Tag Archives: covid-19

Why COVID-19 Must Accelerate Change

While the COVID-19 pandemic and the ensuing economic downturn have prompted consumers to curb their spending, consumers are increasingly mindful of risk and therefore more inclined to purchase insurance. 

A recent survey conducted by Lightico and Sapiens found that a fifth of consumers are exploring purchasing new auto, home and life insurance products amid the pandemic. Those directly affected by the coronavirus – meaning they or someone they knew tested positive – were even more likely to be considering more spending on insurance products. These consumers were 2.3 times as likely to plan on spending more on property and life insurance and 1.8 times as likely to say they would spend more on healthcare and health insurance.

Given that nearly half of consumers in the survey reported that their incomes had plunged by at least 20% since the pandemic started, those figures are remarkable – but for insurers to truly meet the needs of these consumers and stand out from the competition, they must deliver streamlined digital experiences, powered by strong core systems.

Here’s what today’s consumers expect from insurers, and what insurers can do to provide the quality digital journeys that customers crave:

See also: Strategic Planning in the COVID-19 Era

Living in a Digital World

Long before the novel coronavirus outbreak began, consumers were living in a world digitally transformed. Thanks to innovations in e-commerce, content streaming, mobility and beyond, people now enjoy rapid access to consumer goods, groceries, movies, music, car services and much more, all available at their fingertips. 

After months of widespread remote work, millions more now have first-hand experience with a virtually overnight shift in workflows, collaboration and company culture, enabled by innovations in cloud computing, information technology and business software. 

Not surprisingly, 68% of consumers surveyed in the Lightico-Sapiens study indicated that they expect businesses, including insurers, to enhance their capabilities for serving customers remotely. When it comes to purchasing new products and policies, today’s consumers have little patience for analog practices: Three in five consumers surveyed said that they now have less patience for filling out and sending paperwork, and 51% had already e-signed documents within the previous month. 

What Insurers and Carriers Should Do

How satisfied are consumers with insurers’ track record of meeting their expectations for seamless digital experiences? In key areas, insurers are falling well short. According to the survey, insurers are 50% behind consumer demand for online chat servicing and 25% behind demand for website servicing.

The takeaway? While it’s vital for insurers to digitize their business processes and strengthen their core systems, these steps alone won’t suffice to meet the market’s needs. Ramping up online communication capabilities is an absolute must, and insurers can boost the effectiveness of that outreach by getting smart about data.

Robust customer data collection – supported by efficient core systems – yields critical insights for understanding customer behavior, diversifying product offerings and unlocking revenue opportunities. This is especially important amid the pandemic, with the public set to continue practicing some degree of social distancing for the foreseeable future and predictions that COVID-19 will permanently alter consumer behavior. 

Accenture consultancy points to much greater use of digital commerce as one of the most consequential of these changes. While face-to-face sales and customer interactions aren’t going the way of the dinosaurs, insurers seeking to thrive in this new normal must make room for a more prominent role for AI-powered chatbots, personalization and cloud-powered services. Each of these is only possible with a granular understanding of how customers behave, what they want and how insurers can make their offerings meet customers’ needs and expectations.

Necessity, the pandemic has harshly reminded the world, is the mother of invention. For insurers, the crisis has driven home the reality that innovation is a fundamental matter of survival. Through creative partnerships, investments in technology and a commitment to improving customer service, insurers and carriers will propel lasting industry changes and position themselves to meet evolving consumer demands.

Six Things Newsletter | August 11, 2020

COVID-19: The Long Slog Ahead

Paul Carroll, Editor-in-Chief of ITL

While sorting through the latest studies and projections about the path of the coronavirus this past week, I was hit in the face with a veritable two-by-four by a piece in Medium by my old friend and colleague Sam Hill. Sam, an all-around smart guy who may be known to some of you because of some high-impact consulting he’s done in the insurance world, writes that, even under the best of scenarios, we’re probably looking at the end of 2021 before the world might return to normal.

Let that sink in for a minute. More than 16 more months of this, in one form or another… continue reading >

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Why Work-From-Home Threatens Innovation
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Non-insurance competitors such as Amazon, Google, Tesla, Comcast, General Motors and many others are not standing still, and neither should insurers.

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by Tiffany Wang and Jeff Goldberg

Insurers should not invest in technology-driven projects; instead, look for use-case-driven projects.

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As much as claims representatives want to help individuals, there has been no feasible way to provide compassion at scale.

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COVID-19: The Long Slog Ahead

While sorting through the latest studies and projections about the path of the coronavirus this past week, I was hit in the face with a veritable two-by-four by this piece in Medium by my old friend and colleague Sam Hill. Sam, an all-around smart guy who may be known to some of you because of some high-impact consulting he’s done in the insurance world, writes that, even under the best of scenarios, we’re probably looking at the end of 2021 before the world might return to normal.

Let that sink in for a minute. More than 16 more months of this, in one form or another.

In some ways, Sam’s piece strikes me as quite optimistic. He is counting on having three viable vaccines for the virus in the market by the end of this year.

But it will take months to manufacture and distribute enough to vanquish the virus. Some vaccines may not work or may have disastrous side effects, leading to caution both among public health authorities and among those of us considering getting the virus — “In 1976,” Sam writes, “one person died of a flu strain that appeared to be like the 1918 flu. We rushed a vaccine through. It killed 250 and paralyzed 500.”

Even if the vaccine works, it may only be 50% to 60% effective, not 90%, as we’ve come to expect with smallpox, measles and polio, so a lot of people would be left vulnerable.

By the time you crank in all the steps that have to be completed before life returns to normal, Sam puts the over/under at roughly the end of 2021.

And that’s the best of the three scenarios he lays out.

As long as I’m quoting people this week, here are the two smartest observations I’ve seen recently on how to navigate these crazy times. Both come from Kevin Sneader, the global managing partner at McKinsey:

“The first piece of advice I’d offer a CEO is, forecasts are out, dashboards are in. The notion that you can now forecast the economy, healthcare and other aspects of what can disrupt life, I think, is gone. Now we’re in an environment where we’ve also learned that what you really need to have a handle on are the metrics, insights and what’s actually happening on the ground—the dashboard of daily life.

“You really do have to think like an attacker all over again. Even if you were the incumbent, even if you were the leader before this pandemic, you’re now the attacker, so you must take the steps that attackers take. Think very differently. Look for new opportunities, new markets. Reshape the portfolio and, yes, look at mergers and acquisitions. Plan to do things quite differently as the future unfolds.”

Stay safe.

Paul

P.S. Here are the six articles I’d like to highlight from the past week:

Why Work-From-Home Threatens Innovation

Non-insurance competitors such as Amazon, Google, Tesla, Comcast, General Motors and many others are not standing still, and neither should insurers.

How Insurers Are Applying AI

Insurers should not invest in technology-driven projects; instead, look for use-case-driven projects.

‘Scalable Compassion’ in Workers’ Comp

As much as claims representatives want to help individuals, there has been no feasible way to provide compassion at scale.

Panic Pricing May Be a Bad Idea

While raising rates might be how the industry has responded to uncertainty in the past, there are reasons not to do so now.

The Problem With Virtual Events

People routinely consume TED talks online and love them — because they don’t bear any resemblance to boring, low-energy Zoom presentations.

5 Things Here to Stay, Post-Pandemic

While responses to where and how people work have varied, several effects on workplaces from the pandemic will persist even once it subsides.

COVID: Agents’ Chance to Rethink Insurance

When dealt a hand of cards, the goal is to play them as best you can. In other words, be constructive. The COVID-19 virus has given agents a wonderful opportunity to rethink insurance in general and their operations specifically. I’m going to start with a brief synopsis of what insurance is designed to protect.

Many writers have written that the pandemic is a Black Swan event (a few creative writers have stretched for more exotic animals, but a Black Swan is more applicable to insurance). Black Swan events were brought to the financial world’s attention through Nassim Nicholas Taleb’s book, “The Black Swan,” which gained considerable popularity for its seemingly prescient prediction of the credit crisis. Taleb considers how luck, uncertainty, randomness and risk all coincide and how, as the subtitle suggests, The Impact of the Highly Improbable can be managed.

The pandemic was absolutely expected by the scientific community, if not by regular citizens and politicians. I think one might conclude that insurance carriers expected it, too, because of the exclusions they built into their policies. Insurance is designed for Black Swan events, but in many ways carriers, agents and the public have lost this perspective. Insurance is designed to restore the policyholder to the financial status (a balance sheet position) enjoyed immediately prior to the unexpected loss. Insurance would not be affordable if the losses were expected. Those are maintenance policies.

Moreover, insurance would not be affordable if the events were unexpected but occurred frequently. A really good example of how insurance companies have lost track of this point is in my home state of Colorado. For some reason, insurance company after insurance company has opened up in this state for property without realizing that hail happens all the time in all of the major population centers. Hail should be expected to affect a large number of properties on a fairly regular basis, if on an irregular schedule.

A good play to make with poor cards is to simply rethink and go back to the basics of what insurance is designed to do. Then, build your agency and value proposition to clients from there. Insurance is a fantastic tool for reinstating a person’s wealth to its position immediately prior to a highly unexpected and relatively rare event. While auto crashes occur all the time, auto crashes per capita are relatively rare, and outside of fraud, always unexpected.

E&O claims often occur because agents fail to address unexpected and rare events. Business income coverage is a great example in this environment. Claims are virtually always unexpected and relatively one of the rarer insurance claims. Insureds are, therefore, less likely to recognize this exposure as an important insurance coverage. Agents are less likely to recognize it. too (ignoring for the moment most agents’ lack of adequate understanding of this coverage). If both parties fail to recognize its importance, the odds of an insured having adequate coverage if an unexpected business income claim occurs is low.

I read a quote from a business owner who had a pandemic-related business income claim denied. He said something to the effect of, “But that is what I thought insurance was for! That is what I thought I’d bought.” I don’t know anything about that particular claim, but my guess is that he never read his policy and maybe even if he did read it he did not understand the need for pandemic business income coverage. There is no reason to expect he should have.

See also: 5 Transformations for a Post-Pandemic World

Humans have an incredibly difficult time understanding the unknown. Humans do not have a great ability to appreciate the importance of Black Swan events. (I encourage you to read Taleb’s book “The Black Swan” and his book on fragility, “Antifragile: Things That Gain From Disorder.”) Yet insurance is designed for Black Swan events. Arguably, insurance is designed for larger-probability events than Black Swan events but still at the tail end of the normal curve. This is why actuaries are employed. This is also why claim stories are so much fun and fascinating and often earn the sobriquet of, “You can’t make this stuff up!” You can’t make up the claims stories, because they are rare and unexpected.

This re-established insurance foundation provides the cornerstone for helping manage the agency, remotely or otherwise, helping clients and navigating insurance distribution going forward. There are two classes of insurance agents — “order-takers” and “professionals.” Agents who are order-takers work from the assumption or presumption that insureds know what rare and unexpected claims they want insurance to protect. The insured orders these coverages, and the agents obtain those coverages to the best of their ability. It’s pretty simple, except that most insureds have a limited knowledge of what the unexpected events are for which they are likely to need coverage, and, in my experience, most order-taking agents are even less knowledgeable. The blind leading the blind is a great combination for eventual disputes, unhappy clients and E&O claims.

Going forward then, managing the agency should perhaps start with deciding whether your agency will be an order-taker or a professional agency. Once you make this decision, you can then best determine how to manage your agency and help your clients. Because, as an order-taker, you will not be making thorough coverage recommendations, if any recommendations at all, the key is going to be speed and low cost.

These are the benefits you will thrive upon because these are the benefits best appreciated by this class of customers. You will want to hire people focused on speed and efficiency. You will want to invest in technology that emphasizes speed and low cost. The entire agency must be focused on speed and low cost.

This may mean online quoting systems. It may also mean hiring employees who can process emails, calls, paper, etc. at a fast pace but are not skilled in insurance coverages. The technology used is different from the technology of professional agencies because coverage analysis, intimate meetings with clients — “close” work, in other words — is unnecessary in the order-taker environment. Employees who fit the order-taker environment will have a different personality than those who focus on coverages. Hiring specific to your model is vital.

From an E&O perspective, the historic middle ground is being eliminated due to the pandemic. The lines are being drawn more clearly than ever. Agents need to choose to operate as one type of agency or the other because the middle ground has become a dangerous trap. The best way to play this hand of cards is to fold on the strategy of following the middle ground.

The professional agent will focus on hiring people who have excellent communication skills, great insurance technical knowledge and critical thinking skills. These three skills are mandatory for “close” client work at the professional level. These people will educate clients on their exposures. Exposures are common and identified. The question is whether, once a client understands the exposures, the client wants to buy insurance for the unlikely event that an accident (unexpected) occurs relative to that exposure. The education required for this kind of service is challenging, and not everyone has the skills or patience to achieve it.

See also: Managing Risk in a Pandemic

The technology required for a professional agency is different from order-taking agencies because quality Zoom-like meetings will be far more important. The agencies will probably want to train their people on Zoom backgrounds, voice delays and other improvement protocols and will likely find ways to meet in person with clients when possible. These agencies will, more than ever, focus heavily on insurance technical training.

No universal answer exists to this paradigm change other than deciding which kind of agency you will be. Just like a hand of cards — other than the fact that every hand needs to be played — no universal answer exists. Be constructive and decide who you will be going forward. Decisions become much, much easier when you know your point of origination.

You can find this article originally published here.

COVID-19 Impact on Child Vaccinations

A potentially devastating perfect storm is forming due a combination of COVID-19 fears and many parents now not getting their children wellness exams and routine vaccinations. The National Foundation of Infection Diseases has reported a 50% decline in well child office visits due to COVID-19 fears since the beginning of this pandemic. The World Health Organization just stated: “The avoidable suffering and death caused by children missing out on routine immunizations could be far greater than COVID-19 itself.”

As we approach the fall and the new school year, new flu season and a potential second surge of COVID-19 cases, there has been a dramatic decline in children receiving routine vaccinations in my home state of New Jersey. According to the NJ Department of Health Commissioner, there has been a 40% decline in the rate of vaccinations in children under two years of age and a 60% decline among children over two. 

Parents need to know that the need to protect their children from COVID-19 does not eliminate the need to protect their children from serious childhood disease like the measles, mumps, chicken pox and whooping cough. This alarming trend is just not happening in NJ; rather, pediatricians around the country and around the world are deeply concerned that proven vaccines will not be received by large numbers of children, resulting in serious unintended consequences in the spread of preventable illnesses.

The Lancet has reported a major disruption in childhood vaccination efforts in poor rural areas around the world.  During the recent COVID-19 lockdown in the province of Karachi in Pakistan, the rate of immunizations dropped over 50% compared with the previous six months. Once the lockdown was lifted, the situation improved, but there was still over a 25% decline in the rate of childhood immunizations. 

What makes matters worse in these impoverished countries are hot spots for not only preventable diseases like the measles but also polio. Pakistan and Afghanistan are the only two remaining countries where polio is still a major problem. In Pakistan, the number of reported polio cases went from 12 in 2018 to 147 in 2019.

The overwhelming challenge now faced by public health officials around the world is how to address not only the worldwide COVID-19 pandemic but the real danger of the resurgence of 100% preventable childhood diseases once thought eradicated. The World Health Organization declared in 2019 that the anti-vaccination movement was a major threat to public health. The anti-science, anti-vaccination and anti-mask movement is a dire threat to all of us.  

See also: COVID-19’s Impact on Delivery of Care

Long before the COVID-19 outbreak, 2019 was the worst year for the outbreak of the measles in 27 years in the U.S., where there were 1,300 cases in 31 states. The major outbreaks in Washington state, New York and New Jersey were all linked directly to unvaccinated people spreading the measles in airports, at ballgames, at weddings and in other public venues.

As a result, there was a major education effort, and several state legislatures voted to take on the anti-vaccination movement. In Washington state, two major outbreaks resulted in the state legislature banning personal and philosophical exemptions for the MMR vaccine. The city of Seattle provided free vaccines prior to banning unvaccinated children from attending school, which was said to be 2,000 students. 

In New Jersey, the state legislature in 2019 fell one vote short of removing personal, philosophical and religious reasons for parents not getting children vaccinated, much to the delight of the anti-vaccination protesters, who held loud protests in the state capital with slogans like “my body, my choice” and actually called members of the state legislature “murderers.” The 2019 measles outbreak in New York and New Jersey were all based in orthodox Jewish neighborhoods where people were declaring “religious freedom.” In a public education campaign, several rabbis went on TV declaring there is no religious prohibition on vaccines. None. There is no major religion in the world that has a religious exemption for vaccinations, except for the Taliban version of Islam.

The anti-science and anti-vaccination movement is beyond dangerous to all of us. As the world awaits a proven COVID-19 vaccine, the anti-science and anti-vaccination movement is already spreading conspiracy theories. 

Let’s get the facts and the truth straight. The entire anti-vaccination movement is based on a documented hoax linking the MMR vaccine to autism, which has been called “the most damaging medical hoax in the past 100 years.” (See, “To Be or Not to Be (Vaccinated)?” 4/28/15.)

These are the undisputed scientific facts about the MMR vaccine, which is considered one of the great public health success stories of all time, along with the polio vaccine and Louis Pasteur.

The MMR vaccine is 99% effective and provides a lifetime of immunity. There is a 90% chance of an unvaccinated person getting infected if exposed to the measles. There is only a 1 in 3,000 chance of a mild reaction to the MMR vaccine. The measles is, in fact, extremely dangerous and can result in hearing loss, pneumonia and even encephalitis, or swelling of the brain. 

It is completely understandable during this pandemic why parents have been afraid of going to the doctor to get their children what should be routine vaccinations. However, if parents do not believe the measles is still around and very dangerous, look at the results of the recent measles outbreak in Samoa. The outbreak there began in September 2019, and by January 2020 there were over 5,700 cases and 83 deaths. The cause was directly attributable to a drop in vaccination rates, from an already low 74% in 2017 to roughly 30% in 2018. Neighboring islands, with 99% vaccination rates, had no such outbreak. Parents need to call their child’s pediatrician office, which can schedule needed vaccinations at safe and effective times, when there are no known sick children present. 

A public education campaign to remind parents that routine vaccinations are critical should be included in the COVID-19 public health announcements from governors and state health officials in coordination with other state executive orders, such as mandating masks in public places and plans for re-opening schools in the fall. 

See also: Strategic Planning in the COVID-19 Era

Parents need to protect their own children, who then might infect other children. The Imperial College London found lockdowns in Europe saved over 3.1 million lives. The University of California, Berkeley Global Health Lab stated that without restrictions in place there would nearly 14 times as many COVID-19 cases in the U.S.  

Don’t be a knucklehead like the protesters last week outside the governor’s home in New Jersey who had a “burn the mask” protest. Wear a mask in public places, get your child the routine vaccinations before school starts and get the flu shot. You will help save lives and prevent major diseases, including your own.