Tag Archives: Maria Ferrante-Schepis

Who Controls Your Customer Experience?

As an introvert, I don’t often write or talk about subjects that are highly personal to me, but, every time I do, people seem to appreciate it. In fact, my partner and friend Mike Maddock always encourages me to do it more. Another good friend and a highly regarded insurance industry thought leader, Nick Gerhart, encouraged me to tell this story specifically. So here goes:

In the second half of 2017, my family became a three-time reverse lottery winner. When you say that fast, it sounds awesome. But it’s not. The reverse lottery is my personal shorthand for the complexities of insurance: random, sucky things that you win money to “fix.” It’s the lottery you buy a ticket for but never hope to win. These situations have left me with some burning questions.

The first experience was the death of my 86-year-old dad in September. My dad experienced a stretch of time in and out of care facilities. I do not need to explain the pain of this loss to anyone. However, that pain is many times worse for my mom. They met as teenagers and were married for 64 years.

My dad bought life insurance as part of his retirement plan. I was very proud to encourage that purchase and facilitated it through the company I was working for at the time. While life insurance wasn’t really something my parents knew a lot about, they trusted me enough to go ahead with getting a policy on each of them, as they both worked and had pensions to protect. My dad was the one we all expected to live longer, partly because his dad lived to be 94 but also because he promised me that he would live to be 100. So we bought less insurance on him than on my mom. In hindsight, it seems silly to play actuary on the basis of my dad being like Superman to me. While my mom is thrilled to have had any life insurance at all, my only regret it is that I didn’t get objective advice on how much to buy, as more was clearly needed. As an insurance executive with years of experience I was humbled by my own process and shortcomings here. It led me to appreciate how difficult it is to plan properly for life’s unknown events.

See also: Thought Experiment on Life Insurance  

The burning questions on this are, why did a comic book character play the leading role in determining how much life insurance my dad should have? If someone who actually has experience fell into this trap, what happens to everyone else? And how do we help them avoid it?

The second “win” of the reverse lottery was the Saturday evening after Thanksgiving, when my husband and I came home to a flood in our condo from a leaking boiler that flooded our entire building but affected only us. It destroyed the floors on two levels, staircase, several walls, molding and ceilings. Luckily, it didn’t damage any of our personal stuff. But, needless to say, it’s a major inconvenience and stressful to boot during a particularly challenging year at holiday time. We are living in a hotel now as our place is being restored.

The good news is that I didn’t play actuary this time. I got advice on how much was needed from my financial adviser, Chet, who ironically doesn’t make any commission on that type of insurance but encouraged me to have it because he was looking at my needs in totality versus just what he could offer me in terms of products. That’s someone who has your back. The other good news is that I chose a reputable insurance company, which really came through for us, paying not just for the damage repair but for all the extra expenses associated with living elsewhere while the repairs are done. The company is coordinating efforts with the condo association, contractors and mold remediation specialists and even wired money into our account within 10 minutes so we didn’t have to go out of pocket to eat out more frequently than we typically would.

The adjuster breathed a sigh of relief when he saw our policy had plenty of coverage. He told me that so many condo owners wouldn’t have enough coverage to repair the damages our condo suffered. We are lucky we had such a comprehensive policy. But really, we were luckier to have the advice to buy it and not cheap out. Policies don’t come to you solely by luck; they come by choice, and we chose the richer benefits because it isn’t an expense, it’s an investment in sanity.

Therefore, the next burning question is, how often does someone outside the company’s ecosystem (i.e., Chet) affect the outcome at claim time?

The third experience is perhaps the most difficult to talk about because it is still affecting people 15 years later, including my brother, whose 60th birthday is the same day as I write this.

He’s a retired NYPD officer and was a first responder to the World Trade Center disaster on 9/11. While we are all well aware of the thousands who lost their lives and the billions of damage to property, that terrorist attack continues to damage more lives from a wide variety of health issues suffered by people at ground zero. This month, right before Christmas, my brother will have an operation to remove part of his kidney due to a 9/11-related mass that was discovered. He has already lost to cancer several friends who were beside him during that time.

However, the 9/11 fund has made his journey so hopeful. As an insurance expert, I would characterize it as the mother of all insurance policies. And he almost didn’t apply during the open window until one of his buddies encouraged him to do so, because he didn’t want to think about it and didn’t know yet that there was anything wrong.

Good thing. Not only is all of his care fully paid for directly, but also the doctors working with him are among the best available in the world and are treating him with dignity, respect and the urgency he deserves. Granted, this insurance policy had no premiums associated with it, but he paid with a very different currency to get that type of coverage. And he more than deserves it, as do the others who were down there on that horrific day and the months that followed.

Here, the scary burning questions are, what if his buddy didn’t intervene? And what would have happened if the assigned doctor did not treat this situation with urgency and made him wait months for an appointment, as many specialists often do?

These burning questions point to a big customer experience lesson. It is to understand that there is so much opportunity to innovate around the moments associated with claims. After all, isn’t that what insurance is all about? People purchase insurance hoping they never use it, but when they need to file a claim the industry must seize this as its opportunity shine. Exceeding expectations is critical.

So much of the innovation I see is around making insurance cheaper and easier to buy because it is easier to count time and money saved. However, the benefit side of the equation needs more love and attention, because it is rich with possibilities for a better world. That’s because when the random sucky thing happens, it’s a gang of people with expertise, empathy or both that dictate how the story will go. And they come from many different angles and don’t always get counted in the customer journey, or they may be missing completely.

See also: What’s Next for Life Insurance Industry?  

Your customer experience efforts must include deep insight on a wide ecosystem of people and their roles, pain points, attitudes and behaviors to fully understand the opportunities to innovate and continuously improve the experience. Do you deeply understand all the players in that ecosystem, how they interact with your ultimate customer and at what critical moments? If not, consider a commitment to getting an unparalleled understanding of the hidden players in the experience. It could do wonders for your competitive advantage in the New Year.

Happy birthday to my brother. Looking forward to 2018.

Is Shrinking a Growing Trend?

I have been fascinated hearing my futurist colleagues talk about the subject of minimalism as an emerging trend. While not new, the practice of deliberately ridding one’s self of things that do not add real value to life is apparently gaining traction for a variety of reasons that point to the need to understand it better.

Just the fact that I was fascinated by it suggests that I may be a minimalist myself and not even know it. I read an article by Courtney Carver called, “25 Reasons Why You Might Be A Minimalist,” and I saw myself in about 18 of them. The one that made me chuckle the most is, “If you can’t stop giving stuff away, and your dog is afraid he might be next, you may be a minimalist.” I don’t have a dog, which is another sign, but my husband expressed a similar concern to me last year after I spent my entire summer sabbatical finding ways to reduce the amount of stuff in our lives; he wanted to make sure he was not on the list.

Minimalism, which might sound like a religion or cult, is sometimes described as having fewer than 100 things in your life. However, it is more of a mindset than it is about strict rules. For example, Steve Martin’s character in the 1979 movie “The Jerk” had a memorable scene where he was running away from home and said, “I don’t need anything. Except this.” (He picks up an ashtray). Then he gradually picks up several other items and says, “The ashtray, this paddle game and the remote control,” etc. etc. until he is laden with stuff that was actually useless, but to him was important.

See also: Innovation: ‘Where Do We Start?’  

So, what does minimalism have to do with innovation? Everything. If you are in an industry that intersects with people’s stuff. Let’s see, that would be insurance, investments, banking, real estate, education, entertainment, food, packaged goods, appliances, furniture, clothing, media, pets…what isn’t included?

When an emerging trend intersects with your business and there is a potential new need that your capability can fulfill, that’s called innovation “white space.”

New growth opportunities are generally not obvious, so to find them we must triangulate emerging trends/drivers of change with basic human needs that never change, plus the current and potential capabilities of the company. This is the fuzziest of the fuzzy front end of innovation.

To get a better idea about how this is done, do this exercise:

Pick a trend, such as minimalism and:

  1. Choose a human need, such as the need for freedom, stability, simplicity or control (refer to MD Trend Framework Wheel).
  2. Brainstorm many possible future states around how the trend and the need would potentially affect the core of your business competency or provide opportunity.

Here is an example for four different industries. If you cross:

  1. Real Estate: With the need for simplicity, you may imagine that more people in the future may live in tiny homes. If tiny homes are not considered real estate, how would that future hurt you or provide opportunity?
  2. Insurance: With the need for control, you may imagine that people might scrutinize the value of insurance from every direction and expect ultimate transparency. How do products and experiences stack up?
  3. Banking: With the need for stability, you may imagine that more people in the future may pay off their debt faster than they are required to. How does that change your business model?
  4. Education: With the need for freedom, you might imagine that fewer students opt for higher, specialized degrees and instead want real-world experience. If your institution relies on the predictable growth of the student body, how will you lean in?

These are just a few examples. You certainly could, however, imagine many more permutations, combinations and scenarios.

So how do you know which ones to bet on? While nothing is guaranteed, there are ways to de-risk your choices through the application of different types of research, understanding what your organization will support and developing your team’s consumer-focused insight and design skills.

See also: Can Insurance Innovate?  

If you would like to learn more about this topic and how to de-risk the process, please register to attend, or receive the replay of, a WebEx hosted by LOMA and sponsored by LexisNexis Risk Solutions.

In the meantime, clean out your closet and see how it makes you feel!

When Customers Lie, We Learn

As the insurance industry pushes ahead into the next decade, adapting to change and, in some cases, leading change, those committed to the industry and its purpose face an underlying tension that they all wish would just go away. They wish the industry were not so hated by the public.

While “hate” is a strong word and potentially offensive, insurance definitely ranks toward the bottom relative to respect when compared with other industries, products and services.

In my personal quest to end this problem, I find that you can learn a lot by examining the worst of the possible behaviors—that is, insurance fraud.

Recently, my colleagues at Maddock Douglas and I engaged in some conversations with both LexisNexis and Swiss Re on this subject. Both organizations have some interesting lenses to look through. In fact, the three companies will be doing a webinar to share these views on Aug. 10.

See also: Happy Producers, Happy Customers  

First and foremost, it was surprising to hear how big the problem of fraud actually is. LexisNexis Risk Solutions, through a variety of sources, has reported that fraud costs the insurance industry more than $80 billion a year. There are many flavors of fraud, ranging from out-and-out intent to steal money from insurance companies all the way to “little white lies.” The ability to detect and size that behavior is very helpful in creating realistic expectations around costs and isolating areas for improvement.

I find the white lies more intriguing and potentially helpful in understanding the problem because they are more widespread and harder to detect. I suspect that some of that behavior stems from a lack of understanding about how insurance systems work, with consumers not necessarily realizing that “misbehaving” has a cost.

Swiss Re has some interesting insights about the behavior, as well. They’ve leveraged behavioral economics to learn that the context, order and style in which we ask basic underwriting questions can make a big difference in the truthfulness and accuracy of answers.

I believe there is yet another lens that we can put on this challenge: social norms. Insurance is a social construct; however, we treat it like a product. Social constructs—such as electricity, cable TV, public transportation, public parks, schools and community resources—are shared. The behavior of a few with respect to those shared constructs affects the many. It is the many who have responsibility for their preservation, especially when they start to break down.

However, that big picture is often lost after those social constructs age way past the people who invented them. So perhaps it’s time to reinject social norms into the insurance conversation, helping the public see how their behavior affects others.

Some great role models for this type of shift would be:

  • The Keep America Beautiful campaign from the 1970s
  • Mothers Against Drunk Driving
  • Quit-smoking campaigns

On the surface, it would seem like the common denominator is a giant advertising expenditure. While that may be true, there is another common denominator we can learn from—that is, a social label.

Keep America Beautiful, best known for the crying American Indian, is the campaign that also created the term “litterbug.” “Don’t be a litterbug.” Litterbugs are socially unacceptable. But, prior to the invention of that term, it was socially acceptable to dump litter at a traffic light out your car window.

Mothers Against Drunk Driving (M.A.D.D.) created the concept of the designated driver. The “DD” is a hero to those who like to have a good time but want to stay safe.

Quit-smoking campaigns created the concept of “secondhand smoke.” Yes, scientifically proven, but, more important, the concept brought into focus the innocent victims, often children or nonsmoking co-workers. The result was ordinances and family rules banning smoking in many locations.

Is there such a social label that can be created around “little white insurance lies”? The label could cast out the villains, glorify the heroes or spotlight a victim. My colleagues and I have done a little brainstorming on this subject, and there are some interesting ideas we will talk about during the webinar.

See also: How to Get Broader View of Customers  

The bigger question for the industry is whether this labeling is a job for a single brand or a coalition. In my opinion, either is possible with the right passion to make a difference.

While the past examples all had large ad expenditures behind them, they were all invented before the internet existed, when ad spending was the lever that brands and coalitions would pull to raise awareness. However, today we have unlimited access to technology and social connectivity.

Think about the success of the Ice Bucket Challenge. This social campaign raised $115 million for ALS research in just a few months. Why? It created millions of heroes. It let people, for a moment, feel what it was like to be a victim and then do something about it, either through raising awareness or raising money. Those who didn’t participate were, socially, some level of villain. After all, couldn’t you sacrifice your comfort for a few seconds, or kick in a few dollars, for a good cause?

Wow. Hmmm.

Do you have any thoughts about how we could create that sweet spot within insurance? If so, I would love to hear.

5 Critical Traits for an Adviser

After decades of experience working with and getting to know thousands of people whose job it is to give advice around insurance, investments and real estate, I’ve observed a few traits that I personally believe are critical to long-term relevance. Frankly, I also believe they will make certain advisers immune to the threat of their job being eaten by technology.

There is quite a bit of concern over robo advice threatening these livelihoods. We must consider that the underlying reason is a trust problem with those who make their living giving advice while at the same time selling products for a commission. But the underlying cause of mistrust may actually be the absence of one or more of the following five characteristics of advisers that matter more in the trust equation:

1. They seek to help their community first, then benefit from it later.

There’s a not-so-subtle distinction between people who join a community group because they want to network for business purposes and people who join because they are interested in helping advance the mission of that group. While oftentimes both motivations can exist at the same time, the real test would be to ask those people if they would have either joined or stayed with that group even if their prospecting need were not there.

While those inside the business may not see the distinction, others can see it a mile away. Trust erodes when intentions are not clear.

See also: 3 Major Areas of Opportunity  

2. They see work and life as inextricably intertwined and are in love with both.

Advisers who will stay relevant, who are “nondisruptable,” are people who always seems to be there for what’s most important, whether the market is crashing, an individual lost his/her job or someone’s kid or grandkid is in a little league game. From the outside, it may look like those advisers are either always working or never working. And the answer would be: yes, they are.

3. They keep score based on outcome versus income.

While earnings and sales numbers are important for a successful practice, putting numbers on the board is not what makes nondisruptable advisers sleep well at night. Rather, they create metrics of their own, consciously or unconsciously, counting things like how many people they have advised, how many thank you letters they receive, how many people they’ve helped employ or even how many hugs they have ever received from their clients. Counting these means they never need to count sheep.

4. They are described similarly by families, friends, clients and communities.

Nondisruptable advisers show one face to everyone. While they may have many interests, they bring their best to every situation and see the role of adviser as a calling and not just a career. Anyone can give advice from his/her own point of view. However, it takes care, skill and emotional intelligence to deliver advice that’s in someone else’s best interests.

The question remains as to whether these traits can be taught. Sure, someone could write a book or perhaps create a coaching program around them, but I’m not sure either would help. I suspect that people are either raised in such a way that these traits develop or they experience something dramatic that shifts their perspective quickly and forever changes their attitude.

5. They leave a mark that lives past them.

While this trait certainly isn’t realized until the adviser passes away or can no longer do his/her job, that individual’s ability to make an impact is unmistakable and therefore nondisruptable. You just know it when you see it.

See also: Insurance Coverage Porn  

This article was inspired by and is dedicated to my long-time friend Jane Lopp from Kalispell, Montana. Jane and I met at Prudential, where she built an impressive practice with an outstanding team, a supportive family and a community that felt her presence in countless ways. Nothing stopped Jane, including being confined to a wheelchair due to a muscle disease. Jane’s life was taken after a car accident on April 21 of this year, and, as her husband, Bob, noted, she was full of life and at the peak of her career.

If you know someone like Jane who embodies these five traits, please give them a hug. They deserve it.

Innovation, Community and Timelessness

“A thing of beauty is a joy forever.”

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

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

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

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

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

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

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

See also: Innovation Challenge for Commercial Lines  

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

1. Why is it dusty?

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

2. Why is it inspiring?

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

3. What do they want to accomplish?

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

4. How did they start?

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

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

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

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