Scheme Mechanics
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Scheme Mechanics was presented at the British Insurance Brokers Association annual conference in May 2013, with the objective of giving brokers a greater understanding of schemes and how to present a scheme opportunity to an insurer. This presentation gives brokers a greater understanding of: • Identifying a scheme opportunity • Tactical research methods • Presenting a scheme to an insurer • How to realise value from a scheme • The steps involved in setting up a successful scheme If you are an insurance broker that is new to schemes, or even if you’re currently active in the schemes marketplace, this presentation will give you some valuable advice on how to take your scheme to the next level.
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Scheme Mechanics
- 1. Scheme Mechanics Peter Hubbard, Chief Executive Karen Beales, Managing Director, Schemes
- 2. Karen Beales Managing Director, Schemes Peter Hubbard Chief Executive Meeting the growth challenge…
- 4. What you’ve told us… brokers agree that the market will become more geared towards schemes 80% Over 85% brokers asked who didn’t trade schemes said they would be within the next 5 years 70% Over …of brokers suggested they would within 2 years 88.5% brokers active in schemes have experienced growth over the past 5 years
- 5. Setting up a successful scheme Step 1. Identify Target Market Step 2. Find an Insurer Step 3. Operational Considerations Step 4. Preparing your business plan Step 5. Launching your scheme
- 7. Existing products New products Existing markets New markets Identifying your target market Warranty / GAP / Scratch & Dent //PA / Legal Expenses / Tools in Transit Standard car / Private car Classic car / Kit car / Driving Schools / Vans for pleasure only Young drivers / Owners Clubs / Caravan Owners / Commercial Vehicle
- 8. Identifying your target market Warranty / GAP / Scratch & Dent //PA / Legal Expenses / Tools in Transit Classic car / Kit car / Driving Schools / Vans for pleasure only Young drivers / Owners Clubs / Caravan Owners / Commercial Vehicle Standard car / Private car Existing products New products Existing markets New markets
- 9. Identifying your target market Warranty / GAP / Scratch & Dent //PA / Legal Expenses / Tools in Transit Young drivers / Owners Clubs / Caravan Owners / Commercial Vehicle Standard car / Private car Classic car / Kit car / Driving Schools / Vans for pleasure only Existing products New products Existing markets New markets
- 10. Identifying your target market Warranty / GAP / Scratch & Dent /PA / Legal Expenses / Tools in Transit Young drivers / Owners Clubs / Caravan Owners / Commercial Vehicle Standard car / Private car Classic car / Kit car / Driving Schools / Vans for pleasure only Existing products New products Existing markets New markets
- 11. Identifying your target market Warranty / GAP / Scratch & Dent /PA / Legal Expenses / Tools in Transit Standard car / Private car Classic car / Kit car / Driving Schools / Vans for pleasure only Young drivers / Owners Clubs / Caravan Owners / Commercial Vehicle Existing products New products Existing markets New markets
- 12. The Classic Car Market Opportunity Owner interests: Non-competitive rallies (125 mile, one day MSA event) Driver clubs Restoration magazines (Classics Monthly)
- 15. Finding an insurer In order to further develop your scheme business, rate your need for support in the following areas: Insurer Support (%): 64.3% High level of support 1.8% No support7.2% Low level of support 26.7% Medium level of support
- 16. Finding an insurer In order to further develop your scheme business, rate your need for support in the following areas: Underwriting (%): 58.9% High level of support 5.3% No support5.5% Low level of support 30.3% Medium level of support
- 17. Finding an insurer In order to further develop your scheme business, rate your need for support in the following areas: Marketing (%): 33.9% High level of support 5.4% No support 12.5% Low level of support 48.2% Medium level of support
- 21. Preparing your business case Overview of opportunity Target customer profile Evidence of market research Distribution chain Target sales/ income
- 22. Preparing your business case Overview of opportunity Target customer profile Evidence of market research Distribution chain Target sales / income
- 23. Overview of opportunity Scheme name Type of product Why?
- 24. Preparing your business case Overview of opportunity Target customer profile Evidence of market research Distribution chain Target sales / income
- 25. 25 Identifying your target market Warranty / GAP / Scratch & Dent //PA / Legal Expenses / Tools in Transit Standard car / Private car Classic car / Kit car / Driving Schools / Vans for pleasure only Young drivers / Owners Clubs / Caravan Owners / Commercial Vehicle Existing products New products Existing markets New markets
- 26. Preparing your business case Overview of opportunity Target customer profile Evidence of market research Distribution chain Target sales / income
- 28. Preparing your business case Overview of opportunity Target customer profile Evidence of market research Distribution chain Target sales / income
- 30. Preparing your business case Overview of opportunity Target customer profile Evidence of market research Distribution chain Target sales / income
- 31. 31 Target sales / income Year 1 Year 2 Year 3 Total Gross Premium £200,000 £466,665 £1,199,970 £1866,635 Commission payable (%) 30% 30% 30% 30% Commission amount £60,000 £139,999 £359,991 £559,990 Net premium £140,000 £326,666 £839,979 £1,306,645 Policy sales volume 1,500 3,500 9,000 14,000 Anticipated claims volume 150 187 217 554 Average claim cost £300 £250 £220
- 33. Launching your scheme Press release Target Market Data Trade Body Partnership Existing Customers Monitor & Review LAUNCHING YOUR SCHEME
- 34. Schemes lifecycle Ancillary products can accelerate your scheme growth and potential Monitoring, reviewing and updating your scheme will prevent decline
- 35. In summary: • Schemes are and will continue to grow • Planning and preparation is key to schemes success • A good business plan will put you at the forefront • Constant review of your scheme will ensure you maintain your competitive advantage
Editor's Notes
- No wonder this is such an attractive market for brokers:Not just accessible to larger brokersAs long as your scheme opportunity is viable an insurer will consider itI’m going to tell you how to prepare you scheme business plan and key tips on what insurers will look for when discussing a scheme opportunityEvidence to back up statements made on previous slide showing shift of brokers moving towards schemes and that it is a growth area. Key point is that if brokers are product focused and not focused on what their customers want they will get left behind:A UK General survey undertaken in April 2013 revealed that:
- This must be the first step because without it your product development will not be customer focused. You don’t need to invest billions to do this just time and effort. This is the first but most important stage.
- This must be the first step because without it your product development will not be customer focused. You don’t need to invest billions to do this just time and effort. This is the first but most important stage.
- This must be the first step because without it your product development will not be customer focused. You don’t need to invest billions to do this just time and effort. This is the first but most important stage.
- This must be the first step because without it your product development will not be customer focused. You don’t need to invest billions to do this just time and effort. This is the first but most important stage.
- This must be the first step because without it your product development will not be customer focused. You don’t need to invest billions to do this just time and effort. This is the first but most important stage.
- Courier – Enterprise, GroupamaFleet – Mini bus – QBE
- Highlight the importance of ‘partnering with an insurer’ some more results from our survey
- Highlight the importance of ‘partnering with an insurer’ some more results from our survey
- Highlight the importance of ‘partnering with an insurer’ some more results from our survey
- PeopleInsurer will need to be comfortable that you have the existing skill set to warrant the DAMay need to recruit ProcessCustomer journey/touch pointsDistribution Claims SystemsHow will the product be traded, i.e electronically, manually