Insurance Virtual World

Monetizing and Marketing Insurance through Virtual Worlds David Piesse th Global Head of Insurance 9 CEO Asian Sun Microsystems, Inc. Insurance Hong Kong Summit Claus Nehmzow Managing Director Hong Kong ALCUS International Ltd. th Hong Kong March 25 2009

Friday, 27 March 2009 1 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”

Friday, 27 March 2009 2 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 ﬁnance and islamic ﬁnance • Concern about more disasters: e.g., pandemic • No bricks and mortar bancAssurance

Friday, 27 March 2009 3 Next Generation Internet

Data, Activity

M e People

Web 2.0 Web 1.0 Productivity Focus Standard Web Focus © Alcus International Ltd. 2009

Friday, 27 March 2009 4 Generation Y: “Screenagers”

Screenagers

Source: IDC © Alcus International Ltd. 2009 1 Friday, 27 March 2009 5 Multi Channel Distribution Affinities / Retailers

Connecting brands and their customers with insurance products Banks/Post and underwriting capacity. Offices

Best of Breed Global Agents and Insurers Insurance Brokers Service

Telco's/ Rural/ Semi-Urban Connecting insurers with niche

distribution channels and brand Virtual loyal customer segments. Worlds

Friday, 27 March 2009 6 VIRTUAL WORLDS

Friday, 27 March 2009 7 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 © Alcus International Ltd. 2009

Friday, 27 March 2009 8 Virtual world: a real-time, shared experience Presence Co-Presence

Interactive Anonymous Spatial

Friday, 27 March 2009 9 Age 5 Virtual Worlds Registered 2009 Accounts Q4 2008 Twinity Utherverse Chugginton 15m 2m Second Life Woogiworld Age 30+ Handipoints Age 8 2008 1m HiPiHi Jumpstart GeoSim Chapatiz Amazing Philly Worlds My Animal Family Kidstudio Near 2007 Konstruction Zone Xivio ERepublic Hello Kitty 2m Buildabearville

Football 2006 1m Webkinz Superstars Action Allstars Robot Whirled Galaxy Barbie Girls 15m Cyber Webcarzz Poptropica Town 2005 20m Kidscom 1.5m Chobots Moshi Monsters Cars 1m Age 25 2009 2008 2007 2006 2005 2005 2006 2007 2008 2009 Age 10 Dizzywood Franktown MinyanLand LEGO Universe Mycosm Virtual Tweens 45m Neopets SceneCaster 2m Club PonyPals Digital Dollhouse 2005 Massively Me iheartland Whyville 3m Grockit Activeworlds 1m Planet Cazmo 10Vox Kiwi Heroes Onverse Medikidz Green Vizwoz 2006 SportsBLOX 19m Club Penguin Interzone Oddcast ClubCooee 1.5m Weblin My Mini Life Kaneva Spineworld Black Mamba KooDooZ There 2m 2007 100m vMTV 3m Coke Habbo Vivaty Studio 20m 6m Yoggurt IMVU EGO Faketown goSupermodel vLES sMeet SmallWorlds 2008 Home Visitoons Age 20 vSide WeeWorld Taatu Age 13 7m 24m 13m Muxlim Live or open beta Empire of Meez Gaia 21m Stardoll Sports Lively Launched in Frenzoo 2009 www.kzero.co.uk RocketonOurworld In development/private beta No data shown for worlds under 1m registered accounts. Includes estimates. Copyright K Zero 2008 Closed/closing Permission required prior to republishing © Alcus International Ltd. 2009 Age 15

Friday, 27 March 2009 10 Private and public sector organizations are using virtual worlds for serious business

•recruiting •surgeon training, •training operating theatre •conferences •developer partner network •design collaboration management

•b2b marketing •health care seminars

•academic education •internal collaboration •conferences

•IT training •consumer marketing

•Internal sales conferences •cruise missile launch •collaboration training •recruiting •Recruiting •training •b2b marketing, conferences

Friday, 27 March 2009 11 L’Oreal has experimented with “experience marketing” in virtual worlds

• Consumer marketing in Second Life • Playing with scale and experience

Friday, 27 March 2009 12 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

Friday, 27 March 2009 13 ... virtual seminar, social community, interactive learning, and games

Source: Cigna, vielife © Alcus International Ltd. 2009

Friday, 27 March 2009 14 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 Nortel’s “web.alive”

Source: Nortel, ThinkBalm © Alcus International Ltd. 2009

Friday, 27 March 2009 15 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 InXpo’s virtual event platform

Source: VentureBeat, January 2009 © Alcus International Ltd. 2009

Friday, 27 March 2009 16 IBM: “ﬁfth of cost / no jet lag” -- ROI of $320,000 on $80k investment

• meeting with >200 participants, held in late 2008 • speciﬁcally designed meeting place for keynotes, breakouts, 3D server & green data center illustrations • starting with one annual event, laying the base for ongoing meetings • IBM’s “Virtual Community Group” has 6,100 members • used stand-alone, behind ﬁrewall Linden Lab version of SL

Source: IBM/Linden Lab case study, March 2009 © Alcus International Ltd. 2008

Friday, 27 March 2009 17 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 Artiﬁcial Intelligence engines... • ... others have human operators behind them

Source: USA Today, Asia Risk Technologies © Alcus International Ltd. 2009

Friday, 27 March 2009 18 Microﬁnance (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 © Alcus International Ltd. 2009

Friday, 27 March 2009 19 Wells Fargo’s “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: Wes Fargo website, stagecoachisland.com, Facebook © Alcus International Ltd. 2009

Friday, 27 March 2009 20 VIRTUAL WORLDS AND INSURANCE

Friday, 27 March 2009 21 3D virtual worlds can yield beneﬁts across many parts of the insurance life cycle

Product Customer Sales Force Product Deﬁnition/ Sales Service / Training Launch Assembly Claims

• brainstorming • communication • pre-launch • “experience • customer service • partner • interactive meetings marketing” centers communications seminars • sponsor/embed • compliance • use waiting time • internal • role-play with relevant • “risk island” to cross sell

Application communication • help with PR partners (e.g., • interactive • customer self-help household ins & education greener living) • public, small • edutainment group and private sessions • travel/time savings • broader reach • time-to-market • overcome • anonymous allows • more open, (age, location) • better explanation “insurance sales simulated claims creative ideas • better of complex or man” syndrome reducing fraud accessibility, controversial • easier to • improved inclusion products education customer Beneﬁts • travel/time savings complex products experience

Friday, 27 March 2009 22 Bank Assurance: another opportunity using a virtual world channel

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

Friday, 27 March 2009 23 Beneﬁts 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 diﬀerences and reservations against direct sales contact • Medium equally well suited (but for diﬀerent reasons) for younger and older audiences

Friday, 27 March 2009 24 Willy Wong, head of sales, presents a new microﬁnance 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 center’s computer • After the main conference, participants break out into smaller work groups • The seminar space allows frequent sessions to accommodate various time zones

Friday, 27 March 2009 25 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 diﬀerent 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

Friday, 27 March 2009 26 A virtual world channel should be integrated into the wider “Web 2.0” - on PC & mobile

Insurance Virtual World

Friday, 27 March 2009 27 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++ Macao New Zealand Singapore Indonesia 12.9 Vietnam Hong Hong India 20 Taiwan Greece Ireland 14.4 Korea Hungary Czech R Norway Finland Israel Romania Turkey 84 Russia 1.5 Austria 6.8 75 1.5 Portugal 12.6 1.9 Denmark 6.4 2.3 Switzerland 7.3 2.5 Belgium 8.5 66.5 China 2.6 Sweden 4.1 8 9.6 3.0 Poland 4.1 Canada 7.5 Netherlands 15.6 7.5 Spain 8.3 9.3 Italy 8.8

14.3 France 8.1 66 USA 13 32 4.7 Australia 9.6 15 16 14.4 U.K. 10.1 Chile 3 Argentina 3.9 27.1 Japan 4.8 4.8 Mexico 2.2 17.4 Germany 12.7 7.4 Brazil 11.0 currently no signiﬁcant usage: Potential ##: broadband subscribers (millions) ##: minutes/broadband user/month Source: Linden Lab, OECD, Wikipedia, Alcus analysis © Alcus International Ltd. 2009

Friday, 27 March 2009 28 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

Friday, 27 March 2009 29 Wonderland: Sun’s open source virtual world

Friday, 27 March 2009 30