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Mobile insurance case - Germany - Digital business model

Anonymous A asked on Nov 17, 2017 - 1 answer

The client is a large European insurance services provider for businesses and individuals. They would like to launch a new mobile insurer in Europe for standard non-life insurance products, like car or home insurance, by maximizing the use of direct and instant customer interaction via an app on their mobile devices.

The client is interested in taking a greenfield approach, seeking to attract digital customer segments through the application of new technologies –telematics, big data/analytics, IoT, etc. –as a mobile insurer. They expect our consultancy firm to share the risk by co-investing in the new company that would be built as a result of this project. The timeline of the project is two phases of 7 weeks each.

In an upcoming board presentation, the executive board is looking to understand the value potential of digital and their possibilities to launch a mobile insurance.

I am thinking of those questions:

Why is now the right time for the client to use business building as a growth innovation engine?

What kind of mobile insurance can you imagine for them to launch?

Which competitors should they keep an eye out for?

Who are some potential partners/what sort of ecosystem could be required for success?

What is the market potential in Germany? [Please help me out for this calculations].

What kind of business models can you imagine for the mobile insurance?

What other possibilities do you see to disrupt the insurance value chain and create value through digital?

Why is our consultancy firm the right partner for the success of this project?

Client goals: Convenience, accessibility, connectivity, customer experience, data collection, use of new technologies

I would be very grateful if you guys can help me out structure the case and brainstorm/help me out solve it.

Thank you so much! Really looking forward to hearing your thoughts. Please share with me if you saw similar cases treating with new actual content (disruption, digital business models, user experience).


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updated his answer on Nov 17, 2017
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Hi Anonymous A,

From my understanding, you want to answer this question: is there a potential to launch a mobile/digital brand in Europe for P&C (property & casualty) insurance? If so, what are the key attention points to assess?

My hypothesis is that insurers can use digital tools to deliver added value services, lower premiums and an overall better customer experience (hence firms that do this well will reduce costs and raise revenues).

You will find below how I would structure the key questions (and a few ideas on interesting points to assess):

  • Customer
    • What are the key customer segments? (size, growth rate, trends,...)
    • What is the favoured distribution channel per segment?
    • What is the level of expertise required to serve each segment? (e.g. car insurance is much more standardized than industrial insurance)
    • What are the most relevant segments for your Client? (could be ranked by segment attractiveness vs. R&D investment ratio for instance)
    • ...
  • Product
    • What is the current market saturation by product vertical? By European country?
    • What additional verticals could be targeted? Are there any specific tools & capabilities to conquer such verticals?
    • ...
  • Your Client (I would approach this by looking at each step of the insurance value chain)
    1. Product design
      • What is the impact of new expert figures (e.g. Data Scientist) in the new digital insurance era? What are the new forms of data science that will rise to the forefront of the modern insurance firm (e.g. IoT data , historical data for predictive analytics, location awareness for risk mitigation,...)
      • What are the required additional capabilities? Develop internally or buy externally?
      • ...
    2. Pricing and underwriting
      • How to minimize fraud online? What is the right anti-fraud technology to sell online?
      • What are the key value propositions and what are the mutual links between them (cross-sell, up-sell, …)?
      • ...
    3. Distribution
      • What are the key purchasing criteria for insurance products? How does offline compare to online?
      • What are the required skills and organization to accelerate growth online? How to attract the best digital talents?
      • What is the risk that existing distribution partners (e.g. Carrefour) develop insurance products internally?
      • What are the possible impacts of selling online in terms of cannibalization of existing sales?
      • What are the organizational and legal constraints to sell across European countries? (e.g. different legal requisites, multilingual product, multilingual support,…)
      • ...
    4. Admin and claims management
      • By how much will predictive technology improve performance?
      • ...
    5. Additional links upstream/downstream
      • Is there any new function along the value chain created by Digital?
      • ...
  • Competition
    • What strategy has been adopted by competitors? And in other European geographies?
    • How does Client brand image compare to its competitors?
    • What are the risks and threats from GAFA and new entrants (online pure players)
    • ...

I hope this helps. Feel free to reach me for any additional info.


Hello Jacopo! Thank you so much for your valuable input. Actually, this is a case, which needs to be prepared in advance and sent out right before the interview. I am training on this one to prep as good as I can. I am struggling a bit in structuring the whole thing. It should be a ppt presentation for an upcoming board presentation to explain/defend the value potential of digital and give the executive board enough information to decide on implementing this project/new product launch or not. So this is no real-time solving case but we are allowed to do research in advance and use internet for the case. In the case, they gave the information as well that the timeline of the project is 2 phases of 7 weeks each. So I assume I need to prepare the implementation plan as well. The ppt presentation should go for 20min. Focus is on proposing a digital business model for a mobile insurance, which aims to create a desirable customer experience. I am not sure about sizing the market potential in Germany, how to calculate it? How to disrupt the insurance value chain and create value through digital? How can I quantify the revenues/profit from this launch (cost-benefit study? Break-even analysis?) ? Your ideas are very welcome and if you happen to know of a good similar digital case, please share :) — mamouna on Nov 20, 2017

Hi Mamouna, I am struggling a bit to understand the goal of this case but from what I understand, you should create an approach for the project to be covered during phase 1 and 2 (rather than an implementation plan which is probably the end goal of a real project ). Having said that, I would structure the approach in two parts: 1. Confirm potential, size the online insurance market and identify high potential insurance categories – here I would show how you size the online market, identify the ‘product categories’ to be addressed (e.g. home, car, electronics,…) and what sources of information you would use (e.g. GDV if you are looking at Germany, competitive benchmark, number of insurance related searches on Google, pricing benchmark,…) 2. Define entry strategy – once you have confirmed the potential for online insurance and identify what product categories to launch first, in this section of the approach you should define how the client is going to launch and position regarding online insurance (this is basically an entry strategy) I hope this helps, Jacopo — Jacopo on Nov 20, 2017

Hi Jacpo! this absolutely helped! thanks a lot! If possible, i would be even more grateful if you can guide me through a critical part. The client's goal is business growth. Now I have gathered some data about impact of implementing technology A and B on cost and efficiency. Is it possible to quantify the revenues and profit generated from launching, let's say a digital car insurance product. I am struggeling with how to even structure. PS: online market for car insurance has been estimated. How to tacke the quantitative part of business growth by introducing this new produvt? much appreciated! — mamouna on Nov 23, 2017

Hi Mamouna, I would calculate that by dividing the planned marketing investment and the average acquisition cost per customer. For instance, if acquiring a customer costs 40euros and you are going to spend 40,000euros in marketing you would get 1,000 customers (with this information and the average spend per customer you would get the figure you are looking for). How do you calculate your acquisition costs? You can make educated hypothesis by using Google Adwords Keyword Planner and Google Adwords industry benchmark. For instance, let’s assume that you are only going to invest on paid advertising on google. Given that the cost per click in Germany for insurance car products is around 2euros and that the Conversion Rate for that type of product is around5%, you will need 20 clicks to sell 1 insurance (1/5%=20). Generating 20 clicks will cost 40euros (20x2euros cost per click). Hence your acquisition cost is 40euros. If you are forecasting your sales also for year 2, you will have to consider that you will have at this point returning customers (at zero acquisition cost because you had already acquired them). Hope this helps, Jacopo — Jacopo on Nov 24, 2017

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