Introducing `Pay As You Live` (PAYL) Insurance

Introducing ‘Pay As You Live’ (PAYL) Insurance Insurance that rewards a healthier lifestyle August 2015

“Those who think they have not time for bodily exercise will sooner or later have to find time for illness.” Edward Stanley (British Statesman)

2  Introducing ‘Pay As You Live’ (PAYL) Insurance

W e are all leading b usier liv es.

F ig ure 1 nnu l ort l ty r te ro hron c e e

I n betw een j uggling family, ro e on l n other co t ent o t o u re fin ng le t e to ocu on our el e n our ow n personal w ellbeing.

r o cul r e e ncer hron c re r tory e e ete

38 mil l ion p eop l e e ro chron c e e nnu lly

h eh our contr ut ng to the u t ne ncre e n chron c re ent le e e h ch nnu lly contr ute to o e th glo lly t eg the ue t on o l e n he lth n urer h e role to l y n hel ng the r cu to er re uce the r o chron c e e o ght n urer cre te ro uct th t ro ct ely encour ge n re r he lth er l ng or ye r or r th n ng n urer h e conce tu l e e n ur nce th t u ge e n ur nce te turn th conce t nto re l ty

ll on e th are tob a cco rel a ted •

ll on e th re c u e y insufficient p h y sica l a ctiv ity

y ou hel ng

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ll on e th re y h a rmf ul drin k in g

ll on c r o cul r e th re c u e ro ex cess sa l t in ta k e K ey q uestion f or in surers: o to hel re uce re ent le e e th cu to er n the ro er co un ty h le ro ng long ter rofit l ty 3

T ren ds crea tin g op p ortun ities in P a y A s Y ou L iv e in sura n ce G row th of p rev en hron c e e e th y ty e t o ete lthough genet c eh our uch tre re the o

ta b l e l if esty l e disea ses re e ecte to ccount or uch o ll l o re erre to l e tyle e e they nclu e c r o cul r e e c ncer n lung e e n en ron ent l ctor l y role controll le o ng et e erc e lee ng ttern n t gn fic nt c u e

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T h e in tern et of ev ery th in g

$ 8 b n connected dev ices b y 2 0 1 8

n other or the or ty o the e e e c n e re ente y le ng he lth er l e tyle he orl e lth rg n t on ugge t th t the r o uch e e c n y re uce y u to n ult rt c te n n u o nute o o er te nten ty ero c ct ty throughout the ee u t o er nute o e erc e er y

W ea ra b l e dev ices

$ 3 0 b n

P oten tia l f or dig ita l tech n ol og y to imp rov e h ea l th outcomes th ll on nternet re y rt hone lre y n e tence the e r le fitne tr c er r et et to eco e ll on n u try y he e e ce re lre y hel ng ll on o eo le co t l e tyle e e through the l e o e ore th n ll on u er n the nute or out ore th n ll on n t ll e lth n fitne re the te t gro ng c tegory on une n n ro ne th the o t on o onl ne oc l net or ng n h co he lthc re g e n urer cce to n un rece ente ount o t n n ght nto cu to er eh or e er ge correctly th ll n or re u r c ng n unloc ne lue or n urer cu to er n the ro er co un ty

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S ocia l media & on l in e commun ities

“ Breaks dow n the w alls of patient- prov ider communication” M essa g e b oa rds & b l og s S ocia l n etw ork s

Statistics have been sourced from: http://www.who.int/mediacentre/factsheets/ fs355/en/ EY Digital Sate of the Nation, Digitaltrends.com, PHA Australia 4 I ntroducing ‘ Pay As Y ou Liv e’ ( PAY L) I nsurance

Disin teg ra tin g customer l oy a l ty n ng ro recent lo l u to er n ur nce ur ey gure h ghl ght the n u try gro ng ro le th con u er rel t on h ru t ll ng tch ng on the r e ty e olut on ll l y n ort nt role n hel ng n urer to u l ore e n ng ul n t c er rel t on h th the r cu to er

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Cost/ terms Cost/ terms ol cy enefit co er geG l ob ol cy enefit co er ge R ecommended by broker, terms friends R ecommended by broker, Cost/ friends re uency releol cy nceenefit o co counerc ge t on re uency rele nce o co un c t on e elby o broker, er cefriends rece e R ecommended e el o er ce rece e ol cy not l gn to y lcoe c rcu t nce ol cy renotuency l gn rele to y lnce e corcu t un ncec t on e eerrch con ucte e el o ce rece e e rch con ucte e er ence er on l ly le tone oler cyencenoterl gn t nce on tol y l lye c rcu le tone r n re ut er en rch cont on uctet on re ut not l eerthe y cl ly le htone n le er ence on l not l e the y cl h n le u to er loyreltyut enefit r n t u to er loy lty enefit on 2 not l e the y cl h n le

G l ob a l a uto G l ob a l a uto

5 0 %

a l l if e 4 7 % 3 8 % 2 8 % 2 8 %

5 0 % 4 7 %

3 85 %0 % 2 8 % 4 7 % 2388%%

5 7 %

5 7 % 4 2 %

G l ob a l a uto 4 2 % 2 9 % 1 6 %

G l ob a l h ome G l ob a l h ome

2 9 %

5 7 %

G l ob a l h ome4 8 % 3 9 %

4 2 % 2 6 % 2 6 % 2 9 % 1 4 % 1 4 % 1 6 % 2 0 % 2 0 % 2 6 % 14 1% % 1 1 1 % 1 7 % 1 7 % 2 0 % 1 8 % 1 81 %1 % 1 %7 % 1 7 1 7 % 1 8 % 1 6 %

2 6 % 2 6 % 2 8 % 2 85 %% 2 2 5 % 2 4 % 2 4 % 2 6 % 2 4 % 2 4 % 2 5 % 2 2 % 2 2 % 2 4 % 2 40 %% 2 0 % 2 2 %

3 4 % 3 1 %

5 9 % 4 8 %

5 9 %

3 9 % 5 9 %

3 4 4% 8 % 3 31 9% %

23 64 %% 3 0 % 3 3 0 % 1 % 2 %5 % 2 6 2 5 % 2 9 % 2 9 % 3 0 % 2 6 % 2 6 % 2 5 % 22 9 6 % % 2 6 % 2 6 % 2 6 %

u to er loy lty enefit

1 7 % 0 % he rel t on h et een oc cy n 2 loy lty ch ng ng en oc te h 2 e6 % h gh ten ency to tch re h ro ch to u l ng n nt n ng loy lty re u re

A ttrition lo e A ttrition ol cy n the l t onth A ttrition lo e ol cy n the l t onth lo e ol cy n the l t onth

5 8 % 5 9 % 5 8 % 5 9 %

T ota l

T ota l

T ota l

5 8 % 5 9 % 3 7 %

3 7 %

3 8 %

3 8 %

3 8 %

3 7 %

3 8 % V ery unlikely V ery unlikely U nlikely U nlikely V ery unlikely eutr l eutr l U nlikely L ikely L ikely eutr V ery lL ikely V ery L ikely L ikely

3 8 %

2 5 %

2 5 %

K ey q uestion f or in surers:

5 0 % 7 5 % 5 0 % 7 5 % V ery L ikely A dv oca cy A dv oca cy el hoo to reco en 0 % 2 5 el % hoo to reco 5 0 % 7 5 % en A dv oca cy to reco to er nt ore e elnhoo ng ul nter cten on th n urer n ny re ll ng to he l ob a l ma ture ma G l ob a l devuel op integ ma nrk etsec l theG l rob na G l urer e rk ets ye r or rele nt n or G tl obon ma ture ma t rk ets a l devolelcy op in g ma rk ets 0 %

0 %

3 8 %

o re uce ttr t on n ncre e engagement insurers ca n l ev era g e tech n ol og y a n d da ta to erent te on e er ence n r ce ncre ng the erce e lue of their offerings.

o n to ro rel

to ttr ct ret n cu to r e gre ter ne n e t on h

ee en er lue t ng

u r ro Current Preferred Current Preferred Current Preferred Preferred Preferred Current Preferred eCurrent l ro ot on Current Current Current Preferred Current Preferred Current Preferred Preferred Current Preferred Current Preferred G l ob a l dev el op in g ma rk ets

G l ob a l ma ture ma rk ets

Current Preferred

3 4 %

3 4 %

4 3 % 3 4 %

2 6 %

2 6 % 3 0 % 2 6 %

4 0 %

4 3 % 4 3 %

Current 2 9 % Preferred

2 9 %

2 7 %

4 3 % 2 7 %

4 5 % 2 9 % 2 7 % 4 5 % 2 7 %

3 0 %

4 0 % 3 0 % 2 7 % 2 7 %

4 5 %

2 7 % Preferred Current

2 7 3% 1 % 4 4 %

4 4 %

3 1 %

4 3 %

5 5 % 4 3 %

4 6 %

4 6 % 4 6 4% 4 %

4 4 %

3 1 % 2 4 %

2 7 % 4 4 % 2 7 % 2 4 % 1 3 % 1 3 % 4 4 % 4 0 % 2 7 % Policy ener ec 2 l4 % e l 2 7 % l ener e l Policyu 1 3 te% n orl t on ec lpromotions n or t on promotions u te ec l ye e lr ener lore th n once ye r n orore th t onn once promotions ore th n once ye r

Current Preferred

Policy nce ye r or le nce ye u r or te le nce ye r or le

2 7 %

5 5 % 6 7 % 5 5 %

6 7 %

Current Preferred

5 6 %

6 8 % 5 6 %

6 7 %

2 7 %

5 6 %

2 6 %

4 5 %

ec l e l promotions

6 1 % 6 1 %

6 8 %

2 6 %

4 5 %

6 1 % 4 5 %

6 8 %

2 3 % 2 3 % 2 3 % 2 3 % 2 61 %8 % 2 71 %8 % 1 8 % 1 8 % 1 0 % 9 % 1 0 % 2 3 % 9 % 2 3 % ener l ec l e l 1 8 n% orl ener 8 %e l t on ec 1 lpromotions n or t on1 0 % promotions 9 % ener e erl en er or t on

Current Preferred

3 8 %

3 8 %

3 0 % 3 8 3% 0 % 1 7 % 1 7 % 9 % 9 % 3 0 % Policy Policy 1 7 u % te u te 9 % Policy u te

e er

5

T h e P a y A s Y ou L iv e ( P A Y L ) P rop osition W h a t it is rel t ely ne n ur nce conce t e t ro ng controll le eh our to re uce re u n re r cu to er t n ol e the n ure er on ro ng ongo ng t to the n urer out the r l e tyle through e t ng n ne t ource e g e r le technology n the n urer encour g ng cu to er to l e he lth er l e tyle to re uce the r o chron c llne er c n l o tr c the r o n h t through n e ly cce le o nter ce u ng the t to on tor n lter eh our uch et e erc e to ro e he lth outco e n urer c n u e the eh our gener te to er on l e olut on e on he ghtene un er t n cu to er he lth t tu n rele nt r ctor h n turn ro ol cy hol er th re r n count

le n l t ng o e the

T h e b roa der P A Y L ecosy stem out ore th n u t u ng e r le t to n or un er r t ng t o er the otent l to cre te n eco y te o he lth n ell e ng rel te goo n er ce th t lue to the cu to er the n urer n the ro er co un ty hole n or ng n hot o n urer c n u e n ght

cu to er o er ll ell e ng n he lth t tu n t ro eco y te nter ct on or e

•

r c ng fitne

ct t e ro

•

e er g ng r •

ye r o long tu n l ell e ng ntegr t ng ore co lete cu to er n hot

te he lth

e r

le

le e ce

t t to n or

lthough o e n urer re ng o ou l y n th rect on ery e h e ucce ully ntegr te n u l he lth t to un er r t ng eng ne to u t re u e on ne r c ng r

rt le

H ow it w ork s P ol icy H ol der

U ser I n terf a ce

I n sura n ce

U ses w earab le dev ices to manage their health outcomes

Data is passed to insurer through w earab le interface

Behav ioural data is included for loy alty programs and in policy pricing Data

U ser I nterface and communications link positiv e b ehav iour to insurance policy w ith price signal re- enforcing benefits of lifestyle

6

Policy - holder changes b ehav iour for improv ed health outcomes and low er premiums I ntroducing ‘ Pay As Y ou Liv e’ ( PAY L) I nsurance

Pricing

C R M

PAYL benefits

Benefits to the insurer • cce to ne n re l t e cu to er t or ort ol o r n cl o t t on

Benefits to the customer • ortun ty to ct ely t e ch rge o the r o n he lth n le longer healthier lives •

•

u to er c n tr c the r o n l e tyle n et go l to ro e their habits •

•

•

cce to re r uch re u count or cce to rtner enefit gy memberships, healthy eating rogr he lthc re count e l t e nter ct on ll llo cu to er to ee the r co er u to te n rele nt or the r nee •

Benefits to the community • ro e co un ty he lth outco e ue to he lth er l ng •

ro ect nno t on to hel ttr ct ne cu to er ho nt to le healthier lifestyles n le er on l e e er ence to improve engagement w ith cu to er n ee en e t ng rel t on h to ro e cu to er t c ne n retent on through ncre e cu to er t ct on ct ely encour ge g t l nter ct on to re uce long ter co t to er e

•

e uce tr n on u l c n r tructure n re ource e c te to the tre t ent o chron c llne

•

e uce re u o the c o re uce cl h ll ro e the or l ty o l e n ur nce th n the ro er co un ty Demonstrating the greater, oun t on l ur o e o n ur nce co un l r co er ge ur o e le

7

I n troducin g th e P A Y L p rototy p e

or ng rototy e h een cre te to ro e the e l ty o th type of solution. h rototy e olut on h lre y een te te th erent r le n re y or e on tr t on or ng th n urer c n co e elo t lore er on te to eet the r u ne nee n tele t c tr tegy he rototy e e on the ro en y ou r e n ur nce l t or h ch h een ucce ully e loye n uro e n orth er c n te o eh cle tele t c e r le technology ro e ly l e tyle t to the rototy e n o le cce le nter ce re ort on l e tyle r le to n or re u r c ng he t o conce t h e u fic ent co on l ty or the rototy e to le er ge u t nt l ele ent o the ro en olut on ee gure or roo o conce t ur o e the rototy e e on hy othet c l n ur nce co ny u orte y n ctu r l r t ng eng ne th t u e ct ty n ut uch r c ng r le t c n e cce e through n nter ct e h o r th t llo cu to er to on tor the r he lth t n er or nce go l th luetooth connect ty to ell e ng e ce uch t t tche n electron c c le ll te t ng

t h

een recor e to u

ort ongo ng r c ng o t

F ig ure 4 th to lue or le er ge le rn ng ro n other the ucce ul e loy ent o u ge e n ur nce olut on

yA Pa

t on

L ive ou Y s

E volved understanding of traditional pay as you use solution ( e. g. vehicle telematics) to build PA Y L I nputs ( Driver) U ser I nterface CR M

Policy System

Policy System Pricing E ngine Data

8

I nfrastructure

I ntroducing ‘ Pay As Y ou Liv e’ ( PAY L) I nsurance

A s Y o uD riv e

Development effort is required to configure the technology for a new instance w hich takes w earable inputs rather than driver inputs. T he prototype has been built to successfully interface to w earables.

y Pa

F ea tures

2. P erson a l ised g oa l s • et er on l er or • •

on tor rogre

1. F a st, sma rt sig n up • le n n le e cu to er on the

•

•

g ng to e uc te ro o t on

ro

r

o er t

t go l

e

or ch e ng or e cee ng go l

3. S imp l e to use • hrough e to or u er r en ly hone nter ce

or ng ctu r l r c ng eng ne to ro e e y u c uot ng or e le ct t on rect n o c ng n t ntly et u the platform

rn re

nce

rt

•

og n to cce er on l e h o r th t le the u er through the roce th te y te n truct on •

ncor or te tool or cu to er n ll ng

n ge ent

9

W h ere to f rom h ere?

loo ng or or r th n ng n urer to co e elo th olut on or e loy ent to r et hrough er e o ocu e r nt gure w e w ill w ork w ith you to:

ont ct u to cu the potential or e elo ng the rototy e in your business.

r • • •

e tr teg c fit n ent y or ho le ro ch

ro r te

th to

lue u ng

efine the or ng rototy e n run e of this solution

er

e elo the cu to er lue ro o t on re u re ent or el ery to r et

ro uct n o er t ng

•

ent to ro e the

l ty o el

t e loy ent o the olut on th n u le ro uct tr c enefit n cre te clo e ee c loo or olut on refine ent t n e c t ng ro ect to e r et le er through nno t on t o eth ng our thought le er re on te out th only hort n o or fir t o er nt ge no the t e to ct r the y ng goes, “disrupt or be disrupted”.

F ig ure 5 ro o e n cceler te n coll or t e ro ch to le er ge the e t ng rototy e to e elo n l unch t lore olut on or your r et

4 Go to market

3 1

Launch

Solution design

2

Strategic Assessment and Business Model Design

Proof of concept

Fee d

n tio era back loop and it

Desired outcome • •

Strategic alignment Clear path to value •

•

•

Working prototype Successful experiments Proven viability •

•

•

10

I ntroducing ‘ Pay As Y ou Liv e’ ( PAY L) I nsurance

Customer value proposition Product design and pricing Operating model requirements

5

•

•

•

Successful deployment of minimum viable product Data capturing Benefits tracking

O ur P A Y L a n d dig ita l th oug h t l ea ders

glo l net or o n ur nce technology ctu r l n cu to er tr tegy ec l t re re y to hel you t e n en to en olut on to r et

W a l ter P oestch er rtner n ur nce tr tegy el lter oe tcher u ey co

R odn ey P rescott en or n ger ory el ro ney re cott u ey co

lter he our ce n n ur nce r ct ce n le ng tele t c n t t e

er ng e ert e n ory o ney c n t th the ro on o technology er ce

R ich a rd S uh r rtner gt l e el r ch r uhr n ey co

C h ris O ’ H eh ir rtner ory el chr oheh r u ey co

ch r le g t l r ct ce n the c fic th ocu on u l ng n e loy ng ne gt l er ce o er ng

hr o er te

J on a th a n Z h a o c fic n ur nce e er e o ctu r l er ce el on th n h o h ey co

J oel L im rtner ory er ce el oel l h ey co

le n lyt c n ell ng r ct ce or fin nc l ce n the c fic n le er n ctu r l er ce

11

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