Insurance Trends

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Insurance Trends

description

A client preso for the insurance industry. High level with charts to prompt discussion on external access to insurance services.

Transcript of Insurance Trends

Page 1: Insurance Trends

InsuranceTrends

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• CEO Survey

• Changing the Game

• New Media

• Technology

• Customer reference

• Next steps

Agenda

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CEO SurveyWhat is the Enterprise of the future?

We spoke to 1,130 CEOs and conducted in-depth analysis to determine the characteristics of the Enterprise of the Future

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Core Traits of the Enterprise of the Future

1. Hungry for change2. Innovate beyond customer imagination3. Globally integrated4. Disruptive by nature5. Genuine, not just generous

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Hungry for Change

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Change Needed Past ChangeSuccess

Although CEOs are more confident about managing change, the gap between their capability and the challenge ahead is growing

The Change Gap* Triples

“We have seen more change in the last ten years than in the previous 90.”Ad J. Scheepbouwer, CEO, KPN Telecom

Change Needed Past ChangeSuccess

2006 2008

Change Needed

No/limited Change

Moderate Change

Substantial Change

No/limited Success

Moderate Success

Successful

Past Change Success

22 %CHANGE GAP*8 % CHANGE

GAP*

6%11%

83%

19%

20%

61%

13%

22%

65%

12%

31%

57%

Although CEOs are more confident about managing change, their capability and the challenge ahead is growing

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2004 2006 2008

Market factors

People skills

Macroeconomic factors

Globalization

Regulatory concerns

Technological factors

Socioeconomic factors

Environmental factors

Geopolitical factors

84% 67%

42%

33%

44%

41%

48%

48%

35%

External Forces Impacting the Organization

Source: IBM Global CEO Study 2008; n (2004) = 403, n (2006) = 760, n (2008) = 1130

CEOs can no longer focus on a narrow set of challenges and intend to manage a broader agenda and greater uncertainty

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Change Needed Past ChangeSuccess

* Dif ference or ‘gap’ betw een expected level of change needed and past success in managing change

Change Needed Past ChangeSuccess

Source: IBM Global CEO Study 2008; n (underperformers) = 173, n (outperformers) = 164** Performance based on industry comparisons w ithin

survey sample of revenue CAGR 2003 to 2006

Change NeededNo/limited Change

Moderate Change

Substantial Change

No/limited Success

Moderate Success

Successful

Past Change Success

Outperformers**Underperformers**

19%CHANGE GAP*29%

CHANGE GAP*

CEOs of organizations with outperforming revenue growth are more confident about their ability to implement change

5%10%

85%

17%

17%

66%

4%

13%

83%

24%

22%

54%

Companies that delivered higher revenue growth managed change more successfully

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2. Thinking beyond customer imagination

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Investment* past 3years

Investment* next 3years

Source: IBM Global CEO Study 2008, n = 609; * Total investments: all asset investments + all investments in R&D, marketing and sales

Rise of the informed and collaborative customer

“We must redefine our value proposition to customers. Information and advisory content are becoming even more valuable than traditional drivers.”H. Edward Hanway, Chairman & CEO, CIGNA Corp.

“The rise of the informed and knowing consumer will continue to have an impact regarding our go-to-market priorities. We must know how to leverage new media. We've been surprised by the impact that just a few consumers can have with their blog entries.”Rob Hurlbut, CEO, Attune Foods

22%INCREASE

16.7%

20.4%No

impact 14%

Positive impact 76%

Negative impact 10%

CEOs see even more potential with informed and collaborative customers and are rapidly increasing their investment there

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Investment* past 3years

Investment* next 3years

Investment* past 3years

Investment* next 3years

21%24%

14%

19%

Investment in the rise of the informed and collaborative customer

14%INCREASE 36%

INCREASE

Outperformers**Underperformers**

“In the future, we will be talking more and more about the ‘prosumer’— a consumer/producer who is even more extensively integrated into the value chain. As a consequence, production processes will be customized more precisely and individually.”Hartmut Jenner, CEO, Alfred Kärcher GmbHSource: IBM Global CEO Study 2008; n = 167; * Total investments: all asset investments + all investments in R&D, marketing and sales

** Performance based on industry comparisons w ithin survey sample of net prof it margin CAGR 2003 to

2006

Outperformers plan to increase their investment in informed and collaborative customers by 36% over the next 3 years – the time is now

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3. Globally Integrated

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Source: IBM Global CEO Study 2008

Drive multiple cultures

Grow organically

Strive for one culture

Localize brands/products

Do everything in-house

Defend your core

Partner extensively

Globalize brands/products

Optimize operations globally

Deeply change mix of capabilities, knowledge and assets

Grow through mergers & acquisitions

Optimize operations locally

Maintain current mix of capabilities, knowledge and assets

Actively enter new markets

Extensive Globalizers (n=230)Globalizers (n=246)Blended Thinkers (n=131)Localizers (n=140)

UnderperformersOutperformers

Global integration approach

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4. Disruptive by Nature

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Business Model Innovation Focus

Source: IBM Global CEO Study 2008; n = 1106

29%

2%

69%

Limited/NoBMI Focus

Moderate BMIFocus

Strong BMIFocus

* See appendix for list of emerging economy countries

“When the business model is innovative, operations and the product will follow automatically.”Ronald de Jong, CEO Philips CL, Germany

29%

69%

1%

30%

69%

2%

Limited/NoBMI Focus

Moderate BMIFocus

Strong BMIFocus

Established Economy

Emerging Economy*

“All types of business model innovation are equally important; it's a matter of priorities.” Stephane Bancel, CEO of Biomerieux

Across the globe, a full two-third of all CEOs plan to be engaged in some form of business model innovation over the next three years

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56%

91%

New Pricing/TaxationStructures and Models

ReconfigureProduct/Service/Value

Mix

n = 234 n = 203

Source: IBM Global CEO Study 2008

38%

57%

71%

Work WithinOrganization

Focus onDifferentiating

Activities

IntenseCollaborationwith External

Partners

Enterprise Model Innovation Focus

n = 369

Revenue Model Innovation Focus

36% 36%

73%

Create EntirelyNew Industries

Move Into NewIndustries

RedefineExisting Markets

Industry Model Innovation Focus

Collaboration is instrumental to drive Enterprise Model Innovation

Revenue Model innovators shift the value mix

Industry Model Innovation remains rare

Within the various business models, CEOs plan to implement distinct initiatives

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5. Genuine, not Generous

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“Our company is investing extensively in corporate social responsibility. We need to be a reference in this domain. As the leader of the luxury industry, we have to stay ahead.”Yves Carcelle, Chairman and CEO, Louis Vuitton

9%12%

42%

12%15%

44%

18% 17%

48%

EnvironmentalIssues

SocioeconomicFactors

People Skills

200420062008

Source: IBM Global CEO Study 2008; n (2004) = 403, n (2006) = 760, n (2008) = 1130

“Our strong commitment to corporate sustainability will be a clear differentiator for us with all stakeholders.”Tom Johnstone, CEO, SKF

“I see corporate responsibility going through three phases. People start to consider issues like the environment because they are compelled to do so. Then they realize that it actually makes business sense. Eventually they move beyond compulsionand selfish motives to become passionate because it is the right thing to do.”Vinod Mittal, Managing Director, ISPAT Industries

External Forces Impacting the Organization

The only three external forces consistently rising on CEOs agendas are all linked to Corporate Social Responsibility

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Investment past 3years

Investment next 3years

Increasing customer expectations of corporate social responsibility

“The consumer’s concept of quality will no longer be measured by only the physical attributes of a product — it will extend to the process of how the product is made, including product safety, environmental compliance and social responsibility compliance.”Victor Fung, Chairman, Li & Fung

25%INCREASE

10.7%13.4%

No impact 20%

Positive impact 69%

Negative impact 11%

Source: IBM Global CEO Study 2008, n = 609; * Total investments: all asset investments + all investments in R&D, marketing and sales

Majority of CEOs see CSR as an opportunity, not a threat, and plan to significantly invest in CSR to integrate with society

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CEOs can now assess how ready they are for becoming the Enterprise of the Future.

Hungry for change

1Innovative beyond customer imagination

2Globally integrated

3Disruptive by nature

4Genuine, not just generous

5

Core Traits of the Enterprise of the FutureCore Traits of the Enterprise of the Future

IBM Solutions

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Changing the Game

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Changing the Game: Goldcorp Inc

• Yr2000, Strikes, debt, high production costs, terminated mining operations

• CEO Rob McEwen “Goldcorp Challenge” $575,000 prize

• Exposed 400Mb 55,000 acre property of Geological data to the web

• 100 targets identified• 80%+ yielded substantial

gold• 8 million ounces = $3bn• $100 invested in 1993

work $3000 today

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Changing the Game: Lego

• Assembled 4 enthusiasts• Ideas on new sensors,

redesigned input ports, and stabilized firmware

• Contributed for free

• Mindstorm v2 still sells 40,000 units a year at $199 a pop -- with no advertising -- and has become Lego's all-time best-selling product•http://www.wired.com/culture/lifestyle/news/2006/01/69946

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Do you stand out?

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“The purpose of the business is to create a customer” Peter F

Drucker

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• What are the attributes of Generation X• How do you communicate with them?

• What are the attributes of Generation Y How do you communicate with them?

Questions

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Who are we / will we be dealing

with?

http://www.pewinternet.org/pdfs/PIP_Teens_Social_Media_Final.pdf

35% of all teen girls blog54% of wired girls post photos online19% of boys have posted videos39% share their own artistic creations online26% of teens remix content 27% of teens maintain a personal webpage28% of teens have created their own blog33% of teens create or work on webpages or blogs for others

http://www.flickr.com/photos/14692968@N00/1351463530/

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Lancaster, L.C. and Stillman, D. When Generations Collide: Who They Are. Why They Clash. How to Solv e the Generational Puzzle at Work. Wheaton, IL. Harper Business, 2003.

Collaborative & networkedIndependentFacilitatedClassroomLearning style

Gen Y1977 - 2000

Gen X1965 - 1976

Boomer1946 - 1964

Traditionalist1922 - 1945

Generation Born between…

Part of my daily routineNecessarySets me backUnwiseJob changing

Unfathomable if not provided

Unable to work without itUnsureUncomfortableTechnology use

On demandWeekly / DailyOnce per yearNo news is good newsFeedback

PartnerCoachGet out of the wayCommand & controlLeadership style

Team decidedTeam includedTeam informedSeeks ApprovalDecision-making

CollaborativeIndependentHorizontalHierarchicalProblem-solving

CollaborativeHub & SpokeGuardedTop downCommunication style

Continuous & expectedRequired to keep meToo much and I’ll leaveThe hard wayTraining

Some insights about generational diversity“Your customers”

Core Traits of the Enterprise of the Future

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How do we find out about our customers?Core Traits of the Enterprise of the Future

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We ask themHow do you ask them?

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1. People post their ideas on a topic 2. Others can vote on their agreement

or disagreement with the idea by "promoting" or "demoting" it.

3. Comments can be provided to elaborate ones thoughts on the matter at hand.

4. Good ideas rise to the top,5. Bad ideas fall to the bottom. 6. The comments will tell the story why

an idea is good, bad or ugly.

Simple

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• Zuzzid helps people help each other.

• Let everyone know about your insurance experiences by leaving a Rant or a Rave.

• Consumers can learn from each other’s experiences, leave advice or comments, agree or disagree, and get the discussion going.

• Ask questions about insurance and get a general consensus from other users.

• A price engine takes the cost of thousands of peoples’ insurance cover and uses this to figure out what other people like you pay.” Sources:

http://www.listio.com/web20/story.php?title=Zuzzid http://zuzzid.co.uk

Rant and Rave: Zuzzid“Why do you engage customers?”

This is poor example

Core Traits of the Enterprise of the Future

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Innovation starts at Home

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Innoation Jam 2006

Over two 72-hour periods, more than 150,000 people from 104 countries and 67 organizations came up with more than 46,000 new ideas. Out of all that collective intelligence, the best ideas were selected. IBM publicly committed up to $100M in seed money to their development.

3-D Internet Big Green innovations Banking for the Unbanked Digital MeReal-time Translation ServicesElectronic Health Record System & Healthcare Payment Intelligent Transportation System Real-Time Translation Services Simplified Business Engines

Innovating with our customersInnovation Jam 2006

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Innovation with our friends…Innovating with our customersInnovation Jam 2008

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Innovative beyond customer imagination

2

Core Traits of the Enterprise of the FutureCore Traits of the Enterprise of the Future

Hungry for change

1Globally integrated

3Disruptive by nature

4Genuine, not just generous

5

IBM Solutions

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• Interview CEOs• Analyse information• Initiate Innovation Jam• Create blueprint for change• Gain competitive advantage for IBM, its

partners and it’s customers

• (Game changing process)

Enterprise of the Future processCore Traits of the Enterprise of the Future

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innovation that

matters

Product Innovation

Services Innovation

Policy & Society

Innovation

Management& Culture of Innovation

Business Model

Innovation

Business Process

Innovation

Developing and bringing to market products that stand out in feature, function cost, availability… all in the right place at the right time

Product InnovationCustomizing services (instead of one-size-fits-all) and lowering prices (by beating competitors who are not capitalizing on new tools of innovation) in order to distinguish and deliver high value

Services Innovation

Re-conceptualizing the fundamental design of a business through the use of innovation tools and collaborative approaches

Business Model InnovationCreating and maintaining new behaviors and organizational structures to become the company that can constantly create game-changing products/services

Management & Culture of Innovation

Addressing the broader implications of innovation – for privacy, piracy, digital rights, intellectual property, global trade, etc. – and creating breakthrough innovations in these areas and shaping broad societal frameworks

Policy & Society Innovation

Conceiving, implementing, integrating and managing an organization’s business processes (supply chain, CRM, HR, product development, etc.) for competitive differentiation

Business Process Innovation

Innovation Jam - you can have one too

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New Media

We understand demographicsWe understand our customers

We understand what they want?

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Video: How many friends do you have?

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“Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as a platform, and an attempt to understand the rules for success on that new platform.” Tim O’Reilly

Technology

Solutions

Change

Interaction

Styles

“Socially Constructed Media and Communication”

GuruMe

Anyone

Participation

Web 2.0

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http://www.ingblogs.com/mycupofcha/?p=82

Blog: ING in Asia PacificCore Traits of the Enterprise of the Future

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Generational Website: Royal Bank of Canada

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• Cuts out the middleman• Better response times• More user friendly• Supports our communities• Feels good to lend to people

rather than a savings account

• Delivered in a well known interface e.g. On-line auctions

• Fewer costs– No branch, – fewer staff– Less infrastructure (initially)

Peer-2-PeerLending

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http://www.peertopeerinsurance.com/public/friends.php

Peer 2 Peer Insurance?

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Finance in Facebook

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Is it worth the investment?

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Is it worth the investment?

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Is it worth the investment?

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Is it worth the investment?

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Is it worth the investment?

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Training and Games

“The Metaverse”

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What does IBM do in this space?InternallyProduct

Externally – Blue 2.0

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W3 - today

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W3 – Next (today)

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1 2

3

4

Bluepages

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W4 - Research

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Productisation of w3/w4Lotus Connections

Aggregate team data

Identify, develop and maintain a

professional network with

colleagues

Expanded customized profile data

fields and views for your

organization

Tag your colleagues and easily find them, search on them, and

keep in touch with them

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Health of Social Network

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New Media Solutions

Think about other industries and how they do things

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Next?

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Chris Sparshott(Sparkbouy)[email protected]

Portfoliohttp://www.slideshare.net/sparkbouy/slideshows

Bloghttp://chrissparshott.com

[email protected]

Can I help?