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The eInsurance Market Place

The eInsurance Market Place. Financial. Insurance is one of the largest consumer expenses Larger portion of the average household budget than any other consumable* Avg. US household spends $4,250 which represents 45% of financial service expenditures**.

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The eInsurance Market Place

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  1. The eInsuranceMarket Place

  2. Financial • Insurance is one of the largest consumer expenses • Larger portion of the average household budget than any other consumable* • Avg. US household spends $4,250 which represents 45% of financial service expenditures** * Source: US Bureau of Census, Consumer Expenditure Survey ** For households between $50,000 and $100,000 income. Comprised of Homeowners $456, Personal Auto $1,826 and Ordinary Life $1,970 (Source: A.M. Best, Bernstein Research, Federal Reserve flow-of-funds data, ICI, Survey of Consumer Finance, BCG Analysis 1999) *** Forrester Research est.

  3. Financial • Insurance is at an earlier stage of Internet migration… • Highest growth segment on-line is property and casualty markets • On-line transaction expected to be $18 Billion by 2005 or 10% of total market • Additionally sales influenced by on-line will $27 Billion or an additional 15% of total market • In total 10 Million households will be researching and or buying their insurance on-line by 2005*** * Source: US Bureau of Census, Consumer Expenditure Survey ** For households between $50,000 and $100,000 income. Comprised of Homeowners $456, Personal Auto $1,826 and Ordinary Life $1,970 (Source: A.M. Best, Bernstein Research, Federal Reserve flow-of-funds data, ICI, Survey of Consumer Finance, BCG Analysis 1999) *** Forrester Research est.

  4. Net Insurance Sales Will Grow Dramatically…But Winners Will Be Multi-channel Financial 60.0 $ Billions Influenced Online Sold Online 50.0 40.0 27 18 30.0 20.0 14.6 9.8 3.9 1.8 10.0 2.7 0.8 1.9 0.4 1.7 0.2 1.3 0.2 7.0 4.1 ( Source: Forrester, Best BCG analysis ) 0.0 1998 1999 2000 2001 2002 2003 2004 2005

  5. Key Take Away Technology Adoption & Speed to Market About You The Brand Speed to market is critical and accelerating 100 mil # of Users Radio 75 Years TV 50 Years Cellular 15 Years Internet 5 Years Cable 25 Years 1922 1930 1938 1946 1954 1962 1970 1978 1986 1994 1999 (Source: US Consumer Survey 1996)

  6. Financial Online = Lower Transaction cost forInsurance Transactions Transaction Cost Estimate for P/C Policy Origination Transaction Cost Estimate for P/C Policy Service (Source: Meridien Research Analysis)

  7. Key Take Away Financial Simple Low Cost AD&D Annuity Term Life Home Auto Plan for Unexpected (Peace of Mind) Invest LTC Health Whole Life Estate Planning Difficult or Complex High Cost Home / Life / Auto suitable for Web and Call Center Same time thinking about investment products

  8. Key Take Away There Is A Newly Empowered Consumer About You The Brand The POWER is shifting The Wholesaler (Early 20th Century) The Manufacturer (Mid-20Th Century) The Retailer (Late 20th Century) The Consumer (Today) Consumers Will Determine Which Model Will Prevail

  9. Key Take Away Consumers See You As Their Trusted Advisor About You The Brand Convenience And Trust… Cited As Primary Reasons For Buying Insurance Where They do i.e. % Customer citing reasons for insurance purchases at financial institutions Life Insurance Auto-Homeowners Insurance Convenient Location Convenience Deal with people they know Trust Direct deduction of premium from account Convenience Banks deal only with financially sound insurers Trust Bank will lower premium Price (Source: Synergistics Consumer Study, 1997 ABI Fact Book) Convenience = Being Available At The Point Of Need Trust = Your Brand Providing Choice

  10. Key Take Away Enhance the Trusted Advisor Role About You The Brand • Problems • Buying insurance requires revealing personal information. • Solutions • “White-label” solution is perfect for selling insurance % confidence by consumers as trusted advisor Your Brand as the trusted source of information 69% Financial Planners 51% Registered Investment Advisors 42% Stock Brokers 38% Accountants 27% Bankers 16% Lawyers 12% Other (Source: US Consumer Survey 1996)

  11. Evolving eInsuranceModels

  12. Financial B to B to B to C Internet Infrastructure Player Web Insurance Broker B to B ASP (Application Solution Provider) B to B to C Cyber Intermediary Platform

  13. Recognize Need Learn Products Needs Assessment Get Quotes Compare Buy Service & Renewal Claim Quotation Referral Systems • Branded navigators who • Assist consumers through search • Transaction referred to an agent for fulfillment Fulfillment Systems • Non-branded brokers • Consumers enter buy process through “trusted” group • Transaction fulfilled offline or online Reconstructors • End-to-end search and fulfillment • Business model designed to avoid carrier integration challenges • Risk reinsured B2B • Provide engineered existing communication between brokers, underwriters and customers • Enable greater accuracy, speed and analysis of complex insurance products 4 Models are Emerging… Focus on Different Elements of Consumer Experience

  14. insLogic.com – Fulfillment Model Key Take Away About Us The Best Practices of a Traditional Agent/Broker… The Cost Structure of a Direct Dial/Writer… …Enabled on the Web

  15. Key Take Away The Evolution of Insurance Distribution About Us What’s next in insurance. Fulfillment • Lack of actual results • Trusted brands • Access to Information Provides Choice Lead Referrals Direct Writers Complexity and Value • Commoditization • Price Pressure TraditionalBroker 2000 1990’s 1999 Pre 90’s

  16. Key Take Away Aggregation & Fulfillment For Insurance Distribution About Us Insurance Company Insurance Company Insurance Company Insurance Company Insurance Company Insurance Company A B C D E F • Aggregate information • Analysis of customer needs • Multi-channel gateway • Multi-product fulfillment Intelligent Middleware Branch Auto Clerk Work Place Retail Kiosk Home TV Home Internet / Mail / Fax / Phone / Walk in The Intelligent Middleware Between Consumers And Ins. Co’s

  17. Key Take Away Uniquely Positioned! About Us Insurance Company WINS Consumer WINS Brand WINS Sustainable Relationships Allow Everyone To Win

  18. Flawless Consumer Experience Enhanced Economics Superior Systems and Capabilities Choice Intuitive, transparent navigation Unbiased needs assessment and advice Execution of a binding policy in a single session Higher cross-sell rates to increase retention Better retention to increase profits Lower acquisition and retention cost • Fully integrated e-commerce solution • High performance call center • Operational excellence • CPT, COPC Increased lifetime value of customers Key Take Away The insLogic value proposition About Us 3 Key Factors… Drive insLogic The Best Economic Model Will Win

  19. Automotive Parts Electronics Manufacturing Lantic Phoenix Pictures Key Take Away The Onex Family - Proven Infrastructure Player About Us ONEX vencap Airline Catering “Service engine of the new economy” “Service engine for insurance in the new economy” Infrastructure and e-fulfillment designed specifically for a white-label, multi-channel, multi-carrier insurance offering. Proven Experience & The Resources To Execute

  20. Key Take Away insLogic / ClientLogic Facilities About Us • Details: • Service engine of the new economy. End-to-end customer management solutions, focused on specific vertical markets. • Focus on high-end, long-term client engagements. • 32 Locations world wide, 7,800+ employees • Europe: • 9 Countries • 10 Call Centers • 3 Distribution Facilities LIN (2) DUBLIN TORONTO (3) BUFFALO (2) CLIFTON, NJ COLUMBUS COLUMBIA, MD HUNTINGTON DOVER, DE WATFORD OAK RIDGE LAS VEGAS NASHVILLE, TN ALBUQUERQUE DAVIE, FL DALLAS Global Infrastructure ( insLogic.com / ClientLogic )

  21. Key Take Away insLogic. Adoption & Speed to Market About Us • insLogic.com has continually migrated towards cost effective delivery of insurance & towards the way that customers want to do business On-line Sales & Service On-line Quotes Off-line Sales & Service Form Based Web Quote On-line Offering Call Center Only 1998 1999 2000 Pre 1997 insLogic. Solution Enables A True On-line Offering

  22. Rating System Insurance Contact Management & Campaign Management Database Logic Engine Integrated Services Link DataMapping APT ACORD CSIO AL3 Flat File MSMQ MQSeries Applied FTP Delphi FiMail STMP XML Insurance Company Insurance Company Insurance Company Global Contact Management & Campaign Management Database About You The Insurance Company TIGRESTotally Integrated Graphical Real-time E-commerce Solution Insurance Company Internet / Mail / Fax / Phone / Walk in Data Warehouse Flow-ThroughProcessing

  23. Examples of Insurance Specific Formats Implemented. . . AL3 (over 50,000 active implementations)* Applied (over 24,000 active implementations)* AMS (over 15,000 active implementations)* APT (over 1,300 active upload users)* CSIO Delphi Formlink TRA Examples of Industry Standard Formats Implemented. . . Flat File FTP MQ Series MSMQ Simple Mail API SQL XML There Is No Standard The Connector Supports Any Format *Source – ACORD Status Report, Spring 1999

  24. Recognize Buy Service Policy Change, Inquiry & Renewal Needs Analysis & Learn Quote & Compare Select Underwrite & Pay Marketing Claims The insLogic.com Process Recognize

  25. Recognize Key Take Away 1 : 1 Marketing The insLogic.com Process • Problems • Customers unaware of their needs • Mass Marketing or Branded Marketing • Solutions • Integration at the time of need, magic moments marketing • Permission-based follow-ups and scheduled interactions Product Need Event Auto Insurance Car loan/Car Purchase Life Insurance Marriage Change in Residence Home Purchase Home Insurance Life Insurance Birth of a Child Time of Purchase Insurance Shoppers At Any Given Time Brand Market Approach Mass (Source: One-to-One Marketing) Smart Marketing

  26. Recognize Customer Understanding Empowerment Speed & Accuracy of Quote Brand Traffic Quotation Time Key Take Away Needs Analysis And Learning The insLogic.com Process Problems • Too much information creates confusion • Not organized around customer’s needs Solutions • Brand becomes the information source • Online intuitive tools available • No pressure or bias (intermediary) The Brand is the Trusted Advisor

  27. Fast, Intuitive Quotation Process STAGE 1 Thin Risk Profile STAGE 2 Refined Quote STAGE 3 Rating Complete Key Take Away Quote and Compare The insLogic.com Process Buy Problems •Multi-Insurance Company solutions have lengthy (form-based) question set (Time consuming to complete) Solutions • Fast and intuitive question and response session • Access to live licensed agents Quote Range Compare % Customers Engaged in On-line Session Complete # of Minutes (Source: Forrester, Best, BCG Analysis) Increase Completed Quote Sessions

  28. Key Take Away Quote and Compare The insLogic.com Process Buy Solutions • Multi-Ins. Co. to compare/contrast/empower/trust • Multi-Ins. Co to match risk profiles • Reduce selection confusion • Problems • Single Insurance Co. means no choice or price matching risk profile 62.1% Agents offering policies from multiple insurance companies 28.8% Agents offering policies from single insurance company % of consumers rejected, not meeting their needs, or consumer rejection due to price competitiveness 9.1% Don’t Know or No answer (Source: U.S. Consumer Survey, 1994) Risk No One Insurance Company Will Write All Risks Consumers Want Choice

  29. Key Take Away Select Underwrite and Pay The insLogic.com Process Buy Problems • Time consuming • Single channel • Multiple separate sessions required Solutions • Able to buy in a single session • Multi-channel (online or call center). Live contact with a licensed agent increases consumer confidence 32.9 7.0 14.6 1.7 1.9 2.7 3.9 0.2 0.4 0.8 1.8 4.1 9.8 23.5 12 Hours 24 Hours (Source: Forrester, Best, BCG Analysis) Close Ratio Rises With The Ability To Buy In A Single Session

  30. Solutions • Electronic filing cabinet for all policy information • Policy declaration pages • Application forms • Photographs • Mortgage documents Key Take Away Policy Change – Inquiry & Renewal The insLogic.com Process Service • Problems • No access to policy & billing status • Policy change or inquiry is time consuming/inconvenient 100% Move to Unassisted Service % Policy Holders Expresses Dissatisfaction 50% 1999 2000 2001 2002 2003 2004 (Source: Forrester) Access To Information Leads To Customer Satisfaction

  31. Key Take Away Policy Change – Inquiry & Renewal The insLogic.com Process Service And Increased Profit… Improved Bundling… Leads to Increased Retention… 66% of customers today are sold another product 9% Increase in retention = 150% increase in profitability Bundling = 9% Increase in retention Average Profit per Customer (Indexed) Bundling Retention Admin Traditional Insurance Provider Traditional Insurance Provider InsLogic Today InsLogic Today Bundling To Increase Retention To Increase Profit

  32. Key Take Away Learning About Customers The insLogic.com Process Service Learning more about your customers is your only sustainable competitive advantage High What happened? What worked? What did not work? How do we improve Acquisition,Retention or LTV? Multiple products sold Billing Customer Value Sales & Orders Other needs Technical Support Fulfillment 1st Transaction Customer Support Low Time Accountable Marketing & A Focus On LTV Of Customers

  33. Win / Win / Win

  34. Key Take Away The BEST Economical Model WINS Win / Win / Win • Brands WINS: • Leverage Brand Value • New / On-going Revenue • Improved Customer Retention • Improve Customer LTV • Increased Learning About Customers

  35. Key Take Away The BEST Economical Model WINS Win / Win / Win • Insurance Company WINS: • Increase production of business that they are interested in • Lower marketing cost • Lower data processing costs • Increased retention • Learn/exploit together - the Internet channel Better Economics for Everyone

  36. Key Take Away The BEST Economical Model WINS Win / Win / Win • Consumer WINS: • Fast (intuitive) • Shopping experience (choice) • Convenient (at the time of need) • Competitively priced • Familiar, Consistent, (Brand) • Educational • One Stop Shop (sales & service) • Choice of channel Consumers Value Trust & Convenience

  37. The Competition The Economics – Avoiding Drop-Off Visitors insLogic.com Lead Referral BUY! Service Completed Application Cross sell non-insurance products Lead referral time-lag Get support Brand Visitors Compare accurate quotes Move to insurance provider’s site Cross sell additional insurance products

  38. The Competition insLogic OFFERS the most COMPLETE SOLUTION Category/Criteria Multi-Company Multi-Product Multi-Channel Single Session Scaleable / Controlled EDI Learn About Customers Better Economic Model

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