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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Monday, 9 September 13

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.    

Monday, 9 September 13

     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

Monday, 9 September 13