The Seamless Society

Perspective is a funny thing…. it totally depends on your life’s experiences (or lack of experiences for that matter).

For the youth of today, their world is one of instant communications and information – in all forms – on demand whenever they want it and regardless of where they are at the time.  These so-called ‘digital natives’ are totally immersed in an ever-growing ocean of data flows connecting them to their friends and happenings. They take it as “just-so” that smart-phones, touch-screens and ever-more functional devices will be readily available and easy-to-use. And they don’t seem to have as much concern as should about what kinds of information they share with friends – whether actual friends or online friends living anywhere around the world.

For those of us who have to learn how to use all of these new appliances and deal with the information flows gushing over us (we are the so-called ‘digital immigrants’), our experiences are sometimes better described as chores to be done even though the end result can make our business and social lives easier. We wonder just how good we can be with those infernally-small keyboards on the smart-phones.

But regardless of our status of digital native or digital immigrant  in this evolving technological stream, boundaries are blurring. Boundaries – between people, between companies, between events happening and our awareness of them – are rapidly disappearing.

Our society is becoming seamless.

This condition of seamlessness has several implications for the companies providing us products and services. If these firms do not perceive the world around them is becoming seamless they will not be prepared to conduct business in this transformed marketplace and will lose customers. In short, companies still operating as if this was a Lego-block world will become fodder for the history books.

Some of the key implications are:

• Customers – already a rascally demanding bunch – will expect increasingly faster service. “What, you don’t know who I am? I’ve been to several of your stores and have made quite a few purchases. I really don’t care the purchases were from different stores or from different departments…”
• Real-time or low to no latency for the tech bunch reading this post) will become critically more important. Companies who say they are all about responsiveness better not have their customers on-hold for minutes at a time while they are waiting for a human to talk with about their problems or to answer their questions. Companies burnishing that ever-ready FAQs will need really good (really, really good) search capabilities so customers don’t have to take very long to find the answers that actually, well …., answer their questions.
• Companies will need to use all of those (or selected) smart-phone applications to reach and serve their customers. You will need “an app for that.” Customers will come to expect your company can be located and soon to be alerted to sales of what they care about to possibly purchase.
• Company’s supply chains must become seamless if the firm wants to have any hope of strengthening their market share.

Bringing this home to my little pond – the insurance industry – means that insurance companies will need to:

• Speed up their use of industry standards for all of their lines of business (hello, ACORD !!) and technology standards to drive data interoperability
• Finally treat their producers as equal partners throughout the distribution value chains (yes, that means you need to eliminate all paper between your agencies / brokers and the field staff and home office departments)
• Ensure all field personnel regardless of function (e.g. claims  adjusters, agents / brokers, field staff, salvage and subrogation staff, ….) have the devices they need to capture all the field information electronically.
• Ensure the core administration systems (e.g. underwriting; policy administration; billing, claims) actually share all the requisite data flows to keep the business operating, support policyholder and producer service, and ensure auditability and transparency for all of those regulators (and reinsurance companies assuming your firm’s risks). These core administration systems are the guts of an insurance company’s supply chains.
• Ensure data are securely locked down regardless of where they are stored (and yes, that means start now to experiment with cloud computing)
• Continually pull together every bit of data related to policyholders to create an up-to-date profile of the customer including the products the policyholder owns, the selling and servicing agents, and each call or contact from (or to) the policyholder and the nature (and resolution, if applicable) for tha contact. Basically bring “Moments of Truth” into the Web 2.0 world.
• Do the same as above for every agent or broker, including all of the original on-boarding information, licensing / training / certification data (for every insurance coverage the producer sells for your firm), compensation data, and data about the producer’s policyholders.

What do you think? What are some other ways insurers should prepare to compete in a seamless society?

Influencers

Who or what has influenced you as your career has progressed through the years? There have been times that people around me have said something or I have read the work of authors that have impacted me and have stayed with me through the years. These influencers provided me different or new perspectives to consider how I view society, the insurance industry or both.

Who has influenced you?

For me, some of the people that have had a persistent impact on me include:

1. Marshall McLuhan – much more than being a repository of wonderful sound-bites, he was a visionary who understood and clearly articulated the impact of media (e.g. technology) on society
2. Alan Kay – particularly his idea that technology is something that wasn’t around when you were  born. Similar to one of Marshall McLuhan’s sound bites that “he didn’t know who discovered water, but it wasn’t a fish.”
3. Ted Levitt – Marketing Myopia but more…. I liked his idea that corporations had only two major processes: getting and keeping customers. Every business process you can thing of is a subset of one of those two or a subset of the combination of the two
4. Lewis Carroll – both “Through the Looking Glass” and “Alice in Wonderland” should be required reading in any business school program
5. Joe Pine – his concepts around Dynamic Stability are worth a re-read
6. Clayton Christensen – The  “rock-and-hard-place” dynamic continues
7. Geoffrey Moore – so will crossing the chasm ever get easier or quicker? 
8. Nassim Nicholas Taleb – we must develop the ability to be able to respond to Black Swans even if we can not readily identify them beforehand

The fun part, of course, is applying the concepts of these people to my efforts as an insurance industry analyst (and before that, as a management consultant).

No industry, insurance or other, is an island onto itself. I have firmly believed that learning what people in other disciplines discuss and believe, can add value to my own ideas and insights.

Who has influenced you? How have you applied their insights to your own work?

Building a Social Media Analyst

A magic wand has been placed in your hands. With it, you can build what you think of as a good social media analyst.

What are the major areas of knowledge you would gather together to construct a social media analyst you would look to for research, analysis and advice?

A recent Digital Tonto post  (about their recommended 2009 reading list) got me thinking about this. I agree with some of their ideas (particularly social media analysts needing to know about network theory, including power laws) on this and have added some others. I’d suggest a good social media analyst should have knowledge about:

1. Networks and network theory
2. Power laws (and the long tail)
3. Anthropology (particularly applied to communication and collaboration within digital communities)
4. Marketing and advertising within digital communities
5. Commerce initiatives within digital communities, including the acceptance (or rejection) of the hard sell within digital communities
6. Insight about the evolving web – or at least, which new capabilities (e.g. semantic technologies, augmented reality) will emerge in the next 2 – 5 years.
7. ?

And aside from reading a lot of Marshall McLuhan (that should go without saying), what would you add to this mix of domains a good social media analyst should have? Why?

Vestiges

Over the 2009 Holiday Season we have the time to spend more time at home. Being together, listening to music and catching up on some of our reading.

One morning I glanced up from my reading and noticed a wall plug in our family room. It was not a power socket but rather a telephone dial-up connection.

When we built our home 23 years ago we wanted to make sure we could take our computers into the family room (or bedroom, kitchen or dining room) and connect our computer to the Internet. Through dial-up….

Those telephone dial-up wall plugs are vestiges of an earlier time to connect to the Internet.

Now our home also has Ethernet connections to the Internet and wireless Internet connections. My wife and I much prefer the Ethernet connection although it is another vestige of an earlier time. Broadband wireless is so obviously ‘now.’

One vestige of the past I’m happy to be rid of is my external 80 GB external storage unit. Now I use MozyHome and I set it up to back up my 14 GB three times daily.

Cords or cables between my laptop and printer are other vestiges I have happily put in the past. Thanks to wireless, I can use my printer without being tethered.

We have other vestiges ‘in the making’ of the past in our home. One of those vestiges is our collection if books. Most, if not all of them, could just as easily (but not financially) be replaced on an e-reader.

Our laptop computers might also be considered vestiges of a bygone time. For me, my iPhone is a critically important platform of functionality. But I won’t use the iPhone for everything. I still appreciate the form-factor of a laptop.

What vestiges of the past do you still own or continue to use in your home?

What vestiges of the past does your company still use that you would you be happy to see gone? (Hint: the legacy systems insurers use are obvious examples!)

O Christmas Cards, O Christmas Cards

I realized this morning that Christmas cards were the analogue version of Twitter or maybe Facebook.

Think about it: if you send a Christmas card to someone, they send you a card (and sometimes that very long and boring letter recapping their year). If you stop sending that person a Christmas card, they take you off of their list of people to send cards.

Christmas cards = analogue version of social media.

We can go back further in time to find a similar trend: it only took the telegraph one year to replace the Pony Express.

Of course we are only now weaning ourselves from Gutenberg’s invention in 1450. But there is hope, always hope, that we can move from the printed page to the digital ether before another 500+ years elapse.

What examples of movement from analogue to digital should we expect in the next 3 – 5 years?

Volume + Velocity = ?

We all know and feel that the world is moving increasingly faster. Regardless of the current economic situation, events and issues (e.g. health care, climate shifts, regulatory philosophies) are rushing towards us at speeds we may not be able to reasonably deal with when they impact us.

Technology, particularly current and new forms of social media, are certainly bearing down on us whether we can manage them or not. Taken as a set of media channels, social media such as Facebook, Twitter, LinkedIn and others are acting like an amplifier creating an ever-growing volume of conversations, dialogues, and commentary that resemble more of a digital tsunami of unstructured data than coherent streams of manageable discourse.

Coupled with this never-ending volume is the fact that social media also acts as an accelerator by  increasing the speed or velocity that this tsunami picks up each second. Google’s new search appliance hopes to help us surf these break-neck waves in real-time but it is only part of the solution.

What is the answer to the dynamic equation “volume plus velocity?”

I suggest one answer is pattern recognition. But the pattern recognition response itself must be a contextual solution. All of those streams of unstructured data will have to be interpreted through the prism of each viewer’s needs. And those needs – of the same viewer – will change depending on that person’s requirements at the time of viewing as well as the robustness of the existing streams and the new conversations (writ large) added at the new ( possibly seconds later) time of viewing.

What do you think other answers are to the equation volume + velocity =

And most importantly for our industry, what are the implications for insurance companies, policyholders, producers, prospects, reinsurers, and regulators?

Web Information Discovery Strategies

We all know that the digital marketplace is  continually creating ever-increasing amounts of digital content. And with a plethora of content comes at least two problems: a paucity of attention and an inability to find or otherwise leverage the growing amount of digital content.

Three firms – one we all know extremely well – and two others are using two different strategies to resolve both problems: 1. get in the middle and 2. wrap.

Google uses the ‘get in the middle’ strategy by putting themselves between us (the folks looking for information) and the sources of information. We don’t need to belabor what the technology company does and how it is broadening its footprint into areas other than search. Google is about finding information.

Two new companies – Wolfram Alpha and Book of Odds – both employ a ‘wrap’ strategy. Both of these web firms wrap information around other information, sort of like a donut with a jelly filling. And both firms are about leveraging information by presenting it to users in a context and in a way that seekers of information can relate … although that relationship is also about the context of the seeker (the seeker’s background, goals, objectives of seeking information and desire to continually investigate) as well as the context the information is presented.

Let’s first look at Wolfram Alpha. From their web site, the company says its goal is “making the worlds’ knowledge computable.” The About page discusses in part that “Our goal is to build on the achievements of science and other systematizations of knowledge to provide a single source that can be relied on by everyone for definitive answers to factual queries.” On the Examples page the web site has 29 categories from Mathematics to Physics to Dates & Times to Places & Geography to Colors. I suggest you click over and learn how the site works.

Now let’s turn to Book of Odds. Excerpting directly from the About page” ” Book of Odds is the world’s first reference on the odds of everyday life. It is a destination where people come to learn about the things that worry or excite them, to read engaging and thoughtful articles, and to participate in a community of users that share their interests and ambitions.”

And that learning is done in the context of news articles from a multitude of sources but grouped into four major categories: Accidents & Death, Daily Life & Activities, Health & Illness, and Relationships & Society. Seekers of information – and here we mean seekers of probabilities – will find articles both on the home page and on each of the four major category pages. In addition, Book of Odds also displays statements of odds that are not embedded in articles. People wanting to better understand how Book of Odds began can read a blog by the Founder. I also suggest you click over to the Book of Odds site to find out how that site works.

Both of these new web publishers are about exploration and discovery of information in a way that Google is not. Both are hoping to create additional value – beyond returning a site or set of sites that may (or may not) answer a seeker’s question – by establishing a context for the embedded information. Both are examples of Semantic Web or if you prefer, Web 3.0, firms. A new species trying to make a living in the always changing web terrain.

However, the challenge for both Wolfram Alpha and Book of Odds is generating sufficient and persistent profitability by:

• Satisfying the information seeker in a contextual manner they expect or want
• Encouraging the information seeker to continue their explorations and stay awhile, and most importantly
• Triggering the information seeker to purchase something. Each of these new firms will be looking for a variety of revenue paths driven by the capabilities or results they provide the seekers who click over to their web sites.

Information discovery on the web is obviously so much more than search. But, and there is always a but, do you think Wolfram Alpha or Book of Odds has an opportunity to succeed as a stand-alone company 5 years from now? I’m not sure. Are you?

Shazam – Come On, You’re Impressed Too!!

I got an iPhone last year. Didn’t think I would ever “go Apple” for anything. Grew up in the insurance industry so I was used to and happy with IBM computing, including laptops. Later I got a Nokia and “hello, love!” Palm was my device of choice for contacts, calendar, notes and such. Happy as the proverbial clam.

Then a year ago, my Motorola cell died. What to do? I really appreciated Motorola’s form factors and designs. I looked around and increasingly more of my colleagues were getting iPhones. And I was already on AT&T and wanted to stay on AT&T (spent a little bit of time at Bell Labs before divestiture… the thrill of working at Bell Labs was as palpable for me as when I was fortunate to get to Arthur D. Little in the late 1980’s.)

So, I got an iPhone. And one of the ‘apps’ I heard about was Shazam. Sounded too much like science fiction: you launch the app, make sure the iPhone can hear the music and within 15 seconds (or 10 seconds depending on how you set it up), it analyzes the sounds and then tells you what the song is, the artist, and even enables you to buy it on iTunes?

Really? Of course, you all know the answer is YES. OMG as the younger generation might remark. OMG.

Pattern recognition. Not of numbers in a document or table but of sound waves (which are probably decomposed to numbers of a sort). And that is really magic.

Now, it doesn’t work for all music and it certainly doesn’t work for classical music (no, I don’t mean music from the 1950’s or the 1960’s). But most of the time, it recognizes the music.

So, what’s the Shazam application equivalent for insurance? Well, it’s the beginning of my weekend and I’m logging off for the next few days.

You tell me what equivalent applications the insurance industry could use.

Shazam – Come On, You're Impressed Too!!

I got an iPhone last year. Didn’t think I would ever “go Apple” for anything. Grew up in the insurance industry so I was used to and happy with IBM computing, including laptops. Later I got a Nokia and “hello, love!” Palm was my device of choice for contacts, calendar, notes and such. Happy as the proverbial clam.

Then a year ago, my Motorola cell died. What to do? I really appreciated Motorola’s form factors and designs. I looked around and increasingly more of my colleagues were getting iPhones. And I was already on AT&T and wanted to stay on AT&T (spent a little bit of time at Bell Labs before divestiture… the thrill of working at Bell Labs was as palpable for me as when I was fortunate to get to Arthur D. Little in the late 1980’s.)

So, I got an iPhone. And one of the ‘apps’ I heard about was Shazam. Sounded too much like science fiction: you launch the app, make sure the iPhone can hear the music and within 15 seconds (or 10 seconds depending on how you set it up), it analyzes the sounds and then tells you what the song is, the artist, and even enables you to buy it on iTunes?

Really? Of course, you all know the answer is YES. OMG as the younger generation might remark. OMG.

Pattern recognition. Not of numbers in a document or table but of sound waves (which are probably decomposed to numbers of a sort). And that is really magic.

Now, it doesn’t work for all music and it certainly doesn’t work for classical music (no, I don’t mean music from the 1950’s or the 1960’s). But most of the time, it recognizes the music.

So, what’s the Shazam application equivalent for insurance? Well, it’s the beginning of my weekend and I’m logging off for the next few days.

You tell me what equivalent applications the insurance industry could use.

Something Wicked This Way … Is Spreading Rapidly

How many of you saw the article that Michigan may be putting a proposal in front of voters on the 2010 state ballot that if enacted would reduce automobile, home and business insurance premiums by 20 percent. The group – the Fair Affordable Insurance Rates – needs to gather more than 304,000 valid voter signatures and clear other hurdles to put the measure on the November 2010 ballot.

A few thoughts come to mind (that I can print and publish in a ‘family-firendly’ way):

• Part of the problem here is the insurance industry’s inability to express or other wise communicate its value proposition to its customers and prospects. (Life insurers have had this problem forever and still have not solved it)
• Inform Michigan voters that its alright to roll back insurance premiums by 20% as long as you also mandate a rollback of automobile and homeowners remediation expenses by 20% – for auto parts, for auto labor, for court awards, for plaintiff’s legal fees, for rehabilitation services, for medical products, … and, of course, for all products and services insurers and their field staff and their agencies have to use to stay in business
• Leave the State of Michigan entirely – make it one giant state-government run insurance company
• Provide bare-bones coverage for automobile, homeowners and business owners

It’s bad enough that far too many politicians seem to calculate how many votes they can buy to stay in office by mandating insurance premium discounts or not allowing insurers to charge actuarially sound premiums. It will be far worse if citizens think they have the knowledge to set premium rates.

So, for those insurers who do business in the State of Michigan: what are your contingency plans? And, have you built the horrendous possibility of this spreading into your own ERM models?