22. Willis Towers Watson Pricing Software Supporting Effective Pricing
Emblem
Predictive modelling software
Classifier
Geographical spatial analysis
Innovation Projects: Best Practice Pricing and Underwriting
Radar Base
Builds and views analyses and reports
Radar Dashboard
Views reports and interactive dashboards
constructed with Radar Base
Radar Live
Executes calculations and rules
at point of sale
Provides the interface, forms and
workflow integration
Main Policy
Admin System
Radar Live
Radar Base
or Radar
Optimiser
Notes de l'éditeur
Nowadays it is quite common to see digital and customer feature strongly within insurer’s strategies. ..
[update slide to include customer]
However, progress towards becoming a truly digital insurer has been slow. There are various contributing factors –legacy systems and processes, lack of an innovation culture, complexity of insurance to name but a few. We are starting to see pockets of innovation, but is this enough?
Second build
How do we compare to the likes of air bnb, uber, amazon? And more importantly, what are the drivers around their success. Is it purely being digital, or is it rethinking the business model focusing on what customers really need and want…creating a great customer experience..which means a great product with great customer service…delivered efficiently. Making it easy for them to connect with you in the way that they want to. This brings me to the question:
And is the insurance industry ready to rise to the challenge?
However, progress towards becoming a truly digital insurer has been slow. There are various contributing factors –legacy systems and processes, lack of an innovation culture, complexity of insurance to name but a few. We are starting to see pockets of innovation, but is this enough?
Second build
How do we compare to the likes of air bnb, uber, amazon? And more importantly, what are the drivers around their success. Is it purely being digital, or is it rethinking the business model focusing on what customers really need and want…creating a great customer experience..which means a great product with great customer service…delivered efficiently. Making it easy for them to connect with you in the way that they want to. This brings me to the question:
And is the insurance industry ready to rise to the challenge?
To answer the question, we need to realise that digital is not an end in itself. Companies need to be clear on why they want to be digital? Do they want to better understand their customers, not just looking at demographic data, but also at behavioural data? Do they want more powerful customer interactions and a provide a truly consistent omni-channel service. Or is it about improved efficiency and expense management. Or a combination of these.
The answer will depend on the strategy of the company, and how, in turn, the digital and data strategy supports this. Key to this is defining your ambition.
[could include iceberg in that data integration and systems connectivity is key to delivering all three]
Once you have set your ambition – how to you define and prioritise your innovation projects?
We should mention that we support clients with all aspects from ambition right through to Innovation Projects.
Oscar Health Insurance is a health insurance company, headquartered in New York City. Oscar sells individual health insurance plans, both directly and through health insurance marketplaces
Aim: to provide smart, simple health insurance through technology, data, and design
This is a technology enabled company aimed at simplifying customers health insurance experience. Using their app customers can talk to a doctor, get prescriptions without ever leaving home, keep track of their health history and earn rewards for staying active with a free Misfit step tracker
They currently have 145K customers with plan to reach 1Mn customers
In short:
Vitality is a programme providing rewards to customers for living a healthy lifestyle. It is an add-on to health and life insurance products.
How is it different… it acknowledgement that the nature of risk is changing. That risk is no longer purely pre-determined but predominantly behavioural. Three lifestyle choices (smoking, poor nutrition and poor physical activity) contribute to four conditions (diabetes, cancer, heart disease and lung disease) which in turns drive over 50% of mortality every year. So lifestyle choices are fundamental, but behavioural science shows that to make changes people need incentives.
But how to pay for the incentives…well Vitality is a shared value model, whereby they use incentives to change behaviour, which in turn drives up profitability, which allows them to fund the incentives. So really a shared value cycle that is mutually beneficial to all.
Winning features… (in my opinion):
Sharing profits – not just about increasing profit for shareholder (similar to RL who is now planning to widen profit share and Old Mutual South Africa that decided to share the profitability of a large margin release). Discovery Life CEO Hylton Kallner says this model is "based on a combination of engaging clients and incentivising them to manage their wellness and dynamically pricing their behaviour into the products. We share the upside of the superior actuarial outcomes with the client, through lower premiums." Mortality and morbidity risk drops by as much as 40% for those customers who "engage" in managing their health, he says.
Positive focus: Focus on a healthy lifestyle (which then reduces medical expenses and insurance costs) rather than the often negative connotations with life insurance. Thus a positive sale (healthy lifestyle) rather than death cover.
More frequent touch points with customers: not just at claim stage, but regular ongoing engagement through use of wearables, etc.
Culture of innovation: “One key, says Gore, is that rewards and risk taking go hand in hand at Discovery, which puts its money where its mouth is by making an innovation score part of each manager’s performance evaluation and by conducting an annual competition to identify creative new ideas.”
Not purely based on earnings: “We have growth metrics for a lot of what we do. Our earnings per share have grown by 25 percent a year, compounded, for the last two decades, with little capital. But my personal view is that the rationales behind innovation and earnings targets are not really great bedfellows. You have to invest in innovation, even if you don’t know where it will end up. But with a growth-target mind-set, you’re always thinking, “Oh, we can’t do this, because it’s going to undermine our margins” or whatever. You ought to do both well, but it’s challenging to balance those two parts of your brain.”
Over the past three years, as the South African economy crawled, Discovery’s share price rocketed 44%. They are also seeing success in the UK with VitalityHealth (which covers 550,000 lives) and VitalityLife (318,000 lives). Last year, VitalityHealth made a R131m profit while VitalityLife recorded a profit of R366m. Generali Vitality also recently launched in Germany with the programme being available in Germany from 1 July this year.
Perhaps add video digital is a way to create more customer engagement if used correctly.
This slide is about bringing out that digital and customer development is often tactical projects without thinking about the long-term ambition
Once you have set your ambition – how to you define and prioritise your innovation projects?
We should mention that we support clients with all aspects from ambition right through to Innovation Projects.
FCA thematice review with 00’s £m price tag
We can perhaps skip this if there are too many slides, but this is a good one to say it is possible. Then we lead into two examples. The first has a video (which you can view if you are in presentation view and click on the blue box). I also have a discovery video that is about them having a doctor on skype in the UK which you may want to rather use.
You can use some of the points on your slides to talk to this.
Chris - We could just use one to cover all the software
