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The Digital Journey in Commercial Lines

Commercial lines insurers are moving forward on their digital journeys, spurred by customer demands and the acceleration of digital capabilities in the world at large. In earlier phases of the industry’s digital journey, all the attention was on personal lines. Commercial lines, especially those covering the more complex risks, were left behind in the wave of digital, mobile and insurtech activity that was sweeping other parts of the industry. That is no longer true.

The tremendous potential of digitizing assets and digitizing the customer experience is now well-recognized, and transformation is well underway.

However, there have been some significant shifts in digital project priorities over the past year due to the pandemic. The move to the lockdown/work-from-home environment that occurred practically overnight exposed key gaps in insurers’ capabilities. Throughout 2020, commercial lines companies prioritized projects to support agents, policyholders and employees seeking digital, remote capabilities. These new priorities have carried over into 2021, although the projects for insurers are at different stages of maturity for those focused on small commercial and mid-market/large commercial.

A new SMA research report, Digital Transformation in Commercial Lines: Project Priorities for 2021, identifies specific plans for small and mid/large commercial lines insurers related to a variety of digital projects. There are some commonalities across lines. For example, the foundation for digital transformation is deemed to be modern core systems and continuing to digitize assets. Although these projects may not, by themselves, drive transformation, they are vital enablers for a whole range of more transformative digital projects. More information must be in digital formats, and the systems of record that manage key transaction flows and data must be built on modern architectures that provide the flexibility and adaptability needed in the digital age. Some key focus areas for small and mid/large commercial are as follows:

Small Commercial:

Increasing the percentage of business that can be handled via straight-through processing (STP) is a top priority. In conjunction with that goal, upgrading to next-generation portals is high on the project list for many insurers. STP starts with being able to capture more data in structured data formats, which is where portals can aid. Next-gen portals are also designed to meet the expectations of agents and policyholders for digital interactions. Insurers focused on small commercial are generally further along regarding digital platforms and implementing transformational technologies.

Mid/Large Commercial:

Insurers serving these segments focus on foundational elements such as implementing modern policy, billing and claims systems. There is also significant project activity for policyholder self-service capabilities, chiefly because other lines in P&C have already implemented those capabilities, and mid/large is catching up. One interesting area of focus is in using AI technologies such as natural language processing and machine learning for unstructured data. In this area, the insurers focused on mid/large business are forging ahead of the rest of the industry. The complexity of the business and the vast volume and variety of forms, letters, documents and other unstructured data result in major opportunities for automation and insight.

The plans for 2021 signal another year of advancement in the digital journeys of commercial lines insurers, in spite of the pandemic. As the decade progresses, insurers will be moving beyond the earlier phases of digitizing assets and enabling digital interactions as they position themselves for true digital transformation – resulting in more innovative products, new partnerships and new business models. Those that successfully transform will distance their companies from the competition.

False Dilemma Facing Life Insurers

A false dilemma assumes an either/or choice: You are either with me, or you are against me. This kind of thinking typifies life insurance sales, with many insurers looking to digitally transform either their adviser or their direct-to-consumer channel. But does that thinking match the reality of how policies are sold today?

Consider the purchasing journey: research, quote comparison, application, purchase, processing, underwriting, issuance and continuing service. Some parts of the modern journey are almost entirely done online, e.g. research and quoting, while others are primarily handled by advisers, e.g. purchase and processing. Both the direct and adviser channels are engaged.

If that’s the case, can your digital transformation strategy afford to promote one sales channel at the expense of the other? 

Empowering Advisers Requires Empowering Consumers (and Vice Versa)

Advisers typically sell products that are easy. So, insurers must provide the adviser a great experience via intuitive, easy-to-use digital tools for turning prospects into clients. This includes automated lead capture, data analytics for lead routing and management and a dynamic e-application. It also encompasses streamlined application processing, underwriting, approvals and payment to ensure policies are issued and claims are processed in a timely manner. 

Now compare that to the traditional life insurance sales process. First, find a hot prospect and send a generic PDF quoter or application that the person needs to fill out and send back to you. Then manually confirm that all the information needed is provided and send it off to the insurance carrier. Finally, days or weeks later, the carrier approves the application or requests more information. Either way, the process is so manually cumbersome and time-consuming that it’s probably only worth the effort for really big, complex policies – i.e., expensive. 

But what about everybody else? We already know that millennials, the generation of 20- to 45-year-olds our industry desperately needs to attract, has much less buying power than their Baby Boomer peers did at the same age. Can you afford to help millennials? Can you afford not to?

We know that consumers gravitate toward great experiences. It’s your job to offer them one, including dynamic, engaging and easy-to-use content on your website as prospective clients self-educate. You also must make it easy for prospective clients to ask questions and get more information from an adviser in real time, or to convert them directly when no additional help is needed. From there, consumers expect to have policies issued and claims processed in a timely manner.

See also: COVID-19 and Need for Analytical Insurers

Imagine going to the Walmart website, finding exactly the product you are looking for, then not being able to purchase it directly. Maybe you are researching products on the Walmart website and have questions, but no one is available to answer them. How long will you continue to rely on Walmart for your purchases, especially when you can buy from Amazon and receive your product the next day? 

Today, you can have your cake and eat it, too, with an omnichannel approach – enabled by both people and technology — that provides a great experience to each “user” at every point in the buying process.

Getting to Omnichannel 

The key to going omnichannel is NOT blowing up your existing business model. Quite simply, it just means focusing on both processes AND experiences when you are applying technology to distribution challenges. Omnichannel must be part of your plan – really, your endgame — even if you choose to focus on a single channel to start. Here are some ideas for how to get there:

  1. Start small — you don’t need to commit millions of dollars to get started. Pick a couple of products rather than digitizing the distribution of your entire portfolio. Or, start with a single process with a relatively quick time to value.
  2. Establish a few, reasonable key performance indicators (KPIs) — focus on quantifiables besides revenue to start, e.g. an increase in traffic, number of leads generated, number of policies sold, etc.
  3. Test and adjust as needed — this worked; let’s do more of it. This didn’t work; let’s not make the same mistake. 
  4. Evaluate the experience — how does your project improve the experience for all stakeholders (present and future) who engage with it? Is there more you can do to improve?
  5. Add on — for example, you’ve successfully enabled D2C sales of T10 and T20 products. What’s next? Identify another product or process to tackle, establish KPIs and go for it. Do more of what works and learn as you go… just keep going. 

In the past, insurance companies had to assume the full cost and risk associated with technology projects, but this is no longer the case. Subscription-based pricing and modular software platforms provide new levels of flexibility and shift the implementation risk to the technology vendors. They implement, integrate and deliver. You pay a reasonable, agreed-upon monthly fee

Don’t fall into the false dilemma trap. Life insurance, like just about everything else involving digital-native consumers, is a “both/and” world. You can do omnichannel, and frankly you have to to stay competitive. There has never been a better time to get started! 

Omnichannel Life Insurance Policy Sales

Arrogance and Nature’s Deadly Hand

For millennia, humans have struggled to survive and thrive on a sometimes deadly planet. Earthquakes, plagues, crop failures, floods, fires all periodically wipe out enormous numbers of lives. In the late 20th century, the combination of prosperity, the end of the Cold War and dramatic advances in science and technology bred a widespread arrogance that we were at the “end of history” — that the combination of the moment’s geopolitical status quo and continuing advances meant we had reached an end state, immune to both humanity’s and nature’s volatility. 

This was clearly the height of arrogance. The pandemic and the return of deeply challenging geopolitical rivalries have already destroyed the complacency born of this arrogance. The growing global concern about the impact of climate change is another example of a tectonic shift in gestalt. 

In our four years at Jupiter, we’ve witnessed significant changes in thinking about climate change. When we started the company, almost no large companies on the planet were thinking about the impact of climate change on their businesses =- and a few still openly questioned whether climate change was occurring. Today, nearly every large company on the planet is at least thinking about the impact of climate change on their business, a few are taking meaningful action and questioning the existence of climate change is almost as humiliating in the business community as endorsing the violent occupation of the U.S. Capitol. 

And yet, the widespread power outages in Texas and the erosion of grid reliability in California are dramatic examples that an enormous amount of very hard work remains to be done. Jupiter works with power companies all over the planet on issues like how much risks have already changed — and how soon critical thresholds will be exceeded. We work across the global economy in insurance, banking, asset management, real estate, power, vaccine production, minerals and mining, chemicals, emergency management, national security, big cities and, yes, even oil and gas. Our customers are in places as wide-ranging as Texas, Florida, the Netherlands, Tokyo, China and Australia. I know with total certainty the world is grossly unprepared for the changes that have already occurred and are on the near horizon. Recently, a senior executive at one of the world’s largest companies said, “We get hit with billion-dollar-plus impacts, rebuild looking backward, ignoring the science, and get hit again. It’s just crazy.”

In many ways, Texas is the epicenter. Three years ago, Houston was hit by Hurricane Harvey, shutting down the region. What are less well-known are the multiple toxic chemical spills caused by the flooding, which simultaneously breached flood protection and caused loss of power for other containment. The U.S. Chemical Safety Board looked at this issue and concluded that companies’ investments were based on now-out-of-date planning assumptions. And, of course, it’s not just Texas; California’s power reliability is an embarrassment because of failure to adequately plan for ever-worsening risk from fire. 

Now, Texans shivered in the dark because a predictable event was not planned for.  

Some will choose this moment to debate what we really know about climate change or choices of renewables vs. fossil fuels. While those are important questions, they miss the larger issue. Risk is all around us — and the world’s planning assumptions for that risk are egregiously out of date. Whether extreme cold, flood, fire or pandemic and war, risks are at levels we currently don’t plan for in our businesses, with power at the very center of this issue. 

We live in a world designed for an environment that no longer exists.

It’s time to get real.

Best Practices for Returning to Work

COVID-19 has been a rollercoaster. Across the country, the virus has accelerated and then subsided several times over the past year, causing major ups and downs in many industries. Some companies have remained open to conduct essential business, while others have closed, then opened with modifications and then closed again. With a vaccine now being rolled out, the outlook is beginning to improve. However, employers still face the burden of how to keep employees healthy and get them back to work safely during this transitional period. 

As states begin to allow businesses to reopen, there’s a tendency to rush to get back to business as usual. While it’s important to resume normal operations as quickly as possible, we need to be thoughtful as we move toward this goal. It’s a delicate balancing act between the need to maintain essential economic activities and maintaining workplace safety.

Here are some best practices for navigating the return to work process:

1. Be Informed

It is critical to determine whether any state and local mandates will affect the reopening of your business or facilities. Policies, legislation and guidelines have changed rapidly during the pandemic. Make sure that you are following CDC and OSHA guidance and understand what’s required in your jurisdiction, because it can vary greatly from state to state and county to county.

2. Make Fair Choices

As business reopens, you may have to decide who will return to the workplace first. Use neutral selection criteria to determine which employees will return to work. Criteria such as seniority, performance or job classification and what roles the company needs filled should be considered. Depending on the size of the group of employees that are returning to work, you may want to consider conducting a disparate impact analysis to ensure that there aren’t any factors affecting one group more than another. 

Be careful not to assume someone cannot return based on childcare needs or caregiving responsibilities or because they fall under the government label of vulnerable population. Higher risk for developing serious illness as a result of this virus is primarily based on age, disability or pregnancy. As a result, making any decisions because someone might fall into those groups can lead to discrimination claims. 

3. Reinforce Guidelines and Protocols

Many employees have worked in more casual remote environments for the past months, so  consider a refresher on respect in the workplace, harassment and professionalism policies. It is also important to provide education or training on any new safety guidelines, social distancing requirements and other protocols. A simple one-page document to instruct and educate employees on COVID-19 symptoms, social distancing, face mask use and other protocols that promote a safe workspace will help get employees up to speed quickly.

See also: Access to Care, Return to Work in a Pandemic

4. Implement Employee Screening

Businesses that have eased restrictions without putting safeguards in place have seen spikes in cases. This is because people have a false sense of safety when restrictions are eased. A quick screening of employees, based on CDC guidelines and recommendations, can be administered by a nurse or employee. Clinical confirmation includes temperature checks and a review of any symptoms to ensure the employee is healthy to return to work.

5. Leverage Telehealth

Telehealth and other virtual services can be a great option for a multitude of reasons. Telehealth offers more efficient and convenient care, resulting in increased employee engagement and satisfaction. This does not need to be limited to workers’ compensation, as most health plans and health systems now offer this option for care. Take advantage of the convenience and the ability to mitigate potential exposure to COVID or any other contagious virus that might be in your provider’s office.   

6. Provide Testing Options

It is critical that employees have access to accurate testing whose results are easily and quickly reported. One way to ease the process is by providing access to self-administered COVID-19 test kits for periodic testing or for when an employee has been exposed to the virus. (CorVel, a national provider of risk management solutions, provides clients with a test kit from 1health, which requires a simple saliva collection to detect the virus with nearly 100% accuracy. A lab-certified report is delivered within 36 hours, allowing employers to make informed decisions about whether employees can safely return to work. The test kit can also be used as part of the initial virtual triage process—an employee who is having symptoms or who may have been exposed to the virus can receive a test kit to self-administer from the safety of their home.)

7. Support Employees

The effects of COVID-19 often go beyond the illness itself. Some issues that may prevent an employee from fully returning to work include delayed care or treatment for injured workers, prolonged COVID-related symptoms and COVID-19-related stress. Consider implementing services to support employees as they navigate the unexpected consequences of the pandemic. This could include critical event debriefing to help employees deal with the loss of a team member, routine wellness checks for injured workers and virtual mental health services. For injured workers awaiting surgery, provide tools to help them prepare for surgery, maintain optimum physical condition and rehabilitate post-op. Patients who are required to wait for surgery often become deconditioned, which will lengthen recovery time and increase cost. (CorVel offers a mobile app that measures, monitors and guides injured workers before and after surgery to speed recovery and reduce costs.) It is important that employees feel supported no matter what they are experiencing as a result of COVID-19.

See also: 4 Business-Boosting Tips for Social Media

Despite the vaccine outlook, COVID-19 isn’t going to disappear tomorrow or next week or in the next month. Businesses will reopen, and employees will return to work, but procedures, protocols and support services need to be in place to ensure a smooth return-to-work.

Whether your business has been open throughout the pandemic or you are in the process of reopening, it is important to implement best practices that provide employee education on COVID-19, communicate clear expectations regarding health policies and expectations and assess employee health on a continuing basis. In this new normal, the goal is to return to business and get employees back to work as quickly as possible and as safely as possible.

Guide to Insurance on Cryptocurrency

Demand for cryptocurrencies is booming, as more than 40 million people worldwide use some type of them, according to SaaS Scout Research Group. 

As with any financial asset with value, cryptocurrency owners need protection with their investments, and that’s where cryptocurrency insurance enters the picture – at least on a limited basis in early 2021.

“There’s only a handful of insurers either currently offering cryptocurrency coverage, with insurance broker Aon claiming to own 50% of the business-to-business market,” said Virginia Hamill, senior insurance analyst at FitSmallBusiness.com “Approximate estimates for cryptocurrency insurance capacity stands at between $1 billion and $6 billion, for a market that’s valued at around $1 billion.”

The complicated nature of a decentralized trading environment also gives insurers pause, especially in a global trading platform that operates in a wild west environment. 

“The cryptocurrency insurance sector is relatively small but complex,” said Savanna Bilbo, a consultant at Pelicoin, a Bitcoin ATM service. “Bitcoin and other cryptocurrencies are unregulated by the government, which means there are no rules for insuring. The price of cryptocurrency fluctuates day-to-day, which makes it difficult and expensive to insure.”

It’s tough to pinpoint exactly what to expect in a highly volatile cryptocurrency market, but industry experts seem to agree on a few key themes in early 2021.

Prices could rise, and demand, too.

By the end of 2021, Bilbo said Bitcoin, the largest cryptocurrency, could be priced as high as $100,000 (it traded today at about $49,000). 

“Large mainstream companies will likely start purchasing Bitcoin and other cryptocurrencies and accepting them as forms of payment,” Bilbo said. “When this happens, the world of crypto will see a significant change, with demand for financial protection rising.”

Crime and fraud are up-front insurance issues.

Currently, the cryptocurrency crime and fraud sector are seeing the highest insurance costs. 

“Millions of dollars of cryptocurrency have been lost every year due to corruption and fraud,” Bilbo said. “There are many ways to hack or defraud cryptocurrency owners, and many feel the need to insure their cryptocurrency any way they can. Thus, insurance interest is up in these sectors.”

Exchange insurance is gathering steam.

Currently, the largest insurance market in the crypto industry is with exchanges that insure against theft from cryptocurrency hackers. 

“In the past, there have been hacks which took down entire crypto exchanges, and stole every coin in their wallet. The customers had no recourse, and their funds were permanently lost,” said Rob Zel, founder of bitni.com, a crypto exchange focusing on user privacy. “To prevent this from happening again, exchanges have begun insuring their customer’s assets, so, if there is a hack, the customers can at least recover their funds.”

See also: Where Blockchain Shines Right Now

Exchanges are creating their own insurance programs.

One trend in the cryptocurrency insurance sector is large exchanges creating their own insurance funds when such insurance is unavailable anywhere else. 

“A small percentage of each transaction is added to a collective fund, which covers losses by hackers,” Zel said. “We will see more self-insurance by exchanges, although as commercial insurance products are developed, some exchanges may prefer to outsource, instead of dealing with the overhead of managing their own self-insurance funds.”

Currently, the larger exchanges are offering the most insurance to crypto consumers.

For example, Gatehub offers wallets to investors, which they can use to purchase individual insurance for the entire value of their crypto wallets. Other crypto exchanges like Coinbase provide supplementary insurance (backed by Nexus) that covers exchange users who lose 10% or more of their cryptocurrency assets.

Cryptocurrency users are self-insuring.

Insurance providers still largely see cryptocurrency as a risky investment. That’s led to “sky high” premiums for Bitcoin, Ethereum and other crypto investors. 

In that scenario, industry investors are taking matters into their own hands.

“There are a few other ways to protect your crypto investments,” said Chris Abrams, founder of Abrams Insurance Solutions. “I recommend sharing private keys with trusted, independent custodians. This can safeguard your wallet against theft.”

Abrams also believes it’s a good idea for cryptocurrency investors to spread their investments into multiple wallets. “That way, you avoid keeping all your eggs in one basket,” he added. “This can minimize your risk in case one wallet goes belly up.

Cryptos will soon be regulated, which may attract insurers.

Cryptocurrency may soon be mainstream, and, with the stamp of normalcy on the industry, regulators would begin to police it.

“With companies like Tesla making large purchases of it, others are soon to follow,” Bilbo said. “This scenario attention will cause the government to step in and attempt to regulate it, which will make cryptocurrencies more compelling for insurers.”

See also: Breakthrough Technologies for 2021

What can the crypto industry expect from insurers?

In an often-chaotic trading environment, insurance companies may be taking a “wait and see” stance on cryptocurrency coverage, but the financial payoff may be too lucrative to ignore.

“I can definitely see insurers’ appetites for cryptocurrency coverage increasing because the market is clearly there, but I think the growth is going to be slow,” Hamill said. “The possibility for extreme volatility is going to keep most insurers from jumping in too quickly.

“That said, they’re most likely going to be investigating the opportunity.”