EAGLE STAR INSURANCE COMPANY IRELAND LTD'

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Post Consumer Protection Code - Interfacing
with the Customer
Kieran Murphy
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• Changing Face of Insurance Industry
• Competitive Environment
• Changing Customers
• Challenges Going Forward
• The Marketing Response

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• Changing Face of Insurance Industry
• Competitive Environment
• Changing Ireland
• Challenges Going Forward
• The Marketing Response

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Irish Insurance Market - 2006
Total Market 3.822bn (decrease .5)
Source IIF Factfile 2006
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Irish Insurance Market - 2006
Top 10 Insurers Market Share

• Hibernian 21
• Quinn 12
• Allianz 12
• FBD 11
• AXA 10
• RSA 10
• ZIIL 8
• AIG 5
• Irish Public Bodies 3
• St Paul Travelers 2
• Total Top 10 93

Source IIF Factfile 2006
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Market Share Analysis 1999-2006
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Irish Insurance Market

• Improved Operating Conditions Government
  Initiatives
• Safety and Anti-Fraud Campaigns
• Increased Capacity Greater Choice for
  Consumers
• Increased pressure on Insurers - reduced
  profitability
• Premium Reductions Average fall in motor
  premiums - 54,
• 
  between 03 - 07 (IIF Research)
• Claims Environment Number of new claims
  notified to IIF members increased by 13
  between 05 06
• (56 related to motor
  while 28 related to property)
• Net Incurred Claims Costs reduced by 1.5
  
• Motor (05 - 06)
• GWP Increased by 0.4
• Net Incurred Claims Costs Increased by 13
• Net Underwriting Profit Decreased by 40.6

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Irish Insurance Market

• Distribution Increase in Direct Channel
• Approx. 60 of Private Motor
• 33 of Household
• Increased Regulation/
• Compliance IFSRA, PIAB, MIAB,
• Equality Authority/
• Data Protection Commission

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• Changing Face of Insurance Industry
• Competitive Environment
• Changing Ireland
• Challenges Going Forward
• The Marketing Response

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Changing Ireland

• Population 4,239,848 Census 2006, highest
  recorded census level since 1861. Population
  is projected to go to 5.5m by 2030
• 13 of the population are non-Irish nationals
• Fastest growing age segment 25 - 44 years
• Single person households represent 22 of all
  households
• Employment/Income Unemployment rate of 4.2
  (2006) 4.6 (Mar - May 2007)
• Ireland has one of Europe's highest min.
  wages, 8.65/hr.
• Increasing minimum wage leading to
  uncompetitiveness
• Average industrial earnings 30,576 per
  annum
• Motor The total number of licensed vehicles on
  Irish roads was 2.14m as of 31st Dec 05. 1.6m
  of these were private cars.
• 42 of households have at least two cars
• 85 have at least one car

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Changing Ireland

• Households/
• Housing Increasing Interest Rates and
  uncertainty around stamp duty has led to
  slowdown in housing market
• Est. 1.8 million units of housing stock in
  2006, including both vacant and occupied
  dwellings.
• 1/3 of existing housing stock has been built
  in the past 10 yrs.
• 43 detached, 27 semi-detached, 18
  terraced, 10 apartments
• 2006 Completions 54 units were built in
  estates (schemes),
• 25 individual houses and 21 apartments.
• Commuting 12 of workers travel 20 miles and
  over to work each day.
• Technology
• Mobile Phones 4.7 million subscribers in
  Ireland at the end of Q1 2007, (112
  penetration)
• Internet 2 million internet users - 50 of
  the population (internetworldstats.com)
• Broadband 602,000 broadband subscribers (end
  March 2007)

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• Changing Face of Insurance Industry
• Competitive Environment
• Changing Ireland
• Challenges Going Forward
• The Marketing Response

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Challenges Going Forward

• Increased Capacity
• Increased Regulation/Compliance
• Further premium reductions/Technical Price Under
  Threat
• More educated/sophisticated consumers leading
  to increased expectations
• Greater willingness to utilise various channels
  to meet insurance needs
• e.g. internet, leading to greater investment and
  advances in technology
• Distribution
• Further Broker Consolidation, larger broking
  groups, greater buying power
• Increase in Direct Business (currently approx.
  60 - Private Motor)

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• Financial Stability/
• Effective Underwriting

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Financial Stability

• Global Support
• Credit Rating
• Risk Selection
• Effective Underwriting
• Profitability over Market Share
• Investment Performance
• Reserve Strategy

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Effective Underwriting

• Technical Price enables insurers to
• Understand risk cost for every customer
• Identify factors driving the loss cost
• Derive correct profitability level from each
  customer
• Segment customers more effectively
• Right Customers/Right Price

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• Changing Face of Insurance Industry
• Competitive Environment
• Changing Customers
• Challenges Going Forward
• The Marketing Response

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• Matching Insurance Solutions with Customer Needs

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• Matching Insurance Solutions with Customer Needs
• Market Discovery Market conditions/growth/trends
  
• Customer Discovery Customer Insights/Purchase
  Behaviour
• Attitude to company products/service/
  claims process
• Preferences/Interests/Life Stage Issues
• Company Discovery Profitability by customer
  segment
• Capacity/Skill Expertise
• Develop value propositions for preferred customer
  groups
• Promote and effectively target key audiences
• Review Performance of selected segments on
  regular basis

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Customer Centric Approach
Customer Metrics
Delivery
Foundation
Customer Facing

• Insight/ Research
• Customer Insight
• Market Insight
• Marketing Effectiveness
• Customer Database
• Econometric Modelling

• Marketing Communication
• Brand Management
• Campaign Management
• Events
• Sponsorship
• Metrics

• Value Proposition Development
• Customer Solutions
• Proposition Development
• Segmentation Marketing Strategy /
  Planning
• Marketing Budget

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• Enhancing the Customer Experience

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Enhancing Customer Experience

• How can we achieve true customer satisfaction?
• Put the customer first
• Anticipate needs and problems
• Tailor service and products to meet needs
• Make it Easy to do Business
• Ensure all customer contacts are positive
  experiences
• Turn Customers into Advocates

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Create Meaningful Customer Experience
Customer Life Stages
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Create Meaningful Customer Experience
Create Meaningful Customer Experience
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Effective Communication/Service at all Customer
Touchpoints
Renewal pack
Advertising
Web renewal
Word of Mouth
Renewal Conversation
Renewal reminder
DM mailing
Website
Post-Purchase Experience
Claims Settlement
Pre-Purchase Experience
Recovery
Customer Relationship
Claim Notification
Claim - breakdown - insurance
3rd Party Suppliers
Purchase Experience
Complaints
Cross Sell Initiatives
IVR
Product Enhancement Communication
Our People Sales Call
MTA conversations
Promotional campaigns
Welcome Pack
Plastic Cert
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Brokers

• Unique relationships that create competitive
  advantage for our customers
• Customised solutions based on expertise
• Service Excellence
• - Immediate Quotation
• - Documentation Turnaround Time
• - Claims Service Excellence

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• Measuring Performance

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Benefits of Measuring Performance

• Enhanced customer knowledge leading to more
  effective underwriting
• More effective targeting of preferred customers
• Improved customer service potential competitive
  advantage
• Allows for greater flexibility if we can
  identify issues early, we are in a better
  position to manage the problem
• Assists in allocation of resources and marketing
  spend

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Key Performance Measures throughout Customer
Life Stages
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What you want your Customers to say
I found the courtesy and friendliness of your
staff a breath of fresh air

Please keep up the good work. I have told
everybody about you
Couldnt find fault, quick easy and professional
Your staff were very helpful when I rang about a
claim. I am a very satisfied customer
Excellent service looking forward to doing
business with you in the future
Very good service, quick and no hassle
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• Notes
• Improved Operating Conditions
• Anti-Fraud Provisions Civil Liability Courts
  Act 2004 offenders can face fines up to
  100,000 and/or 10 yrs in
• prison.
• Insurance Confidential set up in 2003. Over
  3,200 cases of suspected
• fraud reported.
• Introduction of random breath testing
• Rules of the Road
• The IIF has undertaken to sponsor the production
  and circulation of free copies of the Rules of
  the Road to very household in
• Ireland. As part of the campaign to make
  Irelands roads a safer place the booklet will be
  delivered to over 1.76 million Irish
• households.
• IIF member companies employed 14,200 at end of
  2006 (in addition to employment