Future of Insurance Industry - trends keynote for global insurance conference

Dr Patrick Dixon Chairman Global Change Ltd

Insurance TrendsTake hold of your Future

Fellow, Centre for Management Development, London Business School

Monday, 9 September 13

do things you really believe inLife is Short


Why I believe in insurance


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.



�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.


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


ALL BIG RISKS ARE RELATED


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AGILEInsurers need

more than one strategy


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


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£ 375 bn

$2.3 trillion US + $85bn per monthMonday, 9 September 13

The future is about

EMOTION


80% lost in seconds


ScreensSocial


300 million move to cities in China and475 million to cities in Africa by 2025


Personal Financial Services in Asia

$300bn growth expected: 2011-‐ 2020 Monday, 9 September 13

China / Brazil32% retail insurance growth pa


Europe Dying 4 couples to produce singlegreat-grand child

Stop AgeingMonday, 9 September 13

75% of all US and UK wealth owned by those over 65 -‐ but many need to work


Can we stop ageing ?


Monkeys on diet live longer• After 20 years - 80% alive v 50% on normal calories• Less cancer, diabetes, heart disease, strokes, brain decay


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


lPeople like to belonglSense of idenAtylCommunity lFamilylInsurance oFen tribal product

Happy to Belong


700,000 agents: rela]onship


Reasonspeoplechoosenon-lifeinsurers


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Room to improve 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


http://rome-hotels.tripadvisor.com/ShowUserReviews-g187791-d190138-r3433324-Rome_Cavalieri_Hilton-Rome_Lazio.html








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 satura]on

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

Objec]ve measure of brand value

UK Aggregators


Weakness of all Aggregators


33% in UK don’t watch live TVMonday, 9 September 13

70% UK bandwidth = YouTube + BBC Neflix video streams = 25% US bandwidth (27m users)


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


> 200 million mobile payments > $160bn


• 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


Paypal Mobile $141m -‐ $4bn 2009-‐11


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


MobileMore than a

ChannelMonday, 9 September 13

1500% growth car insurance black boxes

Auto insurance telematicsMonday, 9 September 13

• 90% Microsom R&D

CLOUD


• Zettabyte = 1024 ExabytesExabyte = 1024 PetabytesPetabyte = 1024 TerabytesTerabytes = 1024 Gigabytes

BigData


Big Dataimpact on selling, underwri]ng and fraud


Aramco - 30,000 computers hit - files lost


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


Big Data means shift from

Marketing to Advice


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


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

ONECUSTOMER


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


Shale gas 33% US supplies

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 ARIZONA


Solar cell generation parity


•Only 5% EU power crosses borders


Enough salt caverns to power germany for a week

100


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.” Expect regula]on++

Big hidden penalties for loyal customers will be seen as unethical


• 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


Dr Patrick Dixon Chairman Global Change Ltd

globalchange.com4 MILLION VIDEO VIEWS


Future of Insurance Industry - trends keynote for global insurance conference

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Transcript of Future of Insurance Industry - trends keynote for global insurance conference