There is an estimated unmet need for $1 Trillion additional life insurance in Canada. Small evolutionary changes in our market are unlikely to materially reduce this gap. What can we learn from overseas?

2. Kevin Pledge
Innovation – lesson from
overseas (and elsewhere)
acceptiv.com/crc

3. Question
• 0 – 9%
• 20 – 29%
• 40 – 49%
• 60 – 69%
• 80 – 89%
• 10 – 19%
• 30 – 39%
• 50 – 59%
• 70 – 79%
• 90 – 100%
How much personal protection life insurance will
be sold online 5 years from now?

4. Agenda
1. The Situation in North America
2. Innovation
3. Two Examples from the UK
 Beagle Street
 Aviva
4. Can this be Applied in Canada?

5. A Problem
“It takes too long to issue our business”
Indicative Quote
Underwrite
IssueOfferAdd’l Q’s
Modify Application
Apply
Underwrite
evidence
Further Questions
multiple hand-offs
lack overall process control

6. Typical Solution
Indicative Quote Apply
UW at
claim!
or
Indicative Quote
Underwrite
IssueOfferAdd’l Q’s
Modify Application
Apply
Underwrite
evidence
Further Questions

7. Good
(at least to industry insiders)
A recent announcement

8. Good
(at least to industry insiders)
…but not great
A recent announcement
70% will take more than a
week
More than half will take more
than two weeks

9. Innovation
Is possible due to trends creating a discontinuous
opportunity
Will question an existing paradigm
Often involve looking at the bigger picture or from
another perspective
Disruptive Innovation will be:
 n times better, at
 1/x of the cost

10. Trends
0%
10%
20%
30%
40%
50%
60%
70%
1960 1976 1984 1992 1998 2004 2010
Uninsured Households** Not Face-to-Face**
of Canadian
Households believe
they are underinsured*
Sources
* LIMRA 2007
** US data from LIMRA Household Trends in Life Insurance Ownership
LIMRA’s US Individual Life Insurance Sales Trends 1975 - 2009
is the average age of
agents -
DISCONNECT
of families with
children will have
immediate financial
trouble if the primary
wage earner died
57%
50%
57

11. Paradigm
INSURANCE IS
SOLD NOT BOUGHT

12. Perspective
Look at the bigger picture and from the customer
perspective
Issue is NOT agent productivity
Customers want choice
or

13. Case Studies
New entrant – barriers to entry
Not really an insurance company
Not encumbered by existing
distribution
Largest insurance company in Europe
Life and P&C business
Existing direct and agent distribution
channels - some online business

14. Beagle Street – Online Only
Indicative Quote Apply and UW
Buy
> 5,000x faster
∞ scalable
(85% of the time)
1/10 of the cost
Fully Underwritten
No fluids or additional
evidence
Cover up to £750k
Better lapse experience
Ave issue time 12 mins

15. Beagle Street (UK)
New entrant – not really an insurance
company
Not encumbered by existing distribution
No advertising for first two years, then…

16. Need to integrate with existing distribution – Omni-
channel
Customer service standards consistent with P&C
Online offers “n times” improvement
Integration expands customer base

17. The Solution – AVIVA (UK)
Indicative Quote Apply and UW
Buy
Further
evidence
Buyor
Omni channel
Customer is in control

18. Can this be applied in Canada?
Market research tested
Customers go to Google for
information
Facebook and Google for
advice
Disconnect with agents
Print: http://www.lulu.com/commerce/index.php?fBuyContent=15657323
Ebook: http://www.lulu.com/commerce/index.php?fBuyContent=15663543

19. Can this be applied in Canada?
Market research tested
“Almost half of participants found the
value proposition [to buy directly
online] very appealing (rating of 8 or
more out of 10); these results are
encouraging.
Years ago, when evaluating consumer
interest in the ING Direct value
proposition, our goal was to find
interest in only half as many target
group members (who we defined as
innovators).”
Print: http://www.lulu.com/commerce/index.php?fBuyContent=15657323
Ebook: http://www.lulu.com/commerce/index.php?fBuyContent=15663543

20. • 10 – 30 year term insurance, up to $500k
• Coverage age range 18 - 70
• Applied UK experience and P&C lessons
• Simpler, yet more flexible than current products
• No medical evidence referrals
• Online, with offline support if needed
• On cover in 15 minutes or less
Full UW + Lower costs = Lower premium

21. Full UW + Lower costs = Lower premium
MNS Age 40 $150K. Term Life Monthly Premium
* Based on Acceptiv product design and pricing Feb 2015
0
5
10
15
20
25
30
35
40
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Premium
Term
10 Year Term
Industry $18.65 – $20.30
Teachers Life $13.46
20 Year Term
Industry $24.80 – $30.69
Teachers Life $21.08

22. https://www.youtube.com/watch?v=HWF09ya1o5I

23. Kevin Pledge
acceptiv.com/crc
Thank You