Dr Patrick Dixon Chairman Global Change Ltd

Insurance TrendsFuture World, Future Opportunities

Fellow, Centre for Management Development, London Business School

Text

do things you really believe indoing the right thing

Life  is  Short    

Why  I  believe  in  insurance    

Poor  image  with  customers  and  graduates

�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  to  finance  dividends.

6  words  spell      F  U  T  U  R  E  F astU rbanT ribalU niversalR adicalE thical

ALL      BIG      RISKS      ARE      RELATED

ReputaGon  -­‐  Events  -­‐  Focus  -­‐  Service

 

• Click  to  edit  Master  text  styles

AGILEleaders have more than one strategy and learn rapidly from each other

WGP  1980-­‐2013  (%,constant  prices)

Diversity  to  seizeglobal  markets

EU  GDP  1980-­‐2013  (%,constant  prices)  

Vietnam  GDP  1985-­‐2011  

>40% WDP by 2015

� IMF - adjusted for Purchasing Power Parity

• Click  to  edit  Master  text  styles

• Click  to  edit  Master  text  styles

RISKbenchmarking over same investment

cliff as everyone else

•

£  375bn

$2.3  trillion  US  +  $85bn  per  month

$3.4  trillion  

Reserves  

The future is about

EMOTION

80%  lost  in  seconds  

aggregators  winwith  only  one  form

Most  call-­‐centresslow,  blind  and  

deaf(single  screen  -­‐  no  social  media)

 

300 million move to cities in China and475 million to cities in Africa by 2030

Personal  Financial  Services  in  Asia

$300bn  growth  expected:  2011-­‐  2020  

China / Brazil32% retail insurance growth pa

Europe Dying 4 couples to produce single great-grand child

Hyper-competive + regulation

75%  of  all  US  and  UK  wealth  owned  by  those  over  65  -­‐  mostly  women

Falling  Family  Size  link  means  

Insurance• Average  family  size  in  developing  naCons  fell  from  6  to  3  children  from  1950  to  2000      

• Bangladesh  family  size  halved  in  20  years  • In  Iran  fell  from  7  in  1984  to  1.9  by  2006  • In  S  Korea  fell  from  6  to  <3  in  25  years• PopulaCon  falls  to  replacement  levels  at  $4000  -­‐  $10,000  a  year

Can we stop ageing ?

• Adenovirus

• Infected mouse hair cells

• Permanent colour change

Permanent Hair Colour

Treatment which restores and maintains the youthful elasticity of

hardened arteries – and helps wrinkled skin. Global sales?

Low blood pressure and total body lift

Alteon

• Pigs teeth grown inside rats

• Mice grow new teeth from nerve cells / gum tissue

Grow New Teeth

Repair of heart or brain damage following coronary / stroke

using adult stem cells

Repair Heart / Brain

• Harvard Bioscience

• Bioreactor

• Bone marrow stem cells

• Polymer scaffold

Print New Skin (Lexmar)

Build Nanotech Robots

• Adenovirus contains Math1 gene• Turns young ear cells into hair cells• Inject virus particles into inner ear

• New hair cells grow near Organ of Corti

• Research in Guinea Pigs

Cure for Deafness ? better

Confidential

HSV1  causes  cold  sores.  When  engineered  as  Seprehvir  (HSV-­‐1716),  it  is  harmless  to  healthy  &ssue.

• Oncolytic viruses• Infect and kill cancer tumour cells • No damage to healthy tissue• Evidence of impact in clinical trials• Able to deliver new genes into cancer cells• Micro-dose chemo, micro-dose radiotherapy

Viruses to cure cancer ?

Monkeys on diet live longer• After 20 years - 80% alive v 50% on normal calories

• Less cancer, diabetes, heart disease, strokes, brain decay

55

Worn out Mitochondria – Energy Boost

R-alpha-lipoic acidAcetyl-L-carnitine

Slow  or  no  ageing  is  a  reality  in  animalsJapan  women  gain  15  minutes  of  life  expectancy  every  

• Rockfish, Turtles, some Whales

• No signs of getting old

lPeople  like  to  belonglSense  of  idenCtylCommunity  lFamilylInsurance  oTen  personal    

Happy to Belong

700,000  agents:  relaGonship

Reasonspeoplechoosenon-lifeinsurers

�Click to edit Master text styles

�Click to edit Master text styles

Huge Opportunity: customer experience

1  trillionpages  a  month

"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

SCALE  +  FOCUSSurvival  issues:    country  

region  /  specialty  /  channel  /  technology  /  underwriGng  /  e-­‐sales

 

e-­‐commerce  hit  $1  trillion  in  2012  e-­‐marketer  

Italy:  58%  increase  in  aggregator  sales  of  policies  in  first  6  

months  of  2013  v  2012

56%  all  private  motor  insurance  salesGrowth  1-­‐2%  pa  -­‐  reaching  saturaGon

30%  of  consumers  select  cheapest  policy  Further  58%  select  policy  in  top  five  cheapest

ObjecGve  measure  of  brand  value

UK  Aggregators  Threat

Weakness of all Aggregators

33%  in  UK  don’t  watch  live  TV

>  200  million  mobile  payments    >  $160bn  

• Kenya  -­‐  17m  customers• $9bn  pa  -­‐  >33%  GDP

•

1.7bn  users  unbanked

Mobile“On-time, anyhow, anywhere”

Reduce customer support costsBoost cross-sell / up-sell (works well)Easier policy changes and renewals

Policy alerts / progress on claimsIntegrated product offersFusion with social media

1500% growth car insurance black boxes

Telematics Scale

90% all global data generated in last 2 years

Big  DataSales,  underwriGng,  fraud  

Big Data means shift from

Marketing to Advice

• Home• Work• Online• Offline• Sales• Entertain• Phone• Mobile• Chat• Social web

ONECUSTOMER

• 90%  Microsoh  R&D

CLOUD

5.5  billion  cyberajacks42%  increase  /  year

>160Gbps  in  denial  of  service1000  major  ajacks  /  hr  in  UK

Worries  about  US  Prism  /  security  services  

$40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism

Shale gas 33% US supplies

3.3m US jobs$468bn pa + more oil

produced than Saudi by 2020

200 years global supplyUp from 60 years in 5 years

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  ?

120,000 terawatts of sunlight /day7,000 times total power use

QUEBEC from ARIZONAMOSCOW from SAHARA

Solar  cell  generaCon  for  same  price  

Only 5% EU power crosses borders

Enough salt caverns to power germany for a week

96

Only sell what you believe inand would sell to your family

and friends

The  only  corporate  value  worth  having  

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

“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.”  Doing  the  Right  Thing.

Big hidden penalties for loyal customers will be seen as unethical

• Individuals• Families• Teams• Shareholders•Communi&es•Wide  World

CreaGng  a  Bejer  World

Bejer  value,  customer  service,  underwriGng,  risk  management,  cost  control  and  profitability

Dr Patrick Dixon Chairman Global Change Ltd

globalchange.com5 MILLION VIDEO VIEWS