Tag Archives: crowdsourcing

Gig Economy: Newest Tool for Insurance

Why is this taking so long?!

The challenge I hear echoed throughout the insurance industry is, “How do we speed up the claims process for customers?” Insurance companies often face the brunt of the frustrations from stressed-out customers regarding delays with their claims. As we all know, processing those claims takes time and patience to gather information, details, photographs and a myriad of other documentation. Getting the right information and accurate documentation takes even longer.

Based on the volume of claims, resources and personnel can become stretched thin quickly. Despite all the efforts within organizations, it’s not uncommon to see claims departments contorting themselves like Gumby to get it all done. Insurance claims are stressful, and relying on customers to reliably and quickly provide information is a challenge — even when it’s to their benefit.

The problem becomes exacerbated following natural disasters or claims in geographic locations where companies have little to no footprint and limited resources to document and gather the information needed. In those situations, companies have to reallocate and sometimes relocate resources — which is expensive, time-consuming and a logistical nightmare.

See also: What Gig Economy Means for Insurers  

Saving time, improving data quality and accuracy are all key components to avoiding customer frustration and increasing customer satisfaction and loyalty.

Traditional Challenges Meet Disruptive Solutions

Recently, there’s been a lot of handwringing about the “sharing economy” or the “gig economy” and what it means for traditional lines of business, workers and whether it will completely transform the workplace as we know it. As Tony Canas shared in his Insurance Thought Leadership piece, “What Will Be the Uber of Insurance?”, the gig economy is hardly the end of the world — and the insurance industry is probably due for some disruption.

What a number of traditional lines of business are beginning to discover is that the gig economy presents an opportunity to leverage crowdsourcing to solve challenges and inefficiencies and even spark innovation within their own organizations. Target and Instacart, Ford and Lyft, are both great examples of how large, traditional verticals are finding ways to integrate the gig economy into new products and services to attract and keep customers while increasing the bottom line.

Now, let’s go back to one of insurance’s greatest challenges: saving time and improving accuracy in the claims process, particularly when it comes to getting information such as photographs, records, police reports and inspections. These tasks sometimes feel like they can go on forever with a single claim, as companies try to coordinate logistics with policyholders.

What if there was an Uber for insurers? A service that could dispatch an objective third party with a smartphone to quickly take pictures and gather exactly the information needed in the claims process almost immediately?

There is.

The gig economy and the crowdsourcing model provide a nimbleness and speed that are often sacrificed or buried alive in large enterprise organizations.

See also: The Gig Economy Is Alive and Growing  

Turning to the gig economy and its on-demand workforce is generating economic benefits and creating true efficiency. We’ve witnessed the process being replicated in companies both large and small and in a variety of categories.

I’m continually inspired by the creativity of entrepreneurs and how they’ve found inspirational ways to apply crowdsourcing. From crowdfunding, ridesharing, coworking, delivery services (even pet Airbnb), the gig economy marketplace is homing in on specific consumer and business needs and is delivering.

It can do the same for claims, so we can all stop being asked why they are taking so long.

How to Use All the New Data

Most people who purchase an insurance policy are faced with the daunting task of filling out an extensive application. The insurance company – either directly or through an intermediary – asks a myriad of questions about the “risk” for which insurance is being sought. The data requested includes information about the entity seeking to purchase insurance, the nature of the risk, prior loss experience and the amount of coverage requested. Insurers may supplement that information with a limited amount of external data such as motor vehicle records and credit scores. The majority of information used to inform the valuation process, however, has been provided by the applicant. This approach is much like turning off your satellite and data-driven GPS navigation system to ask a local for directions.

According to the EMC Digital Universe with research and analysis by IDC in 2014, the digital universe is “doubling in size every two years, and by 2020 the digital universe – the data we create and copy annually – will reach 44 zettabytes.” That explosion in the information ecosystem expands the data potentially available to insurers and the value they can provide to their clients. But it requires new analytical tools and approaches to unlock the value. The resulting benefits can be grouped generally into two categories:

  • Providing Risk Insights: Mining a wider variety of data sources yields valuable risk insights more quickly
  • Improving Customer Experience: Improving the origination policy service and claims processes through technology enhances client satisfaction

For each of these areas, I’ll highlight a vision for a better client value proposition, identify some of the foundational work that is used to deliver that value and flesh out some of the tools needed to realize this potential.

Risk Insights
Insurance professionals have expertise that gives them insight into the core drivers of risk. From there, they have the opportunity to identify existing data that will help them understand the evolving risk landscape or identify data that could be captured with today’s technology. One can see the potential value of coupling an insurer’s own data with that from various currently available sources:

  • Research findings from universities are almost universally available digitally, and these can provide deep insights into risk.
  • Publicly available data on marine vessel position can be used to provide valuable insights to shippers regarding potentially hazardous routes and ports, from both a hull and cargo perspective.
  • Satellite imagery can be used to assess everything from damage after a storm to proximity of other structures to the ground water levels, providing a wealth of insights into risk.

The list of potential sources is impressive, limited in some sense only by our imagination.

When using the broad digital landscape to understand risk — say, exposure to a potentially harmful chemical — we know that two important aspects to consider are scientific evidence and the legal landscape. Historically, insurers would have relied on expert judgment to assess these risks, but in a world where court proceedings and academic literature are both digitized, we can do better, using analytical approaches that move beyond those generally employed.

Praedicat is a company doing pioneering work in this field that is deriving deep insights by systematically and electronically evaluating evidence from various sources. According to the CEO Dr. Robert Reville, “Our success did not come solely from our ability to mine data bases and create meta data, which many companies today can do. While that work was complex, given the myriad of text-based data sources, others could have done that work. What we do that is unique is overlay an underlying model of the evolution of science, the legal process and the dynamics of litigation that we created from the domain expertise of our experts to provide context that allows us to create useful information from that data built to convert the metadata into quantitative risk metrics ready to guide decisions.”

The key point is that if the insurance industry wants to generate insights of value to clients, identifying or creating valuable data sources is necessary, but making sense of it all requires a mental model to provide relevance to the data. The work of Praedicat, and others like it, should not stop on the underwriter’s desktop. One underexploited value of the insurance industry is to provide insights into risk that gives clients the ability to fundamentally change their own destiny. Accordingly, advances in analytics enable a deeper value proposition for those insurers willing to take the leap.

Customer Experience
Requiring clients to provide copious amounts of application data in this information age is unnecessary and burdensome. I contrast the experience of many insurance purchasers with my own experience as a credit card customer. I, like thousands of other consumers, routinely receive “preapproved” offers in the mail from credit card companies soliciting my business. However appealing it may be to interpret this phenomenon as a benevolent gesture of trust, I know I have found myself on the receiving end of a lending process whereby banks efficiently employ available data ecosystems to gather insights that allow the assessment of risk without ever needing to ask me a single question before extending an offer. I contrast this with my experience as an insurance purchaser, where I fill out lengthy applications, providing information that could be gained from readily available government data, satellite imagery or a litany of other sources.

Imagine a time when much of the insurance buying process is inverted, beginning with an offer for coverage, rather than a lengthy application and quote request. In that future, an insurer provides both an assessment of the risks faced, mitigations that could be undertaken (and the savings associated), along with the price it would charge.

While no doubt more client-friendly, is such a structure possible? As Louis Bode, former senior enterprise architect and solution architect manager at Great American Insurance group and current CSO of a new startup in stealth-mode observes, “The insurance industry will be challenged to assimilate and digest the fire hose of big data needed to achieve ease of use and more powerful data analytics.”

According to Bode, “Two elements that will be most important for us as an industry will be to 1) ensure our data is good through a process of dynamic data scoring; and 2) utilize algorithmic risk determination to break down the large amounts of data into meaningful granular risk indexes.” Bode predicts “a future where insurers will be able to underwrite policies more easily, more quickly and with less human touch than ever imagined.”

The potential to use a broader array of data sources to improve customer experience extends well beyond the origination process. Imagine crowdsourcing in real time the analysis of images to an area affected by a natural disaster, getting real time insights into where to send adjusters before a claim is submitted. Tomnod is already crowdsourcing the kinds of analysis that would make this possible. Or imagine being able to settle an automobile claim by simply snapping a picture and getting an estimate in real time. Tractable is already enabling that enhanced level of customer experience.

The future for insurance clients is bright. Data and analytics will enable insurers to deliver more value to clients, not for additional fees, but as a fundamental part of the value they provide. Clients can, and should, demand more from their insurance experience. Current players will deliver or be replaced by those who can.

I’d like to finish with a brief, three-question poll to see how well readers think the industry is performing in its delivery of value through data and analytics to clients. Here is my google forms survey.

‘Gig Economy’ Comes to Claims Handling

Why is this taking so long?!

The challenge I hear echoed throughout the insurance industry is, “How do we speed up the claims process for customers?” Insurance companies often bear the brunt of frustrations from customers stressed out about delays. As we all know, processing claims takes time and patience to gather information, details, photographs and a myriad of other documentation. Getting the right information and accurate documentation takes even longer.

Based on the volume of claims, resources and personnel can become stretched thin quickly. Despite all the efforts within organizations, it’s not uncommon to see claims departments contorting themselves like Gumby to get it all done. Insurance claims are stressful, and relying on customers to reliably and quickly provide information is a challenge — even when it’s to their benefit.

The problem becomes exacerbated following natural disasters or claims in geographic locations where companies have little to no footprint and limited resources to document and gather the information needed. In those situations, companies have to reallocate and sometimes relocate resources, which is expensive, time-consuming and a logistical nightmare.

Saving time and improving data quality and accuracy are all key components to avoiding customer frustration and increasing customer satisfaction and loyalty.

Traditional Challenges Meet Disruptive Solutions

Recently, there’s been a lot of handwringing about the “sharing economy,” the “gig economy” and what it means for traditional lines of business and workers. Will the workplace as we know it change completely? As Tony Canas shared in his Insurance Thought Leadership piece, “What Will Be the Uber of Insurance?,” the gig economy is hardly the end of the world, and the insurance industry is probably due for some disruption.

What a number of traditional lines of business are beginning to discover is that the gig economy presents an opportunity to leverage the power of crowdsourcing to solve challenges, eliminate inefficiencies and even spark innovation within their organizations. Target and Instacart, GM and Lyft, are great examples of how large, traditional verticals are finding ways to integrate the gig economy into new products and services to attract and keep customers while increasing the bottom line.

Now going back to one of insurance’s greatest challenges — saving time and improving accuracy in the claims process, particularly when it comes to getting information such as photographs, records, police reports and inspections. These tasks sometimes feel like they can go on forever with a single claim as companies try to coordinate logistics with policyholders.

What if there was an Uber for insurers? A service that could dispatch an objective third party with a smartphone to quickly take pictures and gather exactly the information needed in the claims process almost immediately?

There is.

Disruption Gets Good for Insurance

Like Uber, WeGoLook is changing the way the gig economy is disrupting B2B by providing inspection and custom tasking services. Building on the strength of the gig economy and using the crowdsourcing model, WeGoLook has built a nationwide network of field agents that provides a nimbleness that is often buried alive in large enterprises.

Here’s how it works at one of the nation’s largest auto insurance companies, where WeGoLook is incorporated into the claims-handling process:

  • A claim handler places an order on a custom dashboard and chooses a service: (1) vehicle photos, (2) scene inspections, (3) salvage retrieval, (4) police record retrieval.
  • A WeGoLook representative calls the onsite contact/policyholder to verify address/item information and schedule an appointment.
  • The “Looker” arrives on-site and captures the data needed for the service/task.
  • Data is submitted via the mobile WeGoLook app and reviewed by internal staff at WGL for quality assurance.
  • The completed report is sent directly to the claim file.

Turning to the gig economy and its on-demand workforce is generating economic benefits and creating true efficiency. We’ve witnessed the process being replicated in companies both large and small and in a variety of categories.

Since starting the company in 2009, I’m continually inspired by the creativity of entrepreneurs and how they’ve found new and inspirational ways to apply crowdsourcing. From crowdfunding, ridesharing, coworking and delivery services to even “pet Airbnb,” the gig economy marketplace is homing in on specific consumer and business needs and delivering.

2 Key Tools for Innovation in P&C

Imagine this: two separate kingdoms, the kingdom of P&C insurers and the kingdom of agencies and brokers. Within each kingdom, each insurer and agency is represented by its own little house, and every little house has a door. Each door can open both ways and represents a way to communicate and share data – and these kingdoms need to share lots of data.

The only way to send data between houses is to build deep trenches. Building a trench is difficult, expensive and time-consuming. And the P&C insurer must dig the trench to each agent or broker, then knock on every agency’s and broker’s door to see if they will open it and allow data to be shared.

In the world I have described, insurers are very busy building these trenches to the agencies and brokers. Insurers spend a great deal of time, money and resources. Yet, when the insurers finally get to knocking on all the doors, they find that some agencies have their doors wide open and are ready; that some will open their doors eventually; but that others have no desire to ever open their doors.

What’s more, many insurers won’t fund the trench digging, so agencies may want a connection but are left without the trench.

For the kingdoms of the insurers and of the agents and brokers, the system is not built for success.

What I just described is reality. Insurers and agencies have to share data for policies, billing and claims. But the cost, risk and payback are deterrents. Even the will to communicate is not always there.

The formalities and costs to share data are what I described as trenches. Missing or incomplete “trenches” result in missed opportunities, inefficiencies, misinformation and misunderstandings. For example, what an insurer might view as a small book of business not worth investment might be a huge book for some agencies. Sometimes, the lack of understanding between the two “kingdoms” can be astounding.

Yet we continue to go down this path, just as we have for many, many years.

We have an opportunity to rethink our situation. Two key tools of innovation can bridge the gap between insurers and agents: ideation and crowd sourcing. These may sound like buzz words, but, by allowing varied groups to have a voice in solving challenges, ideation and crowd sourcing can allow decision makers to see data trends across segments of organizations. More importantly, ideation and crowd sourcing can offer solutions to challenges for little to no investment through the ideas of people who wouldn’t otherwise necessarily have “a seat at the table.”

We know what we hear from agents: that, as we described in the “two kingdoms,” sometimes there are agent houses with no trenches even being built to them. We also know that insurers sometimes find that, even after all the work of establishing trenches, some agents keep their doors closed. Utilizing innovation tools to communicate these pain points and search for a better method of business is a great step forward.

But what can insurers do right now to solve the challenge of the two kingdoms?

In the short term, insurers can demand that all leading vendors of agency management systems and policy administration, billing and claims management systems have adapters built in and ready for plug and play for all lines of business and transactions. This would improve implementation time, reduce investments and essentially remove the “closed doors” problem facing insurers.

In the long term, invest in ideation and crowd sourcing to redesign the connections between insurers and agencies. Listen to the pain points and notice trends. Crowd sourcing will offer powerful data to build a better system. Start posing questions to your own organization like, “How do we leverage the cloud and big data concept to rethink the 40-year-old point-to-point integrations?”

You’ll be surprised at the results and how meaningful making small changes can be. Let’s do it.

10 Reasons to Innovate — NOW!

We’re busy gearing up for the annual SMA Summit, where innovation will take center stage. In the spirit of the summit, I started to gather some inescapable facts that could inspire us all to innovate and improve – to truly become the Next-Gen Insurer. But, rather than peddle the same old innovation benefits and business rationale, I thought it would be refreshing to share 10 facts about change and innovation that will directly affect insurance and that may inspire you, surprise you or reinforce why you should be continuously improving by reimagining and reinventing the business of insurance!

  1. Younger generations like Millennials and Generation Z are going to be the biggest consumers in the market in five to 10 years. Make sure you can reach them. They will not use paper applications or have a face-to-face meeting, but they will be searching for options from their phones and cars. A typical mobile user checks her phone more than 100 times a day (Marketing to Millennials).
  2. Innovative workplaces attract the best and brightest talent. Today, word of a stale, outdated work environment spreads fast. Don’t be one of those employers. Invest in talent, but also invest in your infrastructure and creating an innovative workplace (How Great Companies Attract Top Talent).
  3. A majority of insurers (65%) have focused on innovation for five years or less. You aren’t alone, and, surprisingly, you probably aren’t far behind. With the right focus, you can make remarkable strides in a short amount of time (SMA Research: Innovation in Insurance: Expanding Focus and Growing Momentum).
  4. 80% of all crowdsourcing is done by small business and start-ups. Embrace the crowd! It is often the most cost-effective way to generate ideas. Big business loves the crowd, too. Just look at McDonald’s crowdsourced burger or Apple’s crowdsourced mapping tools (Crowdsourcing: Great For Your Business).
  5. The amount of stored data doubles every 24 months. The U.S. Census estimates that the population has grown more than 27% in the last two decades. Changing demographics, aging citizens and diverse populations are changing the face of data accessible to insurers. To stay on top of the situation, you need a data and analytics strategy that makes the most of the new data available (Vernon Turner).
  6. Wearable devices have grown 200% every month since 2012. This doesn’t mean that wearables won’t eventually be replaced by something else or evolve. It does mean that wearables are growing so fast that it makes sense to try to tap into some of that innovation and apply it to your own organization, your processes or even your products (2013 Internet Trends).
  7. It is six to seven times more expensive to acquire new customers than it is to keep existing ones. One risk of not innovating is that you may start losing customers who can find better, easier-to-use insurance options. Studying consumer behavior might be the best indicator of market trends and areas to innovate. Don’t lose renewals because you haven’t kept up with market demands (15 Statistics That Should Change the Business World But Haven’t).
  8. More than 40% of the companies at the top of the Fortune 500 list in 2000 were not on the list in 2010. The digital age shuttered many long-standing businesses. Some experts think that, in the next decade, businesses that do not embrace innovation or adapt to market demands will suffer the same fate. Insurance is not immune to this phenomenon. Today, everything is connected (Sorry We’re Closed: The Rise of Digital Darwinism).
  9. Just 10% of cars were connected to the internet in 2012, but by 2020 it is estimated that 90% will be. It is amazing to think of how quickly we are witnessing innovation expand. What was once an outlier is now a standard (Amazing Facts Everyone Should Know About the Internet of Things).
  10. Internet of Things (IoT) technology has the potential to add $10 to $15 trillion to global GDP over the next 20 years. Like the connected car, IoT will eventually become standard. What insurers do with the new data available and the amazing growth potential will ultimately make or break them (Internet of Things Market Statistics-2015).

These facts are inescapable. Not only is innovation here, but the statistics are astounding. The time to embrace innovation and become the Next-Generation Insurer is now.