9th Asian Insurance CEO Summit Mar09pdf

Monetizing and Marketing Insurance through Virtual Worlds David Piesse 9 CEO Asian th Global Head of Insurance Insurance Sun Microsystems, Inc. Hong Kong Summit Claus Nehmzow Hong Kong Managing Director March 25 th 2009 ALCUS International Ltd. Hong Kong Friday, 27 March 2009 1

3D “Virtual Worlds” and Insurance • Challenges for Insurance CEOs • Virtual Worlds - What are virtual worlds - Applications of virtual worlds in business & education • Application to Insurance - Potential across insurance applications - “A day in the life of an insurance sales person” - “A day in the life of an insurance customer” © Alcus International Ltd. 2009 Friday, 27 March 2009 2

Challenges for Asian Insurance CEOs • Doing more with the same or less marketing budget • Greater outreach on product launches • Connecting with “Generation Y”, both as customer and employee • Reducing fraud and mis-selling • Improved compliance • New channels for addressing micro ﬁnance and islamic ﬁnance • Concern about more disasters: e.g., pandemic • No bricks and mortar bancAssurance © Alcus International Ltd. 2009 Friday, 27 March 2009 3

Next Generation Internet Data, Activity M e People Web 1.0 Web 2.0 Standard Web Focus Productivity Focus © Alcus International Ltd. 2009 Friday, 27 March 2009 4

Generation Y: “Screenagers” Screenagers Source: IDC © Alcus International Ltd. 2009 1 Friday, 27 March 2009 5

Multi Channel Distribution Affinities / Retailers Connecting brands and their Banks/Post customers with insurance products Offices and underwriting capacity. Global Best of Breed Agents and Insurers Insurance Brokers Service Telco's/ Rural/ Semi-Urban Connecting insurers with niche distribution channels and brand Virtual loyal customer segments. Worlds © Alcus International Ltd. 2009 Friday, 27 March 2009 6

VIRTUAL WORLDS Friday, 27 March 2009 7

Virtual worlds continue to attract investment and a growing number of users • Virtual worlds today have more than 300 million users - ... with 70% younger than 18 - 1 billion users predicted for 2012 • $919 million invested in virtual world companies for 12 month prior Oct ’08 - $1 billion prior to Oct ‘07 (Virtual Worlds Management) • Virtual goods represent a $1.5 billion market - ... $60 million per month virtual goods traded in Second Life alone Source: KZero, July 2008, Park Associates: Oct ’08, Strategic Analysis, Oct ’08, Virtual Worlds Management, In-Stat, Nov ’08, Virtual Greats © Alcus International Ltd. 2009 Friday, 27 March 2009 8

Virtual world: a real-time, shared experience Presence Co-Presence Interactive Anonymous Spatial © Alcus International Ltd. 2009 Friday, 27 March 2009 9

Age 5 Virtual Worlds Registered Accounts Q4 2008 2009 Twinity Utherverse Chugginton 15m Second Life 2m Woogiworld Age 30+ Age 8 Handipoints 2008 1m HiPiHi Jumpstart GeoSim Chapatiz Amazing Philly Worlds My Animal Family Kidstudio 2007 Near Konstruction Zone Xivio Hello Kitty ERepublic 2m Buildabearville 1m Webkinz Football 2006 Superstars Action Allstars Robot Whirled Galaxy Barbie Girls 15m Webcarzz Cyber 2005 Poptropica 20m Town Kidscom 1.5m Chobots Cars Moshi Monsters 1m Age 10 Age 25 2008 2005 2007 2009 2007 2006 2005 2006 2008 2009 Dizzywood Franktown MinyanLand LEGO Universe Mycosm Virtual Tweens 45m Neopets SceneCaster 2m Digital Dollhouse Club PonyPals 2005 Massively Me Whyville 3m iheartland Grockit Planet Cazmo Activeworlds 1m 10Vox Kiwi Heroes Onverse Medikidz Green Vizwoz 2006 SportsBLOX 19m Club Penguin Oddcast Interzone ClubCooee 1.5m My Mini Life Weblin Kaneva Spineworld Black Mamba KooDooZ 2007 There 2m 100m vMTV 3m Coke Habbo Studio Vivaty 20m 6m Yoggurt EGO goSupermodel IMVU Faketown vLES sMeet 2008 SmallWorlds Visitoons Home Age 20 Age 13 vSide Taatu WeeWorld 7m 24m 13m Muxlim Meez Live or open beta Empire of 21m Stardoll Gaia Sports Lively www.kzero.co.uk Launched in Frenzoo 2009 RocketonOurworld No data shown for worlds under 1m registered accounts. Includes estimates. In development/private beta Copyright K Zero 2008 Closed/closing © Alcus International Ltd. 2009 Permission required prior to republishing Age 15 Friday, 27 March 2009 10

Private and public sector organizations are using virtual worlds for serious business •surgeon training, •recruiting operating theatre •training •conferences •developer •design collaboration partner network management •b2b marketing •health care seminars •academic education •internal collaboration •conferences •IT training •consumer marketing •Internal sales conferences •cruise missile launch •collaboration training •recruiting •Recruiting •training •b2b marketing, conferences © Alcus International Ltd. 2009 Friday, 27 March 2009 11

L’Oreal has experimented with “experience marketing” in virtual worlds • Consumer marketing in Second Life • Playing with scale and experience © Alcus International Ltd. 2009 Friday, 27 March 2009 12

Cigna has launched a virtual healthcare pilot, integrating web... • Custom brand experience • Registration easy and simple • Consistent branding, visual language, graphic design • Circular, extensible design • Emphasis on human interaction © Alcus International Ltd. 2009 Friday, 27 March 2009 13

... virtual seminar, social community, interactive learning, and games Source: Cigna, vielife © Alcus International Ltd. 2009 Friday, 27 March 2009 14

Lenovo is piloting a 3D training and sales environment • planning to train 15% to 20% of its sales force to interact with customers and prospects via Lenovo eLounge • expect 40-50% conversion rate (compared to 25-30% on phone) • built on Nortel’s “web.alive” Source: Nortel, ThinkBalm © Alcus International Ltd. 2009 Friday, 27 March 2009 15

Sony Electronics conducted virtual trade show • staged trade show for professional broadcasting equipment • attracted thousands of visitors • replaced conventional 15 city (with 200-400 attendees each) • estimated 50% cost savings • used InXpo’s virtual event platform Source: VentureBeat, January 2009 © Alcus International Ltd. 2009 Friday, 27 March 2009 16

IBM: “fifth of cost / no jet lag” -- ROI of $320,000 on $80k investment • meeting with >200 participants, held in late 2008 • specifically designed meeting place for keynotes, breakouts, 3D server & green data center illustrations • starting with one annual event, laying the base for ongoing meetings • IBM’s “Virtual Community Group” has 6,100 members • used stand-alone, behind firewall Linden Lab version of SL Source: IBM/Linden Lab case study, March 2009 © Alcus International Ltd. 2008 Friday, 27 March 2009 17

Retailers are starting to experiment with “talking heads” to connect to customers • “talking head” avatars give more sense of reality to interactions • applications include customer services and sales • some talking heads front Artiﬁcial Intelligence engines... • ... others have human operators behind them Source: USA Today, Asia Risk Technologies © Alcus International Ltd. 2009 Friday, 27 March 2009 18

Microﬁnance (lending, insurance) are starting to experiment with virtual worlds • Peer-to-peer micro lending provider Kiva has a small “presence” in Second Life • Barnett has created a place in Second Life for villages to display their programs by building replicas of their projects. • Both seem currently a bit like “web pages in 3D” but might come to live with presence of people and live events Source: visit to Second Life © Alcus International Ltd. 2009 Friday, 27 March 2009 19

Wells Fargo’s “Stage Coach Island” virtual world - fun and education • A social space, not just a game • Games, socializing, Bingo, virtual currency, quests • Education on money management, budgeting, students loans, credit cards • Integrated with Facebook Source: We$s Fargo website, stagecoachisland.com, Facebook © Alcus International Ltd. 2009 Friday, 27 March 2009 20

VIRTUAL WORLDS AND INSURANCE Friday, 27 March 2009 21

3D virtual worlds can yield benefits across many parts of the insurance life cycle Product Customer Sales Force Product Definition/ Sales Service / Training Launch Assembly Claims • brainstorming • communication • pre-launch • “experience • customer service Application • partner • interactive meetings marketing” centers • • • communications seminars sponsor/embed compliance use waiting time • • • internal role-play with relevant “risk island” to cross sell • • • communication help with PR partners (e.g., interactive customer self-help household ins & education • greener living) public, small • edutainment group and private sessions • travel/time savings • broader reach • time-to-market • • anonymous allows overcome • more open, • better explanation (age, location) “insurance sales simulated claims Benefits • better creative ideas of complex or man” syndrome reducing fraud • • accessibility, controversial easier to improved inclusion products education customer • travel/time savings complex products experience © Alcus International Ltd. 2009 Friday, 27 March 2009 22

Bank Assurance: another opportunity using a virtual world channel • A virtual world is uniquely positioned to integrate and link different offerings • Environments and locations can be dynamically changed and adapted • The spatial character allows more subtle integration than a flat link on a web page © Alcus International Ltd. 2009 Friday, 27 March 2009 23

Benefits from using immersive environments include cost, time, and customer orientation • Immersive environments and real-time dialogue better suited for complex products and training • Better compliance (consumers / audit, and internal training) • Time and cost savings through reduced travel • Mitigation against impact of potential pandemic on conventional communication • Avatar allows to shield cultural differences and reservations against direct sales contact • Medium equally well suited (but for different reasons) for younger and older audiences © Alcus International Ltd. 2009 Friday, 27 March 2009 24

Willy Wong, head of sales, presents a new microﬁnance product to his sales force • Willy logs on from his home computer, presenting the new product to the global sales force • People around the world, regardless of location or physical limitations, attend the conference • Muslim women join from their local community center’s computer • After the main conference, participants break out into smaller work groups • The seminar space allows frequent sessions to accommodate various time zones The fo$owing video i$ustrates a possible virtual world scenario © Alcus International Ltd. 2009 Friday, 27 March 2009 25

Yuki (21) chemistry student from Japan, attends a career planning seminar • Yuki researches career planning, joins a Facebook group, learns there about a career event, with several Pharma companies present • Joined by two friends from diﬀerent cities and a cousin from New York, she attends the career fair • As the event is sponsored by the insurance company, the stumbles into an virtual info booth during the break and talks to the representative • After the fair, she teleports to a private consultant on health insurance © Alcus International Ltd. 2009 Friday, 27 March 2009 26

A virtual world channel should be integrated into the wider “Web 2.0” - on PC & mobile Insurance Virtual World © Alcus International Ltd. 2009 Friday, 27 March 2009 27

Broadband penetration and propensity for virtual worlds: huge potential of Asia Broadband penetration and virtual world usage (example: Second Life) North America Latin America Europe Asia 95++ Macao New Zealand Singapore Indonesia 12.9 Vietnam Hong Hong India 20 Taiwan Greece 14.4 Korea Ireland Hungary Czech R Norway Finland Israel Romania 84 Turkey Russia 1.5 Austria 6.8 75 1.5 Portugal 12.6 1.9 Denmark 6.4 2.3 Switzerland 7.3 66.5 China 2.5 Belgium 8.5 2.6 Sweden 4.1 Canada 3.0 Poland 4.1 8 9.6 7.5 Netherlands 15.6 7.5 Spain 8.3 9.3 Italy 8.8 32 14.3 France 8.1 USA 66 13 4.7 Australia 9.6 16 14.4 U.K. 10.1 15 Chile 27.1 Japan Argentina 4.8 3 3.9 4.8 Mexico 2.2 17.4 Germany 12.7 7.4 Brazil 11.0 currently no signiﬁcant usage: Potential ##: broadband subscribers (millions) ##: minutes/broadband user/month © Alcus International Ltd. 2009 Source: Linden Lab, OECD, Wikipedia, Alcus analysis Friday, 27 March 2009 28

There are multiple technical platforms out there to support business virtual worlds • Second Life by Linden Lab • Olive by Forterra • Wonderland by Sun (Industry analyst Nic Wilson: “we consider it to be one of the most exciting, and potentially game changing virtual world applications currently in development.”) • Open Sim(by mid 2009), open source • Protosphere • Qwak • others © Alcus International Ltd. 2009 Friday, 27 March 2009 29

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