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Digital Playbooks for Insurers (Part 3)

In our last two blogs, we discussed why consumer playbooks and SMB playbooks have such an effective application for business. Insurers, especially, can use the idea of a playbook to put together a package of viable “plays” that will help them on their shift from Insurance 1.0 into Digital Insurance 2.0 — the second wave of technological and business model advancement within insurance.

In our pregame analysis, we looked at Majesco’s research into consumer and SMB behaviors and expectations. In this blog, we’re going to look specifically at the kinds of offerings that may be ideal for consumers. Of course, we won’t be developing low-level product detail, like an insurer would. Instead, we’ll connect high-level consumer indicators to the types of product and service attributes that could yield insurer differentiation and advantage.

New Consumer Behaviors and Expectations

Across all businesses, including insurance, disruption and change is driven by people. At its simplest, an offering can be created in two ways. First, we might observe changing behaviors and unserved or underserved needs that people have in today’s digital world to come up with an innovative idea that improves outcomes. Second, we might develop a new idea through some other inspiration or observation that meets a need or expectation — one that people didn’t even realize they had until the new idea came along — like Steve Jobs famously did at Apple. With either of these, we can create a value proposition that supports a new Ideal Offering.

See also: Digital Insurance 2.0: Benefits  

In 2017, Majesco set out to confirm consumer trends, across generational segments, looking at the attributes of new products and new business models in the marketplace. Using data from our 2016 research, we gauged increased use of new, digital activities that are influencing expectations and behaviors, highlighting year-over-year growth in today’s consumer practices.

The results can be found in our thought-leadership report, The New Insurance Customer — Digging Deeper: New Expectations, Innovations and Competition; a synopsis of areas of digital impact would include:

Sharing Economy: Ride-sharing, home-sharing and room-sharing are on the rise.

Connected Devices: Fitness trackers are gaining incredible traction across all generations. Telematics, though maturing, are still increasing in growth, especially among Boomers.

Payment Methods: Both use of company app payments (Amazon, Starbucks, etc.) and ApplePay and SamsungPay saw strong year-on-year growth among Gen Z and millennials.

Channels: Across all generations, 22% to 38% of individuals purchased insurance from a website.

Products: Between 25% and 30% of individuals had purchased on-demand insurance in 2017.

Other Emerging Technologies: Items such as drones and 3D printers are growing in use.

If we were in front of a whiteboard, we might use a word cloud to place some of these capabilities side by side and in groupings. For the purposes of the blog, we’ve created a list with many of the relevant concepts an organization will find, that will touch or likely touch Digital Insurance 2.0 offerings. This is the type of exercise that insurers may want to use during product brainstorming sessions. Included in the list are both the technologies themselves and the contexts that will drive the use of these technologies. In creating an Ideal Offering, insurers will want to take many of these capabilities and context drivers into account.

  • On-demand
  • Sharing
  • Telematics
  • Fitness tracking
  • Property monitoring
  • Pay-as-you-go
  • Mobile account management
  • Digital security
  • Digital assistant
  • Bundled insurance
  • Data-driven pricing
  • Gig employment
  • Peer-to-peer insurance
  • Artificial intelligence
  • Preventive services
  • Mobile messenger app-based communications and transactions

Given the pronounced generational patterns identified in Majesco’s research, it becomes clear that Ideal Offerings must take into account that different market and product strategies are necessary for each generation. To facilitate this thinking, we developed generational playbooks that summarize the attributes (the “ingredients”) that constitute the ideal insurance offerings (“the innovations”) for each segment (the “recipe model”).

We also identified behavioral targeting opportunities for specific product, service and process offerings for sub-segments within the generations, based on experiences with certain technologies and trends. Here are just a few of our findings:

Gen Z Offerings

Gen Z tops the list for groups that are ready to purchase Digital Insurance 2.0 offerings. These offerings would use highly ranked attributes such as preventive services, rewards-based products, messenger apps, mobile quoting, charitable sharing, on-demand products, bundled products and usage-based products. They are also a prime market for targeting products based on usage of new technologies. For example, those Gen Z members who use fitness trackers (41%), are more interested in having health and life insurance premiums that are partially based on their tracking data. They are also willing to join an affinity group that shares their interests, especially if it helps them reduce the cost of insurance.

So, an insurer trying to identify an Ideal Offering for Gen Z should consider that real-time, personal data tracking tied to fluctuating usage and variable-premium products (premiums based on behavior/activity levels) may be highly attractive to this group. And on-demand products fit their lifestyle needs. They are the industry’s newest buyer that aligns with the new products and models, reflecting the opportunity to capture and engage them today as they emerge as a dominant buyer.

Millennial Offerings

Millennials are likewise open to having personal data drive usage-based insurance. They are mobile users who will be happy transacting via messenger apps. They like the idea of telematics-based auto insurance. They like on-demand offerings and any service that can prevent or minimize accidents and claims. They are willing to share their data if it improves pricing and service. If they have ever used a device that monitors driving, they are highly likely to consider on-demand, device-tracked insurance for other areas of insurance.

Because millennials are also experience-seeking consumers, an insurer looking to capture millennials may want to create products that match up with experiences and trackability. Marine insurance, motorcycle and ATV insurance and any products that can employ both telematics and a mobile-based on/off switch will be highly valued. Because personal watercraft and ATVs are often rented and borrowed instead of owned, on-demand personal liability insurance could be an excellent product, sold both D2C and through rental companies.

In general, all generations, including pre-retirement Boomers, are showing signs that using insurance to cover an event with a specific duration will be a desired capability.

See also: Global Trend Map No. 6: Digital Innovation 

Gen X Offerings

There is really very little difference between Gen X consumer desires and those of millennials, reflecting the rapid adaptation to digital by this generation. However, there is greater growth in the Gen X segment regarding mobile payments. Year over year, more of the Gen X cohort paid for transportation through a ride-sharing service like Uber or Lyft, and more of them began using ApplePay and SamsungPay. Though some of this is driven by work/life maturity and lifestyle, it shows a general acceptance regarding mobile transactions and a desire to make transactions as simple as possible.

Ideal Offerings for Gen X will concentrate highly on ease of use and seamless functionality between quotes, admin, payments and claims. Much of this, clearly, is less product-based and more service-based, but when it comes to Digital Insurance 2.0, the two should never be separate considerations, rather should be an integrated offering. Back-end capabilities, front-end digital capabilities and lifestyle-relevant products are all part of the same agile environment.

Pre-Retirement Boomers

It was once thought that pre-retirement Boomers would simply be happy with traditional insurance products serviced in traditional ways. Once again, active lifestyles and our research are proving this to be false. The greatest jump in online insurance purchases falls within the pre-retirement Boomer segment. Because they tend to drive fewer miles, they have also latched onto the idea of usage-based auto insurance, leading the wave of growth in this area as well. Year over year, they are using substantially more fitness trackers, 3D printers and drones — and they are much more likely to have worked as an independent contractor or freelancer. This is not your previous generation of retirees!

Because they tend to travel more, they are excellent candidates for property-monitoring devices as well as on-demand insurance. They want to protect their earnings, so they are price-conscious. When we tested business models against generational segments, pre-retirement Boomers were highly receptive to online life insurance products that included quick quoting and simplified issue.

“DIY” Ideal Offerings for Insurers

Ideas are business tools. They are just as important as systems and processes. Ideas, however, rely on capabilities. Insurance offerings are obviously constrained or enabled by the digital readiness of an insurance company. In other words, to make the playbook work, there must be a foundation in place. For insurers, that foundation is Digital Insurance 2.0.

Digital readiness opens insurer doors to rapid testing of ideas and rollout. It allows a greater amount of freedom in product development, easier business configurability and exponentially better data gathering and digital service. Digital efforts provide speed to value, converting ideas to offerings while opportunities are fresh.

In our next blog in this series, we’ll look at Ideal Offerings within the SMB market.

How Tech Created a New Industrial Model

With a connected device for every acre of inhabitable land, we are starting to remake design, manufacturing, sales. Really, everything.

With little fanfare, something amazing happened: Wherever you go, you are close to an unimaginable amount of computing power. Tech writers use the line “this changes everything” too much, so let’s just say that it’s hard to say what this won’t change.

It happened fast. According to Cisco Systems, in 2016 there were 16.3 billion connections to the internet around the globe. That number, a near doubling in just four years, works out to 650 connections for every square mile of Earth’s inhabitable land, or roughly one every acre, everywhere. Cisco figures the connections will grow another 60% by 2020.

Instead of touching a relatively simple computer, a connected smartphone, laptop, car or sensor in some way touches a big cloud computing system. These include Amazon Web Services, Microsoft Azure or my employer, Google (which I joined from the New York Times earlier this year to write about cloud computing).

Over the decade since they started coming online, these big public clouds have moved from selling storage, network and computing at commodity prices to also offering higher-value applications. They host artificial intelligence software for companies that could never build their own and enable large-scale software development and management systems, such as Docker and Kubernetes. From anywhere, it’s also possible to reach and maintain the software on millions of devices at once.

For consumers, the new model isn’t too visible. They see an app update or a real-time map that shows traffic congestion based on reports from other phones. They might see a change in the way a thermostat heats a house, or a new layout on an auto dashboard. The new model doesn’t upend life.

For companies, though, there is an entirely new information loop, gathering and analyzing data and deploying its learning at increasing scale and sophistication.

Sometimes the information flows in one direction, from a sensor in the Internet of Things. More often, there is an interactive exchange: Connected devices at the edge of the system send information upstream, where it is merged in clouds with more data and analyzed. The results may be used for over-the-air software upgrades that substantially change the edge device. The process repeats, with businesses adjusting based on insights.

See also: ‘Core in the Cloud’ Reaches Tipping Point  

This cloud-based loop amounts to a new industrial model, according to Andrew McAfee, a professor at M.I.T. and, with Eric Brynjolfsson, the coauthor of “Machine, Platform, Crowd,” a new book on the rise of artificial intelligence. AI is an increasingly important part of the analysis. Seeing the dynamic as simply more computers in the world, McAfee says, is making the same kind of mistake that industrialists made with the first electric motors.

“They thought an electric engine was more efficient but basically like a steam engine,” he says. “Then they put smaller engines around and created conveyor belts, overhead cranes — they rethought what a factory was about, what the new routines were. Eventually, it didn’t matter what other strengths you had, you couldn’t compete if you didn’t figure that out.”

The new model is already changing how new companies operate. Startups like Snap, Spotify or Uber create business models that assume high levels of connectivity, data ingestion and analysis — a combination of tools at hand from a single source, rather than discrete functions. They assume their product will change rapidly in look, feel and function, based on new data.

The same dynamic is happening in industrial businesses that previously didn’t need lots of software.

Take Carbon, a Redwood City, CA maker of industrial 3D printers. More than 100 of its cloud-connected products are with customers, making resin-based items for sneakers, helmets and cloud computing parts, among other things.

Rather than sell machines, Carbon offers them like subscriptions. That way, it can observe what all of its machines are doing under different uses, derive conclusions from all of them on a continuous basis and upgrade the printers with monthly software downloads. A screen in the company’s front lobby shows total consumption of resins being collected on AWS, the basis for Carbon’s collective learning.

“The same way Google gets information to make searches better, we get millions of data points a day from what our machines are doing,” says Joe DeSimone, Carbon’s founder and CEO. “We can see what one industry does with the machine and share that with another.”

One recent improvement involved changing the mix of oxygen in a Carbon printer’s manufacturing chamber. That improved drying time by 20%. Building sneakers for Adidas, Carbon was able to design and manufacture 50 prototype shoes faster than it used to take to do half a dozen test models. It manufactures novel designs that were previously theoretical.

The cloud-based business dynamic raises a number of novel questions. If using a product is now also a form of programming a producer’s system, should a company’s avid data contributions be rewarded?

For Wall Street, which is the more interesting number: the revenue from sales of a product, or how much data is the company deriving from the product a month later?

Which matters more to a company, a data point about someone’s location, or its context with things like time and surroundings? Which is better: more data everywhere, or high-quality and reliable information on just a few things?

Moreover, products are now designed to create not just a type of experience but a type of data-gathering interaction. A Tesla’s door handles emerge as you approach it carrying a key. An iPhone or a Pixel phone comes out of its box fully charged. Google’s search page is a box awaiting your query. In every case, the object is yearning for you to learn from it immediately, welcoming its owner to interact, so it can begin to gather data and personalize itself. “Design for interaction” may become a new specialization.

 The cloud-based industrial model puts information-seeking responsive software closer to the center of general business processes. In this regard, the tradition of creating workflows is likely to change again.

See also: Strategist’s Guide to Artificial Intelligence  

A traditional organizational chart resembled a factory, assembling tasks into higher functions. Twenty-five years ago, client-server networks enabled easier information sharing, eliminating layers of middle management and encouraging open-plan offices. As naming data domains and rapidly interacting with new insights move to the center of corporate life, new management theories will doubtless arise as well.

“Clouds already interpenetrate everything,” says Tim O’Reilly, a noted technology publisher and author. “We’ll take for granted computation all around us, and our things talking with us. There is a coming generation of the workforce that is going to learn how we apply it.”

Winning With Digital Confidence

Today, if there’s a problem with the heat or hot water in your hotel room, you call the front desk and wait for maintenance to arrive. At some chains, you have the option of reporting the issue using a mobile device. But in the near future, many hotel rooms will be wired with connected devices that report potential breakdowns to maintenance and may even automatically fix them. For example, smart-building technology will turn the heat up when your app’s locator notices you are on the way back to your room.

Of course, such developments have significant implications for hotel staff. George Corbin thinks about them from a scientific perspective. As the senior vice president of digital at Marriott, Corbin oversees Marriott.com and Marriott mobile, and he is responsible for about $13 billion of the company’s annual revenue. He says the “skills half-life” of a hotel industry worker is about 12 years, at least for those working in conventional areas such as sales, operations and finance. In other words, if people leave jobs in these functions, they could come back in 12 years and half their skills would still be relevant. But on the digital side, the skills half-life shrinks to a mere 18 months, according to Corbin.

Virtually every other industry faces similar dynamics. Digital competency is practically mandatory in many sectors; if you don’t get on board, you’ll fall behind competitors that do. And yet the knowledge required for widespread digital competency is often in short supply, and the related skills in agility and collaboration are often difficult to achieve in large companies. In a few years, an 18-month skills half-life may seem like a luxury. As a result, many executives’ confidence in their organization’s “Digital IQ” — their ability to harness digital-driven change to unlock value — is at an all-time low.

That’s one of the main findings from the 2017 edition of PwC’s Digital IQ survey. We interviewed more than 2,200 executives from 53 countries whose companies had annual revenues of at least $500 million and found that executive confidence had dropped a stunning 15 percentage points from the year before. These company leaders said they are no better equipped to handle the changes coming their way today than they were in 2007, when we first conducted this survey.

Back in 2007, being a digital company was often seen as synonymous with using information technology. Today, digital has come to mean having an organizational mindset that embraces constant innovation, flat decision making and the integration of technology into all phases of the business. This is a laudable change; however, in many companies, workforce skills and organizational capabilities have not kept pace. As the definition of digital has grown more expansive, company leaders have recognized that there exists a gap between the digital ideal and their digital reality.

See also: Digital Risk Profiling Transforms Insurance  

The ideal is an organization in which everyone has bought into the digital agenda and is capable of supporting it. What does this look like? It’s a company in which the workforce is tech-fluent, with a culture that encourages the kind of collaboration that supports the adoption of digital initiatives. The organizational structure and systems enable leaders to make discerning choices about where to invest in new technologies. The company applies its talent and capabilities to create the best possible user experiences for all of its customers and employees.

Simply upgrading your IT won’t get you there. Instead of spending indiscriminately, start by identifying a tangible business goal that addresses a problem that cannot be addressed with existing technology or past techniques. Then develop the talent, digital innovation capabilities and user experience to solve it. These three areas are where the new demands of digital competence are most evident. They are all equally important; choosing to focus on just one or two won’t be enough.

Our findings from 10 years of survey data suggest the organizations that can best unite talent, digital innovation capabilities and user experience into a seamless, integrated whole have a higher Digital IQ and are generally further along in their transformation. Our data also shows that the companies that use cross-functional teams and agile approaches, prioritize innovation with dedicated resources and better understand human experience, among other practices, have financial performance superior to that of their peers. It’s time for company leaders to build their digital confidence and their digital acumen; they can’t afford to wait.

Getting Tech-Savvy

“We are now moving into a world with this innovation explosion, where we need full-stack businesspeople,” says Vijay Sondhi, senior vice president of innovation and strategic partnerships at Visa, drawing an analogy to the so-called full-stack engineers who know technology at every level. “We need people who understand tech, who understand business, who understand strategy. Innovation is so broad-based and so well stitched together now that we’re being forced to become much better at multiple skill sets. That’s the only way we’re going to survive and thrive.”

In the past, digital talent could lie within the realm of specialists. Today, having a baseline of tech and design skills is a requirement for every employee. Yet overall digital skill levels have declined even further since our last report, published in 2015. Then, survey respondents said that skills in their organization were insufficient across a range of important areas, including cybersecurity and privacy, business development of new technologies and user experience and human-centered design. In fact, lack of properly skilled teams was cited this year as the No. 1 hurdle to achieving expected results from digital technology investments; 61% of respondents named it as an existing or emerging barrier. And 25% of respondents said they used external resources, even when they had skilled workers in-house, because it was too difficult or too slow to work with internal teams.

The skills gap is significant, and closing it will require senior leaders to commit to widespread training. They need to teach employees the skills to harness technology, which may include, for example, a new customer platform or an artificial intelligence-supported initiative. They will also need to cross-train workers to be conversant in disciplines outside their own, as well as in skills that can support innovation and collaboration, such as agile approaches or design thinking. Digital change, says Marriott’s Corbin, is driven by using technology in ways that empower human moments. “Rather than replace (human interactions), we are actually finding it’s improving them. We need the human touch to be powered by digital.”

One way that companies can accomplish these goals is by creating a cross-discipline group of specialists located in close proximity (we refer to this as a sandbox), whether physically or virtually, so each can observe how the others work. Such teams encourage interaction, collaboration, freedom and safety among a diverse group of individuals. Rather than working in isolation or only with peer groups, members develop a common working language that allows for the seamless collaboration and an increased efficiency vital to moving at the speed of technology. This approach avoids the typical workplace dysfunction that comes with breaking down silos: Because business issues are no longer isolated within one discipline but rather intertwined across many, colleagues from disparate parts of the organization are able to better understand one another and collaborate to come up with creative solutions.

Part product development and part project management, the sandbox approach enables your workforce to visualize the journey from conception to prototype to revelation in one continuous image, helping spread innovation throughout the organization. The culture of collaboration can speed the adoption of emerging technologies.

For example, this approach enabled the Make-A-Wish Foundation to bring employees together from across the organization, including some whose role in developing a new tech-based feature may not have been obvious, such as a tax expert and a lawyer. In just three months using this approach, the foundation created and operationalized a crowdfunding platform to benefit sick children.

Investing in the Future

At GE Healthcare, engineers are experimenting with augmented reality and assistant avatars. “Part of my job is to help pull in (great innovations) and apply them through a smart architecture,” says Jon Zimmerman, GE Healthcare’s general manager of value-based care solutions. “The innovations must be mobile native because … our job is to be able to serve people wherever they are. And that is going to include more and more sensors on bodies and, if you will, digital streaming so people can be monitored just as well as a jet engine can be monitored.”

Amid an increasingly crowded field of emerging technologies, companies need strong digital innovation capabilities to guide their decision making. Yet this achievement often proves challenging as a result of organizational and financial constraints. Our survey revealed that fewer companies today have a team dedicated to exploring emerging technologies than was the case in years past. Many are relying on ad hoc teams or outsourcing. Moreover, 49% of companies surveyed said they still determine their adoption of new technologies by evaluating the latest available tools, rather than by evaluating how the technology can meet a specific human or business need.

Equally troubling is that spending on emerging technologies is not much greater today, relative to overall digital technology budgets, than it was a decade ago. In 2007, the average investment in emerging technology was roughly 17% of technology budgets, a surprisingly robust figure at the time. Fast-forward 10 years, and that rate has grown to only about 18%, which may well be inadequate.

It’s time to change these trends.

You’ve identified a problem that existing technology cannot solve, but you shouldn’t just throw money at every shiny new thing. A digital innovation capability must become a central feature of any transformation effort. This approach goes beyond simply evaluating what to buy or where to invest to include how best to organize internal and external resources to find the emerging technologies that most closely match the direction and goals of the business.

Nearly every company is experimenting with what we call the “essential eight” new technologies: the internet of things (IoT), artificial intelligence (AI), robotics, drones, 3D printing, augmented reality (AR), virtual reality (VR) and blockchain. The key is to have a dedicated in-house team with an accountable, systematic approach to determining which of these technologies is critical to evolving the business digitally and which, ultimately, will end up as distractions that provide little value to the overall operation. This approach should include establishing a formal listening framework, learning the true impact of bleeding-edge technologies, sharing results from pilots and quickly scaling throughout the enterprise.

Perhaps most importantly, organizations need to have a certain tolerance for risk and failure when evaluating emerging technologies. Digital transformation requires organizations to be much more limber and rapid in their decision making. Says GE Healthcare’s Zimmerman, “One of our cultural pillars is to embrace constructive conflict. That means that when an organization transitions or transforms, things are going to be different tomorrow than they were yesterday. You must get comfortable with change and be open to the differing thoughts and diverse mind-sets that drive it.”

See also: Systematic Approach to Digital Strategy  

In a promising development, signs indicate that companies are starting to focus on bringing digital innovation capabilities in-house. According to the New York Times, investments by non-technology companies in technology startups grew to $125 billion in 2016, from just $20 billion five years ago. The Times, citing Bloomberg data, also noted that the number of technology companies sold to non-technology companies in 2016 surpassed intra-industry acquisitions for the first time since the internet era began. Walmart, General Motors, Unilever and others are among the non-technology giants that made startup acquisitions last year. General Electric, whose new tagline is, “The digital company. That’s also an industrial company,” spent $1.4 billion in September 2016 buying two 3D printing businesses in Europe.

Other companies are engaging in innovative partnerships. At the annual Consumer Electronics Show in January 2017, Visa, Honda and IPS Group — a developer of internet-enabled smart parking meters — teamed up to unveil a digital technology that lets drivers pay their parking meter tab via an app in the car’s dashboard. By “tokenizing” the car, or allowing it to provision and manage its own credit card credential, they essentially make it an IoT device on wheels. “The car becomes a payment device,” explains Visa’s Sondhi. “And taking it even further, we can turn it into a smart asset by publishing information that’s related to the car onto the blockchain. This can enable a whole host of tasks to be simplified and served up to the driver, such as pushing competitive insurance rates or automatically paying annual registration fees.”

Solving for “X”

At United Airlines, Ravi Simhambhatla, vice president of commercial technology and corporate systems, views digital innovation as a way to break free from habits ingrained in his company over nine decades because they are no longer relevant to its customers and employees. The company plans to use machine learning to create personalized experiences for its customers. For example, when someone books a flight to San Francisco, the company’s algorithm will know if that person is a basketball fan and, if so, offer Golden State Warriors tickets.

“What we have been doing is really looking at our customer and employee journeys with regard to the travel experience and figuring out how we can apply design thinking to those journeys,” says Simhambhatla. “And, as we map out these journeys, we are focused on imagining how, if we had a clean slate, we would build them today.”

With the right digital skills and capabilities comes great opportunity to improve the experience of both your employees and your customers. One constant that emerges from 10 years of Digital IQ surveys is that companies that focus on creating better user experiences report stronger financial performance. But, all too often, user experience is pushed to the back burner of digital priorities. Just 10% of respondents to this year’s survey ranked creating better customer experiences as their top priority, down from 25% a year ago. This imbalance between respondents’ focus on experience and its importance to both customers and employees has far-reaching effects. It creates problems in the marketplace, slows the assimilation of emerging technologies and hinders the ability of organizations to anticipate and adapt to change.

Part of the reason user experience ranks as such a low priority is the fact that CEOs and CIOs, the executives who most often drive digital transformation, are much less likely to be responsible for customer-facing services and applications than for digital strategy investments. As a result, they place a higher priority on revenue growth and increased profitability than on customer and employee experiences. However, user experience is also downgraded because getting it right is extremely difficult. It is expensive, outcome-focused as opposed to deadline-driven and fraught with friction.

However, unlike so many other aspects of technological change, how organizations shape the human experience is completely within their control. Companies need to connect the technology they are seeking to deploy and the behavior change they are looking to create.

Making this connection will only become more critical as emerging technologies such as IoT, AI and VR grow to define the next decade of digital. These — and other technologies that simultaneously embrace consumers, producers and suppliers — will amplify the impact of the distinct behaviors and expectations of these groups on an organization’s digital transformation.

Companies that focus too narrowly on small slivers of the customer experience will struggle to adapt, but overall experience-and-outcome companies that seamlessly handle multiple touch points across the customer journey will succeed. That’s because, when done right, the customer and employee experience translates great strategy, process and technology into something that solves a human or business need. You have the skills and the capabilities; now you need to think creatively about how to use them to improve the user experience in practical yet unexpected ways. Says United’s Simhambhatla, “To me, Digital IQ is all about finding sustainable technology solutions to remove the stress from an experience. This hinges on timely and contextually relevant information and being able to use technology to surprise and delight our customers and, equally, our employees.”

The Human Touch

When talent, innovation and experience come together, it changes the way your company operates. Your digital acumen informs what you do, and how you do it. For example, Visa realized back in 2014 that digital technology was changing not only its core business but also those of its partners so rapidly that it needed to bring its innovation capabilities in-house or risk being too dependent on external sources. It launched its first Innovation Center in 2014; the company now has eight such centers globally, and more are planned.

Visa’s Innovation Centers are designed as collaborative, co-creation facilities for the company and its clients. “The idea was that the pace of change was so fast that we couldn’t develop products and services in a vertically integrated silo. We want the Innovation Centers to be a place where our clients could come in, roll up their sleeves, work with us, and build solutions rapidly within our new, open network,” says Visa’s Sondhi. “The aim is to match the speed and simplicity of today’s social- and mobile-first worlds by ideating with clients to quickly deploy new products into the marketplace in weeks instead of months or quarters.”

See also: Huge Opportunity in Today’s Uncertainty  

Across industries, company leaders have clearly bought into the importance of digital transformation: Sixty-eight percent of our respondents said their CEO is a champion for digital, up from just one-third in 2007. That’s a positive development. But now executives need to move from being champions to leading a company of champions. Understanding what drives your customers’ and employees’ success and how your organization can apply digital technology to facilitate it with a flexible, sustainable approach to innovation will be the deeper meaning of Digital IQ in the next decade.

“It’s the blend that makes the magic,” says GE Healthcare’s Zimmerman. “It’s the high-impact technological innovations, plus the customer opportunities, plus the talent. You have to find a way to blend those things in a way that the markets can absorb, adopt, and gain value from in order to create a sustainable virtuous cycle.”

This article was written by Chris Curran and Tom Puthiyamadam.

How to Build ‘Cities of the Future’

Our cities are built brick by brick, often using construction practices that have evolved little in the last century and giving little regard to proper planning and sustainable development.

Yet innovations and new technologies have produced progressive means of constructing the built environment to ensure that urban infrastructure, once in place, can make a valuable contribution to the workings of a city for centuries to come, withstanding many changes in use and function. Good urban infrastructure needs to anticipate change, be built to adapt and to be resilient.

The Global Agenda Council on the Future of Cities has detailed 10 of the most important urban innovations that will shape the future of our cities. At the heart of these innovations is an understanding that the cities of the future need to be flexible and adaptive on a day-to-day level – doing more with less space and resources – and, in the long term, be able to adapt to the powerful mega-trends placing heavy pressures on the urban environment. The three key trends that will shape the agenda of cities for years to come are: demographic shifts, a changing environment and resource scarcity and technology and business model disruption.

Demographic shifts

The UN reports that the global population will rise to 9.6 billion by 2050. Nearly all of this population growth will occur in cities – it estimated that 66% of the global population will live in urban areas by 2050. Most of these cities are located in the global South and, at present, lack the capacity and resources to ensure that growth is sustainable.

Unchecked urban population growth can lead to vast unsustainable urban sprawl, or the creation of dense slums. Cities will need to accommodate more people without increasing their urban footprint; increasing density, without decreasing quality of life. This can be achieved with reprogrammable living space such as MIT’s reprogrammable apartments or by building structures with multiple uses in mind, ensuring that they can be used for different purposes at different times of the day or week, such as reusing office space or schools for social or leisure activities during the evenings or at the weekend.

In the developed world, years of declining birth rates and longer life expectancy are leading to a rapidly aging population, with its own set of challenges. The effects of this demographic shift are already being felt in countries including Japan, Italy, Germany and Norway, with pressure being put on cities to rethink the provision of urban infrastructure, embrace universal design and reuse and repurpose buildings and infrastructure that is becoming obsolete.

See also: Moving Closer to the ‘Smart City’  

This trend is also increasing the demand for health and social services and the provision of housing that will meet the needs of people during their 100-year life. Tokyo is at the forefront of this trend; an estimated 200 schools per year are closing, and the city is repurposing them as adult education centers, senior homes and places of leisure and exercise for the elderly. Cities in other advanced economies need to prepare for this eventuality.

Changing environment and resource scarcity

The world’s climate over the next century is likely to shift dramatically. Increased occurrences of extreme weather events, desertification and rising sea levels all threaten the world’s cities. Fifteen of the world’s 20 largest cities are located in coastal zones threatened by sea-level rise and storm surges. To prepare for these challenges, cities need to be resilient, building coping mechanisms into their urban fabric. If well-designed, infrastructure that protects against high-impact climate events can also be flexible, serving a valuable purpose for the entirety of its life. Projects such as New York’s Dry Line, or Roskilde’s flood defense skatepark combine resilient infrastructure with a space for community leisure activities.

The urban planner Patrick Abercrombie, who created London’s post-World War II master plan, reserved its hinterland as a “green belt” aimed to preserve the countryside, while also providing nourishment to the city. Today, the city’s greenbelt is global, and water and resource scarcity in any region can easily disrupt the delicate balance between a city and its worldwide network of production.

The advent of urban farming will help to alleviate this risk. Urban farms are largely hydroponic – feeding water and nutrients directly to the roots – and closed-loop, meaning they use as much as 90% less water. They can be placed anywhere and stacked vertically, making them as much as 100 times more productive per hectare. By 2050, the world’s population will demand 70% more food than is consumed today; urban farms will help cities to feed their growing populations, creating a vertical green belt, adding flexibility into the food system with guaranteed yields and low-risk supply chains.

Cities consume vast amounts of all resources, from the materials of which they are constructed, to the demands of their citizens for products and packaging. Cities cannot continue to follow a take/make/waste pattern, filling landfills and depleting finite resources, and need to move toward a more circular economy. Systems of reuse and recycling need to be in place to smartly deal with waste, and building materials themselves need to be designed for reuse. The European Union program Buildings as Material Banks creates reusable buildings that store and record the value of their composite materials over their lifetime. Others use up-cycled materials such as shipping containers to provide low-cost, flexible housing to students and young professionals.

Technology and business model disruption

Cities are economic engines. According to McKinsey, 600 cities are responsible for 60% of global GDP. The healthy economy of a city sustains its population through salaries and entrepreneurial activity. However, all economic activity is subject to disruption; shifts in business models can create opportunities, but cites from Detroit to Liverpool have seen the possible negative effects of industrial change.

In the fourth industrial revolution, we are likely to see the biggest industrial shifts in a generation, changing the way we work and live in the urban environment. Innovations such as 3D printing, artificial intelligence and next-generation robotics will shift models of work and production in ways that are impossible to predict. Cities and businesses need to be adaptive. Google, a company at the forefront of this change, anticipates that its business model could shift dramatically. The company’s new Mountain View, CA, headquarters is adapted for this, a series of giant domes under which any number of structures, fit for any purpose, can be quickly assembled; making it completely reprogrammable for any eventual use. Cities need to take a similar approach to construction.

See also: Can Insurance Become Utility, Like Electricity?  

The sharing economy can be defined as the distribution and sharing of excess goods and services between individuals, largely enabled by modern technology. This new model is having a deep impact on the urban environment. Many consumers are moving away from ownership and toward access, renting access to mobility, entertainment or space.

Companies of the sharing economy naturally add a layer of flexibility into the city. Airbnb, for example, allows people to rent out their apartments when they are out of town, easily increasing a city’s capacity to accommodate influxes of visitors as demand increases. As the sharing economy develops, similar companies will enable cities to turbocharge their efficiency, ensuring that no excess capacity is wasted.

Humanity faces the mammoth task of adding more than two billion people to the urban population before 2050, the equivalent of creating a city the size of London every month for the next two decades. To house, feed and employ these people, cities will have to do more with less. They have to be smarter, greener and more efficient. They will have to innovate.

How Health Tech Is Changing Work Comp

The passage of the Affordable Care Act (ACA) changed both the dialogue and dynamics of healthcare in this country. It has also brought employers a new set of challenges and opportunities.

Seemingly uncontrollable medical costs have plagued virtually all businesses in recent decades. The medical component of claim costs now accounts for well over half of the total workers’ compensation cost make-up.

In addition, as more individuals have signed up for coverage under the ACA legislation, the demand on the system for healthcare services is becoming increasingly strained. This demand, coupled with a projected shortage of physicians, has made access to care a more prominent workers’ compensation concern.

The offshoot of such pressures and constraints is a strong and unyielding focus on healthcare technology developments and advancements. The rapidity with which such innovations are being made, and the advances planned in the healthcare treatment and delivery landscape in the coming years, are phenomenal. Undoubtedly, technology will play an increasingly important role in maintaining employees’ well-being and fostering their recovery in the future.

Some of the technological advancements that are available today and on the verge of exploding onto the healthcare scene include telemedicine, Google Glass, wearable monitoring devices, Internet-connected sensors, 3D printing and robotic devices. These are designed to increase the efficiencies associated with delivering healthcare and maximize the providers’ time and talents.

Below are some additional details on these innovations and the advantages they can bring to the workers’ compensation industry.

Telemedicine
The American Telemedicine Association defines telehealth as remote healthcare technology designed to deliver clinical services. This could include alternatives ranging from medical providers consulting patients by phone to performing robotic surgery from a remote location. Telemedicine can certainly benefit injured or ill employees in situations such as nurse triaging and clinical consultation. For example, using telehealth, a nurse at a remote location can evaluate symptoms and determine whether an injured employee needs to be seen directly or can be discharged with instructions for homecare. Telehealth can also be used to reduce or even eliminate wait times and thus, appointment costs. A patient visiting an occupational healthcare provider who needs an evaluation from an orthopedist could have it right on the spot via a conference call during which the test results are projected onto a screen visible to the specialist.

Google Glass
Google Glass technology is being used today to maximize the time and talents of specialty providers and bring high-level expertise to remote areas of the country. One of its most valuable applications is in surgery. For example, a surgeon in New York could assist a surgical team in rural Oregon and show them precisely where to make an incision for a given procedure. Google Glass can also increase a physician’s efficiency in seeing and assessing patient conditions. A patient’s electronic health records could be displayed on Google Glass as a physician is conducting an initial assessment. Information such as medical history or current symptoms and medications could be reviewed in real-time as the physician converses with the patient and determines ensuing treatment. Moreover, in coming years, patients may use Google Glass to assess and evaluate physicians based on available information and reviews appearing on their own display.

Wearable monitoring devices
A number of wearable healthcare monitoring devices have flooded the market and have become popular among a select set of consumers. They are frequently worn around the wrist and can monitor physical information, such as calories burned, steps taken, activity, blood pressure, heart rate, sleep patterns and other defined metrics. These devices help increase awareness among users. For example, if a morning run is missed and step count is down, the individual may be more inclined to take the stairs, park farther away from the building or consume fewer calories. The next step is for users to begin sharing this information with their medical providers as a way of becoming more engaged healthcare consumers. Such information would allow a physician to customize a healthcare treatment plan specifically for that individual as opposed to relying on more general treatment guidelines.

Internet-connected sensors 
Sensors are being used and will become more readily available in the future as a way of monitoring and communicating an individual’s condition. For example, an individual who has recently undergone surgery may have sensors in his shoes to send an alert if he becomes unstable, thereby increasing the risk of a fall. Such sensors may trigger an alert to a smartphone, dashboard or other monitoring device signaling that the individual needs assistance. With the additional capabilities of these devices, resources can be deployed where and when needed, allowing for more effective and efficient care.

3D printing
3D printing is perhaps one of the most fascinating and promising medical advancements. Using 3D printing, experts have produced replicas of human hearts, which allow surgeons to perform a procedure in advance of an actual operation, improving quality and outcomes. 3D printing is also being used to produce human skin. This technology can be a tremendous benefit to burn victims and can reduce recovery time considerably. It also shows promise in aiding back surgeries. Previously, titanium plates were inserted between disks, and bone would grow around these plates. 3D printing allows the production of cellular structures that can become part of the bone growth itself. Such advancements are expected to reduce the need for repeat surgeries.

Robotic devices
Robotic devices are being used now and will likely become more common. One of their current uses is to help extend the efficiency and effectiveness of nurses and allow them to focus more specifically on patient needs and priorities. For example, when a nurse is recording vital signs, a robot can be used to retrieve supplies, allowing the nurse to spend more time providing valuable patient care. Looking further into the future, robots may be used to provide more extended patient care.

These types of medical technology advancements are helping to create a culture of connected health that will redefine our treatment and delivery system. While new challenges and risks will arise, technology will play a prominent role in tomorrow’s healthcare. In the not-too-distant future, the amount of real-time information and communication that can be shared instantaneously is hard to imagine. This will allow for more productive and cost-effective interactions among patients, providers, employers, payers and caretakers. A more effective and efficient healthcare system characterized by improved quality and outcomes is a win-win situation for virtually all workers’ compensation stakeholders, and one that could quickly become a reality in today’s world.

Preparation breeds optimism, and employers have the opportunity to prepare for the roll-out of the new healthcare legislation using digital health advancements. The suite of health technology tools, companies offering solutions in this space and the advanced products described above are all part of the newly evolving digital health arena, and undoubtedly these advancements will be part of a broader solution.

In looking ahead, the convergence of digital health solutions with evolving healthcare delivery models has the potential to significantly improve access to care, address quality concerns and assist with costs. This would enable consumers to become more engaged and active in their health and, in turn, lead to improved health and productivity for employers. This would be a workers’ compensation offshoot by which we could all stand.

This article first appeared at WorkCompWire.