9th Asian Insurance CEO Summit Mar09pdf

Monetizing and
Marketing
Insurance
through Virtual
Worlds
David Piesse
9 CEO Asian
th
Global Head of Insurance
Insurance
Sun Microsystems, Inc.
Hong Kong
Summit
Claus Nehmzow
Hong Kong
Managing Director

March 25 th 2009
ALCUS International Ltd.
Hong Kong

Friday, 27 March 2009 1

3D “Virtual Worlds” and Insurance

• Challenges for Insurance CEOs

• Virtual Worlds

- What are virtual worlds
- Applications of virtual worlds in business & education
• Application to Insurance

- Potential across insurance applications
- “A day in the life of an insurance sales person”
- “A day in the life of an insurance customer”

© Alcus International Ltd. 2009


Challenges for Asian Insurance CEOs

• Doing more with the same or less marketing budget

• Greater outreach on product launches

• Connecting with “Generation Y”, both as customer and employee

• Reducing fraud and mis-selling

• Improved compliance

• New channels for addressing micro ﬁnance and islamic ﬁnance

• Concern about more disasters: e.g., pandemic

• No bricks and mortar bancAssurance



Next Generation Internet
Data,
Activity

M
e
People

Web 1.0
Web 2.0
Standard Web Focus
Productivity Focus © Alcus International Ltd. 2009


Generation Y: “Screenagers”
Screenagers

Source: IDC
1

Multi Channel Distribution Affinities /
Retailers

Connecting brands and their
Banks/Post
customers with insurance products
Offices
and underwriting capacity.

Global
Best of Breed Agents and
Insurers
Insurance Brokers

Service
Telco's/
Rural/
Semi-Urban
Connecting insurers with niche
distribution channels and brand Virtual
loyal customer segments. Worlds



VIRTUAL WORLDS


Virtual worlds continue to attract investment
and a growing number of users

• Virtual worlds today have more than 300 million users

- ... with 70% younger than 18
- 1 billion users predicted for 2012
• $919 million invested in virtual world companies for 12 month prior Oct ’08

- $1 billion prior to Oct ‘07 (Virtual Worlds Management)
• Virtual goods represent a $1.5 billion market

- ... $60 million per month virtual goods traded in Second Life alone

Source: KZero, July 2008, Park Associates: Oct ’08, Strategic Analysis, Oct ’08, Virtual Worlds Management, In-Stat, Nov ’08, Virtual Greats


Virtual world: a real-time, shared experience
Presence Co-Presence

Interactive
Anonymous Spatial



Age
5
Virtual Worlds Registered
Accounts Q4 2008 2009
Twinity
Utherverse Chugginton
15m Second Life
2m
Woogiworld
Age 30+ Age 8
Handipoints
2008 1m
HiPiHi Jumpstart
GeoSim
Chapatiz
Amazing Philly
Worlds My Animal Family
Kidstudio
2007
Near Konstruction Zone
Xivio
Hello Kitty
ERepublic
2m Buildabearville

1m Webkinz
Football 2006
Superstars Action Allstars
Robot
Whirled Galaxy
Barbie Girls 15m
Webcarzz
Cyber
2005 Poptropica 20m
Town
Kidscom 1.5m
Chobots
Cars
Moshi Monsters
1m
Age 10
Age 25 2008 2005 2007
2009 2007 2006 2005 2006 2008 2009
Dizzywood
Franktown
MinyanLand LEGO Universe
Mycosm Virtual Tweens
45m Neopets
SceneCaster 2m Digital Dollhouse
Club PonyPals
2005 Massively Me
Whyville 3m
iheartland
Grockit
Planet Cazmo
Activeworlds 1m
10Vox Kiwi Heroes
Onverse Medikidz
Green Vizwoz
2006
SportsBLOX 19m Club Penguin
Oddcast
Interzone
ClubCooee
1.5m
My Mini Life
Weblin
Kaneva Spineworld
Black Mamba KooDooZ
2007
There 2m
100m
vMTV 3m Coke Habbo
Studio
Vivaty
20m 6m
Yoggurt
EGO goSupermodel
IMVU Faketown
vLES sMeet 2008
SmallWorlds Visitoons
Home
Age 20 Age 13
vSide Taatu
WeeWorld
7m 24m
13m Muxlim
Meez
Live or open beta Empire of
21m Stardoll
Gaia
Sports Lively
www.kzero.co.uk
Launched in Frenzoo 2009
RocketonOurworld
No data shown for worlds under 1m registered accounts. Includes estimates.
In development/private beta
Copyright K Zero 2008
Closed/closing © Alcus International Ltd. 2009
Permission required prior to republishing
Age 15

Private and public sector organizations are
using virtual worlds for serious business
•surgeon training,
•recruiting
operating theatre
•training
•conferences
•developer
•design collaboration
partner network
management
•b2b marketing •health care seminars

•academic education
•internal collaboration
•conferences

•IT training •consumer marketing

•Internal sales
conferences •cruise missile launch
•collaboration training
•recruiting
•Recruiting •training
•b2b marketing,
conferences



L’Oreal has experimented with “experience
marketing” in virtual worlds
• Consumer marketing in Second Life
• Playing with scale and experience



Cigna has launched a virtual healthcare pilot,
integrating web...
• Custom brand experience
• Registration easy and simple
• Consistent branding, visual language,
graphic design

• Circular, extensible design
• Emphasis on human interaction



... virtual seminar, social community, interactive
learning, and games

Source: Cigna, vielife


Lenovo is piloting a 3D training and sales
environment
• planning to train 15% to 20% of its
sales force to interact with customers
and prospects via Lenovo eLounge

• expect 40-50% conversion rate
(compared to 25-30% on phone)

• built on Nortel’s “web.alive”

Source: Nortel, ThinkBalm


Sony Electronics conducted virtual trade show

• staged trade show for professional
broadcasting equipment

• attracted thousands of visitors
• replaced conventional 15 city (with
200-400 attendees each)

• estimated 50% cost savings
• used InXpo’s virtual event platform

Source: VentureBeat, January 2009


IBM: “fifth of cost / no jet lag” --
ROI of $320,000 on $80k investment
• meeting with >200 participants,
held in late 2008

• specifically designed meeting place
for keynotes, breakouts, 3D server
& green data center illustrations

• starting with one annual event,
laying the base for ongoing
meetings

• IBM’s “Virtual Community Group”
has 6,100 members

• used stand-alone, behind firewall
Linden Lab version of SL
Source: IBM/Linden Lab case study, March 2009


Retailers are starting to experiment with
“talking heads” to connect to customers
• “talking head” avatars give more sense
of reality to interactions

• applications include customer services
and sales

• some talking heads front Artiﬁcial
Intelligence engines...

• ... others have human operators
behind them

Source: USA Today, Asia Risk Technologies


Microﬁnance (lending, insurance) are starting
to experiment with virtual worlds
• Peer-to-peer micro lending provider
Kiva has a small “presence” in Second
Life

• Barnett has created a place in Second
Life for villages to display their
programs by building replicas of their
projects.

• Both seem currently a bit like “web
pages in 3D” but might come to live
with presence of people and live
events

Source: visit to Second Life


Wells Fargo’s “Stage Coach Island” virtual
world - fun and education
• A social space, not just a game
• Games, socializing, Bingo,
virtual currency, quests

• Education on money
management, budgeting,
students loans, credit cards

• Integrated with Facebook

Source: We$s Fargo website, stagecoachisland.com, Facebook


VIRTUAL WORLDS
AND INSURANCE


3D virtual worlds can yield benefits across
many parts of the insurance life cycle

Product Customer
Sales Force Product
Definition/ Sales Service /
Training Launch
Assembly Claims
• brainstorming • communication • pre-launch • “experience • customer service
Application

• partner • interactive meetings marketing” centers
• • •
communications seminars sponsor/embed compliance use waiting time
• • •
internal role-play with relevant “risk island” to cross sell
• • •
communication help with PR partners (e.g., interactive customer self-help
household ins & education
•
greener living) public, small
• edutainment group and private
sessions
• travel/time savings • broader reach • time-to-market • • anonymous allows
overcome
• more open, • better explanation
(age, location) “insurance sales simulated claims
Benefits

• better
creative ideas of complex or man” syndrome reducing fraud
• •
accessibility, controversial easier to improved
inclusion products education customer
• travel/time savings complex products experience



Bank Assurance: another opportunity using a
virtual world channel

• A virtual world is uniquely
positioned to integrate and link
different offerings

• Environments and locations can be
dynamically changed and adapted

• The spatial character allows more
subtle integration than a flat link on
a web page



Benefits from using immersive environments
include cost, time, and customer orientation

• Immersive environments and real-time dialogue better suited for complex products
and training

• Better compliance (consumers / audit, and internal training)

• Time and cost savings through reduced travel

• Mitigation against impact of potential pandemic on conventional communication

• Avatar allows to shield cultural differences and reservations against direct sales
contact

• Medium equally well suited (but for different reasons) for younger and older
audiences



Willy Wong, head of sales, presents a new
microﬁnance product to his sales force
• Willy logs on from his home
computer, presenting the new
product to the global sales force

• People around the world, regardless
of location or physical limitations,
attend the conference

• Muslim women join from their local
community center’s computer

• After the main conference,
participants break out into smaller
work groups

• The seminar space allows frequent
sessions to accommodate various
time zones

The fo$owing video i$ustrates a possible virtual world scenario © Alcus International Ltd. 2009


Yuki (21) chemistry student from Japan, attends a
career planning seminar

• Yuki researches career planning,
joins a Facebook group, learns there
about a career event, with several
Pharma companies present

• Joined by two friends from diﬀerent
cities and a cousin from New York,
she attends the career fair

• As the event is sponsored by the
insurance company, the stumbles
into an virtual info booth during the
break and talks to the representative

• After the fair, she teleports to a
private consultant on health
insurance



A virtual world channel should be integrated
into the wider “Web 2.0” - on PC & mobile

Insurance Virtual World



Broadband penetration and propensity for
virtual worlds: huge potential of Asia
Broadband penetration and virtual world usage (example: Second Life)
North America Latin America Europe Asia
95++
Macao
New Zealand
Singapore
Indonesia
12.9 Vietnam
Hong Hong
India
20 Taiwan
Greece
14.4 Korea
Ireland
Hungary
Czech R
Norway
Finland
Israel
Romania
84 Turkey
Russia
1.5 Austria 6.8
75 1.5 Portugal 12.6
1.9 Denmark 6.4
2.3 Switzerland 7.3 66.5 China
2.5 Belgium 8.5
2.6 Sweden 4.1
Canada 3.0 Poland 4.1
8 9.6
7.5 Netherlands 15.6
7.5 Spain 8.3
9.3 Italy 8.8

32
14.3 France 8.1
USA
66 13
4.7 Australia 9.6
16 14.4 U.K. 10.1
15
Chile
27.1 Japan
Argentina 4.8
3 3.9
4.8 Mexico 2.2 17.4 Germany 12.7
7.4 Brazil 11.0
currently no signiﬁcant usage: Potential
##: broadband subscribers (millions) ##: minutes/broadband user/month
Source: Linden Lab, OECD, Wikipedia, Alcus analysis


There are multiple technical platforms out
there to support business virtual worlds

• Second Life by Linden Lab

• Olive by Forterra

• Wonderland by Sun (Industry analyst Nic Wilson: “we consider it to be one of
the most exciting, and potentially game changing virtual world applications
currently in development.”)

• Open Sim(by mid 2009), open source

• Protosphere

• Qwak

• others



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