This document provides an overview of an insurance trends agenda, including findings from a CEO survey. Some key points: 1) The CEO survey identified 5 core traits of the "enterprise of the future": hungry for change, innovative beyond customer imagination, globally integrated, disruptive by nature, and genuine rather than just generous. 2) CEOs see opportunities in engaging informed and collaborative customers, and most plan to significantly increase investments in this area. 3) Outperforming companies were more confident in their ability to implement change and had a more globally integrated approach.

1. Insurance
Trends

2. Agenda
• CEO Survey
• Changing the Game
• New Media
• Technology
• Customer reference
• Next steps

3. We spoke to 1,130 CEOs and conducted in-depth analysis to
determine the characteristics of the Enterprise of the Future
CEO Survey
What is the Enterprise of the future?

4. Core Traits of the Enterprise of the Future
1. Hungry for change
2. Innovate beyond customer imagination
3. Globally integrated
4. Disruptive by nature
5. Genuine, not just generous

5. Hungry for Change

6. Although CEOs are more confident about managing
change, their capability and the challenge ahead is
Although CEOs are more confident about managing change, the gap between their capability and the challenge ahead is growing
growing
The Change Gap* Triples
2006 2008
8 % CHANGE 22 %CHANGE
GAP*
GAP*
13% 12% 6% 19%
11%
“We have seen more change in
22% 31% the last ten years than in the
83%
20% previous 90.”
Ad J. Scheepbouwer, CEO, KPN
65%
61%
Telecom
57%
Change Needed Past Change Success
No/limited Change No/limited Success
Moderate Change Moderate Success
Substantial Change Successful
Change Needed Past Change Change Needed Past Change
Success Success

7. CEOs can no longer focus on a narrow set of
challenges and intend to manage a broader agenda
and greater uncertainty
External Forces Impacting the Organization
Market factors
84% 67% 48%
People skills
42% 44% 48%
Macroeconomic factors
41% 35%
Globalization
Regulatory concerns
Technological factors 33%
Socioeconomic factors
Environmental factors
Geopolitical factors
2004 2006 2008
Source: IBM Global CEO Study 2008; n (2004) = 403, n (2006) = 760, n (2008) = 1130

8. Companies that delivered higher revenue growth
managed change more successfully
Underperformers** Outperformers**
29 4%
%
CHANGE
GAP* 19 %
CHANGE
GAP*
24% 5% 17%
13% 10% CEOs of organizations with
outperforming revenue growth are
85%
83% 17% more confident about their ability to
22% implement change
66%
54%
Change Needed Past Change Success
No/limited Change No/limited Success
Moderate Change Moderate Success
Substantial Change Successful
Change Needed Past Change Change Needed Past Change
Success Success
* Dif ference or ‘gap’ betw een expected level of change needed and past success in managing change ** Performance based on industry comparisons w ithin
Source: IBM Global CEO Study 2008; n (underperformers) = 173, n (outperformers) = 164 survey sample of revenue CAGR 2003 to 2006

9. 2. Thinking beyond customer imagination

10. CEOs see even more potential with informed and
collaborative customers and are rapidly increasing
their investment there
Rise of the informed and collaborative customer
Negative
impact
No
impact
10%
22 %
INCREASE
20.4%
14%
16.7%
Positive
impact
Investment* past 3 Investment* next 3
76%
years years
“The rise of the informed and knowing consumer will “We must redefine our value proposition to
continue to have an impact regarding our go-to- customers. Information and advisory content
market priorities. We must know how to leverage are becoming even more valuable than
new media. We've been surprised by the impact that traditional drivers.”
just a few consumers can have with their blog H. Edward Hanway, Chairman & CEO, CIGNA Corp.
entries.”
Source: IBM Global CEO Study 2008, n = 609; * Total investments: all asset investments + all investments in R&D, marketing and sales
Rob Hurlbut, CEO, Attune Foods

11. Outperformers plan to increase their investment in
informed and collaborative customers by 36% over
the next 3 years – the time is now
Investment in the rise of the informed and collaborative customer
Underperformers** Outperformers**
14 %
INCREASE
24%
36 %
INCREASE
21%
19%
14%
Investment* past 3 Investment* next 3 Investment* past 3 Investment* next 3
years years years years
“In the future, we will be talking more and more about the ‘prosumer’— a consumer/
producer who is even more extensively integrated into the value chain. As a
consequence, production processes will be customized more precisely and
** Performance based on industry comparisons w ithin
individually.” survey sample of net profit margin CAGR 2003 to
Hartmut Jenner, CEO, Alfred Kärcher GmbH
Source: IBM Global CEO Study 2008; n = 167; * Total investments: all asset investments + all investments in R&D, marketing and sales 2006

12. 3. Globally Integrated

13. Global integration approach
Outperformers Underperformers
Actively enter new markets Defend your core
Deeply change mix of capabilities, Maintain current mix of capabilities,
knowledge and assets knowledge and assets
Partner extensively Do everything in-house
Globalize brands/products Localize brands/products
Optimize operations globally Optimize operations locally
Grow through mergers & acquisitions Grow organically
Drive multiple cultures Strive for one culture
Extensive Globalizers (n=230)
Globalizers (n=246)
Blended Thinkers (n=131)
Localizers (n=140)
Source: IBM Global CEO Study 2008

14. 4. Disruptive by Nature

15. Across the globe, a full two-third of all CEOs plan to
be engaged in some form of business model
innovation over the next three years
Business Model Innovation Focus
69%
Established Economy 69% 69%
Emerging Economy*
29%
29% 30%
2%
2% 1%
Limited/No Moderate BMI Strong BMI
BMI Focus Focus Focus Limited/No Moderate BMI Strong BMI
BMI Focus Focus Focus
“When the business model is innovative, “All types of business model innovation are
operations and the product will follow equally important; it's a matter of priorities.”
automatically.” Stephane Bancel, CEO of Biomerieux
Ronald de Jong, CEO Philips CL, Germany
Source: IBM Global CEO Study 2008; n = 1106 * See appendix f or list of emerging economy countries

16. Within the various business models, CEOs plan to
implement distinct initiatives
Enterprise Model Revenue Model Industry Model
Innovation Focus Innovation Focus Innovation Focus
Collaboration is instrumental to drive Revenue Model innovators Industry Model Innovation
Enterprise Model Innovation shift the value mix remains rare
91% 73%
71%
57% 56%
36% 36%
38%
Work Within Focus on Intense New Pricing/Taxation Reconfigure Create Entirely Move Into New Redefine
Organization Differentiating Collaboration Structures and Models Product/Service/Value
New Industries Industries Existing Markets
Activities with External Mix
n = 234 Partners n = 369 n = 203
Source: IBM Global CEO Study 2008

17. 5. Genuine, not Generous

18. The only three external forces consistently rising on
CEOs agendas are all linked to Corporate Social
Responsibility
External Forces Impacting the Organization
“Our strong commitment to corporate
sustainability will be a clear differentiator for us
48%
2004 with all stakeholders.”
44%
2006 42% Tom Johnstone, CEO, SKF
2008
“Our company is investing extensively in
corporate social responsibility. We need to be a
reference in this domain. As the leader of the
luxury industry, we have to stay ahead.”
Yves Carcelle, Chairman and CEO, Louis Vuitton
18% 17%
15%
12% 12%
“I see corporate responsibility going through
9% three phases. People start to consider issues
like the environment because they are
compelled to do so. Then they realize that it
actually makes business sense. Eventually
Environmental Socioeconomic People Skills they move beyond compulsion
Issues Factors
and selfish motives to become passionate
because it is the right thing to do.”
Vinod Mittal, Managing Director, ISPAT Industries
Source: IBM Global CEO Study 2008; n (2004) = 403, n (2006) = 760, n (2008) = 1130

19. Majority of CEOs see CSR as an opportunity, not a
threat, and plan to significantly invest in CSR to
integrate with society
Increasing customer expectations of corporate social responsibility
Negative
25 %
INCREASE
impact
13.4%
11% 10.7%
No
impact
20%
Investment past 3 Investment next 3
years years
Positive “The consumer’s concept of quality will no longer be
impact measured by only the physical attributes of a product
69%
— it will extend to the process of how the product is
made, including product safety, environmental
compliance and social responsibility compliance.”
Victor Fung, Chairman, Li & Fung
Source: IBM Global CEO Study 2008, n = 609; * Total investments: all asset investments + all investments in R&D, marketing and sales

20. Core Traits of the Enterprise of the Future
Core Traits of the Enterprise of the Future
IBM Solutions
1 2 3 4 5
Hungry Innovative Globally Disruptive Genuine,
for beyond integrated by nature not just
change customer generous
imagination
CEOs can now assess how ready they are for
becoming the Enterprise of the Future.

21. Changing the Game

22. Changing the Game: Goldcorp Inc
• Yr2000, Strikes, debt, • 100 targets identified
high production costs, • 80%+ yielded substantial
terminated mining gold
operations • 8 million ounces = $3bn
• $100 invested in 1993
• CEO Rob McEwen work $3000 today
“Goldcorp Challenge”
$575,000 prize
• Exposed 400Mb 55,000
acre property of
Geological data to the
web

23. Changing the Game: Lego
• Assembled 4 enthusiasts
• Ideas on new sensors,
redesigned input ports,
and stabilized firmware
• Contributed for free
• Mindstorm v2 still sells
40,000 units a year at
$199 a pop -- with no
advertising -- and has
become Lego's all-time
best-selling product
•http://www.wired.com/culture/lifestyle/news/2006/01/69946

24. Do you stand out?

25. “The purpose of the business is to create a customer”
Peter F
Drucker

26. Questions
• What are the attributes of Generation X
• How do you communicate with them?
• What are the attributes of Generation Y
How do you communicate with them?

27. Who are
we / will we
be dealing
with?
35% of all teen girls blog
54% of wired girls post photos online
19% of boys have posted videos
39% share their own artistic creations
online
26% of teens remix content
27% of teens maintain a personal
webpage
28% of teens have created their own blog
33% of teens create or work on webpages
or blogs for others
http://www.pewinternet.org/pdfs/PIP_Teens_Social_Media_Final.pdf http://www.flickr.com/photos/14692968@N00/1351463530/

28. Core Traits of the Enterprise of the Future
Some insights about generational diversity
“Your customers”
Generation Traditionalist Boomer Gen X Gen Y
Born between… 1922 - 1945 1946 - 1964 1965 - 1976 1977 - 2000
Too much and I’ll
Training The hard way Required to keep me Continuous & expected
leave
Collaborative &
Learning style Classroom Facilitated Independent
networked
Communication style Top down Guarded Hub & Spoke Collaborative
Problem-solving Hierarchical Horizontal Independent Collaborative
Decision-making Seeks Approval Team informed Team included Team decided
Command &
Leadership style Get out of the way Coach Partner
control
No news is good
Feedback Once per year Weekly / Daily On demand
news
Unable to work Unfathomable if not
Technology use Uncomfortable Unsure
without it provided
Job changing Unwise Sets me back Necessary Part of my daily routine
Lancaster, L.C. and Stillman, D. When Generations Collide: Who They Are. Why They Clash. How to Solv e the Generational Puzzle at Work. Wheaton, IL. Harper Business, 2003.

29. Core Traits of the Enterprise of the Future
How do we find out about our customers?

30. How Weyou ask them?
do ask them

31. 1. People post their ideas on a topic
2. Others can vote on their agreement
or disagreement with the idea by
quot;promotingquot; or quot;demotingquot; it.
3. Comments can be provided to
elaborate ones thoughts on the
matter at hand.
4. Good ideas rise to the top,
5. Bad ideas fall to the bottom.
6. The comments will tell the story why
an idea is good, bad or ugly.

33. Rant and Rave: Zuzzid
Core Traits of the Enterprise of the Future
“Why do you engage customers?”
This is poor example
• Zuzzid helps people help each other.
• Let everyone know about your insurance
experiences by leaving a Rant or a Rave.
• Consumers can learn from each other’s
experiences, leave advice or comments,
agree or disagree, and get the discussion
going.
• Ask questions about insurance and get a
general consensus from other users.
• A price engine takes the cost of thousands
of peoples’ insurance cover and uses this to
figure out what other people like you pay.” Sources:
http://www.listio.com/web20/story.php?title=Zuzzid http://
zuzzid.co.uk

35. Innovation starts at Home

36. Innovating with our customers
Innovation Jam 2006
Innoation Jam 2006
Over two 72-hour periods, more than 150,000 people from
104 countries and 67 organizations came up with more than
46,000 new ideas. Out of all that collective intelligence, the
best ideas were selected. IBM publicly committed up to
$100M in seed money to their development.
3-D Internet
Big Green innovations
Banking for the Unbanked
Digital Me
Real-time Translation Services
Electronic Health Record System & Healthcare Payment
Intelligent Transportation System
Real-Time Translation Services Simplified Business
Engines

37. Innovation with our friends…
Innovating with our customers
Innovation Jam 2008

38. Core Traits of the Enterprise of the Future
Core Traits of the Enterprise of the Future
IBM Solutions
1 2 3 4 5
Hungry Innovative Globally Disruptive Genuine,
for beyond integrated by nature not just
change customer generous
imagination

39. Core Traits of the Enterprise of the Future
Enterprise of the Future process
• Interview CEOs
• Analyse information
• Initiate Innovation Jam
• Create blueprint for change
• Gain competitive advantage for IBM, its
partners and it’s customers
• (Game changing process)

40. Innovation Jam - you can have one too
Product Innovation Services Innovation
Customizing services (instead of
Developing and bringing to market one-size-fits-all) and lowering prices
products that stand out in feature, Product Services (by beating competitors who are not
function cost, availability… all in the Innovation Innovation capitalizing on new tools of
right place at the right time innovation) in order to distinguish
and deliver high value
Policy & Society Innovation
Addressing the broader Business Process Innovation
implications of innovation –
for privacy, piracy, digital Conceiving, implementing,
rights, intellectual property, integrating and managing
global trade, etc. – and Policy & innovation Business an organization’s business
creating breakthrough Society that Process processes (supply chain,
innovations in these areas Innovation matters Innovation CRM, HR, product
and shaping broad societal development, etc.) for
frameworks competitive differentiation
Management & Culture of Innovation
Business Model Innovation
Creating and maintaining new
behaviors and organizational Re-conceptualizing the fundamental
structures to become the company design of a business through the use
Management Business of innovation tools and collaborative
that can constantly create game- & Culture of Model
changing products/services approaches
Innovation Innovation

41. New Media
We understand demographics
We understand our customers
We understand what they want?

42. Video: How many friends do you have?

43. Web 2.0
Guru
“Web 2.0 is the
business revolution in
Me
the computer industry
caused by the move to Interaction
the Internet as a Technology Styles
platform, and an Anyone
attempt to understand Change
the rules for success “Socially
on that new platform.” Solutions Constructed
Tim O’Reilly Media and
Communication”
Participation

44. Core Traits of the Enterprise of the Future
Blog: ING in Asia Pacific
http://www.ingblogs.com/mycupofcha/?p=82

45. Generational Website: Royal Bank of Canada

46. Peer-2-Peer
Lending
• Cuts out the middleman
• Better response times
• More user friendly
• Supports our communities
• Feels good to lend to people
rather than a savings
account
• Delivered in a well known
interface e.g. On-line
auctions
• Fewer costs
– No branch,
– fewer staff
– Less infrastructure (initially)

47. Peer 2 Peer Insurance?
http://www.peertopeerinsurance.com/public/friends.php

48. Finance in Facebook

50. Is it worth the investment?

51. Is it worth the investment?

52. Is it worth the investment?

53. Is it worth the investment?

54. Is it worth the investment?

55. Training and
Games
“The Metaverse”

56. What does IBM do in this
space?
Internally
Product
Externally – Blue 2.0

57. W3 - today

58. W3 – Next (today)

59. 2
1
3
Bluepages
4

60. W4 - Research

61. Productisation of w3/w4
Lotus Connections
Expanded
customized
profile data
fields and views
for your
organization
Identify,
develop and
maintain a
professional
network with
colleagues
Tag your
colleagues
and easily
find them,
search on
them, and
keep in touch Aggregate team
with them data
61

62. Health of Social Network

63. New Media
Solutions
Think about other industries and how
they do things

64. Next?

65. Can I help?
Chris Sparshott
(Sparkbouy)
chris@chrissparshott.com
Portfolio
http://www.slideshare.net/sparkbouy/slideshows
Blog
http://chrissparshott.com
IBM
chris_sparshott@nz.ibm.com