Going Direct Getting the Technology, People, and Process Right

Transcription

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2 Going Direct Getting the Technology, People, and Process Right Session #574

3 Our Speakers Moderator Anthony O Donnell Panelists Mike Fitzgerald Executive Editor Insurance Innovation Reporter Senior Analyst Celent Chris Chandler Tom Hammond Director of Operations Florida Peninsula Insurance Company EVP Insurance Distribution Bolt Insurance

4 Agenda Going Direct An analyst s perspective A carrier s perspective An agency s perspective Panel Discussion

5 Mike Fitzgerald

6 Content Growth imperative Distribution trends Changing customer expectations Response

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8 1 Growth

9 P&C recovery through growth US P&C NWP ($B) Source: A.M. Best

10 2 Distribution trends

11 Distribution channels P&C 2013 Direct 8% National 26% Exclusive 35% Source: IIABA 2015 Marketshare Report ; A.M. Best Regional 31%

12 Distribution personal Direct 15% National 8% Regional 27% Exclusive 50%

13 Distribution PPA Direct 19% National 5% Regional 26% Source: IIABA 2014 Marketshare Report 2012; A.M. Best Exclusive 50%

14 Distribution commercial Exclusive 20% Direct 1% National 44% Regional 35% Source: IIABA 2015 Marketshare Report ; A.M. Best

15 P&C channel growth rate comparison 12.0% 10.0% 9.4% 8.8% 9.7% 8.0% 7.4% 6.3% 6.0% 4.8% 4.3% 4.0% 3.1% 2.6% 2.7% 2.0% 1.8% 0.0% -2.0% National -0.3% Regional Exclusive Direct 2010 to to to 2013 Source: IIABA 2014 Marketshare Report 2012; A.M. Best

16 3 Changing customer expectations

17 Changing customer expectations Just in time Not too late Not too early Just enough I m not paying for more than I need I won t be left wanting Optimal effort Preferably no effort but if I can save money

18 Demographics Life time value Population (MM) $ per time period 20 to 24 years 19 $2, to 34 years 40 $4, to 44 years 45 $6, to 54 years 38 $8, to 59 years 14 $6, to 64 years 11 $4,000 Age group , , , ,000 84,000 44, , , , ,000 56, , , , , , , , , , Total spend by age 494, , , , ,000 44,000 Source: U.S. Census, Celent

19 Demographics Insurance spend Total insurance spend flow By age group 400, , , , , , ,000 50, Source: U.S. Census, Celent

20 Thousands Demographics For whom are you designing? 2000 Total Value (000) Source:Celent

21 Younger demographic Not all online For complex transactions, how do you prefer to get customer service? (n = 522) Face-to-face interactions Talking to someone on the telephone Self-service, primarily over the web > Source: Celent

22 4 Response

23 Alternate paths

24 QUALIFICATIONS, ASSUMPTIONS AND LIMITING CONDITIONS This report is for the exclusive use of the CELENT client named herein. This report is not intended for general circulation or publication, nor is it to be reproduced, quoted or distributed for any purpose without the prior written permission of CELENT. There are no third party beneficiaries with respect to this report, and CELENT does not accept any liability to any third party. Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been independently verified, unless otherwise expressly indicated. Public information and industry and statistical data are from sources we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information. The findings contained in this report may contain predictions based on current data and historical trends. Any such predictions are subject to inherent risks and uncertainties. CELENT accepts no responsibility for actual results or future events. The opinions expressed in this report are valid only for the purpose stated herein and as of the date of this report. No obligation is assumed to revise this report to reflect changes, events or conditions, which occur subsequent to the date hereof. All decisions in connection with the implementation or use of advice or recommendations contained in this report are the sole responsibility of the client. This report does not represent investment advice nor does it provide an opinion regarding the fairness of any transaction to any and all parties.

25 Chris Chandler An Insurer s Perspective

26 Going Direct Carrier Perspective Homeowner Insurance in the state of Florida, specializing in hurricane/wind coverage 8 th Largest carrier in the Florida with approximately 130K policies 6 th Largest writing carrier, over 24K applications per year. Combined ratio less than 1. Approximately 3,000 Independent Agents, no captive agents.

27 Consumer Perspective -- Agent or Direct? Agent Personal Relationships. Know the area. An agent can relate to where you live. Can even recommend repair facilities in the event of a claim. Agent office open only during normal business hours. Multi-Line Policies Home, auto, life, umbrella, etc. with multi-policy discounts. Competitive Rate Analysis Advocate when have a claim. Agent represents many customers and has pull with the carrier. Professional advice on what coverages are right for the consumer.

28 Consumer Perspective -- Agent or Direct? Direct Popular among the younger generation. They like purchasing and managing their own policy on their own time. Consumer does all the work researching carriers and inputting pertinent information online. Convenience Over the Phone or on the Web Fast and efficient Any time day or night, can go online, quote a policy, and bind it. Potentially cheaper (but not always) - No agent commission Limited offerings Be your own boss. Never speak to the same agent twice.

29 Carrier Perspective -- Agent or Direct? Agent Primary customer may become skewed. Carrier needs to be sensitive to the agent needs. Lose focus on what matters most to the customer. System design toward an insurance professional. Needs to be quick, easy. The fewer the questions, the better. Agents focused on comparative rating. Premium has be to within a saleable difference for agent to recommend carrier. Incentive programs for agents Requires carrier to hire Agent Relationship Managers. KPIs focused on agent performance, such as Hit Rate, Loss Ratios, Claims Frequency, % of Quotes with Carrier, Retention

30 Carrier Perspective -- Agent or Direct? Direct Consumer centric environment and culture. Customer service primary. Uneducated insurance professional with assumed no knowledge of insurance vernacular. System needs to be intuitive, educational, feature rich, and cosmetically appealing, including graphics, videos, and lots of help text. 24/7 Quoting and Support Functionality/Online chat with licensed insurance agents. Consumers expect self-servicing options, including quoting, endorsements, cancellation, reoccurring payments. Multi-device enabled Post binding Carrier is the primary customer service department with consumer. Strong survey and feedback loop. Consumer-friendly communication without legal jargon.

31 Tom Hammond - An Agency s Perspective

32 What we are seeing Customers buying patterns changing 70% 40% 65% of Insurance Shoppers use the internet of Insurance shoppers are on a mobile device would consider purchasing insurance products from organizations like Amazon, Verizon or Google

33 Usage has already changed in Insurance

34 How Mobile Device is being used

35 What we are seeing Single carrier model only Satisfies ~40% of the flow Involvement in Choice Models are now expected and a foundation to building your brand going forward You must Bundle Even if Bundling & combining means selling nonproprietary products Need to offer the right product for the customer from the right carrier, and be competitive Not just Price its fulfillment of the need

36 The Decision to buy Its not all about Price

37 Our Goal: Enable and Provide A Better Way for a Consumer to Choose and Buy Insurance Leverage the cloud to embrace how flow type of business is distributed. How Businesses and Individuals purchase Insurance Today Direct to Consumer Alternative Distribution Exclusive Agent Independent Agent Our approach is a combination of.. Technology Experts/Processes Markets

38 We Create a Network Effect

39 Platform Components

40 How can a broader distribution approach impact business Broaden Distribution Leverage new distribution channels with the Platform to reach more customers. Broaden Customer Relationships Always say yes to customers and meet all their needs with the Platform Maximize Revenue and CLV Flood Homeowners Homeowners Missed Rev. Pet Auto Increase Customer Retention 360 Degree View of customer Renters Products represented as share of wallet Broader Distribution brings new customers an insurer might otherwise wouldn t see. Broader Customer Relationships drive up customer satisfaction, retention, and customer lifetime value.

41 Our Locations Aligned with Customer Types Direct Consumers

42 Direct Products Commercial Lines Bop / Package /GL Commercial Auto Workers Comp E&S E&O Surety Personal Lines Auto Motorhome Motorcycle Homeowners Condo Apartment Dwelling Fire Earthquake Umbrella Mobile Home Flood Event Pet

43 Dynamic Interviews based on Risk and Product Profiles Interview Forms have been proven in both Consumer and Agent environments with clear sectional design and smart build based on Product Underwriting Geography Carrier Appetite Basic Customer Information Page.

44 Embedded Underwriting Tools In addition to Bind UW tools, we utilize conversational tools around exposures to fully understand needs and risk profiles Street view and aerial view for real-time underwriting.

45 Capabilities Robust Product Offering Comparison Capabilities Common Interview Common Integration Engine Across all Platforms

46 Panel Discussion & Q&A

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