Digital Thinking in Health Insurance by Hugh Terry

8th Annual Health Insurance Conference Asia 2014
18th June 2014 , Singapore
Using Digital Thinking to Transform Individual Health
Insurance
Change Picture

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4 Discussion Points
It is a digital revolution
Digital = customer centricity
POS Tablet Toolkit to start a
revolution?
3 other digital innovation opportunities?
1
2
3
4
Slides @the-digital-insurer.com/8th-annual-health-insurance-asia-singapore/

1. It is a digital revolution
revolution?
1
2
3
4

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The Digital Revolution:
“It will not be televised”
Digital
Convenience
• Always on
• Always there
• Universal
• Almost free
Digital
Connectivity
• Access to
information
(Google)
• Access to each
other (Facebook)
• Access through
devices (Apple)
• Location-agnostic
(cloud services)
Digital
Expectations
• Data “on demand”
• Desire for clarity &
simplicity
• Dialogue not
monologue
• Easy to promote a
product .. and
complain
Change, Change, Change .

6
Two digital “Mega” trends :
Forces beyond anyone’s control
1. Technology is cheaper and
easier to implement than ever
– it is the fulcrum to meet
consumer needs, reduce
operating costs and to
change your culture
2. Changing consumer
behaviour – they are more
demanding and looking for a
different experience

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Asia: Moving rapidly to a smartphone
majority
Source: www.our,mobileplanet.com
Smartphone Penetration 2013
““It is worth noting
September 2013 as a
significant milestone, as it is
the month when sales
penetration reached the
halfway mark: when one in
every two mobile handsets
purchased in the region is
now a smartphone.”
Gerard Tan
Account Director Gfk Asia

2. Digital = customer centricity
revolution?
1
2
3
4

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3 changes in customer behaviour
1
2
3
4
5
1 Research on-line
and purchase
anywhere
2. Multi-
channel
service
3. Less
Trust in
Financial
Services
brands

10
#1: consumers research on-line & purchase
anywhere
Source : www.consumerbarometer2013.com .
Around the world 69% of the online population researches on-line
before purchasing a product or service
46% research online /purchase offline23% research online / purchase online

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Is Financial Services different? Not really
For Finance and Real Estate it is 67% around the world
Source : www.consumerbarometer2013.com .

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Is Asia different? Not really
In India it is 65% and in China it is 74% for Finance and Real Estate.
However, a higher % of purchases are currently made offline (reflecting
face-to-face channel dominance).
Source: www.consumerbarometer2013.com .

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The hybrid customer is
• Better informed
• More demanding
• “Multi-channel” for both sales &
services
• Will jump service channels at any
point – catch them if you can!
The Hybrid
Customer
Face
To
Face
Online
Phone
Myth #1: Digital is a new distribution channel
Reality : Digital enables customer (& distributor) engagement
#2: welcome to Digital Customers:
“They are hybrid” (or omni-channel)

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Multiple source of information – “mono”
communication channels no longer exist
Extracted from Swiss Re Sigma 06/13

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#3:Trust is at the heart of financial services.
But
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Source : Edelman 2014 Trust barometer
WE HAVE A TRUST
CHALLENGE
71% would rather go to the dentist than
listen to what their banks are saying to
them
Source: survey by Viacom

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3 Core “Digital Thinking” Strategies
1. Manage existing models for
profit
2. Transform existing face-to-
face models so they are more
customer centric
3. Create or participate in new
customer centric models
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3. POS Tablet Toolkit to start a revolution?
revolution?
1
2
3
4

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Anchored to basics: Digital Advisor strategies
need to leverage insurance fundamentals
Current Agency Paradigm Digital impacts
Trust is at the
heart of
insurance
Rely on agent relationships
Insurance brand is a hygiene
factor in the sales process
As customer research on-line trust
will need to be developed and
leveraged on-line
Trust must be earned & reinforced at
every interaction/touch point
Great
insurance
advisors -
always in
demand
When customers research online they
will research their advisors as well .
Less time face-to-face – but no less
important (probably more so)
Insurance advisors need to be more
mobile (digitally & physically)
Digital will transform & standardise key
management processes
Lack of standardisation in
training, performance
management & coaching
Result : variable quality of
advice and low productivity
resulting in high agent turnover,
low policy persistency
Customer
service matters
Nearly 100% reliant on the
advisor
Back office is back office
Mobile technology provides
opportunities for cost effective
customer service differentiation
Push based communications can be
used to reconnect with customers
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Myth #2: Digital changes the way insurance is sold
Reality: Digital strategies must incorporate the fundamentals

Lead / Prospect
Management
Sales
Opportunities
Tablet
Advisor
Portal
Policy Systems
The Digital Advisor
Business Model
Customer
Portal / App
Digital Advisor business model: www.the-digital-insurer.com/digital-insurance-the-digital-advisor-business-model/

Lead / Prospect
Management
Sales
Opportunities
Tablet
Advisor
Portal
Policy Systems
The Digital Advisor
Business Model
Customer
Portal / App
Digital Advisor business model: www.the-digital-insurer.com/digital-insurance-the-digital-advisor-business-model/
1. Transform
Leads
2. Transform
Service
3. Transform
Sales

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Advisor
Portal
Policy Systems“connecting the
eco system”
Tablet toolkits
Sales
Opportunities
Lead / Prospect
Management
Tablet
Customer
Portal / App

22
Tablets: a new communication medium

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Tablet sales toolkits: will be “business as
usual” in most markets within 5 3 years
1. Present credentials (materials)
2. Identify needs
3. Produce quotes and help to close
4. Easy proposal submission
5. For health : renewal and claim
services
Tablet Functionality:
Should be focused on the customer
• Must be designed for advisors to connect with customers
• Easy to use with a “wow” factor that encourages use with clients
• Great usability is critical: engage/delight customers & advisors
Usability is the Key Success Factor

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POS Tablet sales toolkit: easy business case
PRIMARY BENEFIT
Improved Sales
effectiveness through
a better customer
experience
MEASURED BY:
High tablet usage from
Advisors
Increased sales
productivity per month
OTHER BENEFITS AFTER SUCCESS
1. Enable lead analytics / predictive analysis
2. Improved compliance to sales best practice (&
regulatory requirements)
3. Back office productivity from digital proposals
More efficient
Faster & more accurate (clean policies in a day)
4. Reduced overheads: premises & technology
costs
5. Business intelligence
Benchmarking data
Usage data
“Bigger” data
6. Recruitment training (and hiring) tool
7. Platform for more automated underwriting

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Usability = function plus form
“The Dial”
Easy, fast, fun
& professional
needs analysis
High Usage
% of Advisors actively using iPoS
0%
25%
50%
75%
100%
Oct 12 Jan 13 Apr 13 Jul 13
Country A
Country B
Country C
Country D
AIA Case study available on-line

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Phase 1
(6 months)
Phase 2
(6-12 months)
Phase 3
(12 months+)
Implement in Phases
1. Present Credentials
2. Needs identification
3. Quote / Close
4. Digital Proposal
Submission
5. Renewal and claims
servicing
Execution Risks
1. Present Credentials
2. Needs identification
3. Quote / Close
4. Digital Proposal
Submission
5. Renewal and claims
servicing
Execution Risks
Functional Area
High risk Low riskMedium risk
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The Health Insurance Tablet Toolkit for
advisors
• Resource Centre
/Document repository
• Basic Presentation
• Interactive Quote
• Comparison quotes
• Quote to proposal
• Data capture
• Digital signature &
submission
• Integrate to Resource
Centre
• Annual renewal (if
required)
• Claims resource
• Interactive needs tools
including sales scripts
Selling - decision Selling - execution Customer service

4. Three other opportunities for digital Innovation
revolution?
1
2
3
4

28
Digital Innovation in Individual Health
Insurance
Wearable Devices
Content, Wellbeing & Rewards
Digital Brokers
1
2
3

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Wearables: A game for the giants?
Samsung Simband – Open architecture
Google Glass: eyes on the future?
Fitbit – David vs Goliath’s?
Nike Fuelband – still in the running?
2012
June 2014
2013 (beta)
May2014
2013
Apple enters – health toolkit

30
Digestibles are already here
Ingestion Event Marker – FDA approved
The Password Pill – A ‘super power’June 2012
2013
Amazon has a wearable tech store

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Wearables: impact on Health &Life
Insurance
Increased longevity
Better quality of life
Changes in nature of healthcare expensesThe nature of the risk
Marketing of health
insurance
Measurement of risk
Trend towards selection continues (unless gov’t intervene)
More dynamic pricing. end state: “telematics” of health
insurance?
Will a healthcare app become the ‘Uber” app that controls
access to health insurance
Products designed for different segments
Will data privacy concerns become a roadblock?

32
Insurance
Wearable Devices
Digital Brokers
1
2
3

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The case for content
Source : Executive Board
(http://www.executiveboard.com/exbd/sales-service/challenger/new-decision-timeline/index.page
Is there any reason why insurance will buck this trend?

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Case for content: we all like it
http://www.bazaarvoice.com/ - the conscious consumer

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Content, rewards & wellbeing
Awareness
Education
Information
Execution / Fulfilment
What is on-line selling?
Health – designed for
digital engagement
High demand
Higher engagement – more tangible
Opens the door to broader lifestyle content
1

36
Blank
Great Eastern is a leading regional life insurer – homegrown in Singapore
Alexa Ranking: 164,285 Global ; 1,638 Singapore
3.1 pages per visit, 4 mins average per visit

37
Blank
37
Dedicated microsite
>60,000 Facebook users
Multi– year commitment – content is additive around broad theme
“live great”
Mobile enabled
Engaging – Guides , health apps, tips , rewards
Applied across the region

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Did you know ?
Great Eastern started its content journey more than 2 years ago
Asian Insurance Review’s Life insurance company of the year 2013
“We are honoured to be named Life Insurance Company of the Year. At
Great Eastern, we embrace a simple yet powerful corporate purpose - to
not just be a life insurance company, but to be a LIFE company. We have
made it our purpose to help our customers to live longer, healthier and
better, and over the last two years we have been building our Live Great
programme, . This award is a strong affirmation and validation of our
multi-faceted customer engagement strategy across the region.“
Chris Wei , Group CEO (Source: Great Easter press release 6/11/2013)

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Getting started: Top 3 content
recommendations
1. Create a modern content “factory” - agile
with a dedicated leader, external recruits and
third party support
2. Invest in content distribution in parallel with
content production
3. Co-opt staff and salesforce to support both
content production & distribution
Stating the obvious
A multi-year budget commitment is required

41
Insurance
Wearable Devices
Digital Brokers
1
2
3

42
Would a new entrant set-up a
distribution centric model?
Incumbents have scale
Operations are complex and inefficient
Models don’t deliver value to the consumer on the investment
component
Part-time sellers – very hard to manage
Low productivity
Product range is too narrow
Agency Channel
Bancassurance
Has a lot of advantages but .
Banks have consistently chosen $$ over customer centricity
Lacks the personal touch on servicing
Technology hard to deploy in banking environment
Existing models are ripe for disruption
Agency is a cash cow that needs renewal
Bancassurance is an increasingly expensive game
A personal view for
the life insurance
industry

43
There are untapped opportunities
Extracted from Swiss Re Sigma 06/13
Can digital strategies change the paradigm that “life insurance is sold not bought”?

44
Digital brokers
Customer centricity demands choice
Brokers provide that choice
The trend to choice
The new digital brokers
How to react?
Own an IFA
Own an aggregator (digital venture capital)
New Affinities
Choice – lead the change or react to it?
IFA platforms – with digital enhancements
Aggregator models
Affinity Models
3

45
Digital brokers come in many flavours
Digital Choice – life only
Managing agent models
Aggregator models

46
Digital health insurance in Asia
Broker comparison models for health
Managing agent models

47
Digital affinity
People trust brands
Non financial service brands can sell financial services
Affinities by definition are more customer centric
The Power of affinity
New digital models
How to react?
Digital Worksite – needs a large employee benefits base
Digital Brands – Perhaps a Joint venture mentality providing
preferred access
Digital Orphans – leads for digital advisors?
Digital worksite marketing
Digital brands: partner with brands with digital connectivity –
create a financial services proposition (a new frontier) e.g.
airlines, telcos
Digital orphans

48
Digital affinity – brand or workplace?
Digital brand affinity e.g. airline
Digital employer affinity

49
Is health insurance enough in a digital
world?
High Engagement
Personal Relevance
Profit Margin?
Health insurance
Non - life
Banking
(reverse
bancassurance)
Credit cards
Savings
Loans
Smaller ticket -first to go on-line
Customer acquisition
Customer cross sell
Customers don’t think about industry structures when they
buy on-line
Low engagement
High margin
Becoming easier to sell on-line
Life Insurance

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Concluding: “Business as usual” is the most
dangerous path
Be radical
Now is the time to embrace change and start building digital models.
Be Cautious
You don’t need to “bet the bank”. Learn from fast and strategically well thought
our pilot projects (e.g. POS tablet toolkits. Find people with the skills to
transform.
B e w a r e
If you don’t utilise digital thinking, plenty of others will continue to do so.

Digital Thinking in Health Insurance by Hugh Terry

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