Gregory Maciag

Property Casualty 360 Interview

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Mobile Insurance in Asia

Insurers in Pakistan are bringing life insurance to new markets via “branchless” financial services organizations operating by mobile phone. For example, subscribers to Zong Mobile can get 30 days' coverage between PKR 100k (about $1,000) to PKR 300k (about $3,000) for a daily premium as low as PKR 2 (one fiftieth of a cent, US). To put some context around that, according to Bloomberg http://www.bloomberg.com/slideshow/2012-08-13/highest-cheapest-gas-prices-by-country.html#slide52 the average daily income in Pakistan is $3.57. The service is delivered using just four text messages – and that's all.

The challenge in growing this market is not about technology but awareness. SMS (texting) technology is a perfect channel for life insurance sales transactions. It's not so good for sales education. There will need to be further investment in relationship management.

Another product mentioned in the review I read gives users monthly coverage based on the balance in their mobile bank accounts. This is a cool extension of an existing offering and a good way to promote money management.  I notice also that Zong Mobile is a business of China Mobile. The new mass markets for insurance are being built in Asia, and are based on mobile technology. The potential for innovation and growth is jaw-dropping.  Mobile Life Insurance

Fallacies: Standards Are A Cost

Some say: “Standards are a cost.”   Actually, standards are an investment. This is a completely different department. You wouldn't confuse the money you paid for an income-yielding security with what you paid for a new car. Similarly, people ought not to confuse IT as a cost of doing business with standards as an investment in the business.

Here's an analogy. Everybody has to eat, and food costs money. So food is part of the cost of living. But this doesn't mean it's just a cost. You can eat healthily or unhealthily. Certain food choices are like investments. You might even invest in the guidance of a dietitian or a cookbook. This isn't wasted money: it's carefully directed investment. 

We live in the information age, we have to process and store and exchange information. The question is: Do we want to do that in a smart way, or a dumb way? Do we want to maximize the value of our information and our ability to profit from it? Do we want to make sure we'll still be around in the future to continue our business? If so, we need standards. 

Now, you don't invest all your money. You need some of it to live on, and some to enjoy. When you invest, you probably balance the risks you buy into. It's the same with business technology. Most of your budget goes toward keeping the lights on and keeping pace with growing volumes and speeds. Some of it should also go into the no-risk, ultra-high-return vehicle of standards. This is because it's precisely standards that are going to lower your “lights on” and “keep up” costs! Organizations have to run to stand still. Standards do most of the running for you.

Marketing to the Connected Generation

ACT Article from Jeff Yates:  Ryan Hanley has achieved great success using social media and other digital tools. He focuses on consistently delivering meaningful content that demonstrates the value his agency provides to clients and his community, as a mentor and guide in the insurance buying process and after the sale is made. He urges agents to get over their fear of using social media, because it is not difficult to learn and use, and because it represents a huge opportunity for agencies to employ to level the playing field.  Download ACT article_Marketing to the Connected Generation_Hanley_April 2013

 

Open Data: Knowledge Gaps

A recent survey of the UK public sector found that 72% of staff knew about open data and its importance. 52% recognized that access to data – and to data standards – will generate growth in public and private sectors. This sounds encouraging until you learn the UK has an ambitious open data agenda, and wants to be a leader in this area. You'd expect recognition of the basic messages to be higher.

More worrying, 78% didn't know what open data initiatives are going on, or what their benefits are meant to be. 75% didn't know about sources of data outside of their department that might help them do their jobs. It seems some headline messages have got through, but there's low awareness of practical matters. The survey results give open data advocates and program leaders a basis on which they can build. It looks like the next step should be outreach. Time to connect the dots.  Transparency Hub

Rules Decisions & Standards

While pondering the difficulties still faced by enterprises employing a business rule management system (BRMS) and attempting to fully enable business users, I see yet another wave of standards coming our way. Standards for rules have been attempted in a variety of ways over the years. Each attempt provided some valuable insight but none really answered the call. This got me to thinking about the how far the field has come in terms of approach and execution but not in terms of standardization. Read more on Standards from ACORD and others at Brian Stucky

Standards Consolidation

Steve Keifer wrote a thoughtful piece about the proliferation of B2B standards back in 2009. Looking back on it, one pattern seems clear to me. Standards emerge in the areas where they are needed – domains where different parties need to share data with each other. Standards converge when different parties realize they can simplify their transactional behavior.

So, over time, the standards population waxes and wanes. We saw a burst of B2B standards when industries started to connect online. We now see a shrinkage as these standards converge. But the smaller standards population that results is stronger, more resilient and more useful than the plethora it replaces.

It would be nice if everyone got right-size standards right from the start. However, we're dealing with evolution here. Industries must go through the expansion phase before they can successfully consolidate, and move forward on a strengthened, unified basis.  The Long Tail of eCommerce Standards

Open Data: Keep it Free

Jerry Hall looks at the pros and cons of keeping public data in the public domain. Is the burden on the public purse too high? Does keeping open data public amount to socialism? Or do the collaborative benefits of a level playing field outweigh such concerns?

Hall mentions that staying public is a better guarantor that data standards will emerge and be applied. My view is public data has already been paid for by the public through the funding of the organizations that collect and create it. It already belongs to everyone. But this doesn't stop people from profiting by it.

Meanwhile Code for America is building the CfA Commons, an app directory and knowledge base about civic data. One of CfA's goals is “Aligning on data standards”, because “standardized data are the raw materials for building software that’s actually interoperable and portable across jurisdictions.”   Whoever owns it, without data standards, open data is nothing.  Open Data Opportunities

 

How do you know what you don't know?

Eduard Held of PERILS, an insurance industry initiative aimed at improving the availability of catastrophe insurance market data, has a striking insight about carrier attitudes to sharing data: “Large companies in a certain market may also not see value in sharing their information. They will say 'we are the market and we know the market' so they might hesitate to share data with us.”

I understand where this attitude comes from, so I don't condemn it. But I would point out that outliers are information too. By definition, you can't know what you don't know. The point of sharing in PERILS is not to give stuff away, but to learn more.

This kind of aggregation activity is key to strategy formulation and performance measurement in a host of industries. For example, auto manufacturers share data on sales by vehicle type. Any of the big manufacturers could legitimately say, We own a huge slice of this market, we don't need to share our data. But they know that this is precisely the way to miss the next move in the market.  You may own the majority share of the existing business. But you may not be emitting the signals that matter for the road ahead.  CAT Exposures

Harmonization

Standards are what we do, but “standardization” has a negative ring to it. Harmonization is better – and, as time goes by, is more accurate.

You create standards where confusion and needless complexity reign. Industries – and pockets within industries – establish standards that address their needs. Over time, these different communities begin to deal with each other, or to extend their existing communications. The next challenge becomes negotiating between standards.

Sometimes translation will work. In many cases, translation becomes institutionalized within some kind of hub, or translation facility. Sometimes one community recognizes the other community's standards will work for both. Sometimes the two communities merge and blend their standards.

The common theme in all these solutions is that ad hoc arrangements are replaced by something permanent. So, this is a kind of standardization, even if no new standards are created. Let's call it harmonization. Different voices, singing together. We don't want everybody to be the same – we want everybody to get along.   Let's hear it for harmony.

Using Standards Should be a Standard

Here's another candidate for an eternal Law of Standards, this time courtesy of Chris Puttick, writing in April 2012: “It should be standard to require standards.”

Puttick's Law is addressed to software vendors, and to those who buy from software vendors: “Why would you use a product that doesn’t comply, whose creators aren’t committed to improving interoperability? Seriously: what’s the benefit to you and/or your organization? Not just tomorrow or next week, I mean next year and next decade.”  Computing

Law of Resistance

Back in 1993, Info World magazine ran an article by Peggy Wallace in which she talked about implementing data standards – and, in particular, the phenomenon of resistance to standards. There's a sentence in the report that has the sound of an eternal law: “Resistance to standards increases according to a firm's degree of technical literacy.” This is because the more involved people have been in solving their technical problems for themselves, the less they want to use “somebody else's” solution.

Twenty years have gone by since Wallace's article. Her Law of Resistance still holds true. However, technical literacy has, if anything, gone down rather than up in the intervening period. And this is therefore a good thing for standards.

We have a new generation of people in work who have grown up with technology. But they're not programmers. They want to use technology, not build it. They have what we could call user literacy. So they value access, connectivity and usability. They take standards for granted, because standards are just an under-the-hood element of the commoditization and standardization which deliver low-cost or no-cost solutions to the market.

Nevertheless, Wallace's Law still operates in the management sphere. Here you will find people whose careers have been concerned with developing ways of doing things they may be reluctant to see trashed without ceremony. We must help them let go of earlier solutions, and help them to acknowledge the value of getting with the standards.   Enterprise Computing

Data First

The Intersection blog at insurance-canada.ca asks for opinions on the “data first” strategy for systems modernization. Bruce F. Broussard Jr of Insurity says that the environment for data first has improved due to “several developments over the past few years (which) have changed the insurance data landscape, most notably the maturity and acceptance of industry standard ACORD data structures.”

Data first – it's got to be. Data is what this industry does. It's the raw material and the end product. It's everything in insurance. Data first and last. Insurance-Canada

Telematics: Secret Sauce

There are some business situations where the data you choose to capture or control forms the absolute heart of the business. This is the realm of the secret sauce. If the recipe gets out, you're sunk.  But in many cases, the secret of the business isn't the sauce. It's what you do with the sauce. The ingredients are well known and easily found.

Insurance is the classic example. Carriers can't compete on the nature of the data they hold on risks. But they can and do compete on what they do with that data. “What they do” starts with data quality and runs through communications, analytics, product development, and service improvement.

It's not as if one insurer discovers that, say, the height of a building will be a contributory factor to its stability, and keeps the secret. That knowledge is out there. It's obvious. So – to telematics. I understand pioneers in the field wanting to protect their first mover advantage. But I don't believe the advantage lies in what telematics data is. It's what you do with it.

You and I could draw up a list of telematics data items right now. If you've ever driven a car, you can quickly come up with an exhaustive list of things you could measure related to driving. We might end up with a list that's too long, because we might want to measure quantities that electronic sensors can't (yet) determine – the mood of the driver, say. But our list definitely won't be too short. When it comes to insurance data, the secret isn't the ingredients. It's the execution.  Telematics

Facebook Graph Search

What is Facebook up to today? Well, among other things, it's challenging for leadership in data searching. Which we all thought Google had tied up.

Harpreet at Tools Journal reports on Facebook's Graph Search, a tool Facebook is developing iteratively with a select band of testers. Graph Search lets users search Facebook data with natural language queries. So, instead of typing a bunch of disconnected words, you type something like “My friends who like beer and Apple”.

First thoughts: It's not exactly natural language. That would be: “Uh, my friends who like beer and Apple?” Joking aside, it's not really natural because it's a thinly disguised structured database query.

Second thoughts: What does Facebook have, datawise, that Google doesn't? It's that initial screening level of the query: “My friends who...” Google doesn't have a graph of human relationships overlaying its data.

Facebook's data is more like the must-have data marketers want than Google's. Facebook must already be able to slice and dice data in any way they want. Enabling Graph Search facilities for the whole user population would provide additional valuable information. Facebook will be able to pinpoint and track people's developing concerns and priorities by the ways in which they search. Mash this up with “trending on Twitter” and the real-time marketer's dream is complete. Tools Journal

Sewing with Data

The sewing machine has arguably had a bigger impact on the way we live than computers – though not as much as the domestic washing machine. Now, according to an article in the Wall Street Journal, industrial sewing machines are getting connected, bringing the garment industry up to speed with the rest of so-called “fast retail”.

With a traditional sewing machine, operators control the machine with pedals and switches. They fix problems through their own knowledge or by calling for help. Changing stitch and material types is slow and complicated, because it's all about human communication and coordination.

Link sewing machines to computers and you get something more like modern automated factory production familiar in, for example, car construction. The network can take basic control of individual machines, freeing operators to do more complex operations. Problems can be flagged on a LCD display along with videos showing the fix. Also, retooling for short runs is much easier.

One New Jersey factory installed the technology nine months ago and has experienced a 25% jump in orders. Impressive. Imagine also the data which managers of such factories are going to have at their disposal. They'll be able to understand their own business so much better.  Wall Street Journal

Wearable or Driveable Computing

Wearable computing is coming back into fashion, with the growing hype around Google Glass and rumors about the iWatch. Google Glass is a kind of heads-up display – a pair of spectacles that show video, with sound delivered via bone conduction through the device's legs. The iWatch is... well, nobody knows. But very likely something that upsets the people at Pebble, the crowd-funded tech darling of the moment.

The motivation for wearables originated in the military. Fashion designers have sometimes incorporated bits of tech in their clothes too. But if you think about it, we're already wearing technology – in our pockets.

Clothes are as much, if not more, about display than practicality. It's even more so for accessories. The first wristwatch was made for Queen Elizabeth I of England. The clock display was just an excuse for a fancy bracelet - Good Queen Bess had other people worrying about the time on her behalf. These days, your headphones say something about you too.

I think we may see a different kind of personalized, technological future that's more like the scenario in Minority Report. If you remember, in that movie the environment is embedded with intelligence that recognizes and communicates with individuals. There's no need to wear your own display, because your surroundings are constantly morphing around you. Reality and augmented reality are seamless.

The first place we'll see this kind of personalized environment is in the car. I guess you could say you'll be wearing your car.  Connected Cars

Addicted to Data

I like Kristin McMahon's post about bad data. She uses lively language and the story of the three little pigs to focus attention on the importance of data management. In particular, she warns us about “feeding our real-time addiction for data consumption—with complete disregard for the accuracy, reliability, or trustworthiness of the data”.

Addicted to data – there's something in this. Have we become too attached to our vision of an always-on, always-busy world? Are we churning data just for the sake of it, hoping for miraculous discoveries to leap out at us? Have we actually given up driving the business in the belief that technology will somehow deliver the future we want, gift-wrapped on schedule?

But I don't think everybody is affected in this way. Not everyone gets addicted to data. When the first PCs and spreadsheets arrived, everyone got hooked on tabulating and graphing data. Most of us got through the novelty phase and went on to live healthy, productive lives... The same will happen with big data. At first, surfing the new waves of data will be exhilarating. But people will get used to it quickly. And then the real work will begin.

In the meantime, we need to heed McMahon's warning. However much we use data, we need to be using data that's clean, reliable and represents what we think it represents. In the discipline of data management, considerations of volume must never outweigh considerations of quality.  SAP

Telematics Standards

The industry needs telematics data standards, and fast. The main business reason given is usually about competitiveness. Drivers shouldn't be locked in to one provider at the end of a policy term, just because they can't take their data with them.

One blogger pursues this thought in more detail, and from the policy holder's point of view:  “If you are unfortunate enough to get yourself a bad driving record, then you could be tied to this provider and unable to get cover from any other provider and subject to accepting whatever policy your provider offers at whatever price they decide to set for you. That is if they even decide to insure you. You could even end up being uninsurable and unable to drive legally without ever receiving a criminal ban.”

He or she adds that standardization of telematics scoring would enable regulators to issue a rating system insurers would have to recognize. Once such a system is in place, drivers could train to improve their driving capability, using the published criteria.

These are good points. It's not just freedom to choose an insurer that's at issue here. Standards will also help to guard against customers being captured by companies running unfair practices. They can also be used to improve everybody's driving, so making the roads safer and reducing the risk profile of the business.

From a standards setting point of view, there are two issues here. One is the need for data standards. The other is the need for standard data values. So, we need a standard way of recording, say, swerves. But then we also need an agreement about what magnitude of swerve represents what level of risk element. Then companies can compete fairly, and consumers can make informed choices.

I don't know if the current situation is “the wild west”, in the words of this blogger. But it's a mess that can be avoided.  The New Wild West

Cities Sponsoring Standards

A thought: Cities are often known for the industries concentrated there, or the cultural artefacts created there. Weeds may be growing in parts of Detroit, but it will always be Motor City. Vienna will always have the waltz, great cake and Freud.

In our information age, cities will also be known for their excellence or influence in information technologies – which are, I guess, the ultimate combination of industry and culture. Silicon Valley already has this reputation. Cities and regions around the world continually try to create their own “Silicon X”. There's even a “Silicon Roundabout” in London.

Here's what I'm thinking. The breakthroughs in technology over the next few years may not come from new types of device, but from ways of using ubiquitous, connected technologies. Cities that invent, host or promote tools and processes that serve this environment can gain recognition and prestige when their innovations are taken up globally.

The Babylonians gave us math. Maybe British Columbia will give the world a traffic data standard: “Open North is working towards a data standard for traffic data, such as accidents or roads closures, with Open511. In B.C., many travellers depend upon DriveBC to find out about road closures or weather conditions. The goal of Open511 is to make a traffic data standard that would be adopted by jurisdictions around the world, so your experience getting information on road conditions or closures is consistent from B.C. to Arizona.”

If the protocol that wirelessly connects your phone to your laptop can be called Bluetooth, there's no reason why we couldn't all be using DriveBC – in Australia as well as Arizona. So here's a possible new source of civic pride and regional leadership. Let's have more communities come forward to sponsor standards – to the world's benefit.  Data BC

Technology - An Attractor?

Call me picky, but a roundup of expert comments on insurance technology expresses the consensus slightly wrong. The summary says insurers need to invest in and talk up technology to attract new entrants. But the sense of the expert opinion, as I read it, is not that technology in itself will attract young people to the industry. The point is failure to invest in technology will put them off. To be clear: Any organization wanting the consideration of the smartest and most motivated people has to take technology seriously. This isn't a nice-to-have. It's table stakes.

Positively attracting people to careers in insurance is going to take something more. And some of the factors which will carry most weight with potential applicants actually run counter to the idea that selling technology will do the trick. The social and intellectual aspects of insurance are going to be of great importance to a generation that has not only grown up with technology, but which is also not remotely excited by technology for its own sake. This is a generation that uses technology to connect – with people. It's also a generation that values real experiences. Business Insurance

We should be showing young people that insurance offers sociability.

Standards Taking Root

How's your social media monitoring? Personally, I use fairly crude methods, including, at number one, keeping my ears open. Another quick and effective way of taking the temperature is to do a Google search on your topic of interest, restricting the search to the last month or week. Do this regularly and you may notice shifts in the kinds of results you get.

I've noticed that Googling “data standards” gives very different results than a few years ago. It used to be people were publishing and posting about the value of standards. I see very little of that now. These days, the results are split evenly between job ads and announcements of new standards in new fields.

This tells me two things. The ads tell me standards have become a key requirement in job designs across many corporates. “Data standards” sometimes appears in the job title itself. We've always advocating making standards champions within organizations, so it's good to see this taking root. The ads show that organizations value standards and are using them as core assets.

Second, the appearance of data standards in so many disparate domains tells me people understand the foundational and co-operative benefits of standards like never before. Now, when organizations and individuals in a domain think about working together, they think about sharing information. And they then naturally set about agreeing a standard. It's less and less the case that people seek to apply standards retrospectively, after they've let unnecessary complexity evolve. So the world is getting smarter – and this is thanks to the success of previous standards creators, adopters and implementers. These everyday visionaries have played a major part in improving the way people work together today – and tomorrow.

The Myth About Culture

Organizational culture is often cited as a barrier to change. We've all heard – and even made – calls for cultural change. It's true that organizations need to understand, critique, and often evolve their cultures. However, you don't change a culture by ordaining cultural change.

Culture follows behavior. Culture is “the way we do things around here”. So, to change the culture, you have to change what you do.  The best expressions of this come from therapy and self-help. You may have heard the slogan “Fake it till you make it”. Or “love is a verb”. Both sayings go to the heart of change. You have to do something different if you want things to be different.

For organizations struggling with the idea of cultural change, there's no single big secret – just lots of small, practical steps. Try something new. Live with the discomfort. Reflect. Experiment.

Culture isn't something you're stuck with. It's a way of describing how the organization behaves. And that's all. You don't need to change the culture. You need to do something different. The culture will take care of itself.

Supporting Award ID

“Benjamin Franklin once wrote that nothing can be said to be certain 'except death and taxes.' If Ben were still around, he might now say: 'except death, taxes, and inconsistent federal data standards.'’

Kathleen Tighe, Chair of the Recovery Board and Inspector General at the Department of Education  notes that the issue of data standards in federal government was first raised in 1965, and revisited in 1974. “Nothing much has happened in the intervening years, however,” she says. “It’s about time to do something.”

She makes the argument that data standards “would permit data sharing among agencies, save lots of money, and vastly improve the quality of information, including details on how the government spends your money.” In its four years of existence, the need for consistent data standards is the most important thing the Recovery Board has learned. If gas stations can have standard nozzles, and diamonds are assessed by the same criteria all over the world, and even baseballs are manufactured to strict standards, government can surely do better.

Tighe's recommended starting point for data standards in government is a universal award ID for all contracts, grants and loans. This would be seem to be an essential part of government accountability. We need a campaign!   Recovery Blog

IIABA Market Share Report

After years of market contraction, all property‐casualty insurance premium lines grew in 2011. Independent agents and brokers (IAs) were well poised to capture their share of the market. Many regional and national IA carriers expanded their shares by double digits. Furthermore, overall IA share grew in several states and regional IAs outpaced market growth in many business lines nationwide.  READ MORE.

Download 2013 IIABA Market Share

Standards Essential to Health

Failure to implement data standards in health care could be fatal – that's the judgment of the Harvard Business Review. Thomas C. Redman and Donald Nielsen note that computerization is delivering real benefits in health care, notably from aggregation of data. They cite a serious interaction between Paxil and Pravastin that was only discovered through analysis of newly aggregated data.

But elsewhere they see a “crisis” caused by non-use of standards. First, a lack of patient identifiers makes patient records incomplete and frustrates complete data analysis. Second, non-use of standards for health attributes can lead to poor or incorrect care.

As the authors say, “Without [standards] it is simply too easy to translate 'mild systolic flow murmur' into 'underlying cardiac disease,' 'wheeze" into 'asthma,' and mild reactions to specific drugs into allergies. These sorts of misinterpretations were all too common without computers, and electronic medical records have done nothing to reduce their severity or number.”

Every sentence of this article is highly quotable. I hope it has the impact it deserves.

Harvard Business Review

Standards: Rightsizing Complexity

Some complexity is necessary. If you're serving an inherently complex business process, then failing to reflect this complexity in a systems design will lead to poor functioning and error. But much of the complexity we find in information systems isn't this kind of good complexity. It's complexity grown out of systems development, maintenance and integration. It's the kind of complexity that grows like topsy.

There's one kind of needless complexity that can be tackled relatively easily. This is the complexity created by failures to use relevant data standards. Generally speaking, the best way to reduce complexity of any kind is to restrict choice. This is what regulations do. For example, you don't get to be creative about which side of the road you drive on.

Standards work in a similar way. Standards reduce choice where choice is at best unnecessary, at worst downright dangerous. A data standard restricts the rights of participants to deviate from agreed norms of behavior and flows of communication.

Good standards are non-arbitrary mechanisms for restricting choice. The form of such a standard is derived from the natural characteristics of the business being served. (Which side of the road we drive on can be based on a coin toss, but the structure of an insurance policy record had better be based on insurance policies.)

Great standards go beyond good standards by exploiting choice restriction so as to enable and encourage growth and innovation. Such standards model the business they serve with a whole-industry coherence, rather than focusing only on islands of interest.

Decision theory has a concept known as bounded rationality. This is the idea that anyone's ability to make a decision is limited by the information they have, their ability to process it, and the time available. It's a major corrective to the basic idea in economics that people make optimal choices based on perfect information. I bring this up because it seems to me that an industry data standard is a map of the bounded rationality of the community that creates and exploits it. Data standards are significant artefacts which express the information capabilities of a group of participants.

So, when you deploy industry standards you anchor your organization's information activities in explicit statements of competence. By adhering to standards, you are using as much or as little complexity as is really needed to get the job done. Not too much, not too little, but just right.

Standards for M&A

Companies involved in M&A know that aligning and integrating systems is rarely a walk in the park. Robert Fox warns that alignment and integration shouldn't be a one-time deal. Standards are at the core of a successful, long-term strategy which will also make the new entity more amenable to future M&A activity.

Sand Hill

Standards: Efficiency First

Data standards have immediate, obvious value in industries where tangible products are moved among participants. If you're building automobiles, you know you're involved in supply chains. To make those chains as efficient as possible, participants sign up for data standards that will speed the identification, logging, receiving and storage of parts and products. Standardization also brings easier quality control, safety and disposal management, among other benefits.

Despite the fashion for seeing the world in terms of networks, it's a curious fact that people in non-tangibles don't always realize they're involved in supply chains too. They don't see that the information flowing among partners is their shared endeavor. And how failing to make information flow as efficiently as possible threatens agility, quality and profitability – for everyone in the chain. This is often why standards aren't on their radar.

We can try to fix people's understanding, and get them to see how they're part of a dynamic, collaborating enterprise that crosses organizational boundaries and evolves over time. This might raise awareness, which is always a good thing, but it doesn't necessarily lead to a clamor for standards. It's management who need to get the message.

Standards continue to create benefit for businesses and consumers alike. This is partly because even if you don't conceptualize yourself as being in a value chain, anyone involved in insurance has to cooperate with others. People feel pressure from those relying on them, while putting pressure on those whose input they themselves need. So, while insurance is a non-tangible type of business, it has developed a high regard for the value of standards.

It's a different story in the financial industry. Here, although people are also closely involved in chains, there's more of a culture of independence. The packaging or securitization of debt is a prime example of how finance works to transform flows into products, so they can be traded more anonymously. This encourages people to ignore the interdependencies they are creating. And there is less of an interest in standards, because every deal is (supposedly) unique. Of course, there are exceptions when it comes to transactional business, credit cards and markets.

The good news is that the most important area for standards development, namely health, is following more in the insurance mold than the financial mold. Health professionals from different disciplines realize they are collaborating in complex chains serving the needs of the patient. They know those chains have to be both strong and slick. Standards are key to their success.

Efficiency isn't for nerds. It's for everyone. It's the basis on which we can build real value. Standards aid efficiency, and efficiency is the parent of effectiveness.

Fallacies About Standards

Like Standards Make Work for instance.  Lurking in the background of some resistance to standards is a reluctance to learn something new, even if it will bring benefits. This reluctance is very close to the feeling we can get when we think about changing an unhelpful habit. Yes, going to the gym will be good for me and it will be fun but you know what? Sitting here is just great too.

The rational arguments for standards always go though. No one can seriously argue with saving time and money by using standards. The logic is unassailable. And for folks who don't care for logic, the evidence of successful implementations is overwhelming.

But rational arguments don't touch our emotional reasons for sticking with what we know. Despite the fact that everyone knows we must deal with change, human beings aren't great at contemplating change. Note, I'm not saying we're bad at changing. Actually, humans are incredibly successful adapters. It's the thinking-about-it part we don't like.This uneasiness about change often gets rationalized. We look for a more intellectual basis for our gut feelings. This is where the “standards make work” claim can come in.

Basically, it goes like this. Standards may well save us time and money. But I don't have the time and money to implement standards. To embrace standards fully, I'd have to stop what I'm doing, and I can't do that.One person's discomfort about change speaks to another's fear of standing back from the day-to-day. And this is not a good hook-up.This is the heart of the problem: we're not dealing with one party's emotional intelligence, but two. We can't just keep educating the reluctant implementer. We also have to help the gatekeepers and sanction-holders. We need to turn them into advocates of standards too.

The way forward here is to encourage a small but significant shift in thinking. Standards make work?

Actually, Standards make it work.

The 3 Opens

Open Source, Open Data, Open Standards... Chris Ewing writes a post aimed at untangling the confusion surrounding these terms. I think people are reasonably well informed about what open source means. At least, they know it's about software development. However, I can see why people stumble over “open data” and “open standards”. It's because we should more correctly say “open data” and “open data standards”.

To me, “open standards” are products of a community-driven process which are available to the sponsoring community and beyond, and which are not controlled by any sectional interest. For example: ACORD Standards.  The open data movement is a great thing, and we need standards for open data. But let's not forget that we also need open standards for plain old data.  Opens

Standards Bodies & Intermediaries

“With traditional development methods, supporting such a huge variety of [financial messaging] data standards would have required a massive investment in R&D, which was more than we could have done as a small startup firm, and which would by default not be economically viable […] So instead, we applied a declarative approach based on formal specifications of these standards, which could be achieved through a relatively limited effort in R&D.”

So Forbes magazine quotes Marc Braet of startup INTIX, whose solution manages, accesses and analyzes financial messaging data. The statement isn't elaborated in the rest of the article. What does it mean? I'm guessing that INTIX has a meta-standard that organizes, or cross-references, underlying standards.

Kosta Peric, the article's author, finds the lesson of INTIX in “the 3 Ps of innovation – patience, perseverance and passion”. From a standards viewpoint, I'd add that INTIX demonstrates the robustness of the market space for aggregators and exchanges. Intermediaries can leverage their expertise in data modeling to transcend multiple standards and return value to the original data providers.

Such intermediaries function like after-the-fact industry standards bodies. They are different to actual standards bodies by being for-profit, apolitical and technology based. Standards bodies, on the other hand, tend to be non-profit, community-run and business based. Standards bodies look forward to what will be useful to the communities they serve, while intermediaries profit from evolved disharmonies. It's the difference between seeking agreement, and making things agree. But the end result is the same: data we can use.  Forbes

Social Media Survey of Agencies

Here ia a survey from B.H. Burke & Company.

Download BHBCo 2012 Social Media and Online Marketing Survey

Fallacies About Standards: Cramping Your Style?

Yep, standards are designed to stifle creativity and turn everybody into mindless drones. They're the zombies of IT. Does the dollar cramp your style? Try bartering a goat for a coat next time you're at the mall, and see how far you get.  How about the English language – that's a real straitjacket. Instead of just making random sounds, people want you to use words they recognize. Incredible.

In the case of information technology, what “style” is it standards might be cramping, exactly? Are we talking about the freedom of a developer to unnecessarily write code from scratch? The freedom of an integrator to demand users of other systems reprogram theirs to work with his new, cubist-style data format?

Creativity in the engineering disciplines needs to be directed to architectures, tools and techniques – not basic materials or fundamental forces. By all means, innovate to build me a more beautiful road bridge that lasts longer and costs less, but not one which sways in the wind. Software engineers: you're expected to use the building blocks provided, not chisel your own.

But no – the IT folks have been put in their box. It's the style of the business that might get cramped. We can't betray the uniqueness of our business by forcing it to conform to a standard which comes, frankly, from someplace else. Who do you think we are?

This is the nub of the matter. Some people in some organizations haven't noticed that what's unique about their business is a rare quality within the business. It's not the whole business. It's the secret sauce, or the rating model, or the logistics chain, or the brand, or the patent, or the boss, or the receptionist. You want to be locating and strengthening your real value-adds. Everything else, you can – and must – standardize.

Standards don't cramp your style. They underwrite your ability to have a style.

Empathy

The ACORD community can demonstrate a type of behavior that's becoming, sadly, less common: a group of passionate people, with divergent opinions and interests to advance and defend, arguing reasonably with each other and coming to an agreement.

How come participants in standards can manage this and politicians can't – or won't?  It's not because the politicians are playing for higher stakes. They may think they're important, but their real power seemingly lies in the ability to delay events. The business and technical (and business/technical) people who get involved in standards are working to safeguard and expand the industry they jointly comprise. This is real existential stuff.

In his book about how moral psychology, The Righteous Mind, Jonathan Haidt notes that the ending of practical bi-partisanship in Washington coincided with politicians deciding not to move their families to D.C.  In former times, people from opposing sides of a debate would mix with each other and their families. They lived in the same town and went to the same parties. It's hard to hate someone when your kids play together. It doesn't stop you opposing their views, but it helps you realise they're not aliens.

ACORD's achievements over the years rest partly on the smarts of the people involved, advances in technology and results on the ground. But a large part of the success is also due to people working together – in the same rooms, on the same threads, on the same calls.

Face time can look like lost time, if you only think about it in balance sheet terms. In reality, the time we spend together is a shrewd investment. As industry, commerce and government become ever more distributed, collaboration is key to delivery. No matter how smart our technology, people are the drivers.

Black Boxes for Cars

Telematics has arrived, part whatever. The Department of Transportation's National Highway Traffic Safety Administration (NHTSA) proposes that all new cars have EDRs – Event Data Recorders -  fitted by September 1, 2014.  That's less than 20 months away. Can we have a data standard too, please?

“Some of the EDR-recorded data that the NHTSA hopes to analyze includes things such as vehicle speed; whether or not the brake was activated before a crash; crash forces at the moment of impact; engine throttle level; deployment timing and readiness of air bags; and whether or not the vehicle occupant’s seat belt was buckled.” I know some insurers with a keen interest in this data.    Gizmag

Open Data Standards

The movement for standards in open data is growing. Socrata have a useful introduction to why we need standards and standards bodies. They start with lightbulbs and move swiftly to recent standards like GTFS and OpenPlan. It's a compact, clear case for standards that looks set fair to serve the next generation of applications well. OpenNorth

Losing the Way?

A recent IBM blog post presents the results of an online chat session about “leveraging data in customer experience journey mapping”. Maybe it's just me, but this way of presenting opinions seems untidy and confusing. It's like eavesdropping on a bunch of people who don't really have the time to explain themselves.

This is because the post is a raw report of a Q&A session held over Twitter. So it's actually a questionnaire, with a little by-play among the people filling it in. The irony is, here are people talking about understanding the data involved in a customer journey. But the data of their journey is obscure.

Twitter encourages brevity, which is good – but it can also make people sound arrogant and/or trivial, even when they don't mean to be. Also, a list of tweets is quite hard to digest. With this kind of material, I want to see some analysis, or a summary at least.

I asked if this matters?  The feedback I recveived is the concern if it's an indication of where business analysis is headed. It makes it look like it's okay to solicit some opinions and then replay them verbatim. They think it's a step backward. I doubt it, but would we apply the same procedure to an actual customer experience analysis project? I doubt it.  The Big Data Hub

Agency Disaster Pre-planning

Having a disaster plan ready to go and using mobile technology and social media enabled the author’s agency to provide exceptional service to its clients when their needs were greatest. This positioned the agency to get its clients’ claims paid promptly and their repairs made on a priority basis. Carriers too excelled at keeping their agencies in the loop on claims and being “first responders” for their insureds. This makes a great story about the positive role independent agents and their carriers play for their clients in times of need, along with providing some very useful disaster planning tips for agencies and carriers alike.   Download ACT Agency Planning Sandy Becker Feb 2013

New Legacy for Old

Predictions are great. No one's predictions are ever going to be 100 per cent right, but it's important to make (thoughtful) ones. It's one way we can get ourselves in the right frame of mind to shape the future, and not just experience it.

Robert Regis Hyle made three bold predictions for 2013 (See Link), on systems security, telematics growth and IT staff. I'm nodding at his first two predictions, he's spot on, but I'm not so sure about the third. Hyle's point is that as Baby Boomer COBOL programmers continue to retire, carriers will be forced to replace old core systems. He even sees some pushback against outsourcing as companies strive to own the design and build of these new core systems.

I can't argue against the demographic. But I'll offer this: COBOL still has a lot of things going for it. First, it works. Second, it's teachable. Third, the legacy code in existence has been tested in the toughest environment known to mankind – actual business life.

But even if such legacy systems do have to be retired for lack of skilled personnel, does this really dictate inhouse redevelopment? Retirement of core systems is a key opportunity to consider the as-a-service model. This is where the outsourcing companies will bite back. They'll be asking customers: Do you really want to invest in a bunch of new core systems – and the staff that go with them? Or would you rather pay as you go, with unlimited backup etc etc etc?   If your crystal ball is showing a bunch of graying Javanauts and Hadoopites facing deja vu all over again, maybe it's tuned to the wrong future. Thanks RRH for getting us to think about these important topics.

3 Bold Predictions for 2013

Telematics: Standards Urgent!

Laurence Pritchard gives an excellent overview of the issues surrounding telematics standards in Europe. The European Union is known to punish companies that take advantage of a dominant position to obstruct interoperability – as Microsoft knows to its cost. So, if the insurance industry doesn't get its act together on telematics interoperability, someone could be in the firing line.

But who? There isn't a single dominant player who could be seen to be the obstruction in this market. Without standards, consumers could be locked in. But they wouldn't be locked into just one dominant supplier.

However, Pritchard warns: “There are concerns that, if insurers do not agree data standards for telematics-based products, the competition authorities could step in and force the issue.” The EU may well legislate to enable intervention even in the absence of a single dominant player.

It's clear that telematics is the way forward for car insurance. Everyone in the industry must know there's no mileage (if you'll pardon the pun) in attempting to gain customer lock-in through proprietary technology. Even if a first mover captures a large part of the market this way, they will be rapidly overtaken by a second mover offering the benefits of better, no-lock-in telematics products. The faster the industry focuses on resolving a set of standards, the faster the market will grow.

His Opinion: Telematics providers of other insurers, which would effectively lock the policyholder in to their current insurer on renewal. These issues must be addressed if telematics ... telematics-based technology in cars is by now a familiar story, linked to the European Union Gender Directive being implemented across Europe. ... Francis Abberley ... telematics ...

 

In a Box

Walmart and MetLife worked together to create a “life insurance product in a box” for piloting in Georgia stores. The surprise is it hasn't been done before. Distribution folks need to start stealing more ideas, fast.

“In a box” comes from standard retail. But look how cell phone companies stole the idea of “on a card” from the coupon sector. You can buy pre-loaded SIM cards from vending machines at airports. These telco players realized early on the way to sell an abstract product (in their case, minutes or bytes) is through a traditional, tangible format.

Most importantly, successful distribution is about putting product within the grasp of potential purchasers. Where are your customers? They're at gas stations, museums, malls, race meets, parking lots, piers – they're everywhere. Mobile apps can get you into pockets, kiosks can get you into paths.

Insurance & Technology

Standards: Legislation Needed?

Blogger Bruce Badger reckons it's time legislators stepped in to enforce data standards for the British health service. In an open letter to his MP, he says: “The money recently wasted on NHS systems was wasted because the focus was on *systems* not on data format standards. […] The NHS spectacularly (if unsurprisingly) failed to make the perfect fits-all-needs system, but they could have defined a first version of a standard interchangeable patient record, or even just how medical image data would be exchanged.”

Badger's complaint was prompted when he was given a CD of medical scans – none of which he, or his doctor, could open. He proposes that images could be encoded in a standard format such as TIFF, and an open standard developed in XML for the structured data.

I'm as surprised as Badger must have been to discover that anyone is using a proprietary standard for image data. I'm a little depressed to know that some hospital went to the time and expense of burning a disk that is of no use to anyone. But I'm cheered to see that the remedy is obvious: standards.

Britain's NHS is a public service. If legislation is needed to make it do the right and obvious thing by data standards, then so be it. I can only guess that NHS procurement people have no incentive to ensure patient data can be shared – even when they are buying solutions that produce expensive, dud takeaways for the patient.

The OpenSkills Sett

Patient Data

The healthcare sector is considering how to include patient-input data in electronic health records (EHRs). The idea is to use existing document standards.

Seems obvious enough. We should think of patient input as a kind of form-filling. Items on forms need to be standardized and verifiable. They need to be recognized by collaborating systems.

I guess that in the future large amounts of patient data will be automatically generated and delivered to analysis and workflow systems by personal devices. Various health factors will be monitored and relayed without our ever having to look at the readings, let alone transcribe them into a system.

Patient-input can be presented as patient empowerment. But it's also about downstreaming work. The more the customer does, the less clerking the organization has to do. That's been one side of self-service from the supermarket through the ATM and beyond.

The difference (an difficulty) here may be about nuances. In order to allow a patient to enter, say, symptoms, we'll need to present them with a set of possible symptoms to check. This may encourage people to check more symptoms than they would have done unprompted. It will also mean that the degree to which the symptom itself is causing distress will be masked, meaning that a piece of potentially important data is lost. Call it the light and shadow – the subtleties of human communication that physicians use in the diagnostic process. So maybe patient input will be limited to basic items rather than nuanced ones.  EHR

Data and Process

Data standards are not a one-time deal. They have to be a core part of the way you do business. There's no point in using standards to cleanse your data if the data is then going to be corrupted by inappropriate business processes, or by processes that fail to follow legitimate business rules.

This is the message I get from a blog post by Utopia's John Ferraioli. It set me thinking. Too often, ownership of and interest in process and data are thought to be separate concerns. Yet process and data are clearly intimately involved with each other. If we promote separate excellence in process and data domains, we may wind up undermining the organization's real interests.

Specifically, data standards govern the meaning of data while process models influence the usage of data. Notice how there's an inequality here: We don't speak of “process standards”. In fact, people shy away from the idea of process standards as if it's blasphemous. And yet, unless people see their business processes as standards, they risk implementing them in disparate and incommensurate ways.

If you have a defined business rule, you should be able to define standard business processes which implement and safeguard that rule. This work should align with, and may inform, your standards. This is one reason why the ACORD community is devoting more attention to business processes these days.  utopia

Data Architecture - IASA for Architects

Looking for resources to educate colleagues about the value of data? Here is a link to IASA.  Here is an excellent set of slides on data governance and data architecture at  Data Arhitecture

Value of Standards

What is it with organizations that don't value data governance? Perhaps they're not asking the right, penetrating questions.

I like these questions, courtesy of IBM's Chris Evans: “Imagine you need to submit financial earnings such as 10Q or a 10K that needs to be filed with the SEC with a decentralized governance model. Do you know how much longer and how difficult this would be? Before these reports can be consolidated for submission, you would need to ask the simple questions about the data such as what does it mean? Does it mean the same thing for all business units or just for a few? What are the translation rules to get everything consolidated so that they can mean the same thing?”

When you use data standards, these questions evaporate. Evans is polite in referring to the “decentralized governance model” for a situation we might equally call “data anarchy”. The only way organizations get away with anarchy is by not asking these types of question.

Evans has another question:  “While companies are now becoming global companies, data needs to be more synchronized and to start, data needs standards, but at what level?” Organizations in the insurance domain have a ready answer, thanks to the investment made by the community in the ACORD standards.   IBM

Insurance Apps

Do insurance apps matter? Definitely. Travis Dearing has a quick summary of how apps can help customers and organizations. Refreshingly, Dearing points up the real benefits of apps for insurers – this isn't one of those bandwaggon articles. As well as summarizing the most popular apps, he gives some hints about future apps. In passing, he also makes a strong case for the relevance of cloud computing to the world of apps.

Insurance Apps

Leading or Pre-empting?

In September 2012, the pharmaceutical industry launched TransCelerate – an organization tasked with creating common standards for clinical trials. Two weeks later, one of the industry's big players announced it would make its clinical trials data available immediately to business partners.

With TransCelerate's standards development work only barely begun, this could look like an attempt to pre-empt the eventual standards. If you put your large collection of data out into the community, then the community has to work with what you give them. There's no need for the donating company to translate its data. If the donor's formats become the de facto standard, then it will save money in perpetuity.

However, the pharma industry is dominated by a small number of big players. These leaders are likely to have a proportionately higher say in the crafting of standards than smaller players. They are also more likely to have the resources to assign to standards creation. They will certainly own the largest part of the existing data.

To take a pragmatic view, the faster members of a sector arrange to share their data, the better. Earlier sharing means earlier benefits – to organizations and their end users. The friction generated by the use of one participant's inhouse standard may be outweighed by the benefits of sharing. Also, as time goes by, it is likely that the user community – including the original donor – will press for any changes required to make the standard more effective.

From the donor company's point of view, I guess they see the release of their data as the main benefit they are giving the sector, and any implied standards pre-emption as an additional favor. This organization has presumably invested time, money and expertise in developing its clinical trials standards. Managers there will likely see the resulting formats not as local peculiarities, but as highly professional models of the clinical trials domain.

What is important is that this community continues to support and resource its shared standards efforts. Even if this early donation dominates initial standards creation, its influence will wane as development continues. Essentially, those inhouse resources previously invested in maintaining and developing an inhouse standard will become available to the wider community. The donating company will also begin to alter its own formats and practices in line with shared developments. In other words, everyone will evolve together.

Can the not-invented-here syndrome be beaten? If these unilaterally published standards are good standards, then they should be embraced and extended by the community. If not, not.  Seeking Alpha

Cost Of Business Intelligence

SAP brought out a paper about reducing the cost of business intelligence (BI). Two of their five recommendations explicitly cite the use of standards and a third – promoting shared services – implies standardization too.

I wonder if priorities have gotten switched somehow along the way here. I can't see how you get much value from BI unless you apply data standards first. Without standards, people struggle to get coherent, meaningful information from their data. I can well imaging BI costs ballooning if an organization attempts to do any interesting analysis atop a mess of disparate data. See SAP