PARTNERSHIP FOR QUICK TO MARKET ENTRY

1

PARTNERSHIP FOR PARTNERSHIP FOR QUICK TO MARKET QUICK TO MARKET

ENTRYENTRY

JCG CONFERENCE SEPT, JCG CONFERENCE SEPT, 20092009

Steven Weiss, SVP LOTSolutionsSteven Weiss, SVP LOTSolutions

Jonathan Yee, SVP Chartis InsuranceJonathan Yee, SVP Chartis Insurance

2

AGENDAAGENDA

• Introductions and OverviewIntroductions and Overview• Discussion on TopicDiscussion on Topic• Product Development Cycle TimesProduct Development Cycle Times• Partnership vs. OutsourcingPartnership vs. Outsourcing• Aspects of an Effective PartnershipAspects of an Effective Partnership• Case StudyCase Study• QuestionsQuestions

3

QUESTIONS ON NEW QUESTIONS ON NEW PRODUCTSPRODUCTS

• How important are new product How important are new product introductions to achieving your sales introductions to achieving your sales goals?goals?

• What percentage of new product What percentage of new product introductions succeed?introductions succeed?

• How important is speed-to-market How important is speed-to-market for new product introductions?for new product introductions?

4

ANSWERSANSWERS

• Some insurance companies estimate Some insurance companies estimate that new products represent 25%+ that new products represent 25%+ of new sales.of new sales.

• Less than 30% of new products Less than 30% of new products achieve their expected results.achieve their expected results.

• Speed-to-market is VITAL for Speed-to-market is VITAL for achieving your sales goals.achieving your sales goals.

5

WHAT TAKES LONGER?WHAT TAKES LONGER?

• New home construction – average New home construction – average home?home?

• Having a baby?Having a baby?• New insurance product launch from New insurance product launch from

concept to in market?concept to in market?

6

CYCLE TIMESCYCLE TIMES

• New home construction 6-9 months.New home construction 6-9 months.• Delivery 9 months.Delivery 9 months.• New insurance product 9-12+ New insurance product 9-12+

months.months.

7

WHY DOES IT TAKE SO WHY DOES IT TAKE SO LONG?LONG?

• Poor initial definition of opportunity.Poor initial definition of opportunity.• Competition for internal resources.Competition for internal resources.• Competing internal priorities.Competing internal priorities.• Squeezing a round peg in a square Squeezing a round peg in a square

hole.hole.

8

WHAT’S THE WHAT’S THE SOLUTION?SOLUTION?

• Partner with an outside expert for Partner with an outside expert for specific functionality.specific functionality.

9

6 STEP PROCESS6 STEP PROCESS

• Product concept, definition and Product concept, definition and expectations.expectations.

• Pricing and design.Pricing and design.• Filing and approvals.Filing and approvals.• Marketing and distribution.Marketing and distribution.• Fulfillment and service.Fulfillment and service.• Analysis and reporting.Analysis and reporting.

10

IS PARTNERING THE IS PARTNERING THE SAME AS OUTSOURCING?SAME AS OUTSOURCING?

• Outsourcing is subcontracting a Outsourcing is subcontracting a process to a third party company with process to a third party company with the intent of lowering cost or making the intent of lowering cost or making better use of time and expenses.better use of time and expenses.

• A partnership is a long-term strategic A partnership is a long-term strategic relationship between customer and relationship between customer and supplier based on achieving best supplier based on achieving best practices and sustainable competitive practices and sustainable competitive advantage.advantage.

11

ASPECTS OF AN ASPECTS OF AN EFFECTIVE PARTNERSHIPEFFECTIVE PARTNERSHIP

• Common vision.Common vision.• Strategic leadership.Strategic leadership.• Clearly defined roles.Clearly defined roles.• Mutual trust.Mutual trust.• Efforts towards cultivating the Efforts towards cultivating the

relationship.relationship.• Communication – open and frequent.Communication – open and frequent.• Information exchange.Information exchange.

12

ASSESSING A PARTNERASSESSING A PARTNER

• What is their role?What is their role?• What do they contribute to the What do they contribute to the

relationship?relationship?• What drives their interest and What drives their interest and

commitment?commitment?• What concerns them?What concerns them?• How important is the relationship to them?How important is the relationship to them?• What benefits do they bring?What benefits do they bring?• What are the costs and risks to them?What are the costs and risks to them?

13

CASE STUDYCASE STUDY

Chartis InsuranceChartis Insurance

14

CHARTIS INSURANCECHARTIS INSURANCE

• Chartis began in 2001.Chartis began in 2001.• Experience as an underwriter for Experience as an underwriter for

large cases and agent distribution.large cases and agent distribution.• Limited domestic experience with Limited domestic experience with

DR sold product.DR sold product.• Corporate resources focused on core Corporate resources focused on core

business.business.• Looking for revenue opportunities.Looking for revenue opportunities.

15

CHARTIS INSURANCECHARTIS INSURANCE

• OpportunityOpportunity– IMO had successfully Beta tested a DR IMO had successfully Beta tested a DR

product.product.– IMO was seeking an underwriter.IMO was seeking an underwriter.– IMO had proven track record in DR IMO had proven track record in DR

distribution.distribution.– One product.One product.– One market – credit card files.One market – credit card files.– One channel – outbound telemarketing.One channel – outbound telemarketing.

16

CHARTIS INSURANCECHARTIS INSURANCE

• DilemmaDilemma– Chartis liked the DR business model.Chartis liked the DR business model.– Chartis understood the revenue Chartis understood the revenue

potential.potential.– Internal resource constraints.Internal resource constraints.– High volume transaction processing and High volume transaction processing and

service not a core competency.service not a core competency.– What to do?What to do?

17

CHARTIS INSURANCECHARTIS INSURANCE

• OptionsOptions– Walk away.Walk away.

• Lost opportunity.Lost opportunity.

– Build internal capacity.Build internal capacity.• Time and cost.Time and cost.• Resource strain.Resource strain.

– Buy capability.Buy capability.• Time and cost.Time and cost.

– Partner with others.Partner with others.

18

CHARTIS INSURANCECHARTIS INSURANCE

• An easy decision to make.An easy decision to make.• Establish partnershipsEstablish partnerships

– Distribution – IMO.Distribution – IMO.– Marketing/sales –IMO.Marketing/sales –IMO.– Administration and service – TPA.Administration and service – TPA.

19

CHARTIS INSURANCECHARTIS INSURANCE

• TodayToday– 5 IMO partners5 IMO partners– 25 products plus versions25 products plus versions– All DR channelsAll DR channels– Multiple marketsMultiple markets– 1.7MM policies in force1.7MM policies in force– 1.4MM new annual enrollments1.4MM new annual enrollments

20

CONCLUSIONCONCLUSION

• You can’t be all things to all people.You can’t be all things to all people.• Do what you do well and partner Do what you do well and partner

with other experts for what they do with other experts for what they do well.well.

• Pick a partner with aligned Pick a partner with aligned objectives.objectives.

• Beat the competition to market.Beat the competition to market.• Be a star.Be a star.

21

Q&AQ&A

THANK YOUTHANK YOU

Steve Weiss, [email protected] Weiss, [email protected]

Jonathan Yee, Jonathan Yee, [email protected]@chartisinsurance.com