Tag Archives: community

Insurers Must Collaborate on Cyber

We are living in the accumulated aftermath of the countless cyber breaches that, since the turn of the century, have cost the global economy over $2 trillion. We are in the untenable situation where insurers find it nearly impossible to provide security for their insureds while safeguarding their own profitability.

However, the destruction and loss of the past need not be the fate of the future. If cyber liability and technology E&O insurers learn from the recent past, then insurers can help give rise to a future cyber realm that is free from the doubt and fear that are prevalent now.

Over the past two decades, insurers have not worked with members across the private spectrum to put into place unified laws governing the cyber realm, so there are now laws across the world that have been enacted or about to be enacted that are making it more difficult to provide cyber liability insurance. What may be even worse is that, for the past four years or so, different governments have argued against end-to-end encryption (E2EE), and insurers have not responded swiftly to that threat, either. If a country, especially one like the U.S, were to pass a law making E2EE unlawful, then providing cyber liability insurance to anyone would be made more difficult than it already is.

Thus far, insurers rarely speak to each other regarding their most prominent common adversary: hackers. Perhaps the only time that insurers might broach the subject of that adversary is when they are at a NetDiligence or PLUS Cyber Symposium conference, and even then hackers are treated as more of an appetizer than as a main course. If a hacker or hacking group causes five different insurers a combined loss of $50 million, then clearly such attacks represent a inconsequential loss. However, because insurers do not talk to each other, not only do they not know the common methods of attacks on their insureds, along with the collective loss they suffered, but they also have no way to focus efforts on removing that hacking threat. There is also no way to know that a hacker or hacking group is targeting a specific sector of the private sphere, because the only way to know that is through shared intelligence.

Every day, threat actors from nation states or hacking groups or standalone hackers are using the advances in cyber breach techniques learned from each other to create the next unstoppable attack. It is time for insurers to pool their own resources so that they and their insureds can begin to level the playing field with respect to the main adversary so that laws passed are to the benefit of insureds and insurers alike.

Insurers also need to look at the complete picture to be responsible netizens and help craft a safer cyber future. When semiconductor technology in the form of computers began to integrate with the personal and professional realms in the 1980s and into the 1990s, at least in the U.S, it was a very tortured process. Almost as soon as businesses had upgraded to 33Mhz processors, 66Mhz processors came out. Similarly, the original floppy disk drives quickly gave way to 3.5-inch disks, which gave way to Zip drives, CD-Roms and so forth. In software, things were no better. After finally using computers and learning DOS, businesses were introduced to Windows 3.1 and thereafter were upgraded to Windows 95, 98, 98SE and beyond. Every part of binary technology over the past 40 years has seen a relentless drive toward cutting-edge technology, and that pursuit thrust upon the people of this world a technological reality that very few understand.

Today, most people are unable to say what SoC (System on Chip) drives their smartphones, what a GPU stands for, what the differences are between 4G and 5G wireless technologies and what many other basic technological concepts are. Even among insurance professionals, there are still many people who hunt and peck and are unable to achieve a typing speed of 45 words per minute.

Worldwide, almost all schools lack a structured curriculum for the K-12 system that not only teaches binary fundamentals to the young but also helps them to understand computing history and the potential future of computing and networking technology. Consequently, despite the significant numbers of people using social media and smartphones, and the rise of IoT, most people do not know the fundamentals of our present binary world.

Perhaps more damaging is what the future holds. If most people barely understand current technology, then quantum computing, carbon nano tubes and neurotropic technology will be ever more unnerving for even more people. This disparity between the few who understand it, and the tremendous numbers who access the binary world without comprehension, creates a dangerous situation in multiple ways. Yet, this is the situation in which cyber liability and technology E&O insurers are trying to insure a binary usage world.

See also: Future of Insurance to Address Cyber Perils  

With the whole picture in mind, it is time for insurers to start implementing, soonest, solutions that will prevent the future from being like the past two decades. Insurers and insurance brokers alike need to start to act in accordance with what being part of a community means.

In its most basic form, a community is a group of people or organizations that exist in the same area or share a common purpose, and the most successful communities are the ones that come together and put the good of the community ahead of any individual member. Insurers would do well to start to establish a series of townhalls in physical communities to talk about not only what cyber liability and technology E&O are but also go over every aspect of what cybersecurity is, from anti-virus software to which CPUs and GPUs are the least vulnerable, to cyberattacks.

It would be especially helpful if some of these townhall seminars were dedicated to people 65 and older, because many organizations are wanting to “help” seniors without providing them with reasonably secure cyber products. To date, seniors do not seem to have borne the brunt of cyberattacks. However, it is only a matter of time before cyber criminals begin to realize the monetary value of focusing cyberattacks on seniors.

Many insurance professionals are eager to point out that small and medium-sized businesses are extremely vulnerable to cyberattacks, but warnings from a distance are not an acceptable substitute, on such an urgent issue, for face-to-face human interaction. There is a reason that property and auto insurers in the 20th century, used a phrase such as “like a good neighbor, State Farm is there.” A neighbor is a community member who is invested in the success and challenges of others.

With the 2020 U.S census coming up, there still has not been a unified community outreach effort on the part of insurers to help the census begin and end in a secure form at the community level. The most efficient way insurers can help with the census is to provide public libraries and community centers with new computers and networking equipment and lending IT staff.

Insurers also need to work with the cybersecurity community and with K-12 schools around the world so that students understand how to be responsible netizens. There needs to be encouragement in education, from letting the young follow what is popular technologically, to what is actually effective and useful. If
insurers do not work with the cybersecurity community, then how can educators and parents ever really know what responsible netizen activity looks like? Insurers can either work with others to start reducing that deficit, which will also reduce the frequency of breaches, or insurers can repeat their mistakes and forever put their profitability and the safety of their insureds in doubt.

In terms of effective global communication, we who are living now are standing where once stood those who coped with the changes in communication wrought by the printing press and its transformation of the world. However, modern global correspondence faces challenges that require insurers to start putting solutions into place now that will have benefits that last in terms of decades and centuries. With that in mind, it is time for insurers to bring to life an international competition that will encourage students in the seventh to 12th grades to create educational websites or advanced robots or allow for a structured and interactive way for them to point out zero-day exploits and other vulnerabilities that would have a $500 million or larger impact on the world economy if the exploit were to be used against the netizen community.

Insurers also need to start to rate every piece of technology with an independent testing lab. The lab needs to be built with the authority and autonomy to ensure that its ratings are as impartial and accurate as possible so that insurers can work with information that is as close to factual as possible. Insurers also need to tackle higher education and work with an organization like IEEE to finally bring the training of software developers/engineers into the 21st century. It is time for software engineers to have to meet requirements that are on par with structural engineers and attorneys. Not only will this enable a minimum higher level of coding competency, but it will prevent the non-certified engineers from being allowed to put pieces of inept software code into programs upon which this world depends.

Helping the brilliant young become useful and positive contributors to the cyber community, creating an independent testing lab and working with other members of the netizen community to produce certified software engineers can only enable a netizen community that appropriately values and pursues safety, the common good and the future success of the cyber realm. All of this would be to the great benefit of cyber liability and technology E&O insurers and their insureds.

See also: Surveying Wreckage of Cybersecurity  

People often cite the increasingly sophisticated breach techniques of hackers or the hyper evolving technological innovations of technology companies as reasons why dark knight cybersecurity specialists have managed to become so formidable. However, the reality for the rise of hackers is the inaction of implementing long-term solutions by insurers.

Cyber liability and technology E&O insurers perhaps have the best vantage point of any other part of the private sector, because they get to watch in real time everything that happens before, during and after a breach. It is those insurers, especially cyber liability insurers, who say they can help and protect insureds, and who are actively offering their services on the world’s stage. Unfortunately, insurers have thus far acted as if they need only sprint to the finish line to help their insureds. This is not, though, a sprint. It is in fact a very long journey that insurers must undertake.

However, if insurers pace themselves, unite with each other to overcome shared challenges and reach out to other members of the netizen community, then they will be able to leave the winter of desolation behind and step into a future spring that is lively, safe, profitable and enduring.

Innovation, Community and Timelessness

“A thing of beauty is a joy forever.”

This is the opening line of the very famous poem called Endymion by John Keats, published in the early 1800s.

While this line is intended to set up a beautiful story about timeless romance, the line itself in popular culture has been used in literature, movies, ads and general conversation to describe everything from nature to art to science and more.

Why? Because Keats did an awesome job of extracting the nuance of something that everyone can relate to — not just love, not just beauty, but timelessness. It’s human nature to want timelessness and sometimes even take it for granted.

Good innovators know when something is going to fail the timelessness test. However, great innovators look at what’s failed or failing and, like a priceless painting unrecognizable from years of dust, extract what’s timeless and work hard to put it into a modern context.

Let’s look at some of the most famous modern innovators and put a label on what timeless element they extracted and modernized.

  • Steve Jobs (Apple): 24/7 connection to what’s important
  • Mark Zuckerberg (Facebook): Social exchange and acceptance
  • Jeff Bezos (Amazon): Convenience and time-saving
  • Travis Kalanick (Uber): Anything on demand, including a job

Any company that is constantly looking at its products and their applicability to new consumers is practicing good innovation. However, those that can define the nugget of timelessness have a greater advantage.

See also: Innovation Challenge for Commercial Lines  

Recently, my colleagues and I have had the privilege of working with the American Fraternal Alliance, and we’re in the midst of an inspiring innovation initiative for what could be considered a dusty corner of the life insurance industry.

1. Why is it dusty?

For background, fraternal benefit societies are organizations of people who usually share a common ethnic, religious or vocational affiliation and may provide insurance to members, primarily life insurance. While this model dates back hundreds of years, the dustiness doesn’t come just from age. For starters, the practices and language used by these societies can conjure up outdated or inaccurate images because connotations of words and phrases change over time. More important, for some, there is a decline or weakening of the common bond that drew the group together in the first place, requiring it to be updated.

2. Why is it inspiring?

The insurance industry provides a valuable utility to the public, yet consumers today have a negative impression of the industry. Recent developments in healthcare don’t help that impression. Fraternals are a special kind of insurance organization that is required to give profits back to their communities; thereby, done right, they shift the focus naturally from what they offer to why they offer it.

3. What do they want to accomplish?

The American Fraternal Alliance members want to reposition the fraternal model into the modern day and help more consumers understand it. However, it’s not an exercise of logos and fonts or sexy models selling something. It’s about finding and extracting what’s timeless and then communicating that in the right way.

4. How did they start?

This group started with a small investment, to determine if there was an opportunity in the first place. What was found was very encouraging. While the awareness levels in the market were quite low as a starting point, when consumers intending to buy life insurance in the next two years were provided with a simple description of a fraternal, the overall impression was very positive. Then, when fraternals were described in a new way, overall positive impression went up by another 23 percentage points. Further, the interest level in buying from a fraternal was 70% when prospects were exposed to a new positioning message.

This is further validated by signals in the market. We see younger consumers favoring brands that give back to communities all around the world. In addition, the disruptors in insurance are leveraging new definitions of community as a selling point for peer-to-peer models.

See also: Examining Potential of Peer-to-Peer Insurers  

That’s not to say there isn’t a lot of work still to be done. However, the innovation lesson here for the life insurance industry may be that community is timeless, and modernizing it may mean more to the future of insurance than modernizing insurance itself. Extracting what community really means and working hard to deliver on that value is what will ultimately move the needle in a meaningful way. Fraternals, dustiness aside, are in a great position to do that.

4 Marketing Lessons for Insurtechs

When I recently moved to a new state and had to switch my auto insurance, I thought it would be quick and easy. I was wrong. The process was complicated, and included multiple pages of paper documents that had to be signed, scanned, re-scanned, re-scanned again and ultimately shipped overnight. Only after completing this process and waiting several days did I have my new insurance cards. For someone who is the ultimate online consumer (if I can buy it online, I will), this was a hassle, to say the least.

But maybe I shouldn’t have been surprised. The property-casualty insurance industry is a complex one, marked by long-term agent-carrier relationships, regulations that vary state-to-state, processes and legacy technology. In a world in which you can order a car service, buy food or clothing with one click, or access any aspect of your banking or investment accounts 24X7, much of insurance is still different.

See also: Incumbents, Insurtechs Must Collaborate  

The opportunity to do better has given rise to insurtech, the insurance-focused version of fintech. Through our work with the Insurance Digital Revolution, an industry initiative formed to advance digital technology adoption in insurance, and our partnerships with VCs and entrepreneurs, we’ve seen that many CEOs are focused on technology and solutions, but fewer are getting the most out of marketing. So we’ve pulled together these four lessons to help the B2B players break through:

  • Keep asking yourself, so what? Have you ever been presented with a long list of features for a new product and said to yourself, so what? Some features, like easy-to-use, flexible, secure, fast, SaaS-based, are so common they lose meaning with buyers. The best companies don’t just talk about features, they talk about benefits ⎯ in very specific ways. These companies understand their customers and speak to them in terms that have real meaning. To get to the true benefits of your solution, after every feature, keep asking yourself, so what? Keep going until you can’t go any further. For example, a new analytics software solution might be easy to use. So what? You can create models instantly. So what? Your underwriters can see the effect of a rate change based on market conditions today. And there’s the benefit.
  • In a market where everyone has a better way, say something different. Most solution providers come to market because they really do have a better way. But as a marketing and sales message, “we have a better way” is not enough. It only has meaning for prospects who are extremely frustrated with the current way, and doesn’t help your solution stand out. The same can be said for “we’re fast” or “we’re easy to use.” If you look around, you’ll see that many technology companies say the same things. Test yourself by substituting another solution provider’s name into your sales presentation. If it still makes sense, you have work to do to differentiate your message. And while it’s okay to make bold claims (as long as you can back them up), don’t focus on too many. One tech company I know used a revolving list of 10 big claims about its solution. The approach not only diluted the message, but the company lost credibility by using so many superlatives, like “best” and “most powerful.” It can take discipline, but focus on only one or two things that have real meaning to your customers.
  • Fear doesn’t motivate people to buy. For many insurtech businesses, disruption is part of the value proposition: Some are clearly built on the idea of disruptive business models, and others on empowering carriers and agents to avoid being disrupted. But focusing on fear, and too little on the vision or the opportunity to improve business, won’t get you very far. When you’re selling to insurance carriers and agents, you’ll need to build trust into your solution. That means demonstrating not only how it works, but the results your customers achieve. One of the easiest ways to do this is let your customers tell their stories, on video. And you don’t need a big production ⎯ this is an area where authenticity trumps sophistication.
  • Let your community work for you. While customer testimonials and case studies are important in establishing credibility, they’re only the first step. Not only must you convince prospective customers that your solution works, you must give them compelling reasons to change. Building community can take many forms, including creating and working with user groups, holding customer meetings and using social media, such as closed networks on LinkedIn, to discuss questions and ideas. In one example, a technology company implemented a sandbox and feedback loop, for customers to make suggestions and test new versions of the solution. This created a core community of customers who were clearly vested in helping the company grow.

See also: The Future of Insurance Is Insurtech  

The P&C industry is on the cusp of major digital transformation that will advance how insurance products are developed, priced, sold and serviced. The investment flowing into insurtech businesses highlights the scale of the opportunity. But more dollars flowing creates a more crowded field of solution providers. While many entrepreneurs get into the business with a vision backed by technology, basic marketing can be an important tool for growth. We’ve seen first-hand that not every new company is doing this well. There’s a real opportunity for those who do, to stand out.