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Hugh Terry, The Digital Insurer
Insurance Industry Asia 2015 – Strategic Priorities for Profitable Growth
2nd December 2014, Ritz Carlton Hotel, Hong Kong
DIGITAL THINKING TO TRANSFORM FACE-TO-FACE
INSURANCE IN ASIA
Discussion agenda
1Digital trends & the case for change
2 The Digital Advisor – transforming face-to-
face insurance
3Emerging success stories
2
Presentation can be found in the articles/conferences @www.the-digitial-insurer.com
Digital trends and the case for change
3
InsuranceCom Conference: Insurance Industry Asia 2015 – Strategic Priorities for Profitable Growth: 2nd December 2014,
1
The Digital Revolution: “It will not be televised”
DIGITAL
CONVENIENCE
DIGITAL
CONNECTIVITY
DIGITAL
EXPECTATIONS
Always on
Always there
Universal
Almost free
Access to information
(Google)
Access to each other
(Facebook)
Access through
devices (Apple)
Location-agnostic
(cloud services)
Data “on demand”
Desire for clarity
& simplicity
Dialogue not
monologue
Easy to promote a
product .. And
complain
4
Change, Change, Change….
Two digital “Mega” trends: forces beyond our control
Changing consumer behaviour –
they are more demanding and
looking for a different experience
2
Technology is cheaper and easier to
implement than ever – it is the fulcrum
to meet consumer needs, reduce
operating costs and to change your
culture
1
5
66
A different world
A real-time and rapid
fundamental change in the
way we live
Our Digital World in 2014: every 60 seconds we…
Source: blog.Qmee.com
777
3. Less Trust in Financial
Services brands
2. Multi-channel service
1 Research on-line and purchase
anywhere
3 changes in customer behaviour: Transforming our industry
Around the world 69% of the online population researches on-line before purchasing a product or service
15%8%
19%27%
23% research online / purchase online 46% research online /purchase offline
Global- % of purchasers who did research online
only before purchasing online
Global- % of purchasers who did research both
online and offline before purchasing online
Base : People who purchased the product / service and are part of the online population
Global- % of purchasers who did research
online only before purchasing online
Global- % of purchasers who did research both
online and offline before purchasing offline
Consumer’s research on-line: …& then purchase anywhere
All Products
Source : www.consumerbarometer2013.com. 8
9
Welcome to digital customers: “they are multi-channel”
9
Myth #1: Digital is a new distribution channelReality : Digital enables customer (& distributor) engagement
Online
Face To Face
Phone
The multi-channel customer is…
Better informed
More demanding
Uses multiple customer touch
points for both sales & services
Will jump channels at any point –
catch them if you can!
Source : Edelman 2014 Trust barometer
71% would rather go to the dentist than listen to what their banks are saying to them
Source: survey by Viacom
We have a Trust
Challenge
10
Trust is at the heart of financial services: and…
78%69% 67% 64% 64% 61% 59%
55% 55% 52% 49% 48% 48%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Tech Co.1 Pharma
Co.1
Tech Co.2 Food &
Bev Co.1
Food &
Bev Co.2
Energy
Co.1
Energy
Co.2
Food &
Bev Co.3
Pharma
Co.2
Tech Co.3 Food &
Bev Co.4
Pharma
Co.3
Financial
services
industry
Pharma
Co.4
48%
52% 52%
47%46%
42%
44%
46%
48%
50%
52%
54%
Financial services industry Banks Credit/Payments Insurance Financial advisory/asset
management
3 core strategies
Transform existing face-to-face models
2
Create or participate in new models
3
Manage existing models for profit
1
11
The Digital Advisor: transforming face-to-face selling
12
2
InsuranceCom Conference: Insurance Industry Asia 2015 – Strategic Priorities for Profitable Growth: 2nd December 2014,
Trust is at the
heart of
insurance
Rely on agent relationships
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 interaction/touch point
Great insurance
advisors - always
in demand
Lack of standardization in training, performance management & coachingResult : variable quality of advice and low productivity resulting in high agent turnover, low policy persistency
When customers research online they will research their advisors as well….Less time 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 matters
Nearly 100% reliant on the
advisor
Back office is … back office
Mobile technology provides
opportunities for cost effective
customer service differentiation
Push based communications can be
used to reconnect with customers
Myth #2: Digital changes the way insurance is soldReality: Digital strategies must incorporate the fundamentals
Current agency paradigm Digital impacts
Back to basics: Digital Advisor strategies need to leverageinsurance fundamentals
13
Customer Portal / App
Policy Systems
Advisor Portal
Lead/Prospect Management
Sales
Opportunities
The Digital Advisor Business Model
Tablet
14
Digital Transformation of face-to face
Digital Opportunities
1. More Leads
2. Better service
3. Better selling
Customer Portal / App
Policy Systems
Advisor Portal
Lead/Prospect Management
Sales
Opportunities
Tablet
Improved selling
3. “connecting the eco system”
15
3
Present credentials (materials)
Identify needs
Produce quotes and help to close
Easy proposal submission
Tablet Functionality: Should be focused on the customer
Must be designed for advisors to connect with
customers
Easy to use with a “wow” factor that encourages
use with clients
Great usability is critical: engage/delight customers
& advisors
Usability is the Key Success Factor
POS Tablet sales toolkits:“business as usual” in most markets within 53 years?
16
1. Enable lead management & analytics / Predictive
analysis
2. Improved compliance to sales best practice (&
regulatory requirements)
3. Back office productivity from digital proposals
7 OTHER BENEFITS AFTER SUCCESS
POS tablet sales toolkit: easy business case
PRIMARY BENEFIT
Improved Sales effectiveness
through a better customer
experience
MEASURED BY:
High tablet usage from Advisors
Increased sales productivity
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. Platform for more automated underwriting
• Benchmarking data
• Usage data
• “Bigger” data
17
Emerging Success Stories
18
InsuranceCom Conference: Insurance Industry Asia 2015 – Strategic Priorities for Profitable Growth: 2nd December 2014,
3
FWD case study: 100% digital as an entry strategy
Slaying Myths
19
4
Early results promising
Greenfield Strategy
100% POS Tablet for all agents from Day 1 for Indonesia
Working as a talent attraction strategy
Productivity encouraging @~2 policies per
month
Business demographics :25% of business
“out of working hours” & 2/3rds “straight
through”
Enables 24x7 working culture
1. Agent not ready
2. Client not ready
3. Infrastructure not ready
2020
FWD case study: a new culture emerges
Real time Training & Supportive Community
On-line Knowledge base with FAQ’s
Support via community forum
“chic, cool and colourful”
AIA case study: iPoS regional digital transformation
21
4 Key differentiators
Off-line model100% availability“Any time, Anywhere”Advisor “digital briefcase”
AIA’s Regional Journey
August 2012: First launch in Singapore Jan 2014: Rollout Across 10 markets completed
2014 first bank partner moves to 100% tablet sales2015 and beyond: Elevate iPoS to a total mobile office
21
3. Interactive, intuitive
2. Native Appon a tablet
� Ease of use
� A new customer experience
� High adoption by advisors
� Independence from internet connection
� Fast and uninterrupted service
� Lightweight device
1. Functionally complete
� Paperless sale, incl. eSignature
� Structured, needs-based sales process
� Straight Through Processing
4. Regionally deployed
� In-house development team in China
� Regional standards with localisation
� Rapid deployment
AIA Case study: benefits
23
Fastturnaround
Agents’productivity
� Complete and pre-validated documentation
� Instant underwriting decision
� Straight Through Processing
� More effective customer meetings,less meetings with one customer
� Enhanced mobility, see more customers� Address multiple needs, higher case size
Customer experience
� Interactive, progressive buying experience
� Explore more options, deeper conversations
� Enhanced customer engagement
242424
AIA case study: results exceeding expectations
0%
25%
50%
75%
100%
Oct 12 Jan 13 Apr 13 Jul 13
Country A
Country B
Country C
Country D
High Usage% of Advisors actively using iPoS
Increased Productivity*
*iPoS advisor versus non-iPoS advisor
““I would not do much differently. iPoS is
very successful in the way we manage it,
roll it out and continuously improve it.
However, we were initially overwhelmed by
the success of iPoS and didn’t have enough
scale and capacity. Next time I would react
quicker and be more decisive on adding
resources to such a program.”
AIA Director leading the development
If AIA could do it again
Sales Per advisor+19%
No of cases+20%
Aug 2014 update: Tablet sales >50% in 6 out of 10 markets
Leads
50% of leads from digital
engagement activities
Twice as many leads per advisor
Agency KPIs for 2018
The Digital Advisor:where should you be 45 years from now?
Insurance
advisors
At least 2-3 times more
productive
50% fewer advisors
100% tablet usage for all new
advisors – core tool for sales
Customer
service
matters
50% reduction in back office staff
But at least a corresponding
increase in customer facing staff
supporting digital service, sales
and lead processes
Digital will transform
agency operating models
25
26
26
Internal barriers to change ... but the time is now
Source: EY Report - Insurance in a Digital World: the time is now 26
“Digital is a catalyst for dramatic change, one that threatens
rapid transformation of the competitive
landscape and that established insurers are particularly ill-placed to
deal with.”
27
Concluding: “business as usual” is the most dangerous path
Be radical
Now is the time to embrace change and start building digital models.
Be cautious
You don’t need to “bet the bank”. Learn from fast and strategically well thought our pilot
projects. Find people with the skills to transform.
Beware
If you don’t utilise digital thinking, plenty of others will continue to do so.
27
Extra Reading
28
InsuranceCom Conference: Insurance Industry Asia 2015 – Strategic Priorities for Profitable Growth: 2nd December 2014,
29
29Source: Swiss Re Sigma 02/14 29
The cross channel journey ”mono” communication channels going the way of the dinosaur
Online
search
Compare
quotes Browse
reviews
Targeted
advert
Receive quote Check with
friends
Buy online
Text/email
confirmation
Online customer
surveyFill out on-line
claim requestPost rating and
review
Tweet
reviewLike
Renewal
notification
Tweet
review
Referrals to
family/friends
Follow-up call
Buy through
agent
Approach
agent
Product
related call
Request further
information
Report claim
Gather
InformationSeek advise Purchase policy
After sales
serviceMake claim
Internet
Mobile
Social media
Agent/broker
Call center
Retail
branch/bank
Note: The red line shows an example buying journey initiated by a mobile advert, and the blue line a purchase experience via
online search.
30
30
Insurance Consumer trends:
Source: EY Global Customer Insurance Survey 2014 30
Customer centricity as a strategic imperative
31
31
Insurance Consumer trends:
Source: EY Global Customer Insurance Survey 2014 31
trust seems to be a particular issue in Asia
In Asia we see the largest
Trust gap between bank
and insurers (92-70= 22%)
Customer Portal / App
Policy Systems
Advisor Portal
Lead/Prospect Management
Sales
Opportunities
The Digital Advisor Business Model
Tablet
32
Digital Transformation of face-to face
Digital Opportunities
1. More Leads
2. Better service
3. Better selling
Lead/Prospect Management
Sales
Opportunities
More leads
Managing the sales funnel
Co-partnership models for lead generation
Apps to generate leads from the “digital cafes”
Analytics has an enormous role to play
Get the lead to the right person at the right
time
Lead management systems to manage multiple
leads , measure ROI and promote better
practices
Digital Marketing offer engines
Business outcome:• More leads
• Better quality leads
1
33
Better customer service
Customer portal/app: An on-line marketing capability for
customer engagement leading to cross sell / up
sell opportunities
1
Build a digital “eco-system” around legacy policy systems to treat customers like customers
2 Customer experience centre: Multi channel customer
support to connect customer interactions – a digitally
assisted customer service revolution (the engine room for
converting “data into business”)
3 Advisor portal: Customer data and advisor performance
at your finger tips
Business outcome:Building deeper, richer and better relationships with
customers and advisors
Facilitate and co-partners the advisors to better
meet customer needs
Allow “farming” as well as “hunting”
Customer Portal / App
Customer Experience Centre
Policy Systems
Advisor Portal
34
Tablet
2
Customer Portal / App
Policy Systems
Advisor Portal
Lead/Prospect Management
Sales
Opportunities
Tablet
Improved selling
3. “connecting the eco system”
35
3
Digital Advisor model Reprised: designed for the multi-channel customer
Online
Multi-Device
Access
“Digitally enhanced”
Insurance
Advisors
Customer Experience
Centre
Face
To
Face
Phone
DIG
ITA
L C
US
TO
ME
R
EN
GA
GE
ME
NT
Customer Portal/App
Self - Service
Referrals
Corporate Website
Direct purchase
Support Requests
Digital eco-system
Engaging content
Research tools
DIG
ITA
L
AD
VIS
OR
S
Customer Facing : Tablet POS Toolkit
Sales Intro & Fact Find
Quote & application
Internal : Advisor Portal
Performance & compensation
Customer data & e-comms
DIG
ITA
L
CU
ST
OM
ER
SE
RV
ICE
Multi-access customer experience centre
Voice/chat/text queries & escalation
Direct Sales : content & calls
Analytics engine room
Lead engine roomSales / Service
Opportunities
36
Digital face-to-face transformation: how to succeed?
Strategic Alignment New Implementation approach
Digital as a transformation opportunity Customer centric (outside in)
The importance of tablet POS toolkits Fast pilot (AGILE)
Comprehensive business case approved Explicit change management
Resources dedicated Distribution owned (?)
Advice: Think about tablet POS toolkits as the “pivot” for your change strategy
Reality: Digital should challenge, and transform, your organisational structure
37
Would a new insurer establish a distribution centric model?
Agency Channel
Incumbents have scale
Operations are complex and inefficient
Models don’t deliver value to the consumer on the investment component
Part-time sellers – very hard to manage
Low productivity
Product range is too narrow
BancassuranceHas a lot of advantages but….
Banks have consistently chosen $$ over customer centricity
Lacks the personal touch on servicing
Technology hard to deploy in banking environment
Agency is a cash cow that needs renewal
Bancassurance is an increasingly expensive game – and banking is going digital
Existing models are ripe for disruption:
A personal view for life insurance industry In Asia
38
There are untapped opportunities
Seriously shopped but didn’t buy life
insurance (10%)
Didn't shop for life insurance (78%)
Seriously shopped and bought life insurance
(12%)
Figure 6
Buyers and non-buyers of life insurance, US households(%), 2011
Can digital Strategies change the paradigm that “life
insurance is sold not bought”?
Source : To Buy not to buy life insurance, LIMRA 2011
Extracted from Swiss Re Sigma 06/13
39
78%
12%
10%
7 operating models for Asia: breaking down the value chain
40
Acquire New Customers Selling to Customers Servicing Customers Taking Product Risk
2. Bancassurance InsurerBank
1. Traditional Agency Insurer
3. Digital / Direct Insurer
4. Digital Managing Agents Single Insurer
5. Price Comparison Sites Multiple Insurers
6. Digital IFA Multiple Insurers
7. Digital Affinity Marketing Co. OR
Brand Financial Service Co e.g. TESCO BankMultiple ProvidersAffinity Partner
NO
WE
ME
RG
ING
IN
AS
IA
Health insuranceEngagement
Higher Relevance
A thought: is life insurance enough in a digital world?
Non - life
Smaller ticket
First to go on-line
Customer acquisition
Customer cross sell
Other
Banking products – credit cards, savings, loans
(reverse bancassurance !)
Loyalty programmes
Customers don’t think about industry structures when they buy on-line
41
The trend to
choice
Digital = customer centricity
The educated consumer
The world of “more perfect” information
How can insurers
react?
Be the best choice
Buy choice based models
Manage choice
Defend existing models
Do we think we can deny customer choice ?
Do we think we can deliver poor value products?
42
Another thought: embrace customer choice or baton down the hatches?
43
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