1. © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Mike Fitzgerald Senior Analyst Creative Disruption Symposium September 13, 2012 New York, New York USA CREATIVE DISRUPTION MANAGING INSURANCE INNOVATION

2. 1 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL October 31, 2015 Tradeoffs in performance of activities that define a business model (Porter) Continuum leading to disruption (big “D”) STRATEGY INNOVATION DISRUPTION Breaking those tradeoffs (Raynor, Christensen) A theory of innovation, where: Technology changes the “productivity frontier” Success in fringe markets sets the stage for “up-market march” Managing innovations as a portfolio will increase the probability of success 1 2 3

3. 2 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Compared with other industries, insurance companies successfully innovate.... October 31, 2015

4. 3 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Compared with other insurance companies, my insurance company successfully innovates.... October 31, 2015

5. 4 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Innovation in insurance looks like 1 Inconsistent 2 Initiatives rebound 3 Lack of disciplined approach

6. 5 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL October 31, 2015 Model STATUS QUO Risk and Compliance Business model enablement and partnerships Market and product agility Efficiency and expenses Pre and post sale customer engagement Liability Management Growth and retentionProfitability and Control Improvement Innovation Disruption

7. 6 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Example initiative Enable the direct sales capability for life product sales. Quote and bind applications on the company website for term products.

8. 7 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Identify strategic lever October 31, 2015 Risk and Compliance Business model enablement and partnerships Market and product agility Efficiency and expenses Pre and post sale customer engagement Liability Management

9. 8 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Identify type of project October 31, 2015 STATUS QUO Improvement Innovation Disruption

10. 9 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL October 31, 2015 Where should initiative be placed? STATUS QUO Risk and Compliance Business model enablement and partnerships Market and product agility Efficiency and expenses Pre and post sale customer engagement Liability Management Growth and retentionProfitability and Control Improvement Innovation Disruption

11. 10 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL October 31, 2015 Innovation framework STATUS QUO Risk and Compliance Business model enablement and partnerships Market and product agility Efficiency and expenses Pre and post sale customer engagement Liability Management Product configurator Real-time Capital Adequacy Fraud Analytics Business Process Management Social-media enabled real-time servicing Growth and retentionProfitability and Control Telematics Improvement Innovation Disruption

12. 11 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL October 31, 2015 Innovation framework – 2012 Model Insurer results STATUS QUO Risk and Compliance Business model enablement and partnerships Market and product agility Efficiency and expenses Pre and post sale customer engagement Liability Management Improvement Innovation Disruption Growth and retentionProfitability and Control

13. 12 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Growth and retention STATUS QUO Risk and Compliance Business model enablement and partnerships Market and product agility Efficiency and expenses Pre and post sale customer engagement Liability Management Insurer pilot – priority 1 initiatives October 31, 2015 Profitability and Control Improvement Innovation Disruption

14. 13 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Challenge phase Are we being bold enough? Are our strategic bets the right ones? Are we leveraging disruptive technology? Where are we at risk of losing ground against our competitors? Are our resources aligned against the right initiatives? Have we got our best people on leading the most disruptive initiatives? Do we have the capacity / skills to implement the technologies required? What trade-offs in the portfolio need to be made? Is the organization ready for the changes required? October 31, 2015 Agree actions to realign the portfolio in order to match the strategic intent

15. 14 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL Case studies What is truly new? Why was it a success? What else can be done? October 31, 2015

16. 15 © 2012 CELENT, a Division of OLIVER WYMAN CONFIDENTIAL October 31, 2015