e-Insight - August 2020 by Big I Illinois

AUGUST 2020

INSIGHT NEW TRENDS

IN THE INDUSTRY

Key Post-Covid Trends Insurers Should Tap Into Trends Impacting Traditional Auto Insurance PLUS

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August 2020

CONTENTS 9

5 9 10 12 18 24 26 27

INSIGHT - APEX Award Winner One Thing Leads to Sales Success

By John Chapin

Four Lessons From Coronavirus for Improving Work Performance

By John Graham

Five Trends Impacting Traditional Auto Insurance

By Denise Garth

The Four Key Post-Covid Trends Insurers Should Tap Into

By Roger Peverelli and Reggy de Finiks

12 Trends for 2020 in the New Normal

By Patricia Moore

Is Your Agency Human-Optimized?

By Ryan Hanley

Virtual CONVO 2020

In This Issue

7 17 28

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31 32 34

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The Independent Insurance Agents of Illinois (IIA of IL) has been providing members with a sustainable competitive advantage since 1899. info@iiaofil.org | www.iiaofil.org | (800) 628-6436 or (217) 793-6660 | Fax: (217) 793-6744

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Insight is the official publication of the Independent Insurance Agents of Illinois (IIA of IL). The magazine is published monthly for the members of the IIA of IL, with the office located at 4360 Wabash Avenue, Springfield, Illinois 62711-7009; Consumer Website: www.ChooseIndependent.com. The IIA of IL welcomes letters discussing concerns of the insurance industry, articles, editorials, other matters of interest to the membership. The editor reserves the right to edit and select submissions for publication. Address submissions for review to Rachel Romines at rromines@iiaofil.org. For advertising information, contact Tami Hubbell at thubbell@iiaofil.org.

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The Silver Lining® shines through on claims survey West Bend is Number 12 and earns B+ on Crash Network’s 2020 Insurer Report Card

When more than 1,000 collision repair shops around the country graded auto insurers on how they handle claims, West Bend ranked Number 12 of 79 and earned a B+ rating! This ranking highlights West Bend’s exemplary claims service, not just price and brand recognition. We’re proud to be included on this list as it shows repair shops how we take care of our customers. Crash Network is an independent source of news, views, and information vital to the collision industry. Find out more at https://www.crashnetwork.com/irc.php.

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One Thing Leads to

SALES SUCCESS The recent pandemic is a possible threat to your sales career but probably not for the reason you think. If you’ve read my articles in the past, you know that I attribute sales success and failure primarily to activity level. If you make enough calls to talk to enough qualified prospects, and you have at least average sales skills, you’ll make enough sales. If you don’t make enough calls, you won’t make enough sales. Sales success starts with the math. What’s your annual sales goal? Based upon your average sale, how many sales do you have to make? How many proposals do you need based you’re your closing ratio? How many people do you need to talk to in order to get the necessary number of proposals? And finally, how many calls do you need to make to talk to that many people? Now break those down into monthly, weekly, and daily goals. Simple, right? You’d think so but this is where the problems start. First off, many people skip the math, so they don’t have a target to hit. Some have an excuse such as: I don’t know my average sale, closing ratio, or some other part of the equation. That’s fine. Guess. Based upon other salespeople, industry averages, what your manager says, make an educated guess and come up with some numbers. Whatever those numbers are, increase them by 20%. The other excuse I hear is that the formula is too complicated. Go back and read the formula. A caveman can do that math. Second, while doing the math is an issue in many cases, more often the bigger issue is actually executing on the numbers once people have them. At first glance, this almost always appears to be a time management issue, but as we dig deeper, we find something else. When someone fails to make the necessary calls it’s usually due to the fact that they are either scared, uncomfortable, or both. Sometimes the fear or discomfort is obvious, other times it’s a little more subtle. In the subtle cases, we have to take a look at human psychology. Basically, the brain moves us toward pleasure and away from pain. Rejection for most human beings is painful to some degree. Although many people are able to overcome the pain, fear, and discomfort of rejection, the brain is super-creative and, while our conscious brain is telling us to make calls, the subconscious brain comes up with all sorts of reasons to avoid making prospecting calls. The most common ones I see are servicing current clients, spending too much time researching information before calling a prospect, doing paperwork during prime hours, and working on their call because they don’t feel like they’re ready to talk to a live prospect yet. august 2020

By John Chapin

Another way people avoid making ‘live’ prospecting calls is to hide behind e-mail. I once had a business owner I was working with who was afraid to prospect. We agreed to start slowly by making three calls his first week. After the first week I asked how he did. He said, “I did okay, I made 2 ½ calls.” When I asked him where the ½ came from he said, “Well, actually, I didn’t make any phone calls, I sent five e-mails and I counted each one as ½ call.” An e-mail is not a prospecting call, it’s spam. An in-person call or phone call is a prospecting call. Next, Chambers of Commerce and similar networking groups are not proactive prospecting. These are fine if you’re a veteran and have a great business and these are supplementing your business. If you’re new, you can go to these only after you’ve hit all your new prospecting calls for the week. The name of the game with any method is to meet new people, so your goal should be to meet five new people each time you go to one of these events. They may be guests or new members but the goal is five. Again, if you are a veteran with an established business, the number can be negotiable. If you are within the first three years of your business, or you need to actively bring in new business, five new people is non-negotiable, and again, only after you’ve made all your new prospecting calls for the week. If you can’t meet five new people each time, you need to spend this time calling on new prospects. Another diversion is social media. Two or three hours a day tweeting and putting posts on Facebook is not prospecting. Social media is fine as an addon to your prospecting and marketing, but the only true way to proactively prospect is by reaching people by phone or in-person. And these days, depending upon where you are and what the situation is, it may only be by phone, but it isn’t social media. Lastly, the problem with the current pandemic… I know, I’m getting tired of hearing about it too… is that it gives the creative, subconscious brain yet another way to avoid making scary, uncomfortable prospecting calls. And let’s face it, without working too hard you can convince yourself this one is legit. But at the end of the day, it isn’t. If our world is to survive, business must continue and sales must be made. Without those, we’re dead. You’ve still got to make the phone calls, if not in-person calls, and at the end of the day hit the numbers that your math foretold, because ultimately only one thing leads to sales success: talking ‘live’ to enough people about your product or service. John Chapin is a motivational sales speaker and trainer with over 26 years of sales experience. He is the author of the 2010 sales book of the year: Sales Encyclopedia. He can be reached at johnchapin@completeselling.com. insight

lessons

from coronavirus for

improving work performance By John Graham

“The comfort zone is the dead zone,” states Mike Manes, a business consultant in New Iberia, LA. If we’ve learned anything so far this year, it’s that an unseen - but deadly force kicked us out of our comfort zone - way out! Although the pressure is on to put the coronavirus behind us and get businesses up-and-running, it would be a mistake not to learn from this horrendous experience. Here are some takeaways for business:

We’ve found that going it alone is an illusion

Almost instantly earlier this year, everyone became sensitized to those around us, perhaps like never before. At our condo community, for example, there was concern for neighbors we didn’t even know. We were keeping tabs on one another. We went from being individuals living under a common roof to being members of a community. Yes, there were outliers. One demanded that the pool be opened because it was why she bought here. But something good happened. Most the voices quieted down and we discovered we are not just an accumulation of individuals. We not only had an investment in a property, we had one in each other.

We’re more creative than we thought possible

If there’s anything we need to put behind us, it’s all the talk about the “New Normal.” It’s nonsense. Just a few months ago, the nation’s offices emptied almost overnight and millions were WFH and haven’t missed a beat. The crisis unleashed their creativity. Now many say they aren’t sure they want to go back to the “Old Normal,” including their bosses. An equally impressive example of creativity occurred a few months ago, when the governor of Ohio, wanting young people to stay at home and practice social distancing, turned to Ohio-based Procter & Gamble for help.

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Almost instantly #DistanceDance, featuring an original dance by Charli D’Amelio, went viral with its stay at home/ stay safe message and reaching 17 billion or more views, spawning the posting videos by the millions and setting off a world-wide phenomenon. To say the least, the governor got far more than he expected. It shows what happens when we turn on our creative juices.

We’ve faced up to our own ignorance

It’s been a long dry spell since we last got really excited about scientific knowledge. It may have been when we planted our flag on the moon 50 years ago. Then, out of the blue, we were hit with the coronavirus - which left us not knowing what to think. What followed has been an unending flow of technical information. It was then that it struck us that we were far more ignorant than we dared to think possible. As it turns out, that was good news. We figured out, finally, that ignorance is not bliss, far from it. What we don’t know can not only hurt our health, but harm in other ways as well. For example, we are just now beginning to understand that customers are deeply interested in doing business with companies that reflect their values and concerns. All along, we thought they liked us and what we sold them. The virus has taught us guessing in business leads to trouble. Or, as Harvard psychology professor Steven Pinker points out, how easy it is to “surrender to the cognitive bias of assessing the world through anecdotes and images rather than data and facts.” And then wind-up in trouble.

We’ve discovered what it means to be grateful

Why did it take a pandemic to become aware of those who literally work every day to support our lives? The number is shocking. It’s not just physicians and nurses, but the faceless and nameless who deliver our packages, fix our cars, make appointments, answer our questions, and stock the supermarket shelves.

august 2020

Why has it taken a pandemic to make them visible? Arguably, many are underpaid. But without them, we wouldn’t make it ‘til Friday. Yet, what’s so amazing is that they have been putting their lives on the line for us every day. The least we can do is let them know we recognize they exist by speaking up on their behalf. Even though the experts had been warning us for years about possible pandemics, we didn’t hear them. Then came the coronavirus, the greatest calamity to strike the world in at least 100 years. Nothing has ever made such a total impact on our lives, plans, dreams, and most of all, the future. COVID-19 was a slap on the face. All along we thought we were in control of our own destiny. As I was writing this on a summer’s day, right outside my window was a squirrel darting about picking up nuts and racing up a nearby tree to store them away for winter. Unlike the squirrel, we assume the future will deal us a winning hand. We expect tomorrow to be better than today, as if we’re owed it. Squirrels don’t make that mistake.

Finally, workers’ comp insurance is as easy as pie.

The coronavirus is relentless as it continues its devastation and pain. Even so, it won’t have won if we are smart enough to take advantage of what it can teach us that can make a difference in how we think, plan, work, and live. John Graham of GrahamComm is a marketing and sales strategy consultant and business writer. He is the creator of “Magnet Marketing,” and publishes a free monthly eBulletin, “No Nonsense Marketing & Sales Ideas.” Contact him at jgraham@grahamcomm.com or johnrgraham.com.

The coronavirus won’t have won if we are smart enough to take advantage of what it can teach us that can make a difference in how we think, plan, work, and live.

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insight

Five Trends Impactin

Traditional Auto

Nearly every time you turn on a light switch today, you are witnessing the power of trends upon shifting markets. Though lighting isn’t going away, the types of bulbs we use and their supply chain has been in flux for the past two decades. On May 27, 2020, General Electric stopped making light bulbs entirely (after 130 years), selling its lighting division to smart home company, Savant Systems.[i] All of the other major lighting players have also been negotiating a market and industry in the midst of change. Government mandates for lower energy bulbs have removed most incandescent bulb manufacturing operations from the market. LED bulbs not only use much less energy, but the bulbs last far longer - so the sales of bulbs will drop over time. Philips Lighting, another stalwart industry player (125 years old), decided that instead of leaving the business, it would develop Philips Hue, a connected lighting solution. Smart homes have now given rise to smart lighting, including smart bulbs — digitally-driven bulbs that can adapt themselves to the experience that a customer wants. Many of them can be controlled via home networks and mobile phone apps. Philips also chose to spin off a whole new brand, Signify, that would embrace sustainability and energy-efficient lighting. Auto insurers are going to have choices like this to make. Auto insurance, coincidentally, is also a 120-year-old “established” industry, based around a policy transaction. Will insurers continue to provide traditional insurance in traditional ways until they are forced down a dead-end path or will they embrace new trends, new technologies, new services and perhaps a new mobility ecosystem approach? Will they reinvent themselves to become nextgen mobility customer experience providers? In Majesco’s most recent thought leadership report, “Rethinking Auto Insurance: From a Transactional Relationship to a Mobility Customer Experience,” we use new customer primary research and recent trend data from other sources to answer two pertinent questions: • What are the trends pushing auto insurers to adapt their business models? • Why should auto insurers begin creating mobility ecosystems and customer experiences that will transform their purpose and their profits? 12

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We consider five trending points that are driving change, including: • The Auto Insurance Buyer – A Shifting Demographic • Vehicle Technologies • New Data Sources • Ownership vs. On-Demand Mobility • New Auto Insurance Sources and Providers Let’s briefly consider these trends and how they may impact auto insurers.

Trend 1: The Auto Insurance Buyer

For purposes of simplifying analysis within the Mobility Survey, we created two generational “super segments” by combining two different age groups, Gen Z and Millennials and Gen X and Boomers. As expected, the Gen X and Boomer segment is currently more active than their younger peers in buying or influencing purchases of household services, insurance, and financial products. Three exceptions were in individual life insurance and voluntary benefits, where the segments purchased at equal rates, and Amazon account usage, where Gen Z and Millennials have a slight lead. The older super segment has sizable leads in personal lines P&C insurance (auto and home/renters), employee benefit health insurance, investments and annuities. All of these products are good fits for the 30-60 year-old “sweet spot” for insurance and financial products, given they are at a life stage with the greatest insurance and financial planning needs as they establish households and families and accumulate wealth and possessions that need protection. In 2021 – one year away – Millennials, all by themselves, will meet and begin to surpass the older super segment. The young super segment’s dominance will accelerate four years later when the first members of the Gen Z generation also turn 30, vaulting this new generation to buying dominance. Providers of household services, insurance and financial products that have not adjusted their business models, products and customer engagement experiences to meet the needs of this new “sweet spot” buyer market will find themselves challenged and left behind. The insurance industry will need to adapt to this new super segment of new customers. august 2020

o Insurance By Denise Garth warning, night vision, or parking assistance systems save nothing at all.” Is it possible that eventually the impact of these technologies will overtake the cost of maintenance and repair? In theory, yes. The greater number of high-tech vehicles that are on the road, including the autonomous vehicles of the future, the greater the chance that vehicular accidents will drop. There are, of course, an unknown set of circumstances related to COVID-19 and auto use. Will a significant percentage of the workforce stop commuting? Will public transit commuters begin to use their vehicles to avoid exposure? Or, will vehicle technologies, such as driverless vehicles or flying taxis create an entirely new commuting scenario? Lilium, a German aviation startup “unicorn” has plans for bringing flying taxis to the skies by 2025, which will further change the mobility options. The answers may lie in the rise of mobility ecosystems, which we’ll examine in next week’s blog.

Trend 3: New Data Sources Figure 1: Insurance buyer “Sweet Spot” populations by generation in 2000 vs. 2020

Trend 2: Advanced Technologies for Vehicle Safety

Nearly 60% of Gen Z and Millennials and half of Gen X and Boomers who own or lease a car have at least one type of newer safety or convenience technology in their vehicle. Navigation systems and blind spot detection are the most popular among both segments. The Gen Z and Millennial vehicles have higher rates of collision avoidance systems, surround view systems, automatic braking and automatic parking. These technologies were expected to put downward pressure on auto insurance premiums thanks to fewer accidents. However, insurers’ experience to date has not matched this expectation. The cost of repairing or replacing these more sophisticated vehicles with advanced technologies is greater than the savings derived from lower frequency. Some of these technologies have indeed shown benefits, but the translation to lower premiums has been minimal. For example, NAMIC found that electronic stability control saves a customer an average of only $8 on their annual premium. And, “Those who pay for blind spot warning, driver alertness monitoring, lane departure august 2020

Connected devices (and other data sources) are enabling underwriting and pricing based on mileage, location and driving behavior, which could lower premiums, while also making them potentially less predictable. Surprisingly, there are very similar levels of interest in these new data sources between the two generational super segments. The COVID-19 shelter-in-place actions dramatically reduced the number of miles driven – by an estimated 50% between mid-March to mid-April. This is spurring speculation and debate about the pandemic’s longerterm interest in mileage-based or usage-based insurance. Although streets and roads have fewer vehicles on them, numerous states and cities have reported increases in speeding, reckless driving, and fewer but more severe accidents.From an insurer perspective, broader usagebased/UBI models would be the preferred approach postCOVID-19 than simply tracking miles driven. Despite the growing acceptance of new data sources, with the potential for variable premium by the month, the traditional 6-month term with a set premium is preferred by both generational groups. However, Gen Z and Millennials have a higher interest in a usage-based model that is automatically triggered by sensing when the car is parked or being driven. continued... insight

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Within the Gen Z and Millennial segment, 28% of respondents indicated they have used a device or app to record their mileage or driving behavior as compared to only 15% of the older super segment. Both generational super segments showed strong interest in a smartphone app that provides real-time alerts and advice about driving behavior and conditions. Interest is even higher if following the advice leads to discounts on the next insurance bill.

website – about 25% higher than the older generation. Interestingly, this group also showed strong interest in purchasing insurance from three of the “tech giants,” Amazon, Google and Facebook – a wake-up call for both insurers and those selling vehicles. For a better glimpse, see Fig. 3 below.

Trend 4: Ownership vs. On-Demand Mobility

There is growing popularity and use of non-owned vehicles and alternative mobility options like rideshare, rentals (traditional and shared economy) and other local or urban rental options like scooters and bicycles. With their increased usage comes the threat of an offsetting level of private vehicle ownership and leasing, leading to a declining need for personal auto insurance. This declining ownership could accelerate if more people work from home, eliminating the need for the traditional “2 car family” and using alternative on-demand mobility. All-inclusive vehicle subscription services are a relatively new mobility option offered by several auto manufacturers (currently, most are luxury brands) and thirdparty services. Most allow the customer to switch vehicles on a periodic basis and pay a set monthly fee that covers the vehicle, maintenance and insurance.[vii] A surprisingly high number (30%) of Gen Z and Millennials indicate they are using or have used a service like this – nearly four times higher than the older generation, indicating interest in different access to mobility options as compared to “owning” a vehicle. Some of these users likely correlated these experiences with micro-term car-sharing company’s such as Zipcar. Nearly 26% of Gen Z and Millennials and 20% of Gen X and Boomers indicate they would or definitely would consider a vehicle subscription the next time they go to purchase a vehicle. When you add in the “maybes,” these numbers jump to 71% and 61%, respectively. Gen Z and Millennials use car sharing services more frequently than Gen X and Boomers. Over a third (35%) traveled this way for five or more days in the previous month, compared to only 18% of Gen X and Boomers. Clearly, this is an established mobility preference within the younger generation that will fuel a growing market for on-demand rideshare coverage and indicates, once again, the potential decrease in car ownership by this younger generation.

Trend 5: New Auto Insurance Sources and Providers

Most of the consumers we surveyed said they still own or lease one or more vehicles. The traditional purchase methods for auto insurance are still the most preferred channels - agents/brokers or direct via an insurer’s website. This is consistent from the last couple of years from our consumer research. However, Gen Z and Millennials also indicate strong interest in insurance embedded in the purchase cost of a vehicle, or buying insurance from a vehicle manufacturer’s website, an affinity group, car dealership, or car shopping august 2020

Figure 3: Interest in traditional and new sources of auto insurance If we look at all five of these trends in aggregate, auto insurers are facing a light bulb moment. Many of these trends will likely accelerate as we reconsider our work lifestyles moving to the home coming out of COVID-19. If changes are going to occur in demand levels, channel types and service offerings, can auto insurers compensate by bringing the right kind of change to the market? Can they invent their own supply chains of opportunity? In our next mobility blog, we look at this supply chain in depth. Auto insurers are redefining themselves as mobility companies and in the future will be seeking to own the mobility experience using a vast mobility ecosystem, ideally building those ecosystems around their brands. Those who will lead the mobility shift are the ones who have prepared their business systems and models that will focus on the customer mobility experience and foster nontraditional products and services. Now is the time to start this conversation within your organization! Use Majesco’s “Rethinking Auto Insurance” report as a kickstart for your internal brainstorming or view the replay of our webinar on the research. For more information on new technologies for auto insurers, be sure to look at both out Majesco Digital1st Insurance and Majesco Core Suite for P&C. This article originally appeared on AgencyNation.com. To view the article and citations, go to www.agencynation. com/5-trends-impacting-traditional-auto-insurance. Denise Garth is Senior Vice President Strategic Marketing responsible for Majesco. She is a recognized Top 50 InsurTech Influencer and industry leader with both P&C and L&A insurance experience as a CIO and business executive. For more information on Majesco, visit www.majesco.com.

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AU GU ST 20

INSIGH T NEW

IN TH TRENDS E IND USTR Y

Key Po st-Cov id Tren ds Ins Trends urers S Impac hould ting Tra Tap In ditiona to PLUS l Auto Insura nce Sneak Vir tua Peak at l Speake CONVO r

Middle Market

TRENDS and the

ERA OF UNCERTAINTY Strategies for addressing a challenging market

By Peter McMurtrie and Linda Stueber, Nationwide

In this monthâ&#x20AC;&#x2122;s e-Insight. august 2020

insight

The

Four Key Post-Covid Tre Insurers Should Tap Int

Itâ&#x20AC;&#x2122;s not all gloom and doom. A crisis usually functions as a great breeding ground for innovation. The world is experiencing a unique situation. Over the past months, hundreds of millions of people from all over the globe have been forced to stay home, overnight. The economy came to a halt. The current pandemic determines what we talk about, what we can do and what our future looks like. Besides all the necessary short-term measures, insurers also need to think beyond the current crisis to a future that may be very different. We have identified four post-covid trends that insurers should definitely tap into.

Waking up in a different world - and rapidly adapting to it

During the first couple of weeks, we found ourselves in a post-apocalyptic movie like â&#x20AC;&#x153;Mad Max.â&#x20AC;? High streets turned into ghost towns. Mass panic buying began of all types of shelf-stable food, survival gear and water. In the U.S., according to Yelp, gun interest went up 360%, as if people were preparing for the end of time. But human adaptability turned out to be astonishing. Very quickly, everyone tried to make the best out of the changed situation. Where we cannot follow our old routines anymore, like going to the supermarket to get groceries, people immediately find an alternative by meeting their needs online. And when we could not work at the office anymore, we almost seamlessly continued at home, even while combining this with home-schooling for kids. The scale of change in consumer behavior, in such a short time, has been gigantic and unprecedented. Trying out new things For a lot of people, the current situation provides a reason to try new things. DIY stores and garden centers watch their revenues rise. Baking pies and playing board games have become popular activities. Alcohol consumption went up by 42% in the San Francisco Bay Area, and in 18

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China divorces significantly increased. This is an interesting time for behavioral scientists. The world is about to open again, little by little In many countries, the lockdown measures are alleviated little by little. Now that the world is becoming open to us again, we can start giving more attention to the postpandemic future. Some expect, or hope, that everything will get back to how it used to be. We believe that because of Covid-19 we entered a new era. Not only because of the economic crisis, but mostly because Covid-19 has the potential to create more permanent changes in customer perceptions and behavior. A number of Covid-19-related shifts in customer behavior are temporary, purely based on coping with the crisis, but other, more fundamental shifts are here to stay. Although we know that the pandemic will eventually wane, a significant part of our new behavior will stick. Insurers that also want to be successful after the crisis have to understand this new behavior and turn this understanding into propositions and experiences that strike the right chord. They should start thinking ahead and reimagining the way they can stay relevant after the dust has settled.

Four Key Post-Covid-19 Trends Insurers Should Tap Into

We believe that, specifically for the insurance industry, the current crisis amplifies four consumer trends that determine the priorities of insurance customers and what they will value in a post-Covid-19 world. These four trends should serve as inspiration to reimagine the future of insurance august 2020

People value the sense of having control over things, now more than ever. So they monitor what they do, how they sleep, what they eat, how they feel, how much they exercise and so on - self-knowledge through self-tracking with the use of technology.

rends By Roger Peverelli and Reggy de Feniks beyond Covid-19. Let’s take a closer look at each of these trends.

Trend #1: Health First - More Than Ever

If one thing became clear during the last couple of months, it is that at the end of the day there is nothing of greater importance than your life and health. And almost everyone agrees to that. Individuals, governments and businesses around the world do everything to protect themselves, their families, their citizens and their employees. Virtually everyone is prepared to make huge sacrifices; to drastically change the way we live. Even to put our entire economy in jeopardy. We notice people not just staying at home but also paying way more attention to health than before. What we learn about the virus contributes to that. More exercise The millions stuck at home are keen to exercise, not only because they are bored but also because they want to improve their lifestyle. According to Yelp, interest in home fitness equipment has shot up 344%, and hiking is up by 116%. Yoga mats and kettle bells, but also bicycles, are selling like toilet paper. The online wellness industry is booming, as well. More healthy food Food trends that were already on the radar are now becoming even more important. Data shows that, as social distancing persists, home cooking is on the rise. Online cooking courses are booming. People are becoming more health-conscious and spending more time in their own kitchens, which will further the growing demand for fresh, healthy and additive-free food. People are looking for products that suit their lifestyles and the life stage they are in, and that reduce health risks. More self-tracking All sorts of health apps experience growing popularity. august 2020

More pressure on the health system The lockdowns had much to do with the pressure experienced on every part of the health system. In hospitals, the occupancy rate of intensive care units has been way above 100% for months. Taking care of elderly relatives is massively impaired by the corona crisis. GPs quickly adopted online channels to avoid unnecessary movement and physical contact. They found that online appointments are more time-efficient, and most will continue to use online channels more than they used to. The sense of urgency for digital health solutions as well as the benefits are now clearer than ever.

Health First - Opportunities to Seize

1. Health insurance: Many expect the volumes in health and life insurance to grow in the next few years. The pandemic enhances the overall concern for personal health and wellbeing. It will make consumers more aware of the importance of adequate life and health insurance plans. 2. Pre-active and preventive services beyond traditional insurance: This has been widely discussed for some time now. The added value of an insurer is shifting from only covering risk when there is damage, to rendering preventive services as a substantial part of the offering. It will take a while before a vaccine is developed and everyone is vaccinated. Instead of simply waiting for that to happen, efforts can be made to prevent contamination and to promote a healthier lifestyle. By eating better and exercising more you become more resilient. Insurers should play an active role, or even take the lead, in promoting a healthier lifestyle with tangible services. This would also immediately increase the social impact of the insurance industry. 3. Data-driven health and wellness platforms: Platforms that combine self-tracking, data and all sorts of incentives to help customers with healthier habits will become even more relevant than they already are. In the long term, personalized nutrition may even accelerate the cross-over between food, tracking and advanced analytics. Connected health devices combined with these platforms form the foundation for entirely new business models in the health insurance sector; shifting from a transactional to a relational, collaborative, participatory model, assisting customers to manage their health over time. 4. Active participation by customers: Trackers and platforms provide actionable information and insights that users can act upon. In turn, this allows a much more active role for customers within insurance products and services. The “quantified self” movement and the adoption of Covid-19-tracking apps clearly show not only the consumers’ need for more control and empowerment, but also the desire and readiness to take a more active approach in assessing symptoms, connecting with healthcare providers and improving self-management of care. Active participation allows customers to take more responsibility, leading to more equality in the relationship with insurers. This is a fundamental shift in the relationship and a great new perspective on innovation. continued... insight

5. Ecosystems with health providers: Current health systems are not sustainable due to the rapidly aging population and rising healthcare costs. Connected healthcare devices allow healthcare providers as well as health insurers to extend their reach and interactions with patients. Sharing data among all stakeholders, optimal use of this data and remote patient monitoring have the potential to change the way of working entirely, keeping healthcare efficient, affordable and accessible. The application of all sorts of connected devices, telemedicine solutions and advanced algorithms improve patient care, while decreasing total health care costs across the health ecosystem. These applications need to be taken to the next level, for instance by providing home-care solutions and flexible opportunities to engage with care providers for the elderly and the individuals that live independently.

Trend #2: Connected Living - Now For Real

Shift to digital on fast-forward Covid-19 put the shift to digital on fast-forward. The whole planet just had a crash course in connected living. Working from home, days filled with virtual meetings on Zoom, Teams or Meet. Shopping for everything online, from groceries to fashion and electronics. Remote classes for children instead of going to school. Streaming movies. Online workouts and yoga classes. Ordering food, even from the finest restaurants. Having drinks with friends on Zoom. Worshipping from home. Even attending a funeral online in real time. It all became kind of normal in a short time. After years of incremental change in small steps, digital routines were embraced within a few weeks. The longer we keep on following new routines, the bigger the chance that these changes will stay. Consequently, all kinds of aspects of connected living have become normal. What we currently experience is a fundamental shift in how people will live and work. More remote working Humans are creatures of habit. Every morning you got out only to await the daily traffic without ever thinking whether it could be done differently. Millions of people now have the chance to experience days without long commutes. The pandemic could permanently shift working patterns. Until recently, many companies were reluctant when it came to remote working. But even the functions that we thought could not be performed from home earlier this year seemed possible a couple of months later. Before the crisis, many companies assumed working from home would be unthinkable for call agents. Business owners and managers are discovering that solutions such as Zoom, Teams and Google Meet are adequate for a fair share of meetings and that much knowledge work can be carried out remotely. Many employees are starting to question why they had to go into the office in the first place. It looks increasingly as if the situation will not go back to how it was, at least not entirely. In response to the crisis, Nationwide, a top 10 U.S. insurer, announced plans to permanently work from home in 16 of its 20 locations. When the company was forced to move quickly to a 98% work-from-home model, it turned out it could serve customers and partners without compromising the quality of service. “Our goal is to ensure that, when a recovery comes, we’re prepared to win business with competitively priced solutions while enhancing our 20

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resiliency and operational efficiency,” CEO Kirt Walker says. Smart and safer homes The fact that consumers in general will be integrating all sorts of new technologies into their daily routines will have its impact on their homes, as well. Homes around the world are going to become more connected and smarter in the coming years. Remote working also leads to new risks. Most people are working in environments that are simply not set up for work. More changes in mobility The impact of Covid-19 on mobility is multifaceted and hard to predict. People are happy that they are allowed to leave the house again, but for the time being they will be careful. People will, at least when they can afford to, prefer not to use public transportation. Those who can, will use their own car to get to work, and prefer to commute alone. More demanding customers Consumers now experience the convenience of mobile and online services even more. They expect comparable service levels from insurers. Customers will increasingly reach out to their current providers to meet their needs digitally. If that doesn’t work, customers will turn to another supplier that does a better job. A lot of insurers found out the hard way. When governments put a halt to face-to-face meetings, the sales of traditional insurers, brokers and agents collapsed. Weaknesses of traditional models revealed The gap between digital leaders and laggards has become wider. This development is not new. It just accelerated. The impact goes beyond daily operations. It is about the business model. While many incumbents have always viewed their face-to-face channels as an important differentiator, during this crisis those channels do not even appear to be a qualifier. Even worse, they made incumbents vulnerable. The traditional distribution model turned out not to be competitive and sustainable. On top of that, it was not agile enough to respond fast to changing conditions and a less physical world. The digital models, on the other hand, have proven to be resilient and successful in these difficult times. It seems that digital models are better-protected against the crisis and more future-proof. Advanced technologies allowing for remote transactions lead over traditional models. Never before have these differences become so clear. That the insurance industry needs to become much more digital is nothing new. But the outbreak made clear how slow the digital transformation of insurance has been to date.

Connected Living - Opportunities to Seize

1. Prerequisite: Insurers need to become more connected and agile. Being digital is paramount. More and more insurance executives are realizing this. The current crisis is a wake-up call to many. They see the strategic importance, and there is a clear sense of urgency. Simple digital products, online services and customer experiences, delivered at lower cost; becoming more connected and agile – they have become essential for continued growth. For many, they are essential for survival. It is not an option to press the snooze button once again. There will be quicker adoption of new technologies and a bigger role for insurtechs that enable the acceleration of digital transformation and innovation august 2020

- because the time frames to achieve this have been compressed.. 2. Usage-based car insurance: Especially when people use their car less, there will be an increase in the demand for simple solutions that reflect actual usage. Why pay a flat rate for a car that most of the week won’t leave your front porch? It could be that Covid-19 will push for usage-based car insurance to finally become mainstream. 3. New generation of home insurance with cyber and services: Thanks to connected devices, insurers will be able to offer personalized services meeting the lifestyle needs of customers. The more time we spend at home, the more important such services become as an extension of home insurance. More and more connectivity at home and all the new data streams that come with it open up all sorts of possibilities for services that help customers manage their house better and decrease the total cost of ownership. With people working more from home, also after the crisis, the importance of cyber security will increase. It is therefore likely that the scope of home insurance will broaden in the short term to include new propositions combining home insurance, IoT, cyber security and services. 4. Reciprocity to solve privacy issues: The use of customer data means fresh grounds for concern over privacy. Obviously, insurers need to manage concerns that many consumers have. Reciprocity is the answer. Consumers’ perceptions about the use of data by insurers will flip if they use the data to put customers in control and to offer something meaningful in return. It’s all about giving more than you take. The value insurers deliver based on consumer data should be perceived as bigger than the cost of handing over privacy in return. Insurers should combine things that customers can’t combine themselves or that customers would never think of. 5. Data protection: For centuries, insurers were engaged with offering protection to their customers. It would make a lot of sense to also assist customers in protecting their data, not just by offering cyber insurance but by offering new services. The so-called PODS (Personal Online Data Storage) introduced by Zurich are a great example. The customer owns the data and solely decides whatever part of the data to share with a third party. When you think about the enormous new data flows, there are numerous ideas for new value propositions.

Trend #3: Unprecedented Uncertainty - Lasting Long

The sense of control is far away In recent decades, technology has given us more control over the way we live. Just think of something as mundane as navigation systems, so we never have to get lost again, or search engines that provide all information at our fingertips. The possibilities seemed endless. But 2020 will be known as the year of biblical disasters: the immense bushfires in Australia, the grasshopper plagues in Africa, Pakistan and India and, on top of that, Covid-19. In a few months’ time, it seems we have been thrown back to the Middle Ages, where plagues lurk around every corner. We’ve suddenly woken up to the reality that the world is much more fragile than we once believed. Nothing is as certain as it once seemed. The sense of control seems to be very far away.

Continuing concerns about health People are obviously concerned about the virus and their own health. What exactly is Covid-19? Could I have it? If so, what can I do about it? How can I prevent my parents from getting infected with the virus? When will there be a vaccine? There is an enormous hunger for information. Thanks to the internet, the amount of information available is overwhelming, but unfortunately for us not always reliable… More questionable information Alongside the pandemic, an infodemic is also taking place. Disinformation and misinformation occur on an unprecedented scale. The arrival of the virus immediately resulted in panic buying of toilet paper, because, according to social media, this is produced in China and would therefore soon not be available anymore. Looking back on this situation, most of us can have a laugh about it. However, we also see conspiracy theories on Facebook and the spread of well-meant but non-factual tips via WhatsApp. According to the World Health Organization, the infodemic is as dangerous as the pandemic itself. When people do not know what to believe and who to trust any more, it becomes more difficult to have proven solutions and advice from scientific experts followed. More vulnerable economies In addition to uncertainty about the pandemic and individual health, Covid-19 has painfully exposed the Achilles’ heel of individual companies and the economy. Think of too much dependence on distant countries for production and supply, and operating models that did not turn out to be that robust after all. Even a giant like Apple only had stock for 10 days. Many brick and mortar companies did not have their e-commerce in order. Others turned out to be too dependent in their sales on customers in distant, suddenly unreachable countries. In just a few months, the prospects of companies have changed drastically. The annual plans for 2020 have already been taken care of by the shredder. Companies are mainly working hard on saving what can be saved. Gloomy economic prospects When it comes to the supply side of the economy, it could be that we already experienced the worst. In more and more factories, people are starting to get back to work. The question is whether that is also the case for the demand side of the economy. The economic devastation of the pandemic is becoming painfully evident. In February, the unemployment rate in the U.S. was only at 3.5%. As a result of Covid-19, this percentage went up to 14.7% in April. In just two months, it went from an extreme low to the highest unemployment rate since the Depression. Decline in propensity to spend Deep economic shocks and unemployment are normally accompanied by financial uncertainty, less consumer confidence and a shift away from spending. Consumers prefer to save their cash amid uncertainty. According to research by personal finance company Bankrate, 52% of Americans had already cut their spending in response to the pandemic. 54% of consumers are no longer considering the purchase of big-ticket items such as homes, cars, holiday trips and luxury goods over the next three months. continued...

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Uncertain exit paths The coming period will be critical. The various exit paths across countries from lockdowns will be precarious. Locking everything and then opening up again is not as easy as it seems and creates alignment challenges across virtually every supply chain. When will the economy get back on its feet again? Will consumers and businesses start spending more? Just as much as before the crisis? We do not know how uncertain consumers will deal with the new health protocols. Can we expect a new peak in infections in autumn? What will the consequences of the recession look like by then? Will it be even more severe than we already experience today? More stress and reduced mental and physical health A recession will further affect population health. Events that increase during economic downturns, such as becoming unemployed and losing financial and housing assets, result in more gloominess, more stress and reduced mental and physical health. This is amplified by people’s concerns about Covid-19, their own health and those of their loved ones. In the last week of March, meditation app Headspace saw a 19-fold jump in users completing a calming exercise and a 14-fold increase in those doing a “reframing anxiety” session. It’s a bad omen.

Unprecedented Uncertainty - Opportunities to Seize

1. Safety and reliability: Consumers will have a lower appetite for risks than they had before. Consequently, it is likely that they are more interested in protection than they were before. Insurers have the opportunity to explicitly confirm the feeling of protection and peace of mind to their customers. 2. Simple, transparent, affordable propositions: The economic downturn and resulting thriftiness increase the demand for insurance solutions and price propositions that are simple, transparent and cost-efficient. We already mentioned that PAYD, usage-based and ondemand car insurance may become mainstream – so that you only pay for what you actually use. We expect the same for embedded insurance concepts, in which coverage is part of the purchase of a product or service – so that you don’t have to worry any more. 3. Empowered customers: Most people want to make the right decisions in all areas of life. In uncertain times,

this desire is even more crucial; especially when there is a growing number of unreliable information sources, it is important to be a trusted source of information and to provide guidance. Data enables insurers to help consumers enhance their lives by drawing actionable insights out of their data sphere and by giving feedback to customers, for example suggestions to adjust behavior that otherwise could lead to costs of damage, increased health risk or bad prospects. Insurers should aspire to give customers “superpowers” with all the available data. Think of speech-to-speech language translators that free you from having to learn foreign languages. Of GPS car navigators helping you find your way without knowing your way. In the coming period, we will see if insurers can give their customers similar kinds of superpowers. 4. Leverage risk management capabilities: Helping customers deal with uncertainty is the core business of any insurance firm. We believe there are ample opportunities to leverage these core capabilities to provide new value to customers, in commercial and retail, beyond offering insurance. The current challenging times offer insurers a great opportunity to sit down with customers and leverage their expertise to help customers also with risk management advice (not just insurance) on how to navigate through these difficult times.

Trend #4: Empathy in Everything - Show You Care Retreat from globalization Globalization was never perceived as a blessing by everyone anyway. That makes sense; except for a tiny minority, most people find themselves in a very local community throughout the year. Due to the outbreak, everyone experienced the disadvantages of globalization. The pace at which the virus spread worldwide as well as how fast supply chains stopped are, in the perception of many, the consequences of globalization.

More search for self-reliance This retreat from globalization had already started; think of Brexit and the White House trade wars. During the coming period, countries and companies will keep looking for solutions to reduce economic vulnerabilities. “Self-reliance” is the most used word. Japan provides subsidies to companies to get supply chains back to the country again. The prime minister of India explicitly said that “a new era of economic self-reliance has begun.” The reflex is control of one’s own fate and search for strategic autonomy. Citizens in different countries are encouraged to buy products from their own country, city and neighborhood to support local businesses and to rebuild the local economy. #supportyourlocal is trending. Value of family is on the rise The retreat from globalization is accompanied by turning inward and a shrinkage of our world. We also see this on an individual level. During the period we had to stay at home, people also rediscovered all kinds of long-neglected traditional life skills and pastimes. Baking bread, playing board games or simply spending a little more time with your loved ones. Self-isolation has forced us to rethink family time. The value of family is on the rise again. Family not only acts as a safety net, but, in hard times, the connections we have with

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the people around us keep us grounded, something we will need for quite some time. More sense of connection and togetherness The crisis also brought up something unexpectedly positive. Everyone is doing their best to help all of us get through this trying time. According to Yelp, interest in blood and plasma donation is up 204%. Clients are buying gift certificates from their favorite local restaurants to help keep them in business. Toy animals are placed in front of windows so that little kids can go “bear hunting.” Professionals and volunteers in the health sector are applauded. Italians started singing from their balconies to enhance the feeling of community. Beer brewers recycled stock to produce hand sanitizer. And, of course, the absolute poster child: 99-year-old Tom Moore raised millions for NHS staff by walking laps in his garden. The number of heart-warming examples during the outbreak is unbelievable; also in insurance and insurtech. Just check our article on “how insurers and insurtechs are helping to fight the pandemic.” An unprecedented sense of connection and togetherness is noticed. People really care about each other.

Empathy in Everything - Opportunities to Seize

1. Tough times are an opportunity to show you care: Challenging times see people craving for institutions that care. Consumers expect their financial service providers to support customers who are facing difficulties. Show you care when customers experience moments of truth. In March, Kees van Dijkhuizen, CEO of ABN AMRO, said: ‘’’During the previous crisis, banks were part of the problem. At this moment, we are emphatically part of the solution.’’ Standing at this crossroad, insurers must ask themselves a similar existential question: As an insurer, do you want to be a part of the solution, or do you want to be known for causing more problems? 2. Empathy is a pillar for differentiation: The empathic, emotional part of the relationship will become more important for consumers. Demonstrate your company’s commitment to individual customers and emotionally engage with them. Reach out to clients. Act in the customer’s best interest. Treat customers the way you would like to be treated. Simple gestures can make a big difference. The objective is to enhance your usefulness for the customer. In turbulent times, showing that you care will find an extra-appreciative audience and certainly won’t be forgotten. Customers are also likely to return favors by being more loyal and more willing to spread the word about their experiences with you. Furthermore, employees and executives alike find that it is more engaging to work for a company with a caring mindset. 3. Leverage the human skills of co-workers, brokers and agents: Now more than ever, to relate to their customers, insurers need to secure the feelings side. Humans inject emotion, empathy, passion and creativity and can deviate from the procedure, if needed. The thousands, sometimes even tens of thousands, of employees working at an insurance firm, as well as all the brokers and agents, are the most valuable asset to accomplish exactly that. The challenge is to use advanced technologies to empower them, making them even more effective and efficient and creating the best of both worlds.

Re-Imagining Post-Covid-19 Relevancy

The four trends set the stage Covid-19 is having a significant impact on people’s lives, beyond social distancing. It seems the Maslow pyramid is turned upside-down; putting your health first is the top priority. The trends toward connected living shifted into a higher gear. The unprecedented uncertainty that people experience regarding the health situation, the recession and their job security is not likely to change soon. The current crisis also highlights the importance of empathy in everything and the human dimension. Consequently, consumers and businesses are looking for a new generation of products and services that fit these new circumstances. Leaders of insurance companies therefore not only have the short-term challenge to keep their business afloat. At the same time, they also have to make sure the company remains relevant in the new market conditions once the dust is sort of settled. They need to fast-forward digital transformation and reconsider not only processes, products and services, but distribution and operating models, as well. Moreover, they should think of new business and revenue models, leverage the latest technologies and insurtech partnerships and seize new opportunities. The four trends set the stage. Never waste a crisis It’s not all gloom and doom. A crisis usually functions as a great breeding ground for innovation. Innovation is no longer optional but urgent and crucial. It is impossible to fight this crisis with the same instruments that you use when everything is going well. The new conditions and constraints force us to think in new ways. Moreover, we see across industries and companies that executives and employees are more open to radical solutions and are much more efficient in realizing these solutions. Think of how rigorously companies and colleagues have switched to remote working. If we abstract from the current situation, we can only conclude that we have exciting times ahead if we know how to seize the opportunities. To view this article in its entirety go to www.insurancethoughtleadership.com/4-post-covid-19trends-for-insurers/. You can download the full DIA white paper at https://tinyurl.com/DIA-White-Paper. Roger Peverelli and Reggy de Feniks are the founders of The DIA Community, missioned to accelerate customer centric innovation in insurance. DIA = Digital Insurance Agenda. Both hold a 25-year track record in strategy and (digital) innovation for blue-chip financial institutions throughout Europe, the Americas and Asia (e.g. AEGON, Allianz, BNP Paribas, Credit Suisse, Farmers, ING Group, Munich Re, NN Group, Zurich). Peverelli and de Feniks are consistently listed on InsurtechNews’ Global Top ‘50 Insurtech Influencers’. They are bestselling authors; 100,000+ copies sold of ‘Reinventing Financial Services’ and ‘Reinventing Customer Engagement’, published in 8 languages and are frequent speakers in board sessions, at international conferences, and at lectures at universities and business schools. View more information at www.digitalinsuranceagenda.com.

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Reloading 2020...

Insurance Industry:

12 Trends for 2020 in the New Normal By Patricia Moore Although there is still some debate about when the coronavirus pandemic became public knowledge, I think it’s safe to say that, in the months leading up to 2020, none of us expected to be where we are today. The dichotomy between expectation and reality became markedly clear to me after recently looking back at our annual “12 Trends” blog, which covered topics ranging from telematics and micro-mobility to predictive analytics and virtual reality. These emerging technologies, growing challenges, and urgent calls to action suddenly pale in comparison to the global tragedy and economic turmoil we now face. COVID-era considerations, many with potential lifeor-death implications, have shifted our collective focus back to the basics of business continuity. Health and safety precautions, remote working logistics, and market instability now rank among the top concerns for most organizations. As companies adapt to this new reality, the original twelve trends – now viewed through the lens of national crisis – have changed course from their earlier (pre-pandemic) trajectories.

12 Insurance Challenges and Opportunities in the New Normal 1. The New Face of Auto Insurance With widespread shelter-in-place orders, the roads have become significantly less congested. This dramatic drop in traffic has resulted in fewer auto claims, allowing many auto insurance companies to offer their policyholders partial refunds on their premiums. In addition to strengthening customer relationships, these rate adjustments could pave the way for more flexible

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pricing structures in the future, resembling the usagebased arrangements that have been gaining momentum over the past year. 2. Telematics Commercial fleets are already leveraging telematics to maximize productivity while practicing social distancing, utilizing their vehicles’ automation features to replace traditionally hands-on functions. Telematics may soon see a surge in popularity in personal auto as well, as more companies decide to adopt remote work flexibility on a permanent basis, allowing former commuters to continue to experience the cost-saving benefits of usage-based premiums via mileage-tracking technology. 3. Micro-Mobility For now, community-shared anything increases the risk of viral spread, which has led many cities and other micro-mobility operators to temporarily pull the service. Some companies have made their feet available exclusively to healthcare workers, providing a safer alternative to crowded public transportation systems. As the pandemic subsides and micro-mobility vehicles return to public usage, we’ll likely see a greater emphasis on basic health and safety precautions, such as disinfecting the vehicles between rides. 4. Generational Shifts Whereas generational differences are still important considerations in your marketing and customer experience strategies, COVID-19 has produced an entirely new generational disparity. According to the Center for Disease Control (CDC), older adults have a greater risk of experiencing severe symptoms, complications, and even fatalities from the disease. As the economy begins to “open up,” multiple lines of

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business – life, health, liability, and workers comp, for example – may see an impact based upon the different risk levels associated with each age-group. 5. Employment Gap No longer a “perk of the job,” remote capabilities have quickly become a workforce mainstay in this shelter-in-place environment. Some experts predict that social distancing may need to continue, at least to some extent, for many months (or even years) to come, making flexible work arrangements an essential part of your long-term employee recruitment and retention strategy. 6. Customer Experience Many policyholders have experienced dramatic life changes over the past few months, whether it be their employment status, financial stability, place of residence, family care structure, access to basic necessities, physical health, emotional well-being, social support systems, or all of the above. The key to lasting customer relationships will be your ability to effectively engage with them remotely, removing as much friction as possible from each touch point. This might include offering multiple communication channels, flexible payment options, and creative solutions and products to meet their present needs. 7. Environmental Issues COVID-19 may be the most immediate existential threat, but that doesn’t mean the climate change has taken a backseat. The complex relationship between public health, the economy, and sustainability is one of the many important lessons emerging from this crisis. Expect a rise in consumer demand for environmentally conscious business practices as conservation efforts continue beyond the current pandemic. 8. Going Mobile We’ve been a mobile-first culture for several years already. But with today’s social distancing efforts, mobile is vital – and in many cases the only option – for communication between customers and businesses. Mobile-friendly websites, customer account portals, mobile payments, and apps will be key for futureproofing your business. 9. Advanced/Predictive Analytics Advanced analytics play an important role in resolving COVID-related issues of all kinds. The information we learn from current research will help insurers develop effective strategies for policy management, fraud detection, and personalized messaging. Access to and analysis of this data will allow you to better serve policyholders throughout these rapidly changing circumstances.

11. Technology Threats Unfortunately, some groups are capitalizing on COVIDrelated vulnerabilities, doubling down on social engineering efforts to obtain personal information and gain access to systems. Be sure to communicate to your employees and policyholders the importance of diligent adherence to cybersecurity protocols. 12. Virtual Reality Virtual reality and augmented/mixed reality simulations allow insurers to conduct training activities, site inspections, and meetings from a safe distance, which is especially valuable in a pandemics and other catastrophic events. The fight against coronavirus has impacted the industry to a greater degree and at a faster pace than any one of the originally predicted trends. Yet to this day, innovation and adaptability remain at the heart of the business continuity conversation. The companies that continue to thrive through this difficult time are those with a strong digital infrastructure, flexible workforce, and willingness to pivot their strategies in the face of unexpected events. This op-ed is a follow-up to One Inc’s 12 Insurance Trends for 2020 blog article, originally published in December 2019. Patricia M. Moore is the Head of Content Marketing for One Inc. For information on One Inc, go to www.oneincsystems.com.

As companies adapt to this new reality, the original twelve trends – now viewed through the lens of national crisis – have changed course from their earlier (pre-pandemic) trajectories.

10. Automation With severely limited access to equipment and facilities, automation has become much more than a convenience. It’s a critical tool of the trade. By replacing resource-intensive manual tasks with automated processes, you can dedicate more time to customer care, innovation, and other functions that require your undivided attention and can be performed from a distance.

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Is Your Agency

Human-Optimized?

By Ryan Hanley

Nothing has changed. COVID-19, social unrest, political division, automation, widespread consolidation...none of it matters (at least not for the success of your agency). People still need insurance. Period. In fact, many of the agencies I’ve spoken with recently are up year-over-year in gross revenue. How is this possible? They’re rapidly deploying “Humanoptimized” tools and processes in their agency. That doesn’t mean they’re chasing the next CRM, engaging in drawn-out discussions on the pros and cons of each agency management system, nor are they over-indulging in insurtech porn. Simply put, they’re adding human touches where humans increase value and removing human touches where they do not. This is the mission of the next generation of independent insurance agencies and nothing in the current political, societal, or economic environment has changed that mission. If anything, the dynamic nature of the obstacles we currently face has expedited the need for the transition to a human-optimized agency. Now is not a time to hide in your turtle shell or stick your head in the sand like some Ostrich meme. Now is a time for decisions and action. Will you be able to purchase the perfect technology? No. Choose a tool and move forward. Will you find the perfect game plan? Nope. Choose an action plan and move forward Will you make mistakes? Absolutely. Choose to accept failure as part of the process and move forward. You’re going to get frustrated. You’re going to spend money and time on tools that don’t work. You’re going to question your decisions (daily, if not hourly). Join the club. No one knows what they’re doing (and that’s ok), because we’ve entered a new era in the history

of independent agents...the era in which we reclaim our throne. The last forty years have been our Hero’s Journey. We were safe and comfortable. We knew our place in the world and the world was comfortable with how we fit in. Then the internet happened. Our world changed and we were forced to travel unknown lands. It was in these lands that we encountered technologists and venture capitalists. We battled these strangers, acquiring skills and scars alike. As a result of these trials, we return world stronger, fiercer, more dynamic, and diverse...we return the Hero. The old obstacles feel like anthills. So download still doesn’t really work...whatever. So carriers continue to decrease commission and push into the D2C space...big deal. So direct competitors continue to commoditize the market...who cares? You have a superpower that tech companies, insurance carriers, and D2C competitors will never have...YOU AND YOUR PEOPLE. Stop playing their game. They envy you. Yes, every insurtech startup, carrier call center, and direct competitor would die to have the human connection with their clients that your agency takes for granted. This means, as crazy as this may sound, they are fighting from behind, not you. Humans are the hard part, not technology or advertising or automation. Your mission, should you choose to accept it, is to optimize the humans in your agency to serve the clients you want to serve. This idea sits at the core of my agency, Rogue Risk, and provides a construct for every decision we make, every day with every client. My belief is that in maximizing the value of our humans we will maximize our value to our clients and ultimately (and selfishly) the value of our agency. Is your agency human-optimized? Ryan Hanley is the owner of Rogue Risk LLC in New York and will be a featured speaker at Virtual CONVO 2020.

Sneak Peak at Ryan Hanley’s Virtual CONVO Session:

The insurance industry just experienced five years of customer experience push in less than five months. Work from home isn’t a luxury anymore. You’re rapidly implementing VOIP phone services and moving your Agency Management System to the cloud. Automation is creeping into every aspect of your business. What the heck is going on?! The clients you serve today act differently than the clients you’ve spent a lifetime serving. Don’t panic, now more than ever the human advantage of independent insurance agencies is showing it’s true value. In this session we’re going to explore exactly what you should and should not be focusing on in order to build your own version of the human-optimized agency. 26

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august 2020

CONVO is going virtual! VIRTUAL ReTHINK • ReINVENT • ReIMAGINE

October 6-8, 2020

Tuesday & Wednesday: Full Day • Thursday: Half Day

YOUR CONFERENCE... YOUR WAY Moving CONVO to a virtual platform provides additional opportunities for education topics, speakers, and networking. Virtual CONVO will feature a variety of education sessions to meet the needs of your staff while providing up to 12 hours of IL Continuing Education. Register by September 1 to receive a special gift! ENHANCING YOUR KNOWLEDGE... EXPANDING YOUR OPPORTUNTIES

august 2020

www.ILConvention.com

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INSIGHT | associate news Thank you to our Associate Members.

Diamond Level Members

Platinum Level

Progressive Surplus Line Association of Illinois

Gold Level AAA Insurance Arlington/Roe

Silver Level Grinnell Mutual Reinsurance Company Imperial PFS IMT Insurance

Nationwide West Bend Mutual Insurance Co.

Bronze Level A. J. Wayne & Associates AFCO Credit Corporation AMERISAFE AmWINS Brokerage of the Midwest, LLC Auto-Owners Insurance Co. Berkshire Hathaway Guard Insurance Companies Columbia Insurance Group Continental Western Group Donald Gaddis Company, Inc. Donegal Insurance Group Encompass Insurance Encova Insurance Erie Insurance Group Foremost Insurance Group Forreston Mutual Insurance Company Frankenmuth Insurance Grange Insurance Illinois Mine Subsidence Insurance Fund Illinois Public Risk Fund Indiana Farmers Insurance Insurance Program Managers Group J C Restoration J M Wilson Kemper Keystone Insurance Group, Inc. 28

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Liberty Mutual/Safeco Insurance Madison Mutual Insurance Company MarshBerry & Company Maximum Independent Brokerage, LLC Mercury Insurance Group MetLife Auto & Home Midwest Insurance Company miEdge PEOPLE Previsor Insurance ProAg Management Inc RT Specialty - Naperville Selective Insurance Company of America ServiceMaster DSI Society Insurance Specialty Risk of America Transcom General Agency Travelers UIG - The Agent Agency United Fire Group Universal Property & Casualty Utica National Insurance Group W. A. Schickedanz Agency, Inc./Interstate Risk Placement Western National Insurance Westfield august 2020

associate news | INSIGHT Grinnell Mutual Recognized as Top 50 Property and Casualty Insurance Company

Grinnell Mutual has been recognized by Ward Group as one of its 2020 Top 50 Property and Casualty Performers for the fifth year in a row. Ward Group, the leading provider of benchmarking and best practices for the industry, analyzed the financial performance of nearly 3,000 property-casualty insurance companies based in the United States and identified the top performances based on objective data and subjective quality measures. Each company must pass primary safety and consistency tests and are measured and scored along five-year average returns on equity, assets, total revenue, growth in revenue, growth in surplus, and combined ratio. “It is always an honor for Grinnell Mutual be recognized by Ward’s as a top 50 property and casualty insurance company. To be part of that list five years running is an accomplishment we’re very proud of,” said Jeff Menary, president and CEO of Grinnell Mutual. “We’re grateful to our employees, members, and agents, who always put in the work to ensure our continued growth and financial security.” Ward Group is in its 30th year of conducting the analysis.

Dina Schultz Named Senior Vice President of Pekin Insurance

Pekin Insurance has announced the newest member of its Executive Team, Dina Schultz. Schultz was recently named the Senior Vice President (SVP) and Chief Operating Officer (COO) of The Farmers Automobile Insurance Association and SVP of Pekin Life Insurance Company. Prior to joining the Executive Team, Schultz was SVP and COO at Society Insurance in Wisconsin. In her tenure there, she oversaw the strategic leadership of internal operations. Additionally, she led strategic planning that successfully shaped and guided the future growth of the company. She also served as the Vice President of Sales and Marketing, where she implemented a new brand and expanded into other states. Schultz spent 10 years at Missouri Employers Mutual, the state’s leading workers compensation carrier. While she served as COO, the company grew from a startup to $150 million in revenue. Schultz has served as a board member of the Wisconsin Restaurant Association and is a past president of the University of Wisconsin, Fond du Lac Foundation. She is an active member of the National Alliance of Mental Illness (NAMI) - Dane County, a Rotarian of the Fond du Lac Rotary Club, and previous board member of the Cops for Kids Foundation in Fond du Lac, Wisconsin. A native of Camp Point, Illinois, Schultz earned a Bachelor of Science degree in Marketing, Public Relations, and Advertising with a minor in Psychology from Stephens College.

august 2020

FCCI Insurance Group Names Cina Welch as President and CEO

The FCCI Insurance Group board of directors is pleased to announce its selection of Christina ‘Cina’ Welch as president & CEO. Welch began her career with FCCI in 1998 as attorney in the legal department and has held varied and progressively complex roles during her tenure, taking on the role in 2018 of executive vice president, general counsel, and chief audit & compliance officer. “We are delighted to welcome Cina to her new role with FCCI,” said Jack Cox, FCCI’s chairman of the board. “We were fortunate to have a number of exceptional internal candidates. We feel confident in our decision and look forward to what Cina’s leadership will bring to FCCI in the coming years.” Welch’s many accomplishments include the development of FCCI’s Data Security Incident Response and Information Security programs; building a robust Enterprise Risk Management program; managing FCCI’s Business Continuity Management program – including the corporate COVID-19 response; and leading the company’s geographic expansion efforts. To learn more about FCCI Insurance Group, visit www. fcci-group.com.

J.C. Restoration – The Official CLEANUP Hitter Sponsor on Both Sides of Town J.C. Restoration, Inc. (JCR) is proud to announce they have signed on as a 2020 CLEANUP Hitter sponsor for both Chicago baseball teams in town. JCR will be featured as the official CLEANUP Hitter sponsor on WGN Radio 720 for the Chicago White Sox, which consists of live in-game mentions. On 670 The Score, the restoration company will be featured after the games as the Post-Game CLEANUP Hitter Recap sponsor for the Chicago Cubs. In baseball, the CLEANUP hitter is the fourth hitter in the lineup. This is the player with the most power on the team and their most important job is to bring runs in - the CLEANUP hitter “cleans up the bases”! This partnership is a perfect match since JCR is the premier disaster restoration company in the Chicagoland area – from North to South. From water and fire damage restoration, to emergency clean-up and board-up, to full reconstruction services, JCR is the CLEANUP partner of home and business owners in greater Chicago. To mark the new partnership, JCR has created a new phone number so baseball fans will be able to easily reach them: (331) CLEANUP.

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august 2020

iia of il news | INSIGHT

Education Classes View the latest information at www.iiaofil.org/education.

august

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Pre-Licensing - Property & Casualty Springfield Pre-Licensing - Life & Health Springfield Agents E&O Webinar E&O Roadmap To Homeowners Endorsements Webinar E&O Roadmap To Cyber & Privacy Insurance Webinar CISR - Insuring Commercial Property Webinar E&O: Commercial Property Coverage Gaps Webinar Culture, Ethics, and E&O Webinar E&O Roadmap To Policy Analysis Webinar Ethical Dilemmas Webinar E&O Roadmap to Identity Theft Webinar E&O Roadmap to Personal Auto & Umbrella Webinar Pre-Licensing - Life & Health Springfield CISR - Elements of Risk Management Rolling Meadows CISR - Commercial Casualty 1 Webinar E&O: Roadmap to Personal Auto & Umbrella Webinar E&O Risk Management Webinar

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Pre-Licensing Course Life & Health Rolling Meadows CISR-Commercial Casualty 1 Orland Park E&O Roadmap To Homeowners Endorsements Webinar E&O Roadmap To Cyber & Privacy Insurance Webinar E&O Roadmap to Identity Theft Webinar E&O Roadmap to Homeowners Insurance Webinar Ethics and E&O Webinar E&O Roadmap To Policy Analysis Webinar CIC-Agency Management Springfield Agents E&O Webinar Pre-Licensing-Property & Casualty Springfield CISR-Insuring Personal Residential Property Rolling Meadows Ethics and Agent Liability Webinar E&O Risk Management Webinar CISR-Agency Operations Springfield E&O: Commercial Liability Coverage Gaps Webinar E&O Roadmap to Personal Auto & Umbrella Webinar

New Members

member agencies

CIC - Insurance Company Operations Webinar

Redmon Insurance Agency, LLC Collinsville

Pre-Licensing - Property & Casualty Springfield

Rigel Hines and Associates Corp Tinley Park

CISR-Insuring Personal Auto Exposures Webinar

august 2020

Rocchetta, Inc. Skokie insight

INSIGHT | agency members in the news

In Memoriam

Donald S. Blank Donald S. Blank, 91, of Olney, died July 20, 2020 at Carle Hospital. Don was born October 13, 1928 in Stringtown, Illinois, the eldest son of Sylvester Henry “Joker” and Mary (Michl) Blank. As a youth, Don attended St. Henry’s seminary in Belleville, then later travelled west to Wyoming with his brother Jarl for adventure and a brief stint working at Pure Oil. Returning to Olney in 1950, Don partnered with his father Joker, where he went on to lead his family legacy, Blank’s Insurance Agency. Don contributed actively in business, community, and his church. He was active numerous years with the Independent Insurance Agents of Illinois (IIA of IL) and received the Cartwright Award, the highest honor for a IIAI member agent for industry service, activity on behalf of member agents, and community activity over his career. He was a fourth-degree member of the Knights of Columbus and celebrated 50 years in the organization as well as serving as chairman of the St. Joseph School board and various other community organizations. Don fell in love with his wife Julia (Herman) and the two were married March 5, 1957. He was such a beloved, funloving father, grandfather, and great-grandfather and warm friend to all. His hobbies included winemaking, history, reading, stamp collecting, nature, photography, and of course, raising his voice in song along with the heavenly St. Joseph Choir. Don is survived by his Daughters: Jane (Rich Siil) Blank of Chicago, Julie (Tom) Hearring of Olney, Emily (Greg) Dowell of Barrington, Stephanie (Joe) Fasone of Oak Park, and Melissa Blank of Chicago; Sisters, Margery Jean Lee

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and Dee Ann Russel; Grandchildren: Jamia (John) Joyce of Claremont, Allyson (Angel) Padilla of Olney, Eliza (Spud) Dick of Indianapolis, IN, Jimmy Dowell of Chicago, and Sophia Fasone; Great-Grandchildren: Madelyn Dunn, Ella Eimer, Sean Joyce, AJ, Bennett, and Cruz Padilla, and Mackenzie Dick. Don was preceded in death by his parents, wife, sisters, Joyce and Jackie, and brother, Jarl. “Don’s contributions to the association were many and significant, from his service as a Regional Director to his leadership as Chairman of the Long Range Planning and Education Committees,” said Phil Lackman, IIA of IL CEO. “He was the first to step up and volunteer for projects and Task Forces. But the most telling evidence of Don’s many contributions to the Association was his receipt of the Cartwright Award, the highest honor presented by the IIA of IL, in 1995. Don has the distinction of being one of the few Cartwright Award recipients who have not served as a Past President of the Association. The loss of Don Blank will be felt throughout our Association. It was an honor to know him.” Don’s association legacy will live on through his daughter, Julie Hearring, President of the Association in 1999, and his granddaughter, Allyson Padilla, current Young Agents Committee Chair. The IIA of IL Board of Directors and staff extend our deepest condolences to Don’s family and friends.

august 2020

agency members in the news | INSIGHT Christine Bailey, Mark Bailey Named Top Forty Under 40

Christine Bailey and Mark Bailey of Bailey Family Insurance in Springfield have been named to Springfield Business Journalâ&#x20AC;&#x2122;s annual Top Forty Under 40 list. The Springfield Business Journal proudly features 40 leaders who are under the age of 40 in the Springfield and neighboring business communities. These individuals are selected based on their contributions to the local business community and the community in which they reside. They represent, in part, the future of business in the community and in central Illinois. The selecteesâ&#x20AC;&#x2122; career paths, educational background, and community affiliations are varied. They represent the best and brightest from a wide range of occupations. To view the Forty Under 40 profiles, go to https:// springfieldbusinessjournal.com/awards-program/fortyunder-40/.

august 2020

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INSIGHT | classifieds for the insurance professional by the insurance professional

COMMERCIAL LINES ACCOUNT MANAGER POSITION AVAILABLE

25. The Commercial Lines Account Manager reports to the AVP of Commercial Lines. This position is responsible for assisting clients and sales executives, in all aspects of customer service and marketing by managing an assigned book of business. A full job description is availabe upon request. Dansig Inc. is an Equal Opportunity Employer. Contact:

Tina Suzewitz Dansig Insurance Risk Advisors (217) 451-9101 tinas@dansig.com

AGENTS, AGENCIES, BOOKS OF BUSINESS, PRODUCERS AND ACCOUNT MANAGERS WANTED.

32. Searching for something different or a better deal? Tired of the cookie-cutter option, the one-size fits all approach in making a deal? Looking for something better suited to your immediate and future plans? Share your story with Olson. We will help put your plans into action. You will find us nimble, direct, and great listeners. The Olson promise is to customize each deal. We are all about collaboration and being true partners. The deal must work for you before it can ever work for us. Whether for yourself, your agency, your staff or location - run your story by us. Today, tomorrow, or further down the road Olson is always ready to strike a deal and craft a winning plan with you. Our relationship manger, Jim Sandberg and our founderâ&#x20AC;&#x2122;s son, Jeff, hope to hear from you, soon!

Jim Sandberg Olson Insurance Group/Norman G. Olson Company (708) 986-1115 Jim.S@Olson-Ins.com JeffOlson@Olson-Ins.com

AGENCY/AGENTS/PRODUCERS WANTED

02. Forest Park/Oak Park agency for over 60 years, will meet your needs by providing space, markets, marketing & sales support, automation, merging with or purchasing your agency. Perpetuation/ Succession Plans, BuySell Agreements also available. We have experienced, educated and dedicated staff for you and your clients. Have access to our numerous companies, office services and many other resources. Retain ownership in your book with contingency. Please look closely at us- we are an agency you want to do business with! Weâ&#x20AC;&#x2122;ve done it before, we know how- we make it easy! Visit our website at forestagency.com/agents.html, or call for a confidential discussion and a list of Agency benefits. Dan Browne will provide an agency evaluation/appraisal at little cost to you. Please call:

Dan Browne or Cathy Hall Forest Insurance (708) 383-9000 www.forestinsured.com/mergers-acquisitions

OPPORTUNITIES/SPACE AVAILABLE/RETAIN OWNERSHIP

13. We are a 100 year old Northbrook agency looking to discuss any mutually beneficial opportunity. Our producers, mergers, clusters and agency purchases receive 50% commissions on new and renewal business without any expenses. We can provide: office space, phones, agency management system, service renewals and changes. The companies we represent are: Badger Mutual, Employers Mutual, General Casualty, Guide One, Hartford, Kemper, Progressive, Rockford Mutual, Safeco, State Auto, Travelers and Met Life. Contact:

Nancy Solomon Martini, Miller & Schloss, Inc. (847) 291-1313 Ron@martini-miller.com

AGENCY WANTED

20. Since 2004, Central Illinois Agents Group LLC has been providing independent agents with a variety of markets with contingency opportunities. Agents have availability to several markets that they may not be able to sustain or maintain on their own. We have markets for personal, commercial, agricultural and crop insurance lines. Let us help you get to the next level.

Visit www.ciagonline.com for contact information.

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august 2020

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e-Insight - August 2020

Articles inside

The Four Key Post-Covid Trends Insurers Should Tap Into

Is Your Agency Human-Optimized?

One Thing Leads to Sales Success

12 Trends for 2020 in the New Normal

Four Lessons From Coronavirus for Improving Work Performance

Five Trends Impacting Traditional Auto Insurance