Data Driven Business Models in Insurance

Every day that goes by, more data is accumulated, the systems to organize it become more dynamic and the predictive qualities as a result more precise.  Where the future goes in this realm will be interesting to watch –

A report by SwissRE hosted by

Data Driven Business Models to Affect Entire Insurance Value Chain: Swiss Re Report

February 3, 2020

Digital transformation empowers consumers to be more informed and independent, and equips insurers with the tools to develop new tailored products and services and refine existing ones, said the latest sigma report published by Swiss Re.

This is leading to the development of new data-driven business models, which will affect the entire insurance value chain, said the report titled “Data-driven insurance: ready for the next frontier?” “True leverage will come from partnerships with key data suppliers.”

Insurers increasingly will operate in an environment where they have continuous access to different data sources including from connected objects (such as connected cars, homes or wearables) and platform providers. They also will gain behavioral insights from consumer and environmental data, the report indicated. “This will see the evolution of new-data driven business models taking insurers beyond their existing value chain,” sigma continued.

“The availability of internet-enabled devices and universal connectivity has changed consumer behaviors and expectations, particularly among younger generations,” said the report, explaining that customers now expect rapid access to information, transparency and more personalized products.

Although consumer-supplier touchpoints will become predominantly digital, human interaction will continue to play a role, said the report, which explained that consumer feedback and analysis will help insurers identify where in-person engagement is most effective.

Digital and Targeted Human Touch

“With the growing granularity of insights into customer behaviors,” the report said, “the role of insurance is evolving from indemnification of losses to a broader consultative service on risk prevention and mitigation covering both private and commercial clients’ changing needs over time.”

The sigma report cited the example of changes in an individual’s life circumstances such as marriage, a new home or job, signaled by digital data sources.

“In response, insurers can direct personalized guidance to the client on predictive and prescriptive next-step risk mitigation actions,” it continued. “The direct relationship with customers will evolve as new touchpoints and channels become normalized, and back-office processes like marketing/sales, underwriting and claims administration are increasingly automated.”

Insurers will be able to target human engagement to circumstances where consumers expect an empathetic response, such as a health crisis or death in the family, the report said. “The personal touch in sensitive areas will bring a human face to insurance.”

Emerging Markets Lead the Way

At this point, insurers in emerging markets lead the way in optimizing the potential offered by digitalization because the starting point is digital rather than analogue in many of these markets, the report added.

“[Emerging market insurers] are partnering with established digital platforms and ecosystems to combine features typically offered by standalone incumbent firms into a one-stop-shop service,” said sigma. “Insurers bring underwriting expertise, while platforms and ecosystems offer access to customers through their ability to target specific segments and mine user behavior, as well as offer multiple touchpoints to capture user attention.”

Successful Insurers

Successful insurers in the long term will be those that leverage insights from their investments and partnerships in data and analytics, while developing risk protection products aligned with evolving regulations, sigma said.

“Regulation will play an important role in supporting the integration of new technology and data into insurance business across different jurisdictions,” the report noted. “In monetizing the potential of digitalization, insurers will need to manage local data protection and privacy requirements.”

Source: Swiss Re/sigma

Top 10 Judicial Hell Holes

My mother used to say, “you need a Philadelphia lawyer to figure this out”… seems you might.  #1 on the list –

From our friends at

The 2019-2020 top Judicial Hellholes are:

  1. Philadelphia Court of Common Pleas
  2. California
  3. New York City
  4. Louisiana
  5. St. Louis
  6. Georgia
  7. Illinois’s Cook, Madison and St. Clair Counties
  8. Oklahoma
  9. Minnesota Supreme Court and the Twin Cities
  10. New Jersey Legislature


Prestige Named”NY Area’s Largest Privately Held Companies” for the eighth consecutive year

Congrats Andrew – well deserved!

NY-Based Professional Employer Organization (PEO) Ranked #18
– Demonstrating Year-over-Year Growth

PrestigePEO, a Professional Employer Organization (PEO) offering affordable, large-company employee benefits and HR services to SMBs, announced today that it has been named to the 2019 Crain’s New York Business list of the

Each year, Crain’s ranks the area’s privately held businesses by annual revenue. PrestigePEO has been recognized as No. 18 out of 150 companies on this year’s list, demonstrating growth since the company was ranked No. 20 in 2018. In fact, PrestigePEO has achieved a higher rank each year since the company was first named to the Crain’s New York Largest Privately Held Companies list in 2011.

“It is a great honor and achievement to once again be named to this list of high-growth companies. We are experiencing tremendous growth as more SMBs learn about the benefits of PEOs,” said Andrew Lubash, Founder and CEO of PrestigePEO. “Our co-employer relationship allows our clients to free themselves from the administrative burdens of daily HR tasks so they can focus on more important revenue-driving activities. We’re proud to have a hand in cutting costs and helping our clients achieve their goals.”

PrestigePEO has recently received other notable distinctions such as: one of 2019’s Best Places to Work on Long Island by the region’s premier business publication, Long Island Business News. The company was also named a finalist for the 2019 Hauppauge Industrial Association of Long Island’s (HIA-LI) Business Achievement Awards. PrestigePEO has been ranked on Inc. Magazine’s 5000 fastest-growing companies for 2008-2012 and 2015-2017.

Crain’s New York Business publishes daily and weekly digital and print editions of local business news. Crain’s lists are highly regarded in the business community for the NY area’s lists of top companies and business leaders.

About PrestigePEO

PrestigePEO, incorporated as Prestige Employee Administrators Inc., is a Professional Employer Organization (PEO) that partners with small to medium-sized businesses (SMBs) to provide full service human resources, payroll processing, employee benefits, and compliance services. Accredited by the Employer Services Assurance Corporation (ESAC) and IRS Certified Professional Employer Organization (CPEO), Prestige guarantees financial security and reliability for clients. By acting as a full-service HR department, and offering top-tier employee benefits, PrestigePEO’s SMB clients can focus on their business goals to improve productivity and profitability. Headquartered in Melville, NY, PrestigePEO provides services for SMBs in the New York metropolitan area. For more information, visit

About Crain’s NY Business

Crain’s New York Business is the trusted voice of the New York business community—connecting businesses across the five boroughs by providing analysis and opinion on how to navigate New York’s complex business and political landscape. Crain’s reports on emerging trends, interviews with thought leaders and industry experts and coverage of commercial opportunities, economic changes, politics and more.

View source version on


Jackie Savage, Epoch 5 Public Relations

NCCI to Simplify ERM-14’s for Ownership Changes

….a wonderful idea.  The current process for those that acquire a business requires the entity being acquired to work with the bureau to verify data that they are often not apt or motivated to do.  Hopefully this will help the process going forward –

From our friends at

The Texas Division of Workers’ Compensation is accepting comments on proposed changes to the Experience Rating Plan Manual that are designed to make it easier for employers to file ownership information.

The National Council on Compensation Insurance, the rating organization for Texas and 36 other states, has proposed revisions to the ERM-14 form and Rule 3-A in the rating manual. The changes are designed to simplify the form, DWC said in a bulletin.

The NCCI surveyed carriers and producers in 2017 and received a number of comments about the need to revise the forms, which ask about changes in ownership, the council said in its filing. Because of the feedback, the NCCI has changed the form to reduce its length and to clarify wording so that it’s easier to understand.

The changes, the first since 2003, would take effect Feb. 1.

Comments and requests for a public hearing can be sent via email to Comments will be accepted through Jan. 21.

Southern California Blues

In a not so shocking report, it appears that the LA Basin has higher frequency and severity.  Those playing in that market need to price for it….thanks to our friends at the Insurance Journal…

Indemnity claim frequency is significantly higher in the Los Angeles basin and significantly lower in the San Francisco area after controlling for regional differences in wages and industrial mix, according to a report the Workers’ Compensation Insurance Rating Bureau released Wednesday.

Claim frequency in the Los Angeles and Long Beach region was almost 33% higher than the statewide average, according to the report. Frequency was lowest in the Peninsula/Silicon Valley area, which came in about 28% below the average claim frequency for the state.

Medical-legal costs and paid allocated loss adjustment expenses in the Bakersfield and Los Angeles regions are also significantly higher than in the remainder of the state, according to the report.

WCIRB also reports that the share of open indemnity claims has decreased substantially in all parts of the state since 2013. The largest decreases were in the Los Angeles area, which had the highest initial rates of open claims.

The WCIRB will host a free webinar to discuss the 2019 study from 11-11:45 a.m. Dec. 12.

Another Actuarial Recommendation Refuted

The State of New Jersey’s Insurance Commissioner has overruled and improved upon the recommendation given by the New Jersey Compensation and Inspection Bureau (NJCRIB).  NJCRIB is the exclusive rating bureau for New Jersey.  This comes on the heals of the Florida Commissioner refuting and improving upon the rate decrease suggested by the National Council of Compensation Insurance (NCCI).  As modeling for this line are frequency-driven and thus pretty consistent, these types of deviations are not usual.

From our friends at

Commissioner Overrules Rating Bureau; Approves 5.8% Decrease in Rates

Another state’s insurance commissioner has overruled a rating agency and forced a larger decrease in in workers’ compensation overall premiums.

Marlene Caride

Marlene Caride

The New Jersey commissioner of banking and insurance, Marlene Caride, last week announced that she had approved a 5.8% decrease in rates and rating values for 2020. That’s two percentage points greater than what the New Jersey Compensation Rating and Inspection Bureau recommended in September, the bureau reported.

The average rate change for industry groups ranges from a 4.5% decrease for office and clerical, to a 7.7% decrease for contracting. The commissioner’s approval marks the fourth straight year that rates in New Jersey have dropped, due to what industry experts have said is a nationwide trend toward fewer injuries and fewer claims by workers.

The rating bureau’s filing was based on three policy years and recent adjustments to benefit levels.

The New Jersey commissioner’s action comes three weeks after Florida’s insurance commissioner demanded — and received — a larger loss cost decrease from the National Council on Compensation Insurance.

The NCCI had recommended a 5.4% decrease for 2020, but Florida Commissioner David Altmaier asked the council to examine another year of experience and revise its filing to a decrease of 7.5%. The NCCI complied, and the decrease was approved Nov. 6.

The New Jersey rates take effect Jan. 1.

Department of Labor Busts Physicians and Pharmacists

Is this the tip of the iceberg on this front?…

“In some arrangements, a pharmacy will bill the insurance program for the reimbursement, then provide a referral fee as high as 40% to doctors who prescribe the medications, and another fee to teams that find the injured workers and other patients who are referred to certain doctors, Oberheiden said.

For years I have seen TPA’s get “bonused” for referrals to allocated loss adjustment expense providers and that is bad.  A physician getting the same by routing claimants to specific pharmacies for personal benefit is Godawful and directly in violation of the AMA’s Code of Medical Ethics.

“Section 7. In the practice of medicine a physician should limit the source of his professional income to medical services actually rendered by him, or under his supervision, to his patients. His fee should be commensurate with services rendered and the patient’s ability to pay. He should neither pay nor receive a commission for referral of patients. Drugs, remedies or appliances may be dispensed or supplied by the physician provided it is in the best interests of the patients.”

Federal Comp Cream Scheme Probe Widens; New Charges Added to 2017 Indictment

The arrests all across Texas represent the latest round in a 12-year crackdown by federal authorities against what they call “pill mills,” many of which also produced high-priced compounded creams for injured federal workers.

“As we continue to dedicate resources to battle health care and opioid fraud schemes in Texas and elsewhere, we are shining an inescapable light on dirty doctors, clinic owners, pharmacists and others who may have long believed they could perpetrate their frauds behind closed doors,” Assistant U.S. Attorney General Brian Benckowski said in a statement Wednesday.

Eight of the defendants, charged with defrauding the U.S. Department of Labor’s Office of Workers’ Compensation Programs, are no strangers to prosecutors. They were indicted in 2017 on charges that they and three pharmacies in the Dallas area billed the federal compensation program as much as $28,000 per tube for pain and scar creams.

Some of those defendants may be in the midst of plea negotiations on the 2017 charges, but now face the superseding indictment handed down last week. The new indictment adds several new charges, according to federal court records and the U.S. Attorney’s Office in Dallas.

As a condition of their release after the 2017 charges, the defendants were prohibited from billing for compounds, said spokeswoman Erin Dooley.

The latest wave of charges related to the federal cream scheme comes as something of a surprise to some criminal defense lawyers. Although the Department of Labor’s workers’ comp program was slower than some other federal insurance programs to react to exorbitant compounded creams, the office did announce new restrictions in 2016, and dozens of people have been prosecuted across the country since then.

The latest arrests may be part of the tail end of the prosecutions for the schemes, which were allowed to fester because the federal comp agency was slow to react, said attorney Nick Oberheiden, of Dallas. He said he has represented clients in about 150 federal compound-cream fraud cases in recent years.

“The question is, how was it possible that the Department of Labor kept offering these incentives and paying the crazy reimbursement without some better auditing or controls?” he asked. “It created an opportunity for people to try and get lucky.”

The Texas arrests are part of the Medicare Fraud Strike Force, a joint effort by the U.S. Department of Justice and the Department of Health and Human Services to deter fraud, and stem overprescribing in the age of a nationwide opioid addiction crisis, prosecutors said. Since 2007, the operation has charged almost 4,000 people with health care fraud.

Prosecutors are right to go after the blatantly fraudulent pill mills that have devised ways to bill insurance programs for drugs that are unnecessary and overpriced, Oberheiden said. But in some cases, he said, doctors and pharmacies are getting caught up in investigations because they may not realize that prosecutors often treat any type of referral arrangement as a kickback.

“Under federal law, that’s illegal,” he said.

In some arrangements, a pharmacy will bill the insurance program for the reimbursement, then provide a referral fee as high as 40% to doctors who prescribe the medications, and another fee to teams that find the injured workers and other patients who are referred to certain doctors, Oberheiden said.

He recommended a two-part test that medical providers must pass to avoid federal prosecution.

“First, was the prescription medically necessary? Did the doctor have a valid reason for the prescription?” he asked. “And second, does the patient’s chart contain those reasons for the prescription?”

Of the 58 defendants arrested this week, the nine charged in connection with defrauding the federal workers’ compensation program, laundering money and evading taxes, are:

  • Jamshid Noryian, also known as James, the owner of Ability Pharmacy, Industrial & Family Pharmacy and Park Row Pharmacy, all in the Dallas area.
  • Dehshid Nourian, also known as David, a pharmacist and president of those pharmacies.
  • Christopher Rydberg, an official with Bandoola Pharmaceuticals.
  • Leyla Nourian, a dentist and business owner.
  • Ashraf Mofid, also known as Sherri, an official with Bandoola Pharmaceuticals.
  • Dr. Leslie Benson, an occupational medicine physician and owner of three clinics in central Texas.
  • Dr. Michael Taba, and orthopedic surgeon.
  • Ali Khavarmanesh, co-owner of Park Row pharmacy.
  • Dr. Kevin Williams, a former orthopedic surgeon.

All except Khavarmanesh were indicted in the 2017 investigation, prosecutors said. Two people who worked for Benson’s clinic also were charged with health care fraud last October.

Thanks For Joining Us @ NAPEO 2019

Libertate Insurance wanted to thank you for joining us at NAPEO 2019 in Austin! I hope everyone had a great time and learned a lot from the breakout sessions!

We hope you gathered some valuable information about the impact that Big Data and AI/ML can have on you and your PEO! We look forward to a great year ahead!