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Insurance 2020 - Innovating beyond old models
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Insurance 2020 - Innovating beyond old models

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Presentation at Euresa Innovation workshop on the Insurance industry in 2020 and Innovation

Presentation at Euresa Innovation workshop on the Insurance industry in 2020 and Innovation

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  • Hi all, tx for the comments and sorry for not answering (I hardly look on here.)
    I am afraid I can't share the ppt, I am generally willing to do an in-house presentation, though. Easist way to arrange that is through your local IBM client rep.
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  • Very useful presentation. Can you please send a copy to coc.newcanaaninsurance@gmail.com
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  • very good, can u send me the ppt at josepccunha@gmail.com
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  • very useful ppt.
    can u send me the ppt at uniquespecial@libero.it?

    kind regards
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  • Interesting topic, good for an existing client. Thanks for sharing
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Insurance 2020 - Innovating beyond old models Insurance 2020 - Innovating beyond old models Presentation Transcript

  • Christian Bieck – Global Leader Insurance, IBM Institute for Business Value Köln, 18. May 2010 Nordic Financial Services Sector Insurance 2020 Innovating beyond old models © Copyright IBM Corporation 2003 © 2010 IBM Corporation
  • "Is purple ketchup innovative?" 2 18.05.2010 © 2010 IBM Corporation
  • "Is purple ketchup innovative?" that depends... 3 18.05.2010 © 2010 IBM Corporation
  • "Is purple ketchup innovative?" …it certainly can be, given the preferences of the user... “An innovation is an idea, practice or object that is perceived as new by an individual or other unit of adoption” Everett Rogers, Diffusion of innovations (2003, first published 1962) Source: "purple ketchup" quote adapted from Dan Saffer, "The Cult of Innovation", BusinessWeek March 5, 2007. http://www.businessweek.com/magazine/content/07_10/b4024111.htm?chan=search 4 18.05.2010 © 2010 IBM Corporation
  • "In 2020, will cars need insurance?" 5 18.05.2010 IBM Global Business Services © 2010 IBM Corporation
  • "In 2020, will cars need insurance?" 6 18.05.2010 IBM Global Business Services © 2010 IBM Corporation
  • "In 2020, will cars need insurance?" that depends... 7 18.05.2010 IBM Global Business Services © 2010 IBM Corporation
  • Leaders in banking and insurance are torn between the need for stability and the need for change The enterprise of the future is ... ... but FSS CEOs feel they are lagging behind Insurance 2008 1 9 89 2006 17 29 54 0% 20% 40% 60% 80% 100% Financial Markets 2008 7 9 83 2 2006 27 23 50 Innovative 0% 20% 40% 60% 80% 100% beyond Banking customer 2008 9 12 80 imagination 2006 27 23 50 0% 20% 40% 60% 80% 100% All industries 2008 6 11 83 2006 13 22 65 0% 20% 40% 60% 80% 100% Change needed No/limited change Moderate change Substantial change Source: IBM Global CEO Study 2008 8 18.05.2010 © 2010 IBM Corporation
  • Let's have a look at the world in 2020 as insurance leaders think it will be 9 18.05.2010 © 2010 IBM Corporation
  • Summary Mega-Trends Shaping the Insurance Industry in 2020 Megatrend 1 Consumer Active and informed consumers across demographic groups reward Expectations non-traditional operators 2 Insurance Operations 3 Business Performance 4 Regulation Source: IBM Institute for Business Value 10 18.05.2010 © 2010 IBM Corporation
  • Behavioral trends - information The "active and informed" customer can best be seen in the need for diverse and transparent sources of information Price comparison via Internet 10 40 50 Recommendation family / 15 45 40 friends Recommendation insurance 19 47 34 agent Recommendation independent 34 47 19 broker Recommendation bank 40 47 13 Offers in advertising 40 49 11 Offer from a vehicle dealer / 59 36 5 estate agent 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% low importance some importance high importance Source: IBM Institute for Business Value survey data. Europe, n=2,400 11 18.05.2010 © 2010 IBM Corporation
  • Market dynamics – transparency / fairness For young singles, peer groups are the most important information source 50 50 18 - 29 years Single 53 52 53 Partnership, no 52 30 – 39 years 46 kids 37 49 Partnership, 49 40 – 49 years 36 with young kids 40 48 Partnership, 49 50 – 59 years 33 with older kids 30 51 Divorced / 51 60+ years 29 widowed 37 0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60% High importance of price comparison via Internet High importance of price comparison via Internet High importance of recommendation from family and friends High importance of recommendation from family and friends Source: IBM Institute for Business Value survey data. Europe, n=2,400 12 18.05.2010 © 2010 IBM Corporation
  • Summary Mega-Trends Shaping the Insurance Industry in 2020 Megatrend 1 Consumer Expectations 2 Insurance Technology virtualises the value chain and lowers barriers to entry Operations 3 Business Performance 4 Regulation Source: IBM Institute for Business Value 13 18.05.2010 © 2010 IBM Corporation
  • The monolithic value chain becomes a componentised service chain Policy Administration Product Policyholder Claims Marketing Operations Acquisition Underwriting Management Asset Management Channel Management Customer Relationship Management Enterprise Resource Management Traditional Monolithic Value Chain 14 18.05.2010 © 2010 IBM Corporation
  • Summary Mega-Trends Shaping the Insurance Industry in 2020 Megatrend 1 Consumer Expectations 2 Insurance Operations 3 Business The building blocks of insurance products are granular and provide Performance more even revenue streams 4 Regulation Source: IBM Institute for Business Value 15 18.05.2010 © 2010 IBM Corporation
  • Consumers would buy new and innovative products 18 - 29 years 51 49 30 – 39 years 45 55 40 – 49 years 49 51 50 – 59 years 53 47 Usage based Traditional 60+ years 51 49 calculation calculation 0% 20% 40% 60% 80% 100% 48 % 52 % Very low income 53 47 Low Income 48 52 Lower middle class 53 47 Upper middle class 42 58 High Income 49 51 Very high income 46 54 0% 20% 40% 60% 80% 100% Source: IBM Institute for Business Value survey data. Europe, n=2,400 16 18.05.2010 © 2010 IBM Corporation
  • Summary Mega-Trends Shaping the Insurance Industry in 2020 Megatrend 1 Consumer Expectations 2 Insurance Operations 3 Business Performance 4 Regulation Regulatory coordination and affirmed industry standards broaden to international scales Source: IBM Institute for Business Value 17 18.05.2010 © 2010 IBM Corporation
  • A proactive approach will enable competitive advantage Evolving Regulatory Environment Compliance today External Forces Compliance 2020 Financial crises Reactive approach Proactive approach Increased scrutiny of risks Fragmented Integrated Move toward complementary Insufficient standards Shared systems availability and Internal and hygiene of data external Information not Internal Forces transparency shared across lines Pressure on cost and efficiency of business Scrutiny on capital allocation Sensitivity to reputation risk 18 18.05.2010 © 2010 IBM Corporation
  • What kinds of innovation bring us toward 2020? 19 18.05.2010 © 2010 IBM Corporation
  • The ”Internet” changes the way everybody does businesss What was the most successful innovation in the financial sector in the past 20 years? Internet Cash machine Index bonds Other 20 18.05.2010 © 2010 IBM Corporation
  • Innovation is not binary Totally new things for new markets and / or new customers Internet banking / insurance Cash withdrawal machines (ATM) Unit-linked insurance Bank ID (security) Share index bonds Health care services New mandatory liability insurance for motor Low latency trading Improve the existing processes, products and service for existing customers 21 18.05.2010 © 2010 IBM Corporation
  • Customer innovation: segment differently Cluster involved connaisseurs trusting straight-forward critical inert risk-avoiders followers analyzers skeptics Percentage of 21.7 % 22.6 % 22.2 % 11.0 % 22.5 % total Key theme "I want it all" "I want life's risks reduced" "I need somebody to "Insurance is a "Convince me" explain" commodity" How to Tailor-made and as best-of- With comprehensive, full- With simple and clear Transparent, quick and Through traditional approach breed service offerings advice easy to do business push-mode them with Source: IBM Institute for Business Value survey data. n=4,800 22 18.05.2010 © 2010 IBM Corporation
  • Value chain innovation: work differently 1 4 5 On-site support On-site support 2nd Level Mail Mail Agents Agents Telephone Telephone 3 Input 1st Level Output Mgmt. Mgmt. Self-service Self-service E- E- Mail Mail 2 Automation Customers Internet Internet Customers 0 Level 6 Controlling/Process Transparency Business logic, business specific functions, data, employees IT-Infrastructure 23 18.05.2010 © 2010 IBM Corporation
  • Product innovation: pay differently 0 km 4.000 6.000 8.000 10.000 km Normal / High mileage drivers xx-small x-small small medium large rance ull insu Motor h y bonus t 5% safe leage drivers!! h mi ment bo nus for rance! - al s o f o r hi g Environ motor hull insu arty and anc e ird p er i ns ur motor th P as s en g onu s 50% safety b e drivers!! leag hi gh m i - al s o f o r Source: http://www.uniqa.at 24 18.05.2010 © 2010 IBM Corporation
  • Regulation innovation: serve the customer differently Source: Swiss Life 25 18.05.2010 © 2010 IBM Corporation
  • What do you do to innovate? 26 18.05.2010 © 2010 IBM Corporation