FNO: InsureTech

“A lot of things are evolution. Not revolution.” - Tim Bruffey (click to tweet) People used to think of adjusting as an art. That there was a touch to inspecting damage, writing scope notes, and sending it off to the insurance company. But about five years ago, the insurance industry started to see the opportunity for machines to assist in the process. Now, we live in an age where drones and robots are able to compute the cost. This shift is the impetus for much of the discussion around insuretech. That’s why on today’s episode of FNO: InsureTech, we are joined by Tim Bruffey—the Vice President of Innovation at Accurence. The Accurence Smart Automated Guideline Engine (S.A.G.E.™) automates key adjusting components including: inspection, claim documentation, scoping, estimating, and auditing across multiple perils. Tune in to this episode to hear Tim’s insights on everything related to having a technology-solution provider inside the insurance industry. “What made adjusters good adjusters is that they were coming to the workforce with a base knowledge of construction. I don’t think that’s really common anymore.” - Tim Bruffey (click to tweet)   The FNO: Tips It turns out that there’s a lot of valuable data inside the scope notes that most adjusters just throw away When creating insuretech solutions: integrate with others like Xactanalysis, Xactimate, Geomni, and Eagleview Independents respond and calibrate much more quickly than staffed groups Collaboration between adjusters can be complicated when laborers have certain working restrictions (ex: can’t climb over a certain height) Accurence’s recent acquisition of National Water is creating QualityAssist for water mitigation Water losses create a uniquely complicated set of data for insurance carriers to work through   Fourseventy Claim Management www.470claims.com        

“In 2019, the chance for a weak to moderate El Niño is definitely on the table.” - Dr. Philip Klotzbach (click to tweet) Sandy, Katrina, Dennis—these are the names of catastrophic storms that devastated millions of people and left billions of dollars in damages. Hurricanes are sure to happen, but how can our increasing knowledge and advancing technologies help us better predict their behaviors? On today’s episode of FNO: InsureTech—we are joined by Dr. Philip Klotzbach to discuss all things related to hurricanes.  Phil Klotzbach is a Research Scientist in the Department of Atmospheric Science at Colorado State University, and among many achievements—he developed the two-week forecasts currently being issued during the peak months of the hurricane season between August-October. He has published over two dozen articles in peer-reviewed journals such as Journal of Climate and Weather and Forecasting. Tune in to this episode to hear Dr. Philip Klotzbach’s insights, so you can better understand the trends and science of hurricanes. “With forecasting, you learn a lot more when you bust than when you have a good forecast.” - Dr. Philip Klotzbach (click to tweet) The FNO: Tips Large-scale signals in the atmosphere and in the ocean can predict hurricanes El Niño is warmer than normal temperature in the central/tropical Pacific The higher damage done by hurricanes is largely because more people are living on the coast Due to technological inadequacies, much of the storm-tracking data from the past isn’t reliable Tropical cyclones’ primary fuel source is warm ocean water, whereas mid-latitude cyclones thrive off the gradient of temperature Especially in the Gulf of Mexico, hurricane storms can appear out of nowhere The number of systems coming off the coast of Africa doesn’t change year-to-year (around 60-70) The more southern the storm is coming off Africa, the worse the damage will be Vegetation in the chaparral climate is designed to burn Resources National Hurricane Center Seasonal Hurricane Predictions Tropical Tidbits   Fourseventy Claim Management www.470claims.com

On today’s episode of FNO: InsureTech—we are discussing the upcoming PLRB conference. Seated are Matt D. Fatheree, Rob Beller, Lee Boyd, and Janine Davis. Tune in to this episode to get the inside scoop for the upcoming event! PLRB, Claims Conference & Insurance Services Expo is being held this year in Indianapolis from March 31 - April 3, 2019. For more information about PLRB, visit:  plrbclaimsconference.org If you have any questions—you can reach Janine Davis at janine@470claims.com Fourseventy Claim Management www.470claims.com        

“It’s more likely that a homeowner will have to file a claim for water damage than fire and theft combined.” - Gabriel Halimi (click to tweet) A whole economy exists after the claim has been made. From adjusters to call centers, carriers to providers—this ecosystem of service and transaction defines the insurance claims space. But what happens when technologies get introduced that lessen the chance for a claim ever needing to be made? On today’s episode of the FNO: InsureTech, we are joined by CEO and Co-founder of Flo Technologies—Gabriel Halimi. Flo is a first of its kind water control and monitoring service that proactively detects microleaks and other vulnerabilities anywhere in a home water system (thus, reducing the need for claims.) Gabriel’s father, Henry Halimi, invented the technology—with his 25 years as a fluid mechanics engineer, plumbing manufacturer, and inventor. Tune in to this episode to hear Gabriel’s technology and plumbing-centric insights! “People make good decisions when they have better data.” - Gabriel Halimi (click to tweet) The FNO: Tips Leaks and water damage are the most common cause of preventable home damage Similar to a heart attack, there are many indicators for future water damage The EPA estimates that 13% of household water nationwide is lost to leaks (over a trillion gallons/year) Insurance companies see water claims as an indicator for future claims, as the fixes are typically just band-aids Look at the number of industries a company can benefit when assessing value   Fourseventy Claim Management www.470claims.com

“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