Embed Size (px)
Citation preview
Are Online Sales in Your Future?(Hint: They Better Be)
Doug BakerCEO, Teachers Life
Kevin Pledge FSA, FIA CEO and Founder, Acceptiv
1. The Market Today2. Why sell online?3. How does it work?
2
Agenda
A couple of notes before we start
Building a U.S. – Canada Wall…
3
It will only work in the summer…
And just remember…..
4
We’ve had practice climbing over things…….
How much personal protection life insurance (by policy count) will be sold online 5 years from now by Fraternals?
50 – 59%
60 – 69%
70 – 79%
80 – 89%
90 – 100%
0 – 9%
10 – 19%
20 – 29%
30 – 39%
40 – 49%
5
Trend – Life Insurance Sold in US
6
Trend - Uninsured households
57% of families with children will have immediate financial trouble if the primary wage earner died
30% of households have no life insurance
Insurance Gap - $20T in US, 1T in Canada
50% of households believe they are underinsured
7
Trend - Agents
85% of consumers research insurance online
Most consumers happy doing business online
Average age of agents now 57
- disconnect to young modern consumers
8
Life Insurance Industry - Barriers to Entry
Highly RegulatedPrudential oversight of insurance companiesCapital adequacyPolicyholder protection
Complex InfrastructureSystemsProcesses
Brand Reputation
LIFE INSURANCE IS SOLD NOT BOUGHT
9
It’s slightly different for Fraternals
Limited capital
Hostile acquisitions are not possible
Fraternals have a reason to do what we do (beyond profit)
But, we are still competing in the same market and (most likely) for the same customers.
10
Why sell online?
Part 2
11
Willie Sutton
12
Reporter:
“Because that’s where the money is.”
Sutton:
“Why do you rob banks.”
Teachers Life
Large players dominate the market – including the banks
Brand and Advertising can be lost, especially through intermediaries
How can Teachers Life compete in this market?
Responsibility to members to offer best terms possible?
13
14
2007 2008 2009 2010
o Member portal
o Online product launch
o Websiteo Online Payment
o Document Management System
o Term 20 Online
2011
o NewAccounting Software System
15
2012 2013 2014 2015
o New Business Continuity / DR
o Expense Point(Mobile Accounting Software)
o Policy Admin System
o New Policies & Procedures System
o Phone System
o New Online Product (T10-30)
o New Marketing Website
o PCI Payment Portal
o Continuous Improvements to Customer Journey
o Expanded Online (T-10-40)
o New Online Portal for Retirement Products
o New Marketing Website and Fall Marketing Campaign
o Provide TPA Services for Other Insurers
The best thing about a small company -it’s a small company. The worst thing…
Our Weaknesses are our Virtues
16
� Agility to respond – we had put ourselves into a position to capitalize on the new online opportunity
� Decision-making
� The ‘cost’ of technology relatively speaking is within the reach of small organizations
� Strong partnerships – outsourcing is key
� Ability to ‘punch above our weight’
Advocates for a Modern Digital Strategy
17
PWC: Life Insurance 2020: Competing for a future“As customer expectations become more exacting and the supply chain becomes more fragmented, your business will need to develop new routes to market or risk being cut out of the loop.”
Deloitte: 2013 Life Insurance and Annuity Industry Outlook”Carriers looking to
overcome challenges reaching the middle market might consider developing direct-to-consumer options to bolster their agency distribution system.”
Accenture: The Digital Insurer“The difference between the front-runners and those who are struggling to keep up is, in many cases, the engine that drives them. Old, outdated legacy platforms are costly to maintain and prevent insurers from competing effectively against those with modern, flexible systems. “
Capgemini: Trends in Insurance Channels“To remain competitive in the marketplace, insurers need to redesign their business processes to speed up the automation processand also develop predictive analytics and automated underwriting solutions. “
10 years ago you would not dream of banking online – “it’s not safe”
5 years ago few people would buy groceries online
15 years ago Travel Agents would claim that you cannot book vacations online – “it needs a personal touch and experience”
Digital Disruption – Other Industries
18
Disruption in Retail
19
The Trend is Online Distribution
Consumers are looking online to buy insurance:§ 250,000 relevant Google searches every month in
Canada§ 2.6m relevant Google searches every month in US
Opportunities:§ Growth§ Better customer experience§ Low expenses = better price / higher profits
20
But … The Market Today
Full underwriting is complicated, involves multiple hand-off and is hard to convert to an online process
Immediate issue in North America typically means simplified issue:§ Less underwriting = worse mortality experience§ Claim underwriting = worse customer experience
21
➢ Higher premiums = disappointed customers & higher lapse rates
How does it work?
Part 3
22
Typical Process
Indicative Quote
Underwrite
IssueOfferAdd’l Q’s
Modify Application
Apply
Underwrite evidence
Further Questions
Indicative Quote ApplyUW at claim!
Or Simplified Issue
23
Can we do better?
Metrics to beat:
Time to Issue 42 – 47 days*
Capacity Depends on number of agents
Cost $500 - $747** + commission
Sources: * 2009 LOMA Service Turnaround Times Survey – Term Products: 47 days**SOA 2010 Expense Study Average Per Policy $500 weighted, $747 unweighted
24
Yes, we can do better - Much better!
Indicative Quote Apply and UW
Buy
> 5,000x faster∞ scalable
(85% of the time)1/10 of the cost
Fully UnderwrittenNo fluids or additional evidenceCover up to $500kAve issue time 12 mins
25
10 – 40 year term insurance, up to $500k
Coverage age range 18 - 70
Applied UK experience and P&C lessons
Simpler, yet more flexible than current products
No medical evidence referrals
Online, with offline support if needed
On cover in 15 minutes or less
Full UW + Lower cost = Lower premium
26
The Solution at Teachers Life
T10 - $19.10 Online Quote and ApplicationBasic auto and Manual Underwriting
T10 - $20.00T20 - $26.04
Online Quote and ApplicationBasic auto and Manual Underwriting
T10 - $20.10 Online Quote and ApplicationBasic auto and Manual Underwriting
T10 - $20.30T20 - $30.69
Online QuoteManual Application and Underwriting
And price leadership…
MNS Age 40 $150K. Term Life Monthly Premium* Based on Onvivo product design and pricing at May 2014 27
Insurance
T10 - $13.42T20 - $21.08
Online Quote, Application and BuyAutomated underwriting immediate decision including rating if applicable
Demo – Path to Purchase
28
Video is available at www.acceptiv.com/AFA2015
Our Turn Key Solution for Canadian Fraternals
A Complete Solution: § Full go to market solution for online fulfillment§ Administration support § Product and underwriting
designed for online distribution
Faster, less costly, more agile: § Fast, economical solution§ Benefit from Teachers Life
experience § Pay for results
29
Acceptiv / Teachers Life Solution
30
Acceptiv§ New Business Process
customized to your brand§ Underwriting Rules and
system§ Product design and pricing
Your Reinsurer
Teachers Life§ Administration System§ Customer Service
VersaPayPCI compliant payment
New Business Administration
Do we need to change?
Closing Thoughts
31
$20T uninsured
New Entrants?Synergy
$2.7 bTerm
market
$14.5 bProtection
market
32
Life Insurance Industry - Barriers to EntryHighly RegulatedPrudential oversight of insurance companiesCapital adequacyPolicyholder protection
Complex InfrastructureSystemsProcesses
Brand Reputation
LIFE INSURANCE IS SOLD NOT BOUGHT
33
34
Video is available at www.acceptiv.com/AFA2015
Any Questions?
35
www.acceptiv.com/AFA2015
Are Online Sales in Your Future?Thank You
Doug [email protected]
Kevin Pledge FSA, FIA [email protected]
www.acceptiv.com/AFA2015
