FNO: InsureTech

“The industry is realizing that it’s not just about using technology. It’s that technology is changing the fundamentals of risk.” - Ali Safavi (click to tweet) Technology is inescapable. With Alexa ordering our toilet paper, Nest changing our home’s temperature, and smartphones controlling every other part of our lives—we’ve become walking cyborgs. And in insurance, the story is no different. With each day comes a new technology challenging the archaic systems of yesterday. That’s why on today’s episode of FNO: InsureTech, we are joined by Ali Safavi to discuss the intersection of technology and insurance. Ali Safavi is the Global Head of Insuretech at Plug and Play. Ali is also a Partner in Plug and Play Ventures, our venture arm, where he invests in startups in different spaces including insurance, travel and hospitality, and IoT. Ali has published numerous articles on data analytics, machine learning, and insurance, as well as holds an M.Sc. in Computer Engineering Tune in to this episode to hear Ali’s insights, so you can apply them to your product or business! “A good team always finds a product-market fit.” - Ali Safavi (click to tweet) The FNO: Tips A platform is different than a technology because it provides an ecosystem of data and insights Compared to other industries, insurance is capital-rich, from assets to cash flow 50-60% of insurance startups started with an application unrelated to insurance, and then shifted into the market Provide better value by looking at your clients as partners, not clients At its core, technology is driving fundamental changes to risk Insurance is hard to reshape because it’s a concept: distributing risk across many people Invest in insurance companies that are service-oriented, rather than reimbursement-centric. Check out Neos for a company with smarter home insurance Entrepreneurship works off the network effect, people who exit want to do it Fourseventy Claim Management www.470claims.com        

“Better beats perfect.” - David Williams (click to tweet) Disasters happen. And when that time of crisis hits, all touchpoints of the insurance chain of command are notified. But is this communication seamless? Or, are some notches in the workflow bottlenecking the progress to the next? On today’s episode of FNO: InsureTech, we are joined by David Williams to discuss the intersection of technology and insurance claims. David is the Chief Claims Officer at the Texas Windstorm Insurance Association, and in this conversation—he shares his unique lens on the claims space. Tune in to this episode to hear David talk about everything from how to best manage your employees to the future of insuretech.   “We all know the longer a claim stays open, the worse it gets.” - David Williams (click to tweet)   The FNO: Tips Claims transformation can be rooted in changing process, procedure, people, or technology Six sigma is a method for managing projects that looks at 2 things: the voice of the customer and the voice of the process Many public-serving insurance operations are understaffed and thus, unprepared for the bigger natural disasters Look EagleView, Guideware, and Xactware as solutions to shortening cycle times Studies show that around 60% of technology projects never get implemented due to fear of not being perfect Get to know your clients instead of using sales and marketing tactics In the future, the claims consumer will demand a multi-channel experience Insuretech will have to create the expert systems to bridge the gap between the newbies and the people who are retiring Fourseventy Claim Management www.470claims.com        

“We always want the risk. We just have to put a price on it.” - John Langowski (click to tweet) Most people think paperwork when they hear the word ‘insurance.’ From filling out applications to filing claims, it seems that every touchpoint of the insurance-based customer journey is filled with paper and pen, PDFs to fill out, and signatures to sign. But the insuretech companies of today are shifting this idea. On today’s episode of FNO: InsureTech, we are joined by John Langowski—the Chief Claims Officer and EVP of Swyfft. Swyfft is disrupting the homeowners insurance industry by using big data and analytics to make buying insurance as easy as typing in your address. Tune in to this episode to hear John’s insights, so you can learn how your company can integrate technology into their equation. “Technology is a double-edged sword. It solves problems and it creates problems.” - John Langowski (click to tweet) The FNO: Tips The data automation in technology-driven solutions allows the user to transcend traditional model speeds Entry-level insurance adjuster jobs provide perks and a work-on-your-own schedule lifestyle Stay away from Florida-based insurance businesses, as the laws are much harsher The majority of people will never file a claim on their insurance policy Understand the heightened emotion of a claim when setting up businesses around it In claims—time, transparency, and knowledge of outcome are most important The average age for a claims professional is 46 years old, 25-30% retiring in the next 18 months Bigger carriers may provide more transactions but understand there are compromises involved With the rise of Alexa and Siri—look at GEICO still using “save 15 minutes” as evidence for bigger companies not evolving Fourseventy Claim Management www.470claims.com

“When an insurer sends claim information to us—we’re the clearing house, the stewards of their data.” - Mike Fulton (click to tweet) Self-driving cars are scary. Are we really going to hand over our fate to algorithms and microchips? Whether we know it or not—we already are are, with technologies like lane assist, self-parking, auto-braking. These  micro-versions of the greater technology warm us up to the idea, so that when it is introduced to the market—we embrace it fully. And the insurance industry is doing the same right now with claims and automation. That’s why on today’s episode of FNO: InsureTech, we are joined by Mike Fulton to discuss this future. Mike is president of Xactware Solutions. He oversees Xactware’s integrated solutions for estimating, managing, and analyzing property claims as well as products for professionals involved in the repair and maintenance of bank-owned property and real estate sales. Tune in to this episode to hear Mike’s insights on everything insuretech-related, from automation in claims to computing power in insurance companies. “What most insurers are interested in automating are the very high-frequency, low-severity type of losses.” - Mike Fulton (click to tweet) The FNO: Tips Implement automation in your claims process according to policyholder demographics Millennials aren’t as willing to embrace automation as you might think Studies show people are willing to give more money to a machine than a machine pretending to be human Data is what drives automation; the more data you have, the more automated the system can be The IoT and insurance industry are developing technologies that sell parts for repair at the time of accident The future generation doesn’t know how to fix things—check out Nuts, Bolts & Thingamajigs as a solution In 2018—the insurance industry had $46 billion in loss claims In the last 3 years, the average cycle time from contact to inspect has dropped 1.5 days Insuretech typically means VC-funded—and a smaller, younger team Fourseventy Claim Management www.470claims.com   

“Our view is that being a professional drone pilot is a new class of skilled labor.” - Dan Burton (click to tweet) Drones are all the buzz. We hear about Amazon now delivering packages via drone flight and our neighbor getting the newest drone for Christmas—but what do these mini-UFOs mean for the world of insurance? In claims, the need for drones is robust—in mines, surveying water damage, calculating the dimensions of a construction site.  These are just some of the examples where drone technology can be beneficial to insurance claims. But it turns out that the equation for success is more complex than just filling these needs. A drone company must capture the data and analyze it in a way that the carrier can do something with. On today’s episode of FNO: InsureTech, we are joined by visionary and veteran, Dan Burton, the Founder and CEO of Dronebase. Started in 2014, Dronebase is now the largest provider of commercial drone flights. Tune in to this episode to hear Dan’s insights about drone flight in the insurance space, so you can know where it fits into your product or service. “School is great—but practical application is better.” - Dan Burton (click to tweet) The FNO: Tips Fast, reliable drone data allows the customer to save time and money Many drone pilots are military veterans, leveraging their skills into civilian life When first starting out, just seek out experience to gain knowledge Drone technology progresses toward becoming obsolete at a rate 2x the iPhone Put as much energy into operations as you do into marketing and sales When employing 1099s—you want to keep them working as much as possible In the future, sprouting technologies like thermal sensors will create more pointed datasets The successful verticals will be established by the acquisition and analysis of certain datasets There are internal capture drones specifically designed to fly in the interior (ex: warehouses)   Fourseventy Claim Management www.470claims.com        

“There’s been tremendous growth in the number and complexity of cyber attacks that take place.” - Gary Sullivan (click to tweet) We’re all living physical and digital lives. And for insurance, this means we must be covered in both worlds. For the physical, we have our traditional insurance models—property, life, car, etc. But now, with so much of our information inside computers and in the cloud, we must also seek out cyber insurance. On today’s episode of FNO: InsureTech, we are joined by Gary Sullivan to discuss cyber insurance. Gary Sullivan is Assistant Professor of the F. W. Hirt Erie Insurance Risk Management Program at Mercyhurst University. Previously, he was the Vice President of Property & Subrogation Claims for Erie Insurance. Tune in to this episode to hear Gary’s insights from cybersecurity to blockchain technology to the evolution of drones inside the insurance industry. “Innovation starts at the top. The CEO has to have innovation as a priority.” - Gary Sullivan (click to tweet) The FNO: Tips Insurance companies have 2 concerns when it comes to cyber: Protecting data just like any other company A marketing opportunity when offering cyber insurance The current job market is very hot right now for all types of insurance professionals There is a gaping hole in claims knowledge in the cybersecurity insurance space Most recent reports estimate cyber insurance as a $200 billion industry There are 5 types of cyber attacks: Fishing: Emails sent under the guise of someone in the organization asking for link-clicks Ransomware: when the system is taken hostage and you have to pay to have it be released Cryptojacking: when blockchain miners steal computing power Nation-state threats: when other countries initiate cyber attacks Insider threats: when employees of the organization—willingly or unwillingly—undermine the organization Blockchain is an immutable ledger that enables transparent, security, and anonymous transactions Vendors must develop rapport with the decision-makers, relationships are the highest priority This next generation is ideally situated to be in the insurance industry: they’re competitive, pragmatic, racially diverse, and tend to learn information fast The drone story continues to evolve, but it’s still well within the parameters of being safe and cost-effective. Fourseventy Claim Management www.470claims.com        

“We try to not just focus on the measurement piece of it, but the context piece as well.” - Andy Greff (click to tweet) For property claims, the outside is much easier to assess than the inside. Whether it’s via drones or actual adjusters on site—pulling information from the exterior of a property requires very little when compared to the demands for the interior. To assess the interior requires going inside the property, stepping into someone else’s space, and potentially interrupting someone else’s day. This set of demands calls for a technology solution. That’s why on today’s episode of FNO: InsureTech, we are joined by Andy Greff to discuss his application PLNAR that uses SmartPicture technology to swiftly and accurately process the information inside a property. Tune in to this episode to hear Andy’s insights on everything from insuretech to Series A funding. “In startups, there’s a lot of high-highs and a lot of low-lows.” - Andy Greff (click to tweet) The FNO: Tips Augmented reality is when there is a different overlay on top of the real world Carriers are often concerned with the real-time status of a claim Speed of delivery eliminates the customer’s ability to be curious Carriers have the most issues when the control of the claim starts to slip away Not many people are going into the adjuster world because frankly—it’s a tough job Software companies need a relatively small amount of money to get off the ground The most important thing to consider for a startup is staying on the playing field Smarter technologies empower lower-skilled data collectors to give desk adjusters exactly what they need Fourseventy Claim Management www.470claims.com        

“At its core, HOVER is a machine-learning technology that transforms smartphone photos of a home into a scaled, interactive 3D model.” - Kevin Reiley (click to tweet) Every company strives for a great customer experience. But often times, being a customer can be a pain. From calling support to scheduling an appointment—the tasks required to be a customer can, more often than not, feel like work. But what if in today’s technologically-driven economy—there is a shifting customer experience? That, by empowering the customer to actually do some of the work, you make their experience better overall. This is what the HOVER team has uncovered in their service. That the customer is fully capable and motivated to use their technology, much more so than going through the archaic motions of assisting adjusters on site. On today’s episode of FNO: InsureTech, we are joined by Kevin Reiley and Justin Hancher from the HOVER team. HOVER is a 3D technology company that creates fully measured, customizable 3D models. Tune in to this episode to hear Kevin and Justin discuss what they’ve learned about the modern-day consumer, so you can apply those teachings to your product or service. “The insured wasn’t aware of how the settlement number was being derived.” - Kevin Reiley (click to tweet) The FNO: Tips HOVER can benefit other industries outside insurance (ex: home inspections, mortgage financing, real estate, etc.) There is a rising trend of 3D modeling technologies enabling the policy holder to take pictures and thus—assist in the claims process Nearly 90% of homeowners are adopting this technology Creates transparency - homeowner sees all the measurements firsthand Homeowners are also able to use the 3D model for other projects Millennials would rather take pictures themselves than spend time on the phone or have someone on site Accuracy is most important: decreases cycle times and reduces both known and unknown costs Empowering the homeowner to participate actually produces more detailed information of the interior Inaccuracy in the underwriting industry is due to carriers using public data sets 3D modeling technologies like HOVER output into any CAD program, saving any professional time from the get-go Fourseventy Claim Management www.470claims.com        

“Elevate is where business gets done.” - Dustin Barrington (click to tweet) On today’s episode of FNO: InsureTech, we are joined by Dustin Barrington, Director of Product Marketing at Xactware Solutions, to discuss the upcoming conference Elevate. Tune in to this episode to hear about everything from the conference itinerary to what Rob and Lee will be presenting about! You can learn more about Elevate here  Fourseventy Claim Management www.470claims.com    

“Claims are a linear process. They move from A-Z, but they don’t always take the same path to get there.” - John Hall (click to tweet) If you spend any time in the insurance world, you’re bound to hear the sentiment that a vehicle claim is distinctly different than a property claim. But is this true? It turns out that while a property claim has more information to fill in, there are still the same questions being asked. The customization of a property is no different than the drilling down to what part needs fixing inside a vehicle. That’s why on today’s episode of FNO: InsureTech, we are joined by John Hall, President at Audit Services Inc. to discuss how claims fit into the auto insuretech space, where we see technology driving their position, and why they are no different than property claims. Tune in to this episode to hear John’s insights, so you can speak both the languages of property and auto claims. “As more and more things become automated—those claims that are an exception to the automation process need to go somewhere.” - John Hall (click to tweet) The FNO: Tips Even with all the technologic automation, there still exists the need for human labor In automobiles, innovation yields safer cars but higher costs to repair Studies show that a new auto technology takes 30-40 years to make its way through the fleet of U.S. vehicles In general, rate of change is slower than people think Contrary to popular belief, most vehicles accidents occur in the city (not the highway) Understand that the average home loss is small Many carriers are prioritizing automation over accuracy The most successful carrier partnerships are the ones born early in the process Follow up with all parts of your workflow to find where the gaps are There will always be a need for in-person claim adjustment Fourseventy Claim Management www.470claims.com