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?



The other day I was thinking about some of the ‘classics’ we have had here in the Boston area regarding different types of food. Three came to mind immediately:

1. Blueberry muffins from Jordan Marsh
2. Ice cream sundaes at Baileys
3. Clam chowder at Legal’s Sea Food restaurants.

Fortunately the last classic restaurant and chowder still exists. The other two are gone into the pages of history.

What makes a food – or anything else for that matter – a classic?

I submit that the main attribute is the experience the food (or product or service) provides the customer.

But while all classics are wonderful experiences not all experiences are classics.

A company can build off of their classics. The company can generate a stream of revenue from them and broaden their footprint into other products. The experience customers feel from the classic allows companies to experiment or offer new products. Of course, not all of the company’s new products will be classics. And the company has an obligation to maintain the trust they have engendered with their customers. The new products must enable the same or similar experience the customer associates with the company.

What about insurance companies? Where are the ‘classics?’

I’d submit there are only a handful when we use the prism of considering classics – and in that case, companies known for the wonderful experience they provide their clients:

1. USAA’s customer service
2. Chubb’s exemplary attention to the high net-worth households
3. Northwestern Mutual’s focus on products (and producers which also benefits the insurer’s customers)
4. Progressive’s ability to leverage technology to benefit its policyholders from business acquisition through claim adjudication
5. ?????

Who would you add to number 5 – and beyond? But be honest and demanding before answering.

Published in: on December 12, 2009 at 12:06 am  Comments (2)  

Razors and Razor Blades

One of the most enduring strategies for a company to use is “Razors and Razor Blades.” The strength of this strategy is continually on display from razor companies like Gillette. A consumer pays a basic price for the razor and then continues to generate revenue for Gillette through the life-long purchases of razor blades.

Another example of a company using this strategy is HP with their printers. Buy the printer at a low price and then purchase ink cartridges as they run out. HP added a new twist some years ago by having a message show up on the printer (and the print function on WORD) that states a cartridge is running low.

That got me thinking that my relationship with the car dealership I bought my car from is the same type of relationship. Yes, it is entirely in my control but I always bring my car to the same dealership for service.

An example that is not in my control is my iPhone (I just love this device). I’m always on the lookout for new apps and go to iTunes to purchase (or download free) applications. For Apple, it is a win all around – for them, for their developers and for me. And the constantly growing number of apps (now over 100,000) provides a nice competitive advantage for Apple.

Well, can the “razor and razor blade” strategy work for insurance?

How about property/casualty insurers who offer concierge service after an automobile accident? Hopefully it won’t happen with the same frequency as iPhone app purchases but seen over a vast number of automobile insurance policyholders who use the concierge service, these insurers are hoping that by providing a well-tuned (no pun intended) experience, they can better manage their loss costs than having the rascally claimants go to the body shops of their choice.

Are there other insurance examples? Perhaps in the life or annuity segments? Please let me know.

Published in: on December 8, 2009 at 8:22 am  Comments (2)  
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Two Perspectives Enabling Stronger Strategic Options For The Insurance Industry

Getting down to basics about the insurance industry, how might someone perceive or reperceive the industry from a strategic perspective? Strategy, for me at least, is what a company does to differentiate itself uniquely from its competitors. That’s why I don’t consider core administrative systems (or one of the components of a core administrative system such as billing) to be strategic. But that is a post for another time.

The purpose of determining a perspective is to help identify those strategic elements to truly differentiate one insurer from another. It’s very much like people majoring or being expert in multiple disciplines. Reperceiving enables a fresh view; a new view; a different way of thinking.

I suggest there are, at least, two perspectives insurance companies should use when considering how to create or enhance their strategies. One is an information perspective and the second is a media perspective.

We all know that insurance is an information-based industry (not information intensive but information based). So, how might an information perspective help an insurance company differentiate itself from its competitors? Well, an insurer with an information perspective should:

  • Understand that information must be shared throughout the enterprise and realize that information silos are barricades to success
  • Craft an initiative to ensure that information is cleaned as it comes into, flows through, and streams outward to any and all parts of the value chains that encompass insurance decision-making and operations
  • Realize that information is just  not all of that structured stuff being held (sometimes held hostage) in the various databases in every functional area
  • Set a higher priority to monitor, manage and act on unstructured data whether that is text, pictures, sound or video
  • Create strong search and navigation throughout the information streams for both internal staff (and I would include agents and brokers in this category for the purposes of our current discussion) and external stakeholders
  • Create an information council made up of people from each business department

What would you add to this list if an insurer wanted to perceive its strategic objectives through an information perspective?

Then there is the media perspective. Of course, it is highly interdependent with the information perspective. However, an insurer that applies a media perspective would do best if it realizes it is both a consumer and publisher of information. So, the insurer would:

  • Identify the media (or information channels, if you prefer) that information is produced (published) and consumed throughout the company value chains
  • Look to actual media companies that are successful (e.g. Google or Amazon) and determine which processes, if any, can be repurposed for the insurance company (if the insurer is stumped at this point, they can just ask those stakeholders like their own staff or their agents or brokers how they would prefer to receive information)
  • Augment their own media capabilities with existing social networking web sites (e.g. LinlkedIn)
  • Begin to apply rich media authoring capabilities (e.g. Adobe’s AIR) to package and present information in a way that is more easily acceptable (not that the long, dry procedure manuals are not exciting and interesting in their own right)
  • And as above, there are a host of other ways that an insurer could reperceive itself strategically by thinking of itself as a media company

What would you add to this list of media perceptions for an insurance company to consider?

Published in: on December 3, 2009 at 12:01 pm  Leave a Comment  
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Objects In Mirror Are Closer Than They Appear

We have all seen the statement that “objects in the mirror are closer than they appear’ and most every driver knows the statement is true. In fact, if the speed of the oncoming car behind us is faster than we are driving, the object will soon past us.

But what about objects just over the horizon that we’re not ready for? Are they closer than they appear? And if so, how do we determine what they are and get ready to deal with them?

The history of the insurance industry seems to show that insurers do not quickly respond to either objects behind them or to the soon-to-be-revealed objects just over the horizon. For insurers, objects just over the horizon include shifting demographics, changes in ethnic composition of their target markets, asset / liability matching and realizing how the impact of other industries applications of technology reshape the expectations of both policyholders and producers.

Objects from behind insurers include competitors from the insurance industry, the financial services industry more generally, other industries and even prospective policyholders themselves. When considering who their competitors are, insurers must continually keep in mind that it is both current and emerging customer needs that reshapes the competitve terrain. The old expression that people don’t want a 3/4 inch drill but a 3/4 inch hole continues to strongly resonate and should provide guidance to insurers who consider only other insurers in their specific segment as competitors.

What objects – either from behind or just over the horizon – should your company be ready to respond to competitively succeed?

Published in: on November 23, 2009 at 6:44 pm  Leave a Comment  


Some years ago I attended a LIMRA Annual Conference. For those of you not on the life insurance side of the insurance house, LIMRA is a firm that focuses on life insurance marketing and distribution issues and trends. Their employees are verytalented statisticians and others with quantitative skills. Life insurers from around the world are members of LIMRA. The Annual Conference is squarely focused on CxO level executives. (I was a management consultant at the time paying a steep entry fee striving to generate business from these aforementioned senior executives).

There was a big tent speaker who I have never forgotten. He had a flip chart on the stage – his only prop for his entire presentation – and on the first page he had written DK / DE.

His themes were quite straightforward. He told the audience of assorted senior executives that their companies had no “Deficiency of Knowledge.”  However, there was a significant “Deficiency of Execution” because insurers just did not get the job done in a timely manner nor in an effective manner.

If this person was delivering a similar presentation today, he might vewry well add DRM (no, not for digital rights management). He could discuss the fact that insurers have a deficinecy of risk management …. in their asset / liability matching, in the target markets they go after (hello, coastal properties!!), and in …

Well, in what? What other areas do insurers demonstrate a deficiency of risk management? And is it still true – or was it ever true – that insurers exhibit a deficiency of execution?

Published in: on November 23, 2009 at 9:12 am  Leave a Comment  
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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?

Place, Pace & Perspective: Three Key Strategic Forces

Let’s see what kind of mental mischief we can come up thinking through the strategic importance of place, pace and perspective. Sort of a marking an invisible white board with some ideas.

Years ago when I began playing chess (just regular pieces sitting on a flat chess board), I realized how critical both my various pieces places or positions on the board were to my goal of check-mating my opponent.

At any one time the positions of my chess pieces and my opponent’s pieces defined a context of future choices. The pieces were both occupying a place and just by that fact were projecting potential offensive reach and defensive capabilities. My opponent and I had to be aware of the point-in-time context and its associated possible paths through the future.

As we played together more frequently, our pace of play increased. Much like two people who have been married or otherwise living together for many years, we knew each other’s moves. At least up to a point where we could set up a “new” game with several pieces in a place that represented a game that had experienced several moves. Sometimes, though, a quickening pace would steamroller over opportunities we each had to try new initial moves … to innovate, if you will.

Many chess games brought me the lesson that perspective was also important. Perspective is like an uber factor that brings place and pace together in a way where the two forces become more than the sum of their individual contribution.

A real-world example hit me after the first Gulf War when a reporter asked General Schwartzkoff if he wasn’t concerned about enemy advance people understanding the number, nature and movement of his forces. The General said he would be only if the enemy was in a plane or helicopter high enough off the ground to both see all the Allied Forces, their number, their make-up, their dispersion and the speed of their movement.

In a related example, consider either college football or professional football games. Teams always have coaching staffs high above the field to monitor both the opponent’s placement, moves and speed … and their own teams. And, of course, what happens in the context of interaction.

Let’s bring this mental mischief to your company: how is your insurance company using place (market penetration, market positioning), pace (speed of business acquisition, speed of agency onboarding, speed of moving business from agencies through underwriting, speed of policy delivery or paying claims), and perspective (understanding and reacting to your company’s capabilities, your competitor’s capabilities, and managing the interaction between the two) to strengthen your company’s competitive position?

Published in: on November 5, 2009 at 3:29 pm  Leave a Comment  
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