Disruptive Innovation Using Mobile Devices CELENT What's Next: The Search for Disruptive Technologies Oct. 3 San Francisco Tsukasa Makino Manager, Corporate Planning Department & IT Planning Department Tokio Marine & Nichido Fire Insurance Co., Ltd. Visiting lecturer at Tokyo, Tsukuba and Kyushu University 1
About Tokio Marine & Nichido Fire 1) Profile Established in 1879 (134 years old) Total Assets:US$83 Billion Net Premium Written:US$19 Billion Employees: Domestic:17,000, Overseas:16,000 2) Product Lines 3) Distribution System (As of FY2012 1$=100Yen) Automobile Superinsurance(Non-life+Life) Homeowners Injury, Sickness Travel, Leisure Tokio Marine & Nichido Kid s Saving Type 401k Mutual Fund Life Agencies(46,000) HQ Branch (124) Sub Branch (417) Independent Car Dealer Bank Post office Etc.. 2
My Job Research, presentation, teaching at Universities Chicago 2006 Hong Kong 2005 Hong Kong 2006Shanghai 2008 Now Taking London 2013 Paris 2008 Hong Kong 2008 Macau2010 Beijing2007 Tsukuba Univ. Las Vegas 2004 Coming Soon Las Vegas 2008 Boston2008 Wiesbaden 2011 New York 2007 Munster 2007 Taipei2008 Kyushu Univ. Las Vegas 2006 San Francisco2008 Zurich2009 New Delhi 2006 Brisbane2008 Dallas2007 Orlando 2005 San Francisco 2008 Athens 2006Singapore 2008 Singapore 2007 Cairns 2005 Orlando 2009 Rio de Janeiro 2007 Orlando 2007 3
Today s theme How to provide better insurance services for customers and society using digital technology, without humiliating human agency distribution channel. 4
Disruptive new products and services Collaboration with NTT docomo Apr. 2010 One Time Insurance Overseas Travel Domestic Travel Sports & Leisure Distributed through Mobile phones Golf One Day Auto June 2011 Medical Insurance Medical i-bodymo June 2013 How my body feels Jan 2011 Choi-nori insurance (One Day Auto Insurance) Promoted by agencies 5
People use mobile phones anytime, anywhere Karaoke Commuter train Office Home Station Restaurant SALE Supermarket Jogging Shopping 6
Comprehensive business alliance agreement Provide innovative and competitive High Quality Services and be chosen by customers. Provide innovative services throughout alliance with business partners, using the advantages of mobile phone technology. 17 million customers 55 million customers Provide insurance services which provide "relief and safety to the daily life Provide mobile phones which support daily activity as an infrastructure Fusion of assets and know-how Make our society more comfortable and convenient 7
Docomo Medical Insurance On the market from July 2011 Affordable and easy-to-buy medical insurance Distributed via mobile phones Exclusive for NTT docomo Premier Club members. Hospitalization (per day, max 60 days) Operation (according to the type of operation) Basic Expense for injury, sickness Three Major Disease More coverage for cancer, apoplexy, AMI Lady s More coverage for Lady s specific diseases 5,000 5,000 Lady s 10,000 Others 5,000 25,000 50,000 200,000 25,000 50,000 200,000 25,000 50,000 200,000 Advanced Medical - 3,050,000 3,050,000 Serious disease - 1,000,000 Lady s plastic surgery (according to the type of operation) Revised as of Oct.1.2013-100,000, 200,000 Premium (monthly, starting from) 830~ 1,130~ 1,180~ 8
Docomo Medical Insurance Mobile phone monitors daily activities automatically. Grant 150 docomo point a month (maximum) according to the daily workout and diet. Can be used to buy goods, repair services etc., (100point= 100)
docomo Healthcare How your body feels A smartphone application for women. Your avatar in your smartphone monitors your activities and gives you advise to live a healthy and comfortable life. Mobile phone can link to a medical thermometer and monitor your body temperature as well. If it detects a sign of women s disease, the phone urges you to go to hospital to have a health check. You receive 5,000 (approx. $50) or 30,000 (approx. $300) according to the diagnosis. Your cycle period and I d temperature like to wear indicates that something you may have hormone Pink disturbance. Please go to see a doctor. Launched on June 2013 10
docomo One Time Insurance On the market from April 2010 Short term, affordable and easy-to-buy injury insurance Available whenever and wherever, just for the days you need insurance From application to payment, all you need is your mobile phone Product Coverage(Economy Type) Premiums Sports and Leisure Death & Residual disability Hospital expense Liability Rescuer's Expenses Baggage 3.25m 4,500 20m 0 0.1m 300 (Two days One Night) Golf Casualty Liability Golf Clubs Hole in One 2m 30m 0.1m 0.3 300 (Two days One Night) Domestic Travel Death & Residual Disability Hospital expense Liability Baggage 3.25m 4,500 20m 0.1m 300 (Two days One Night) Overseas Travel Loss of Life from Injury Residual disability from injury Medical & Rescue Expenses Loss of Life from illness Liability Baggage 0 0 5m 0 10 0.1m 980(One day~)
Golf Insurance (Hole in one coverage) Congratulations! In Japan, if you made a Hole-in-One, you have to host a party to celebrate your accomplishment and give out commemorative gifts at YOUR OWN EXPENSE! ($3,000~$5,000)
Auto GPS Function (Location-aware active recommendation) Enjoy Skiing? Sports insurance covers injury, indemnity, damage or theft of your gear Recommendation for you in the airport! Docomo One Time Insurance covers injury, indemnity, theft or breakage of your belongings during your trip. Display recommendation when you arrive at Airport, Golf course, Ski resort, etc. Best for outing or travel. You can buy One Time Insurance right now from 300 a dat. Learn daily livingrange and display recommendation when you are more than 50 km away Playing Golf? Protect yourself with Docomo One Time Insurance Easy, convenient, 300 a day. Available right now!! Learn daily living pattern and avoid recommendation if you are commuting to the airport or the golf-course. 13
Choi-nori insurance (One Day Auto insurance) Launched on Jan 2012 Short term, simple and inexpensive auto insurance. Can be purchased via mobile phones. Grant maximum 20% discount for those who switched to annual policy. Plan Basic With automobile damage coverage Premium 500/day 1,000/day Liability (bodily injury and property) Driver/Passenger injury Liability for borrowed car damage Unlimited 10 million (lump-sum 100,000) Unlimited 10 million (lump-sum 100,000) - 3 million ( 50.000 deductible) 14
Background Mature Japanese P&C insurance market. Decreasing motivation for young people to own a car. 100,000 Followers 30,000 Likes 15
Issues Auto Insurance premium surges up when it include young drivers Approx. 100,000 accidents are caused by borrowed and noninsured cars per year. 16
Objectives Provide more opportunity to drive cars to younger generation. Cultivate auto insurance market in younger generation. Reduce accidents caused by non-insured cars. 17
Target Young generation who has driver s license and doesn t own a car (16million) Drive parent s or friend s car once a month in average (7million) Have an intention to own a car within a year(0.7million) 18
Process Pre-register Buy Pay Premium is added on the monthly mobile phone bill Read QR Code (agency code embedded) Register Input Name License plate No. Birthday Address e-mail address Date of driving Driver s License No. License expiry date 19
How to avoid channel conflict with agencies? One Day Auto is distributed by agencies. The users of One Day Auto are potential customers of annual auto insurance for agencies. The users are potential car buyers as well. Car-dealer-agencies obtain lead information by selling One Day Auto. TMNF is providing PC application to help agencies promote selling One Day Auto.(e.g. generate flyers with QR) Agency Pre-register Buy Agency s name and contact Data Commission & Data 20
Strong positive effect to our annual auto business Market expansion One day auto insurance Annual auto insurance (Switched from One day auto) 160,000 187,000 policies 1000 840 policies 160 million yen 170million 133 yen From April.2013 Jan.2012 to Nov.2012 Aug.2013 21
Won t our peers copy our products? 22
Technologies and Strategies Technology Market Strategy IP Strategy Mobile technology One Time Insurance Location Aware Context Aware Medical Insurance Motion Capture How my body feels Bio sensing Women Patent (pending) Choi-nori insurance (One Day Auto Insurance) Young drivers (who don t own a car) Patent (pending) 23
Value Proposition For Customers Convenience (Anytime Anywhere) For Society Safety & Health For Agencies Value & Opportunity One Time Insurance Just in time recommendation Medical Insurance How my body feels Active health promotion Active disease prevention Reduce medical cost Provide new value to customers (NTT docomo) Choi-nori insurance (One Day Auto Insurance) Safe driving opportunity Reduce uninsured accidents Create potential customers 24
Lessons Have a courage to take a new business chance. Always think Customer, Society and Agency s benefit first. Company s benefit will follow. Otherwise you ll fail Build Win-Win-Win model. Trust customers. Do not miss opportunities by assuming customers are always evil You ll never learn until you try. 25
Thank You! Contact: tsukasa.makino.tmnf@mbr.nifty.com 26
Following Slides are reserved for Q&A 27
Sales Volume Summer holiday season Spring holiday season Summer holiday season Smartphones supported 28
Customer Research Are you satisfied with the product and service of One Day Auto Insurance? Will you consider Tokio Marine & Nichido when you buy annual auto Insurance? 86% customers satisfied 66% potential customers June 2012~Feb.2013 N=2,500 29
Profitability Loss ratio is (slightly) lower than the normal auto insurance Loss Ratio Annual One Day 30
Market response I wanted to practice driving with my parents car before I buy my own. Insurance was my concern. One day auto insurance was very helpful for me - a customer - One day auto insurance grants maximum 20% discount to the users. That is a good promotion for auto sales to young generation. - An Executive of automobile manufacturer We appreciate the social merit of One day auto insurance to reduce the accidents caused by non-insured car, and its effect to foster market for automobile and insurance industry. -Manager, Insurance division, Financial Services Agency (FSA) 31
Strong positive effect to our annual auto business Market expansion One day auto insurance Annual auto insurance (Switched from One day auto) 160,000 187,000 policies 1000 840 policies 160 million yen 170million 133 yen From April.2013 Jan.2012 to Nov.2012 Aug.2013 32
How to avoid fraud? Introduced pre-registration system. Users should register their personal data before they can buy a policy. Automobile coverage plan can only be purchased 1 week after the registration. Pre-register Can apply for Basic Plan Can apply for Automobile Coverage Plan One Week 33
We have been dealing with very limited information How is the customer s health condition Feedback form Marketing Market Research What the customer wants/ thinks/ feels How the accident happened Underwriting /Rating Karte Claims form Claims How the customer drives Application Form Structured Data Filter & Convert Real Information 34
We have to deal with real and huge information to create value How is the customer s health condition Heart rate Blood pressure Miles run or walked Weight Marketing Blogs Facebook YouTube Mixi Amazon Twitter What the customer wants/ thinks/ feels How the accident happened Underwriting /Rating How the customer drives Accurate Mileage Speed Hour/day Acceleration Deceleration Analyze& Create Value Engine Speed Gravity Brakes Airbag Seatbelt What the customer is doing Claims Real Information S A L 35 E
Thank You! Contact: tsukasa.makino.tmnf@mbr.nifty.com 36