Tag Archives: RCA

What Loneliness Does to Your Health

One of the myriad reasons workplace wellness is not performing well is that all humans have about 100 risk factors, of which obesity, high blood sugar, high blood pressure and high cholesterol are only four. If those four are in pretty good shape but the other 96 are out of whack, don’t expect good health results.

Further, putting bandages on symptoms of metabolic disease has limitations. Such bandages do not address the root causes of metabolic syndrome. According to Wiki, “Root cause analysis (RCA) is a method of problem solving used for identifying the root causes of faults or problems. A factor is considered a root cause if removal thereof from the problem-fault sequence prevents the final undesirable event from recurring; whereas a causal factor is one that affects an event’s outcome but is not a root cause. Though removing a causal factor can benefit an outcome, it does not prevent its recurrence within certainty.” [Emphasis mine.]

One thing sorely missing from most modern wellness methods is RCA. Unless one deals with RCA in metabolic syndrome, it will continue to recur.

Some other huge health risks factors are job misery, terrible marriages, very poor money-handling skills, envy, general lack of contentment in life and loneliness. Another health risk is how far you live from a “dial-911 first responder.” Yet another is how safe your neighborhood is. I could go on and on. Worksite wellness does nothing to address the vast majority of personal health risks. My book, An Illustrated Guide to Personal Health, elaborates on such health risks.

This article will cover just one of those risks, loneliness, which among other things is a root cause of metabolic syndrome. (Let’s hope this information does not inspire true believers in wellness penalties to look for ways to charge lonely employees higher payroll deductions.)

Loneliness harms your immune system, makes you depressed, diminishes cognitive skills and can lead to heart disease, vascular disease, cancer and more. Loneliness is roughly the health risk equivalent of being a diabetic who smokes and drinks too much. Read on.

An article from the National Science Foundation explores the health hazards of loneliness. According to this article, “Research at Rush University has shown that older adults are more likely to develop dementia if they feel chronic loneliness.”

Moreover, John Cacioppo, neuroscience researcher of the University of Chicago, says of loneliness, “One of the things that surprised me was how important loneliness proved to be. It predicted morbidity. It predicted mortality. And that shocked me.”

Dr. Sanjay Gupta recently wrote, “The combination of toxic effects [of loneliness] can impair cognitive performance, compromise the immune system and increase the risk for vascular, inflammatory and heart disease.”

According to studies in Europe, loneliness has about the same health risk as obesity.

An article in Caring.com says, “A 2010 Brigham Young University review of studies involving more than 300,000 people concluded that loneliness is as unhealthy as smoking 15 cigarettes a day or being an alcoholic.

This is a headline in the U.K.’s Express: “Loneliness is as big a KILLER as diabetes.” The article describes how loneliness is like a deadly disease that decreases life expectancy and makes you more susceptible to cancer, heart disease and stroke. The study behind that conclusion was published in the Proceedings of the National Academy of Science.

Here are some personal observations:

Why do many people have so few friends as they age?

  • Maintaining long-term friendships takes a lot of work and investment of time.
  • Don’t let your career stand in the way. Don’t wait for someone to befriend you; reach out.
  • Some people have invested their time and energy solely in a spouse, who may predecease them by 25 years, or in children, who fly the nest in time.
  • Many people have invested much in work-related friendships, which, while genuine at the time, can wilt almost immediately when they retire or move on.
  • In friendships, one has to give more than he takes. Make yourself likable. Who wants to spend time with someone who complains all the time? People like that are often avoided by people around them.
  • Be a good listener.
  • If you’re lonely, try joining something…a place of worship, a book club, a hiking club, anything. In every community are places where everyone is welcome.

In the end, a true measure of your wealth is the number of lifelong friends you have. Having lifelong friends is a joy and a perfect cure for loneliness.

The Future of Telematics Is… Italy

The black box used for telematics makes it possible for insurers to enrich their auto insurance value proposition by adding services built upon data. These services represent a way of de-commoditizing the car insurance policy and are also a source of income. In the medium/long term, such services will become more and more important as the risks covered by car insurance decrease because of technological progress on security and connected cars. These services also increase the number of interactions with the client, creating a richer connection and improving customer satisfaction. This is true both for Italy and at an international level.

There are three macro categories when it comes to services:

  1. Informational services related to the UBI (usage-based insurance) policy, typically delivered through a smartphone app or a dedicated area on a website. These services concern: quantification of pricing adjustment at the moment of the contract renewal based on previous driving behavior; coaching and advice regarding the style of driving; advice on how to save more while behind the wheel; “gamification” that allows a comparison of one’s own driving style with that of friends. A Canada-based company called Intact and Discovery, which is based in South Africa, can be considered among the most advanced examples that currently use this type of approach. According to recent data made available by a telematics service provider, four out of five clients owning a telematics insurance policy check put their driver score at least once a month. Furthermore, there is evidence that remote coaching programs can lead to concrete results in modifying driving behavior.
  2. Product offers related to the client’s automobile — like Discovery has done in South Africa with the Tires or like Allstate Rewards — or insurance policies sold “on the go” using data collected from the boxes installed on cars (a process known as reverse geocoding). Tokio Marine (Japan-based) and telephone operator NTT Docomo have shown that impulse “cross-selling” of low-value insurance coverage is a valid approach.
  3. Services related to the customer journey in a connected car.

There is a vast array of services that can be developed within the connected car ecosystem, and the technology is moving fast. There are start-ups and innovative business models popping up everywhere around the world. To cite just a recent Italian example, there is WoW — a digital wallet created by CheBanca! — which has integrated a parking payment service called Smarticket.it.

Services could be observed on three stages of the customer journey:

  • While behind the wheel. Services include bad weather alert, speeding alert, dedicated concierge and even an alert that is activated if the car leaves a pre-defined “safe area” (family “control” options for young or old members of the family). Discovery‘s approach in this field is highly relevant and includes an anti-theft service that signals to the client if the driver has a different driving style compared with the usual one;
  • In case of an incident. Here the Italian market is considered to be an international best practice because of how it has perfected the usage of telematics data to manage services. Many companies here have invested in creating a valuable customer experience by involving partners specialized in assistance. The solutions provided in case of an incident start with contacting the client and — depending on the gravity of the event — continue with sending help directly and taking care of all the logistic and case management problems that can arise. Innovation is now focusing more on simplifying the FNOL (first notice of loss) procedure. One such example is Ania, Italian Association of Insurers, which has announced for 2016 the launch of an app for FNOL.
  • While the car is parked. Beyond locating and recovering the car in case of theft, the blackbox can send alerts when the vehicle is moved or damaged in any way. This also allows a driver to locate a parked vehicle. There are three Italian companies – TUA, Cattolica and Cargeas – that have recently launched innovative value propositions for parked cars. One of the best practices is the street sweeping alert by Metromile.

In this new service ecosystem, insurers will find themselves forced to co-compete (that is collaborate and compete) with different actors that are active in the connected car sector.

Italy is at the moment one of the most advanced countries in terms of service development connected to telematics; they have become mainstream, not just a niche. At the end of 2014, telematics represented 15% of motor insurance sales and renewals in Italy, reaching 30% in some regions, as underlined by a recent analysis by IVASS.

This creates the perfect conditions for the consolidation of approaches driven by insurance companies.

Telematics: Now a ‘Movie,’ Not ‘Snapshot’

The traditional underwriting of an auto policy is based on a snapshot of certain static variables that belong to the client and his vehicle – the impact and weight on the pricing is determined by the analysis of the claims historical series of the company – and the renewal comes after taking the same type of snapshot after 12 months.

Telematics is becoming more and more used as a way of changing this approach and going more toward an individual pricing of risks, which uses a “movie” of the client’s driving: Already today, more than half of the products that have a black box and that are present on the Italian market have a usage-based (UBI) tariff. (The rest of these products do not have any variable component linked to telematics information, only an up-front flat discount.)

The ways in which telematics data can be used within the tariff mechanism fall into three main categories:

  1. Telematics can be seen as an option on the existing tariff or as a stand-alone product;
  2. The client’s value proposition can be “real individual pricing” applied during the first year, or a fixed discount for the first year and the “promise of a discount” at renewal based on the driving behavior in the previous 12 months;
  3. Variables can be incorporated within the tariff, either referring only to the distance traveled (“pay as you drive”) or can also take into consideration a wider range of data regarding the driving behavior (“pay how you drive”).

Pay as you drive (PAYD)

This type of product prices based on distance traveled and represents the most commonly used UBI tariff approach on the Italian market: around 80% of UBI products currently use a “kilometer” approach.

This approach focuses on a pretty wide niche and is based on a discount created especially for those clients who don’t use their cars often: For example, California-based Metromile starts from the client’s profile – based on traditional static variables – to determine the monthly fixed cost and the fee per kilometer; then, each month, Metromile measures with the box the “amount of risk exposure” (number of kilometers) and charges accordingly. Product innovation is moving toward assigning a different importance to the kilometers traveled based on the time of day and the type of road.

Looking at the PAYD solutions in Italy, in 30% of the cases telematics is an option on traditional policies and in 40% of the cases there is some form of adjustment of the premium during the first year.

Pay how you drive (PHYD)

This approach exploits the true telematics potential to define the adequate price for each client, based not only on the “amount of exposure to risk” but the “real level of risk,” based on actual driving behavior. PHYD also brings major benefits by influencing driving behavior and by allowing for the acquisition and retention of less risky customers. In addition, insurers can switch from a niche approach to one that can be applied to the whole portfolio. Studies show that the ability to discriminate about risk is highly elevated. The 10% of clients that are identified as riskiest on the base of behavioral telematics account for 40% of total claims, while identifying the riskiest 10% based on traditional variables usually intercepts only 25% to 30% of claims.

A very interesting example is the policy launched recently by Direct Assurance (Axa Group) in France: The product includes a self-installing telematics box that is sent to the client’s home. The client’s cost is adjusted from month to month based on her driving behavior (it may vary between plus 10% and minus 50% with respect to the first month’s premium).

The range of variables that are considered is wide. They start with traveled kilometers (having a different weight based on road type, time of day, day of the week and weather conditions). They move on to the intensity and length of braking, cornering and acceleration; respecting of speed limits; time spent behind the wheel; familiarity with the roads; and any use of the mobile phone while driving.

It becomes clear how the growth of this type of solution – which today still represents only a small part of the millions of telematics insurance policies that are in circulation worldwide – will make the ability to extract insights from big data the key element of the competition among insurance companies.

This article originally appeared in the Insurance Daily n. 738 Edition.