Tag Archives: wikipedia

What Comes After Big Data?

The force of transformation in our technological age is undeniable, unpredictable, rapid and without controls to slow or stop. No industry can freeze a convenient moment in time when its commodity has high value that is safe from competitive disruption and in perfect alignment with technology. Any and every business can be blindsided by a competitor’s next-generation upgrade of IT, or an upstart’s reinvented consumer acquisition and interaction experiences. What is new today becomes old in a flash.

In the risk and insurance industry, investment is booming in predictive analytics and big data. Many proponents envision the death rattle of stodgy experience mod rating, which would give way to “Moneyball” fantasies flush with evergreen underwriting profits. While Moneyball fantasies may pan out for now, our industry cannot control the genie emerging from this bottle. I suggest we consider when and how big data might mature as a cheap ubiquitous commodity and how to hone the next logical step that capitalizes on its inevitable demise.

First, we must accept that the devaluation of predictive analytics is imminent, whenever that comes. Consider these questions:

–Will analytics still create any underwriting advantage when all companies are applying similar models?

–How will the “smart money” know when to stop huge investments in model-building? When 900 data points show no more appreciable value than 400? When the burdensome collection of data at the adjuster’s interface limits, dumbs down, dehumanizes and fast-tracks the front-line adjusting operation so as to, ironically, become a detriment to claim outcomes in and of itself?

See Also: Competing in an Age of Data Symmetry

–What happens when the first major broker or marketing interest cracks the dam and applies analytics as a loss-leader to fish for clients or tangentially grow a related market share? For example, offering to analyze a prospect’s work comp for free as part of winning a lucrative global property program. Can you beat the rush as more consumers expect predictive analysis “freebies” as part of the entry expense for winning customer contracts?

–How soon will some website’s appetite for “click-bait” mean that it offers free, robust, on-line predictive analytic calculators simply to build email lists of potential WC customers?

–What if government interests unleash the ability to apply top-notch WC analytics on an open-source employer platform for the good of the state? Can self-use, cost-saving analytics become a public “right” and not a paid-for “privilege”?

Today’s reality is simple: Information is vast, easily accessible and free. This fact not only foretells the demise of the value of big data in our industry, but it also instigates the next step in creating opportunity. This next step will arise from the changing nature of higher education and future job seekers.

I was recently privileged to hear a talk by the headmaster of an esteemed college preparatory school, who espoused a necessary wholesale change in education. His premise: There is no longer any value in teaching students facts and information because all of it is available and accessible for free. He considers it educational malpractice to make students learn facts. He has shifted a good part of his school curriculum to project-based learning. Student teams are presented with issues or situations and create solutions or new perspectives that open higher possibilities.

One of the project teams tackled the challenge of cross-teaching Mandarin and English languages. Their research discovered that the Chinese have a passion for U.S. basketball. The team produced a video of instructional interactive basketball drills that taught language during the real-time experience of following drill instructions. Their first module is now actually being used in China to support prospective students interested in American schools. The headmaster jokingly said his school may have to forego non-profit status to look for investor money and make the concept a complete language package. Mind you, these creators are teenagers with no real budget who were able to use the Internet and common technology to research, design and produce this valuable product and change notions of language-learning.

The bottom line is that future employee talent will not care to know facts but will find its highest value in being able to ignore the conventional, ask the right questions and conceive whole new visions from abundant data and information. This is where our industry must pick up a focus as big data’s intrinsic value declines.

Specifically: We need to cultivate real seat-of-the-pants critical thinking around micro-employer data and macro-industry data. We need thinkers who will ask incendiary, never-before-imagined questions and propose changes and interventions that will reinvent how any employer’s WC program might be constructed and operated and how vendors will provide action and service. While vast, yet soon-to-be-cheap, data points will still garner some valid predictions, monetizing the employer’s change proposition and perhaps having a stake in the outcome will be where the future profit lies.

Not just any claims expert can provide value at this needed level, as most in today’s world only know templates and best-practice concepts. Very few have skill in ground-up, project-based problem solving. The next wave of industry smart money must seek out and hire a new army of solution-prone human capital.

Our industry must admit that predictive modeling is but an early step toward other means of value beyond just the current fleeting ability to increase underwriting profit or fast-track a claim process. The ancient industry construct that silos underwriting, sales and claims needs a re-assessment of where priority human capital investment lies and of how cross-skills must work together.

See Also: The Science (and Art) of Data, part 1

Perhaps current position value will flip-flop… the soon to be data-rich yet bulk-automated underwriting process might become an offshore, outsourced common function while the adjuster will emerge as a future kingpin in protecting profitability and holding the highest salaried function – abundant with talent and intuition while provided ample time to ask the right questions employer by employer and claim by claim.

I welcome any entity that wants to explore and build the next value-wave on the downside of big data to please contact me.

LiveMed Brings Digital Human Touch

Many tasks and actions have been replaced by digital solutions. This is nothing new. However, sometimes nothing beats a face-to-face with a customer. Now, using a VideoTech platform, Silicon Valley start-up LiveMed replicates the physical face-to-face with a digital one.

I’ll start with an event that happened to me last year. I’ll skip the details, other than to say I was required to confirm my identity and sign a document by a department in a financial institution.

With my passport and utility bill in hand, I went in search of a branch (which isn’t as easy as it used to be, even in Central London). It didn’t help that the fax machine at the first branch I found was out of order, so I had to find another one, which I did! After much back-and-forth on the phone between the department, the branch and me, we completed the process, and I was on my way.

What struck me at the time was how out-of-date this financial institution was. Not just technically or digitally but also in terms of customer experience. And it was completely unnecessary.

Digital FinTechs and InsurTechs have been onboarding new clients in less than 10 minutes, without any physical interaction. Identities can be proven and verified in a matter of minutes with background checks, a photo of your passport and a selfie.

The use of eSignatures is widespread. In the U.S., the Electronic Signatures in Global and National Commerce Act is a federal law put in place to facilitate the use of electronic signatures in commerce (long-form definition on Wikipedia, here). In the European Union, the equivalent regulation is the Electronic Signature Directive (see Wikipedia reference here) that defines the use of eSignatures in electronic contracts within the E.U.

Both these legislative frameworks require the same thing, which is that electronic signatures are regarded as equivalent to written signatures.

Given all this, was it really necessary for me to spend several hours inconvenienced and, frankly, wasting time?

Last month, I wrote about the use of VideoTech in the claims handling process In that piece, I talked to InsurTech startup Vis.io about its use of video technology to both reduce cost for insurers and improve the customer experience for claimants.

This week, I move to the front end of the insurance process—client onboarding and policy administration—and talk to LiveMed. To tell me how their solution brings together the use of video, customer identification and eSignatures, I Skyped with Silicon Valley-based co-founder and CEO Yair Ravid.

Ravid explained to me, “LiveMed is a platform that allows financial institutions to confirm customer identity remotely, collect signatures remotely and provide a video record of the customer engagement.”

The way it works is simple.

When a face-to-face discussion is required, the insurer emails a link to the customer. This can be for events such as confirming a customer’s understanding of the insurance policy conditions or witnessing the signing of all parts of the policy agreement.

The customer activates the link and is connected via a live video to an insurance agent. The agent uses the LiveMed platform to conduct a secure, face-to-face discussion with the client. The platform allows documents to be shared between the two parties, which they can both review and amend in real time, before both parties sign electronically and the document is locked down.

The whole session is recorded and kept for several years in case a customer disputes the policy conditions or that he even signed the policy in the first place. (If you are interested in an example of a policyholder disputing an electronic signature, read this article in the Insurance Journal about Bonck v White.)

Knowing whom you’re talking to

While digital facial recognition technology (and other biometric measures) are advanced and sophisticated, humans remain better at visual identification. In some jurisdictions, that remains the only option because biometrics are not yet permitted for identity verification.

“Humans understand the face holistically,” according to the study “The Limits of Facial Recognition” by Tim De Chant. And visual identification still carries great weight in the process of verifying a customer’s identity and in fraud detection. Humans are better at assessing if we are who we say we are or if our claim is suspect.

There will always be occasions when a face-to-face meeting is required to complete a transaction. LiveMed enables this human interaction without requiring the customer to go to a branch or an insurance agent to visit the customer’s home.

More than a VideoTech platform

Behind the video interaction, LiveMed’s algorithms verify the authenticity of documents supplied by the customer. Ravid told me, “When a customer brings in a fake document, we have a high success rate at identifying if it is a fake. We’ve developed a solution that takes real IDs, studies different parameters against them and then compares these with the documents being presented. The institution still relies on human judgment, but LiveMed gives the agent a reliable tool to help with the decision.”

The LiveMed platform uses webRTC, an open-source platform that provides browsers and mobile applications with real-time communications (RTC) capabilities via simple APIs. It also runs as a cloud or an on-premise solution to cater to an institution’s specific requirements and policies on security, data and technology.

It is a device-independent platform that delivers both mobile and web. Ravid explained, “We’ve worked hard to make this very easy to use for the customer. Simply click on the link, go online with the agent, finalize or review the document, open the signature box and then sign with their finger. Simple!

“We take any format document or webpage, whatever, and turn them into a series of pictures. This allows changes, sketches and amendments on the screen by both parties, [in] real time. Then these pictures, or pages, are locked and put together and sent to both parties as a record. We are patenting the technology because we believe it to be unique.”

The old-fashioned ways are no longer viable

Asking a customer to come into a branch carrying paper documents just isn’t going to cut it any more. Nor is the cost of sending a representative to meet the customer. In this digital, mobile age, time is precious, and money is tight.

We are also in the consumer protection age of regulation. Financial institutions need to be able to prove beyond doubt that their conduct is acceptable and that customers fully understand the financial decisions they are making.

This requires evidence both parties can rely on should there be a dispute. (See my previous research notes on RecordSure and its use of AI for compliance monitoring.)

With LiveMed, the finance institution “sees” the person in real time without the inconvenience or cost of a physical, in-person meeting. And because the transaction is completed there and then, the insurer doesn’t have to wait for documents to be sent and processed. And both parties can be certain there are no mistakes (that it’s right the first time) because everything is checked and verified on the video call.

What next for LiveMed?

Ravid is one of three co-founders who bootstrapped LiveMed and took the start-up through the UpWest Labs accelerator in Palo Alto. LiveMed has now raised its first $400,000 from seed funding on its way to raising $1.5 million in a Series A. The minimally viable product (MVP) is built and in pilot with several financial institutions, and the new funding will enable the LiveMed to launch the platform into the U.S. financial services market.

This article was first published at www.dailyfintech.com 

Insurance Needs a New Vocabulary

Lots of industries face criticism because they talk the talk but don’t walk the talk — the computer industry, for instance, long talked about making machines intuitive but required users to work their way through manuals and memorize long series of steps before they could accomplish anything. But the insurance industry doesn’t even talk the talk yet.

Sure, everyone is talking about improving the customer experience, but look at the words we use. Many are opaque — the industry talks to itself, somehow unaware that customers are listening and are turned off by the gobbledygook. Some words are even offensive — we’re saying things to customers that we really don’t want to be saying.

We have to at least get our talk — our vocabulary — straight before we tackle the much deeper issues and figure out to really engage customers and address their evolving needs.

My least-favorite word is one so widely used that few will find it offensive: “adjuster.” My problem: If I’m filing a claim, I don’t want it adjusted. I want it paid.

Yes, I realize that processing claims is complicated and that all sorts of adjustments need to be made. I also realize that no industry simply pays when a claim is made against a company. But if you send me an “adjuster,” you’re telling me right off the bat that you don’t trust me, and that’s a lousy way to start an interaction. It certainly isn’t any way to start a relationship, which is what insurers insist they want with customers these days. Don’t trust me, if you must, but send me a “claims professional” or simply a “customer service representative.” Don’t send me an “adjuster.”

Less offensive but still unnecessarily bad are words like “excess” and “surplus.” The insurance may be categorized as excess and surplus to you, but not to me, the customer. I’ll thank you to treat my needs with the respect they deserve (says the customer).

Some words need to go away because they already have meanings — and they aren’t the meanings assigned to the words by the insurance industry. A binder is a plastic cover with three rings that you buy for your kids at this time of year as they head back to school; it is not temporary evidence of insurance. An endorsement is something you put on the back of a check — or at least used to, before banks simplified deposits. An endorsement is not something that modifies an insurance policy.

Mostly, many terms need to be revisited because they are opaque, and often archaic:

  • “Underwriting”? How about “assessing risk”?
  • “Actuary”? That’s a legitimate word, but I prefer the European form: “mathematician.” (“What do you do at XYZ Insurance Co.?” “I’m the mathematician.”) “Mathematician” just seems friendlier.
  • “Capitation” and “subrogation”? Important functions, but there have to be layman’s terms that can be substituted.
  • If I’m buying life insurance, good luck getting me to grasp intuitively the difference between whole life and universal life; “whole” and “universal” are practically synonyms in this context.
  • “Inland marine”? Please.

While we’re at it, let’s do away with the acronyms. All of them — at least on first reference, and mostly in subsequent references, too.

Changing the language will be hard because so many in the industry subscribe to what I think of as a 19th century sort of approach to business: Let’s make things seem as complicated as possible to justify the existence of lots of experts and intermediaries and to demand nearly blind faith by clients. This is sort of the “don’t try this at home, folks,” approach to business. Leave the complicated terms to us.

The approach has worked for insurers for a very long time. It has worked for doctors and lawyers. If a cynical T.A. in a philosophy class in college way back when is to be believed, it worked for Hegel, too — he supposedly wrote a short, clear version of his big idea (thesis/antithesis/synthesis), and no one took him seriously; he then wrote a 1,000-page, nearly impenetrable version, called it merely the introduction to his ideas and found lasting fame.

But things have changed since Hegel wrote in the early 1800s. Now, if I want to remind myself about Hegel, I turn to Wikipedia and its clear, little summary; I don’t crack open The Phenomenology of Spirit. Change has accelerated in recent years, to the point where even doctors find themselves having to communicate more with patients in plain English.

If doctors can simplify how they communicate about the mind-boggling issues involved in medicine, then the rest of us can figure out how to talk the talk in insurance. We need to begin by taking a hard look at every term we use and revising many of them, from the perspective of a total newbie customer, so we talk to customers the way they expect us to talk to them.

That’s the only way to lay the groundwork for the broad improvements in the customer experience that we all want to deliver and that customers are increasingly demanding.