I'm on the AAIS Main Event this week and I've learned a lot. I go to many different events for many different reasons. I go to this event to network and meet people that the academy can help and partly to learn about what some insurance worlds are working on that I may not be completely up to date.
Oh yeah. It's a learning event for me. Continue learning is not just a slogan I use. I mean it. Everyone must continually and intentionally continue to learn.
This year's event really opened my eyes to three subjects, including: the cannabis business around the US, insights into some key regulator's minds and the use of blockchain for insurance companies. Let me turn some of the highlights to you.
Cannabis grows around the country.
Cannabis business really takes off. 48 out of 50 states have taken some action to legalize the use of cannabis and cannabis derivatives. It includes everything from full legalization to easy decriminalization.
Let's define some terms. By full legalization we mean that cannabis products in any form or other are available on the basis of medical necessity and that they are available for recreational use by adults. By decriminalizing, we mean that in some states the state has decided not to prosecute individuals for possession or use of cannabis products under certain circumstances.
Cannabis, cannabis derivative and cannabis products all refer to products containing one or more of the active chemical components present in cannabis. You already know what products they are. You don't have to explain me anymore.
The industry's growth is not surprising given the trend towards legalization around the country. What is surprising is that even in places where it is legal in one form or another, the industry is struggling to find insurance coverage. It was even more surprising to learn this from the organization that created the first standard marketing company policy for use especially for the cannabis industry in California. There is a strong surplus and surplus market for this coverage, but it has not yet reached the standard market.
I ascribe to the common market operators' aversion to the fact that there is still a tension to be resolved between the federal government (which still considers cannabis as a scheduled substance) and the several states. In my opinion, no major operator will file or use any forms or programs designed for cannabis business until this voltage is handled.
NOTE: Please do not read anything above as my approval of this company. And do not read this disclaimer as my rejection of this type of activity. I'm just telling you something you need to look at, because if it's not a company looking for coverage in your area, wait.
A few weeks ago, we read all the news that Berkshire Hathaway has created its new type of business.
A few weeks ago, we read all the news that Berkshire Hathaway has created its new type of business owner's policy. You will surely also remember that our friends at Lemonade announced last year that they were interested in making the policy language easier by using Policy 2.0.
If you're like me, you wondered what happened in the thoughts of Berkshire. Sure, that company wouldn't believe it would work. It turns out that this type of new policy has some regulatory approval and even support from some regulators. I found out that Berkshire's product has already been approved in several states.
It turns out that some regulators want a simpler policy language for customers so much that they are willing to allow a company (such as Berkshire) to experiment. They feel that there will be challenges for the policy language, but that it only needs a few adjustments to be a solid policy.
As with any advanced product, the evidence will be profitable. Will consumers rely on it to protect them? Will agents trust that they won't have any problems if they sell it? Will it be what consumers really want in the future? Or is it something that will fizz out due to poor recording, poor results or poor viewing in the courts.
I will remind you that none of us wanted music, games, social media on our phones until someone gave them to us.
Blockchain will help with reporting while maintaining privacy.
This was probably the most immersive part of the day for me. I admit that I have a basic understanding of what blockchain is, how it started and what the dominant use of blockchain is so far.
Blockchain is a common management design that allows authorized users to add a block to the chain and those blocks can never be deleted or changed. In one of the speakers today, blockchain (in three words) is: distributed, unchanging leaders.
All ready now? Maybe it can help. All blockchain users have copies of the same transaction history. When a member adds a transaction, it is added to everyone's copy of the history. Once a transaction has been sent to the chain, it cannot be deleted. Nor can it be changed unless everyone in blockchain agrees with it.
Today, we talked about the use of blockchain as a tool to help help regulators make a data call. In short, an advisory organization (AAIS), any member insurance company and the regulator become all members of blockchain. The regulator puts out a data call, for example, the Florida Office of Insurance Regulation can send out a call for data related to all losses due to Hurricane Michael. This request for data goes to the Advisory Organization and the requested information is released to OIR, while maintaining the integrity of the Company.
As I understand it, it would make the data call process faster, easier and safer for everyone.
I can't pretend to be an expert on all the things I learn. I can tell you that I will chew on more things that the days go by and will probably reach out to some contacts with more questions. I like to find out what I do not know. It helps me know what to do next.