Big Picture Mutuality
Chaired by Alan Goddard, Cornish Mutual
• Daniel Tischer, Centre for Mutual and Employee-Owned Business, Oxford
• Steve Barry, ICMIF • Roy Jubraj, Accenture
Reframing Building Societies and Mutual Insurers: Collaboration as a source of competitive advantage Dr. Ruth Yeoman, Kellogg College, University of Oxford Dr. Daniel Tischer, Manchester Business School
Outline § Contextualising the research § Collaboration in the UK: A scenario § Features of collaboration § Further actions
Contextualising the research § Sector was/is under pressure § Changing landscape § Demutualisation
§ The “mutual revival” § Post-crisis rhetoric and support § Political support?
§ Some positive developments (growth related) § But is it a revival? (continuing decline of # of mutuals in UK)
What would a mutual revival entail? § Become more “competitive” § Benefits of being a mutual + “x”
§ Restore historic market share § 40/50% market share § Possibility of new entrants § Innovative products/solutions;
§ Consideration of different scenarios: § Independence / consolidation § Partnership § Collaboration
Collaboration in the UK: A scenario § Collaboration in FM UK is limited § Largely independent action or some partnerships
§ Our scenario goes beyond § Requires collective action; sharing of knowledge § Coordination or activities and sharing of costs/benefits § Centralisation of services
§ Collaborating is doable § Transformation of Finnish Coop sector in the mid-90’s
Features of collaboration 1. Agreement on the degree of, areas and scope for collaboration - building an institutional fabric § § § §
Shared need in the long-term Values shared by mutuals and stakeholders Ability to co-create operating models, capabilities and governance Outcomes and value to be specified
2. Mutual values at organisational and sector level § Modes of interaction between firms § (mutual) trust and leadership beyond the boundaries of the firm
3. Overcoming resistance from members / boards
Can collaboration work? § Yes, it can: § Co-operative Systems in D, NL, CA & FI § High levels of integration; centralisation of power
§ French mutual insurance groups (SGAM) - Covea § Eurapco & Euresa as cross-boarder models § Australia’s CUSCAL
§ UK § Mutual Vision back office integration § 3rd party service providers, e.g. Cornerstone Mutual § Cooperation between building societies and mutual insurers
Cross-selling between building societies
& mainstream insurers
& mutual insurers
Questions that need discussing 1. What does it mean to be a mutual (at firm/sector level)? § Are firms isolated from each others faith?
2. Who should participate? § Convince opponents or go ahead with supporters only?
3. Who should coordinate voices and activities? § Leadership to drive the process
4. How can you work more closely with other mutual organisations? § Equity release plans; targeted insurance products?
Supporting the Leadership agenda
The storm we have weathered
The nervous ‘confidence’
‘Human Capital’ takes its toll
18% Employees - Actively Disengaged
Source: Gallup (2014) - Global Engagement Survey, 5,000 employers surveyed
The silent majority
49% Employees - Disengaged ‘lack motivation’
18% Employees - Actively Disengaged
Source: Gallup (2014) - Global Engagement Survey, 5,000 employers surveyed
Harnessing the energy 33% Employees - Actively Engaged
49% Employees - Disengaged ‘lack motivation’
18% Employees - Actively Disengaged
Source: Gallup (2014) - Global Engagement Survey, 5,000 employers surveyed
Benefits of engagement 125 100 75 50 25 0 Productivity Engaged
Quality of Output Disengaged
An illustration of engagement Description
#
Number of people employed
1000
Disengaged Staff
67%
670
Impact of Engaging ‘Disengaged’ 18% improved productivity
670 x 1.18
791
Effective increase in people employed
791-670
121
Typical Annual Salary (Source: Bureau of Labor)
121
$56,000
$6,776,000
Typical recruitment cost % against annual salary
15%
(15% x $56K)x121
$1,016,400
Total saving to your business
Value
Impact
$7,792,400
Listening to our members
The Leadership Agenda is on our radar and a key priority of our CEOs and members
Responding to their needs
ICMIF's leadership development offering is good, but we’re only touching the surface against the potential
Positioning Leadership+ to our members A complementary suite of development materials that underpin and support our members existing programmes
Member needs
Skills
Technical
Reinsurance
Supervisory
Mutuality
ICMIF support
Leadership
Networking
Reviewing our member services
Re-defined programme, tailored to meet senior executive needs, improved networking opportunity
Advanced Management Course
Creating new opportunities
New course successfully piloted, March Next course scheduled in November 2015
Advanced Management Course Advanced Potential Course
Creating new opportunities Taking our resources to our members Argentina 2015 Strategic Decision Making Advanced Management Course Advanced Potential Course
Creating new opportunities Developing UK based events for our members’ senior teams, November 2015
Senior Executive Retreats Strategic Decision Making Advanced Management Course Advanced Potential Course
Leadership+ Products & services International Secondment Programme Senior Executive Retreats Strategic Decision Making Advanced Management Course Advanced Potential Course Designed for your whole organisation
Bringing Leadership+ to our members
Broadening our reach, 2016+
Advanced Management Course
Insert video trailer
Leadership+ Developing Leaders, Harnessing Networks
TECHNOLOGY AND INSURANCE – A NATURAL MARRIAGE 12 OCTOBER 2015
General Insurance Trends Innovative insurers must balance digitalisation, customer centricity and legacy modernisation to compete effectively in an evolving market. Accenture Research have identified the following key trends for P&C insurers over the medium term… Internet of Me
A personalised world
Outcome Economy
Traditional business models are under threat. Outcomes over Products
The Platform (R)evolution
Digital platforms are becoming the tools of choice
The Intelligent and Changing Enterprise
Huge data, smarter systems - better business
Future Products and Pricing
Consumption and composite propositions
Distribution in a Mobile World
A dynamic, accessible and continuous consumer interaction model
Workforce Reimagined
Collaboration at the intersection of humans and machines
“Insurance is inherently about managing risk, and the key to surviving these challenges is flexibility and insight” Global Insurance CEO
Copyright © 2015 Accenture All Rights Reserved. Proprietary and Confidential
35
Customers are empowered
Engagement is on their terms
Platforms and devices change the playing field
There is a new face of competition
New Profit Pools
The changing realities we can’t escape…
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36
Digital Has Disrupted Customers In the last decade, consumer dynamics across sectors have deeply changed.
Compared to 10 years ago…
44% / 68% Informed and self-directed
•Wants access to relevant content in real time
48%
Social •Relies on “wisdom of crowds” (social media, blogs, …)
Copyright © 2015 Accenture All Rights Reserved. Proprietary and Confidential
Today…
52%
64%
Online
Price-sensitive
• Prefers to buy insurance online
•Wants to be in control
72%
78%
• Wants to interact with insurers in his digital environment
• Will provide personal information in exchange for better, more personalised insurance cover
Connected
Willing to share
37
…and transformed the industry
Aggregator
Telematics
Usagebased insurance
Connected Home
Life Style Insurance
The industry is being transformed by disruptive new technologies
Big data & Analytics
Connected people & devices Mobility
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Remote sensors
Automated advice Seamless omnichannel experience
Social media
38
Different Customer, Different Intensity, Different Speed… Every Customer is a Digital Customer Need to pivot to the multispeed customer organisation for all customer types.
Traditional
Experimental
Transitional
Digital Savvy
They rely on traditional channels & interactions. Even then, they leave digital traces.
They selectively engage in digital for utility value, discovering how the experience improves.
They strive to leverage digital more broadly but may not always be able to do so.
They make digital technology part of all dimensions in their life. Mobile access is key.
Increased Speed Higher Digital Customer Intensity
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39
Yet Customers are being let down Findings in the review revealed that insurers are failing to engage consumers on digital channels, with just 20% responding to questions asked on Twitter and via email, and only 30% answering questions satisfactorily.
Sector failing on customer experience (June 2015) Report says insurance firms’ customer relationships are “bland and undistinguished”. The insurance sector has been criticised for offering its clients a "bland and undistinguished" customer experience. The review warned that companies in the insurance sector are failing to use customer experience to differentiate themselves and forcing customers to make decisions solely on price - a situation exacerbated by the aggregator sites. Review, by MyCustomer.com, a customer relationship management expert
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40
Eight Trends Highlight Providers’ Struggle to Keep Pace Globally, problems of the past and digital challenges of today are key hurdles. 1
Missing out on customer growth
2
Push customers to the exit
First contact resolution is consistently the top frustration over past 5 years
3
Under-exploiting own channels
Impact of company websites decreased versus other channels.
4
Sub-optimising digital service
Low digital adoption due to lack of right information (30%) or spam risk (22%)
5
Service still falling short
6
“Dis-Loyalty” Programs
7
Not winning back defectors
8
Unprepared to face disruptors
Intent to buy less from current companies grew (+40%) in same period.
Switching due to poor service is flat or slight decreasing very slowly For 60%, key driver is access to best deals focused on ‘short-term’ loyalty Many companies miss this opportunity, as switch back drivers are not compelling. Many established providers are slow to adapt to new business models
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41
The Digital Consumer – What does this mean for you?
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42
Analytics & Insights Snapshot
Data / Insights – Proactive vs. Re-active Customer Analytics Claim Analytics
Harnessing analytics to drive growth & profit Leading organisations not only use data historically to evaluate best actions but also employ advanced analytics methods to predict and optimise future business outcomes to gain competitive advantage
Predictive Insight to Outcome
Business Intelligence
Managing Information
Analytical Maturity
AnalyticsEnabled Decision Making
Optimisation
“What’s the best that can happen?”
Predictive Modelling
“What will happen next?”
Forecasting / Extrapolation
“What if these trends continue?”
Proactive (looking forwards at what will happen)
§
Optimised Decisioning
§
Big Data Exploitation
§
Predictive Modelling
§
Forecasting & Next Best Action
§
Behavioural Analysis
Statistical Analysis
“Why is this happening?”
§
Advanced Data Segmentation
Alerts
“What actions are needed?”
§
Data Visualisation
Query / Drill Down
“What exactly is the problem?”
§
Dashboards
§
Data Warehousing
Ad hoc reports
“How many, how often, where?”
§
Operational Reporting
§
Ad-hoc Query
§
Data Management
Standard Reports “What happened?”
Reactive
(looking back at what has happened)
Business Value Copyright © 2015 Accenture All rights reserved.
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44
The Analytics Leap-frog Our point of view Analytics early adopters have an opportunity to get ahead and stay ahead by focusing and investing in the right areas, and emulating analytics leaders, not their industry competitors
To… Cross-industry leader Analytics Embedded in Every Decision Customer-centric models
Leaping the capability the industry is pursuing
Real-time digital channel connectivity Data ‘Built for Analytics’
Big Data Lakes
Continuous Test & Learn Always on
Current state - primarily…
Uplift Modelling
Product-centric models across functional areas
Personalised Next Best Action
Voice Analytics
Batch execution of manually built models
Claims Forecasting
Actuarial GLM Regressions
Aggregator Quote Modelling
Data ‘Built for BI’
Real-time Rules
From…
Copyright © 2015 Accenture All rights reserved.
Copyright © 2015 Accenture All Rights Reserved. Proprietary and Confidential
Industrialised Machine Learning
45
Embedding Analytics Into The Insurance Lifecycle Our experience and credentials enable analytics to add value to every decision along the insurance lifecycle
Market better
Stimulus
Price / quote better
Manage claims better
Zero Moment of Truth
First Moment of Truth
Predict Claim Events
Manage Third Parties
Targeting models
Price and Purchase
Predictive Analytics through the Claims Lifecycle
Know Your Supplier / Opponent
Brand and direct marketing
Apply data to controlled Develop a unique data Identify customers during marketing experiments to insight to build separate the sales process in real understand and attribute quote and conversion uplift time, and respond with marketing activity and models – combining the right, tailored offer understand the impact and customer insight with Understand what enriched interaction with the brand underwriting knowledge to data tells you about the improve marketing insurance risk beyond efficiency and grow the standard 10 u/w sales questions
Apply data to power claims Understand your management processes customers and their with automated predictive preferences better to decisions to reduce manage third parties claims costs by up to 5% during claims to improve and manage fraud customer outcomes and proactively maximise value
Build profit
Customer Experience Single Customer View Embed partner data and predictive / prescriptive decision models to improve cross sales, retention and improve customer experience
46
Copyright © 2015 Accenture All Rights Reserved. Proprietary and Confidential
Accenture Customer Analytical Record Accenture’s Customer Analytical Record (CAR) is a virtual single view of the customer combining multiple disparate data sources and made available for rapid predictive modelling and real-time predictive / prescriptive applications CAR made available to: Historical Model Build Enable analysts to recreate single views of the customer at any historical point to enable rapid predictive / prescriptive model builds
Applications / Products
Web / mobile logs
Accounts
Transactions / Events
Real-time Decision Management The Customer Record is made available in real-time across all channels for customer-level decisions at every customer touch-point
Customer Journey ETL
Real-time Prescriptive / Predictive Analytics Prescriptive analytics / machine learning running at
