlight growth opportunities in specific countries around the globe.

While once-flourishing BRIC economies Brazil and India are now expanding at a slower pace, the U.S. is rebounding, and the U.K. and the Eurozone are at last rising from their doldrums. At the same time, a cluster of emerging markets, such as Malaysia, Indonesia, Mexico and Turkey, are making regulatory changes that could produce significant opportunities.

These shifts are causing insurance executives to reassess their strategies to determine which rapid-growth markets (RGMs) represent the most attractive investment options. To help navigate this rapidly evolving landscape, EY has created a matrix that analyzes the risks and opportunities for insurance firms across 21 RGMs. Our study identifies the following RGMs as particularly attractive for insurance investment:

• Turkey offers a greater level of opportunity than any other RGM in the study but also poses substantial risks. An economic downturn cannot be ruled out. While political turmoil has cooled in recent months, tensions could return. In addition, markets for some lines of coverage are relatively mature.

• Indonesia also offers an extremely strong economic growth picture — second only to China and Vietnam in our forecasts. However, it is challenging to obtain licenses, so acquisition is the main entry route.

• China, despite a recent slowdown in growth rate, continues to boast extraordinary income growth that spurs auto and home ownership. In addition, an aging population will drive the development of the life and health markets. However, market entry remains difficult for foreign firms.

• Malaysia offers an attractive mix of demographics and strong economic growth and has become a base for the development of takaful, sharia-compliant insurance.

• Hong Kong (a special administrative region of China) ranks low for opportunity but presents less risk than any other market in our study. Hong Kong can also serve as a trade route into the rest of Asia.

• The United Arab Emirates (UAE) has become the fastest-growing insurance market among the Gulf States, with a compound annual growth rate (CAGR) of 17% over the past six years. Regulatory changes may create greater opportunity for expansion of takaful products.

Our analysis does not merely focus on markets with the highest opportunity and lowest risk but provides a more nuanced picture of the shifting landscape. Depending on a firm’s appetite for risk, a second tier of RGMs also shows considerable promise:

• Brazil remains an important opportunity, though slowing growth rates have revealed festering economic risks. Following a program of liberalization, Brazil is the most accessible of the BRICs for foreign insurance companies. Brazil’s key advantage is scale: Of the markets in our study, it has the third-largest forecast growth in insurance premiums in US dollar terms, following China and India. Moreover, record new car sales are propelling robust growth for automobile lines.

• South Africa follows Brazil with the fourth-largest absolute growth in insurance premiums. In addition to scale, South Africa may be a good trade route into sub-Saharan Africa, as South African companies have been among the most successful in penetrating other African markets.

• Vietnam has become one of the most exciting RGM opportunities. Its income growth and premium growth rates (when considered in percentage terms) place it among the top two markets we assessed. But investors face significant corruption and sovereign risks when entering Vietnam.

• Mexico has undergone a program of extensive liberalization, opening its market to foreign insurers. On some measures, Mexico is the most open insurance market in our study. Yet the pace and unpredictability of regulatory change can be risky for investors.

• India’s opportunity is impossible to ignore, given that it is second only to China in terms of absolute forecast growth in insurance premiums. Yet, the regulatory environment has proved extremely challenging for investors. In addition, a large current-account deficit and reliance on portfolio capital inflows elevate liquidity risks.

Our analysis suggests that while investment in RGMs will continue to be vital for global insurance firms, outsized returns will not come easily. Companies that carefully tailor products and develop market-entry strategies suited to particular economies and their cultures will see the greatest rewards.

Key factors influencing market selection

When investing in RGMs, insurance executives will want to carefully consider four important waves of change:

1. The speed of regulatory change.

Some RGMs, such as South Africa and Mexico, are moving quickly to adopt new insurance regulations and may surpass advanced economies in the stringency of their risk-based regulation or consumer-protection requirements.

2. Customer adoption of insurance products.

The rise of social media and the growing popularity of overseas educational experiences are among the forces breaking down traditional barriers to insurance penetration. Many markets where traditional cultures tended to limit adoption of insurance products, such as Vietnam and Saudi Arabia, are now experiencing rapid premium growth.

3. Government fiscal policy.

Offering tax incentives for insurance products can significantly affect how customers choose savings and pension services. At the same time, a lack of confidence in public pension and welfare schemes can encourage adoption of private insurance alternatives.

4. Government attitude.

In most RGMs, the government considers the insurance sector strategic. This is in part because of the crucial role insurance plays in facilitating savings, investment and entrepreneurship. Understanding the government’s goals for the sector’s long-term development is therefore crucial. Some governments will focus on the potential growth benefits of insurance development and seek as much foreign expertise as possible in developing the insurance sector. Others will wish to have the insurance market dominated by domestic companies over the long term.

Download the full report here: Waves of change: the shifting insurance landscape in rapid-growth markets

“We just hired her two months ago. Now she is telling us she is pregnant and will need three months off for the birth and for bonding with the child. Didn’t she have to tell us she was pregnant when we interviewed her? How are we supposed to run a business this way?” 

These sentiments of frustration are fairly common for employers in California, particularly those with fewer employees and less frequent encounters with maternity leaves of absence. Generally, these sentiments do not arise from hostility toward the employee or pregnancies in general, but rather from the difficulties the employer will face with staffing,  and the potential for increased  costs. These are real and legitimate concerns. Nevertheless, employers should consider taking a positive view of maternity leaves.

Taking a positive view begins with accepting that pregnant employees are protected by multiple laws. Disagreement with the laws should be directed toward the legislature, Congress and industry associations that lobby for employers. It should not be directed toward or communicated with employees. They did not create the laws, and raising disagreement or frustrations with them will only create bad evidence in pregnancy discrimination cases. 

Let’s look at some of the most basic rules.

Hiring

An employer cannot refuse to hire a woman because of her pregnancy or a pregnancy-related condition. Nor can an employer refuse to hire because co-workers, clients or customers have a negative view of a pregnant employee.

Pregnancy and Maternity Leave

An employer may not single out pregnancy-related conditions for special procedures to determine an employee's ability to work. Requiring a doctor's certification about the employee’s ability to work or the need for a leave of absence is permissible, but only if the employer requires similar certification for other kinds of medical issues and disabilities.

If an employee is temporarily unable to perform her job because of her pregnancy, the employer must treat her the same as any other temporarily disabled employee. The employee may also have the right to transfer to a different position. Pregnant employees must be permitted to work as long as they are able to perform their jobs.

As a general principle, employers must hold open a job for a pregnancy-related absence the same length of time jobs are held open for employees on sick or disability leave. But, even if the employer gives no time off for other leaves, a pregnant employee must be given as much as four months of leave while disabled by the pregnancy. Employers with 50 or more employees will also have to provide as much as 12 weeks of leave for bonding with the new child.

Health Insurance

Any health insurance provided by an employer must cover expenses for pregnancy-related conditions on the same basis as costs for other medical conditions. Employers must continue to pay for the health insurance during a pregnancy disability leave or mandated bonding leave on the same basis as though the employee were working.

Fringe Benefits

Pregnancy-related benefits cannot be limited to married employees. If an employer provides any benefits to workers on leave, the employer must provide the same benefits for those on leave for pregnancy-related conditions.

No Discrimination or Retaliation

It is unlawful to discriminate or retaliate against an employee for a pregnancy, for a leave of absence taken in relation to the pregnancy or for complaining about the employer’s policies or practices related to pregnancy.

These basic rules only scratch the surface of the details in the multiple and overlapping laws that apply to a pregnancy. Accordingly, it is often wise to get expert assistance when handling an employee pregnancy.  

It is also wise to carefully plan your communications related to the pregnancy. While poorly planned communication can create bad evidence, well-planned communications create positive energy and strengthen employee relations. 

Let’s take the example of an employer who is bothered because a new employee did not disclose that she was pregnant during the interview process. 

Taking a positive view requires the employer to understand that there are many legitimate reasons why an applicant might not tell. Fear of the employer’s reaction, desire to keep work and family matters separate and shame about an unwanted pregnancy are just a few. Wise employers can use this situation as an opportunity to set a positive tone, build openness and strengthen the relationship. It can start with a simple question asked in a friendly, non-threatening tone: “Is there a reason you did not tell us you were pregnant?” 

Where the conversation goes from there will vary. Here are a couple of possibilities:

Example 1: “I was concerned I would not get the job.” 

“That is understandable, but that’s not how we operate. In the future, we want you to feel comfortable that you can have open communications with us on this kind of thing or any matter. That’s the kind of employment relationship we want to have.”

Example 2: “I’m just private about my family things and did not think it was the company’s business.” 

“We understand and respect your desire for privacy. We are not going to try and become involved in your private affairs. On the other hand, your pregnancy is not entirely a private matter.  Because you will be taking time off from work, it has an impact on the company.  Communications and planning are important for the company. We want an employment relationship where you feel comfortable letting us know about family matters that directly affect the company because you know we are going to respect your privacy.”

Taking a positive view of pregnancies and maternity leaves may not be second nature for employers. The approach, however, will reduce the potential for the creation of bad evidence and increase the potential for high-quality employment relationships and the productivity and profit that result from them.

This article originally appeared in the Sacramento Business Journal.

Sometimes, it’s good to be a plaintiff’s attorney. Why? Fee shifting. You don’t need a big win in lawsuits where stat­utes allow the court to make the defendant pay the plaintiff’s legal fees. Even if the plaintiff only obtains a small award (as little as a dollar), a “win” entitles plaintiff’s counsel to submit fees to the defendant for reimbursement. It seems almost too good to be true! But that is what the law allows in most employment-related cases.

You might ask: What stops plaintiff’s counsel from submitting made-up or inflated fees for reimbursement? Nothing!

The plaintiff’s counsel submits the fee petition to the court, and the court is the only gatekeeper that decides the appropriateness of the request. In a perfect world, a court would review the fee petition carefully, scrutinizing counsel’s listed activities to make sure that those services were actually rendered and that the time billed to those activities was reasonable. But in the real world, courts usually only make reductions for entries or ac­tivities that are clearly duplicative, exorbitant or outrageous.

Based on these fee-shifting provisions, it is important to caution your clients that any employment claim, no matter how seemingly minor, can turn into a case that exhausts their insurance policy limits. For example, in a recent case in San Francisco (Kim Muniz v. United Parcel Service, Inc.), plaintiff Muniz had demanded $700,000 to settle her case. No settlement was reached, and the case went to trial. At trial, Muniz was only awarded $27,000. However, that award was soon followed by a $2 million fee petition by plaintiff’s counsel. The court reviewed the petition and reduced the fees submitted to approximately $700,000. Although the reduction was substantial, what was a minor victory for the plaintiff still resulted in a major victory for plaintiff’s attorneys.

When you add it all up, the bottom-line expenses for the employer in the Muniz matter would include the following: 1) plaintiff’s award of $27,000, 2) plaintiff’s counsel fee award of $700,000, and 3) estimated defense expenses at least equal to the plaintiff’s $700,000 fee and likely much more.

If your client had a $1 million employment practices liability policy, the policy would almost have been exhausted just by the client’s own defense expenses, leaving little to fund an award or the award of plaintiff’s attorney fees. Unless your client had other applicable insur­ance coverage, the client would have to dig into its own pocket.

What does this mean for your clients? It means that when clients seek insurance protection for employment-related lawsuits they should consider not only the potential award but also the possible fees for plaintiff’s attorneys if even $1 is awarded to the plaintiff. Even the smallest of victories for plaintiffs can still leave the employer holding the bag.

Buyers beware! Carefully consider your client’s EPLI coverage and ask yourself: Are their limits adequate? 

Here's a proposal for the plot of a new comic book.

Perry White summons Clark Kent and Lois Lane into his office one day in Metropolis.

"I have bad news," White barks. "Health costs at the Daily Planet are through the roof. And it's all your fault. You're unhealthy!"

White tells Clark and Lois to fill out a questionnaire, which he assures them will be kept "private." Once they complete it, they will receive free advice on running their personal lives better. "And we're docking your pay $1,200 if you don't fill it out and see a doctor," White warns.

The questionnaire asks about smoking, exercise, weight, feelings of depression, financial problems, marital problems and stress. Clark's questionnaire asks whether he examines his testicles regularly. Lois must answer whether she plans to get pregnant. And they get lots of valuable guidance on their misguided lifestyles. Eat your vegetables. Cheer up. Calm down. Don't smoke. Pay your bills on time.

Though he can leap tall buildings in a single bound, Clark, according to the questionnaire, needs a number of tests and screenings to rule out serious health problems.

I probably couldn't sell this comic book proposal because the scenario sounds too preposterous, even for a guy with X-ray vision who flies. Surely, in real life it would be illegal or at least politically incorrect for your boss to demand to know your most private information, obtained under the threat of a pay cut.

Sorry to say, this plot isn't entirely fictional for thousands (if not millions) of Americans. Not only is it actually legal for your employer to require you to answer intrusive personal questions, it's encouraged by a little-known provision in Obamacare, which is embraced by a surprising mix of people and interests on both sides of the aisle. That provision allows employers to promote "worksite wellness" programs and require their employees to pay up if they don't participate.

A multibillion-dollar industry has grown up overnight, selling wellness programs to well-meaning employers. More than 90% of all large employers report offering one for employees. Some of these programs are excellent and welcomed by employees. It's nice for an employer to support exercising and quitting smoking.

But badly designed programs are not so nice, as Matthew Woessner learned. He received an email from his employer on July 17, 2013, instructing him to take the online questionnaire called a "Health Risk Assessment," reporting on his personal life and habits akin to Perry White's grilling of Clark and Lois. Like the Daily Planet employees, if Woessner refused, he would lose $1,200.

This could happen to you, according to Al Lewis and Vik Khanna in a disturbing new book, "Surviving Workplace Wellness…with Your Dignity, Finances, and (Major) Organs Intact." The book is so laugh-out-loud funny you may wonder if it's really serious, but actually it's a sobering exposé of hazards in the worksite wellness trend in American business. Think of the book as Dave Barry meets Rachel Carson.

The authors agree that the worksite wellness movement is not only a privacy hazard, but a health hazard and business hazard to boot. While some of us might be willing to tolerate a certain amount of privacy loss if we thought it would improve our health and save some money, Lewis and Khanna make a compelling case that poorly designed wellness programs don't help at all. In fact, these programs in the wellness business: 1) dismay and alienate employees, 2) fail to reduce health costs and 3) harm employee health.

How is this possible? Let's look at each in turn.

1. Dismaying and Alienating Employees

Bad wellness programs send the message that your boss thinks you're an idiot. This typically isn't a good strategy for improving morale, though it does improve motivation to update your resume.

Woessner's employer is a good example. That employer tells employees who smoke that tobacco use is not healthy. This implies that employee smokers are not educated enough to recall the Surgeon General's warnings or the mountains of studies over the past 50 years. Woessner's employer also believes that a good number of workers are too simple-minded to understand they should eat their vegetables and get some exercise.

What kind of company employs such a dim workforce? In Woessner's case, it is Penn State, which employs some of the world's leading researchers in science, technology, social sciences, humanities and health care. Despite their apparent stunning lack of knowledge about the most fundamental aspects of their health, a disproportionate number of them managed to earn PhDs.

Of course, the reality is that public health is a complex enterprise for which it is very easy to condescend and coerce when you mean to encourage. Bad wellness programs focus on the former.

2. Bad Programs Don't Save Money

Lewis and Khanna show examples of wellness vendors inventing savings numbers to sell their services to your employer. (I dare anyone to get through this section of the book without laughing.) Wellness marketers make claims that literally don't add up, such as proclaiming savings exceeding 100% (mathematically impossible) or, similarly, suggesting an employer saved more money than he spent in the first place.

Fundamentally, Lewis and Khanna make a compelling case that bad wellness programs don't save money because the programs themselves cost money, and the added cost of screenings and education and other services aren't free, either.

3. Potential Harm to Employee Health

Even if wellness programs may cost a bit more money in the short run, surely they improve health in the long run…right? Unfortunately, that's not evident either, the book argues.

Lewis and Khanna give us a case study of the state of Nebraska, which touts the success of an employee wellness program that won the national C. Everett Koop Award. The book shows convincingly that, not only are the proclaimed savings numbers impossible, but Nebraska's employees may have been exposed to hundreds of unnecessary and invasive tests. Many resulted in false positives that demanded even more invasive tests and treatments, which can scare patients for no reason and even lead to additional risk and harm.

I recommend this book because your employers – and the vendors and consultants that sell to them – aren't going to change without your input. Employees and business leaders need to do what the Penn State staff did and push back on poorly designed programs. In the process, they will be supporting, not undermining, the economic wellbeing of their employer.

Many of us may be reluctant to question the design of our company's wellness program because it sounds like we are challenging Mom and apple pie. How can you oppose something as pure-sounding as employee wellness? But what this book warns is that poorly designed wellness programs can violate the very essence of good management practice: namely, that management should focus on employee performance, not employees' personal lives. The latter can do much more harm than good.

A well-designed wellness program does not threaten to dock Superman's pay if he doesn't get a cholesterol test. A good one might instead add a salad bar to the Daily Planet cafeteria. The latter doesn't sound like something Perry White would do, but after all the Chief has never been the model of a good boss.

I don't come to this conclusion about the problems with wellness programs lightly. I worked in public health and dedicated much of my career to promoting prevention. My belief in the importance and the difficulty of prevention is precisely why I believe we must call out poorly designed programs that prey on well-meaning employers and other purchasers. Those programs apply equal measures of coercion and disparagement toward the people they are supposed to help. That discredits employer benefits programs and undermines employee loyalty and trust. Employers deserve better for the investment they make in the wellbeing of their employees.

This article first appeared on Forbes.com.

The Gatesway Foundation, a nonprofit organization in Tulsa, OK, had seen an increase in its work-related musculoskeletal (MSD) cases, which the U.S. Department of Labor and Occupational Safety and Health Administration (OSHA) define as injuries of the muscles, nerves, tendons, ligaments, joints, cartilage and spinal discs. These types of disorders, commonly referred to as soft tissue injuries as well as sprains and strains, most often present as injury or pain of the back, neck, shoulder or knee and are a major source of disability. According to the 2010 report by the Bureau of Labor Statistics, the disorders account for 29% of total cases.

The Gatesway Foundation was experiencing both an increased frequency of claims and a rise in the cost of treatments, so, in 2012, the foundation began employing the EFA’s soft-tissue management program to compare pre- and post-loss data to accurately distinguish if there is acute pathology after a work-related injury. The program determines if pathology arises out of the course and scope of employment. A baseline test is conducted at the time of hire and compared with post-incident tests. State workers’ compensation laws may have many differences but have one thing in common: The employer is only responsible for returning the individual to pre-injury status. 

In the past, determination of pre-injury status, especially for soft tissue injuries, was often guess work.  Having objective findings can prevent costly misdiagnosis, unnecessary or inappropriate surgery, prolonged treatment periods and fraudulent claims. Employees also receive better treatment for compensable conditions.

The Gatesway Foundation began its program in April 2013 and had no MSD claims or OSHA recordables until Sept. 17, when a 52-year-old health care provider reported that a patient had fallen on her.  Initially, her complaints included her arm and shoulder. By the time she saw a doctor, her pain included her back.  The physician ordered a post-loss test for comparison with the baseline test.  The comparison showed a minimal increase in lumbar muscle spasms that decreased with stretching.  Two sessions of physical therapy were prescribed, and the employee has returned to work.

In the adjuster’s words, “This could have involved a great deal more expense and possible lost time without this information” from the baseline test. The program enabled the physician to have objective information and allowed the injured worker to receive appropriate care.

The program has drastically reduced the Gatesway Foundation’s soft-tissue-related workers' compensation claims.  The year prior to initiating the program, the foundation’s developed losses were $1 million. In the first six months of the policy year, before starting the program, the developed losses were $500,000. With the implementation of the program, the developed losses in the last six months of the policy year were $30,000.

A detailed analysis of the data revealed a dramatic decrease in the cost per claim when a baseline test was conducted.

This resulted in a dramatic return on investment (ROI)

The utilization of this book-end strategy allows for unprecedented access to information and allows for better treatment.

Without a doubt, 2014 will be a pivotal year for the insurance industry – a new future is dawning, reshaped more quickly than expected by powerful influences such as customer expectations, forces from outside the industry, and technology. We will see the acceleration of these influences. 

This pace of technology change, challenging decades of business traditions and assumptions, is unprecedented in the history of the insurance industry. The industry’s biggest technology disruptions and changes usually came along every decade or two, from the introduction of mainframe computers in the 1950s and ‘60s, to the personal computer in the ‘80s, to the Internet and e-business in the late ‘90s and early 2000s, and the first iPhone/smartphone in 2007. 

Now, changes are coming every month, with new technologies, the mash-up of technologies and new uses for these technologies. There are next-gen technologies such as mobile, cloud, data and analytics, telematics and collaboration tools. There are emerging technologies such as 3D printing, the Internet of Things (billions of devices that talk to each other without human intervention), drones, driverless cars, and wearable devices. The speed of experimentation, innovation and adoption will intensify. Insurance will begin to be redefined and reshaped, from the inside as well as from outside the industry.

As other industries have experienced, from retail to books, music and movies, the insurance industry is finding the very foundations of the business being challenged, requiring new thinking, experimentation, innovation and adoption of the new technologies. To respond to this continual disruption, insurance leaders will create a culture and model around continuing collaboration and ideation that extends outside their organizations. Legacy business assumptions, operations, systems and culture will begin to fall away. 

Increasingly, insurers will recognize that tracking and assessing the potential and use of next-gen and emerging technologies (both within and outside the industry) will be paramount to their competitive advantage and long-term survival. But insurers often lack the time, expertise and resources to track details of technology trends, follow outside industry perspectives, find and access research and case studies and stay current on trends outside the U.S. market. Insurers will increasingly look at creating and participating in an ecosystem of outside experts and resources to capture the potential, inspire their leadership and enable their journey of change, transformation and innovation. 

The journey toward reinventing insurance has started, whether you are on the road or not. No business, regardless of its size, can go it alone and expect to completely take hold of all the possibilities. It will be interesting to see the innovation ecosystems that emerge to help fully capture the potential, change legacy cultures and enable the ideas and technologies to be put into operation uniquely within each insurance organization.