Harnessing the Power of the Crowd

Internal crowdsourcing platforms leverage technology and social media to spark insurance innovation.
By: | September 29, 2016

The insurance industry commonly gets branded as old-school and conservative And it has good reason not to step off the beaten path.

“The insurance industry does appear to innovate slower than we expect it to. It is, after all, a very risk-averse business that is hesitant to deviate from tried-and-true methods,” said John Lucker, Deloitte Advisory’s global advanced analytics market leader.

John Lucker, global advanced analytics market leader, Deloitte Advisory

John Lucker, global advanced analytics market leader, Deloitte Advisory

“Insurance products have also become highly commoditized, so that the only real differentiator from the point of view of the consumer is price.”

That commoditization he said, can pigeonhole insurers and make it difficult to conceive of new products and processes.

“Innovation can also be very complex. Insurers are subject to a lot of regulatory oversight, so they have to consider that in addition to the ROI of any new product or service,” Lucker said.

“But despite that, I actually think the insurance industry is much more innovative than we give it credit for. It has survived financially despite many major world events that could have upended it.”

Now, insurers are turning to technology and social media to keep a stream of new ideas flowing. Crowdsourcing is emerging as an effective tool to spark innovative thinking.

Diverse Minds of the Many

Crowdsourcing, or “open innovation,” taps into the minds of the many and allows organizations to break out of traditional ideation processes. Crowds bring diversity of perspective and experience, and with the right incentives, they are readily available at any time to tackle a new challenge.

“I actually think the insurance industry is much more innovative than we give it credit for. It has survived financially despite many major world events that could have upended it.” — John Lucker, global advanced analytics market leader, Deloitte Advisory

In 2014, global insurer AIG began working with an external technology partner to build an internal crowdsourcing platform, called “Ideas to Impact.”

“We began to ask how we could tap into that wellspring of creativity that exists with tens of thousands of employees around the world.” said Matt Power, executive vice president, head of strategic development for Lexington Insurance, a branch of AIG.


Since its inception, Ideas to Impact has not only produced strong ideas, but it facilitated the process of turning those ideas into concrete business plans.

Tom Grandmaison, executive vice president and construction casualty leader at AIG, used the platform to tap into a pool of 300 employees in the construction and energy practice.

A senior team within the practice pulled together a list of employees who were “highly engaged in construction and energy, which included people from underwriting, risk consulting, claims, actuarial, legal, finance, operations, a bunch of different skill sets with different responsibilities,” Grandmaison said.

Through Ideas to Impact, which is set up like a social media channel encouraging sharing, discussion and feedback, Grandmaison and his team asked the 300-strong crowd what new product, service or process they would bring to the energy and construction industry to add value for either employees or customers.

Six or seven nominated moderators kept watch on the channel and occasionally facilitated the discussion.

“We began to ask how we could tap into that wellspring of creativity that exists with tens of thousands of employees around the world.” — Matt Power, executive vice president, head of strategic development, Lexington Insurance

“It’s low-touch and very intuitive. It’s not intended to dominate people’s lives. But we want to encourage participants to think prospectively in an innovative way about what we can do to improve employees’ experience and customer experience,” Grandmaison said.

Over the course of about 30 days, the platform generated about 45 new ideas. The technology features a built-in voting mechanism that whittled those 45 down to 15.

Tom Grandmaison,

Tom Grandmaison, executive vice president and construction casualty leader, AIG

From there, Grandmaison and his senior team further pared them down to 2 winners based on ease of implementation.

The winning ideas led to the development of two new products due to roll out in the “not too distant future,” Grandmaison said.

Those 43 ideas left on the table don’t go to waste, though. Some proposed plans would take a significant amount of time and money to implement, and while not selected to move forward immediately, are kept in mind for future, longer-term projects.

“We also completed this process with a group of employees in India with a 100 percent participation rate,” Power of AIG said. “We developed some very good strategic takeaways that we were able to put into action.

“We’ve gotten in the rhythm of using this technology to create feedback loops and to engage very large groups of employees from around the organization.

“The lesson learned is that the technology and the social media have matured to a point where you actually can have an intelligent conversation with thousands of people and turn that conversation into actionable steps.”

Internal vs. External Crowdsourcing

AIG harnessed crowdsourcing to solicit ideas from within its own workforce, but how would opportunities expand if the conversation was opened up to the general public, inviting customers to chip in their two cents?

“You need a powerful incentive to get someone to distract themselves from their day-to-day work and devote their attention to an additional problem.” — Kevin Boudreau, assistant professor of strategy, London Business School; research fellow, Harvard University Institute of Quantitative Social Science

“Lots of innovators still don’t do enough to get into the heads of their customers,” Lucker said.

In addition to widening the funnel to a larger audience of idea-generators, external crowdsourcing typically comes without the burden of asking current employees to do what could be perceived as extra work without the promise of a reward.

“You need a powerful incentive to get someone to distract themselves from their day-to-day work and devote their attention to an additional problem,” said Kevin Boudreau, assistant professor of strategy at the London Business School and research fellow at Harvard University’s Institute of Quantitative Social Science.

“They may expect a monetary reward or a promotion if their idea is accepted and implemented by their company.”

Developing a reward system for external crowdsourcing, on the other hand, may be as simple a one-time prize.

When asked if AIG might consider using their platform to query outside audiences, Grandmaison said, “I think it’s absolutely a must for us to be hearing the voices of our customers and brokers. I can see a social networking technology platform augmenting that.”


“If our collective goal is to create value for customers, then the more talent and ability you can tap into and ask those tough questions, the more insight you’re going to gain,” Power added.

Even internally though — especially at large, global companies — there still exists enough diversity to cultivate a fresh perspective. Internal crowdsourcing also comes with the benefit of drawing on people who know a company’s strengths and weaknesses better than anyone.

Regardless of the form it takes, crowdsourcing holds promise as a tool for large insurers to keep pace with evolving demands of both its employees and its customers as technology advances.

Katie Dwyer is a freelance editor and writer based out of Philadelphia. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.


Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.


As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.


Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &


Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]