future of insurance industry - trends keynote for global insurance conference
DESCRIPTION
Future of insurance, demographics, emerging markets, ageing, consumer lifestyles, aggregators and online, mobile, ecommerce, motor insurance, home insurance, health insurance. Future of insurance in developed markets. Future of underwriting and telematics in auto insurance.TRANSCRIPT
Dr Patrick Dixon Chairman Global Change Ltd
Insurance TrendsTake hold of your Future
Fellow, Centre for Management Development, London Business School
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do things you really believe inLife is Short
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Why I believe in insurance
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Insurance: Confusing Messages
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Insurance: Confusing Messages
�Marke&ng: We are here to protect you and family, to pay out generously and quickly if something happens to you, giving you peace of mind at a fair price.
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Insurance: Confusing Messages
�Marke&ng: We are here to protect you and family, to pay out generously and quickly if something happens to you, giving you peace of mind at a fair price.
�Investors: We make shareholders as much wealth as we can without breaking laws. We raise premiums as o@en as we can, and pay out as liAle as possible.
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6 words spell F U T U R E F astU rbanT ribalU niversalR adicalE thical
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ALL BIG RISKS ARE RELATED
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AGILEInsurers need
more than one strategy
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WGP 1980-‐2013 (%,constant prices)
Diversity to seizeglobal markets
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EU GDP 1980-‐2013 (%,constant prices)
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Vietnam GDP 1985-‐2011
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>40% WDP by 2015
� IMF - adjusted for Purchasing Power Parity
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£ 375 bn
$2.3 trillion US + $85bn per monthMonday, 9 September 13
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The future is about
EMOTION
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80% lost in seconds
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ScreensSocial
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300 million move to cities in China and475 million to cities in Africa by 2025
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Personal Financial Services in Asia
$300bn growth expected: 2011-‐ 2020 Monday, 9 September 13
China / Brazil32% retail insurance growth pa
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Europe Dying 4 couples to produce singlegreat-grand child
Stop AgeingMonday, 9 September 13
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75% of all US and UK wealth owned by those over 65 -‐ but many need to work
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75% of all US and UK wealth owned by those over 65 -‐ but many need to work
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Can we stop ageing ?
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Monkeys on diet live longer• After 20 years - 80% alive v 50% on normal calories• Less cancer, diabetes, heart disease, strokes, brain decay
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Slow or no ageing is a reality in animalsJapan women gain 1 year in 4 of life expectancy
• Rockfish, Turtles, some Whales
• No signs of getting old
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lPeople like to belonglSense of idenAtylCommunity lFamilylInsurance oFen tribal product
Happy to Belong
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700,000 agents: rela]onship
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Reasonspeoplechoosenon-lifeinsurers
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Room to improve customer experience
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1 trillionpages a month
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"Perfection!, Wonderful hotel. Good value, beautiful views.“
Madrid May 20, 2013
This was the most beautiful hotel. Clean, friendly and good value.
“Worst hotel I have ever been in. Should be closed down.“
Paris April 11, 2013
NEVER stay in this terrible place. Rats, insects, dirty. Many guests got sick.
74 million users a month
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Italy: 58% increase in aggregator sales of policies in first 6
months of 2013 v 2012
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56% all private motor insurance salesGrowth 1-‐2% pa -‐ reaching satura]on
30% of consumers select cheapest policy Further 58% select policy in top five cheapest
Objec]ve measure of brand value
UK Aggregators
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Weakness of all Aggregators
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33% in UK don’t watch live TVMonday, 9 September 13
70% UK bandwidth = YouTube + BBC Neflix video streams = 25% US bandwidth (27m users)
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e-‐commerce hit $1 trillion in 2012 e-‐marketer
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> 200 million mobile payments > $160bn
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• Kenya -‐ 17m customers• $9bn pa -‐ >33% GDP• Tanzania 9m people• 35 na]on links via HomeSend Hub• Monday, 9 September 13
1.7bn phone users are unbanked
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Paypal Mobile $141m -‐ $4bn 2009-‐11
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2m businesses use SQUARE in US
30 companies like Square in ChinaMonday, 9 September 13
MobileReduce customer support costs
Boost cross-sell / up-sell (works well)Easier policy changes and renewals
Policy alerts / progress on claimsIntegrated product offersFusion with social media
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MobileMore than a
ChannelMonday, 9 September 13
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1500% growth car insurance black boxes
Auto insurance telematicsMonday, 9 September 13
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• 90% Microsom R&D
CLOUD
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• Zettabyte = 1024 ExabytesExabyte = 1024 PetabytesPetabyte = 1024 TerabytesTerabytes = 1024 Gigabytes
BigData
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Big Dataimpact on selling, underwri]ng and fraud
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Aramco - 30,000 computers hit - files lost
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5.5 billion aoacks42% increase / year
>160Gbps in denial of service1000 major aoacks / hr in UK
Worries about US Prism / security services Huge poten]al impact on cloud compu]ng
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Big Data means shift from
Marketing to Advice
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• Home• Work• Online• Offline• Sales• Entertain• Phone• Mobile• Chat• Social web
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• Home• Work• Online• Offline• Sales• Entertain• Phone• Mobile• Chat• Social web
ONECUSTOMER
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$40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism
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Shale gas 33% US supplies
200 years global supplyUp from 60 years in 5 years
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120,000 terawatts of sunlight /day7,000 times total global power usePower Moscow from Libyan Desert
“40% EU power = wind by 2050”Surplus wind to hydrogen - to methane ?
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120,000 terawatts of sunlight /day7,000 times total power use
QUEBEC from ARIZONA
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Solar cell generation parity
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•Only 5% EU power crosses borders
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Enough salt caverns to power germany for a week
100
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Only sell what you believe inand would sell to your family
and friends
The only corporate value worth having
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Truth about Retail Funds�Next miss-selling scandal? Expect regulation++�65-75% of actively managed funds fail to beat trackers - huge hidden charges
�Most fund managers are reluctant to invest own money in own retail funds and do not recommend to their friends
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“Trust and Transparency...We aim to delight our customers with our service to them and ensure that they have every reason to renew their policy every year.” Expect regula]on++
Big hidden penalties for loyal customers will be seen as unethical
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• Individuals• Families• Teams• Shareholders•Communi&es•Wide World
Crea]ng a Beoer World
Beoer value, customer service, underwri]ng, risk management, cost control and profitability
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Dr Patrick Dixon Chairman Global Change Ltd
globalchange.com4 MILLION VIDEO VIEWS
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