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Exigen Adds Mobile Capabilities to Core System Suite

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At the annual IASA education conference and business show in Indianapolis, Exigen Insurance Solutions (EIS) announced the addition of EIS Mobility, a set of mobile capabilities, across the company’s Exigen Suite, including PolicyCore, ClaimCore, BillingCore and CustomerCore. The mobile functionality includes two new apps to foster greater efficiency for insurer staff and end-customers: the Mobile Field Adjuster App and the Mobile Self-Service App.

The addition of mobile services to the Exigen Suite will enable the vendor’s customers to offer superior services, enhance customer satisfaction, reduce customers service and claims costs, streamline core processes and establish a direct communication channel with customers, asserts Siamak Sartipi, product executive, EIS. “During development of our mobility solutions we established a future-proof platform which is ready for next-gen consumer technologies that could even include wearables,” he comments.

Siamak Sartipi, Product Executive, EIS.

Siamak Sartipi, Product Executive, EIS.

Referring to the new mobile platform as scalable and Secure, Exigen says its core suite now provides greater access for field personnel and end users to basic insurance processes, and introduces a new level of transparency into the insurance process for all stakeholders.

The vendor further describes the new mobile apps as fully-configurable by insurers, allowing complete white-labeling. The vendor says that future planned releases will further build on its new mobile platform to offer what it calls a true omni-channel insurance experience across the value chain and advanced features leveraging location based services and push notifications.

Exigen reports that its new Mobile Field Adjuster App enhances productivity and automates claim processes by enabling the field adjusters to:

  • Manage daily tasks (times, locations, parties, etc.);
  • Receive assigned tasks or picking from task queues;
  • Attach photos, videos, voice notes and other documents to a task; and
  • Send automated reports back to the claim office.

Exigen says its new Mobile Self-Service App empowers policyholders to manage insurance activities specific to home and auto lines of business when, where and how they choose through:

  • Context-based design for exceptional prioritization and user experience;
  • First notice of loss (FNOL) capabilities;
  • Personalized core administration, including My Claims, My Policies, and My Billing;
  • Insurance ID display and share; and
  • Identification of nearby agencies.

 


CB Insights Reports Huge Increase in Insurance Industry Investment in Start-Ups

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(Image source: CB Insights.)

When technology evolution is moving faster than insurance carriers can run, the best course is often to simply invest in or acquire a company that has developed the technology they need. Recent examples include MassMutual’s investment in Haven Life and Patriot National’s acquisition of Vikaran Solutions. Accenture’s 2014 Digital Innovation Survey found that 43 percent of respondents were planning or have completed the acquisition of start-up, and now CB Insights reports a 460 percent increase in insurers’ technology start-up deal activity during 2014. Insurers’ total investment in technology companies since 2010 totals $1.78 billion, according to the researcher.

(Related: New Online Agency Haven Life Offers Instant Term Life Purchase)

Insurers are investing in wide variety of technologies ranging from pricing information and location-based technologies, to payments and transportation-as-a-service offerings. CB Insights’s blog notes investments in start-up firms such as Uber, Coverhound, Coinbase and TrueCar.

Among the top ten investment rounds with participating insurance investors listed by CB Insights are Ping An’s (Shenszen, China) $485 million investment in Chinese online lending platform Lufax, China Life’s (Beijing) $200 million investment in Uber. USAA (San Antonio) owns four places on the list for the company’s investments in: TruCar’s automotive pricing and information website; the Prosper Marketplace peer-to-peer lending platform; Coinbase’s Bitcoin wallet and platform; and Personal Capital’s wealth management robo-advisor. Other American firms in the top ten are MassMutual (Springfield, Mass) for its investment in IEX Group, an equity trading venue; Northwestern Mutual (Milwaukee, Wisc.) for the Betterment wealth management robo-advisor; and American Family (Madison, Wisc.) for the Life360 location and communication app designed for use by families.

Insurers Need the Same Creativity that Got Apollo 13 Back to Earth—Cigna CIO

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(Cigna CIO Mark Boxer on stage at PegaWORLD in Orlando, Fla.)

To illustrate the spirit of innovation needed in the insurance and healthcare industries, Mark Boxer, executive VP and CIO, Cigna (Bloomfield), speaking at PegaWORLD in Orlando, Fla., drew on a scene from the movie Apollo 13. The excerpt depicts the improvisation of NASA’s flight control team to assemble disparate elements to create a filtering device that enabled the crew of the troubled mission to breathe. “We need the same creativity that got Apollo 13 back to the earth safely,” he remarked.

Mark Boxer, EVP and Global CIO, Cigna.

Mark Boxer, EVP and Global CIO, Cigna.

Cigna’s efforts to apply such creativity to the healthcare value chain is supported by the capabilities provided by Pegasystems and Cigna’s end-to-end claims capability, according to Boxer. He stressed the need of insurers to meet customers where they are, recognizing the role that technology plays in their lives. He noted that there are approximately 320 million mobile devices in use in the United States, and that over 40 percent of consumers report that social media would affect their choice of a healthcare provider.

(Related: Gamification in Insurance: Customer Engagement and Beyond)

“We need to meet customers where they are, and that means integrating health and wellness into the daily habits of our customers,” he said.

Using a Cigna-produced video, Boxer illustrated a customer experience driven by mobile connectivity and responsive systems: a working mother learns that her daughter has been injured at a soccer game, having received a video and text from the coach; through Cigna’s member site the customer is able to quickly locate urgent care facilities and order them by her criteria. Finally, the customer is able to temporarily share her daughter’s medical records with the relevant clinicians, arranging the approval through the member site.

The Best of Times, The Worst of Times

Healthcare is in some respects a troubled area of society today, Boxer acknowledged, but he illustrated that current problems are not unique with a headline from 1924: Hospital Fees Hit the Middle Class Hard. Referencing Dickens’ A Tale of Two Cities, he commented that, “It is the best of times and the worst of times in healthcare.” Expanding on the “best,” he foreshadowed an emerging science-driven approach to healthcare leveraging big data—noting that existing medically related records today in paper form would occupy 2 trillion filing cabinets.

The focus in the emerging healthcare vision will not be on just lowering costs, but encouraging better health and lifetime wellness. It signifies a shift, Boxer explained, “from sick care to health and wellness care.”

(Related: Cigna-HealthSpring Incorporates Wearable Technology in Silver&Fit Benefit Program)

Mark Boxer speaks at PegaWORLD 2015.

Mark Boxer speaks at PegaWORLD 2015.

Technology will help in reducing friction that exists in the customer process today and enable both support for improving and maintaining good health, Boxer related. He described the emerging field of instrumentation of the patient, which includes monitoring vital patient information such as body mass index and glucose level.

Boxer shared a case of an individual diagnosed with Type 2 diabetes who used an implantable glucose meter with a telemetric connection to his clinician and was able to lose 50 pounds and achieve a normal level of health.

“It’s about integrating habits into daily lives, and creating a virtual ICU,” Boxer commented. “This is one example that represents the promise of technology. Is tech the sole factor? No, but technology empowered that individual to take more control of his health. It was a process of sharing information with the clinician that enabled a more relevant and personalized experience.”

The Game Remains The Same

Boxer concluded with a comparison of table tennis footage from the 1920s to recent times. The objectives of the game had not fundamentally changed, he said, but the pace of play and the equipment had. The task today is to use available technology and data to drive the frontier of the healthcare experience forward to help keep the well healthy and help the at-risk be more healthy, he suggested.

“We have the opportunity, and I would argue the responsibility and obligation to integrate technology that is actionable and relevant,” Boxer said. “And it is to access the power of information to enable people to make better choices and experience healthcare in a more personalized manner.”

 

Insurance of the Future: Prevention, not Reaction – SAP Exec

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(Photo of St. Paul’s Cathedral, City of London, location of SAP’s Financial Services Forum. Photo credit: Mark Fosh.) 

As the world moves deeper into the “digital age” and the Internet of Things becomes a ubiquitous reality, the insurance companies of tomorrow will focus less on mitigating risk and more on offering end-to-end “customer protection services.”

Robert Cummings, Head of Insurance, SAP.

Robert Cummings, Head of Insurance, SAP.

So says Robert Cummings, the head of SAP’s Industry Business Unit for Insurance. Cummings was speaking during a session called “The Digital Future of Insurance,” held this past week at SAP’s Financial Services Forum in London at the Grange St. Paul Hotel. Cummings argued that insurance represented one of the last industries not to have been significantly disrupted by digital technology–and is thus ripe for such disruption.

“There’s really only been three major events in the history of insurance: when the first policy was written in 1347, the 1666 Fire of London that made people realize the need for home insurance, and now the digital revolution,” he said.

Cummings noted that the advent of developments such as telematics, wearable technology and connected “smart homes” portended a different kind of insurance offering in the future. Whereas insurance policies have traditionally offered products that attempt to mitigate risk by creating a policy around an event or object, the model will soon switch to that of a customer protection services.

Cummings gave examples, some of which already exist in the industry. He pointed to an AIG practice of using drones to monitor football/soccer stadiums it insures, in order to detect and repair structural weaknesses as well as check for damage after storms. This same concept could also be employed within personal homeowner’s insurance, with drones making periodic checks of houses with the goal of reducing claims and assessing risk much more accurately. Further, technologies such as Google subsidiary Nest Labs could allow for Internet of Things applications such as a smart home sensors capable of detecting anomalies in water pressure, potentially triggering a temporarily shut-off a home’s water.

Telematics and Wearable Technology

Similarly, while the use of telematics to measure a driver’s safety for the purpose of crafting an auto policy is not a new concept, the technology of the “connected car” can go even further with preventative measures. Cummings offers a scenario wherein an auto insurance customer gets a text alerting him that his vehicle appears to be parked outside and a major thunderstorm is forecasted for that evening, and suggests to him to move it into the garage.

Going even one step further down this path, smartwatch owners could conceivably get text message from their life insurer along the lines of “You should go for a walk; you haven’t had much movement today.”  While the last example may be a bit creepy for many people, Cummings says it’s all part of the future shift in insurance towards preventing accidents and damages, as opposed to writing checks after they occur.

“Insurance as we know it will continue to exist, but the focus will be different,” Cummings concluded. “It’s won’t be just about selling products, but designing services for the customer and a blurring of lines of businesses.”

IT/Strategy Alignment Checklist: 3. Learn What Is Available

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(Image credit: Dollar Photo Club.) 

With an understanding and assessment of the existing technology, a company’s leadership must familiarize itself with the emerging technology trends that are reshaping business strategies. Unquestionably, many business executives fear that they may struggle to grasp sophisticated technology topics. However, leaving it to IT alone to evaluate these trends is shirking executive responsibility.

Here we present a few IT trends worth studying as factors that should influence strategic thinking, and will continue to be so for some years to come. While immersion in the subject of IT can be intimidating for some executives, a rudimentary understanding of evolving developments, such as those outlined below, is an essential responsibility of all senior leadership. After all, a limited knowledge of the possibilities will only limit your organization’s ability to remain vital and strong.

Internet of Things: Everyday items are embedded with computer devices that can be connected and fully integrated with the Web. Examples include wireless sensor networks used in “smart home” monitoring, RFID [link definition] –tagged consumer goods used in inventory control and real-time camera feeds from stop lights involved in traffic flow management. The physical world is quickly becoming system-enabled, allowing it to be fused with the digital world. Executives should consider the implications for this trend on their organizations.

Mobile Computing: From tablets to smart phones, people increasingly rely on their mobile devices to assist them in managing their lives. Businesses are already building apps that accommodate the needs of their mobile-minded customers. The next phase of evolution will demand computer device independence, enabling an uninterrupted computing experience as we move from device to device throughout our daily lives. How will the organizations that we are responsible for adapt to the continued evolution of mobile computing?

Cloud Computing: There is a variety of cloud computing solutions available, including:

  • Software as a Service (SaaS)—SaaS is a software distribution model in which automated systems are hosted by a service provider and made available to customers over a network. The SaaS vendor is responsible for upgrades and troubleshooting, and commonly provides the infrastructure and backup/recovery capabilities as well.
  • Infrastructure as a Service (IaaS)—Data storage, hardware, servers and networking equipment are provided to the customer on a per-use basis by the IaaS vendor, who holds the equipment and is responsible for housing, running and maintaining it.
  • Platform as a Service (PaaS)—PaaS is a service delivery model that provides the capability to lease the hardware, operating systems, storage and network capacity over the Internet. It allows customers to rent virtualized servers and associated services needed to develop, test and run applications.
  • Business Process as a Service (BPaaS)—Procurement, payment, processing and payroll are just a few of the business functions that can be supported by BPaaS vendors, who provide the necessary infrastructure so that organizations no longer need to staff and perform the activities in-house.

Cloud computing has the potential to dramatically change the way organizations use computer technology, replacing the need to buy and maintain computing systems and hardware with a much more cost-effective, on-demand model, similar in nature to the ways in which utilities provide water and electricity to their customers.

Social Media: There’s no doubt that social media is here to stay. Social networks such as Facebook, Twitter and LinkedIn manage communities that comprise millions of people worldwide. Social media is too big to ignore. The challenge for most enterprises is determining how best to harness the potential. As executives, we must devise strategies that allow our organizations to leverage social media in order to optimize our presence, generate product and brand awareness, enhance employee engagement, improve customer relations, augment product/service development, and supplement staffing efforts.

Gamification: Gamification refers to the use of game thinking and mechanics in software design in order to improve the ways in which automated applications are used and the methods by which people engage with technology. Most organizations intend to leverage gamification for the purposes of marketing, customer retention, productivity measurement and training. We are already seeing firms such as American Express, Hertz and Starbucks use it as underpinnings to their latest loyalty programs. We will need to get a handle on this trend in order to manage it for competitive gain.

Editor’s Note: This is the third in a series of seven articles on IT/strategy alignment adapted from The Executive Checklist, by James M. Kerr. Click below to read other installments.

1. Define Where Technology Fits

2. Know What You Have

4. Separate Table Stakes from Competitive Advantage

5. Mind the Gaps to Reimagine the Future

For more information, visit www.executive-checklist.com.

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The Internet of (this changes) Everything—The Insurance Industry Included

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(Image credit: Dollar Photo Club.)

Let me state it plainly: the Internet of Things (IoT) will completely transform the insurance industry as we have known it. In fact it has already begun to do so—if only in relatively trivial ways so far. The real inflection point will occur when insurance carriers begin to analyze IoT data outputs to develop and sell personalized insurance products and price them individually and dynamically.  This transformation is only just now being made possible by the convergence of several powerful forces: the rapid adoption of mobile technology, digitization, the ability to cost-effectively store, manage and analyze enormous volumes of data (unstructured as well as structured) and the emergence of prescriptive analytics.

People say that the IoT is over-hyped, and that’s understandable. Acronyms that have as much potentially broad and extensive impact as does IoT are destined to get a lot of “ink.” They are like Top 40 pop tunes—we’re all familiar with them, we hear them far too frequently and we quickly tire of them. And their original meaning of quickly becomes obfuscated as a consequence of widespread use without real comprehension.

But there is no disagreement among leading researchers that there will be tens of billions of devices—computers, smartphones, tablets, and sensors of many different kinds, including wearable devices—connected to and broadcasting readings across the Internet by 2020 (just five short years from now) and that this number will continue to grow at a rapid pace for the next several decades.

(Related: HSB CEO Greg Barats on the Insurer’s investment in the Internet of Things)

Usage-based insurance products, some of which actually utilize connected vehicle and driving data to determine premium, are examples of early applications of the IoT in insurance.

Commercial auto carriers are beginning to utilize telematics data from fleet management device networks for pricing and risk management.  A few innovative life insurance programs have come to market based on information gathered from policyholders’ wearable devices.  And there are the numerous drone experiments being piloted by property and casualty carriers for potential applications in property claims and catastrophe response management. But all of this still only represents the tip of an iceberg of impending transformation.

The Power of Prescriptive Analytics

True industry transformation will be made possible by the emergence of the forces described earlier, the most critical two of which are; the proliferation of mobile devices and sensors capable of being connected to the internet, and the ability to capture, store and process the enormous volume and frequency of data which will emanate from these devices. The science that will enable the industry to harness these two powerful forces is prescriptive analytics, the third and final phase of business analytics, referred to by Gartner as the “final frontier” of analytic capabilities.

Prescriptive analytics has the ability to automatically synthesize big data incorporating multiple disciplines of mathematical and computational science and business rules in order to make predictions and suggest decision options to take advantage of those predictions.

Prescriptive analytics extends well beyond predictive analytics by specifying both the actions necessary to achieve predicted outcomes and the interrelated effects of each such decision. Prescriptive analytics software ingests hybrid data—a combination of structured (numbers, categories) and unstructured (videos, images, sounds, texts) data and business rules to enable users to make these highly reliable predictions.

Resource and Talent Gap

However, the transformation will not occur without a wide array of challenges and likely several corporate fatalities. Not all carriers are adequately resourced to take advantage of these opportunities.  The already serious data management and decision sciences talent gap will only continue to expand. The necessary organizational change management and expertise does not exist equally within all carriers and innovation cultures cannot be created overnight. Industry consolidation will resolve some but not all of these inadequacies.

(Related: Non-Carrier Portals and Tools Vie to Become Consumers’ Insurance/Protection Consultants)

In addition, insurers with need to more closely align themselves with and rely upon third-party information management providers who have the expertise and resources and cultures required to manage and leverage torrents of IoT data on their behalf. And finally, of course, is the very real competitive threat of disintermediation that carriers face from potential interlopers—companies that manufacture IoT devices as well as those that store, manage and transmit the data itself.

A Brighter Future for the Insurance Industry

However, insurers’ core competency is data and risk management. The IoT presents the industry with a opportunity to capitalize on and leverage these special skills in order to transform itself and secure its future—one in which insurance is not only relevant once again, but potentially far more valuable to society and all stakeholders than ever in its history. Indeed, the ability to enable customers to avoid or contain the very risks they are insuring against may ultimately prove to be of greater value than the insurance itself.

Editor’s Note: Stephen Applebaum and Anthony O’Donnell will be co-chairing the executive Insurance IoT USA Conference, December 1-2, 2015, The Ritz-Carlton, Coconut Grove, Miami, FL.

LIMRA CEO: Respond to Disruption with Differentiation, Customer Engagement

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(Robert A. Kerzner, president and CEO of LIMRA. Courtesy of LIMRA.)

The forces of consumerization and new online competition are disrupting the ways insurers have traditionally operated, but insurers should embrace the opportunities that disruption presents by differentiating themselves and engaging customers, according to Robert A. Kerzner, president and CEO of LIMRA, LOMA and LL Global, in his opening remarks to the 99th LIMRA Annual Conference in Boston this morning.

The theme of the LIMRA 2015 Annual Conference is “Pivot Point: Striking a Path for Success,” focusing on the challenges and changes affecting the financial services industry. Over 500 senior executives from life insurance and financial services companies worldwide are attending the meeting.

“Technology can be a disruptor or an enabler ─ websites like Google Compare and Policy Genius make price the top driver for consumers,” said Kerzner.  “For some companies these sites represent an unwelcome disruption while others are leveraging these sites to enter new markets and reach new customers.”

Kerzner highlighted the impact commoditization can have on an industry and noted that to avoid it, companies need to differentiate themselves through innovation, service or segmentation. He cited John Hancock’s partnership with Vitality, Mass Mutual’s Society of Grownups and Protective’s relationship with Costco, as examples of how insurers can turn the challenges of disruption into a foundation for building relationships with customers.

(Related: John Hancock’s Vitality Program: SVP Brooks Tingle Talks Wearable Devices)

“The rise of the consumer is having a tremendous impact on every industry,” Kerzner remarked. “Consumers have more choices and more power to determine how and when they access information.  We need find ways to be where they are in their day-to-day lives.”

According to LIMRA research, 41 percent of people shop for life insurance as a result of life events, such as getting married, buying a home or having a child.  Kerzner suggested that insurers find ways to connect with consumers during these life events, speculating that companies could engage new parents at the hospital through kiosks, educating them about the importance of life insurance to ensure their family’s financial security.

Kerzner also addressed the potential of a growing robo-advice market, allaying fears that it would disintermediate producers. “Our research demonstrates that people still want advice from a person,” he said.  “But the model will change and advisors will need to leverage more of the tools and technology available to meet consumers’ expectations.  Companies too will have to shift their strategies, building platforms and relationships that attract consumers to seek the advice in new ways.”

Positive Impact of Advisors

Kerzner concluded his address with comments on the Department of Labor’s proposed fiduciary rule. He characterized the rule as the most imminent disruptor of the financial services industry and cited LIMRA Secure Retirement Institute research that illustrates the positive impact using an advisor has on retirement savings rates and retirement planning.

“In the next 10-20 years, there will be an unprecedented shift of assets as the majority of Boomers enter retirement,” he noted. “It is likely their financial goals also will shift from accumulation to principal protection and income generation.  They will need help to achieve those goals.”

(Related: Three Macro Trends Reshaping Life Insurance)

“Our research indicates that people are more likely to save and plan for retirement when they work with an advisor,” Kerzner added.  It seems clear that this is just the beginning of an effort to limit how we can serve people who are trying to get the financial advice they want and need.”

IoT Can Conquer the Insurance Industry’s Greatest Challenges—Conference Report

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(Delegates attending the Insurance IoT USA Conference in Miami, Fla.)

The Internet of Things (IoT) gives insurers a once-in-a-lifetime opportunity to create differentiated products, according John Lucker, Principal, Deloitte Consulting LLP (New York), speaking at FC Business Intelligence’s Insurance IoT USA Conference held at the Ritz-Carlton Coconut Grove Hotel in Miami, Fla., earlier this week and co-chaired by Stephen Applebaum, Managing Partner, Insurance Solutions Group, and Anthony O’Donnell, author of this report. Under the current state of market commoditization, “you’re just selling lettuce,” Lucker said to the attending insurance executives. “You have the opportunity to differentiate insurance products and also sell assurance and layers of service.”

John Lucker, Principal, Deloitte Consulting LLP.

John Lucker, Principal, Deloitte Consulting LLP.

If solving the seemingly intractable problem of personal lines product commoditization weren’t enough, speakers during the course of the event suggested that the IoT provides the means of introducing frequent—and more gratifying—touchpoints in the insurer/policyholder relationship and making relevant in consumers’ daily lives. Several speakers also suggested that due to the sensor-and-data technology that characterizes the IoT, it also has the power accord a dynamic quality to risks, reducing their severity or frequency through monitoring risks and modifying policyholder behavior that can affect the risk.

(Related: The Internet of (this changes) Everything—The Insurance Industry Included)

Keynote speaker Kathy-Ann Hutson, insurance analytics leader, IBM (Armonk, N.Y.) reported that five million new things will be connected within the IoT daily during 2016, and by the end of the year the total of connected devices will be 6.4 billion. By 2020, the total will be 20.8 billion.

“The IoT is a means to an end, so what are the ends—what are we trying to do, for example in the insurance industry?” Hutson queried. The answer, she continued, was to “unlock revenue from existing products, inspire new practices or processes, change or create new business models or strategies.”

Disruptor or Disrupted?

As an emerging disruptor, the IoT will be a $30 billion industry by 2020 and be valued at more than $100 billion by 2050, according to Hutson. “The question for insurers is, ‘Will you be a distruptor or will you be disrupted?’,” she added.

The adapt-or-go-extinct theme was reiterated by several speakers. Technology application areas such as smart home, collision avoidance and autonomous cars have already begun to change the way risk operates, said Bill Hartnett, head of innovation at insurance standards organization ACORD (Pearl River, N.Y.). “The world is being derisked by the IoT,” he said. “Insurers must act or lose.”

The IoT is ushering in a new economic age, with $14.4 trillion annual global economic potential across all sectors, noted speaker Meghan Thomas, chief underwriting officer, AIG Global Casualty (New York). Among IoT related capabilities that can enable smarter decision are drones, which are fast growing in number. Today there are about 40,000 in operation, and that number will jump to 160,000 by 2050, according to Thomas. “Insurers can innovate with the IoT or just disappear,” Thomas commented.

Among the greatest challenges faced by insurers seeking to adopt the IoT is building the capability to manage the large amounts of data that it generates.

Need for Big Data Infrastructure and Strategy

“It all comes back to the data,” said speaker Mark Breading, partner at research and advisory firm SMA (Boston). Insurers will need to adopt a common architecture to manage the data flows, requesting information, receiving it, reacting and responding.”

Mark Breading, Partner, SMA.

Mark Breading, Partner, SMA.

The IoT assumes nothing less than a complete reorientation toward data from the reactive to the proactive, Breading elaborated. “It is vital to think about managing data in this environment in a way that isn’t point-to-point and doesn’t result in building yet more silos,” he said. “We need to change the paradigm—we’ve been an industry that looks at historical data. We now have all this real time information, so we must go from reactive to proactive.”

Speaker Joe Wodark, product manager at Verisk (Jersey City, N.J.) noted that research firm IDC expects the generation of 40,000 exabytes of data through the IoT. Each insurer will have to identify the proper data scale at which to operate, identify data providers and develop an “encompassing big data strategy,” he advised. Insurers will also have to navigate the pace of consumer adoption of the IoT and their degree of willingness to share data. “The value proposition must be strong,” Wodark said. “The data must be secure and there must be clarity about what customer data is being used and why.”

IoT Even More Relevant to Life Insurance

Brooks_portrait4.000

Brooks Tingle, SVP, John Hancock.

Perhaps surprisingly, in the case of John Hancock’s Vitality program, which involves policyholders using wearable devices to earn rewards and discounts, data sharing was less an issue than usability, according to speaker Brooks Tingle, senior VP, Marketing & Strategy, John Hancock. “People cared far less about privacy, giving up personal data, as they cared about ease of use,” he said. “Don’t get me wrong—they don’t want a breach—but they care about the quality of interaction.”

Tingle said that the audience might be skeptical of his talk’s claim that the IoT could transform life insurance, but that was in fact the case. “In the past we’ve stood back and simply hoped that policyholders live a long life but never played a role in promoting it,” he said. “What an opportunity the IoT presents to fundamentally change that.”

Tingle described a “partnership” forged within the Vitality program through intervention, incentives and rewards. “It creates a lot of value and we share that back with the customer,” he said.

The life insurance industry has been overdue for innovation, Tingle stressed. “Life insurance is a record low and has become quite irrelevant,” he said. “And if we can’t meet consumer expectations, we become irrelevant.”

(Related:  John Hancock’s Vitality Program: SVP Brooks Tingle Talks Wearable Devices)

The IoT provides a unique opportunity for life insurers to reengage insurers and invert the conversation about the dominant theme behind a life insurance conversation—death. Traditionally one of the reasons consumers are understandably not excited about life insurance is because the best case scenario of their relationship with the insurer involves them being dead, Tingle quipped. With the IoT the relationship becomes one of a collaboration toward ongoing health and well-being.

That is possible because, whereas historically communicable diseases accounted for half of the causes of death, advances in medical science mean that today 50 percent of the causes of death are related to lifestyle choices about exercise, nutrition and whether one smokes. Because of how interaction based on wearable device data, “I can argue that IoT is even more relevant for life insurance,” Tingle said.


Wearables and the IoT: More Bang Than Bling?

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(The MICA: My Intelligent Communication Accessory. Credit: Collier Schorr for Opening Ceremony and Intel.)

It’s generally agreed that technology advances are moving quickly.  Ignoring the need to update company culture, failing to align operations to customer needs, and clinging to misplaced belief that the past will be an effective predictor of the future do not represent a plausible strategy going forward.  In fact, these elements conspire against many insurance carriers in their quest to remain competitive—or perhaps even relevant—in the current period. Of course it’s not just technological advances that are impacting the market. When combined with demographic changes, economic shifts and regulatory considerations today’s business/technology environment has created a “Perfect Storm” which must be navigated thoughtfully and invested in with flexibility in mind.

Engines of Disruption

The engines of insurance industry disruption are diverse, including demographic changes, economic shifts and regulatory evolution. However, none of these is without a technology dimension, and of all the technology trends the Internet of Things (IoT) may have the potential for effecting the most profound changes to the insurance industry.

Bodymedia armband used by Cigna to help members control diabetes.

Bodymedia armband used by Cigna to help members control diabetes.

The IoT burst onto the insurance scene with telematics, which harnessed communication between machines to enable new customer engagement models and underwriting approaches. The trend is now exploding into a myriad of sensor-driven applications focused primarily on property protection and related insurance products and services. Using machines to monitor the risk of objects is an obvious opportunity for the property and casualty industry, but the technology will be an important avenue for other industry sectors as well.

Sensors can monitor humans as well as inanimate objects, and the “instrumentation of the individual” has already been adapted for uses by life and health insurers. One early step was to incorporate wearable device data into their pricing models through offers that traded discounts for monitoring.

As a next step, what would prevent a carrier from turning this into a bi-directional “discussion” to help improve outcomes?  Very little indeed. Saying to the policyholder that, “Smart people like you are more active today” seems perfectly reasonable in an Amazon-inspired world. Can fluid monitoring (e.g., for diabetics) be far behind?  Emphatically not. Carriers in the health space are working on this already. The Fitbit (or other device) that had a certain “bling” quality initially would, at that point, acquire pretty significant economic implications—bang.

So what does this means for life insurers?  Plenty it turns out.

On the one hand, much of the concern around competition lately has been between group and individual life oriented carriers. With the introduction of the Affordable Care Act, and recognition that voluntary benefits represent a potentially significant growth opportunity, these carriers have seen each other as the main protagonists.  Each has capabilities which could help them in their quest for the voluntary market, and each has liabilities.  Neither has made significant investment to date in understanding the implications of IoT capabilities and, barring a few notable exceptions, many are focused on how to improve incrementally their existing capabilities.  Very few are considering the possibility that future competition could actually come from an alternative space.

The Threat of Non-Traditional Competition

For example, armed with significant census data and access to personal and confidential information, what would keep group health carriers from moving into the individual product space, including life and disability coverages?  Precious little is the probable answer, particularly after they perfect, through “test and learn models,” their current efforts with emerging technologies.

(Related: John Hancock’s Vitality Program: SVP Brooks Tingle Talks Wearable Devices)

In the past, the barriers to entry into the life insurance space were undoubtedly more significant, which kept these carriers focused on their own lines of business. That is changing.  Also, the opportunity to grow in the existing health insurance line has limitations and risks.  With margins compressed, competition high and regulatory scrutiny tight, finding alternative revenue sources by these carriers already appears to be a priority.  Having new entrants like this join in the life market could be the very definition of disruption. That, in effect, could represent a very big bang—particularly for carriers comfortable in the belief that the past would in fact be a predictor of the future.

John Hancock's Vitality program uses Fitbit devices.

John Hancock’s Vitality program uses Fitbit devices.

History shows us just how wrong this focus on the rear view mirror can be.  Between the two world wars, early in the last century, the French concluded that all future wars would be started by an army coming from Germany.  They were so convinced that this was true that they built massive fortifications to protect the frontier between the two countries.  Of course, when Germany attacked France in 1940, they simply invaded Belgium first and came in through an alternative route. Since the French fortifications were built with their guns fixed in one direction, they had no choice but to immediately surrender when the Germans arrived at the back door. For both individual and group life carriers, as they plan for 2016 and beyond, they need to consider that future threats may come from a direction which could surprise them. All of this could be fueled by the emergence and acceptance of the sensors that we lump together into the Iot. Not bling—but bang.

Three Avenues for Insurance Industry Transformation: Part I, From Indemnification to Mitigation

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(Depiction of collision avoidance technology in Volvo’s self-driving cars. Source: Volvo.)

One of the key words in the insurance industry in 2015 was “disruption,” and though different people hold different views on what kind of disruption (if any) actually occurred, most people inside and outside the industry recognized that it’s happening soon. This three-part series will discuss three key ways the insurance needs to transform itself over the coming years or else risk that transformation being imposed from outside the industry. The future of the industry can be found in:

  1. Mitigation vs Indemnification
  2. Broadening the Experience
  3. Narrowing the Focus

Part 1: Mitigation vs Indemnification

Risk mitigation is when an insurer works with an insured to prevent risk before it happens rather than simply repaying an insured after a loss. The concept of risk mitigation is perhaps the most discussed area of current insurance industry transformation going on, if not in those precise words. This is because central to any mitigation approach is the Internet of Things (IoT), which provides the data necessary to understand what is going on in a vehicle, a home, a business, or on a person in real-time.

This new access to cheap, connected sensors and smart devices means companies can do things like monitor environmental conditions in a house or office building to detect leaks before  they become floods, or can use wearables to call paramedics before a minor health issue becomes a major one. No area has received more focus and media attention than the self-driving car, which will potentially reduce auto accidents by orders of magnitude. But even before autonomous vehicles take over the road, smart cars with accident avoidance features will become the norm, along with services analyzing telematics data to recommend safer driving routes and encourage better driving behavior.

(Related: Just How Much Could the Internet of Things Change Insurance?)

How does this impact insurers? First, there will be changes to how and what insurance products are sold. Some insurers will provide (or already are providing) IoT devices and technologies along with the insurance they sell. These companies will monitor the data streams from those devices and use them to engage with insureds, both to better analyze their risk profile but also to educate and correct, making all insureds safer. Consumers will buy insurance from these insurers not just for the indemnification or risk but for these additional risk mitigation services.

Not every insurer will have the technological capability or budget for such programs. There will be plenty of third party companies, however, who will be developing this technology. Insurers will have the opportunity to partner with these companies, either by giving discounts to people and businesses who use the new tech or by skipping that step and paying for it themselves for all policyholders. Whether insurers like it or not, insureds will begin to expect this kind of risk mitigation service to be part and parcel with indemnification they are used to.

(Related: Transportation-as-a-Service Growth Equals Auto Insurance Premium Shrinkage)

The second impact, even for insurers who choose not to build or partner with IoT companies, will be the way that risk profiles start shifting as more and more people and business use these kinds of technologies. No matter what any disruptive startups say, risk is never going completely away. But in different areas it will be greatly reduced (with automotive being the most obvious example). This means that claims and corresponding losses will go down, but it means rates will need to follow. And, eventually, as reserve requirements lessen for certain lines, the threat of external entities with greater technological expertise but less insurance experience moving into the space becomes much more real.

The shift from indemnification to mitigation is in the best interest of the insured and a great opportunity to provide more and better service, but it’s also a move away from how insurers have done business for hundreds of years.

MLC Deploys BCA’s COVALENCE for Australia’s First Wearables-driven Wellness Program

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(Intel’s Basis Peak device is one of the data sources used within MLC On Track. Source: Intel.)

MLC, the wealth management division of the National Australia Bank Group (Melbourne) has launched the MLC On Track Program powered by Big Cloud Analytics Inc.’s (BCA, Atlanta) COVALENCE Health Analytics Platform. MLC will introduce the program—which is Australia’s first wearable device wellness program—during 2016 to thousands of customers.

David Hackett, EGM, Insurance, MLC.

David Hackett, EGM, Insurance, MLC.

The MLC On Track wellness initiative uses Big Cloud Analytics’ COVALENCE analytics platform to capture, organize and score Internet of Things (IoT) data generated by the Intel Basis Peak fitness and sleep trackers and other data sources. The data is presented to participants via personalized dashboards with actionable trends and scores, triggered messaging, content and programs. As a result, MLC is able to encourage and reinforce improved health behaviors for program participants.

Potential Game Changer

“It’s a potential game changer for the industry,” comments David Hackett, executive general manager, Insurance, MLC. “For too long, companies have relied on old ways to do business. We want to create more value for an insurance customer beyond just the policy itself.”

In the MLC On Track program, customers will be provided with target wellness scores, calculated by COVALENCE, based on several factors including step count, hours of activity, sleep duration and average resting heart rate. Much of that data are captured by Intel Basis Peak fitness and sleep trackers.

“The key is the provision of objective data.  Wearable IoT devices, coupled with analytics scores, negate the use of subjective and self-reported data,” says Kate Burleigh, Managing Director at Intel Australia/New Zealand.

Premium Discounts for Meeting Wellness Targets

J. Patrick Bewley, CEO, Big Cloud Analytics.

J. Patrick Bewley, CEO, Big Cloud Analytics.

When customers meet the wellness targets during a 90 to 160-day period, the customer will receive a five percent discount on premiums. Additionally, customers are given two opportunities to capture the discount for a total of 10 percent off premiums for the life of their policy.  

“This program provides a unique alignment of interests,” comments J. Patrick Bewley, CEO, Big Cloud Analytics. “Customers can monitor their health habits in real-time to see how their activity and sleep levels can affect their health scores while reducing their premium costs. Additionally, insurance providers become more engaged with their customers. Accessing massive amounts of longitudinal data and scores can significantly change how actuarial information has been derived for the past century.”

John Hancock’s Vitality Program: SVP Brooks Tingle Talks Wearable Devices

Life.io Ramps-Up the Life Insurance Customer Experience Revolution

Putting Wearables to Work for the Injured Worker

Fitbit Announces HIPAA Compliance for Its Wearable Devices

 

John Hancock Rewards Vitality Policyholders for Healthy Eating

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(Chef Tom Colicchio appeared at a publicity event at NYC’s Grand Central Station. Source: John Hancock.)

John Hancock (Boston) has expanded the John Hancock Vitality solution by adding the HealthyFood program, which enables policyholders to earn rewards including real-time discounts and/or cash-back up to $600 a year on their grocery bills, and program points that lead to savings on their annual premiums up to 15 percent. The insurer has enlisted celebrity chef Tom Colicchio to publicize the program and make the case for healthier food choices.

Michael Doughty, President, John Hancock Insurance.

Michael Doughty, President, John Hancock Insurance.

The John Hancock Vitality program, launched in 2015, involves a partnership with wellness program management provider Vitality (Chicago), and provides policyholders with free Fitbit wearable devices that help people track their physical activities. The program works with almost all wearable devices such as Garmin and Jawbone, and smartphone applications like Apple Health. Policyholders log their activities with online and automated tools that are integrated with personal health technology.

The Vitality HealthyFood component takes the program adds a new dimension to the program by rewarding policyholders for purchasing healthy food at any of 16,000 participating stores nationwide, including Walmart and other major grocery chains in the NutriSavings network — a complete list of included grocery stores can be viewed athttp://www.nutrisavings.com/all-retailers/ .  Policyholders also gain nutritional information and guidance that will help them adopt healthier eating habits through a new collaboration with the Friedman School of Nutrition Science and Policy at Tufts University.

“Over the past year, we’ve seen our customers embrace the John Hancock Vitality program,” comments Michael Doughty, president, John Hancock Insurance. “In fact, our policyholders are taking an average of 9,205 steps per day, compared to the average U.S. adult, who takes an average of 5,900 daily steps.”

However, adds Doughty, fitness without good nutrition is not nearly as impactful on an individual’s health as when the two are combined. “Now, with the addition of the HealthyFood program, policyholders can be rewarded for both walking a few more steps and making healthy food choices to improve their overall health,” he comments.

Poor Diet as Mortality Factor

Dariush Mozaffarian, Dean, Friedman School of Nutrition Science and Policy, Tufts University.

Dariush Mozaffarian, Dean, Friedman School of Nutrition Science and Policy, Tufts University.

Poor diet contributes significantly to mortality, being attributed to out of four deaths (26%) in the U.S., or nearly 700,000 deaths each year, according to a 2013 study. More than two-thirds of American adults age 20 and older are overweight or obese, as are 32 percent of children, according to the American Heart Association. Adopting a healthy diet and active lifestyle can help many Americans take control of their health and prevent heart disease and other chronic conditions.

“Policyholders also gain access to trusted science, resources, and other tools that will help them adopt healthier diets through a new collaboration with the Friedman School of Nutrition Science and Policy at Tufts University, the only graduate school of nutrition in North America, which will provide up-to-date and relevant guidance towards maintaining a healthy diet,” comments Dariush Mozaffarian, dean of the Friedman School of Nutrition Science and Policy at Tufts University.

John Hancock reports that similar programs abroad have been successful in influencing consumers to choose healthier foods. In South Africa, where the HealthyFood benefit was developed by Discovery Insurance, research has shown that offering cash-back can change consumer purchasing behaviors. When offered discounts of 10 percent and 25 percent for healthy foods, consumers increased the amount of money they spent on healthy food by 6 percent and 9.3 percent; increased the amount of fruit and vegetables they bought by 5.7 percent and 8.5 percent; and decreased the amount of less-healthy foods purchased by 5.6 percent and 7.2 percent, respectively.

Chef Tom Colicchio Appearance

The insurer enlisted the help of celebrity and restaurateur Tom Colicchio, who made an appearance yesterday at an interactive John Hancock Vitality Marketplace at New York City’s Grand Central Terminal. (John Hancock’s promotional video featuring Colicchio can be reached here.)

“I have always been an advocate for easy ways to eat healthier, and I’m excited that now you can be rewarded for those little changes—beyond just nutritional value—through the HealthyFood program,” Colicchio remarked at the event. “It’s really important as we think about all the ways, both physically and financially, to motivate ourselves and our families to live long and healthy lives.”

The John Hancock Vitality program is available on Term, Protection Universal Life, Accumulation Indexed Universal Life, Protection Indexed Universal Life, Accumulation Variable Universal Life and Simplified Life (easy-issue Variable Universal Life) products. John Hancock plans to add additional products to its Vitality portfolio later this year.

John Hancock’s Vitality Program: SVP Brooks Tingle Talks Wearable Devices

John Hancock Adds Vitality Solution to Accumulation VUL Product 

Wearable Technology in Workers’ Comp: Taking the Great Leap Forward

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(Scanadu Scout vital sign monitor. Source: Scanadu.)

Until recently, wearables have been largely used by consumers to track fitness activity. But wearables are gaining traction in the area of injury prevention and recovery. The recent FDA approval of the Indego exoskeleton, which enables paraplegics, amputees and people suffering from many types of gait disabilities to walk, is the latest milestone in the new world of wearable technology for injured workers.

“Wearables” are not simply technology worn as headphones, a watch, or a pedometer. These devices represent a new age of personal technology equipped with smart sensors to track the metrics of an individual’s daily activities to achieve goals such as losing weight or monitoring an injury. They promote the concept of the “quantified self”—a movement to incorporate technology into data acquisition on a person’s daily life such as food consumption, mood, blood oxygen levels, sleep, posture, as well as mental and physical performance.

The workers’ compensation industry is embracing wearable technology to reduce, manage, and prevent workplace-related illnesses and injuries. Doctors are starting to write prescriptions for exoskeletons. Claims managers are beginning to think about emerging “smart” technologies not only to deal with a current injury but for the life of a long-term disability. Administrators and attorneys will begin to consider investments in wearable technology when setting reserves and planning for future expenses.

Wearables for Prevention

Currently, wearables are used most often post-injury to track the recovery of an injured worker.  However, as the technology continues to evolve, workers’ compensation professionals can leverage wearables in the prevention of injury. Also, the data collected from wearable technology devices can be used to inform recovery plans and long term prevention strategies for injuries or re-injuries. Wearables can provide a real-time window into the capabilities, the health status, the recovery of an injured worker, and into populations of injured workers, far beyond what can be obtained in doctor visits and therapy sessions.

Still finding it hard to imagine that wearables will change the status quo of injury management? Here are a few examples of appropriate use of wearables in prevention and recovery:

  • The construction and mining companies can use wearables to alert managers whenever someone enters a dangerous and/or restricted area. Employers would be notified by a personal wearable alarm if someone entered these high-risk areas, preventing injuries before they occur.
  • With new smart devices and downloadable software, a person who has lost their voice can communicate for less than $1,000. This is a fraction of the cost of old speech technologies which can cost almost $10,000 and which lack portability.
  • Paralyzed patients that have some movement in at least one finger can use wearable technology and devices to give them control in many daily activities they normally would have to ask others to help them with, from driving an electric wheelchair to changing the thermostat or turning on the lights from the comfort of their bed.
  • Severely burned injured workers who need to stay out of the sun can use activity and wellness devices to monitor their exposure to sunlight.
  • Claims professionals can regularly monitor an individual’s recovery process and avoid extended prescriptions of opioids for a work-related injury or occupational diseases. Effective monitoring of vital signs can reduce potential risks of addiction and the claim veering off course.

The major benefits of wearable technology in workers’ compensation can include:

  • Faster recovery and return-to-work
  • Improved quality of life for seriously injured workers
  • Increases in workplace productivity and wellness management
  • Prevention of potential injuries
  • Lower overall claims costs
  • Providing data to assist in health management

Making Decisions about Wearables for an Injured Worker  

Already, the array of products and applications of wearables for workers’ compensation can seem daunting for the adjuster or claims manager. Expert guidance can help them make the right decisions that are suitable for a particular case. Rehab specialists and assistive technology professionals (ATPs) can advise claims managers on which technologies may be most appropriate, taking into consideration the long-term view of an injury, the home environment, and patients’ needs for functionality and independence, their cognitive abilities and technological competence.

Once the right wearable is identified, an ATP will ensure users understand how it and any associated applications work to produce the desired results. An ATP can help identify wearables that integrate and connect, allowing for seamless analysis of data.

The Prognosis for Wearables

What’s in the future? Soon it will become routine to consider wearables as options for rehabilitation, especially for serious injuries. More applications will be deployed in the workplace to avoid injury and to monitor individuals to prevent re-injury. The data generated by these devices will bring a completely new level of coordinated care and real-time medical management that will benefit the worker, the employer, and the payer.

Wearable technology is a strategic investment for the workers’ compensation industry.  Whether it is wearable safety devices, smart glasses, bionic prosthetics, exoskeletons, or vital organ monitoring, wearable devices must become part of the arsenal of tools used to mitigate work-related injuries and reduce the frequency and severity of workers’ compensation claims.

Insurers Need the Same Creativity that Got Apollo 13 Back to Earth—Cigna CIO

UnitedHealthcare, Qualcomm Integrate Wearables with Motion Wellness Program

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(Fitbit Charge 2 is the newest device integrated and validated with Qualcomm’s 2net platform. Source: Fitbit.)

UnitedHealthcare (Hopkins, Minn.) and Qualcomm Incorporated (San Diego), through its wholly owned subsidiary Qualcomm Life, Inc., announced today at the International Consumer Electronics Show (CES) 2017 that they had added enhancements and expanded UnitedHealthcare Motion, a wellness program that provides employees with wearable activity tracker devices at no additional charge and enables them to earn up to $1,500 per year by meeting certain goals for the number of daily steps.

Richard Migliori, M.D., Chief Medical Officer, UnitedHealth Group.

Richard Migliori, M.D., Chief Medical Officer, UnitedHealth Group.

The two companies introduced UnitedHealthcare Motion in 2016 as a pilot in 12 states to select employers, using Qualcomm Life’s 2net Platform for what the companies characterize as medical-grade connectivity featuring multiple safeguards to help keep data secure. Following the successful test, the companies expanded the program to 40 states and will now include access to additional customized activity trackers through a ‘bring-your-own-device’ (BYOD) model. The program is now available to self-funded employers with five or more eligible employees, and companies with fully insured health plans with 101 or more eligible employees.

Qualcomm Life reports that it will use its global connected health ecosystem and connectivity expertise to provide secure data transfer from the devices, to the Motion app and to UnitedHealthcare. Qualcomm Life will also enable the BYOD model to allow the integration of more activity trackers into the 2net Platform and UnitedHealthcare Motion, providing participants with more choice. Integrated activity trackers will be customized to enable users to see on their wrists how they are tracking against the program’s three daily F.I.T. goals.

James Park, CEO and Chairman, Fitbit.

James Park, CEO and Chairman, Fitbit.

“The growth of UnitedHealthcare Motion showcases the value of providing companies and their employees with personalized, connected health and wellness resources,” comments Richard Migliori, M.D., chief medical officer, UnitedHealth Group. “Wearable technology can help encourage employees to walk each day and earn financial rewards at the same time, using secure technology that we believe is intuitive and convenient.”

Fitbit Charge 2 Integrated with 2net

The Fitbit Charge 2 is the newest activity tracker integrated and validated with 2net and UnitedHealthcare Motion within the BYOD model, according to UnitedHealthcare and Qualcomm. The custom feature can be activated during early 2017 on any Charge 2 device in market by any eligible program participant, the companies say.

“As the global wearables leader, we have taken another big digital-health step forward by collaborating with UnitedHealthcare and Qualcomm Life to enable people to fulfill their fitness goals and be rewarded for living a healthier lifestyle,” comments James Park, co-founder and CEO, Fitbit. “Our team custom-designed this feature to help give UnitedHealthcare Motion program participants activity insights right on their wrists, as part of our commitment to make our products integral tools to evidence-based consumer health programs.”

James Mault, VP, Chief Medical Officer, Qualcomm Life.

James Mault, VP, Chief Medical Officer, Qualcomm Life.

The Power of Wellness Programs

Employers are expected to incorporate more than 13 million wearable and fitness tracking devices into their wellness programs by 2018, according to technology consultancy Endeavors Partners. A related study published in Science & Medicine showed people tend to overestimate how much exercise they get each week by more than 50 minutes, and they underestimate sedentary time by more than two hours, which UnitedHealthcare and Qualcomm suggest emphasizes the importance of a wellness programs.

“By combining UnitedHealthcare’s leadership and pioneering pro-consumer benefit designs with Qualcomm Life’s unique ability to provide effortless connectivity across an expansive ecosystem of wearables, UnitedHealthcare Motion will continue to help engage people throughout the country with the goal of enhancing their well-being,” comment James Mault, VP, chief medical officer of Qualcomm Life.

How Wearable Devices Can Transform the Insurance Industry

Striiv and LifeQ Partner on Wearable Body Monitoring Platform

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(Striiv Fusion device. Source: Striiv.)

Striiv (Redwood City, Calif.) and LifeQ (Alpharetta, Ga.) have announced a partnership to jointly develop a wearable-based personalized health information platform. The partnership combines Striiv’s expertise in sensor integration and hardware design and LifeQ’s on-device and cloud based analytics and modeling to deliver a suite of health information streams. The solution aims at what the vendors identify as the two major barriers to a scaled health information platform: lack of biometric information of adequate quality, and up-front technology and program costs.

David Wang, founder and CEO, Striiv.

David Wang, founder and CEO, Striiv.

Striiv’s devices are used in programs run by top tier insurers and other companies. The company’s partnership with LifeQ will enable it to deliver wearable devices that extract maximum relevant physiological data, with minimum friction for the user, at previously unavailable unit economics, thereby redefining the standards for performance, utility and cost, a joint statement asserts.

Richer Health Information Ecosystem

The joint offering will enable a richer health information ecosystem, combining the expertise of relevant companies linking to the LifeQ Platform, to provide end-to-end solutions that can be scaled across insurance, wellness and pharmaceutical industries, the vendors say.

“Striiv is the first wearable company we’ve met where our skills and vision are so complementary and aligned,” comments Riaan Conradie, president and co-founder LifeQ. “Striiv’s device and sensor know-how will further enable the LifeQ platform to accelerate the rollout of personalized health information, and we are incredibly excited at the potential for this partnership.”

LifeQ’s deep expertise and scale in systems biology driven analytics and modeling are ideally suited to provide critical insights for risk stratification and early intervention with Striiv’s catalogue of data capture platforms, according to David Wang, founder and CEO, Striiv. “We’re delighted to team up with LifeQ to accelerate the adoption biometric and behavioral data in driving better outcomes and at scale,” he says.

Wearable Technology in Workers’ Comp: Taking the Great Leap Forward


How Augmented and Virtual Reality Can Impact the Insurance Industry

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(Image source: screenshot of MetLife conVRse virtual customer service application.)

Augmented Reality (AR) and Virtual Reality (VR) are both nascent, revolutionary technologies making inroads into conversations at all levels of technology leadership. The two technologies are often discussed in tandem, and while both are still being explored, they are distinct and represent unique sets of possibilities. Their applicability to insurance is mainly speculative, at this point, but their potential for improvement in areas such as efficiency, customer experience and risk avoidance is significant.

AR involves the use of overlaying digital elements onto the physical world in real time. While the most well-known examples are in gaming, other industries have found numerous applications for AR, including medicine, travel, advertising, and the military. On the other hand, VR is the simulation of a real-world setting in a computer or a digital environment. VR technology has taken off in education, training simulation, and gaming, with several companies offering headsets for VR applications.

Potential Insurance Applications

AR and VR technologies represent another channel through with insurance companies can serve digitally immersed stakeholders. AR and VR have potential real-world applications in improved efficiencies, loss ratios, and customer experience, as well as risk mitigation. AR has the potential to predict risks before or while they happen, and VR presents an opportunity to both prepare for and model risk in an essentially zero-risk environment.

The majority of the applications and use cases for AR and VR are likely to be seen in the property/casualty side of the insurance industry, with more rare use cases in the life/annuities side. AR can be used to gain efficiencies in cost and loss ratios through risk avoidance and customer education. Tying this into other technologies like smart homes and IoT could help the avoidance of property losses and drive down claims incidences. Allianz, for example, launched an AR-based app called “Haunted House” in Hungary through which catastrophes and accidents can be visualized in different parts of homes.

AR and VR rely heavily on smartphone usage in their current states. This represents an opportunity for insurers, as real-time data collected from smartphone usage can lead to enhanced customer insights and potentially improved customer relationships. MetLife recently deployed “conVRse” in India, allowing policyholders to enter a virtually simulated 3D setting and interact with a virtual customer service representative. VR-based customer service may offer a more immersive and individualized experience that reaches Millennials and digitally savvy consumers more effectively.

Additionally, AR and VR can enable gains in operational efficiency, though this may come at a cost to employees; the reduction of manual roles could ultimately result in job displacement. Through the use of smart glasses, which Zurich recently implemented, on-site claims adjusters and agents can document work progress in real time, access site plans, and conduct remote conferences with experts. Carriers should be fully aware of these potential consequences and employ proper change management protocols.

Increasing Relevance

The effects of both technologies on the insurance industry will increase over time, and AR is likely to have more potential uses in insurance than VR. AR’s potential lies in its ability to change how reality is experienced and perceived by layering digital elements over the real world in real time. While VR simulates reality, the results do not necessarily translate to a physical environment.

While these emerging technologies are becoming more accepted, they are still relatively immature, and their applicability to insurance are mainly speculative. Taking full advantage of these technologies will require robust digital, data, and analytics capabilities, and the potential for AR and VR to influence and enhance the customer experience is thought-provoking.

For more information on the impact of AR/VR technology on the insurance industry, Novarica’s new executive brief can be accessed at the following link Augmented and Virtual Reality: Potential Use Cases for Insurers.

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MākuSafe Closes on $1.25M Funding for Wearable/Workplace Safety Platform

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(Photo illustrating the evolution MākuSafe’s MākuSmart devices. Source: MākuSafe.)

MākuSafe, a Des Moines-based InsurTech start-up company and makers of a wearable workplace safety device and software platform, has announced that it has closed on a $1.25 million convertible note round of fundraising. The vendor also reports that the final rounds of field beta testing of the solution are underway, with a view toward release in 2018. The company recently announced the appointment of a new CTO, Mark Frederick, new CIO, Kevin Krefting, and the company’s procurement of new office space in West Des Moines.

Gabriel Glynn, CEO, MākuSafe.

The vendor reports that since securing EMC Insurance Companies (Des Moines) as an investor in early 2017, Glynn and his partners have identified a distribution model that utilizes insurance companies to deliver the MākuSmart device and cloud platform. MākuSafe contextualizes its funding announcement by noting that workers’ compensation premiums written has gone up year-over-year since 2011. With employers paying more than $1B a week in direct workers’ comp costs, it makes sense that insurers would want to take a proactive and innovative approach to worker safety, the vendor says.

“We’ve seen telematics—GPS software that records and analyzes your driving behavior—achieve a great deal of success in the automotive insurance sector,” comments Gabriel Glynn, CEO, MākuSafe. “Our belief is that there is an uncharted opportunity to implement those same principles and technologies within the manufacturing realm to change the way people view workplace safety. From identifying risks ahead of time and preventing injuries to efficient deployment of resources, lower premiums and making workers more cognizant of their behaviors, the benefits of our solution reveal themselves more by the day.”

Like Fitbit for Workers’ Comp

The wearable device—worn on an armband and sensing a variety of environmental conditions—is paired with the MākuSmart platform, and uses what the vendor characterizes as the latest in Machine Learning (ML) and Artificial Intelligence (AI) to derive valuable information from the data collected from the device.

“What Fitbit did for personal fitness, we want to do for workplace safety and productivity,” said Mark Frederick, MākuSafe CTO. “Being located in one of the insurance capitals of the U.S. and in the Midwest, where manufacturing still wins the day, the excitement for this solution has been palpable, and this raise is solid evidence of that.”

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QBE Closes Investment in RiskGenius, Will Implement Its Solution

Emerging Tech in Insurance in 2018

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(Image credit: Adobe Stock.)

Over the past few several years, a number of new technologies have grabbed headlines with their potential to improve or disrupt the insurance industry. Some are promoted by InsureTech startups as their own secret sauce, or as a silver bullet they can provide to their partners; others have become buzzwords for traditional service providers and technology vendors; and some are cool technologies still looking for real applications.

Our research, based on interactions with more than 100 insurer CIOs, indicates that while there is active interest in a wide range of tools and technologies that fall under the “emerging” label, there is still considerable diversity in both deployment rates and active plans for pilot programs.

At one end of the range of “Emerging Technologies,” are mobile and predictive analytics, which hardly deserve the label “emerging.” Mobile is rapidly becoming not only a customer expectation, but a pre-requisite as a platform other emerging technologies like AI voice analytics and telematics, and the majority of insurers have launched at least some form of mobile capability. More than half of insurers who haven’t already deployed predictive analytics to improve their underwriting, claims, or client engagement, are planning pilots for this year. In both areas, planned pilot activity mean that nearly all insurers will have direct experience in these areas by the end of 2018.

At the other end of the spectrum are technologies that are either brand new, or for which the insurance business cases are uncompelling or highly complex. Blockchain, despite the growth of consortia and completion of successful pilot projects, is still looking for an important problem to solve that can’t be solved more effectively by traditional technology. Wearables may have delivered untold PR value to a couple of early-adopting life insurers, but few others are actively pursuing similar projects. Smart home technologies are still at the early end of the consumer adoption cycle. Augmented and virtual reality show some promise in field training and claims adjusting, but are part of few insurers’ active plans for deployment or pilots.

One technology with little current adoption but high levels of pilot activity is chatbots. About a third of insurers either have a deployment or a planned pilot in this area, with the goal to increase customer engagement and make information retrieval and transactions easier for stakeholders of all kind, including agents and internal knowledge workers. We expect roughly one in five insurers to have active chatbot deployments by the end of the year.

In the middle of the range are a collection of technologies where 15-25 percent of insurers have already made some deployments, and equal or greater numbers are actively planning pilots for 2018. These include:

  • Artificial Intelligence. Whether it’s machine learning to improve the performance of rating or fraud detection algorithms, or mining of unstructured data from images and raw text, more insurers are embracing artificial intelligence as the next tool in their data analytics journeys.
  • Big Data. Use of big data tools like Hadoop and NoSQL are common at about a quarter of insurers, while use of big data sets like weather data and raw internet consumer data are less so. Nonetheless, insurers are planning additional pilot activity and explorations in both areas.
  • Sensors and telematics are poised for additional growth in property/casualty, as insurers refine their value messages beyond rating discounts to value added services like providing customers greater risk management tools.
  • Drones are also rapidly becoming a standard tool for property inspections and claims, although most insurers are working with service provider partners in this area rather than building their own capabilities.
  • Robotic Process Automation is an object of much interest, as it holds the promise of an immediate fix for poorly designed systems and processes without expensive re-engineering. Some insurers (abetted by over-promising partners) see RPA as a transformative technology, which we don’t believe it is. But it’s an important and valuable short-term fix.

These five areas sit squarely in the center of the emerging technologies spectrum for insurance. None are adopted by more than one in four insurers today but, based on reported pilot activity, all are poised for rapid growth. The growth of these capabilities should lead to improved risk analysis, streamlined processes, and better business results for insurers in 2018 and beyond.

But technology changes faster than culture and practice at most insurance companies—insurers that want to fully leverage the capabilities enabled by emerging technology should look at their products and processes in the light of new technical, market, and customer realities.

Is 2018 The Year Insurance Unlocks IoT and AI?

If 2017 Was the Year of Insurtech, Will 2018 be the Year of the Insurance Platform?

MetLife Venture Fund, Accelerator to Cultivate Internal Innovation and Industry Disruption

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(Photo credit: Beyond My Ken.)

MetLife (New York) has announced the launch of two new InsurTech-related investment programs, MetLife Digital Ventures and the MetLife Digital Accelerators. While these new entities are proximately aimed at the cultivation of startup companies, their ultimate objective is to accelerate internal digital transformation and MetLife’s participation in industry innovation and disruption. They represent a complementary approach to MetLife’s recent investment in strictly internal initiatives, such as its LumenLab innovation center in Singapore.

MetLife Digital Ventures will support the company’s transformation through direct investment in strategically aligned startup companies that can bring new forms of value to its customers. The entity is backed by a $100 million co-investment that will be combined with capital from MetLife’s venture capital firm partners.

Greg Baxter, Chief Digital Officer, MetLife.

The MetLife Digital Accelerator, which will be driven by MetLife’s partner Techstars (Boulder, Colo.), will identify and mentor startup companies around the world that are developing innovative technologies for the insurance industry. Startups selected will be hosted at MetLife’s Global Technology Campus in Cary, N.C. for what the insurer characterizes as an intensive 13-week program to develop and accelerate transformational concepts. Techstars is a global network of entrepreneurs and other professionals involved in the creation and development of companies.

External Orientation to Innovation

The two new investment programs, which will be managed under the aegis of MetLife’s Chief Digital Office, will support a strategy based on the development of digital technology as a means of transformational change, according to Greg Baxter, the insurer’s Chief Digital Officer. The strategy aims at three areas, building up a foundation of innovative technology, developing differentiating products, and disrupting the industry. The announcement of the two new entities is about bringing an “external orientation” to MetLife’s approach to innovation, he says.

“We see disruptive opportunity as both being internal and bringing the best of what the world has to offer to us,” Baxter elaborates. “It’s about discovery and execution, and partnering with the best in the world to filter which companies and technologies we should be working with.”

With regard to MetLife Digital Ventures, Baxter says the greater challenge isn’t building the investment fund but rather acquiring the necessary skills and thus finding the companies to invest with. He explains that in his activities in the financial services industry prior to MetLife, firms he worked with faced the task of building out their company development sales capability. “We don’t need to build out a local presence in markets to compete with VCs, because we’ve been working with 16 leading VCs, representing the world’s best startup salesforce for close to a decade,” he says. “We have introduced 450 companies and about 35 proofs of concept launched within the organization.”

As with knowing which companies to invest in and market, identifying and grooming promising startups is not a core competency that a company can develop quickly, Baxter comments in reference to MetLife’s Digital Accelerator and its partnership with Techstars. “We believe their brand will create an attractive proposition globally, particularly with MetLife’s backing,” he says.

MetLife and Techstars will induct a new cohort of startups. This year the focus areas will be underwriting, health and wellness, and the “gig” or sharing economy.

Transforming the Industry

Baxter says that MetLife is peripherally involved with a variety of accelerator opportunities, and notes that LumenLab, MetLife’s Singapore-based innovation center, is designed to incubate companies in order to place them within the MetLife organization. “We want to make discovery and execution a core competency here,” he comments.

MetLife Digital Accelerator is not designed to mentor companies for internal-only consumption, Baxter stresses. “We’re not looking for unique access,” he says. “Our goal is to help companies scale into viable enterprises and also become strategic partners in whose success we have a stake—the goal will be to transform the industry, not just MetLife.”

MetLife LumenLab Launches ‘Collab’ Insurance Tech Accelerator Program

Digital, Core and Microservices: Conversations at IASA 2018

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(Stan Morris, VP, Business Development, Data; and Brian Evans, VP, Business Development, ITS. Photo by author.)

Scaling for Rapid Growth: Abhijeet Jhaveri, ValueMomentum

The accelerated pace of change in the insurance industry has been good for transformation-focused ValueMomentum. The Piscataway, N.J.-based vendor has gained 18 customers in as many months for a variety of transformation-related projects across a spectrum of functional and technology areas including digital transformation, core transformation, bureau rating, cloud solutions, customer communications and enterprise integration, according to Abhijeet Jhaveri, the company’s Chief Marketing Officer. As a result of the booming business, the company is ready to scale and has undertaken a restructuring that includes the appointment of Kalyan “KK” Kodali as CEO (more on that at this link).

Abhijeet Jhaveri, Chief Marketing Officer, ValueMomentum.

Jhaveri attributes the company’s rapid growth to a variety of factors. Among those relating to the company itself are its range of software and services and its insurance focus

He also credits ValueMomentum’s customer ethos as a success factor. “Among our core values is that we put the customer first, operate with integrity, make sure every employee wins—we believe the honest work benefits everyone, helping our customer succeed and helping our careers as well,” Jhaveri says. “We also take the view that we have no sacred cows—we don’t push our solutions but rather tailor solutions for what is best for the client, and we see the resulting success as a win/win whatever the solution.”

Jhaveri also acknowledges the influence of an extremely favorable business environment in the insurance industry on the company’s recent growth. “We think there’s an unprecedented opportunity today for an organization such as ours—systems integrators, software and service providers—because of the changing nature of risk exposure and assessment, huge demographic shifts and changing customer appetite,” he says. “These are precipitating the need for insurers to embark on transformational journeys.”

Sapiens’ North America Journey: Yaffa Cohen-Ifrah and Alex Zukerman

What might be called Sapiens’ North America campaign began in earnest in 2014. Today, the company is consolidating its acquisitions from both a technology and marketing point of view and reinvent itself for this market. While the company had long been active in North America, it acquired Maximum Processing (of the Stingray system) in mid-2016, which it followed up with the hugely significant acquisition of StoneRiver, announced in Feb. 2017. The company acquired Adaptik, in Feb. 2018.

Yaffa Cohen-Ifrah, Chief Marketing Officer and Head of Corporate Communications, Sapiens.

The magnitude of Sapiens’ investments in North American companies are enough to demonstrate its seriousness about the market, but it is now following that up with commitments that show its determination to make the most of the opportunity to strengthen its position on the continent.  “We’re working hard on consolidation and integration, for example presenting the Adaptik core components and StoneRiver Stream Claims together,” relates Yaffa Cohen-Ifrah, Chief Marketing Officer and Head of Corporate Communications, Sapiens.

“Georgia Farm Bureau is our first customer with Steam Claims, and they have now selected Adaptik Policy and Billing,” Cohen-Ifrah continues. “They will be our first customer that have the three components of our offering for mid- to upper tier North American carriers.” [Sapiens offers Stingray for lower-tier carriers in North America.]

Today Sapiens offers what it characterizes as a strong proposition for both small and mid- to upper-tier property/casualty carriers. The vendor has two products for the workers’ compensation market: WC PowerSuite and CompSuite. On life side, it has the combined offering of Sapiens and StoneRiver, which strengthens its former position tremendously. The vendor has also embraced the platform concept, the next departure from the integrated suite insurance core system paradigm which includes core, data-related and digital solutions—or really any technology capabilities a carrier might need.

Alex Zukerman, Head of Corporate Product Strategy, Sapiens.

“For us platform is a major shift in how we see the industry evolving, and combining platform with our being the SI of this platform—those are two unique aspects of what we do,” comments Alex Zukerman, Head of Corporate Product Strategy, Sapiens. “We feel very confident also doing the delivery and customization is an added value—not a revenue but a quality thing. Having your strategy and road map being intimate with the customers, provide them the value and give them support. When you combine that with platform it’s a single focal point, one hand to shake. The expectation is customers will look at us for all the insurance things, analytics, innovation with startups. We’re providing them a platform they can grow on.”

Data is the Insurance Industry’s Gold: Stan Morris, ITS

Stan Morris, an industry veteran whom we’ve had the pleasure of interacting with at some of the most important companies in the insurance technology space, recently joined Insurance Technology Services (ITS) and made a public debut of sorts at IASA 2018. His new appointment as ITS’s VP of Business Development continues a career focus in driving innovation in insurer’s use of data.

Morris likens the progress of insurers use of electronic data use to that of the progressive refinement of petroleum products after the mineral product supplanted whale oil, from kerosene to gasoline to jet fuel—each step resulting in the liberation of greater power.  “The core of all the innovation, that thing that fuels it and is necessary to make it reality is harnessing the power of data,” Morris comments. “Insurance data activities, while useful, were historically treated with a measure of disdain—I remember in the early days of my career that data migration jobs were given to you as a punishment. But now people realize that’s where the gold is.”

Morris stressed that ITS is helping companies handle that aspect of their business, moving data from legacy systems into more modern systems where it can be harnessed. “Carriers spend a great deal of time choosing the right core systems and don’t always allocate as much energy to thinking about what’s necessary to have a successful project,” Morris observes. “We’re helping companies migrate to a new core system, including helping them plan the testing, data migration and set up training—which is often an afterthought.”

Getting the Band Back Together: Martyn Sutton, AdvantageGo

It’s not unusual for IT services companies to have powerful software solutions among their assets, but it is difficult for them to establish themselves as product companies as part of their branding. That challenge is what led NIIT Technologies (Noida, India) to launch its AdvantageGo brand from its insurance technology division, with a new emphasis on the U.S. market. The new brand reunites veterans of several important insurance technology veterans who are alumni of Xuber/Xchanging, including Adrian Morgan, EVP at AdvantageGo, John Racher, the company’s head of U.K. operations, and Martyn Sutton, head of U.S. operations.

Martyn Sutton, Head of U.S., AdvantageGo.

“We’re putting the band back together,” Sutton quipped in our meeting at IASA 2018. “Adrian Morgan’s remit is to build on the pedigree we have in the London market and start looking overeas. We all worked at Rebus/Xchanging and, looking further back, reinsurance and high-end specialty.”

The new brand could be interpreted to signify a departure from existing advantages, in this case a proven core platform and pedigree in policy, claims and billing, now combined with microservices, digital systems, and Aniita, the vendor’s digital assistant, which gives users quick, accurate access to business-critical information.

AdvantageGo will continue to aim at large commercial insurers, at least for its core systems. However, its digital services have the potential to tap the broader market, and feature APIs that can integrate with popular core systems, such as Guidewire and Duck Creek, according to Sutton.

It’s still early days for AdvantageGo’s U.S. business—Sutton joined the firm six months ago. “We have signed a contract with a tier-one carrier for policy, claims and billing,” he shares. “In the U.K., we’re building on our existing strength, having just signed with a large U.K.-based syndicate for the core platform.

ValueMomentum Names Kalyan Kodali CEO

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