Presentation to the National Association of Insurance Commissioners on the benefits of transparency and the data regulators need to collect to enable transparency.

1. © ValChoice 2016
Dan Karr
Founder and CEO, ValChoice Assistant © 123rf.com

2. © ValChoice 2016
Topics
• Who is ValChoice?
• Marketing & Selling Insurance
• Transparency
• Summary
o Carriers – Winning in a Digital World
o Regulators – Helping Consumers

3. © ValChoice 2016
Who is ValChoice?

4. © ValChoice 2016
Data Mining/
Analytics
User Surveys
Insurance
Other Markets
© ValChoice 2016

5. Forbes Calls us, “Carfax for Insurance”

6. © ValChoice 2016
Where We’re Heading
The Technology Effect

7. © ValChoice 2016
Differentiation is Difficult
• Regulation limits
product differences

8. © ValChoice 2016
Differentiation is Difficult
• Differentiation vs. brand
building

9. $
$ $
$
$
$
$
$
Brand Identity

10. Technology Will
Make Insurance
Easier to
Understand and
Easier to Buy
rawpixel© 123rf.com

11. Purchase Decisions Made
Based on Online
Shopping and Research
Ivan Kruk © 123rf.com

12. © ValChoice 2016
Consumers & Online Research
LIMRA Surveys
conducted to
identify % of
consumers
researching on
Internet before
buying life
insurance.
Online research
is rapidly
increasing
0%#
10%#
20%#
30%#
40%#
50%#
60%#
70%#
80%#
90%#
2006# #
...#
2013#
%#of#
Consumers#
Researching#
Life#Insurance#
on#Internet#

13. © ValChoice 2016
The Research Consumers Find

14. © ValChoice 2016
Customer Loyalty
A Changing Market

15. © ValChoice 2016
Online shopping
+ Self-directed research
+ Easy price comparisons
+ Little connection with
supplier
= Customer churn
© ValChoice 2016
iqoncep © 123rf.com

17. mindscanner © 123rf.com

18. © ValChoice 2016
Transparency
What Does it Mean?

19. © ValChoice 2016
Transparency
Market Definition
In economics one of the
theoretical conditions
required for a free market
to be efficient

20. © ValChoice 2016
Transparency
Social Definition
A set of policies that
allow citizens to access
information held by
authorities

21. © ValChoice 2016
Transparency
Why Embrace it?

24. © ValChoice 2016
Extreme Transparency

25. © ValChoice 2016
Why Buffer Does This?
“The power of
transparency…is that it
drives us to be better—to
create a company that's
both great and good.”
Leo Widrich, Founder and
COO, Buffer

27. © ValChoice 2016
Data Mining + Analytics
Car Buyers Save Thousand$

28. © ValChoice 2016
Quality Programs
A Form of Transparency

29. © ValChoice 2016
Baldrige Award
“(Im)Prove Your Performance”
• Presidential award for
performance excellence
• Award given for 27 years
• No P/C insurer has won the
award

30. © ValChoice 2016
2014 Service Winner
Public Sector Practice

31. Source, http://patapsco.nist.gov/Award_Recipients/PDF_Files/2014_PwC_PSP_Award%20Application_Summary.pdf
Revenue per Employee

32. © ValChoice 2016
Asset Utilization

33. © ValChoice 2016
Good Example for
• Asset Utilization
• Revenue per Employee
Not a Good Example for
Growth
• PWC-PS serving a
shrinking market

34. © ValChoice 2016
1992 Manufacturing Winner
• IC industry early adopter
of quality programs
• Many companies are
transparent about defect
rates

35. © ValChoice 2016
• Production costs reduced 20 to
30%
• One of two semiconductor
companies to gain market
share from ‘93 to ’96
• Last to first in return on assets
compared to big four U.S.
semiconductor companies
Won Baldrige Award in ‘92

36. Transparency Delivers

37. © ValChoice 2016
Transparency
It’s on our Doorstep

38. © ValChoice 2016

39. © ValChoice 2016
“People in the Granite State
do their research before
any important purchase,
such as buying a car,” said
Insurance Department
Commissioner Roger
Sevigny. “They ought to
have that same right when it
comes to their heath care
expenses.”

40. © ValChoice 2016
Completing That Thought
“They ought to have that same right when it comes to
their heath care expenses”…AND their auto, home
and health insurance.

41. Artem Egorov © 123rf.com

42. Artem Egorov © 123rf.com

43. Artem Egorov © 123rf.com

44. Artem Egorov © 123rf.com

45. © ValChoice 2016
Carriers
Winning in a Digital World

46. © ValChoice 2016
Winning in a Digital World
“Customers are willing to
pay more for better
advice and coverage
that is carefully tailored to
their individual needs.”
https://hbr.org/2014/07/insurance-isnt-safe-from-digital-upheaval

47. © ValChoice 2016
Winning in a Digital World
1) Differentiate based on
o Price
o Protection – claims payment
o Service quality
Hannu Viitanen © 123rf.com

48. © ValChoice 2016
Winning in a Digital World
2) Set clear, cross-
functional,
improvement goals
o Communicate performance
goals
o Measure performance
o Communicate results

49. © ValChoice 2016
Winning in a Digital World
3) Work with the private
sector to improve
transparency

50. © ValChoice 2016
Regulators
Helping Consumers

51. © ValChoice 2016
Helping Consumers
1) Improve complaint
data collection
o Based on number of claims
filed
o Include time-to-settlement
o Include number of contested
claims, and why
o Include settlement data
Gemenacom © 123rf.com

52. © ValChoice 2016
Helping Consumers
2) Consistent collection &
vetting of complaint
data
Gemenacom © 123rf.com

53. © ValChoice 2016
Helping Consumers
3) Make rate filings,
including loss ratio
studies, public
Gemenacom © 123rf.com

54. © ValChoice 2016
Helping Consumers
4) Work with the private
sector to improve
transparency
Gemenacom © 123rf.com

55. Embracing
the Inevitable
is a Good
Business
Strategy Assistant © 123rf.com

56. Meet the Founder
Sheraton Lobby, Today, 12 to 2
High-Top Tables Overlooking Canal Street