Kevin PledgeInnovation – lesson from overseas (and elsewhere)

acceptiv.com/crc

Question

• 0 – 9%• 20 – 29%• 40 – 49%• 60 – 69%• 80 – 89%

• 10 – 19%• 30 – 39%• 50 – 59%• 70 – 79%• 90 – 100%

How much personal protection life insurance will be sold online 5 years from now?

Agenda

1. The Situation in North America2. Innovation3. Two Examples from the UK

Beagle Street Aviva

4. Can this be Applied in Canada?

A Problem

“It takes too long to issue our business”

Indicative Quote

Underwrite

IssueOfferAdd’l Q’s

Modify Application

Apply

Underwrite evidence

Further Questions

multiple hand-offslack overall process control

Typical Solution

Indicative Quote

ApplyUW at claim!

or

Indicative Quote

Underwrite

IssueOfferAdd’l Q’s

Modify Application

Apply

Underwrite evidence

Further Questions

Good(at least to industry insiders)

A recent announcement

Good(at least to industry insiders)

…but not great

A recent announcement

70% will take more than a week

More than half will take more than two weeks

Innovation

Is possible due to trends creating a discontinuous opportunity

Will question an existing paradigm

Often involve looking at the bigger picture or from another perspective

Disruptive Innovation will be: n times better, at 1/x of the cost

Trends

1 2 3 4 5 6 70%

10%

20%

30%

40%

50%

60%

70%

Uninsured Households** Not Face-to-Face**

of Canadian Households believe they are underinsured*

Sources* LIMRA 2007** US data from LIMRA Household Trends in Life Insurance Ownership

LIMRA’s US Individual Life Insurance Sales Trends 1975 - 2009

is the average age of agents - DISCONNECT

of families with children will have immediate financial trouble if the primary wage earner died

57%

50%

57

Paradigm

INSURANCE IS SOLD NOT BOUGHT

Perspective

Look at the bigger picture and from the customer perspective

Issue is NOT agent productivity

Customers want choice

or

Case Studies

New entrant – barriers to entryNot really an insurance companyNot encumbered by existing distribution

Largest insurance company in EuropeLife and P&C businessExisting direct and agent distribution channels - some online business

Beagle Street – Online Only

Indicative Quote

Apply and UW

Buy

> 5,000x faster∞ scalable (85% of the time)1/10 of the cost

Fully UnderwrittenNo fluids or additional evidenceCover up to £750kBetter lapse experienceAve issue time 12 mins

Beagle Street (UK)

New entrant – not really an insurance companyNot encumbered by existing distributionNo advertising for first two years, then…

Need to integrate with existing distribution – Omni-channelCustomer service standards consistent with P&C

Online offers “n times” improvementIntegration expands customer base

The Solution – AVIVA (UK)

Indicative Quote

Apply and UW

Buy

Furtherevidence

Buyor

Omni channelCustomer is in control

Can this be applied in Canada?

Market research tested

Customers go to Google for information

Facebook and Google for advice

Disconnect with agents

Print: http://www.lulu.com/commerce/index.php?fBuyContent=15657323Ebook: http://www.lulu.com/commerce/index.php?fBuyContent=15663543

Can this be applied in Canada?

Market research tested

“Almost half of participants found the value proposition [to buy directly online] very appealing (rating of 8 or more out of 10); these results are encouraging.

Years ago, when evaluating consumer interest in the ING Direct value proposition, our goal was to find interest in only half as many target group members (who we defined as innovators).”

Print: http://www.lulu.com/commerce/index.php?fBuyContent=15657323Ebook: http://www.lulu.com/commerce/index.php?fBuyContent=15663543

• 10 – 30 year term insurance, up to $500k• Coverage age range 18 - 70• Applied UK experience and P&C lessons• Simpler, yet more flexible than current

products• No medical evidence referrals• Online, with offline support if needed

• On cover in 15 minutes or less

Full UW + Lower costs = Lower premium

Full UW + Lower costs = Lower premium

MNS Age 40 $150K. Term Life Monthly Premium* Based on Acceptiv product design and pricing Feb 2015

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 300

5

10

15

20

25

30

35

40

Term

Premium

10 Year Term

Industry $18.65 – $20.30

Teachers Life

$13.46

20 Year Term

Industry $24.80 – $30.69

Teachers Life

$21.08

https://www.youtube.com/watch?v=HWF09ya1o5I

Kevin Pledgeacceptiv.com/crc

Thank You