Monetizing and Marketing Insurance through Virtual Worlds

David Piesse
Global Head of Insurance Sun Microsystems, Inc. Hong Kong

th 9

Claus Nehmzow
Managing Director ALCUS International Ltd. Hong Kong

CEO Asian Insurance Summit

Hong Kong th 2009 March 25

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Friday, 27 March 2009

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

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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 nance and islamic nance Concern about more disasters: e.g., pandemic No bricks and mortar bancAssurance

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Next Generation Internet

Data, Activity

M e

People

Web 2.0 Productivity Focus

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Web 1.0 Standard Web Focus

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Generation Y: Screenagers
Screenagers

Source: IDC

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Multi Channel Distribution

Connecting brands and their customers with insurance products and underwriting capacity.
Best of Breed Insurers

Affinities / Retailers

Banks/Post Offices

Global Insurance Service

Agents and Brokers

Telco's/ Rural/ Semi-Urban

Connecting insurers with niche distribution channels and brand loyal customer segments.

Virtual Worlds

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VIRTUAL WORLDS

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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
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Virtual world: a real-time, shared experience

Presence Co-Presence

Anonymous

Interactive

Spatial

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Virtual Worlds Registered Accounts Q4 2008

Age 30+
HiPiHi Amazing Worlds Near ERepublic

Age 5
2009
Twinity
2m

Utherverse

15m Second Life

Chugginton Woogiworld

2008
GeoSim Philly

Handipoints 1m Jumpstart

Age 8

Chapatiz My Animal Family

2007
Xivio

Kidstudio Konstruction Zone Hello Kitty 2m Buildabearville

Football Superstars

2006

Cyber Town

2005

1m Webkinz Action Allstars Robot Whirled Galaxy Barbie Girls 15m Webcarzz Poptropica 20m Kidscom
1.5m

Moshi Monsters 1m

Chobots Cars

Age 25
Mycosm

2009

2008

2007

2006

2005

2005

2006

2007

SceneCaster 2m iheartland Activeworlds 1m Onverse SportsBLOX Interzone Weblin Black Mamba

1.5m

2005

Dizzywood MinyanLand LEGO Universe Virtual Tweens 45m Neopets Digital Dollhouse Club PonyPals Franktown Grockit Planet Cazmo 10Vox Kiwi Heroes Medikidz Green Vizwoz 19m Club Penguin Oddcast ClubCooee My Mini Life Spineworld KooDooZ Whyville 3m Massively Me

2008

2009

Age 10

2006

Kaneva There 2m vMTV 3m Vivaty Yoggurt 20m IMVU vLES Home EGO sMeet vSide Empire of Sports SmallWorlds Faketown

2007
Coke Studio

100m 6m

Habbo

goSupermodel Taatu

2008
WeeWorld 24m

Age 20
Live or open beta Launched in In development/private beta Closed/closing

Visitoons Muxlim

7m 13m Meez 21m Stardoll Gaia Lively Frenzoo 2009 RocketonOurworld

Age 13
www.kzero.co.uk

No data shown for worlds under 1m registered accounts. Includes estimates. Copyright K Zero 2008 Permission required prior to republishing

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Age 15
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Private and public sector organizations are using virtual worlds for serious business
recruiting training developer partner network management b2b marketing surgeon training, operating theatre conferences design collaboration

health care seminars academic education conferences consumer marketing cruise missile launch training recruiting training

internal collaboration

IT training Internal sales conferences collaboration Recruiting b2b marketing, conferences

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LOreal has experimented with experience marketing in virtual worlds

Consumer marketing in Second Life Playing with scale and experience

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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

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

Source: Cigna, vielife

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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 Nortels web.alive

Source: Nortel, ThinkBalm

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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 InXpos virtual event platform

Source: VentureBeat, January 2009

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IBM: fth of cost / no jet lag -ROI of $320,000 on $80k investment

meeting with >200 participants, held in late 2008 specically designed meeting place for keynotes, breakouts, 3D server & green data center illustrations

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

IBMs Virtual Community Group has 6,100 members used stand-alone, behind rewall Linden Lab version of SL

Source: IBM/Linden Lab case study, March 2009

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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 Articial Intelligence engines...

... others have human operators

behind them

Source: USA Today, Asia Risk Technologies

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Micronance (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

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Wells Fargos 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

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VIRTUAL WORLDS AND INSURANCE

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3D virtual worlds can yield benets across many parts of the insurance life cycle
Product Denition/ Assembly
Application

Sales Force Training

communication interactive seminars role-play help with PR

Product Launch

pre-launch meetings sponsor/embed with relevant partners (e.g., household ins & greener living) edutainment time-to-market better explanation of complex or controversial products

Sales

experience marketing compliance risk island interactive education public, small group and private sessions overcome insurance sales man syndrome easier to education complex products

Customer Service / Claims

customer service centers use waiting time to cross sell customer self-help

brainstorming partner communications internal communication

travel/time savings more open, creative ideas

broader reach (age, location) better accessibility, inclusion travel/time savings

Benets

anonymous allows simulated claims reducing fraud improved customer experience

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Bank Assurance: another opportunity using a virtual world channel

A virtual world is uniquely positioned to integrate and link dierent oerings Environments and locations can be dynamically changed and adapted The spatial character allows more subtle integration than a at link on a web page

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Benets 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 dierences and reservations against direct sales contact Medium equally well suited (but for dierent reasons) for younger and older audiences

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Willy Wong, head of sales, presents a new micronance 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 centers 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
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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 dierent 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
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A virtual world channel should be integrated into the wider Web 2.0 - on PC & mobile

Insurance Virtual World

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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++
12.9
Macao New Zealand Singapore Indonesia Vietnam Hong Hong India Taiwan

20
Greece Ireland Hungary Czech R Norway Finland Israel Romania Turkey Russia Austria Portugal Denmark Switzerland Belgium Sweden Poland

14.4

Korea

84 75
8
1.5 1.5 1.9 2.3 2.5 2.6 3.0

Canada

9.6

7.5 7.5 9.3 14.3

Netherlands Spain Italy France U.K. Germany

15.6 8.3 8.8 8.1 4.7 10.1 27.1 Japan 4.8 12.7 currently no signicant usage: Potential
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6.8 12.6 6.4 7.3 8.5 4.1 4.1

66.5

China

66

USA

13

32
Australia 9.6

15
3 4.8 7.4 ##: broadband subscribers (millions)

16

Chile Argentina 3.9 Mexico 2.2 Brazil 11.0

14.4 17.4

##: minutes/broadband user/month

Source: Linden Lab, OECD, Wikipedia, Alcus analysis Friday, 27 March 2009

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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Wonderland: Suns open source virtual world

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