“Alexa, Help Me Understand Insurance”


Tom Benton

This week healthcare giant Cigna announced the launch of their Amazon Alexa-powered application, “Answers by Cigna.” After finding via a study of health literacy that many didn’t understand terms like “premium” or “formulary,” their goal is to help members better understand and access their health benefits. Cigna sees the interactive voice channel offered by Alexa as “an exciting and innovative way for Cigna to educate and engage people about healthcare in a way that is convenient for them.”

In less than four years since it was launched by Amazon, the Alexa platform has led the introduction of voice-based digital assistants as a new medium for communicating with consumers. Inspired by the sci-fi computer systems on the Star Trek Enterprise, the platform features use of speech recognition and natural language processing to translate requests from consumers into responses that include answering questions, providing information on weather forecasts, and playing music and videos on devices equipped with screens. The platform also provides developers with the ability to build “skills,” like the “Answers by Cigna” app launched this week.

Other insurers have introduced skills, including the following (see this search of Amazon insurance-related skills for more details):

  • • Allstate: The Allstate Alexa skill can help you find an agent or information about your policy.
  • • American Family: The Dream Protector Skill from American Family Insurance (has) tips on topics ranging from motivation, happiness, gratitude, finances and more, (and can) locate an agent near you.
  • • Amica: Alexa will guide you through important auto and home insurance topics like billing, policy changes, quotes, [and] claims; you’ll get information about Amica’s billing process and coverage types, checklists for getting a quote or changing your policy, and… descriptions of discounts.
  • • Farmers: [Find answers to] frequently asked questions about insurance terminology, policy coverages, deductibles, and limits.
  • • Geico: Request ID cards, check your account balance, make payments, and request vehicle assistance.
  • • Ladder Life: Ask questions about life insurance, calculate your needs, and get a ballpark quote.
  • • Liberty Mutual: [Get] auto policy estimates and advice on home and auto issues; start your home insurance claim by answering a few simple questions.
  • • Nationwide: Learn more about auto insurance products; find out how to get a quote or get contact information; Nationwide members enrolled in the SmartRide program (device only) can even ask about their driving information.
  • • Safeco: The Insurance Advisor provides risk quizzes that evaluate your risk knowledge and behaviors related to when you drive, when you are at home, or your lifestyle.

These insurance-related skills focus mainly on educating consumers by providing information on products and insurance terminology, and some can provide policy information to their customers along with other functions. For example, Liberty Mutual mentions the ability to gather FNOL data to begin a claims process, but this will likely be added by others in time. Nationwide provides a link to their SmartRide device to provide feedback to customers, and with the adoption of smart home and other IoT devices, other insurers will soon add similar capabilities.

One limitation of the Alexa platform has been persistence – skills do not remember data outside of the instance of use of a skill, so if you ask for Alexa to play a song when halfway through telling your device claims information, you’ll have to start over again. Amazon is working on this issue and recently provided updates for users to ask multiple questions within a brief span after getting the device’s attention with a “wake word” (by default saying “Alexa” triggers the device, but as in the case of the two devices in my office, devices can be configured to respond to “Echo” or “Computer”… and, oh, how I wish I could use “Hal” as a wake word, sigh).

Digital voice assistants like Alexa, which include Google Home and Apple HomePod, provide insurance carriers with another digital channel for engaging their policyholder customers, though the platforms are somewhat limited. Future improvements, such as connection to insurer’s customer-facing systems and smart home IoT devices, will bring new capabilities to policyholders, including proactive notification of water leaks, smoke detection, and other risk factors through voice assistant devices. However, data security and assurances of privacy of both voice and customer information must be improved before users will trust voice assistant platforms for interactions with insurers.

“Alexa, when should insurers consider interacting with customers via voice assistants?” With retail and other industries increasingly using voice assistants as a channel for customer engagement, the answer may be “now,” or at least “soon.”

Tragedy May Lead to Reform and Growth


Matthew Josefowicz

The recent death of a pedestrian caused by a self-driving car in Arizona is a tragedy. While some analysts believe that this will set back consumer acceptance of self-driving cars by “years if not decades,” it seems more likely that this will provoke both transit and insurance regulators to institute greater oversight of self-driving cars. While this may feel onerous in the short-term to innovative transportation companies, in the long-term having solid “rules of the road” for safety and risk management should enable long-term growth.

For insurers, this tragedy will provide some clarity on how a liability case involving self-driving cars will play out. There will be many lessons about risk management and the relative liabilities of drivers, manufacturers, OEM manufacturers, and ride-sharing platforms learned in the next few months as this case progresses. These lessons will be part of creating a risk management framework that will support the growth of this sector which clearly has a compelling consumer value proposition.

Security is Not an Afterthought


Mitch Wein

Over the weekend the Washington Post reported that Facebook allowed user data access to an app developer called Cambridge Analytica. The app developer collected the data using the permissions granted to it by Facebook under its Terms of Service. The big data of 50 million people was used to help the 2016 Trump Campaign. Data collected included education, work history, birth dates, likes, relationship status, religion, and political affiliation.

Here are the issues:

  • While permission was sought from the individuals whose account it was, no permission was given or sought from the person’s friends.
  • The data shared went beyond the privacy settings the users established in Facebook, even if they gave permission to the app.
  • There is a consent decree between Facebook and the FTC mandating privacy protections. The maximum fine for violating the decree is $40,000 per person. At 50 million people, that is potentially millions or hundreds of millions of dollars in fines.
  • Mark Zuckerberg initially tried to delegate the response to this mess to his legal team. On 3/21/18, he went on CNN and said “he was sorry it happened.”

Sorry is not good enough. Mark Zuckerberg admitted that he doesn’t know if there are other apps that are doing the same thing. He will need to do forensic audits of possibly hundreds of apps. EU and US privacy rules have been broken. There are calls for Mark Zuckerberg to testify to various committees in the UK, US, and EU. Massachusetts and Pennsylvania have opened investigations. Fifty billion in market capitalization of Facebook has disappeared this week alone!! This is just the latest example of security issues bringing a firm down. Think of Experian or Target. Experian is being sued by San Diego this week for a data breach of 3.1 million people, including 250,000 in San Diego.

What are the lessons for insurance CIO’s? Security matters. Security is not an afterthought. If you ignore regulations that govern data privacy and security, your firms reputation, your reputation, and possibly the firm itself can be destroyed. The stakes are high. Did I mention that the stakes are high? There are numerous laws that have emerged such as the New York State Cybersecurity regulations which went into effect in 2017 and the General Data Protection regulation in the EU which goes into effect in May 2018. There will be more security regulations emerging across insurance. Yet, we still hear some CISOs say that their CEO wants to spend the least amount possible on security and that security needs to be prioritized against other IT projects within an overall fixed IT budget. Some CEOs won’t spend the money for a CISO, believing another executive can handle security in their spare time. NIST audits are a must. Remediation must occur and a good faith effort to address security deficiencies and protect consumer data, including health data, must be made.

I hope I won’t be reading about your carrier in next week’s news.

Tech Investments Focused on Improving Digital Workflow for Large Commercial Brokers


Chuck Gomez

Large commercial brokers face transacting business with multiple carriers and distributors as their greatest technology challenge. In order to differentiate themselves in a competitive marketplace, brokers are seeking improved technology to transform the large commercial broker space.

Brokers are investing heavily in analytics, business intelligence, and, in some cases, AI-driven technology solutions. Across the value chain, from customer acquisition to customer service, brokers are looking towards these tools to not only profitably grow their business, but to also provide differentiated customer service. Additionally, brokers are investing in mobile and self-service capabilities, including portals to interact with customers and other brokers. Chatbots and social media are also of growing interest in reaching prospects and existing clients.

While many may maintain their existing management systems, brokers are open to upgrading those systems to take advantage of broader functionality. Many brokers are integrating cloud-based solutions to aid with automation. To a lesser extent, brokers are also investing in CRM/sales support and BPM/workflow capabilities to address the issue of carriers having their own application forms and processes; this issue is particularly pertinent for large commercial brokers.

Large commercial broker CIOs and business executives should consider the following top technology priorities: automated and digitized business process management and workflow systems; business intelligence and analytics capabilities as data and its analysis are key differentiators; claims monitoring and analytics to identify trends and highly impactful claims; and an awareness of InsureTech solution providers for partnering or acquisition opportunities.

More on this can be found at: https://novarica.com/business-and-technology-trends-large-commercial-brokers.

The Need for Change in the Annuity Market


Chris Eberly

As previously reported and discussed, even though sales numbers for the annuity market struggled in 2017 they did look better in the fourth quarter for fixed products. Much of the reason for this late uptick in the year was attributed to the special transition period to 2019 of a good part of the DOL fiduciary rules, exemptions, and amendments. This could change and possibly put best-interest, commissions, and other topics back into the light as there seems to be a shift from the DOL to the SEC and NAIC according to a recent article on InsuranceNewsNet. This could certainly create some concern for annuity carriers as they continue to look for ways to capture customer needs, grow market share, and ultimately grow the overall market.

Carriers and new entrants have made some significant changes or improvements in product offerings with the focus to grow sales. In particular, these carriers and new entrants have created new direct to consumer products, flexible variable annuity products, “personal pension” focused products, and better fixed products to bring needed performance, guarantees, and customer experience amiable to today’s consumers. These changes have stretched many IT organizations to deliver solutions in the timeframe required by the business, and certainly many of those IT teams are having to modify and work around legacy platforms in the process. Many CIOs have updated or are in the process of updating their IT strategy documents to ensure they have the flexibility and capacity to meet these significant business demands. Further movement in regulations and resulting product requirements will only continue to up the demand and requirement for speed and agility. CIOs who need all the time they can get to react and adjust can no longer wait for normal project management processes to occur but rather they need to engage directly, understand all market conditions, and work with organizational peers to determine direction and solutions.

The need for CIOs to move away from legacy platforms, services, and processes is expanding as the need for change continues to grow. By combining an efficient operation model with products that reach and meet the needs of changing distribution, products, regulatory entities, and customers, carriers will see a much needed improvement in market share and overall market expansion for annuity products.

Virtual Reality for Real Pain Management


Keith Raymond

Augmented reality (AR) and virtual reality (VR) are among many evolutionary technologies making inroads into conversations at all levels of technology leadership. These separate and distinct technologies may ultimately represent another channel through which insurance companies can serve digitally immersed stakeholders. They have potential real-world implications that span risk mitigation, improved efficiency and loss ratios, enhanced customer experience, and in this example, the potential power of healing.

The technology evolution in insurance continues… A recent article in Property Casualty 360 described a group of companies consisting of a P&C carrier, hospital, and tech company that are collaborating on an application for virtual reality to help manage chronic pain related to workplace injuries. They are looking to research the effectiveness of digital pain-reduction using therapeutic virtual reality and wearable technology. They see this as a potential alternative to opioids, which have caused addiction rates to skyrocket in the US, and which can also mask pain, thus making recovery more challenging. The VR approach is a non-pharmacological supplement to managing pain.

We are seeing the advancements in virtual and augmented reality start to evolve significantly in insurance in both real world applications and innovation. The world as we know it will continue to change fairly rapidly as the trials and research broaden in all aspects of insurance with healthcare and property casualty leading the charge. Smart-glasses, VR headsets, and smartphone applications have helped to disperse AR and VR to the masses, and consumers are increasingly growing comfortable with this technology. Even so, AR and VR are still very much “in the lab,” and their applications to insurance are mainly speculative, with few pilots to date. Regardless of impact, taking advantage of this and other emerging technology requires investment in robust digital, data, and analytics capabilities. Though the technology is still in its infancy and can be quite expensive to build and deploy, a number of companies are working on making AR and VR more accessible to large organizations and consumers. As these technologies advance, they will become more accurate at measuring and rendering, thus getting closer to becoming viable.

The effects of VR and AR on the insurance industry will be most impactful over time, and their potential to influence and enhance the customer experience is thought-provoking. Insurers should plan to monitor and engage with these technologies in the future. Exciting times lie ahead.

Ecosystems Matter… A Lot

Rob McIsaac

One of the key “lessons learned” from our Innovation Tours to Silicon Valley is that the network of capabilities available in specific areas provide them with a tangible advantage when it comes to delivering on the promise of major technological advances. The combination of a highly educated labor force, access to investment capital, research capabilities, and the correct legal framework are all contributors to creating an environment that fosters both calculated risk taking, portfolios of opportunities, and a willingness to press the envelope on what can be considered possible. The combination of these factors creates a unique ecosystem in Silicon Valley that can be best described as delivering on the promise of two degrees of separation.

In the current era, we hear frequently about other regions looking to build out their own forms of “innovation” centers. With a focus on factors that they believe will create a draw to boost the local economic prospects the civic concept is that these centers may replace industrial bases that have matured or moved on. While this is great in concept, the reality is that it takes time, potentially significant time, to actually move the innovation needle in a significant way. After all, Silicon Valley traces its roots to 1938. Research Triangle Park in NC dates to 1955. The 128 Corridor in the Boston area reflects back to at least the 1940s. Clearly these places do not evolve overnight, but with the right nurturing their impact on the local economy can be both persistent and far reaching.


Which brings us to one of the most celebrated, and hyped, corporate real estate hunts of all time. Amazon has made quite the splash in their ongoing effort to locate HQ-2. The list of possible sites was recently narrowed to 20 and, as the Washington Post reported, the writing of a big subsidy check “probably won’t tip the scales.” Instead what these cities have is “a common interest in university research, science education and accessible neighborhoods.” These are not assets that were created overnight, but rather the result of a demonstrated long-term commitment to building out these environments. In the study conducted by WaPo, which interestingly enough, is owned by Amazon’s Jeff Bezos, they concluded that all of the current cities in the competition are building competitive tech economies (i.e., ecosystems) that they will benefit from irrespective of Amazon’s eventual decision. Joseph Parilla, of the Brookings Institution, notes that creating these ecosystems is really hard work that “has to be built up over decades. You can actually make the types of investments in innovation and collaboration that will benefit your community — and by the way they are things that Amazon and other companies like, too.”

Which of course highlights other decisions that companies have made recently in terms of their own focus on locating technology organizations to leverage access to resources and the ecosystems that can support their own aspirations for growth. MetLife recently opened a Global Technology Office in RTP, MassMutual is moving additional assets into Boston, and Prudential has opened an innovation center in Silicon Valley. Each presumably expects to create competitive advantage by being in a place where there’s a reasonable chance that a rising tide can lift all ships.

One of the fascinating conversations we recently had with the new CIO at Salesforce (SFDC), Jo-ann Olsovsky, was that one of the critical realizations that she needed to drive across her management team while at BNSF was that they needed to transform themselves from a transportation company into a technology enterprise. For insurance carriers that realize that this is also a differentiating aspiration, thinking about what ecosystem they want to be a part of may be a fair first question to answer.

Vendors: You’re Always Selling to the CIO


Matthew Josefowicz

Many technology vendors like to believe that they’re “selling to the business.” They concentrate on claiming huge business benefits and persuading business executives hungry for new capabilities that they can wave a magic wand and give them everything they want without being stopped by those killjoys in IT. You know, the folks who worry about implementation, integration, security, compliance, long-term cost of ownership, etc.

“But this is how Salesforce did it! And that’s how Apple got into the enterprise!” these vendors cry.

This is true. If you are selling technology that a business unit can sign up for with a credit card and start getting value from without any integration, then the Salesforce.com play is for you. If you’re piggybacking off millions of dollars of consumer marketing to the mass affluent, then yes, the Apple play is for you.

If not, CIOs may not be your initial champions, but they better not feel like you’re about to mess up their worlds. Because here’s what happens after the vendor leaves the room.

CEO: “I love this technology, I want it! Let’s bring it in.”
CIO: “OK. It will cost millions of dollars to integrate with our existing systems, and I can’t vouch for its security, performance, or longevity.”
CEO: “OK! Forget it. I’m already on to the next thing.”

Selling to the line of business, the CEO, or CFO can be a very successful strategy. As long as you’re also selling to the CIO at the same time, and you have a clear message about how the solution will fit into their worlds and make their lives better.