The Future of Finance Michael Spiteri The London Insurance Club

Disrupt or be disrupted?

79% Of smartphone users are using devices to shop at least once a month

CMOs will spend more money on technology than CIOs. By 2017

Predicted number of connected devices by the year 2020. 50 Billion

higher revenue growth forecast for companies who prioritize innovation to a greater extent than their peers. 10%

We have observed a rapid shift in customer expectations

64%

of shoppers read customer reviews always or most of the time before making a

purchase decision

Easy access to research and data will expose efforts to mislead and enable comparison to your competitors; transparency and authenticity are required

Easy access to research and data will expose efforts to mislead and enable comparison to your competitors; transparency and authenticity are required

!50%

of UK mass market, wealth and private

banking clients use social media at least once a day

Vehicles for communicating experiences with your brand – both good and bad – are ubiquitous and free, and your customers are not shy about voicing them

Vehicles for communicating experiences with your brand – both good and bad – are ubiquitous and free, and your customers are not shy about voicing them

90%

of consumers trust recommendations from

people they know

71%

of consumers would pay more for good customer

service

85%

of UK shoppers would go out of their way to use a

company that offered better service

Brand loyalty has been replaced by peer conversations and other social media interactions; those who fail to participate risk being sidelined

Undifferentiated products and services, lack of loyalty, easy access to alternatives and low barriers to defection mandate extra effort to retain your customers

Expectations are being shaped by experiences outside of your industry, where content, interactions and features may be much richer and more compelling

Expectations are being shaped by experiences outside of your industry, where content, interactions and features may be much richer and more compelling

Brand loyalty has been replaced by peer conversations and other social media interactions; those who fail to participate risk being sidelined

Undifferentiated products and services, lack of loyalty, easy access to alternatives and low barriers to defection mandate extra effort to retain your customers

... trust their peers ... are informed ... have choices ... have a voice ... expect more

We have observed a rapid shift in customer expectations

64%

of shoppers read customer reviews always or most of the time before making a

purchase decision

Easy access to research and data will expose efforts to mislead and enable comparison to your competitors; transparency and authenticity are required

64% read customer reviews

always or most of the time before making a purchase

!50%

of UK mass market, wealth and private

banking clients use social media at least once a day

Vehicles for communicating experiences with your brand – both good and bad – are ubiquitous and free, and your customers are not shy about voicing them

Vehicles for communicating

experiences with your brand – both good and bad- are ubiquitous and free, your customers are

not shy about using them

90%

of consumers trust recommendations from

people they know

71%

of consumers would pay more for good customer

service

85%

of UK shoppers would go out of their way to use a

company that offered better service

Brand loyalty has been replaced by peer conversations and other social media interactions; those who fail to participate risk being sidelined

Undifferentiated products and services, lack of loyalty, easy access to alternatives and low barriers to defection mandate extra effort to retain your customers

Expectations are being shaped by experiences outside of your industry, where content, interactions and features may be much richer and more compelling

85% of UK customers would go

out of their way to use a company that offered a

better service

90% of consumers trust

recommendations from people they know

71% of consumers would pay more for good customer

service

... trust their peers ... are informed ... have choices ... have a voice ... expect more

New and different types of customer behaviours are here to stay – A decade of disruption

Decade of change

0

20

40

60

80

100

120

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K A

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dult

Popu

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The changing mix of consumers in the UK, and the rising influence of the Digital Natives

Traditional Consumer Transitionals Digital Natives

Up to 2008 Traditional consumer behaviour is the majority

2008–2018 Transitional behaviour is the majority

2019 and beyond Digital native

behaviour dominates

Data sources continue to proliferate and offer further customer context and insight Mobile devices and sensors are now interconnected and are communicating in unprecedented ways …

• Devices and sensors continue to decrease in size while increasingly communicating via the

internet

• Adaptive, “smart” environments with

embedded and connected devices will enable

innovative usage models

Telematics is often seen as more of a technology rather than a customer play. However, in insurance telematics is frequently used in a product context around Pay As You Drive/ Pay How You Drive etc. We strongly believe that telematics and other sensor based technologies will have a major impact on how businesses engage with their customers. This is closely aligned with the ‘Always On Customer’ and will further accelerate customer interactions and expectations. Sensor based solutions enable a much richer understanding of a customer and can radically disrupt the ‘annual premium’ and ‘claims moment of truth’ events that have dominated the insurance industry for so long. The ability to listen, learn and engage with customers and offer them products or services that are good for them will separate those companies who succeed in this space from companies who will struggle.

If used sensitively this can transform the relationship between the Insurer and the Insured

Accident Response

Roadside Assistance

Accident Avoidance

Traffic Pattern Detection

Entertainment

Car Sensors

On Board Diagnostic Report

Mobile Device

Telematics Platform

Anti-Theft/ Location Accident Detection

Traffic Pattern Detection

Navigation

Accident Report

On Board Diagnostics

Marketing Alerts

Driver Scoring

Remote Entertainment

Vehicle History Report Vehicle Repair Estimate

Anti-Theft/ Location

Medical Info

And it’s not just motor …the Connected Home

Core premise: The earlier that an event can be predicted, the more it can be controlled. Home Intelligence solutions now offer home automation solutions that covers security, HVAC, energy management, remote access and appliance monitoring & control

In fraud detection, rigorous real-time sophisticated analytics engines for ‘search word’ patterns online can help understand the occurrence of falsified behavior based on the nature of search patterns traced to certain geographies, and accordingly preempt it

In the world of preventative diagnostics, ‘Real-time’ information could be fed into claims/risk prevention functions so that early warnings of an event could trigger action to reduce or even prevent it from occurring

From the Big! - the world at your fingertips ....To the Small! - when seconds matter

Global Asset Optimization

“Obama campaign uses big data to address concerns of individual voters” – MIT Tech Review

“The Climate Corporation raises $50M for big data driven weather insurance”

– Tech Crunch

Global Asset Optimization

“Google Driverless Car Worth Trillions” - Forbes

“New genetic diagnostics save NICU lives” - NY Times

And it’s not just at the personal level