Your SlideShare is downloading. ×
Insurance Industry Research & Analysis
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Insurance Industry Research & Analysis

1,854
views

Published on

This presentation provides a comprehensive overview of the current insurance industry. The focus is to further explore life, health and auto insurance, as well as some new trends, ideas and …

This presentation provides a comprehensive overview of the current insurance industry. The focus is to further explore life, health and auto insurance, as well as some new trends, ideas and disruptions facing this sector. From there, we move into a discussion on consumer tools. This section breaks down customer insurance behaviors, and the changes coming up in 2014. To end we take a look into how various companies are leveraging technologies to advance the industry.


0 Comments
3 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,854
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
128
Comments
0
Likes
3
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. insurance industry propanestudio.com san francisco newbusiness@propanestudio.com 415.550.8692 private & confidential august 10th 2013
  • 2. agenda • • • life Insurance health insurance auto insurance
  • 3. life insurance
  • 4. overview statistics 91 M adults in the U.S. do not have any life insurance1 40% of American households would be unable to meet expenses if their spouse died5 57% of women have some kind of life insurance3 61% of men have some kind of life insurance2 50% of Americans admit they do not have adequate life insurance4 1-4."Life Insurance Facts & Figures." Whole Term Life Insurance Quotes. N.p., 26 Apr. 2012. Web. <http://www.infographicpost.com/termand-whole-life-insurance-facts-figures/2012/04/26>. 5-6. "What You Need to Know About Life Insurance." LIFE A Nonprofit Organization. N.p., n.d. Web. <http://www.lifehappens.org/pdf/ printable-consumer-guide/life-insurance-pcg.pdf>. 93% of Americans agree life insurance is something most people need6
  • 5. overview market share 2012 6% 5% 5% 21% 7% 7% 14% 10% 12% 13% MetLife Aflac Prudential Northwestern Mutual New York Life Lincoln National John Hancock MassMutual Aegon State Farm Figure 1.Hersch, Warren. "NAIC Names Top 25 Life Carriers by Market Share." Life Health Pro. N.p., 13 Mar. 2013. Web.
  • 6. overview fundamental changes Customer • real time decision support • customization and personalization of product and services Technology • full integration of old channels with a new digital core • harnessing the power of predictive tools and techniques Competition • threat from other industries or new startups entering the market7 7.Jackson, Graham, Jeremy Lefebure, and Vicki Symmerhayes. "Life Insurance The Digital Insurer: Change Now to Get Ahead." Accenture. Accenture, 2012. Web.
  • 7. trend 1: {demographic shift}
  • 8. trend 1 boomers vs. millennials • two fundamentally different groups, insurers need to decide who they will target, will it be the 55+ or the under 35 age group • each segment will require a complete restructure of current distribution models to satisfy customer needs • • first movers will have an advantage companies that fail to act will become providers of commoditized insurance in a market looking for personalization8 8. French, Doug, and James O'Neill. "The Future of Life Insurance." Ernst & Young. N.p., Sept.-Oct. 2012. Web.
  • 9. trend 1 challenges • two segments have almost opposite needs and buying preferences • customers may turn to buying direct from online channels (much like what has happened to bookstores, travel agencies and stock broker firms) • as customers better understand life insurance needs through independent online research, self service will become more popular • failing to adapt, insurers lose an opportunity to strengthen existing relationships or develop new ones with young buyers9 9. French, Doug, and James O'Neill. "The Future of Life Insurance." Ernst & Young. N.p., Sept.-Oct. 2012. Web.
  • 10. trend 1 55 & over • these customers have turned to advisors for a personalized service approach • they have a complex set of financial needs, and need advice on financial planning and retirement income advice • insurers will need to acquire knowledge to act more like financial planners and investment advisers • major investments will need to be made to meet customer needs • changes will occur across technology infrastructure and toolsets, product development processes, data management, agency incentives and training • insurers will face new competition from wealth management companies as they are better equipped in technology and have a stronger suite of products to meet customer needs10 10. French, Doug, and James O'Neill. "The Future of Life Insurance." Ernst & Young. N.p., Sept.-Oct. 2012. Web.
  • 11. trend 1 under 35 • younger generation is looking for fairly basic protection and savings as they enter the market for the first time • they prefer to conduct as much as possible online • insurers who plan to serve this segment will need a technologically savvy and connected agency force • agents will have to play new roles and capture data about individual consumers and feed it back to the home office in order to effectively measure customer engagement • there is no optimal data source to track these trends, an agency force with the listening capabilities and agility to play this role will succeed11 11. French, Doug, and James O'Neill. "The Future of Life Insurance." Ernst & Young. N.p., Sept.-Oct. 2012. Web.
  • 12. trend 1 defining future success • 10 - 15 years the number of people in different life stages will be a significant driver for life insurers choosing which primary market to serve • who they will serve should be determined by a self assessment of carriers current operational strengths, as well as where they are most strategically positioned to succeed • depending on the segment life insurance carriers must understand how and what customers want to buy more precisely than they do today • this will require a retooling of their distribution channels to address the unique needs and opportunities associated with each of the major segments12 12. French, Doug, and James O'Neill. "The Future of Life Insurance." Ernst & Young. N.p., Sept.-Oct. 2012. Web.
  • 13. trend 2: {the digital insurer}
  • 14. trend 2 the digital insurer Successful life insurers will demonstrate 3 characteristics. 1. Connected - reinvent the customer experience and place customers at the heart of their business 2. Analytic - exhibit richer insights and smarter decisions to enable better outcomes 3. Agile - constantly stay one step ahead13 13. Jackson, Graham, Jeremy Lefebure, and Vicki Symmerhayes. "Life Insurance The Digital Insurer: Change Now to Get Ahead." Accenture. Accenture, 2012. Web.
  • 15. trend 2 the digital insurer connected • physically and emotionally connected with consumers, and stay in tun with changing customer sentiments, behaviors and expectations • multi-channel sales and service as a standard offering, fully integrating old channels with a new digital core • embracing and actively engaging through relevant social media, such as social and mobile platforms • harnessing deeper collaboration and connection with a broader group of stakeholders including customers, employees, partners, distributors and suppliers14 14.Jackson, Graham, Jeremy Lefebure, and Vicki Symmerhayes. "Life Insurance The Digital Insurer: Change Now to Get Ahead." Accenture. Accenture, 2012. Web.
  • 16. trend 2 the digital insurer analytic • richer insights and smarter decisions to enable better outcomes • tap into and exploit value from the explosion of data • harness the power of next generation predictive tools and techniques • wire analytics into core processes and decision making • integrate real-time decision support, drive more value from each customer interaction • customize and personalize products and services15 15. Jackson, Graham, Jeremy Lefebure, and Vicki Symmerhayes. "Life Insurance The Digital Insurer: Change Now to Get Ahead." Accenture. Accenture, 2012. Web.
  • 17. trend 2 the digital insurer agile • execute operational excellence built around lean core business processes and strong process management disciplines • use an intelligent sourcing approach, making cost effective and flexible use of supplier capabilities • develop early warning and rapid response mechanisms to constantly scan, assess and initiate changes based on market movements and opportunities • deliver greater, faster and cheaper change through agile methods • foster a culture of innovation and entrepreneurship16 16.Jackson, Graham, Jeremy Lefebure, and Vicki Symmerhayes. "Life Insurance The Digital Insurer: Change Now to Get Ahead." Accenture. Accenture, 2012. Web.
  • 18. new entrant competition
  • 19. competition IEnetwork Mobile life insurance app to find the best quotes quickly and easily. • easily estimate quotes across 100+ carriers • no annual/monthly fees • up-to-date quotes • includes policy fees17 17. "IEnetwork." Manage, Market & Recruit. N.p., n.d. Web. <https://www.ienetwork.com/>.
  • 20. competition cakehealth The best free way to manage health care plans online. • track health spending by entering insurance credentials • visibility into medical payments, and peace of mind that you are on top of your bills • helps you find a plan that’s optimized specifically for your needs • keep up with routine check-ups and doctor’s appointments18 18. "The Best Free Way to Manage Healthcare." CakeHealth. N.p., n.d. Web. <https://cakehealth.com/>.
  • 21. life insurance industry summary Life insurers will need to provide customers with a innovative and personalized experience. Insurers will need to embrace digital technologies that are preferred by their target segment. On the retail side, insurers will need to focus on acquiring and training high performing agents and providing with them with the proper tools to effectively serve their customer base. Ultimately, insurers who accomplish this will gain a significant advantage in the marketplace, while those that don’t will be replaced by new entrants.
  • 22. life Insurance Industry opportunities for the future • develop integrated tools to give customers access to information and educate themselves on different types of life insurance • create mobile and online tools to provide agents with the ability to collect, monitor, manage and quantify data • design mobile tools to assist insurers with segmented targeting and selling strategies
  • 23. health insurance
  • 24. overview statistics Individuals’ contribution to health care is rising 10% a year19 Medical bills are a major cause of 60% of bankruptcies in the US23 875,000 Americans were medical tourists in 201021 18% of Americans are uninsured20 41% of working Americans have medical bill problems or are paying off medical debt22 Women pay approximately 30% more for health insurance24 19. Komisar, Harrient. "The Effects of Rising Health Care Costs on Middle Class Economic Security." AARP Public Policy Institute. N.p., n.d. Web. 20-24. "Health Insurance Facts." EnhanceInsurance.com. Enhance Insurance, n.d. Web. <http://www.enhanceinsurance.com/images/health-insurance-facts-infographic.jpg>.
  • 25. overview health insurance companies
  • 26. overview fundamental changes • customers are more likely to purchase insurance from nontraditional sources • private insurers and employers are likely to pursue contracts with accountable care organizations • increase in private health insurance exchanges • new legislation, starting the 1st of the new year, health insurers won’t be able to turn people away because of health problems25 25."Health Reform: Seven Things You Need to Know Now." Consumer Reports. Consumerreports.org, n.d. Web.
  • 27. trend 1: {health insurance exchanges}
  • 28. trend 1 overview • PwC estimates by 2019 28 million Americans will purchase health insurance through this new online channel • 52% of health insurance executives plan to compete and participate in the exchanges • exchanges will create an array of new choices for customers in the individual and small group markets • top concerns for insurers are adverse selection and technology integration (payment & enrollment transactions)26 26.Barnes, Kelly, Michael Galper, and Jeffery Gitlin. "Change the Channel Health Insurance Exchanges Expand Choice and Competition." PwC. PwC, July 2011. Web.
  • 29. trend 1 2014 changes Health insurers will not be permitted to... • deny coverage or charge different premiums based on a person’s health or claim history • charge premiums that are more than 3x higher than the lowest premium, based on age, for the same product and geography • spend less than 80% of premium dollars on medical expenses for the individual and small group markets27 27. Barnes, Kelly, Michael Galper, and Jeffery Gitlin. "Change the Channel Health Insurance Exchanges Expand Choice and Competition." PwC. PwC, July 2011. Web.
  • 30. trend 1 2014 changes What insurers can do... • charge different rates based on geography, number of persons covered (ie. single, family), age and tobacco use • there are limitations on the premium variation for age and tobacco use • charge a smoker 1.5x the premium of a non-smoker28 28. Barnes, Kelly, Michael Galper, and Jeffery Gitlin. "Change the Channel Health Insurance Exchanges Expand Choice and Competition." PwC. PwC, July 2011. Web.
  • 31. trend 1 for customers top things health insurers can do to make insurance purchasing more user friendly... • 72% provide a clear view of what is covered • 46% make it easy to talk to someone at the insurance company • 43% provide tool to estimate costs of common procedures • 37% offer a way to compare insurance products • 31% make it easy to change plans • 20% offer multiple methods of payment (ie. electronic or automatic payment)29 29. Barnes, Kelly, Michael Galper, and Jeffery Gitlin. "Change the Channel Health Insurance Exchanges Expand Choice and Competition." PwC. PwC, July 2011. Web.
  • 32. new entrant competition
  • 33. competition covered california • goal is to increase the number of Californians with health insurance • customers can shop online, over the phone and in person choose the health plan that offers the best services and greatest value for their individual needs • individuals and small businesses can discover if they qualify for federal financial assistance • customers have access to financial assistance 30 30."Covered California." About Us. N.p., n.d. Web. <https://www.coveredca.com/about/index.html>.
  • 34. competition bloom • Bloom works with employers and health plans to define and control health benefit spending • employers pre-deposit tax defined contribution dollars on behalf of each employee into a Bloom account • employees take an health survey that matches them with plans and services to meet their needs • recommendation engine generates tailored insurance plan options for each employee (displayed through Virtual Shelf, online marketplace) 31 31."Bloom." Our Help Your Benefit. N.p., n.d. Web. <http://www.gobloomhealth.com/>.
  • 35. competition oscar health • Oscar makes it simple to guide customers through the complex process of health insurance • revolutionizing care delivery, log into your account, type your symptoms and a doctor will call you to chat within 20 minutes • if you need to see someone, the site offers a list of nearby providers • allows customers to check prices for procedures ahead of time and offers 3 free in person doctors visits and free generic drugs 32 32."Oscar Insurance." New York Health Insurance. N.p., n.d. Web. <https://www.hioscar.com/>.
  • 36. health Insurance Industry summary New legislation and regulations are paving the way for change within the health insurance industry. Current health insurers are facing increased competition from new market entrants. In order to retain their market share, traditional insurance companies will need to take on health insurance exchanges. Successful insurers will be able to simplify the insurance buying process and provide customers with personalized plans.
  • 37. health Insurance Industry opportunities for the future • destination for customers to search health conditions and compare different types of plans • easy definable personalized access to plan pricing information • portal to access insurers and make it easy for customers to ask questions and get immediate answers
  • 38. auto insurance
  • 39. overview statistics $1,029 is the average amount spent on auto insurance per year33 Auto premiums usually go down substantially after a driver turns 2537 16% of drivers are uninsured at any given time35 On average a driver will have an accident claim every 17.9 years34 All 50 states require drivers to carry insurance36 33. Copeland, Larry. "The Cost of Owning Your Car? $9,000 a Year." USA Today. Gannett, 16 Apr. 2013. Web. 34. Aho, Karen. "Here's How Many Car Accidents You'll Have." CarInsurance.com. N.p., 17 June 2013. Web 35.- 37 Stauffer, Eric. "Automobile Insurance Facts (Infographic)."ExpertInsuranceReviews.com. N.p., n.d. Web. <http://www.expertinsurancereviews.com/insuranceeducation/car-insurance-facts-infographic/>
  • 40. overview fundamental changes customer • shift to individual customer data collection instead of industry wide statistics technology • impact of car technology could completely alter auto insurers current business models • demand for online and mobile tools to give customers the convenience and access they desire competition • increased competition from new entrants 38 38. Brockman, Marik, and Anand Rao. "The Insurance Industry 2013." Reshaping Auto Insurance. PwC, 2013. Web.
  • 41. trend 1: {car technology}
  • 42. trend 1 insurance by manufacturers • in-car technology, such as telematics, location awareness and collision avoidance sensors will shift the risk of driver liability to manufacturers • a new auto insurance, that comes packaged with these technologically advanced cars • coverage would be marketed to customers directly by the auto manufacturers and/or dealers • profound impact on insurers, changing the entire value chain from product definitions, to pricing, marketing and distribution 39 39. Brockman, Marik, and Anand Rao. "The Insurance Industry 2013." Reshaping Auto Insurance. PwC, 2013. Web.
  • 43. trend 1 pay per mile insurance • urban living and the increasing availability of car sharing suggest a future in which premiums move from 24 hour asset coverage to pay per use model • currently 80% of the US, and 50% of the global population are considered urban dwellers and car sharing is rapidly growing • Forbes reported in 2012 that the global car sharing market is expected to grow and could exceed 10 billion by 2020 • result would increase the number of low frequency drivers, which would reduce individual insurance premiums 40 40. Brockman, Marik, and Anand Rao. "The Insurance Industry 2013." Reshaping Auto Insurance. PwC, 2013. Web.
  • 44. trend 1 then there’s google... • success and adoption of driverless vehicles could change the entire industry • Google’s driverless, laser equipped vehicles have logged over 300,000 miles without an accident • 2012 study by JD Power found that 37% of US drivers were interested in this new technology • driverless cars can reduce traffic accidents, the number of cars on the road and wasted commute time and energy by 90%, resulting in savings of 2 trillion per year for the US economy 41 41. Brockman, Marik, and Anand Rao. "The Insurance Industry 2013." Reshaping Auto Insurance. PwC, 2013. Web.
  • 45. trend 2: {driver monitoring}
  • 46. trend 2 gps monitoring • gps systems in cars are being used to rate individual drivers on their driving habits, instead of relying on statistics of accidents reported in the area as a whole • systems collect the following: • • • • • average speed driven, occurrence of sudden stops average times of day driven number of miles driven per day location of parked vehicle systems benefit less risky drivers, who can now receive lower premiums and more discounts thanks to this technology 42 42."Auto Insurance Chnages in 2013." VehicleInsure.com. N.p., n.d. Web. <http://vehicleinsure.com/auto-insurance-changes-in-2013/>
  • 47. new entrant competition
  • 48. competition leaky Leaky helps you compare car car insurance the easy way for free. • compare prices, plans and potential scenarios to take the mystery out of your insurance • manage all your insurance information in one easy spot • provide alerts when customers can save money so you get the best deal possible on insurance 43 43. "Compare Car Insurance the Easy Way." Leaky. Leaky, n.d. Web. <http://leaky.com/>.
  • 49. competition metromile MetroMile is per mile car insurance designed for people who drive less than 10,000 miles a year. • calculates insurance costs each month based upon actual miles you drive • customers pay a few cents per mile and a low monthly base rate, that’s significantly less than standard insurance • rewards customers for driving less, so when your car is parked or when you decide to take the bus or ride your bike you save money • charges are capped at 150 miles per day, regardless of how far you drive 44 44."MetroMile - Because You Drive Less." MetroMile. MetroMile, n.d. Web. <https://www.metromile.com/>.
  • 50. competition drivefactor Drivefactor is the trusted worldwide source for driving data and analytics • use a sensor telematic platform to gather better driving data for superior scoring and customer rewards • smart ways for customers to monitor and improve personal driving behaviors through a plug and drive device • insurers can utilize drivefactor’s technology to roll out usage based insurance programs and gain a key competitive advantage in the marketplace 45 45. "The Trusted Worldwidesource for Driving Data and Analytics." Drivefactor.com. Drivefactor, n.d. Web. <http://www.drivefactor.com/>.
  • 51. auto Insurance Industry summary Changing technology is dramatically impacting auto insurance companies. Advances like GPS monitoring, in car telematics are paving the way for a new insurance model known as usage based. Successful auto insurers will need to recognize these changes and act quickly before they are displaced by new entrants.
  • 52. auto Insurance Industry opportunities for the future • develop apps for auto insurers that monitor individual driving behaviors • create apps and online comparison tools for auto insurers to provide customers with access to pricing and plan information • develop interactive quizzes or games that allow customers to estimate individual insurance needs based on personalized scenarios
  • 53. propane studio is a full-service digital agency focused on developing experiences and solutions that fuel the way people connect with brands and each other. propane studio | 1160 battery street, suite 350 san francisco, ca 94111 | 415.550.8692 | www.propanestudio.com