32
Hugh Terry, The Digital Insurer Fintelekt 7 th Annual Insurance Technology Summit, Mumbai 20 th January 2016 DIGITAL INSURANCE – OPPORTUNITIES IN INDIA?
| Date post: | 12-Jan-2017 |
| Category: |
Economy & Finance |
| Upload: | the-digital-insurer |
| View: | 1,242 times |
| Download: | 2 times |
Hugh Terry, The Digital Insurer Fintelekt 7th Annual Insurance Technology Summit, Mumbai 20th January 2016
DIGITAL INSURANCE – OPPORTUNITIES IN INDIA?
Discussion agenda
1 Why is digital so transformaEve?
2 TransformaEon of face-‐to-‐face insurance
2
Digital OpportuniEes for India? 3
Why is digital so transformaGve?
3
1
The Digital RevoluGon: “It will not be televised”
DIGITAL CONVENIENCE
DIGITAL CONNECTIVITY
DIGITAL EXPECTATIONS
Always on
Always there
Universal
Almost free
Access to informaEon (Google)
Access to each other (Facebook)
Access through devices (Apple)
LocaEon-‐agnosEc (cloud services)
Data “on demand” Desire for clarity & simplicity
Dialogue not monologue
Easy to promote a product .. And complain
4
Change, Change, Change….
5 5
2015: 2 billion smartphone users 2020 : 80% of adults will own a smartphone
Our digital world: very new, addicGve and diverse
Source: The Economist, Qmee.com
New & Big AddicGve Diverse
Three digital “Mega” trends: forces beyond our control
Changing consumer behaviour – they are more demanding and looking for a different experience
3
Technology is cheaper and easier to implement than ever – it is the lever to meet consumer needs, reduce operaEng costs and to change your culture
1
6
Data maXers– we are collecEng more and more data that can be used to create winning business models
2
7
Welcome to digital customers: “they are mulG-‐touch”
7
Myth #1: Digital is a new distribuEon channel Reality : Digital enables customer (& distributor) engagement
Online
Face To Face
Phone
The mulG-‐channel customer is…
Becer informed More demanding Uses mulEple customer touch points for both sales & services Increasingly starts on-‐line Will jump channels at any point – catch them if you can!
3 core strategies
Transform exisEng face-‐to-‐ face models
2
Create or parEcipate in new models
3
Manage exisEng models for profit
1
8
The Digital Advisor Business Model
9
2
AGENCY MODEL HAS WEAKNESSES
Life Insurance in India
§ New Business for industry falls 25% in 5 years to 2015
§ Agency accounts for 78% of total sales (2013-‐4) v 90% (2006-‐7)
§ LapsaEon rates remain high > 40% @13months § Agency salesforce falls 30% in 5 years to 2015
10
2. REGULATIONS TIGHTEN
§ Inefficient – for many reasons § Difficult to control – mis-‐selling too common § Historically biased towards investment
component
RECENT PERFORMANCE POOR
… BUT HOW WILL DIGITAL TRENDS IMPACT THE AGENCY MODEL GOING FORWARD?
. MORE POSITIVE OUTLOOK
§ Increased focus on ProtecEon § Growth returns to industry in
2015 § Foreign capital changes
encourage investment
Trust is at the heart of insurance
Rely on agent relaEonships Insurance brand is a hygiene
factor in the sales process
As customer research on-‐line trust will need to be developed and leveraged on-‐line
Trust must be earned & reinforced at every interacEon/touch point
Great insurance advisors -‐ always
in demand
Lack of standardizaEon in training, performance management & coaching
Result : variable quality of advice and low producEvity resulEng in high agent turnover, low policy persistency
When customers research online they will research their advisors as well….
Less Eme face-‐to-‐face – but no less important (probably more so)
Insurance advisors need to be more mobile (digitally & physically)
Digital will transform & standardize key management processes
Customer service maXers
Nearly 100% reliant on the advisor
Back office is … back office
Mobile technology provides opportuniEes for cost effecEve customer service differenEaEon
Push based communicaEons can be used to reconnect with customers
Myth #2: Digital changes the way insurance is sold Reality: Digital strategies must incorporate the fundamentals
Current Agency Paradigm Digital impacts
Back to basics: Digital Advisor strategies need to leverage insurance fundamentals
11
Customer Portal / App
Policy Systems
Advisor Portal Lead/Prospect Management
Sales OpportuniGes
Tablet POS
12
Digital Advisor business model
Digital OpportuniEes 1. More Leads 2. Becer service 3. Becer selling
“connecGng to the digital eco system”
1. Enable lead management & analyEcs / PredicEve analysis
2. Improved compliance to sales best pracEce (& regulatory requirements)
3. Back office producEvity from digital proposals
7 OTHER BENEFITS AFTER SUCCESS
POS tablet sales toolkit: easy business case
PRIMARY BENEFIT Improved Sales effecEveness through a becer customer
experience
MEASURED BY: High tablet usage from Advisors
Increased sales producEvity per month
• More efficient • Faster & more accurate (clean policies in a day)
4. Reduced overheads: premises & technology costs 5. Business intelligence
6. Recruitment training (and hiring) tool 7. Plasorm for more automated underwriEng
• Benchmarking data • Usage data • “Bigger” data
13
1. Full-‐Eme, salaried & No mulE-‐level hierarchy
2. Digitally enabled advisors for remote sales & servicing – a genuine mobile office
3. On-‐line lead generaEon driven by the insurer using corporate & sales person digital connecEvity
4. Digitally assisted recruitment, training and coaching
HOW COULD YOU RADICALLY REDEFINE FACE TO FACE SALES?
Agency of the future: Who will move first?
14
< 200,000 Full-‐Eme advisor > 15 policies per month per advisor >50% of lead generated on-‐line >50% of sales executed virtually
WHAT WOULD A DESIRABLE END STATE BE FOR AGENCY…?
How can we radically transform face-‐to-‐
face models?
Q. Will an exisEng insurer adopt radical transformaEon – or new entrants?
Digital Business Models – Case Studies & OpportuniGes
15
3
There are untapped opportuniGes around the world
Seriously shopped but didn’t buy life insurance (10%)
Didn't shop for life insurance (78%)
Seriously shopped and bought life insurance (12%)
Buyers and non-‐buyers of life insurance, US households(%), 2011
Can digital strategies change the paradigm that “life insurance is sold not bought”?
Chart Source : To Buy not to buy life insurance, LIMRA 2011. Extracted from Swiss Re Sigma 06/13 . *Swiss Re Asia Pacific Mortality ProtecEon gap 2015 16
78%
12%
10%
US$55 trillion ProtecEon gap
in Asia. India : US$8.5
trillion*
Digital OpportuniGes for India
CreaEng a profitable motor porsolio
2
Digital life “ecosystem” proposiEon
3
Redefining Employee Benefits
1
17
Employee Benefits
18
OPPPORTUNITIES? 1. Affinity – the employee 2. Group like pricing for the
individual 3. SME’s not well served 4. Employee benefits is archaic –
easy to improve
Commentary & insights Excellent example of “service for Free” model disrupEng two industries (HR soyware and employee benefits)
Window of opportunity was Affordable Care Act that simplified raEng for health insurance for small companies
Not so “Zen” – very public argument regarding use of ADP payroll accounts
Suite of HR services
Background Fastest growing SaaS business ever Offering free HR soyware plasorm and integraEon to third party services in return for insurance on employee benefits
Focused on SME’s Just raised US$500 million on US$4.5 billion valuaEon Revenue target of US$100 million by Jan 2016
Region: North America Broker Model: Zenefits
19 19
Crystal clear and compelling proposiGon TesGmonials
Online employee filing cabinet
100% paperless benefits enrolment
Automated onboarding
Zenefits: customer focus reaps rewards
20 20 Q. Is there an opportunity for a Zenefits in India?
Motor Insurance
21
OPPPORTUNITIES? 1. Profitable niches using telemaEcs 2. Rewards based structures to
reduce pricing sensiEvity 3. New customer acquisiEon
strategies
Vitalitydrive – holisGc rewards programme
Immediate Fuel Rewards & safety features Drive well to earn points Maintain and improve Vitalitydrive status Enjoy the rewards
App giving driving performance and reward profit
Q. Could a motor rewards scheme work in India?
Vitality driving challenge – App only
Discovery Insure driving challenge app combines mobility and behavioural science to improve road safety independent of the telemaEcs device. Excellent for customer acquisiEon.
Digital Life Insurance
24
OPPPORTUNITIES? 1. Valued added term insurance 2. Lead generaEon mechanisms for
face-‐to-‐face?
Region: United Kingdom Managing Agent Model: Beagle Street
25 25
Background 8% of new business in UK from this company
Online recommendaEons for customers Relevant value added services
Term Life with great experience
Q. Do we have enough focus in India on customer experience?
“The larger part of our success, however, comes down to our single-‐minded focus on innovaEon. We recognized early on that major change was coming in the way life insurance was being distributed and so we focused our acenEon onto innovaEng at the distribuEon level and invesEng heavily into improving the way that life insurance is sold.” -‐ MaXhew Gledhill, CEO of Beagle Street
Region: Asia (Singapore) Agent Model: AIA Vitality
26 26
Background Points for Wellness acEviEes including tracking
Comprehensive rewards Science based programme 5 million members around the world
Wellness Rewards
Q. How quickly will this programme expand to other countries?
Region: Asia (Hong Kong) Agency Model : Move (from Manulife)
27 27
Background Free tracker for qualifying products Up to 10% discount on premiums
TelemaEcs for agency sales
Q. Will this become mainstream?
Region: North America (US) Managing Agent Model: Sureify
28 28
Background Lifestyle opEon Discounts for healthy lifestyle
Term Life + telemaEcs
Q. How long before we use telemaEcs with term life insurance in Asia?
Digital innovaGon in insurance: what ingredients are needed?
29
• Customer at the heart of the process
• “Outside-‐in” approach to iniEaEves
• Respect customer choice
• DistribuEon partners
• Tech partners • MarkeEng
partners • Eco-‐system models
1. Customer Centric 2. CollaboraGve ü ü
5. Data centric & scalable operaEng models leveraging technology plasorms
4. New challenger brands – disrupt own business if necessary
3. Agile frameworks and mindsets
6. Strong internal support for a clear plan with risk miEgaEon via piloEng
Enablers
30 30
Transforming insurance: Acknowledging innovaGon
Source: Transforming Insurance, KPMG InternaEonal, 2014 & The Insurance InnovaEon ImperaEve, KPMG InternaEonal 2015 30
Acknowledge the challenges Seize the opportunity
65% Regulations high costs &
margin erosion
45% 48% 83% future success = ability to innovate
business models disrupted
31 31
Our industry is on the move
Source: Survey of 280 global C Suite execuEves for « A New World of Opportunity: The Insurance InnovaEon ImperaEve, KPMG 2015 31
How fast can we innovate? At our fastest is it sEll too slow?
GOOD LUCK WITH YOUR OWN DIGITAL ADVENTURES !
32
About The Digital Insurer
Contact The Digital Insurer: hugh.terry@the-‐digital-‐insurer.com 32
The forum for professionals interested in digital insurance
Thought Leadership • Independent research on digital
insurance around the world • Sponsored content on digital
insurance • Conference speaking and
workshop facilitaEon • ConsulEng services including
support for new business models from insurers and start-‐ups businesses
Digital Insurance Library & Digital Insurance in AcGon • Library -‐ best online knowledge
bank on digital insurance – sponsored by Swiss Re
• In AcEon -‐ a go to source for actual digital insurance iniEaEves – sponsored by KPMG
• Monthly release of views and summaries
• “Curated” –with analysis that summarises the key comments
The Tech Community for Insurance
• Asia Pacific’s first dedicated site to connect buyers of Insurance tech with vendors
• Making technology more accessible to decision makers
Our digital insurance content is free. Thanks to our sponsors. Join more than 7,500 others @ the-‐digital-‐insurer.com
