Global Innovation - Lessons from Overseas

There is an estimated unmet need for $1 Trillion in additional life insurance in Canada. Small evolutionary changes in our market are unlikely to materially reduce this gap. The panel will provide real examples of innovation execution in other territories, and speculate as to their applicability in our market.

Transcript

2. Kevin Pledge Innovation – lesson from overseas (and elsewhere) acceptiv.com/crc
3. Question •  0 – 9% •  20 – 29% •  40 – 49% •  60 – 69% •  80 – 89% •  10 – 19% •  30 – 39% •  50 – 59% •  70 – 79% •  90 – 100% How much personal protection life insurance will be sold online 5 years from now?
4. Agenda 1.  The Situation in North America 2.  Innovation 3.  Two Examples from the UK §  Beagle Street §  Aviva 4.  Can this be Applied in Canada?
5. A Problem “It takes too long to issue our business” Indicative Quote Underwrite Issue Offer Add’l Q’s Modify Application Apply Underwrite evidence Further Questions multiple hand-offs lack overall process control
6. Typical Solution Indicative Quote Apply UW at claim   ! or Indicative Quote Underwrite Issue Offer Add’l Q’s Modify Application Apply Underwrite evidence Further Questions
7. Good (at least to industry insiders) A recent announcement
8. Good (at least to industry insiders) …but not great A recent announcement 70% will take more than a week More than half will take more than two weeks
9. Innovation Is possible due to trends creating a discontinuous opportunity Will question an existing paradigm Often involve looking at the bigger picture or from another perspective Disruptive Innovation will be: §  n times better, at §  1/x of the cost
10. Trends 0%   10%   20%   30%   40%   50%   60%   70%   1960   1976   1984   1992   1998   2004   2010   Uninsured  Households**   Not  Face-­‐to-­‐Face**   of Canadian Households believe they are underinsured* Sources   *        LIMRA  2007   **    US  data  from  LIMRA  Household  Trends  in  Life  Insurance    Ownership     LIMRA’s  US  Individual  Life  Insurance  Sales  Trends  1975  -­‐  2009   is the average age of agents - DISCONNECT of families with children will have immediate financial trouble if the primary wage earner died 57% 50% 57
11. Paradigm INSURANCE IS 
 SOLD NOT BOUGHT
12. Perspective Look at the bigger picture and from the customer perspective Issue is NOT agent productivity Customers want choice or  
13. Case Studies New entrant – barriers to entry Not really an insurance company Not encumbered by existing distribution Largest insurance company in Europe Life and P&C business Existing direct and agent distribution channels - some online business
14. Beagle Street – Online Only Indicative Quote Apply and UW 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
15. Beagle Street (UK) New entrant – not really an insurance company Not encumbered by existing distribution No advertising for first two years, then…
16. Need to integrate with existing distribution – Omni-channel Customer service standards consistent with P&C Online offers “n times” improvement Integration expands customer base
17. The Solution – AVIVA (UK) Indicative Quote Apply and UW Buy Further evidence Buy or Omni channel Customer is in control
18. Can this be applied in Canada? Market research tested Customers go to Google for information Facebook and Google for advice Disconnect with agents Print:  hPp://www.lulu.com/commerce/index.php?fBuyContent=15657323   Ebook:  hPp://www.lulu.com/commerce/index.php?fBuyContent=15663543    
19. Can this be applied in Canada? Market research tested “Almost half of participants found the value proposition [to buy directly online] very appealing (rating of 8 or more out of 10); these results are encouraging. Years ago, when evaluating consumer interest in the ING Direct value proposition, our goal was to find interest in only half as many target group members (who we defined as innovators).” Print:  hPp://www.lulu.com/commerce/index.php?fBuyContent=15657323   Ebook:  hPp://www.lulu.com/commerce/index.php?fBuyContent=15663543    
20. •  10 – 30 year term insurance, up to $500k •  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 costs = Lower premium
21. Full UW + Lower costs = Lower premium MNS Age 40 $150K. Term Life Monthly Premium * Based on Acceptiv product design and pricing Feb 2015 0   5   10   15   20   25   30   35   40   10   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30   Premium Term 10 Year Term Industry $18.65 – $20.30 Teachers Life $13.46 20 Year Term Industry $24.80 – $30.69 Teachers Life $21.08
22. hPps://www.youtube.com/watch?v=HWF09ya1o5I  
23. Kevin Pledge acceptiv.com/crc Thank You