Don’t Yank My Value Chain

In perusing Insurance Business America, we came across the insurtech weekly news roundup. In the roundup, we came across this:

The coronavirus pandemic has underscored the need for insurers to modernize but fewer than 25% of the 200 largest global insurers have truly digitized their value chain.

It might be more helpful to the remaining 76 percent or more of the largest global insurers if value chain — or digitized value chain — were defined. Then the largest global insurers would have a better chance of knowing what they were supposed to have been doing.

Our main office is in Michigan. During Michigan winters, value chains are what we put on our tires when it snows. But according to Investopedia:

  • A value chain is a step-by-step business model for transforming a product or service from idea to reality.
  • Value chains help increase a business’s efficiency so the business can deliver the most value for the least possible cost.
  • The end goal of a value chain is to create a competitive advantage for a company by increasing productivity while keeping costs reasonable.
  • The value-chain theory analyzes a firm’s five primary activities and four support activities.

Investopedia goes on to explain the five primary activities and the four support activities. But we still think value chain sounds a little stuffy. And four bullet points and nine enumerated items still feels a bit too complicated to communicate something that could be said more clearly and succinctly.

Plain English

Call us crazy. But wouldn’t it be easier to define value chain like this? Value chain connotes the activities needed to create a product or service and bring it to market. And if we did that, wouldn’t it be easier to grasp the concept of digitizing our value chains if we said this? Digital value chain connotes the activities needed to create a product or service and bring it to market using computers and the internet.

If we simplified the language we use to explain things and if we used less jargon, it would be easier to facilitate collaborative synergies and to enable the various parties along the digital value chain to transition end-to-end functionalities as a way of architecting turn-key functionalities for all of our end-user constituencies and to exploit innovative metrics to revolutionize extensible distribution channels.

See what we mean? 😉

Ripped From the Headlines

Sorry. We couldn’t resist making the title of this post as sensational as possible. But we did find a headline that intrigued us. It was this, from Insurance Business America: “Wisconsin Supreme Court rules against insurance coverage for COVID losses:”

The Wisconsin Supreme Court ruled on Wednesday, June 1, that businesses are not entitled to insurance coverage for losses resulting from the COVID-19 pandemic and related public safety restrictions … “One may think of the business-income provision as indirect loss-of-use coverage, but that does not change the fact that a prerequisite for that provision is still a direct physical loss or damage.”

And then we found the Supreme Courts of and Massachusetts and Iowa handed down similar rulings. Here’s the intriguing part: Loss-of-income insurance can cover revenues lost due to property losses. Disability insurance can cover wages lost by individuals due to illness or injury. COVID-19 clearly didn’t result in property damage. And few if any disability writers could have foreseen a global pandemic.

But the bigger question to us, it seems, is what happens when wages are lost due to governmental decisions to shut down entire segments of an economy? Wow. Talk about unforeseen circumstances.

Uncharted Territory

We’ve now been contending with COVID for about 28 months. That may seem like a long time. But the insurance industry works in mysterious ways. Developing insurance coverages at all requires huddling with actuaries, writing new products, testing them, rating them, underwriting them, pricing them, getting them approved by State DOIs, marketing them, selling them, and more. Compound all that with the vagaries of a global pandemic (or any other unforeseen disaster) and we’re working without experience, to say nothing of maps, compasses, and guide dogs.

Yes, these court decisions against COVID losses seem harsh and heartless, at least as they pertain to the interests of policyholders. But they’re learning experiences. We now know at least some of what we didn’t know before the pandemic. We can apply that knowledge in anticipation of future eventualities and to write contingencies into protections and limits against future uncertainties.

The most consistent thing ripped from the headlines these days is uncertainty.

We’re all doing our best to live with it.