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? 😉

The May edition of NU Claims contains an article entitled, “Cybersecurity compliance is about to get even trickier”. It contains this fact:

A January study by KPMG found that senior risk executives in the Americas reported record losses from fraud, compliance breaches and cyberattacks over the last year and expect threats to grow in 2022.

Granted, cybersecurity and cyber liability insurance are relatively new fields. But two of the reasons for the record losses are (1) insurers have been writing cyber liability coverage without fully understanding the extent or the complexity of the risks, and (2) their policyholders don’t understand the extent or the complexity of their vulnerability.

As with everything else, with cyber liability, we’re learning as we go. But there are things insurers and their policyholders can do to protect both parties.

Safety First

Before writing coverage, insurers can work with their prospective policyholders to make sure their environments have been evaluated and some manner of protection has been put in place. Those evaluative and protective measures should include but need not be limited to:

• Gap Analysis: Make sure environments and infrastructures are evaluated to determine levels of preparedness and to determine the ability to recover from potential cyberattacks or data breaches. If weaknesses are discovered, perform a …
• Vulnerability Assessment: Find the weak points and identify compliance gaps in the IT infrastructure. Evaluate points of remote access. Assess authorization levels for access to networks and systems. Analyze perimeter and internal defenses and system configurations. Categorize the risks and prioritize remediation efforts.
• Penetration Testing: Make deliberate attempts to hack environments to evaluate networks, software, security controls, and defenses.
• Monitoring: Make sure you have the tools in place to monitor and secure the IT infrastructure.

To help their prospective policyholders, insurers can also suggest their prospects make sure their cybersecurity vendors have one or more cybersecurity certifications. The website of the National Initiative for Cybersecurity Careers and Studies is a good place to start identifying the appropriate certifications.

Forewarned is Forearmed

No system or environment is hack-proof. That’s why there’s cyber liability insurance. But all systems and environment can be protected from the most common kinds of attacks. And insurers can help their prospects and policyholders mitigate their risks of fraud, compliance breaches, and cyberattacks.

The fact is we’re all in this fight together.

People don’t want to be sold. They want to buy. Do you think those sentences are contradictory? Consider this:

Think about what happens when you walk into a retail store. An attendant usually comes up to you and asks, “May I help you?”

You typically respond, “No, thank you. I’m just looking.”

In all likelihood, that’s not true. You’re not just looking. You’re hoping to be buying. But you’d prefer to be left alone to buy what you want — or to buy what you need — in your own time, without pressure from a salesperson.

Now think about this: You walk into that same retail store. The attendant approaches and says, “Hi. I know you’re probably just looking. So, please free and take your time. If you need help, I’ll be right over there. And if you’re interested, I can probably help you save 40 percent of the time you’d otherwise spend here.” Then she walks away.

What happened there? The attendant realized that your need to buy from her was much more important than her need to sell to her. She approached you with the intent to serve you and to make your visit to the store valuable.

No, This is Not Retail

It’s obvious enough that core processing software is not a retail sale. Core processing software is not a a commodity. It’s not an impulse buy. But it does serve business needs. And it does provide value.

That’s why we don’t run ads that say, “We won’t be undersold!” It’s why we don’t run limited-time discount offers. It’s why we cultivate trusting relationships, stand by our customers, provide the services they need to ensure the success of the implementations, and continue to enhance, improve, and add new functional capabilities to our software.

“Why are you telling us this?”

We thought you’d never ask. We’re telling you this because if our desire to sell you our software exceeds your desire to buy it — and to work with us for the good of your company — we’re doing it wrong. And if we come with any intention other than to serve you and to help you achieve your objectives, it’s the wrong intention.

If you’ve ever seen a demo of our software, you know it practically sells itself anyway.

If you haven’t, why not?

We received a report from McKinsey & Company called, “How top tech trends will transform insurance”. It begins with this statement: “Over the next decade, the fully tech-enabled insurer will bear little resemblance to today’s organization. Five trends, individually and in combination, will have a seismic impact.” Seismic impact is a little over the top. But to each his own.

Tech trend, #2, however — distributed infrastructure — struck as a little odd, particularly this statement:

As cloud matures, a rapid shift to the cloud for all core systems will help insurers to be more nimble in launching new products and creating better customer service. Cloud will also be critical for enabling the type of compute [sic] power that is needed to fully understand and make use of the incredibly large data sets (such as tens of millions of claims data points). 

The report was issued in September of 2021. So, over the next decade would take us well into 2031. That seems a bit odd since, according to Wikipedia:

References to the phrase “cloud computing” appeared as early as 1996, with the first known mention in a Compaq internal document. The cloud symbol was used to represent networks of computing equipment in the original ARPANET by as early as 1977, and the CSNETby 1981.

This appears to be yet another instance of our going back to the future. But that’s a subject for another blog post.

Which Is It?

The insurance is frequently criticized for being slow to adopt technology. Yet, in January of 2021, nine months before the McKinsey report was published, Clover Infotech wrote this in a post called, “The Impact of Cloud Computing on the Insurance Industry”:

Insurance companies are readily accepting and leveraging the robust cloud computing services. Cloud-based solutions, besides providing security and flexibility, also offer rapid provisioning, better asset visibility, and robust data governance facilities. Cloud computing has a huge impact on the insurance industry, with benefits for internal processes, new customer acquisition, and building policyholders’ loyalty.

If insurance companies were readily accepting cloud computing in early 2021, we’re not sure where the notion that it’ll take until 2031 for the rapid shift McKinsey projects came from. Ten years might seem rapid to a tortoise. But even the insurance industry is faster than a tortoise.

We suspect the industry would be well-served to look at the capabilities available to it now, rather than waiting for a series of confusing reports to come true.

If it does that, its capabilities in 2031 might be as yet unimagined.

It’s a new year. Spring is coming. That means the first trade show season of the year is coming. (Fall will be next.) That means a whole bunch of budgetary decisions have to be weighed against a whole bunch of social decisions. Given the gravity of those decisions, we decided to debate the issue amongst ourselves, pro and con. Here’s what happened:

Pro: Hey. How you doin?

Con: Really? That’s how you start a debate?

Pro: Sorry. I think we should sign up for the trade shows because we get to see people we haven’t seen in a while.

Con: Have we ever acquired a new customer as a direct result of attending a trade show?

Pro: No. But if we’re not there, people will think we’re in trouble.

Con: Yeah. But if we go and there are no prospects there, we will be in trouble.

Pro: Given the size of our marketing budget, we can afford to go.

Con: Since the commitment to going costs tens of thousands of dollars, what else might we do with our marketing dollars that could be more effective?

Pro: I have to admit that’s a good question. But I don’t know that anything else is as effective as person-to-person communication.

Con: Do we yet know the effect COVID will have on trade-show attendance in the future?

Pro: No. But isn’t going the best way to find out?

Con: Yes. But it’s also the most expensive way to find out.

Pro: Then what should we do?

Con: I don’t know. Let’s think about it.

Pro: Have I ever told you how much I admire your decisiveness?

The Real Question

The levity of the preceding conversation notwithstanding, that kind of debate goes on in most companies in most years. This year, the debate is likely to be a little murkier thanks to COVID, even though (or maybe because) we seem to be shaking it off in some places (and not in others). But the debate will never go away.

As always, the resolution of the debate will depend on some subjective combination of personal predilections, budgetary considerations, and incremental value. On one hand, we managed to survive two years with virtually no trade shows (but lots of virtual ones). On the other hand, if we don’t show, we run the risk of being perceived as having gone dark.

To go, or not to go, that isn’t the real question. The real question is: What’s the cost of either choice?

Choose wisely.