One Day Auto Insurance Providing a New Customer Value
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One Day Auto Insurance
Providing a New Customer Value
Tsukasa Makino
Deputy General Manager Corporate Planning Department & IT Planning Department
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Visiting lecturer at Tokyo, Tsukuba and Kyushu University 1
About Tokio Marine & Nichido
Established in 1879 (134 years old)
1) Profile
Total Assets：US$87 Billion
Net Premium Written：US$18 Billion
Employees: Domestic:17,000,
Overseas:16,000 （As of FY2011 1$=90Yen)
• Automobile • Kid’s
2) Product Lines • Superinsurance（Non-life+Life） • Saving Type
• Homeowners • 401k
• Injury, Sickness • Mutual Fund
• Travel, Leisure • Life
3) Distribution Tokio Marine & Agencies（46,000)
System Nichido
Sub Car
Branch Independent Bank Post office
HQ Branch Dealer
(125) Etc..
(427) ©Tokio Marine & Nichido 2
Research, presentation, teaching at Universities
My Job
Chicago 2006
Hong Kong 2005 Hong Kong 2006
Shanghai 2008Shanghai 2008 Beijing2007 Las Vegas 2004
Now Coming
Printing Soon
Boston2008
London 2013
Las Vegas 2008
Paris 2008 Hong Kong 2008 Tsukuba Univ.2007
Paris2008
Wiesbahden 2011
New York 2007
Ｔａｉｐｅｉｉ2008 Las Vegas 2006
Kyushu Univ.2008
San Francisco2008
Munster 2007
Orlando 2005
Zurich2009 New Delhi 2006 Dallas2007
Brisbane2008
San Francisco 2008
Athens 2006Singapore 2008 Singapore 2007 Orlando 2007
Rio de Janeiro
Cairns 2005 Orlando 2009 2007
©Tokio Marine & Nichido 3
Which one is more “Moteru”(モテる）?
10,000 Followers
30,000 Likes
©Tokio Marine & Nichido 4
Issues
• Mature Japanese Non Life insurance market.
• Decreasing motivation for young people to own a car.
10,000 Followers
30,000 Likes
©Tokio Marine & Nichido 5
Issues
• Auto Insurance premium surges up when it include young
drivers
• Accidents caused by non-insured drivers
©Tokio Marine & Nichido 6
On the market from Jan, 2012
One Day Auto insurance
• Short term, simple and inexpensive auto insurance.
• Can be purchased via mobile phones.
• Grant maximum 20% discount for those who
switched to annual policy.
Plan Basic With automobile
damage coverage
Premium ¥500/day ¥1,000/day
Liability (bodily injury Unlimited Unlimited
and property)
Driver/Passenger ¥10 million ¥10 million
injury (lump-sum¥100,000) (lump-sum¥100,000)
Liability for borrowed - ¥3 million
car damage (¥50.000 deductible)
©Tokio Marine & Nichido 7
Market
Young generation who has driver’s license and
doesn’t own a car
(16million)
Drive parent’s or friend’s car once a
month in average (7million)
Have an intention to own a car
within a year(0.7million)
©Tokio Marine & Nichido
8
Objectives
• Cultivate auto insurance market in younger generation
• Provide more opportunity to drive cars to younger generation
• Reduce accidents caused by non-insured cars.
©Tokio Marine & Nichido 9
Process
Pre-register Buy Pay
Premium is added
on the monthly
mobile phone bill
Read Register Input
QR Code • Name • License plate No.
(agency code • Birthday • Date of driving
embedded) • Address
• e-mail address
• Driver’s License No.
• License expiry date
©Tokio Marine & Nichido 10Sales is increasing with seasonal volatility
Sales Volume
Japanese summer
holiday season
Smartphones
supported
©Tokio Marine & Nichido 11Customer Research
“Are you satisfied with the product “Will you consider Tokio Marine &
and service of One Day Auto Nichido when you buy annual auto
Insurance?” Insurance?”
90% customers satisfied 60% potential customers
©Tokio Marine & Nichido 12Loss ratio is quite fair, considering the age of drivers
Profitability
• Loss ratio is (slightly) lower than the normal auto insurance
Loss Ratio
♪
Annual One Day
©Tokio Marine & Nichido 13Market response
“I wanted to practice driving with my parents’ car before I buy my
own. Insurance was my concern. One day auto insurance was
very helpful for me”
- a customer -
“One day auto insurance grants maximum 20% discount to the
users. That is a good promotion for auto sales to young
generation.”
- An Executive of automobile manufacturer –
“We appreciate the social merit of One day auto insurance to
reduce the accidents caused by non-insured car, and its effect
to foster market for automobile and insurance industry.”
-Manager, Insurance division, Financial Services Agency (FSA) –
©Tokio Marine & Nichido 14TMNF already had a strong brand name, but expanded it further
Brand recognition.
21% of the One Day Auto Insurance customers recognized
the name of Tokio Marine & Nichido after they knew or
bought One day auto insurance.
©Tokio Marine & Nichido 15Awards
“Nikkei Grand prize for superior
financial products and services”
(Jan 2012)
Second place of “Nikkei
Advertisement Award”
(Oct.2012)
©Tokio Marine & Nichido 16Strong positive effect to our annual auto business
Market expansion
One day auto insurance Annual auto insurance
160,000 policies 1,000 policies
160 million yen 170 million yen
From Jan.2012 to Nov.2012
©Tokio Marine & Nichido 17There were, of course challenges which other companies couldn’t overcome
Challenges
• How to evaluate the risk and calculate premium?
• How to avoid fraud?
• How to avoid channel conflict with agencies?
• Will it work?
• Will our peers copy our products?
©Tokio Marine & Nichido 18How to evaluate the risk and calculate premium?
• Conducted in-depth claims analysis on the target cluster
in our customers.
• Utilized other data source which may have similar risk
profile (such as claims data of rent-a-car)
©Tokio Marine & Nichido 19How to avoid fraud?
• Introduced pre-registration system. Users should register
their personal data before they can buy a policy.
• Automobile coverage plan can only be purchased 1 week
after the registration.
Pre-register
Can apply for Basic Plan Can apply for Automobile Coverage Plan
One Week
©Tokio Marine & Nichido 20How to avoid channel conflict with agencies?
• One Day Auto is distributed by agencies.
• The users of One Day Auto are potential customers of
annual auto insurance for the agencies.
• The users are potential car buyers as well. Car-dealer-
agencies obtain lead information by selling One Day Auto.
• TMNF is providing PC application to help agencies promote
selling One Day Auto.(e.g generate flyers with QR)
Pre-register Buy
Agency
Data
Commission & Data
©Tokio Marine & Nichido 21Will it work?
• Experience in “NTT docomo One Time Insurance” since 2010.
Sports & Leisure, Golf, Overseas Travel, Domestic Travel
• Piloted by NTT docomo 3 months prior to the grand opening.
Docomo One Time Insurance (AUTO)
Source: NTT docomo
©Tokio Marine & Nichido 22Won’t our peers copy our products?
©Tokio Marine & Nichido 23Lessons Leaned
• Have a courage to take a new business chance.
• Always think Customer, Society and Agency’s benefit first.
Company’s benefit will follow.
• Build Win-Win-Win model.
• Trust customers. Do not miss opportunities by assuming
“customers are always evil”
You’ll never learn until you try.
©Tokio Marine & Nichido 24Next Steps
25We have been dealing with very limited information
Marketing
What the
customer wants/
How is the thinks/ feels
customer’s health
condition
Feedback Market
form Research How the accident
happened
Karte
Claims
Claims
Underwriting form
/Rating
Application Structured Data
How the Form
customer
drives
Filter & Convert
Real Information
©Tokio Marine & Nichido 26We have to deal with real and huge information to create value
Marketing
What the
customer wants/
How is the thinks/ feels
customer’s health
condition
Blogs Facebook
How the accident
YouTube Mixi
Heart rate Miles run
happened
Amazon Twitter
or walked
Blood
pressure Weight
Underwriting Engine Brakes
/Rating Claims
Speed Airbag
Analyze& Gravity Seatbelt
How the Create Value
Accurate Hour/day
customer What the
Mileage
drives Acceleration
Speed Deceleration
customer is doing
Real Information
S
A
©Tokio Marine & Nichido
L 27
EThank You!
Contact: tsukasa.makino.tmnf@nifty.com
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