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How to Determine the right Channel for the Right Customer Trond Bergestuen VP Commercial Marketing, Gjensidige (Norwegian Mutual) Vienna, 17 September 2009 Agenda Determine who are the decision makers in the purchase of insurance in the SMEs Understand what factors affect their decision process Assess how customer channel preference varies according to the situation How to create the optimal customer journey 2 21.07.2015 How to Determine the Right Channel for the Right Customer Snapshot Gjensidige Market Shares1) • Total Market Leading Market Position in Norway Customers 29.1% (#1) – Private2) – Commercial3) – 897,000 in the private segment 27.7% (#1) 32.5% (#1) – 95,000 in the commercial segment (Same market share as If.. within Commercial) FY2006 (GWP) Diversification into Nordic/Baltic Region • Total number of customers 992,000 (30 June, 2009) Nordic/Baltic 2.6% 6M2009 (GWP) • Nordic/Baltic 22.3% MNOK 2,239 • • Norway 77.7% Norway 97.4% MNOK 7,780 Headcount 30 June 2009 New Business Areas in Norway New Businesses 753 General Insurance Norway 2,040 General Insurance Nordic/Baltic 892 Nordic/Baltic Operations • • LF’s Baltic operations (2H-2009, contingent upon regulatory approvals) RESO Europa (Baltics, May-2008) Fair and KommuneForsikring (Denmark, Mar-2006, Jan-2007) Parekss (Baltics, Sep-2006) Tennant (Norway and Sweden, Aug2007) New Businesses • Pension and savings (Gjensidige Pensjon og Sparing) • Online retail bank (Gjensidige Bank) • Health care services provider (Hjelp24 NIMI) Total: 3,685 1) The Norwegian Financial Services Association (“FNH”), general insurance per 30 June 2009. Segments are based on company definitions, but drawn directly from FNH report. Gjensidige market shares include Tennant 2) Products sold to private and agricultural customers. Product groups include: motor, property, personal accident, agriculture and other (travel insurance, leisure boats and animals) 3) Products sold to SME and corporate customers. Product groups include: motor, property, personal accident, liability and marine 3 21.07.2015 How to Determine the Right Channel for the Right Customer Key Figures (MNOK) Earned premiums general insurance, net of reinsurance 13.189 14.848 15.482 860 669 7.525 2006 Underwriting result general insurance 2007 2008 1H 2008 553 7.712 1H 2009 347 2006 Combined ratio 96,1 94,4 95,4 94,6 18,9 17,5 17,0 17,4 17,7 75,9 78,6 77,4 78 76,9 2006 2007 2008 1H 2008 1H 2009 4 21.07.2015 2008 1H 2008 1H 2009 Net income from investments 94,8 Loss Ratio 2007 417 Cost Ratio 3.711 * 2.820 * 1.079 2006 2007 (259) (432) 2008 1H 2008 1H 2009 * The 2006 and 2007 figures include net financial items in Pension and savings and Online Retail Banking. As from 2008 only financial items that relates to the return on the company portfolios in Pension and savings and Online Retail Banking are included in net income from investments (i.e operating items are included in Operating income and Claims, loss etc) How to Determine the Right Channel for the Right Customer Cost Discipline Continuous Improvements A continuous focus on efficiency in the Norwegian general insurance operations has yielded results • • Number of branch offices in Norway reduced from 151 in 2005 to 54 at the end of Q2 2009 2600 30 2400 2200 25 2000 1800 20 1600 1400 15 1999 2000 2001 2002 2003 2004 2005 Employees Cost Ratio improvement in the Norwegian 2006 2007 2008 Cost Ratio 16000 14000 MNOK GWP growth from MNOK 7,000 in 1999 to 13,131 MNOK in 2008 Cost Ratio (%) Reduction of employees in the Norwegian general insurance operations from approx. 2,750 in 1999 to 2,040 at the end of Q2 2009 general insurance operations in the same period; starting at 30.6% in 1999 improved to 16.4% in 2008 (16.8% as of Q2 2009) • 35 2800 Number of Employees • 3000 12000 10000 8000 6000 1999 2000 2001 2002 2003 2004 2005 2006 Gross Written Premiums A.D. Little: Gjensidige is among the top ten most efficient non-life players in Europe 5 21.07.2015 How to Determine the Right Channel for the Right Customer 2007 2008* Agenda Determine who are the decision makers in the purchase of insurance in the SMEs Understand what factors affect the decision process Assess how customer channel preference varies according to the situation How to create the optimal customer journey 6 21.07.2015 How to Determine the Right Channel for the Right Customer Decision makers in the purchase of insurance Who is the main decision maker in the purchase of insurance in SMEs? CEO/Owner CFO/Business controller HR Other Source: Market study SMEs, Norway, 2008 n=400 7 21.07.2015 How to Determine the Right Channel for the Right Customer Agenda Determine who are the decision makers in the purchase of insurance in the SMEs Understand what factors affect the decision process Assess how customer channel preference varies according to the situation How to create the optimal customer journey 8 21.07.2015 How to Determine the Right Channel for the Right Customer What factors affect the decision process? Internet Local branch services Risk Price management Providers advice industry Brand insight Key account manager 9 21.07.2015 How to Determine the Right Channel for the Right Customer What factors affect the decision process Attribute importance when purchasing insurance Price Key account mgr. Brand Risk mgmt. advice Industry insight Local branch Internet services 0 5 10 15 20 25 Source: Conjoint analysis, SME segment, Norway PA Consulting Group, 2006 n = 409 10 21.07.2015 How to Determine the Right Channel for the Right Customer There are small differences in the preferences when we segment based on geography 30 East Inland 25 South West 20 North 15 10 n= 409 11 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr. Local branch Brand 0 Internet services 5 Price Relative importance (sum = 100) Segmentation by geography The difference in preferences is noticeble when we segment based on industry Relative importance (sum = 100) Segmentation by industry 30 Financial services 25 Healthcare services Manufacturing Industry 20 Construction, transportation, communcation 15 Retail, hotels and restaurants 10 Public services and education 5 n= 409 12 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr. Local branch Internet services Brand 0 Price Primary industries The differences are also noticable when we segment based on size (premium paid) Relative importance (sum = 100) Segmentation by size 35 Micro Small 30 Medium 25 Corporate 20 15 10 n= 370 13 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Accout mgr. Local branch Internet services Brand 0 Price 5 The average decision maker does not exist! Needs based segments Price Competence 15 10 0 Risk mgmt. advice 5 Inudstry insight Key Account Segment: 22% 20 Key Account mgr. Internet Segment: 9% Key account Local branch Local Relation Segment: 25% 25 Internet services Competence Segment: 29% Internet Brand Price Segment: 16% Local relation 30 Price Five needs based segments: Relative Importance (sum = 100) 35 Source: Conjoint analysis, SME segment, Norway PA Consulting 2006 14 21.07.2015 How to Determine the Right Channel for the Right Customer The Price Segment selects almost entirely based on price Relative importance (sum = 100) Price (16% of Segment 1: sample) 16% in sample 35 30 25 20 15 10 15 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr. Local branch Internet serv. Brand 0 Price 5 Source: Conjoint analysis, SME segment, Norway PA Consulting 2006 For the Competence Segment it is important to have a contact person that knows the customer’s industry Segment 2: 29% in sample 30 25 20 15 10 16 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr Local branch Internet serv. 0 Brand 5 Price Relative importance (sum = 100) 35 Source: Conjoint analysis, SME segment, Norway PA Consulting 2006 The Local Relation Segment prefers a contact person locally and a brand they trust Segment 3: 25% in sample 30 25 20 15 10 17 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr Local branch Internet. Serv. 0 Brand 5 Price Relative importance (sum = 100) 35 Source: Conjoint analysis, SME segment, Norway PA Consulting 2006 For the Internet Segment price is an importance factor but internet services are also important (self service) Segment 4: 9% in sample 18 30 25 20 15 10 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr Local branch Internet serv. 0 Brand 5 Price Relative importance (sum = 100) 35 Source: Conjoint analysis, SME segment, Norway PA Consulting 2006 The Contact Person Segment would like a key account manager that can handle any issue/situation Segment 5: 22% in sample 35 25 20 15 10 19 21.07.2015 How to Determine the Right Channel for the Right Customer Risk mgmt. advice Industry insight Key Account mgr. Local branch Internet serv. 0 Brand 5 Price Relativ viktighet (sum = 100) 30 Source: Conjoint analysis, SME segment, Norway PA Consulting 2006 Segment composition varies by population density Needs based segments by population density 100 % Key account 80 % Internet 60 % Local relation 40 % Competence Price 20 % 0% Rural 20 21.07.2015 Small town Medium town Large town How to Determine the Right Channel for the Right Customer Agenda Determine who are the decision makers in the purchase of insurance in the SMEs Understand what factors affect the decision process Assess how customer channel preference varies according to the situation How to create the optimal customer journey 21 21.07.2015 How to Determine the Right Channel for the Right Customer In order develop an effective service model we need to understand in what situations the customer wants to use the different channels • Up to this point we have focused on attributes when the decision maker selects a provider of insurance • It is also important to understand the customers’ preference related to service in different situations Situations with need for contact Seek info. Proposal Buy Update Claim Service channel Branch 22 21.07.2015 Internet Phone How to Determine the Right Channel for the Right Customer Complaint Choice of channel depends on the situation, but calling a contact person is most often the preferred channel rnett / e-post og brev Total sample Ønske om kontakt via telefon Ønske om besøk Internet/e-mail/mail Ønske om å bruk Internett av Internett / e-post og brev Internet Klage Brev/fax Letter/fax Omfattende oppgjør Enkelt oppgjør Complex Omfattendeclaim oppgjør Melde skade Brev/faxoppgjør Omfattende Enkeltclaim oppgjør Simple Oppdatere Enkelt oppgjør Melde skade Report claim Kjøpe Melde skade Oppdatere Update Tilbud Kjøpe Purchase Skadeforebyggende Tilbud Proposal Søke info Seek 80 % 100 % E-post Ønske om kontakt via telefon Contact person Fast kontaktperson Forsikringsmegler Broker Kontor i Klage nærheten Enkelt oppgjør Klage Internett Klage Complaint 40 % Risk Skadeforebyggende mgmt. advice60 % Call center Bedriftssenter Klage Local ibranch Kontor nærheten OmfattendeRepresentantbesøk oppgjør KAM visit Ønske om besøk E-post E-mail 0% Ønske om kontakt via telefon Phone Branch/Visit Ønske om besøk Klage Melde skade Omfattende oppgjør Oppdatere Enkelt oppgjør Kjøpe Enkelt oppgjør Melde skade MeldeTilbud skade Oppdatere Skadeforebyggende Kjøpe Tilbud 0 %Skadeforebyggende 20 % 40 % Kjøpe Søke info 60 % 20 % 80 % Tilbud 40 % 60 % Skadeforebyggende 100 % 0% 20 % 40 % 60 % Melde skade Oppdatere Kjøpe 80 % 100 % Tilbud Søke info Skadeforebyggende 20 % 80 % 0 % Forsikringsmegler Enkelt oppgjør Tilbud Søke info Søke info information Fast kontaktperson Oppdatere Oppdatere Kjøpe 0% Bedriftssenter Kontor i nærheten Klage Representantbesøk Representantbesøk Omfattende oppgjør Omfattende oppgjør 100 % 40 % 60 % Søke info Skadeforebyggende 80 % 0 % 100 %20 % 40 % 60 % 80 % 100 % Søke info 20 % Respondent could indicate channels situation, 0% 20 % 40several % 60 % 0 % for 80 %each 100 % 40 % therefore sum > 100 23 21.07.2015 How to Determine the Right Channel for the Right Customer Local relation and Internet segments have very different servicing preferences Ønske om å bruk av Internett / e-post og brev Segment 4 Ønske om besøk Segment 4 Ønske om besøk Branch/Visit Internet/e-mail/mail Internet Segment Ønske om kontakt via telefon Ønske om kontakt via telefon Ønske Segment 4 om kontakt Phone Segment 2 Internett Klage Complaint Klage E-post Omfattende Complex oppgjør claim Brev/fax Omfattende oppgjør Enkelt oppgjør Simple claim Kontor i nærheten Kun Klage Kundesenterte Fas Representantbesøk Klage Omfattende oppgjør Klage Fast kontaktper For Kontor i Klage nærheten Omfattende oppgjør Enkelt oppgjør Forsikringsmeg Enkelt oppgjør Omfattende Melde skade Meldeclaim skade Report Representantbesøk Omfattende oppgjør Enkelt oppgjør oppgjør Melde skade Melde skade Oppdatere Update Oppdatere Oppdatere Enkelt oppgjør Kjøpe Purchase Kjøpe Melde skade Tilbud Risk mgmt. advice Skadeforebyggende Skadeforebyggende Enkelt oppgjør Oppdatere Kjøpe Proposal Tilbud Melde skade Kjøpe Tilbud Tilbud Oppdatere Oppdatere Skadeforebyggende Skadeforebyggende Seek information Søke info Søke info Søke info Kjøpe 0% 20 % 40 % 60 % 80 % Ønske om å bruk av Internett / e-post og brev Segment 3 100 % 120 % 0% 20 % 40 % Ønske om besøk Tilbud Segment 3 Skadeforebyggende Lokal relation segment Internett Klage Complaint Klage E-post Omfattende Complex oppgjør claim Brev/fax Omfattende oppgjør Enkelt oppgjør Simple claim Enkelt oppgjør Meldeclaim skade Report Melde skade Oppdatere Update Oppdatere Kjøpe Purchase Kjøpe Ønske om kontakt via telefon Segment 3 SegmentSkadeforebyggende 2 0% Skadeforebyggende Seek information Søke info Søke info Skadeforebyggende Søke info 21.07.2015 40 % 50 % 60 % 70 % 80 % 90 % 100 0 %% Kundes 60 % 0 % 80 % Forsikri Fast kontaktpe 20 %100Forsikringsme % 40 % Kjøpe RiskSkadeforebyggende mgmt. advice 30 % 120 % Melde skade Oppdatere Tilbud 20 % 100 % 120 % Fast kon Kundesenterte Omfattende oppgjør 20 % 40 % Enkelt oppgjør Kontor i nærheten Enkelt oppgjør Melde skade Representantbesøk Tilbud Skadeforebyggende 10 % 80 % 100 % Klage Omfattende oppgjør Tilbud 0% 60 % 80 % Søke info Klage Søke info Kjøpe Tilbud Proposal Kjøpe Søke info 0% % 20 %% 40 % 60 % 80 % 100 120 Ønske om telefon 0 % kontakt 20 % via40 % Tilbud 60 % Oppdatere 24 via telefon 20 % 40 % 60 % How to Determine the Right Channel for the Right Customer Søke info 80 % 0% 0100 % % 20 % 20 % 40 % 40 % 60 % 60 % 80 % 80 % 100 % 120 % 100 % Agenda Determine who are the decision makers in the purchase of insurance in the SMEs Understand what factors affect the decision process Assess how customer channel preference varies according to the situation How to create the optimal customer journey 25 21.07.2015 How to Determine the Right Channel for the Right Customer The use of field sales, the phone and the internet as direct sales tools Segment Micro Small Premium/ complexity 26 21.07.2015 How to Determine the Right Channel for the Right Customer Medium Corporate The use of field sales, the phone and the internet as direct sales tools Segment Micro Small Medium Corporate Premium/ complexity Sales/ Call center Field sales Corporate unit service Effective sales and service channel for micro and small segment (phone, e-mail) 27 21.07.2015 Tailored personal service to larger customers by local sales force How to Determine the Right Channel for the Right Customer Specialist service to Corporate customers The use of field sales, the phone and the internet as direct sales tools Segment Micro Small Medium Corporate Premium/ complexity Sales/ Call center Field sales Corporate unit service Effective sales and service channel for micro and small segment (phone, e-mail) Roles Tailored personal service to larger customers by local sales force Inbound Key Acc.Mgr. Outbound Service consultants Specialist service to Corporate customers Key Acc.Mgr. Service consulants Brokered customers Service of indirect customers (through) brokerage houses 28 21.07.2015 How to Determine the Right Channel for the Right Customer The use of field sales, the phone and the internet as direct sales tools Segment Micro Small Medium Corporate Premium/ complexity Sales/ Call center Field sales Corporate unit service Effective sales and service channel for micro and small segment (phone, e-mail) Roles Tailored personal service to larger customers by local sales force Inbound Key Acc.Mgr. Outbound Service consultants Specialist service to Corporate customers Key Acc.Mgr. Service consulants Brokered customers Service of indirect customers (through) brokerage houses Internet and Log in services 29 21.07.2015 How to Determine the Right Channel for the Right Customer How to create the optimal ”customer journey” The customer ”travels through” different channels Contact: Purchase Servicing Renewal Example Segment x Ansikt Face til to ansikt face Kundetilfredshet Customer nye kunder satisfaction bredde Loyalty levetid Tlf og post Phone/mail Profitability Nett Internet Customer lifetime 30 21.07.2015 How to Determine the Right Channel for the Right Customer Tusen takk! (A thousand thanks!) 31 21.07.2015 How to Determine the Right Channel for the Right Customer