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New Approach to Natural Disasters

When losses occur during natural disasters, carriers in the $4.5 trillion insurance market understand that — in addition to safety — at the top of policyholders’ minds is how they are going to recover, and how fast. It is at these times that carriers must respond quickly and efficiently to make their policyholders whole again while keeping costs as low as possible.

Operating in a cost-sensitive and hyper-responsive market that affects all service industries, even the most sophisticated and progressive carriers often find themselves struggling to effectively deal with the scalability, complexity and unpredictability of managing a local, regional or national adjuster workforce. This typically drives up service costs, hindering service performance and ultimately hurting policyholder satisfaction, particularly in crises.

One way carriers can respond quickly and safely — and keep policyholders happy — when natural disasters strike is relying on an on-demand model to supply a scalable and affordable workforce. This article provides an overview of the strain that natural disasters place on carriers and discusses how the on-demand model can relieve pressure by revolutionizing how the insurance industry responds.

The Insurance Industry Is Feeling the Strain

Since Hurricane Andrew, the industry has shifted from a reactive to a proactive approach. This process is assisted by the development of much more sophisticated technology, fully formulated catastrophe response plans and the realization of the necessity for immediate response. Still, as natural disasters increase in frequency and strength, the insurance industry is feeling the strain.

It takes far too long to assess claims and initiate payouts following catastrophes in the current insurance environment. “Waiting six weeks, 12 weeks or more for financial reparations is terribly stressful for policyholders,” says Ryan Kottenstette, CEO at Cape Analytics. “Carriers are striving to do better, and emerging tech companies can help them.” Indeed, the internet, mobile apps, on-demand models, automated estimations, drones and storm tracking technologies are but a few examples of how technology is improving the speed at which insurance companies settle claims.

See also: Key Findings on the Insurance Industry  

The main struggles for insurance professionals and insurance companies when dealing with large-scale natural disasters like the one-two punch of Hurricanes Harvey and Irma include extended response times and lack of resources.

Extended Response Times

“A stale claim is an expensive claim,” says John Rollins, an executive with Cabrillo Coastal General Insurance Agency LLC in Gainesville, FL. “The key… is getting to the policyholder and getting some money in their hands so they can begin the recovery process.”

Certainly, one of the biggest pain points is time. Anything that slows payouts diminishes their value at the front end of a crisis.

“There is a huge number of claims and a limited number of adjusters to handle them,” says Suzanne McCormack, director of business operations at Robert L. McCormack Public Adjusters. “As time goes on, the policyholders become more and more restless because their homes or businesses have been impacted, and they want to get back to their normal lives. People are understandably very emotional having been through the trauma of the disaster, then waiting and waiting to get back to normal.”

In addition to the emotional toll that wait times place on policyholders, delays open the door for insurance fraud. “In the past five years here in Utah, catastrophic winds have provided the opportunity for rogue roofing contractors to knock on doors with minor roof damage, claiming that they can help provide a free roof replacement,” says Brent Thurman of Keystone Insurance. “In some cases, the contractor has even removed additional shingles before the claims representative arrives in an effort to have the entire roof replaced rather than a smaller repair. This can be difficult to track during a normal claim load, let alone a time when claims adjusters are overbooked by the sheer volume of claims submitted during a catastrophe.”

Lack of Resources

Carriers have traditionally understood the value of in-person asset inspections. However, maintaining an infrastructure capable of quickly completing these inspections in any location has become cost-prohibitive for most companies.

As expected, during and after Hurricane Irma, many of Florida’s adjusters were still on the front lines in Texas, working on claims made after Hurricane Harvey hit. “I would have to say it’s difficult to find enough inspectors willing to work 12- to 14-hour days seven days a week,” says John Espenschied of Insurance Brokers Group. “Most large insurance carriers are facing thousands of claims daily that need to be inspected. However, there are only so many insurance adjusters around the country, and pulling hundreds away from their regular duties creates a shortage.”

Then there is the underlying problem of managing logistics during a crisis. “From a logistics perspective, the biggest issue for the insurance industry will be the ability or inability to ramp up quickly and effectively to appropriately service the volume of claims that have and will continue to be submitted after disasters like Hurricanes Harvey and Irma,” says Dawn Sandomeno, national director of brand management, Procor Solutions + Consulting. “Whether it is the insurance companies having enough trained staff to triage claim intake or insurance adjusters managing a portfolio of claim appointments to visit loss sites — many of which are inaccessible — the capabilities of the industry will continue to be tested.”

In fact, as insurers scrambled to get more of the nation’s 57,000 independent adjusters to Florida, it created a bidding war and the promise of a record payday for anyone available. It was reported that some Florida home insurers increased fees paid to adjusters by about 30%. In some cases, adjusters could earn $30,000 for evaluating a single complex property claim. Of course, these unprecedented increases in fees have the effect of increasing the cost of each claim.

See also: Why Is Insurance Industry So Small?  

The Power of the On-Demand Model

We live in an era of immediate gratification where Uber provides rides on demand and Amazon delivers almost any product we desire on the same day we order it. Consequently, policyholders’ expectations for the types of services they want to receive continue to grow more demanding.

To respond quickly and safely, carriers can leverage innovative approaches that align business processes from information-gathering to claims adjustment. By further aligning these essential business processes in a real-time, location-based context, carriers will be in a better position to understand and calculate risk while responding during catastrophes in hours, not days.

Using workers contracted through an on-demand provider, carriers can get more done more quickly. They have access to a distributed workforce of vetted and trained information gatherers who are ready to be dispatched to the scene of a catastrophe at a moment’s notice.

As on-demand options become more accessible, the insurance industry is beginning to realize that some of its traditional processes are less efficient than they need to be. The idea of sending a highly-paid, licensed adjuster to handle every claim scenario, regardless of its complexity, is being questioned. “

During a catastrophe, many claims require only a simple validation of damage. But traditional claims handling processes are over-engineered for such a situation. Why send a highly paid, licensed adjuster when an on-demand workforce can validate the damage immediately for a third (or less) of the cost? Why tie up valuable adjuster resources on simple claims when there aren’t even enough adjusters to handle the more complex situations that do require their level of expertise?

This article is an excerpt from a white paper by WeGoLook, a provider of on-demand workforce solutions for the insurance industry and other industries around the world. You can find the full paper here.

Can Insurance Be Made Affordable?

PwC predicts that the sharing economy will grow from a $15 billion-a-year industry in 2014 to more than $300 billion in 2025. Now that’s growth!

Although the term “sharing economy” can be elusive, the common denominator is an on-demand workforce that leverages underused assets. That on-demand workforce is made up of freelancers, gig workers, temporary staff, moonlighters or whatever label you want to prescribe. This is leading to a world of reduced costs for both consumers and businesses.

So, can this translate into more affordable insurance products?

Let’s explore.

The Sharing Economy: A Brief Introduction

The key to the shift in consumption behavior from ownership to access (or what we’ve termed the “sharing economy”) is the use of mobile technology. Smartphones and mobile platforms have enabled major sharing platforms such as Uber, Lyft, Airbnb and WeGoLook. (Yes, we know that early agrarian communities shared everything — including labor and food. But they didn’t have smartphones!) The sharing economy also includes services — especially those that can be delivered electronically.

See also: The Sharing Economy and Accountability  

How Businesses Can Take Advantage

Individuals benefit from the sharing economy because of the ability to connect goods and services to consumers electronically or, ultimately, in person. A peer-to-peer model of consumption reduces consumer costs. Adding mobile technology facilitates the sharing and has allowed for cost savings across the board.

The sharing economy allows individuals to go into business by using the internet, a laptop, tablet or smartphone. Businesses benefit as much as individuals because they can connect, and contract, with members of the on-demand workforce for ad hoc projects or temporary services.

And businesses are noticing. According to a Jobshop survey, one-third of businesses plan to use workers from the sharing economy for their staffing needs over the next five years.

But what does that mean for insurance?

How the Sharing Economy Can Help Promote Affordable Insurance

Look at property and casualty insurance, where rates continue to increase year over year: The sharing economy can have a significant effect on payroll and service-delivery costs.

National insurance carriers have massive payrolls that drive up rates for consumers. When payroll costs are compared for W-2 employees and on-demand freelance workers, the savings is significant. When a full-time employee is hired at $20 an hour, the actual cost to the company is much more than the hourly wage because of payroll taxes, benefits, workers’ compensation premiums and unemployment insurance. Not to mention the cost of the workspace needed for each employee.

The W-2 employee who is hired at $20 an hour actually costs the employer about $25.60 an hour, so an independent contractor hired at $20 an hour reduces the cost of payroll by $5.60 an hour, or more than 20%. Contractors can also be hired as needed, so they aren’t paid full-time. Multiplying the payroll reductions by the many thousands of independent contractors working nationally, and huge savings are created that can be passed on to the consumer.

By accessing the on-demand workforce, insurance carriers can gain access to highly skilled independent contractors (many of them retirees) at minimal cost. These professionals typically work as independent contractors and offer their skills at below-market prices because they have a retirement plan.

I would know. WeGoLook employs more than 30,000 of these highly skilled on-demand workers.

Areas for Insurers to Target

Insurers seeking to reduce payroll costs can easily access various web platforms, such as WeGoLook, to search for independent contractors to satisfy their needs and save money.

These needs can include:

  • Communications: Experienced communicators can be contracted to connect with clients and agents to discuss coming programs or to conduct surveys.
  • Asset Verification: Most property and casualty insurers rely on inspections of residential and commercial properties to make certain the dwelling or building qualifies structurally for a policy. Insurers can use gig platforms to contract skilled field service agents to personally visit and photograph the property in question.
  • Claims: An insurer’s claim department relies on experienced adjusters to inspect and adjust damage to a property or vehicle. In areas with lower populations, using independent contractors makes better financial sense than hiring full-time claims adjusters.

See also: Sharing Economy: The Concept of Trust  

Make Insurance Affordable by Passing on Savings to Consumers

It’s highly likely that national insurers can reduce payroll costs and service delivery by partnering with on-demand workers in the sharing economy. Technology makes it possible for the parties to connect, discuss and contract for whatever the project might be.

The savings can be passed on to consumers, making you more competitive in a crowded market.

Mobile Ends Need for Usual Inspections

As I write this article, I hear the lilting melody of Alicia Keys’ tribute to New York City:

“Hail a gypsy cab, take me down from Harlem to the Brooklyn Bri-i-i-i-idge…”

Can you hear it? There are just certain things that jump to our minds when we think of New York.

I think of hot dogs, Central Park, awesome shopping, coffee shops, marquee lights on Broadway and “bouquets of sharpened pencils” (yet another New York reference for you movie buffs).

What else comes to mind? Taxis… lots and lots of yellow taxis. In the era of the sharing economy, that also means lots and lots of Uber and Lyft drivers.

But did you know that an outdated law is keeping New York consumers from taking advantage of a convenience that millions of drivers in other states already enjoy?

In New York, a law requires consumers wanting to sign up for new auto insurance coverage to first have their vehicles inspected by their insurance companies. The law was enacted in the 1970s and was designed to protect against insurance fraud.

These days, instead of preventing fraud, the law mostly produces frustration. Individuals must have their vehicles physically inspected by a licensed insurance agent or bring them to an inspection site before they can activate their auto insurance coverage.

This inspection requirement is ON TOP of the annual inspection required for all New York vehicles. So, someone who owns multiple vehicles could potentially be required to do multiple inspections throughout the year!

See also: On-Demand Workers: the Implications  

What else does this mean exactly?

Old Technology for New Times

Well, for starters, a lot of headaches, hassles and inefficiency for consumers. They frequently report:

  • Insurance coverage lapsing due to failure to complete the inspection
  • Missing work to complete the inspection
  • Long wait times at inspection sites
  • Inconvenient hours at inspection sites
  • Inspection sites with inconvenient locations
  • Students at out-of-state colleges needing to drive their cars all the way back to New York to complete the inspection OR re-register their vehicles in another state
  • Insurance companies receiving inaccurate information about inspected vehicles

That’s a lot to deal with for the average car owner, who may be balancing a full-time job, college courses and a family and has precious little time in which to get an inspection done.

But what choice do they have?

For now, none.

Mobile Innovation Changes Everything

But advances in mobile technology are radically changing the world we live in, empowering consumers to get work done conveniently and efficiently. Smartphones are at the core of this radical change.

In fact, according to recent statistics by GO-Global, not only are smartphones being used by more people than ever, but those people are spending 52% of their time on those smartphones using mobile apps.

That’s incredible!

Statistics also indicate that 18- to 24-year-olds use more mobile apps than any other age group.

See also: How to Embrace Workforce Flexibility  

It’s no wonder that the global revenue from mobile apps has risen dramatically over the last few years from $35 billion in 2014 to $58 billion in 2016, and in 2017 is expected to hit $77 billion.

Why Are Mobile Apps so Popular?

1. Mobility comes in all shapes and sizes

Almost 80% of consumers around the world have smartphones, 50%-plus have tablets, nearly 10% have wearable mobile devices and 7% own all three.

That high level of usage has had a significant effect on business practices around the world.

2. Location-Based Services (LBS)

Most devices currently have GPS capabilities that empower users to get real-time information, right here, right now.

3. Internet of Things (IoT)

Again, this advancement in technology provides users with real-time control and information, regardless of where they are.
Forgot to turn your lights off at home? No problem. Just log into your smart home app and do it from the comfort of your office.

4. Virtual and Augmented Reality (VR and AR)

This technology is revolutionizing how we interact with each other and with other software systems. Mobile app developers are expecting tremendous growth in this area.

In short, these mobile apps allow people to find the goods and services that they need quickly, easily and cost-effectively. In other words, the middlemen and gatekeepers have been all but eliminated.

Combining Mobility With Manpower

So, let’s apply those capabilities to the New York, with its outdated law that requires drivers to obtain a vehicle inspection before they can activate their insurance coverage. With today’s technology, the answer just isn’t that hard. Drivers in other states already have an alternative: smartphone-based vehicle inspection.

WeGoLook has developed mobile technology that puts a large mobile workforce at the fingertips of consumers who are too busy or simply too far away to obtain in-person inspections. Others may have their own solutions; ours looks like this:

  1. A client needs an inspection, and orders a vehicle inspection report from WeGoLook via the website or mobile app.
  2. A “Looker” is dispatched to perform the inspection. (The number of Lookers has grown from 7,400 in 2012 to more than 30,000 in 2016.)
  3. The Looker manages all aspects of the inspection from scheduling to coordinating the different parties to preparing the final report.
  4. Throughout this process, the client can monitor real-time progress on the inspection via the mobile app’s online dashboard.
  5. The WeGoLook app also has photo and text support so that clients can capture the right angles and desired information needed for the report.
  6. A management team reviews the report for quality assurance and accuracy.
  7. The client receives the detailed report, quickly and conveniently and can download it directly from the app.

Given the power behind mobile technology and flexible workers, like WeGoLook’s Lookers, there is no reason consumers should be locked into doing their inspections at traditional inspection sites.

The use of flexible mobile inspectors can solve the problem of drivers having to physically take their vehicles to an inspection site. Mobile apps like WeGoLook’s also allow for “app consistency” — that is, if a policyholder, insurance carrier and third-party inspector are all using the same platform, there is a better chance of a successful transaction. For savvier consumers, technology like WeGoLook’s app even opens the door for the consumer to self-inspect the vehicle. Certain states already allow self-inspection via smartphone for home inspections and claim inspections after an auto accident.

See also: A New Way of Thinking on Assets  

In New York, however, for the pre-insurance inspection requirement, a new law would need to be enacted to empower consumers to self-inspect their vehicles using a smartphone app. This dream scenario would give consumers the option of using a WeGoLook Looker to complete their inspection, of self-inspecting the vehicle using WeGoLook’s app or of completing the inspection via the traditional route.

WeGoLook: On-Demand Solutions That Save Time and Energy!

The beautiful thing about a mobile app service like WeGoLook is that it will offer consistent and trustworthy results regardless of who requests the report — the policyholder, a third party or the insurance carrier.

So, if you’re a busy and productive citizen of New York state, why not save yourself a heap of time and energy? Smart use of technology benefits everyone involved.

So, this spring, I urge Albany lawmakers to enact a new law that would help consumers put today’s smartphone technology to better use. Let’s give New Yorkers smartphone-based options for their pre-insurance vehicle inspections.

I’m a Retired Professional…

The insurance industry is a massive market composed of many professionals with various backgrounds.

When consumers consider insurance professionals, they typically think about either the sales or claims end of the business, but there’s so much more.

Generally, national property and casualty insurance carriers are made up of many different departments that ultimately support the sales and service sides of the company. Although the sales side of the industry can have frequent turnover, those who find a home in the various support departments lead amazing careers.

But, as time moves on, and the Baby Boomers decide to start retiring, there is a growing army of retired insurance professionals.

What is one of the best jobs for retired insurance professionals? The gig economy!

Here’s why.

Retirement Flexibility

Gig platforms connect people to paying clients. It’s as simple as that. This includes freelancers, contingent workers, temp employees and the millions of digital nomads currently working from home on their own terms. The gig economy is the perfect retirement option for those wanting to remain social, earn supplemental income and maintain a flexible part-time job.

Why do we say this? Gig workers make their own hours, choose their own clients, meet new people and bring in some extra cash.

According to a study conducted in 2016 by Harvard University economics professor Lawrence Kats, nearly 24% of those between ages 55 and 74 were working in the gig economy in some capacity.

Further, according to a study by JP Morgan, 67% of pre-retirement workers said they planned to continue working in retirement. However, only 25% actually did.

Why not? Because most don’t even know where to start. That’s where we come in.

See also: The Stubborn Myths About Older Workers

The Best Retirement Gig: WeGoLook

We think the best job for retired insurance professionals is WeGoLook, a popular gig platform that specializes in asset verification tasks, something all insurance professionals are familiar with!

WeGoLook’s gig workers, whom we call “Lookers,” engage in a variety of tasks that any insurance professional will understand. These include:

  • Real estate verifications;
  • Auto verifications;
  • Heavy equipment verifications;
  • Various insurance solutions;
  • Courier services;
  • Document retrievals; and
  • Custom tasks and other field services.

Let’s break down a typical gig, or “Look,” for you:

A customer in Idaho buys a used car on eBay but wants to make sure that the seller in Oklahoma City is legitimate and that the car is “as described.” Mr. Idaho places a quick order through WeGoLook, which is integrated directly into the eBay Motors platform, pays a fee, and a “Looker” (the future you!) is dispatched to the physical location of the vehicle.

Acting as boots on the ground for the customer, a Looker will answer many questions about the item, snap some photos, check capability and then submit a secure report directly on the WeGoLook smartphone app for delivery to the client.

WeGoLook has more than 30,000 Lookers across North America taking on these type of side gigs on a daily basis.

You could, too!

The services WeGoLook provides for insurance clients — and others — are ones that companies realize they no longer need full-time staffing for.

Tasks such as property verifications, data collection, photographs and videos, asset condition verification, mobile notarizations, police and court report retrieval, etc., are easily contracted out to skilled on-demand gig workers.

Insurance Roles: Potential in Gig Economy

Although most insurers have departments that handle underwriting, actuarial, legal, licensing, marketing, claims and inspections matters, many contract with on-demand gig workers who are qualified to perform the service required.

That’s where WeGoLook comes in, connecting people to tasks. We are already operating in the insurance space. In fact, we were recently acquired by Crawford & Co.

See also: How Telemedicine, AI Are Transforming Care  

Final Thoughts

As years of working in the insurance industry go by, like most workers, insurance professionals look forward to a comfortable retirement.

But, like many other retired workers, insurance professionals want to supplement their retirement income by working part-time and remaining in the industry they know and love.

Fortunately, technology today allows a retired individual to use their skills on an on-demand basis so they can work when they want and where they want — in the industry of their choice.

Insurtech vs. Legacy Insurance Carriers

Combining the resources of one of the world’s largest TPA firms with one of the world’s largest sharing economy platforms will result in true innovation within the insurance industry during a time when most carriers continue to operate in a legacy manner. Forbes, December 8, 2016

The writer was describing the announcement last week that Crawford will acquire 85% of the equity in my company, WeGoLook, which I believe will be the precursor both for other mergers and for other types of deals that will drive innovation through a merger of the gig economy and the insurance industry.

Let me explain.

Traditional Supply Chain Disruption

Simply put, the traditional supply chain is being disrupted. Hugely.

Digital technology and innovation have altered the traditional supply landscape in a number of ways. Technology has decentralized and democratized the supply chain, removing the need for traditional intermediaries. This digitization has resulted in the rise of gig economy platforms, which can use mobile technology to organize cost-efficient labor in a connected supply chain ecosystem.

For a long time, insurance carriers have tacitly acknowledged the need to adjust business models and consumer delivery processes. The time has come.

The WeGoLook-Crawford partnership is only the beginning.

Customer Experience Is Changing

Forbes contributor Steve Olenski noted that “the [WeGoLook-Crawford] merger is making the customer experience even better than before by adding key benefits for insurance company customers.”

These advantages include a more streamlined claims process, the addition of flexible workers to supplement field staff and powerful mobile technology.

See also: The Sharing Economy and Accountability  

It goes without saying that the younger generations love mobile. When it comes to business-to-consumer interactions, mobile is becoming even more important than traditional communication pipelines.

Simply put, the customer experience is now one of on-demand. WeGoLook, and other gig economy platforms, are premised on on-demand asset delivery through mobile technology.

The Workforce Is Changing

The world is becoming more freelance. By 2020, one study predicts that 50% of the U.S. workforce will be independent contractors. This has significant implications that move beyond the insurance industry itself.

WeGoLook and the gig economy are using technology to redesign work process flows for enterprise clients. This, combined with the ability to dispatch on-demand workers who possess the proper skill-sets, helps to augment and supplement existing, full-time workforces.

This augmentation can be indefinite, or during times of peak demand.

Perhaps even more importantly, gig workers can easily act as field personnel for platforms that don’t yet have a nationwide footprint.

For insurance carriers, this results in a much faster and cost-effective way of providing inspections, or performing low-complexity tasks.

Gig companies including WeGoLook are more than just vendors; we easily become part of traditional business processes through partnerships and acquisitions.

What happened last week, was a perfect example of this integration in its infancy.

Expediting Claims Processes

The Crawford-WeGoLook acquisition solves one of the most persistent challenges in the insurance industry: how to get claims processed faster.

Today, insurance inspections may take anywhere from a few hours to a few weeks to schedule and execute.

With the acquisition of WeGoLook, Crawford is fast-tracking the entire process and streamlining the claim process workflow by leveraging “gig economy” workers, already in the field”

  • Crawford will be able to send out claim requests in real-time, tapping into WeGoLook’s workforce of 30,000 Lookers, and growing.
  • Crawford will be able to assign experienced agents to high-priority tasks, allowing Lookers to handle simple inspection requests for a fraction of the cost.
  • Crawford will experience extensive data capture efficiencies. All inspections sent through WeGoLook will be funneled through a secure, mobile platform. No more paper trails, and no confusion over what an inspection does or does not entail.
  • Crawford can leverage WeGoLook’s custom inspections capabilities. For special requests, such as needing an agent who is proficient in a specific language, Crawford can simply include the request in the order to WeGoLook’s workforce.
  • Crawford can quickly scale its workforce up or down to match demand for inspections.

Indeed, according to Crawford’s press release, this strategic acquisition will enable “Crawford to revolutionize, automate and expedite the claim handling process by utilizing a large mobile workforce for automotive and property inspections.”

See also: A Mental Framework for InsurTech  

These are exciting times for the insurance industry, with innovative technology ingraining itself in this centuries-old industry. The above thoughts are simply my observations, and time will certainly tell the full story.

But I can assure you, the marriage between the insurance industry and gig economy will be a lengthy and prosperous one.