you would not dream of banking online – “it’s not safe” 5 years ago few people would buy groceries online 15 years ago Travel Agents would claim that you cannot book vacations online – “it needs a personal touch and experience”
Prudential oversight of insurance companies • Capital adequacy • Policyholder protection Complex Infrastructure • Systems • Processes Brand Reputation LIFE INSURANCE IS SOLD NOT BOUGHT 7
have immediate financial trouble if the primary wage earner died 50% of households believe they are underinsured 30% of households have no life insurance Insurance Gap - $20T in US, 1T in Canada 9
Will question an existing paradigm Often involve looking at the bigger picture or from another perspective Timing is critical Disruptive Innovation will be: § n times better, at § 1/x of the cost 12
beat: Time to Issue 42 – 47 days* Capacity Depends on number of agents Cost $500 - $747** + commission Sources: * 2009 LOMA Service Turnaround Times Survey – Term Products: 47 days **SOA 2010 Expense Study Average Per Policy $500 weighted, $747 unweighted 16
Prudential oversight of insurance companies • Capital adequacy • Policyholder protection Complex Infrastructure • Systems • Processes Brand Reputation LIFE INSURANCE IS SOLD NOT BOUGHT innovation The myth that 18
Buy > 5,000x faster ∞ scalable (85% of the time) 1/10 of the cost Fully Underwritten No fluids or additional evidence Cover up to £750k Better lapse experience Ave issue time 12 mins 23
Focus on distribution • Partnerships – Reinsurer, Traditional Insurer No complex systems • Focus on distribution – outsource the rest Fresh approach to branding… 24
• 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 cost = Lower premium 27
Simplified and Manual Underwriting T10 - $20.00 T20 - $26.04 Online Quote and Application Basic auto and Manual Underwriting T10 - $20.10 Online Quote and Application Basic auto and Manual Underwriting T10 - $20.30 T20 - $30.69 Online Quote Manual Application and Underwriting Where did this put Teachers Life? Insurance T10 - $13.42 T20 - $21.08 Online Quote, Application and Buy Automated underwriting immediate decision including rating if applicable 28
in online distribution 2. My company is looking at online distribution only to support existing distribution 3. My company is looking at online distribution as a primary method of distribution 4. My company expects online distribution will replace other distribution methods 31