Innovation and Distribution

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V6 30/06/08
Innovation and Distribution
International Insurance Society, Inc
44th Annual Seminary
Osvaldo do Nascimento Taipei, Taiwan July, 2008
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Brazil - Prepared to develop its Insurance
Industry Insurance Market - Need of Growing Info
rmation Technology to develop insurance sales
Micro-insurance Definition and Challenge
Brazil Case CRM and Life Insurance Sales at
Itaú
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About Brazil...
Area (km2) 8,511,965
Brazil
GDP 2007 US 1,3 trillion
Population 2007 191.8 million
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Conditions to Develop the Insurance Industry in
Brazil
Inflation under control Wealth distribution M
arket Growth
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Inflation in Brazil
(INPC - p.y.)
()
() 2008 until May
Source IBGE
5
6
Interest Rate
Nominal and Real SELIC Rate
(in 12 months, p.y.)
Source Brazilian Central Bank
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Net Debt
Source Brazilian Central Bank
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8
Foreign Reserves
US Billion
Investment grade by Standard PoorsUpgrades on
April 30, 2008 long-term foreign currency
US Billion
195,8 ()
Brazil BBB -
() Apr, 2008
Source Brazilian Central Bank
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Robert A. Kerzner, President and CEO of LIMRA
International presented this slide during the
LIMRA 2007 Annual Meeting in Boston last October.
Mutual Fund Companies Life Insurance Industry
Source ACLI Fact Book, 2005
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And more According to LIMRA , 60 of consumers
in the USA say they prefer to buy
face-to-face.() But , to be physically prese
nt to sell face-to-face nowadays we have to
consider
Costs of transportation Traffic jam into big ci
ties
New stile of life
Face-to-face preference Personalized approach
Opportunity to establish relationship
X
So, we can be available, but not physically
present, offering the most recent technology to
interact with clients.
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() Trillion Dollar Baby, LIMRA International,
2005
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1.4 billion Internet users worldwide!
Brazil 46.2 million
Source Internet World Stats
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Wealth Distribution in Brazil
Bolsa Família a Brazilian program to reduce the
poverty
11 million families supported by Bolsa Familia
45 million people are covered
US 6.8 billion is the budget to 2008
Mr. Luiz Inácio Lula da Silva (President Lula)
President of República Federativa do Brasil
() US 1,00 R 1,597 06/30/2008
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Wealth Distribution in Brazil
Changes in the population distribution by classes
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15
18
More than 86 million people
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36
46
51
46
39
2005
2006
2007
Class A/B
Class C
Class D/E
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Source Ministry of Finance - Research IPSOS (O
Estado de São Paulo, pages B16, 03/30/2008).
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Micro-insurance
Micro-insurance is a type of insurance with low
premiums developed to protect low-income people
against specific risks. As the premium price is
very low, there is a need of a large scale to
allow its economic viability and one important
issue is to define the distribution model to be
adopted by insurers. In Brazil SUSEP (the
Governmental Supervisor) and FENASEG (the
insurance market institutional representative)
are working hard to create the adequate
environment to develop the micro-insurance.
Of course, some partnerships will be relevant to
sell micro-insurance, like utilities companies
(electricity and gas bills), retail market,
credit cards providers and financial
institutions. China, India and Russia have sign
ificant experience in micro-insurance
distribution, but Brazil certainly will be a
expressive player in this business considering
its technological structure provided by the
financial industry and specialized insurance
brokers developed inside the communities.
Challenge!
Regulatory changes
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INSURANCE COMPANIES
Providing the distributors
with high technological tools
BROKERS
AGENTS
DIRECT SALES
BANKASSURANCE
FINANCIAL ADVISORS
Distribution Players at Insurance Industry
Mobile Phones (SMS 3G technology)
Internet
Call Centers
Financial Services
122 million of mobile phones in Brazil (1)
46.2 million of internet users in Brazil (2) and
99 of Income Tax Declarations delivered by
internet (3)
18,308 Bank Braches (4)
166,773 ATMs (5)
CLIENT
Source ANATEL Brazilian's Telecommunications
Agency Source Internet World Stats Dec/2007 S
ource O Estado de São Paulo, 04/may/2008 Mrs.
Renata veríssimo, Jornalist Source Tribuna do Br
asil, 28/may/2008 Source Research O setor bancá
rio em números by FEBRABAN Brazilian's
Association of Banks Dec/2007
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Experience of Itaú in Segmentation and
Distribution
Key Information () 2nd largest financial insti
tution in Brazil 2,594 branches 11.2 million c
urrent account holders US 138.7 billion bill
ion in AUM
() March, 2008
() US 1,00 R 1,597 06/30/2008
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CRM Environment
Stimulation
Interaction
Insurance Products
Service Interactive Providers
Video Phone
Internet
ATM
CLIENT
Brokers Agents Financial Advisors Insures
Banks
Partners
Insurance Providers
Insurance Products
E-mail
Mailing
SMS
Insurance Products
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CRM Operational Platform
Elected Customers to offers
Control of stand-by Contacts Policies for
Product-Channel
Bureau
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Operational Return (no-call, phone and address
actualization
and signalization good/bad)
DW
Customers CRM Feedback Registers
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Feedback analysis to support the Correct Value P
roposition (price, product, channel, communicatio
n/script)
Stimulation feedback (acceptation/refuses)
Post-Sales Valuation Segmentation
Sales Probability Models
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5
Products Uses (renew cancel, attrition, up-sell
, etc)
D (Stimulated x Controlled)
post-sell
Customers Feedback
Control Groups Feedback (to determine D Stimulus)
Warnings optimization Algorithm
7a
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Intranet accompaniment / alert triggers
Potential Offers Basket for each Customer
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Branch
Cashier
Telemarketing
Telemarketing
Performance Manage
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Sales Optimization Budgets/Scenario,
Capacity Planning
7b
Direct Mail
CUSTOMER
ATM
e-mail
Bankline
Bankline
Bankfone
D x Potential stimulations Valuation
Warnings and Telemarketing Committees
Channels
Objective D Total Valuation Maximization
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Operational Optimization Workflow
CRM Policies
Unique Selection Optimization
31,5 Elect for Telemarketing
65,2 Elect to Offers
100 Active Customers Prospects
24,7 Sent to Operation
Filters Customer File Quality and Contact Restri
ctions
Filters Elect to Offers and Standby Policies
50 effective Call
D
CRM
x
Valuation
19,6 Effective Contact
D
Modeling
CRM
by
Customer
/
Product
/
Channel
Relation Customer-Channel saturation
Relation Customer-Product saturation
Preferred Channel to buy Profile Investor, Mixed
, etc. Product propensity
15 Conversion (Sell)
CRM Feedback
for each Customer
- Results (Valuation 7 years)
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Experience of Itaú in Life Insurance Sales
(Number of individual polices sold)
277,000
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646,000
115,000
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312,000
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2008 (Jan to May)
2007
Sales by electronic stimulation (1)
Sales by face-to-face (2)
ATM, Internet, Bank Cashier and Telemarkting
Sales Team and brokers
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