- We are living longer due to improvements in healthcare and lifestyle. However, our optimism bias can lead us to underestimate risks to our health and finances. - Studies of seatbelt usage and helmet usage for cycling show that awareness campaigns, social incentives, and laws can significantly increase the adoption of protective behaviors over time from below 10% to over 80%. - For the insurance industry, there are opportunities to better engage customers at "digital moments of truth" online and provide easy, immediate solutions to customer needs through new digital business models that create value through data and social elements rather than just advertising.

1. • We are living even longer:@
PLAY WHERE PEOPLE ARE PLAYING
Eoin Lyons [Chief Executive - OPAL]
Protection Association
January 20th 2017

2. “It will never happen to me”
Behaviours can change dramatically
Play where people play [digital]

4. Research suggests it is an evolutionary imperative to look
on the bright side “Optimism Bias”

5. “It is possible, then, to strike a
balance, to believe we will stay
healthy, but get medical insurance
anyway; to be certain the sun will
shine, but grab an umbrella on our
way out - just in case.”
Talia Sharot [The Optimism Bias]

7. Protection case study: Wearing your seatbelt

8. Volvo gave their 3-point seatbelt invention patent to rivals:
for free
They fitted them as standard in all vehicles from 1963
yet adherence was still <10%
Government started educating (“clunk-click”)
and incentivising: compulsory in law since 1983
In one generation adherence moved to >85%
Protection case study: Wearing your seatbelt

9. A behaviour driven by optimism bias has become socially unacceptable
Technological Innovation
A leap of faith
Creating awareness
Financial and social incentive
Alignment of stakeholders
Protection case study: Wearing your seatbelt

10. Protection case study: Put your helmet on

11. Protection case study: Put your helmet on

12. Arguably golden age of cycling for work and leisure
Commuting by bicycle doubled in London from 2001-2011
Cycle to work scheme has incentivised sales of accessories
Helmet wearing – not compulsory – UK estimate at 20%
-> Tripled revenue in 7 years
Protection case study: Put your helmet on

13. A behaviour driven by optimism bias is changing
Some technological Innovation
Creating awareness
Financial and social incentive
Alignment of stakeholders
An element of luck
Protection case study: Put your helmet on

14. Technological Innovation
A leap of faith
Education
Financial and social incentive
Alignment of stakeholders
What lessons for protection?
A (real) digital customer journey
Share data (“free”?)
Engagement not advertising
Reward behaviour change £ $ €
Lead the conversation

15. Mistrust (PPI, bank bail-out)
Conservative thinking
Short term objectives
Not digital
Challenge Opportunity
Significant economic player
=> seat at the table
Government outsourcing
health & retirement funding
Lots of data
Capital

17. “ You need to go back over
30 years to
find the last great
innovation in financial
services: the invention of
the ATM ”
Paul Vockler, former chairman of the Federal Reserve

18. Take advantage of existing technology
Work out how to deliver an easy and immediate
solution for their customer
Service or increased value delivered digitally
Some element of trusted information
What do disruptive business models have in common?

19. Where the industry is currently putting “digital energy”
Need not served
Product research
Quotation
In force
Little digital engagement
=> disruption opportunity

20. Traditional protection “moments of truth”

21. Traditional Moments of Truth
Need not served
Product research
Quotation
In force
Industry is getting better at
converting those already
engaged
Customer is “already in the
shop”
Rule of 80/20 - energy is
focussed on 20%

22. “Life Insurance”

24. “Which life
insurance is
right for me?”

25. Examples of digital moments of truth
Clicking on related news stories
Conversing on social media
Searching job websites or company
websites for information on benefits
Changing shopping behaviours of
expectant families
Accessing information on health or
wellness

26. Digital Moments of Truth
Need not served
Product research
Quotation
In force
People want/need financial
protection not insurance
50% of mortgages
90% of incomes
Need identified at time and
place that resonates i.e.
“moment of truth”

27. Engagement with financial services
Product and price = disengaging
Service more engaging
Experiences are engaging

28. Wearable technology is changing
behaviour
Raising public awareness can work
Financial value and information is
being exchanged in new ways [e.g.
P2P / UCG / Bitcoin & Blockchain]
What good ideas are out there?

29. Some taking advantage of these new models

30. Insurance is a “grudge purchase”
The loyalty effect:
“I have to buy this stuff anyway
- I might as well get some
additional benefit out of it”

31. Protection: Move from “we pay” to “they pay”?
Advertisers - not users - pay Google to organise the internet
Other FS markets successfully bundle “free” offers to
engage customers on a commoditised product
Growth of group income protection is a relevant “they pay”
example at a moment of truth for sick pay (new job)
Acquiring a customer, engaging them, and getting access to
their behavioural data is the value in a “they pay” model

32. What about disintermediation of the market?
Mass market self-serve replaces travel agents
Market has doubled in one generation
Same period workforce ↓10% (50k to 45k)
Travel agents are on average more profitable than before
=> Surviving intermediaries have adapted and moved ↑value chain

33. “Value creation will be digital, be populated
by rich and reliable information, be connected
to the moment of truth, provide incentive,
and have a social element.”

34. contact: eoinlyons@opal-uk.com
Thank you!
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