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1、Maximum Value CreationMaximum Value CreationLast year we challenged the industry not to write off growth opportunities in developed markets.This year we challenge the industry to see products and services through the eyes of its customers.Through the looking glassUnderstanding customers easier to sa

2、y than do.A report by ReMark International October 20152 ReMark International.All rights reserved.Executive Summary 5About this research 6KEY THEMES Theme One:Advice or Guidance?7Theme Two:Bundling or Bungling?Products and Customer Value 10Theme Three:Brand Promise versus Promiscuity 13Theme Four:An

3、alytics Symphony versus Noise 17What do you need to do?20Contents2 ReMark International.All rights reserved.3Through the looking glassInsurance is at a crossroads.It faces the impact of new channels,the digital revolution,changes in regulatory framework and a global economic slowdown.Like other indu

4、stries,it has seen a fundamental shift in how people consume media,with smartphones changing our lifestyles and expectations,with a blurring of boundaries between on-and off-line.Insurance is also facing fresh competition from within and outside the sector,including other financial service providers

5、,tech giants,health care companies,venture capital firms and eager startups.While the picture presents equal measures of challenges and opportunities,one thing is clear old ways will no longer work.Customers are calling for change.Indeed,this is the common denominator uncovered in our research.It is

6、 all about customers.We are self-serving if we believe it has always been the case customers needs must now drive the distribution landscape,product design and brand value.In short,the industry environment is confusing and full of conflicts.However,by examining these trends from the customers perspe

7、ctive,in the context of their lived experience,the confusion fades and clarity emerges.In the report,we organise key findings around four themes:Advice or Guidance?;Bundling or Bungling?;Brand:Promise versus Promiscuity;Analytics:Symphony versus Noise.In the final section,we offer insights into what

8、 they may mean for your business.3Through the looking glass4 ReMark International.All rights reserved.4 ReMark International.All rights reserved.5Through the looking glassExecutive SummaryWelcome to ReMarks second annual Global Consumer Study(GCS)which once again is based upon the responses of a con

9、sistent sample of insurance consumers in 14 major markets.The purpose of this research is to focus on the consumer and their behaviour specifically as it relates to insurance:why and how they purchase and experience insurance.This years research is grouped into four key themes.Advice or Guidance?It

10、is clear that consumers place great importance on advice,however there is a disconnect between how the industry perceives the need for(and value of)advice and how those issues are seen by the consumer.In essence,the dynamics of price,product,service and brand hold sway at different levels within dif

11、ferent segments.It is only by understanding these dynamics and delivering advice in a fashion that consumers find compelling that the industry will continue to grow.Regardless of industry perceptions,it is clear that advice remains a powerful and necessary part of the proposition as far as consumers

12、 are concerned.The need for insurers is to accept primary responsibility for engaging directly with customers when designing propositions for the advice channel.This represents a distinct move away from the historical practice of using the advisor as an interlocutor between the customer and the insu

13、rer.Bundling or Bungling?Customers continue to buy bundled products.While there is an industry perception that cost factors underpin the sometimes startling lapsation numbers,we believe the problem lies in consumers perception of value as a result of poor engagement around these products.By educatin

14、g customers,improving their experience and adapting to changing needs,bundled products are likely to retain their place in insurers product portfolio.Brand:Promise versus PromiscuityOur third theme focuses on issues confronting all industries disruptive change driven by digital technology,especially

15、 the rise of social media and mobile.These trends are reshaping how insurance is sold and how brands work.We counsel the industry not to see this trend as playing out universally across all markets.Our research also suggests the solution to this issue is one that has been discussed by marketers for

16、decades insurers need to share their brand with their customers.Analytics:Symphony versus NoiseIn our final theme,we recognise the industrys obsession with Big Data.The industry now needs to move from Big Data to smart,relevant data data that examines and improves the customer experience rather than

17、 focusing purely on underwriting efficiency and cost-out activity.The comprehensive research in this report indicates that the challenge for the industry is to see the issues of the day through the eyes of its customers.This is a key path to growth for the industry.Join the conversationThank you to

18、our readership for the comments and contributions generated by last years report.Your ideas have informed this years report to help ensure that it offers relevant and actionable insight for the critical task of reshaping the industry for the customer.We welcome your feedback once again this year.Ste

19、phen Collins Chief Executive OfficerReMark International6 ReMark International.All rights reserved.About this researchThis research is based on online interviews with 8,000 insurance consumers across 14 key life markets with fieldwork conducted in 2015.The sample and methodology complies with best p

20、ractice for each market based on a nationally representative set of demographic and economic parameters.CA500Emerging MarketDeveloped MarketUSA1000MEX500BR500SA500FR500UK500GER500RU500JP500CN1000MY500ID500AU500Figure 1:Breakdown of customer study sample by regionTruly global coverage:The 14 markets

21、in this research account for around 85%of global life insurance risk premiums and approximately 80%of global GDP.7Through the looking glassTo an extent,an insurance purchase is just like any other.In Say No to Maturity,our 2014 Global Consumer Study(GCS 2014),we reiterated the four phases of a purch

22、ase decision:Customer research Industry-led lead generation Individual trigger point Transaction However,our research suggests that the complexity and intangibility of insurance products means customers are placing greater emphasis on how they receive advice(channel),the nature of advice and the cre

23、dibility of that advice.As a result,we see the emergence of four broad categories of customers:Professional Advice buyers:customers selecting an advisor based on their qualifications,independence or fees(50%of customers up from 38%last year)Traditional Advice buyers:customers selecting an advisor ba

24、sed on a personal recommendation or referral(30%of customers significantly down from 43%last year)Guided Direct buyers:customers buying direct but needing significant support during Figure 2:Most important selection factor for a financial advisor Note:%ranked first for each factor by region.What are

25、 the reasons for choosing your existing advisor?You can select more than one.Customers place a great deal of importance on advice,just not in the way we thinkthe buying process(13%of customers marginally up from 12%last year)Execution Only buyers:customers buying direct and with enough confidence to

26、 complete the process without support(7%of customers marginally down from 8%last year)In short,customers value the quality of advice,hence the emphasis on advisors qualifications.Our research suggests customers want to make an informed decision but still prefer someone helping them with the(at times

27、,tedious)process of insurance application.Consistently,the following two trends are observed:More customers are seeking professional advisors Fewer customers choose to complete the purchase process without support this is at odds with many of the industrys previous predictions and investments in the

28、 growth of direct distributionMore customers seek professional advisorsThe segmentation below illustrates that the advisor selection process is changing rapidly as regulation puts pressure on relationship-based advice models which do not deliver for the customer.Globally,the percentage of consumers

29、selecting an advisor based on relationship has remained steady at 25%,while those selecting Key ThemesTheme One:Advice or Guidance?8 ReMark International.All rights reserved.on qualifications has risen from 17%to 26%(Figure 2).Qualifications are now the most frequently cited factor for advisor selec

30、tion with tellingly significant increases in markets with a strong consumer protection focus such as the UK,US,Canada and South Africa.For example,the US has seen growth in the independent Registered Investment Advisor channel.RIAs take fiduciary responsibility for clients and typically operate on a

31、 fee rather than commission basis(albeit with a skew toward investment products).Interestingly,other channels such as broker dealers are now reviewing their models and responding to client demand.Across markets,the interaction between factors such as independence and qualifications are becoming more

32、 important.In particular,the link between investments and insurance products is critical with respect to advisor choice.Customers frequently select an advisor primarily for investment advice and consequentially use the same advisor for life insurance.Few customers choose to complete the purchase pro

33、cess without support Most customers who want to buy direct still want help during the buying process.Figure 3 validates this point with Execution Only in decline and the aggregate of Professional Advice,Traditional Advice and Guided Direct buyers broadly flat year-on-year.Curiously,the lack of prope

34、nsity to buy direct is seemingly Figure 3:Customer channel sub-segmentation frameworkNote:%of customers in each customer buying channel segmentation.What are the reasons for choosing your existing advisor?You can select more than one.What prompted you to purchase in this way?“Guided Direct offers a

35、growth channel as it is supported by regulation and online uptake.It is also the channel where the existing industry struggles to deliver.at odds with regulatory attempts to reduce the number of advisors(see GCS 2014)and the weight of industry investment which is focusing on direct-to-consumer propo

36、sitions.Principally,of the four,Guided Direct offers a growth channel as it is supported by regulation and online uptake.It is also the channel where the existing industry struggles to deliver.This is largely because agency insurers face internal conflict while intermediated insurers are blocked by

37、external channel conflict.Meanwhile,direct insurers need to build more complex products and incorporate underwriting into the customer journey.Due to these factors,it is increasingly evident that new entrants and new value chain configurations may be better placed to deliver within this channel.Nota

38、bly,the dynamics between price,product,service and brand vary significantly by segment:For Execution Only customers,there is a willingness to sacrifice service to gain a better price even if this means a product solution that may not be the most appropriate Alternatively,the Guided Direct segment pr

39、ivileges service over price.However,in line with Execution Only,these customers do not seek the support of a face-to-face advisor For Professional Advice and Traditional Advice customers,we see the emergence of brand playing a critical role for buyers in both developing and emerging markets,with les

40、s price-sensitivity(Figure 4)9Through the looking glassFigure 4:Provider selection factors and information sources by customer sub-segment Note:%ranked first for each factor for developed(Dev)and emerging(EM)markets by customer channel segmentation.Please rank the following factors in terms of their

41、 importance to you when selecting a life insurance provider,where 1 is most important and 4 is least important.Again,even if you have never taken out life insurance,please consider what would be of importance to you if you were to look into it.These findings conflict strongly with intermediary resea

42、rch in major life insurance markets which shows that intermediaries lean towards a focus on product or price(Figure 5).Indeed,this critical gap between the customer and advisor view may be widening.The implications:a clearer view of the advisory role Our research suggests that the role of the adviso

43、ry channel could benefit from a rethink.The following table summarises the picture Purchase Decision Process Industry Perspective Customer PerspectiveCustomer research Emphasis on intermediary Decisions are customer-led,but rather than end customers professional advice is valuedLead Generation Drive

44、n by advisor Innovation in channels&propositionsLifestyle Trigger Driven by advisor Smarter use of dataPurchase Heavy investment in Would like process to be fulfilment via direct guided by“advice”from an Industry versus Customer Perspective.To us,the mismatch is apparent.At this point the industry i

45、s expecting the advisor to drive provider selection.The problem with this strategy is that advisors struggle to identify new propositions for customers.For companies that want to grow or disrupt the market,the focus should be on what customers need and want.Ultimately,if insurers get this right,advi

46、sors will sell their products.Figure 5:Advisor selection factors for life insurance(UK and South Africa)Evaluate each attribute on its importance when recommending a protection provider to a client,where 1 is least important and 10 is most important.10 ReMark International.All rights reserved.In our

47、 GCS 2014 report,we identified the role of bundled products(a savings plan with life insurance)in supporting high levels of life insurance penetration,especially in emerging markets.In this theme,we replay customer perceptions of bundled products to the industry to encourage a customer-led approach

48、to developing new life insurance propositions.To do this,we focus on the customers understanding of product and proposition and their perceptions of value based on stated propensity to lapse.In this study,it is clear to us that a significant proportion of customers understand they are purchasing lif

49、e insurance with investment elements,though it appears they are not convinced they are getting a great deal.This in turn leads to greater vulnerability to lapsation a trend exacerbated by regulatory changes that are customer-value driven.The low-yield investment environment is also having a substant

50、ial effect from both a customer and insurer perspective.In the absence of a change in the investment environment,the key for the industry is how to reshape customers perceptions of the product value and,once again,to improve the customer experience.Figure 6:Penetration of bundled productsNote:%of li

51、fe insurance customers with product type.Do any of your life insurance policies also contain a savings or investment plan?Customers buy bundled products but remain less than convinced that bundled products provide optimal value Theme Two:Bundling or Bungling?Products and Customer Value Bundled produ

52、cts are a global concept,not restricted to emerging marketsGlobally around 60%of customers who own a life insurance policy say they have an in-force policy which includes a savings or investment component(Figure 6).From a new business perspective,bundled products are most common in Asia,continental

53、Europe,and a range of emerging markets,but they remain relevant as a legacy product(e.g.with-profits in the UK).Most customers understand the basics and value the life insurance elementMore customers say that the primary purpose of the policy is life insurance while also recognising that less than 5

54、0%of their contributions are allocated to life insurance(Figure 7).This indicates an interesting dynamic:most customers(ex-China)are buying policies for life insurance but paying more for investments.The driver of the product purchase is life insurance but the additional investment premium is fundin

55、g(via commissions)most of the distribution costs.11Through the looking glassFigure 7:Primary driver of buying a bundled productNote:%ranked first for product type.What is your main motivation for taking out a life insurance policy?Figure 8:Net responder propensity to lapse by region and product type

56、 Note:%respondents for each response by country,region and product type(bundled versus unbundled).Do any of your life insurance policies also contain a savings or investment plan?Which of the following features are included in this life insurance policy?For each policy please state how likely you ar

57、e to cancel it within the next five years.None of these observations indicate an issue with bundled products or propositions.In fact,responses on average allocations to life insurance could be seen as a positive indicator of customer awareness.The issue is customer perceptions of value not product c

58、osts and marginJust because bundled products are expensive relative to unbundled products does not mean they are bad value from a customer perspective.Customer value is based on their perception of their needs and,in most cases,price is not the primary driver.The issue is high propensity to lapse(Fi

59、gure 8).The numbers are very high:33%of customers in Indonesia,40%of customers in Brazil and 41%of customers in China are quite likely or very likely to cancel products in the next five years(even after adjusting for any policy maturities during this period).The issue is proposition not productIn em

60、erging markets,unbundled products(such as AD and PA sold direct via banks)have equally high lapse rates.So the issue is not product but proposition.In the case of advised agency sales and bank list direct mail and telemarketing,many customers do not fully understand the value of the product.Indeed,“

61、.many customers do not fully understand the value of the product.Indeed,some customers never understood the full extent of the proposition many understood the offer but perceived that value decreases over time.12 ReMark International.All rights reserved.To manage the bundling trends we have identifi

62、ed,providers need to make a genuine effort to convince customers of the value of their purchase and improve their experience.This requires insurers to:Focus or measure customer perceptions on value and effectively link these customer insights to proposition innovation Effectively collect and use man

63、agement information on their customers,especially for intermediated sales Establish a systematic customer engagement strategy which considers lifetime value and changing customer needssome customers never understood the full extent of the proposition many understood the offer but perceived that valu

64、e decreases over time.Perhaps the salient point in this type of business is that there is limited basis for ongoing customer engagement within these propositions and almost no scope to respond to changing customer needs.This is particularly the case with bundled products typically sold via bancassur

65、ance channels which see high propensity to lapse.The implications:a solution focused on the customerWe can already see key drivers of change emerging from within and without the life insurance industry.In particular:More customer-focused regulation e.g.MiFID 2 in Europe Macroeconomic challenges to s

66、tatus quo propositions e.g.the low return environment or Solvency 2 changes to capital rules Growing customer activity online Improving financial literacy13Through the looking glassAt its core,insurance promises a customer that a future liability will be met should the pre-specified need arise.For o

67、bvious reasons,brand investment is important to:Reinforce customer confidence Drive advisor perceptions Drive awareness so brand is front-of-mindWhilst that necessity still remains highly relevant,traditional brand advertising relegated to one-way broadcasting is no longer valid:Audiences are active

68、 co-creators of the brand,thanks to the prevalence and interactivity of social media a brand owners adaptability in this environment to have sole control and shape brand image has been significantly reduced Customer protection regulation,especially in developed countries(post-GFC),provides customers

69、 with a potentially calamitous perception that big brands are too big to fail in such an environment,it is tempting to believe that the implied security and stability of a solid brand is less relevant and customers are,therefore,more focused on price and proposition However,the reality for customers

70、 participating in developed Western and other economies should be a more cautious approach to the long term trust and faith they put in the institutions life insurance is a long commitment for both parties with all the difficulties long term relationships imply While the rise of aggregators and pric

71、e comparison sites actively promote commoditisation and reduce the relative importance of brand,it is too soon to definitively determine whether this is fad,fashion or an ongoing trend However,these changes in customers brand use coincide with some fundamental changes in consumers approach to media.

72、Taking the UK as an example1:Two-thirds of people now own a smartphone and spend almost twice as long online with smartphones than on laptops and personal computers A third of internet users see their smartphone as their most important device for going online The rise in smartphone surfing marks a c

73、lear shift since 2014,when just 22%turned to their phone first,while 40%preferred their laptopWithin the guise of social media and smart technology,we need to adopt disruptive strategies for managing insurance brands Theme Three:Brand Promise versus Promiscuity1Ofcom:2015 Communications Market Repor

74、t http:/bit.ly/1W4j3WM Figure 9:Factors driving life insurer selectionNote:%ranked first for each factor by region.Please rank the following factors in terms of their importance to you when selecting a life insurance provider,where 1 is most important and 4 is least important.Again,even if you have

75、never taken out life insurance,please consider what would be of importance to you if you were to look into it.14 ReMark International.All rights reserved.The surge is being driven by the increasing take-up of 4G mobile broadband,providing faster online access during 2014,4G subscriptions leapt from

76、2.7 million to 23.6 millionThe figures for China are even higher,and the advent of 5G looks certain to maintain the trend.Yet the most cursory engagement with the majority of life insurers demonstrates the inadequacy of their response to this increasingly important channel.For insurers to remain rel

77、evant,they need an approach that corresponds with modern customers perceptions of brands and the media used to access them.Brands matter to customersThe results of our study highlight the power of brand and marketing.While this is intuitive to the consideration of life insurance as a long term promi

78、se,there are significant variations in the perception of brand between markets.For instance,in Brazil and China,more than 40%of customers rate brand as the most important factor driving provider selection,significantly higher than product,price or service.By contrast,most developed markets rate prod

79、uct and price as key factors however,brand still remains the most significant factor to 25%of customers.Brand matters more in emerging marketsOne of the key derivatives driving the demand for brands in emerging markets is the lack of trust in the regulatory environment and the corresponding importan

80、ce of trust with respect to insurance brands(Figure 9).Conversely,the relative high degree of trust placed in the regulatory environment of developed markets in particular,leads to an assumption that all brands can be trusted.As a result,customers in developed markets can move to the next level of d

81、etail and focus on product benefits and price.The supply side is also important.Customers in emerging markets buy from life insurance agents who promote the brand of their company over independence,product and price.Analysis of selection factors confirms that the importance of brand increases for ti

82、ed agency forces relative to contested distribution channels(Figure 10).In last years GCS 2014,we explained that an incremental shift from advised to direct was obscuring fundamental changes in how customers buy life insurance.The key trend is not a shift to direct but an increasingly complex custom

83、er journey in the lead up to a life insurance purchase.This theme builds on last years findings and highlights how brands can shape the customer journey which increasingly involves online search and social media.Note:%ranked first of tied agency and contested/IFA channels for each factor for emergin

84、g markets.Please rank the following factors in terms of their importance to you when selecting a life insurance provider,where 1 is most important and 4 is least important.Again,even if you have never taken out life insurance,please consider what would be of importance to you if you were to look int

85、o it.Which one of the following channels did you mainly use to actually arrange this product?(Tied and contested channels only).Figure 10:Factors driving life insurance selection for emerging markets15Through the looking glassCustomers in developed markets search for products and priceA key enabler

86、for customer information is search engine activity.Over 40%of consumers globally will search for life insurance,about 20%will search for specific providers and a slightly smaller number will search for price comparison websites(Figure 11).As we observed in Theme One:Advice or Guidance,market structu

87、res and customer priorities vary and averages can be misleading.In developed markets,more customers search for life insurance or comparison sites rather than a specific insurer.This trend has played a role in the rapid increase in the supplementary acquisition costs of direct response TV(DRTV)for li

88、fe insurers.In the past,most customers watching TV adverts called the insurers call centre.But now many customers go online and life insurers re-pay to acquire them via search engine optimisation(SEO)or pay-per-click(PPC).Multi-channel campaigns(DRTV plus digital)often deliver better marketing resul

89、ts than single channel campaigns in isolation but compromise the profitability of programmes because of the difficulty of controlling acquisition ratios.Hence the importance of a genuine omnichannel strategy.Customers in emerging markets search for brandsBy contrast,in emerging markets more customer

90、s search for specific brands.The scale of the difference is material.In China,more than 40%of customers say they search for specific life insurer brands compared to less than 20%in Australia.Demand and supply drive these differences:brand is valued more highly in China and there are fewer price comp

91、arison sites.There are barriers to digital marketing in emerging markets but most relate to the acquisition process(e.g.confidence in online transactions)rather than the role of digital in the pre-sale journey.The use of digital marketing to generate leads and support the professionalisation of agen

92、cy forces is one of many key themes in emerging markets.Innovation has started to travel from East to WestCountering a long-run trend,we find evidence that Asia and emerging markets will lead the next phase of digital marketing innovation in life insurance(Figure 12).Nearly 20%of online customers in

93、 emerging markets are using social media as a source of information for life insurance.This figure is more than double the number for developed markets.Figure 11:Search engine activity for researching life insuranceNote:%ranked first for each factor by region.When researching life insurance online,i

94、f you were to use an online search engine,which of the following would be your most likely approach?“Asia and emerging markets will lead the next phase of digital marketing innovation in life insurance.16 ReMark International.All rights reserved.Again,China leads other major international markets.We

95、 also note that a study of 50 leading life insurers revealed that insurers in emerging markets place greater relative priority on email and websites than life insurers in developed markets(Figure 13).Taking a contrarian view,we argue that the role of price comparison websites is actually supressing

96、digital marketing innovation by life insurers in developed markets.If these trends continue,emerging markets will lead the life industry in brand building,digital marketing and social media.The implications:brand promotions To customers eyes,the line between brand promotion and proposition promotion

97、 is overlapping.Customers do not think about the type of promotion or communication they are receiving.The opportunity for brand owners is therefore to have a clear well-defined brand executed across all touch points.As such,communications can work harder to reinforce the values a consumer associate

98、s with that brand.An effective promotion can create both a positive customer experience whilst also engaging with customers.This is true not only when selling,but throughout the customer journey from sales through to after sales service and at claim.Creating this positive customer experience require

99、s a dynamic data processing ability and a customer engagement strategy.This is the essence of our fourth theme.Note:Average importance on a scale of 1-10.Please rate the importance of the following channels for customer engagement,where 1 is least important and 10 is most important.Figure 13:Channel

100、 importance for customer engagement by international life insurers(NMG Research)Figure 12:Sources of information before buying life insurance direct Note:%ranked first for each factor by region,year on year.What sources of information,if any,did you use before you took out this product?17Through the

101、 looking glassThe life industry has spent a significant amount of effort building its Big Data capability via huge investments in risk profiling and data warehouses.The outcomes of this investment are:A large quantity of data has been collected from the perspective of insurers,which focuses on facto

102、rs such as risk,medical and claims data Whilst valuable insight can be drawn from this data,a significant amount of white noise or irrelevant data makes the analysis exercise costly and time-consuming Less optimal use of insightful data on customers behaviour and attitudes has revealed the predictiv

103、e modelling process to be somewhat un-predictive due to its narrow focus on demographic and biometric dataTherefore,we advocate a move from Big Data to Smart Data.The guiding principle should be to place the customer at the centre of data analytics,rather than the risk or product considerations that

104、 the industry traditionally adopts.We will know we have succeeded if the customer experiences a joined-up approach when engaging with an insurer.To create a superior customer experience we need to move from an obsession with Big Data to the precision of smart,relevant data Note:%respondents for each

105、 response by rehabilitation services.How useful were these rehabilitation services in aiding your recovery?Figure 14:Positive citations for different rehabilitation servicesTheme Four:Analytics Symphony versus Noise The good news is that the journey is underway There has been significant innovation

106、in underwriting and claims processes over the past decade.Around the world,tele-underwriting and auto-underwriting are enhancing advisor value propositions,improving disclosure,driving down costs and sharpening customer pricing.The latest technology and the move to cloud based propositions offers sm

107、aller and newer insurers access to affordable first class systems.Furthermore,the ability to append external data in the US(e.g.prescriptions and liquids)is transforming the possibilities for middle market life insurance propositions.There has also been innovation in claims management.Claims assessm

108、ent processes are more automated and providers are developing new strategies to prevent or manage claims.Effective wellness strategies can engage customers and reduce claims,while the emergence of new technologies(e.g.wearables)is creating new propositions and delivery channels.Rehabilitation servic

109、es improve employee satisfaction,employer productivity and industry claims.Employees globally have a positive perception of rehabilitation services,especially where third parties are introduced by the employer(Figure 14).18 ReMark International.All rights reserved.Yet applications have not focused o

110、n the end-customerHowever,most of these innovations have originated from a focus on underwriting and claims results or on advisor demand e.g.tele-underwriting services which reduce time(and improve service)for the advisor and also reduce non-disclosure risks(Figure 15).Broader,better quality custome

111、r data is the key change catalystThe key change catalysts for customer led innovation are increasing consumer focused regulation,growing financial literacy,new consumer technologies and better customer data.Historically,reinsurers and insurers lacked comprehensive data on the end-customer;however,wi

112、th rapid improvements in the quality and accessibility of data,insurers are now capable of focusing on the end customer.This capability has been heavily influenced by the evolution of third-party data sources allowing the industry to capture quality data on customers and distributor sales,lapses and

113、 claims.The influence of regulators,association bodies,reinsurers and consultants is also helping to drive this trend.Granular demographic,economic and wellness data is now readily available and the cost to collect bespoke nationally representative data on customer behaviours is much lower.The impli

114、cations:change of data approach is requiredInsurers need to imagine the potential of multiple data sets across the customer,distributor,underwriting and claims.The challenge is integrating data on propensity to buy,lapse and claim and then translating these insights into a proposition which works fo

115、r the customer not just the industry.While industry examples of success in achieving this are rare(if not scarce),the innovation in data use in the US for underwriting provides an illustration of the benefit to both customers and insurers of smart applications where the use of structured third-party

116、 data is widely permissible.The underwriting process has long put the needs of the insurer before those of the customer.However,the availability of these third-party data sources combined with sophisticated algorithms and improved processing speeds,has revolutionised the customer journey.Please rate

117、 the successfulness of the channels for tele-underwriting,where 1 is least successful and 10 is most successful.Figure 15:Preferred channel for tele-underwriting by international life insurers(NMG Research)“The challenge is integrating data on propensity to buy,lapse and claim and then translating t

118、hese insights into a proposition which works for the customer not just the industry.19Through the looking glassThe lower costs of the automated process mean the potential for better customer value and more effective use of top underwriting talent.This smart use of multiple data sources maintains ins

119、urer risk protocols while increasing market reach.In addition,the nascent wearables phenomenon promises to transform this space even further.Wellness programmes,underpinned by real-time data from non-intrusive health and prescription compliance monitoring devices,have the potential to improve the mo

120、rtality experience of existing policyholders.The customer value proposition here is obvious.For insurers,such smart data propositions hold out the tantalising prospect of future reserve releases(as has been the case as a result of the significant mortality improvement of policyholders with HIV/AIDS)

121、.It is also possible to imagine such regimes providing the platform to offer better rates to new customers with chronic conditions.Furthermore,this capability could be used to expand the insurable market to include those with a range of well managed chronic conditions that may have been previously c

122、onsidered uninsurable.Such customer-centric smart data propositions could meaningfully alter the perception of the industry as a whole,with concomitant benefits for more straightforward business.The opportunity for insurers is clear:A data approach centred on customers,with leaner and simpler struct

123、ures(i.e.with fewer variables and less noise)but broader categories such as behavioural and attitudinal variables Investment in dynamic rather than static data Decisions enabled by real-time data that promotes dynamic decision-making combining lifestyle proxies and good product design rather than th

124、e medical data traditional approaches require(e.g.using credit history as a customers risk profile)20 ReMark International.All rights reserved.Theme One:Advice or Guidance?Align the advisory role to the needs of the customer.Our research suggests that the role of the advisory channel could benefit f

125、rom a rethink.For companies that want to grow or disrupt the market,the focus should be on what customers want and how advisors fit into that paradigm.Ultimately,if insurers get this right,advisors will sell their products.Theme Two:Bundling or Bungling?Products and Customer ValueThink about the cus

126、tomers experience of your product.We believe there is an opportunity to make more genuine effort to highlight to customers the value of their purchase and,even more importantly,to improve their experience.This means:Measuring customer perceptions of value Turning customer insights into proposition i

127、nnovation Establishing a systematic engagement strategy for existing customers which considers lifetime value and changing customer needsTheme Three:Brand Promise versus PromiscuityManaging a changing brand environment.It is essential that insurers understand the changing nature of brands and the ch

128、anges wrought by technologies that affect how consumers engage with those brands.Insurers need to be prepared to share their brand with their customers,exchanging control for engagement and,for the holy grail of social media,the sharing of positive experiences.As ever,insurers need to remember that

129、a brand means different things in different markets,demographies and distribution systems.Theme Four:Analytics Symphony versus NoiseIts not about the number of numbers.Having flirted with the false promise of Big Data,insurers need to move to:Leaner,simpler data structures(i.e.fewer variables and le

130、ss noise)A data approach centred on customers and using broader categories including behavioural and attitudinal variables Investment in dynamic data as opposed to static data Decision-making informed by real-time dataWhat do you need to do?21Through the looking glassReMark is a world leader in alte

131、rnative and direct distribution of insurance products with a single focus maximum value creation for our business partners and their clients.For more than 30 years,in 40 countries and 21 languages,we have been turning that strategic expertise into customised direct distribution programmes for the wo

132、rlds most innovative and ambitious financial services organisations.By constantly refining lessons learned from decades of global industry experience,we are an active participant in reshaping the way insurance products and services are developed and distributed,while generating outstanding returns a

133、nd lasting competitive advantage for clients.Operating business models from B2B,B2B2C and D2C,we offer marketing,product and technology solutions throughout the value chain,in a diverse range of market segments including Bancassurance,traditional Life&Health,Takaful and Affinity groups.With a simple

134、 philosophy grounded in partnership,we actively invest in all of our programmes.This unique commitment delivers more effective marketing outcomes and,together with our knowledge transfer process,guarantees clients access to the best practices and competitive advantage available in the world.ReMarks

135、customer-driven marketing culture informs all we do,maximising the lifetime value of your customers in an era of demographic change and digital disruption.ReMark is part of SCOR Global Life,one of the the worlds leading life and health reinsurers.Through the looking glass2122 ReMark International.Al

136、l rights reserved.This report has been produced to add to the industry debate and generate conversation to help reshape the insurance marketplace.If you would like to talk to us about the insights in this research,we are keen to hear from 22 ReMark International.All rights reserved.Maximum Value CreationMaximum Value Creation