Offering Experiences: The Emerging Basis of Competition

on Jan 31 by Barry Rabkin
Tags: basis of competition, distribution channels, edgeIPK, experiences
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Can you imagine running into Steve Job’s office at Apple and exclaiming: “Steve, I just realized that the new basis of competition is being able to provide world-class experiences for our customers !” Either he would laugh you out of his office or call Apple’s security to throw you out of the company. Steve Jobs already knows that offering experiences is the way for companies to achieve stronger competitive differentiation and larger market share.

Apple, of course, is not the only company that has been pursuing this strategy. In our world of insurance, USAA, Progressive and Chubb are three insurance companies that immediately come to mind as companies providing a world-class experience for their clients.

But what about your insurance company? Of if you are a producer, what about the insurance agency or broker you work for? Does your firm provide a world-class experience? Is it planning to offer a world-class experience? (By the way, it is your customers, producers and other stakeholders who would be the ones deciding if your company offers a world-class experience.)

Let’s assume that either your company wants to offer a stronger experience or offer an experience in the first place. (Yes, every firm offers experiences. It is just that most of the stakeholder interactions are labored, awkward or otherwise painful.) What technology firm might you consider contacting that would enable your insurance company or agency / broker to offer experiences for your policyholders, prospects and others?

edgeIPK.

Who is edgeIPK? My question exactly. On Wednesday, January 27^, 2010 Wendy Corman, the newly appointed president of the U.S. division of edgeIPK and her colleagues were gracious enough to brief me about edgeIPK and show me a demo. The purpose of this post is to get across the highlights of that briefing.

Please note that I am not saying you should rush out and purchase edgeIPK’s products. But given that three of their insurance customers are Allianz, Zurich and Willis, you might want to consider reaching out to edge for a conversation, a demo and potentially creating a pilot for one of your lines of business. I’ll leave it to you to decide if you want to go their web site, find the contact information and call them.

So, what does edgeIPK offer? Edge enables insurance companies the ability to wrap and extend their functionality simultaneously to multiple delivery channels in multiple formats. That means, your insurance company can provide the same look-and-feel to producers, policyholders, prospects or others regardless of the nature and form of the interaction.

Say what? Edge enables insurer or broker functionality to be delivered in a consistent look-and-feel to the web, to mobile devices, and to laptop computers. A critically important point is that edge is ‘target platform agnostic’ so it doesn’t matter if the insurance company or broker is reaching out to people who use IE, Firefox, Safari, or other browsers. Nor does it matter what version of those browsers the target audience is using because edge (supposedly according to Wendy during the briefing) keeps up with all the browser versions and ensures the content can be correctly rendered for the target audience.

Edge capabilities can be used by marketing, distribution and call center staff in the home office as well as field office, agency or broker staff. Edge realizes insurers conduct business on a global stage and so supports multiple languages and multiple currencies. As they told me during the briefing, edge can easily handle our UK cousins use of ‘u’ everywhere as well as our US spelling. Edge supports Spanish, Chinese (Mandarin, I believe) and many other languages.

Edge uses their open presentation platform to quickly configure screens for the home office or field office user or agent or broker. Edge can configure composite screens from different applications which is particularly useful for home office call center representatives or agency support staff.

Edge focuses solely on the presentation of the information required by the insurance company or agency for their target markets. It is part of their skill set to keep up with the growing number of widgets and widget libraries. Occasionally edge will even create their own widgets for their customers when necessary. Edge also deals with security and performance to ensure that the insurance company’s target audience – regardless of end-device or browser – experiences approximately the same level of performance.

Yes, edge is new to the United States. They are in the process of building both sales and services teams here in the U.S. But based on my thirty-plus years in the insurance industry, I believe they are worth a look. Edge gets it: with the evolution of the web, the growing number of devices that clients and field personnel use, and the absolute mandate for insurance companies (and agencies and brokers) to provide a consistent look-and-feel for their policyholders, prospects and other stakeholders, edge provides the software to make that all happen.

Insurers do not have to replace their legacy systems or purchase new core administrative systems. Edge wraps around all of those systems and enables insurers to bring their ever-increasing number of Moments of Truth to the level of a world-class experience.

I’ll be checking back with edge and their insurance customers periodically to see  how edgeIPK is doing in the insurance space.  But to repeat, based on what I saw and heard (and given that Zurich, Allianz and Willis are world-class organizations themselves), I suggest you call edge and see what they can do for your company.

The Seamless Society

on Jan 25 by Barry Rabkin
Tags: Digital Immigrants, Digital Natives, Seamless, Supply Chains
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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?

Industry Technology Analyst Firm: Jazz Band or Symphony Orchestra?

on Jan 20 by Barry Rabkin
Tags: Analyst Firm, Industry Technology Analyst Firm, Intellectual Property, IP
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Would you compare an industry technology analyst firm to a symphony orchestra or jazz band?

Let’s focus this a bit more: you have been asked to join an industry (pick the vertical domain of your choice) technology analyst firm. Would you expect this analyst firm to generate IP (intellectual capital) and be more successful competing if it resembled a symphony orchestra or a jazz band?

Both have talented musicians; both have a leader of some flavor; both mandate that the musicians constantly practice to maintain their skills. Musicians of either entity must be respected as experts with their instruments. Switching to the analyst world, the onus is on both the analysts and the analyst firm to ensure that the analysts recieve the training they need or attend relevant conferences to maintain and build their level of expertise.

Both types of musical entities follow a musical score although in different ways. Symphony musicians have the score in front of them and a conductor they follow for guidance of pace and intensity. Jazz musicians rarely, if ever, have a musical score in front of them. They all “know” the music and are guided lightly by a leader who directs the  individual members as to the order of their solos, duets or other combinations within the larger group.

Similarly to the symphony orchestra, jazz musicians select the songs they will be playing for their audience during their rehearsals.  And in the analyst world, analysts know the key themes or issues they will be generating their IP about before their fiscal year begins. 

Two areas where jazz musicians differ from their symphonic counterparts are freedom to experiment and having the ability to blend their sounds together in unanticipated ways in real-time. Jazz musicians are expected to experiment with variations around themes they express with their instruments. They are also expected to blend their sounds together in real-time and usually (in what seems to be to the audience) unexpected ways with other members of the ensemble. (Yes, there are musicians who play their own cadenzas as soloists with symphony orchestras but I would submit they do not have anywhere near the degree of freedom jazz musicians do.)

Another area where jazz musicians differ from their symphonic counterparts is that jazz musicians, sensing their audience, can and do take liberties with new selections not identified during their rehearsals. They can do this because they have a broad library of music and musical explorations in their knowledge set and, as importantly, they know how to blend their sounds together to get the best outcome possible for their audience.

Similarly, analysts must be able to generate IP about new events or issues that have either reached the radar screen of their clients or that are soon-to-emerge on their client’s radar screens. And they must be able to do this even if these issues were not identified for their formal research agenda. Of course, they do have to let the ‘leader’ know so that person can potentially identify other IP streams that might help the new content or that could be helped by the new content.

Because of the differences mentioned above, an analyst firm is more like – or should be more like – a jazz band. Whether I worked for an analyst firm or was a client of an analyst firm, I would want them to be able to experiement around key themes, to blend their skills together and to find new issues that would be impacting me that I didn’t have time to discover myself.

Analysts, like jazz musicians, need an environment that supports their ability to experiment with different perspectives of existing concepts; motivates them to blend their IP or analytic skills together, and permits them to explore new concepts all  in a way that produces a very rich, pleasing, and quite possibly, unanticipated outcome for their clients.

Swing, baby, swing!!

Influencers

on Jan 12 by Barry Rabkin
Tags: Influencers
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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

on Jan 03 by Barry Rabkin
Tags: anthropolgy, commerce, long tail, networks, psychology, Web 2.0, Web 3.0
Comments: 1 Comment �

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

on Jan 02 by Barry Rabkin
Tags: Ethernet, Internet, wireless
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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

on Dec 24 by Barry Rabkin
Tags: Analogue, Digital, FaceBook, Twitter
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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?

Redefining Customer Experience

on Dec 21 by Barry Rabkin
Tags: BMW, Customer Experience, Customer Service, Herb Chambers, Joe Pine
Comments: 2 Comments �

Do you enjoy bringing your car in for service? I never cared one way or another. Last week bringing my car in for an oil service turned out to be a truly wonderful experience.

Full disclosure: I always bring my car back to the dealership I bought the car from. I usually lease my car so I figure the car is really their property. And because it is a BMW, I only want BMW technicians working on it. But now that I (really) own the car, I still only want BMW technicians handling it.

To digress just a bit – but, not really, because this discussion is all about providing a ‘wow’ customer experience – do you remember a book Joe Pine co-authored back in 1999 with James Gilmore titled “The Experience Economy?” The full title was “The Experience Economy: Work is Theatre & Every Business a Stage.”  It was Harvard Business School Press and the ISBN number was 0-87584-819-2. The Amazon.com link is here.

The main argument of the two authors is that “recognizing experiences as a distinct economic offering provides the key to future economic growth.” They also note that “mass customization automatically turns goods and services into experiences.” And yes, Joe Pine wrote a book in 1993 about mass customization titled “Mass Customization: The New Frontier in Business Competition” also published by Harvard Business School Press. That Amazon.com link is here.

So, why did I get excited about having a straight-forward oil service done?

I purchased my BMW from Foreign Motors West (FMW)  in Natick, Massachusetts about 4 years ago. Recently, FMW was purchased by Herb Chambers. Mr. Chambers owns some 46 dealerships selling a vast array of automobiles and other vehicles. I had been wondering how the FMW service (which was always excellent) would be changed because of the new ownership.

Here is the process: I drove to BMW of Sudbury (Massachusetts) and waited in front of a large door (I was quite early …. always am… drive my wife crazy). The service door opened and I drove into a large area. There was a “greeter” in front of me motioning for me to pull forward. After stopping at the spot she designated, she took me directly to my customer service representative (CSR). I handed my BMW key to my CSR who then entered the key into a reader (FMW also had this same capability) to capture current mileage, other readings pertinent to my BMW (what service was noted as needed by the on-board computer), and the specifics about me (work and home phone numbers).

I was directed to the waiting area inside the dealership. The waiting area was quite large and separated into distinct areas: a coffee bar with high-top tables in the coffee area, a semi-circular area with comfortable chairs facing a fireplace, and a business area with eight individual work areas. One of the business center work areas had a computer connected to the Internet. The entire dealership provides free wireless for their customers.

While the technicians took care of my oil service (and flushed and changed the brake fluid), I had two cappuccinos and a hot chocolate (made, I’m very happy to say with milk instead of water). The person making the morning drinks told me they even had little marshmallows for anyone who wanted them in their hot chocolate.

I had an opportunity to meet a very pleasant customer at the coffee bar and talked to him while I was waiting. (It turned out he was an independent insurance adjuster. What are the odds?)

But the piece de resistance for me was when I had to use the restroom. When I entered the restroom I heard CNN. OK, we have stayed at hotels that had television speakers in the bathroom. But no, that is not what I heard… not exactly. At eye-level at each of the urinals was a 7-inch television screen showing the CNN broadcast.

Now c’mon….. turning the waiting service area into an airline club area is, for me, a stroke of genius. My waiting time went quickly even though I had brought reading material for the 2010 State of the Insurance Industry Report I’m working on to publish to this web site late January 2010. The surroundings were extremely nice and very comfortable.

The CSR walked over to me to let me know my car was ready – and washed, of course – and took me over to it. Naturally it was inside just in case of bad weather. I got in, she raised the door in front of me, and I drove home anxiously waiting for my next service appointment.

What is your insurance company, agency or technology firm doing that provides such a great customer experience?

NYL Is Improving Agent Use of Social Media

on Dec 16 by Barry Rabkin
Tags: Compliance, LinkedIn, New York Life, NYL, Socialware
Comments: 2 Comments �

New York Life’s tag line is “The Company You keep.” New York Life (NYL) recognizes that the “company you keep” has to be involved with social media because that is where a growing number of their clients and prospects inhabit. In particular, NYL continues to build momentum and experience applying social media to strengthen their interactions and relationships with their agents and policyholders. Most recently, NYL has invested their time and resources with two social media initiatives supporting their agents: one involves using a technology start-up company and the second involves LinkedIn.

NYL is working on a Proof-of-Concept with a technology start-up company to ensure that their agents remain compliant regardless of which social media sites they use. This start-up technology company accomplishes this by getting in the middle between NYL’s agents’ dialogue and social media sites the agents want to post information. With the solution from this start-up, NYL agents can use Facebook, Twitter, Flickr, LinkedIn and other social media sites.

Is this “Big Brother” in action? NO! The life insurance industry is a heavily regulated industry by the States the insurance company does business in and by various Federal Government agencies (such as SEC or FINRA, formerly NASD). The insurance industry also must comply with industry regulations as well.

Using the solution from the start-up company, NYL is ensuring that their agents can participate in the conversations of the digital marketplace whenever they want and remain compliant to the plethora of never-ending regulations. One other benefit of NYL’s application of this solution was the immediate realization that the Compliance Department had to be brought into the (use of social media) fold from the beginning – just as it should be.

NYL’s second initiative is with LinkedIn. Working with Sales & Distribution management, NYL created a template for their recruiting managers and agents who either are using or want to use LinkedIn. The templates provide NYL agents with a way to go beyond the obvious uses of LinkedIn and get much more out of LinkedIn’s functionality. With these templates, NYL has crafted a set of Best Practices that the company and its agents can improve going forward in time. NYL is driven to facilitate the agent’s ability to put themselves forward into the marketplace in a way they can best explain their personal value proposition to their policyholders and prospects.

Also regarding LinkedIn, NYL is participating in LinkedIn’s Beta Company Profile program. NYL has added several customized features, including video to the standard algorithmically-produced page, to provide a much more robust and richer media experience for their prospective agents and employees, and of course, existing policyholders. In particular, NYL has created a customized view for prospective agent recruiting of the insurance company for anyone whose LinkedIn profile indicates having a sales background or interest in sales.  Eventually NYL wants to feature as many as 72 different sales recruiters over the course of a year.

I was told at the end of our discussion that NYL realizes their agents – social networkers by nature - are using social media. The company wants to direct those activities in a manner that benefits their agents, policyholders, prospects and regulators. They feel (correctly) that the best way to do that is to adhere to the guiding philosophy “let the community live!” But, and here are important lessons for other insurance companies, monitor the community, pay attention to the community, and most importantly, learn from the community to sharpen the company’s strategies and tactics to best meet the expectations of all of the company’s stakeholders.

What is your insurance company doing? How is it applying social media to enable its agents or brokers? What social media software (whether Socialware or others) is your company looking to best engage in the dialogue within the social mediasphere?

Naughty or Nice

on Dec 15 by Barry Rabkin
Tags: Santa Claus
Comments: 2 Comments �

Iggy ran into Santa’s office and was almost out of breath when he got there and sat next to Robby. Robby, of course, had arrived on time and he and Santa were enjoying a warm cup of hot chocolate – with those little peppermint marshmallows – and munching on some just-out-of-the-oven sugar cookies he loved so much.

Santa merrily chuckled when he saw Iggy plop down and waved off his tardiness.

“Don’t worry about it. Here, have a cup of cocoa and some cookies. Let’s get to it. You two know I need your help deciding who has been naughty or nice in the insurance industry space.”

“What do you recommend? I had asked you, Robby, to think more about the insurance industry and you, Iggy, to think about the technology companies supporting insurers.”

Santa reached for another delectable sugar cookie covered with the many-colored sugar sprinkles. “Tell me who should get what so we can finish our N & N list.”

Robby said he did have some thoughts:

• Let’s give the life and annuity insurers a large dose of hope for 2010. They are going to be regulated up one way and down the next in 2010. Plus the retirement crisis hasn’t really pushed sales as high up as it should have. probably due to the recession.
• For property and casualty insurers, predictive analytics and other modeling capabilities would be nice stocking-stuffers; plus a large dollop of reality of the necessity of federal regulation. The marketplace has moved well into a national – and really international – framework.
• For state insurance regulators we need both lumps of coal for those who think insurers exist primarily as whipping posts so they can remain in office – and lumps of sugar for those regulators who understand without reasonable capacity as defined by actuarial standards, insurers won’t be able to do business in their states in the first place

Santa put down his hot chocolate. “Anything else we need to put on the list for insurance industry players?”

Robby said there was one last item and it was a big one: “we need to leave a large saw for all insurers so they can clear a wide path in their companies to apply enterprise risk management practices and systems.”

“That’s a good one,” Santa guffawed. “And Iggy, what should go on the list for technology firms supporting the insurance industry?” Santa asked as he got up from his desk and poured More hot chocolate for Robby, Iggy and himself.  

“To begin with,” Iggy said “I want to give technology companies a large tub of white-out or white tape.” “Why,” Santa asked. “Because everytime a really new concept comes along, too many technology firms just relabel what they were already selling and say they are now offering the new concept.”

“I also want to give some of the outsourcing companies sets of small scissors to help them cut out all of those CMM levels and professional designations from their business cards.”

“Isn’t industry training important? Isn’t capability modeling important?, ” Santa asked.

“Of course it is but we know from talking to insurance professionals they really care about their outsourcers having actual, demonstrable insurance industry experience and referenceable clients whose company names carry some weight.”

“That can’t be all, ” Santa exclaimed, blowing the excess heat from his cup of chocolate and putting more of those tiny marshmallows in at the same time.

“Nope, there’s more,” Iggy said and rattled off:

• For technology firms new to the insurance industry, I’d put HBR Case Studies in their stockings. These companies have to come up with sharp and unstandable value propositions and ways to truly differentiate themselves from the existing technology players.
• For technology firms who are in a specific niche – say billing or even predictive analytics – we should give them a financial planning manual to they can prepare themselves to be acquired … or maybe directions to the nearest white knights.
• For technology firms who are creating products or services based on new technologies (say, semantic technologies), I want to give them a 48-month annual calendar because selling something new to the insurance industry is going to take a very, very loooooong time.

And that’s it, Santa. Iggy reached for two more of those sugar cookies.

What would you add to either Robby’s list for insurers or Iggy’s list for technology firms to help Santa decide what to pack in his bag in 10 days?

Classics

on Dec 12 by Barry Rabkin
Tags: experience
Comments: 2 Comments �

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.

Tenants In Time

on Dec 10 by Barry Rabkin
Tags:
Comments: 3 Comments �

You and me

and everyone and everything we see

are tenants, tenants in time

 

We demand permanence

we strive for permanence

but it’s not to be

for we’re tenants, tenants in time

 

We exert ownership

of our artifacts, of our surroundings

and the places we live

as if that belief or perception

will keep change at bay

 

We make laws, rules and regulations

prohibiting change we don’t want or

slowing change we don’t like

but really to no avail because

we’re tenants, tenants in time

 

Our attempts at stasis, of blocking the

wind, stopping the tide

or keeping the character of our places

are meaningless and futile activities

because we’re tenants, only tenants in time

 

When the landlord asks us to leave

we will

because we know it’s not a request

it’s just what happens

regardless of our desires or wishes

because we’re tenants, tenants in time

 

We expect to meet our family or

our friends when we leave

we believe, we hope we will

but knowledge eludes us

because we’re tenants, only tenants in time

Volume + Velocity = ?

on Dec 10 by Barry Rabkin
Tags: Google, Pace of Change, social media
Comments: No Comments �

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?

Razors and Razor Blades

on Dec 08 by Barry Rabkin
Tags: experience, Strategy
Comments: 2 Comments �

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.

Architecture of Geographic Reach for Insurance Companies

on Dec 04 by Barry Rabkin
Tags: geographic reach
Comments: 2 Comments �

When we consider the set of insurance companies based in the United States, there seem to be six types striving to succeed in their particular marketplace :

• Local: this type of insurer offers its products and services to a few counties or perhaps one state
• Regional: this type of insurer offers its products and services to two or more states
• Super-Regional: this type of insurer offers its products and services to most, if not all, of the states in a specific geographic region as defined by the U.S. Census (e.g. Midwest or Mid-Atlantic)
• National: this type of insurer offers its products and services throughout the entire United States
• International – Adjacent: this type of insurer offers its products and services throughout the US and to either Canada or Mexico (or both)
• International – Broad: this type of insurer offers its products and services throughout the US and to one or more countries around the world

As insurers in the US decide how to expand geographically to reach more customers there are several matters they need to deal with:

• Diversify risk: I would submit this is one of the primary reasons – along with economies of scale – that drive an insurance company to widen their geographical reach
• Manage more regulatory requirements: One of the pleasures of being regulated by 50 state insurance commissioners is that once an insurer has met one state’s regulatory regime, it has met just that one state’s regulatory regime
• Become locationally intelligent: expanding the reach of the insurer’s products and services to different markets mandates that the insurer becomes intimate with the consumer and business demographic profiles of that geography as well as with the skills and expertise of the available distribution channels, the economy of the geography, and the actual terrain of the geography (i.e. to better assess property risks and liability risks if the insurer is a property/casualty insurer)
• Widen distribution channel mix: Unless the insurer is using online methods to reach, sell and support their products, the insurer moving to wider geographies will also need to appoint agencies or brokers in the new geography and create new field offices as well
• Leverage product offerings: it is quite possible that the insurer can apply its same products – albeit with changes required by the state insurance commissioners’ offices – in the new geography as it sells in its existing markets. But the insurer should also take the opportunity to ‘tune’ its products and services according to its locational analysis of the new markets
• Create location-specific customer service: prime example at play here is moving to minority-majority areas where mere translation of its marketing materials is far, far from being sufficient. Additionally, the insurer should have producers in its distribution channel mix and customer service representatives who are from the cultures being targeted in the new geographies.

What would you add to these lists?

Two Perspectives Enabling Stronger Strategic Options For The Insurance Industry

on Dec 03 by Barry Rabkin
Tags: content management, context, document management, Information, media
Comments: No Comments �

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?

Objects In Mirror Are Closer Than They Appear

on Nov 23 by Barry Rabkin
Tags: competitive dynamics
Comments: No Comments �

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?

DK / DE

on Nov 23 by Barry Rabkin
Tags: LIMRA, risk management, tactics
Comments: No Comments �

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?

Web Information Discovery Strategies

on Nov 15 by Barry Rabkin
Tags: Book of Odds, context, Google, Web 3.0, Wolfram Alpha
Comments: 1 Comment �

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!!

on Nov 13 by Barry Rabkin
Tags: iPhone, iTunes, Shazam
Comments: 2 Comments �

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

on Nov 12 by Barry Rabkin
Tags: competition, pricing models, societal interference
Comments: 1 Comment �

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?

Place, Pace & Perspective: Three Key Strategic Forces

on Nov 05 by Barry Rabkin
Tags: Pace, Perspective, Place
Comments: No Comments �

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?

Here's Looking At You, Kid !!! Insurers Should Look Forward to Web 4.0

on Oct 26 by Barry Rabkin
Tags: Augmented Reality
Comments: 2 Comments �

We all know the web is in a constant state of change, of evolution. I’ve thought of where the web has come from, where it is, and where it is headed in terms of groupings of capabilities. To me, right now, I see four groupings:

• Web 1.o – what we had initially and it was all about content. Companies used these capabilities, such as they were, to provide brochureware to clients and prospects who clicked over to their company web site.
• Web 2.0 – the sweet spot of where we are now and it is all about collaboration. I see the collaboration as having two major flavors – 1) collaboration between people expressed by social networking – and 2) collaboration between software programs expressed by web services
• Web 3.0 – the contextual web and where we are headed next. The capabilities inherent in the contextual web are semantic technologies which enable the meaning(s) of text data to be understood, managed and analyzed.
• Web 4.0 – the world of confluence where tangible assets and intangible assets come together in meaningful ways. We see the beginnings of that in some of the apps on the iPhone (and probably on the Blackberry but, alas and aghast, I don’t have one of those.)

Another instantiation of Web 4.0 is augmented reality - wearing goggles that have information available to the person wearing them to better complete various tasks. The Technology Review article the link points to discusses how mechanics can complete their jobs faster and more effectively.

But think about using AR goggles for insurance claims adjudication and management.

Using AR goggles, a claims adjuster could visit a homeowner who is claiming a loss and see both the actual home as it is now after the loss and the home as it was before the loss. The AR goggles could access information from the insurance company’s databases or sources from the web showing detailed information about labor requirements, building materials and costs.

More generally, the AR goggles could show the processes and resources needed to adjudicate the claim in a way that remediates the loss to bring the claimant’s home back to the way it was before the loss event.

Similarly, AR goggles could be used by claim adjusters for automobile claims.

Yes, augmented reality might be as far off as ten years from now but I wouldn’t be surprised if some industries – other than our slow-moving insurance industry – are using AR well before that. Would you?

Thinking About Technology

on Oct 21 by Barry Rabkin
Tags: Alan Kay, Societal expectations, technology
Comments: 2 Comments �

Alan Kay defined technology some years ago as that which wasn’t around when you were born. Of course, he said it much better than that but the point stands. When you arrive in the world and become cognizant of your surroundings – including the technology that your parents use, you use, your friends use – you just think of all that ‘magic’ as normal.

Of course, we can project ourselves at many miles per hour or talk to family and friends across the globe; or see our favorite projected sights whenever we want (whether on television or YouTube or embedded in our social networking media); or text a message and expect an answer back instantaneously. We breathe, don’t we?

Those technologies are just part and parcel of our environment. They inform a baseline experience.

That baseline experience gets enhanced when the existing technologies are used in new and varied ways. That baseline experience gets enhanced when new technologies alter how we go about our daily life whether at work, play, or shopping.

Specifically the baseline moves up a notch or two or more when the application of current and emerging technologies alters  our interactions with other people, with how we conduct or affairs and, as importantly, with other technologies.

No company is an island onto itself. But you could be excused if you thought so because many companies behave as if they were impenetrable and highly fortified castles in their own right. You feel that when you ask yourself “how come I can do (fill in the blank) with that company but not with this company?”

The new baseline redefines your experience. The new baseline defines a new floor of your expectations. Companies that don’t meet those (new) expectations are competing on precarious ground.

What technologies or applications of technologies have heightened your baseline experience?

Life Insurers: Managing The When & How of Meeting Clients

on Oct 21 by Barry Rabkin
Tags: FaceBook, Life insurance, LinkedIn, Location, MySpace, Timing, Twitter
Comments: No Comments �

No, the above title is not a typo. I mean ‘when.’

The matter of ‘when’ has been changing over the decades. Back in the quite olden days of the husband working in an office and wife busy at home with 2.something children (and a dog),  life insurance clients or prospects could be reached after dinner if you wanted to talk to both spouses. That was ‘when’ was quite straightforward.

And so was the ‘how’ – a phone call. And that phone call was to a landline (or wireline if you prefer).

These days the ‘when’ is much trickier. Both spouses may be working; one spouse may be working and the other spouse is out of work but looking; both spouses may be looking for work; the stay-at-home spouse may be working at home or taking care of the children and off-and-about doing errands. Or possibly one or both of them are retired and gallivanting hither and yon.

Of course, the technology options that can be used to reach any of these people has become quite a full palette of possibilities.

Here’s one list of suggestions to reach potential life insurance prospects:

• Gen Y or younger Gen X: MySpace, FaceBook, Twitter (if the ‘following’ arrangements with each other are in place), texting  or other Instant Messaging (IM), or cell phone (do they even use a wireline phone?!)
• Older Gen X: FaceBook, IM, e-mail or cell phone
• Boomers: e-mail or wireline telephone (or possibly cell phone if you have a strong relationship with them)

And for those prospects of more complicated life insurance policies or annuities of some flavor – LinkedIn.

But what about a calendar service on the Web? Agents could upload documents for clients to view or print if they want. (Of course, agents could also create a document of potential meeting times and information to be reviewed, upload to a portion of their agency web site and send the URL to the prospective clients before the face-to-face takes place.)

How do you determine when to meet life insurance clients? What technologies do you use to arrange the meeting? To share information before the meeting? What technologies are your clients expecting or asking for to conduct business with you?

Yet Another Insurance Exchange Emerges

on Oct 14 by Barry Rabkin
Tags: insurance exchanges
Comments: No Comments �

Business Insurance published an article  written by Sally Roberts on October 11, 2009 titled “Broker group launching online placement system.”  Yes, this is yet another attempt at an insurance exchange in a long line of such attempts. Unlike natural biological systems where evolution seems to have quite a lot of success optimizing life for existing conditions, the insurance industry hasn’t had much luck with their many attempts at insurance exchanges.

Why don’t insurance exchanges find success? For an outsider, it seems like a great idea. And obviously it also seems like a great idea for producers (the demand side of the supply / demand equation) given all of their attempts to build a lasting exchange.

The goals and attributes of this latest version, which is a partnership between the Council of Insurance Agents & Brokers (CIAB) and LexisNexis, certainly are laudable. Some key points about this latest exchange from the article:

• Improve the efficiency and transparency of the broker-insurance distribution system while enabling insurers to differentiate their products (hint: this is a key factor to the potential success of any insurance exchange)
• Intermediaries will be able to submit a proposal for coverage to any of the participating insurers [hint the number and quality of these insurers are also key factors crucial to ongoing success] or wholesalers and collaborate with them on the underwriting, pricing and ultimate insurance placement
• Aggregate data flowing through the exchange to track marketplace trends including insurance pricing, individual insurer appetites{I wonder if some insurers will be shunned if they are not ‘eating enough’ as decided by ??], and new coverage introductions, in real time

Will this insurance exchange succeed where previous versions of this species quickly became extinct?

I’d be more excited about its future if there were also quotes from insurance companies in the articles that I’ve read. Insurers, after all, are the folks with the capacity – the money – to actually cover the risks.

Insurers have been none to friendly to these exchanges in the past because they do not want to become a ‘cell in a matrix’ and put themselves in a position to be chosen primarily (only) on price. Not that producers would do that, particularly in the general liability middle market where the pilots of this exchange will begin in the third quarter of 2010.

Of course, it might only take one or two insurers to participate in the exchange to break through… or not. BTW: look at the article in Business Insurance to see the costs of participation for both producers and insurers.

So, will this new exchange last longer than its ill-fated ancestors? Time will tell but I would not put much money on it until I:

• See the names of the participating insurance companies
• Find that these insurers remain on the exchange for, well, maybe not necessarily as long as Lloyd’s exists
• Better understand the revenue and profit pools for insurers, producers, LexisNexis and the CIAB
• Have a better handle on the information-based products and services the exchange will offer the market participants

What do you think? Will this insurance exchange be the one that survives? Why or why not?

A Few Lessons Learned

on Oct 10 by Barry Rabkin
Tags: career lessons
Comments: 1 Comment �

I have been fortunate to learn some key lessons from managers and colleagues along my path through the years in the insurance industry, management consulting and industry analysis.

One of the earliest lessons was from my supervisor at AEtna Life & Casualty was CSW or “completed staff work.” After he gave me an assignment and I finished it – or thought that I had finished it – he would look up at me as I was putting it in his in-basket and ask “if it was really completed, was I happy with it, was I sure there wasn’t anything I might have wanted to add?” I almost always kept the paperwork in my hands and took it back to my desk. Later either that day or a few days later I gave him a product that I felt sure met his requirements.

At Arthur D. Little (ADL)  I learned two lessons: one, to always put myself in my customer’s mind. And here I mean more than just wanting to meet our consulting client’s objectives. The main issue is putting myself in the mind of our client’s customers. What should our client be doing to improve their customer’s experience when they did business with that firm? Striving to put the chain of customer’s needs in mind continues to serve me well.

The second lesson at ADL was learning when to declare victory. When in an engagement to say, yes we have accomplished the client’s objectives and take the brush off of the canvas. You might feel this contradicts the first two lessons but it doesn’t. After all, most of our efforts – whatever it is that you and I do – are done in an environment of limited resources (whether time, money, skills, people or some combination). The challenge is to find the optimal solution (and yes, I’m suggesting we think through an Operations Research lens).

The next lesson is also an ongoing one and it applies, in my case as an industry analyst, to think like a VC analyst. No, I don’t mean push to earn as much money as possible in the shortest amount of time, sell out and live on a beach  in Maui. I do mean that my industry analysis will be sharper and deliver better results for my clients the more strategically I approach their situation.

What key lessons have you learned throughout your career?

Gourmet Magazine & Modern Bride … Gone!

on Oct 06 by Barry Rabkin
Tags: digital revolution
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I imagine most folks saw the news the other day that Conde Nast has decided to shut down four magazines including Gourmet and Modern Bride. My reaction to that news was whoa…. even though I’m not a gourmet and certainly not a modern bride. I have had the same reaction to my weekly ComputerWorld when it arrives. I have been subscribing to ComputerWorld for many decades and to see it shrivel down to its anorexic state is just … well just depressing. Yes, I do research and analysis of current and emerging technology’s impact on the insurance  industry. But to see the impact of the digital revolution on these traditional magazines is another matter.

I know, I know, you’re wondering about the ’so what’ as it pertains to our insurance industry.

The ’so what’ is fairly straight-forward. You and I both know hard-copy print is going the way of the dinosaurs except the magazines won’t be leaving society any future tar pits. So, here’s the thing: how many insurance company departments and field offices have left paper behind? How many agencies are now totally digital? How many claims adjusters are going away from paper?

How fast is the insurance industry moving towards totally – or even mostly – digital operations? Or are they waiting for Modern Bride to disappear? Hold on, it just did!

What about your insurance company or insurance agency? Are you off the paper-diet yet? Why not?

Prisoner of Our Own Experiences

on Oct 02 by Barry Rabkin
Tags: improvements, Innovation
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Back in 1973, my wife and I went to see American Graffiti. You might remember it was about hamburger joints, car-hops, cruising … all the fun stuff that she and I had enjoyed as teenagers. Even though we were from different parts of the country (my wife is from the Midwest – Kansas City, Missouri and I’m from one of the Boston MetroWest suburbs) we thoroughly enjoyed watching the movie and connecting with it.

At that time, I was working at The Hartford and one of my close friends who worked with me came from New York City. He and his girlfriend went to see the movie with us. As we walked outside afterwards, he said that was a fun movie but how could anyone come up with all of that ‘fiction.’ My wife and I just stared at him dumbfounded: fiction we asked? That was real, that is how we grew up, nothing about the basic tenets of American Graffiti was fiction.

He laughed at us. He couldn’t believe how we so closely identified with the movie. We asked him where he took his dates on Saturday night: night court, he answered without missing a heart-beat. And again my wife and I were dumbfounded. Night court?! Who takes a date to night court?

We are all prisoners of our own experiences. Those experiences shape us, inform us and act as signposts as we move through life. We have to remember that our experiences are not universal. More importantly, we have to look outside our experiences if we are to improve ourselves and more on point to my blog, improve how insurance business is transacted.

Improvements are far more than streamlining operations or speeding up transactions. Improvements include using current and emerging technologies to develop products that prospective policyholders and producers expect, deliver those products and services using technologies that may not be part of our experiences, and strive (and probably struggle) to keep up with an ever-changing environment and marketplace.

Without getting out of our prisons of past experiences, we’ll never find that mysterious but beautiful blond in the Thunderbird.

Insurable Interest – What Am I Missing????

on Sep 30 by Barry Rabkin
Tags: Insurable Interest, Life Settlements
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A long time ago – about four decades ago –  in a world different from our current world, I became a life actuarial student. I first was employed as a Summer Actuarial Student at John Hancock and after graduation, Hancock invited me to come back as a full-time employee. My first assignment was in  Hancock’s Actuarial Research department. Without getting too far off-track, I only passed two tests but through the dim reaches of time thought that they taught me you should only sell life insurance products to people who had an insurable interest.

And that made perfect sense to me. I didn’t need to pass more than even one actuarial test to understand that made perfect sense. Why on earth would anybody want to purchase a life insurance policy if they did not have an insurable interest?

Fast forward with blinding speed to current times and life settlements. Why would any policyholder owning a life insurance policy want to sell that policy to someone who had no insurable interest in them? Isn’t that basically asking the fox to guard the hen-house? Isn’t that asking for “an accident” to happen to them? Whether insurers or banks or others profitably securitize life settlement contracts or agents make decent commissions from life settlements is nowhere near the issue.

It seems to me to go against all reason. As a policyholder, selling your life insurance policy creates a moral hazard or in this case, a mortality hazard.

I think this practice should be outlawed. Immediately.

Tell me why I’m wrong!