iis china 2014 - the new insurance engagement final

The New Insurance Engagement

Andrew Dart

15 May 2014

2 CSC Proprietary and Confidential May 15, 2014

Key take aways from this Session

1 Customer engagement is the new high ground for Insurance

2 Engagement boosts profits while binding customers

3 Customer’s will trade their data in return for value from the Insurer

4 The market is moving quickly to this new model

In these disruptive times, transformation is imperative


Market Dynamics

Digital is Real!


Digital is becoming the new

normal for all interactions

Business, as we know it, is changing!

• A tipping point for consumers and businesses has been reached, where the default manner of interacting has shifted from atoms to bits – from physical to Digital.

• Increasingly, all interactions with the Insurer – whether customer, partner, supplier or other – will be done via a Digital, rather than a physical channel.

• Many of today's Digital initiatives fall well short of their transformational potential, being more tactical in nature and lacking a cohesive strategic vision.

• Smart business leaders are rethinking their plans to exploit the potential of “a Cohesive Digital Strategy”; empowering and connecting people inside and outside of the business in new ways – creating new business models and real value in the marketplace.


Low Returns / High Expenses

Insurance Business Trends all technology enabled or impacted

Connected Consumer / Broker

Distribution Customer

engagement

Customer/Agent

experience

e-Commerce

and straight-

through

Social, Economic,

Climate Change

Profitable

underwriting

Merger &

Acquisition

Claims loss

ratios /process

transformation

Policy

administration

automation

Regulatory change

Emerging markets

Catastrophe

Technology Transforming

Process

Mass customization (pricing, telematics)

Mobile

Analytics


The Engaged Insurance Customer


Insurance Customer

The journey to Engagement begins with Insurers moving beyond the transactional mind-set

What happens in between these 2 events – not much!

However 51% of customers

said their Insurer made no

effort to retain them!

Source EY Insurance Consumer survey 2012

Buy

Claim


How to become important to the customer every day during the “white space” of these fundamental transactions?

You need to re-think your business model!

Insurance Customer

Customer

Value

Creation

Opportunities

Buy

Claim

Customer

Value

Creation

Opportunities


You need data to drive Continuous Customer Value Creation (CCVC)

• Location of customer

• Activity of customer

• Overall goals and aspiration of customer

• Ability to affect meaningful behavioral change of customer in real-time

• How your product/proposition is enhanced by the above

– Better value for customer (perceived)

– Better value for the insurer (bottom line)

Digital Engagement!


Your Customer Proposition must change

• Not only have you bought the best Insurance product on the Market….

• You are now part of a personalized value creation program that will prove worthwhile to you in your everyday life…..

• The only limit on the value to you, is the data you are willing to share. The only cost to you is the data you are willing to share.

Digital Engagement!


Examples of Continuous Customer Value Creation

Some real and soon to be real.


Example of CCVC: P&C Automobile Telematics

Why? Because driving behavior is modified by feed back from the system.

If you use a vehicle with inbuilt “black box” and you give us access to the data, you can opt in for the following services….

– Premium calculated by how safely you drive

– Safe driving alerts / tips; Driving hazard proximity alerts

– Cohort comparison on fuel efficiency / safety by vehicle by driver

– Social media opt-in competition with friends on driving skills / efficiency / safety

– Expense claim assistance by output for company car on trips

Did you know UBI Telematics

programs reduce accidents by

between 20% - 30%?


Insurance Customer

Customer

Value

Creation

Opportunities

Buy

Claim

Customer

Value

Creation

Opportunities

Example of CCVC: P&C Automobile Telematics

Customer’s

Value • Premium is reduced

• Claims can be

avoided

• Avoidance of

hazardous driving

conditions

• Can compare myself

with other drivers

• Can compete with

friends on skills

• Helps me keep track

of my business trips

make it easier to

make expense

claims

Insurer’s Value • Great data

• Uses ecosystem

• Reduces claims

• Reduces fraud

• Builds brand affinity

• Potential cross sell


Example of CCVC: Life Insurance

Why? Because they don’t reach the Hospital in time!

If you wear an X, Y or Z brand of iWatch and you give us access to the data, you can opt in for the following services….

– Life threat detect – early detection (or prediction) of potentially life threatening conditions

– Life threat evac – priority notification to emergency services of your location and condition (even if you are incapacitated)

– Life threat eval – real-time connection with a qualified expert to assist you with evaluating your symptoms and vital signs; can automatically set up an appointment with your nominated health provider

Did you know 250,000 Americans

die from heart attack each year

within 1 hour of initial symptoms?


Insurance Customer

Customer

Value

Creation

Opportunities

Buy

Claim

Customer

Value

Creation

Opportunities

Example of CCVC: Life Insurance

Customer’s

Value • Life is monitored for

free

• Life can be saved

• Can talk to a

qualified

professional if I have

a concern

• Discount on

Insurance?

• Another reason to

buy that cool iWatch


• Uses ecosystem

• If life saved or

concern addressed:

- Persistency

- Delay major claim

- Customer tweets

- Brand Ambassador

- Cross sell


Example of CCVC: Life / Health Insurance

Why? Because it’s too bothersome to fill out the form on most apps.

If you have an X, Y or Z brand of device and you share with us the photos of the food you eat, you can opt in for the following services….

– Healthy eating scorecard / planner

– Healthy eating real-time advisor

Did you know that 7 out of 10

health conscious people stop

counting calories?

Healthy people have 16% less heath

related claims than unhealthy

people.


Insurance Customer

Customer

Value

Creation

Opportunities

Buy

Claim

Customer

Value

Creation

Opportunities

Example of CCVC: Life / Health Insurance

Customer’s

Value • Calories counted

consistently easily

• Can make healthier

eating choices

• Can hit weight

objective

• Discount on

Insurance?

• Another reason

to buy that

cool iWatch


• Can make customer

healthier which

reduces claims by

16%

• Brand impact:

- Customer tweets

- Brand Ambassador

- Cross sell


Example of CCVC: P&C Automobile (Personal / Fleet)

Why? Often because of incorrect tire inflation or tire over-heating.

If you install a tire monitoring kit from X manufacturer, you can opt in for the following services….

– Discount from X manufacturer of the tire monitor

– Real-time alerts on tire heath and well being (prediction) / savings monitor

Did you know over 23,000

accidents and over 500 deaths

each year due to tire blow-outs?

Note: you will be able to cut personal

fuel consumption by 6% thru correct

tire inflation – saving $265 annually


Insurance Customer

Customer

Value

Creation

Opportunities

Buy

Claim

Customer

Value

Creation

Opportunities

Example of CCVC: P&C Automobile (Personal / Fleet)

Customer’s

Value • Avoids potentially

fatal accidents

• Saves on fuel cost

• Increases life of tires

= reduced annual

spend on tires

• Discount on

Insurance?

• No questions asked

claims (assuming

alerts are heeded)

• Discount on cool

device

Insurer’s Value • Interesting data

• Reduces claims

• Increases Renewal %

• Cross sell

• Uses Ecosystem

• Brand impact:

- Customer tweets

- Brand Ambassador


Example of CCVC: Workers’ Compensation

If you provide us the access to required data, you can opt in for the following services…

– Workforce sentiment and engagement analysis (internal / external)

– Workforce heath tracking

– Facilities Health & Wellbeing Scorecard

Did you know that organizations with

high employee engagement are 18%

more productive than those with low.

And those with low engagement

have 62% more accidents than those

with high engagement.


Digital Engagement: The Bottom Line


The Bottom Line: If 60% of expenses are claims; a 10% reduction in claims gives a huge boost to Insurance profits…

…while binding your customers tighter!

Reduce accidents Save your life

Live healthy Live happy

Save on your

home energy costs

Save on your

driving costs Insurance Customer

Customer

Value

Creation

Opportunities

Buy

Claim

Customer

Value

Creation

Opportunities


Digital Engagement: How do I get there?


Attractive value

propositions:

• Simpler product and

services that meet

specific client

segments’ needs

• Competitive pricing on

utility basis

• Differentiation through

Digital engagement

Frictionless processes:

• Self-service 24/7

• Front to back digitalized

processes

• Paperless

• Authentic, Efficient and

friendly omni-channel

contact centers

Strategic Approach

Digital engagement demands Insurance Institutions to transform

• Key to becoming a Digital Insurance Organization is to take existing tactical digital solutions, and morph these into a seamless digital experience for customers, partners and employees

• An authentic digital presence for the Organization fostering ever increasing and meaningful digital engagement with customers, partners and employees

Tactical Approach Digital

Financial Services

Organization

Remote collaboration

and engagement

Distribution transformation

& channel strategy

Customer experience excellence

Product and service

innovation, Partner eco-

system Virtual

servicing, automated

provisioning

Advanced risk and decision

making tools

apps

online call

centres

web

mobile

sms

api


There’s a world of opportunity and many of

your competitors are ready to exploit it


50 BILLION INTERNET CONNECTED DEVICES BY 2020

Vehicle, Asset, Person & Pet Monitoring & Controlling

Agriculture Automation

Security & Surveillance

Building Management

+ -

Embedded Mobile

Everyday Things

Smart Homes & Cities

Telemedicine & Healthcare

Opportunities: building on the Internet of Things


What are innovators doing in this disrupted marketplace? Non-traditional competitors and forward-thinking Insurers are capitalizing on these Digital disruptions, staking their claims in this new market place

Mobile Insurance • Africa based mobile phone operator

• Pioneer in providing free micro-insurance

based on talk-time – the more you talk the

greater the cover

• Partnership with Bima and Vanguard Life

Life style Insurances • Pioneering “Life style” insurance

• Discounts on Life Insurance for healthy living

plus other value added services

• Social engagement dimension

• Mobile App

Internet only Life Insurance • First Internet only Life Insurer in Japan

• Premiums are ½ of competitors as a result

of low distribution costs

• Simple, easy to understand products

• 75% of customers are between 20 – 30

years old

Mobile Payments • Replaces a traditional card terminal with a

mobile device (i.e. iPhone)

• Allows anyone to accept card payments

without the need for specialist equipment

• Co-founder of Twitter is the CEO

• Visa have invested

Platform of Engagement • Introduced a platform of engagement for

Motor Insurance

• Only Pay-as-you-drive premiums

• Many value-added services for Insurance

customers and non-customers via analytics

• Social engagement dimension

Usage Based Insurance • Pioneer of Pay-as-you-drive Insurance in US

• Created patented “black box” technology to

track driving behaviour to calculate premiums

• Over 1.4 million customers in first 18 months

• Attracting younger drivers 18 to 25


Key take aways from this Session

1 Customer engagement is the new high ground for Insurance

2 Engagement boosts profits while binding customers

3 Customer’s will trade their data in return for value from the Insurer

4 The market is moving quickly to this new model

In these disruptive times, transformation is imperative


About the Presenter:

Andrew Dart Industry Strategist

[email protected] @ITInsuranceGuy

+65-9092-2835

iis china 2014 - the new insurance engagement final

Documents

csc proprietary

customer proposition

engaged insurance customer

aspiration of customer

line digital engagement

better value

real value

new business models