Gordon WilsonGroup Managing Director

Welcome to our

Life & Pensions Executive Dinner

Financial Services Forum

Guest Speaker – David Smith – “Back from the Future”

Jon MayHead of Sales, Financial Services

Welcome to our

Life & Pensions Executive Dinner

Financial Services Forum

Legacy pensions audit underway

SOLVENCY II

RDR impact now clear

Pensionfreedomsand choice

Mobile apps overtake PC internet usage

“Annuity sales planshave potential”

Providers grapple with

charge cap and AMD ban

Group risk experts welcome

Fit For Work launch

TPR slams providers masquerading as master trustsWebb wants bulk transfers

from high charging plans

Will Collective DC fly?

Bulk annuities take off

Providers go direct

Technology drives customer engagement

Providers face AE capacity crunchPot Follows Member goes ahead

Are Lifestyle Funds dead?

Webb backs pension

passport plans

Insurers slammed over pension wake-up packs

UK life and pensions industry hit by drop

in annuities sales

Merger creates legacy issues

Software Solutions

new world product

propositions

retirement income innovation

worksite delivery heritage transformatio

n

digitally enabledcustomer centric

omni-channelstraight through processing

workflow driven

Guest Speaker

Back from the Future

Introducing David SmithChief Executive

Global Futures and Foresight

A unique insight into the future and how to prepare for it

New Whitepaper

Global Futures& Foresight

David SmithChief Executive

Global Futures and Foresight

Copyright © 2015 Global Futures and Foresight Limited

Global Futures& Foresight

Data Processing

"I have travelled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year." The editor in charge of business books for Prentice Hall, 1957.

Global Futures& Foresight

... and the telephone

“The 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”

Western Union internal memo, 1876.

Over 1.2 billion telephone lines

Over 7 billion mobiles

Global Futures& Foresight

• Nokia was a phone company in a world that stopped buying phones.

http://www.theatlantic.com/business/archive/2013/09/why-nokia-died-nobody-buys-phones-anymore/279337/

We now buy small computers that also make calls.

Global Futures& Foresight

Innovation

48 Years

1810 1858

Ezra Warner of Waterbury, Connecticut patented the first can opener

Global Futures& Foresight

With change comes risk

• Root causes of declines in public companies’ value:• 60% strategic risks.• 30% operational risks. • 10% financial risks.

Source: Society of Actuaries (2013) : Enterprise Risk Management: Looking Forward

"the assumptions on which the organization has been built and is being run no longer fit reality.“ Peter Drucker

Global Futures& Foresight

1. Globalization

2. Technology

3. Environment

4. Changes in work

5. Demographics & people

6. Consumption

Mega trends

http://csr-news.net/main/2008/08/04/megatrends-and-the-future-of-corporate-social-responsibility/

Global Futures& Foresight

GLOBAL

Global Futures& Foresightwww.watchblog.com Source: Population Research Bureau www.prb.org

The global population is expected to rise from 6.5bn in 2005 to 7.7bn in 2020 and 9.6bn in 2050

Global population growth

Global Futures& Foresight

“The size of the world economy will triple over the next four decades as emerging- market economies wield increasing power”

“World GDP to double within two decades”

Global Futures& Foresight

Emerging global economic growth

• 70% from emerging economies - 2030.

• 6/10 fastest growing economies are African.

• By 2020 - Asean economy doubles.

• China – No.2 insurance market in 10 yrs.

– 5 of top 10 insurance growth markets in APAC in P&C and Life.

http://www.standardchartered.com/en/news-and-media/news/global/2013-11-06-super-cycle-EM-growth-is-key.htmlhttp://www.londonlovesbusiness.com/business-news/exports/daniel-peters-only-one-in-five-uk-smes-export-we-must-increase-that-number/6011.article

http://www.economist.com/node/17677746

“the rise of emerging markets is forcing insurers to re-think their current business models...’

Global Futures& Foresight

‘Middle Class’ consumption 100 million becoming ‘Middle Class’ every year

Global Futures& Foresight

Global ageing by 2050

• Over 60’s:

– Mature economies - 22% to 33%.

– Developing world - 9% to 20%.

• 25% of China’s people over 65.

• Japan alone has 30% over 60.

– 64 countries will have by 2050.

http://info.cancerresearchuk.org/cancerstats/world/demographics/demographic-facts-for-the-world-population

http://www.global-ageing.eu/Bilder/collage.png

http://www.unescap.org/sdd/issues/ageing/ageing.asp

http://www.aicpa.org/RESEARCH/CPAHORIZONS2025/GLOBALFORCES/SOCIALANDHUMANRESOURCE/Pages/default.aspx

By the time a person born today is 80, their life expectancy would have gone well past 110.

Global Futures& Foresight

And we’re living longer lives

Human life expectancies have the potential to reach 500 or possibly even 1000.

“In the near future, the next two to four decades, the disease of ageing will be cured.”

Dr. Aubrey de Grey B.A., M.A. and Ph.D., University of Cambridge, Cambridge, UK. Born 20th April 1963

Robert A. Freitas Jr. is Senior Research Fellow at the Institute for Molecular Manufacturing

AGEING

CURED

Global Futures& Foresight

Health and wellness

By 2030

• Overweight & obese doubles to 3.3bn.

• Non-communicable diseases to cost £29tn.

• Cancer rates jump 75%.

http://www.weforum.org/news/non-communicable-diseases-cost-47-trillion-2030-new-study-released-today http://www.economist.com/news/special-report/21568065-world-getting-wider-says-charlotte-howard-what-can-be-done-about-it-big http://www.webmd.com/cancer/news/20120531/global-cancer-rates-set-to-soar-by-2030

We are living longer but not necessarily healthier.

Global Futures& ForesightHEALTHCARE

http://www.pdesigni.com/news/show/1468

Global Futures& Foresight

Getting older

• 10m people over 65 years.

– One in 6 people. 

– By 2030 5½m more +65’s.

– By 2050 one in four.

• By 2020

– 3m more over 70.

– 36% of workers over 50.

http://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/value-for-money-in-public-services/the-ageing-population/http://www.hrreview.co.uk/hr-news/diversity-equality/cipd-urges-employers-to-embrace-ageing-workforce/40366 http://www.telegraph.co.uk/finance/personalfinance/pensions/9612708/One-in-four-will-retire-at-70-by-2028.html http://www.hrmagazine.co.uk/hro/news/1075369/more-workers-continue-employment-past-age-65

http://cdni.wired.co.uk/620x413/o_r/oldpeople.jpg

In 2015, those aged 40+ will outnumber under-40s

Global Futures& Foresight

UK Lifestyles

• 95% not even doing minimum amount of physical activity.

• Sedentary lifestyles leads to more than 40 chronic diseases.

http://www.bbc.co.uk/news/health-11442101 http://www.nhs.uk/news/2011/08August/Pages/half-of-uk-predicted-to-be-obese-by-2030.aspx

http://www.breathslim.com/blog/wp-content/uploads/2012/03/sedentary-life.jpg

Sedentary leisure time is expected to rise in the UK by 52 hours per week by 2030.

Global Futures& Foresight

Health outlook

• 15m live with a long-term

condition.

• 18m within 20 years.

http://medicalxpress.com/news/2013-02-exposure-pesticides-food-air-diabetes.htmlhttp://www.theguardian.com/society/2012/oct/02/diabetes-charity-warns-health-calamity?newsfeed=truehttp://www.fitforworkeurope.eu/Downloads/uk/Fit_for_Work_WEB.pdf

http://www.mondolithic.com/wp-content/uploads/2010/12/Baseline-Magazine-Cover-UK-Health.jpg

By 2030 one in two UK

workers could have a

long-term condition.

Global Futures& ForesightREDEFINING LATER LIFE

Global Futures& Foresight

@65

• More than 1,700 British people reach 65 every day.

• 10.3m over 65.• 15.5m by 2030.

Source: The TUC

http://www.cii.co.uk/knowledge/insurance-institute-of-london/articles/pensions-101/31253 http://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/value-for-money-in-public-services/the-ageing-population/

35% of UK workers not contributing to any savings.

Global Futures& Foresight

Silver wealth UK

• 2002-2012, spending by over-50s grew by £100bn.

• +50’s control 80% of wealth.

• 60s own 25% (£993bn) of all property wealth. 

http://www.ey.com/UK/en/Industries/Financial-Services/Insurance/Beyond-2020---Forces-shaping-the-industry http://www.campaignlive.co.uk/news/1283323/ http://www.lv.com/adviser/working-with-lv/news_detail/?articleid=3238383

http://www.english.rfi.fr/sites/english.filesrfi/imagecache/rfi_43_large/sites/images.rfi.fr/files/aef_image/old-people-actives.jpg

Global Futures& Foresight

Ageing workforce

• 2020: 36% of UK working pop’n will be over 50.

• 20% don't expect to retire.

• 41% take a part-time job in retirement to make up for the shortfall in their savings.

http://www.hrmagazine.co.uk/hro/news/1075224/all-play-british-workers-dont-plan-reach-retirement-agehttp://www.hrreview.co.uk/hr-news/diversity-equality/cipd-urges-employers-to-embrace-ageing-workforce/40366 http://www.telegraph.co.uk/finance/personalfinance/pensions/9612708/One-in-four-will-retire-at-70-by-2028.html http://www.hrmagazine.co.uk/hro/news/1075369/more-workers-continue-employment-past-age-65

http://i.telegraph.co.uk/multimedia/archive/01802/retirement_1802700b.jpg

2028: 1 in 4 UK employees could work until they’re 70.

http://www.aviva.com/research-and-discussion/consumer-attitude-survey-2014/

Global Futures& Foresight

BUSINESS

Global Futures& Foresight

Porter’s 5 Forces

Changed Dynamics

Global Futures& Foresight

Home equity release

• 2013, older homeowners raised £1bn in home equity release.– 60% for home and garden

improvements. – 21% to clear debt.– Car upgrades, holidays

and helping younger relatives financially also feature.

http://www.express.co.uk/finance/personalfinance/455422/The-key-to-unlock-a-brighter-future-Look-at-the-rise-of-equity-release http://www.express.co.uk/finance/personalfinance/455422/The-key-to-unlock-a-brighter-future-Look-at-the-rise-of-equity-release http://www.cii.co.uk/media/5092528/beyond_2020_life__pensions_and_health_insurance.pdf

http://moneylendingexpert.com/wp-content/uploads/2014/06/equity-release-house-squeeze.jpg

Global Futures& Foresight

Reconfiguring the competition

• 30% believe new emerging market insurers will move into the developed world to become global insurers.

• 28% see truly global markets. PWC

http://www.pwc.com/en_GX/gx/insurance/pdf/insurance-2020-turning-change-into-opportunity.pdf http://www.pwc.com/us/en/press-releases/2012/2012-is-the-year-of-the-customer.jhtml

http://www.trimsunlimited.com/global-markets.php

“the rise of emerging markets is forcing insurers to re-think their current business models...’

Global Futures& Foresight

Emerging competition

• 89% of insurers say competition intensifies in distribution in 3 years.

• 64% say from non-insurance players - Google, Amazon, Walmart…

http://newsroom.accenture.com/news/insurance-sold-through-digital-channels-to-reach-25-billion-annually-in-europe-according-to-accenture-study.htm?c=glb_accglbtwt_10000945&n=smc_0713#sf18286796

http://www.netrate.com/wp-content/uploads/2013/01/Enhanced-Insurer-Agent-Connectivity-in-Insurance-Distribution-Chain.jpg

Global Futures& Foresight

The industry is not delivering

• Customers trust L&P providers least among all financial companies.

– Only 31% of L&P customers can manage their policy the way they want.

– Only 38% say their L&P provider offers value for money

– Only 37% say their insurer provides clear and transparent comms.

– 39% products complicated & confusing. http://juliayoga324.files.wordpress.com/2013/06/img_3277.png

https://www.bcgperspectives.com/content/articles/insurance_financial_institutions_improve_p_c_profitability_premium_growth/ http://insuranceblog.accenture.com/getting-to-grips-with-the-switching-economy-in-insurance/?cid=fs_insblogfy14_10000255_smc_0913#sf22269992 http://newsroom.accenture.com/news/uk-life-insurance-customers-prefer-buying-policies-online-but-personal-touch-is-important-for-advice-according-to-accenture-research.htm

Too complicated and confusing, difficult to engage with and not great value for money

Global Futures& Foresight

Reorientated business models

• From ‘inside-out’ to ‘outside-in.’ • A shift to a world of:

– Web-based.– Decentralised.– Front-office-oriented.– Mobile.– Touch-screen.– Consumer-oriented.– Co-creation

http://www.insurancetech.com/management-strategies/insurance-companies-embrace-emerging-tec/232200668

http://www.theharteofmarketing.com/wp/wp-content/uploads/2011/02/customer-centric-outside-in-reorg-harte.jpgL&P providers face lower levels of

engagement and satisfaction than even banks (44% vs. 60%)

Global Futures& Foresight

Value shifting outside the enterprise

• Organizations outnumbered by the resources provided by their network.

• Business value from the social world.

– Crowdsourcing.

– Open and social supply chains.

– Open innovation.

– Co-creation.

– Social media marketing. Sloan Review (MIT)

80% of executives worldwide say enterprise-wide collaboration is the key to success.

Global Survey Enterprise Collaboration

Global Futures& ForesightChange is coming

TECHNOLOGY & COMMUNICATIONS

Global Futures& Foresight

Three Horizons

Horizon 1 Core

Horizon 2 New

Horizon 3Out there

Manager

Leader

Entrepreneur

Point of greatestconfusion

Extend and defend Build emergingbusinesses

Create viableoptions

In 2008

Global Futures& Foresight

Horizon 1 Technologies maturing now

• Mobile• Consumerisation of I.T. (BYOD)• Big data and analytics• Social• Cloud• Internet of Things• Telematics• Wearables• Artificial intelligence• Augmented reality• Avatars

Global Futures& Foresight

Horizon 2 Technologies coming within 10 years

• Holographics• 3D printing• Automation• Unmanned Autonomous Vehicles• Instant language translation• Cognitive computing• Haptic technology• Electronic nose• RNA based therapeutics• Vocal health diagnostics via smartphone• Next generation neuropharmacology

Global Futures& Foresight

Horizon 3 Emerging technologies of 10yrs+

• Quantum computing• Prescriptive analytics• Smart dust• Programmable material• Neuroprosthetics• Brain-to-computer interfaces• Brain-to-brain interfaces• Geoengineering• Microscale 3D printing• Anti ageing interventions

Global Futures& Foresight

First we do things differentlyThen we do different things

Global Futures& Foresight

Mobile to 2018

£29.99 Ubislate 7Ci

http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI-Forecast_QA.html/index.html

telephone – computer - sensor

• Mobile data traffic growth 61% cagr.• 66% of devices – smartphones. • Speeds increase 2.6-fold. • 15.9 Exabyte's/month. 69% video.• Functions:

– Payments– Environment– Travel– Health & wellness– Context etc.

Mobile will remake insurance business models by 2020

Global Futures& Foresight

Wearables

• $19bn revenue by 2018.– $1.4bn in 2013.

• 6% of businesses given these to their staff...– Next logical step.

• 21% already wear a device or use App. to track health.

http://news.cnet.com/8301-1035_3-57607524-94/wearable-tech-revenue-to-hit-$19b-by-2018/http://www.bbc.co.uk/news/business-23579404http://www.idgconnect.com/blog-abstract/3419/how-will-wearable-technology-impact-business-world

‘For businesses - implications for systems development, insight and analytics, leadership & competitive

advantage.’

http://s3files.core77.com/blog/images/2013/04/where-wearable-tech.jpg

Global Futures& Foresight

The mobile consumer in context

• Where am I?• What am I doing?• Who’s around me?• Where am I going?• What would help me?

– Where

– What

– Who

Global Futures& Foresight

Social networks

• Changed the way we live.• Social and political processes.

• Change the way we work.• Global• Work Swarms

• New Management processes.• Collaborate around problems. • Faster and more creative solutions.

The post e-mail eraAdds $1.3tn per year – 66% through collaboration

Social Media

http://www.newmediatrendwatch.com/world-overview/137-social-networking-and-ugc McKinsey Global Institute pdf, July 2012, ‘The Social Economy: Unlocking value and productivity through social technologies.’

20-25% improvement in productivity of knowledge workers.

Global Futures& Foresight

Internet of ‘Things’By 2020• One trillion sensors embedded in humans and machines.• We will each own 50 internet connected devices.

http://www.industrytap.com/the-hybird-age/3651

99.4% of the 1.5 trillion physical objects in the world are still unconnected.

Global Futures& Foresight

Big data

• Every day we create 2.5

quintillion bytes of data:

– A new Google every 4 days.

• Google: 6bn daily searches and indexing of over 50bn web pages (2013).

http://techcrunch.com/2014/08/10/big-data-bound-to-get-really-really-big-with-the-internet-of-things/ http://www.big4.com/big4-thought-leader-interviews/industrial-internet-strategy-must-urgently-embrace-big-data-analytics-new-survey-ge-accenture/?sf32764894=1

http://data.bigdatastartups.netdna-cdn.com/wp-content/uploads/2014/02/HiRes-221.jpg

Global Futures& Foresight

Predictive analytics

• 41% of FS org’s say predictive analytics is more about minimising risk than exploiting opportunities: SAP

http://www.bankingtech.com/203462/predicting-the-future-in-financial-services/

73% say it would help them to make better offers to their customers.

‘Life companies have been shockingly bad at using customer data effectively.’

Phil Loney, Group Chief Executive, Royal London Group.

Global Futures& Foresight

• Artificial Intelligence (AI) - we will interact with it like humans.

• e-technology advanced:– Fewer human interactions– More strategic focus.

• Face & voice recognition that identifies emotional changes.

• Holographic by 2015• Haptic by 2020

Source: http://www.supplymanagement.co.uk/EDIT/Featured_articles_item.asp?id=16394

Engaging with technology

Global Futures& Foresight

Avatars

• Avatars are evolving into sophisticated computer generated images.

– Could monitor heart rate and blood pressure as well as provide medication reminders.

http://www.redorbit.com/media/uploads/2013/03/152946044-617x416.jpg

http://metro.co.uk/2014/03/03/future-of-healthcare-avatars-could-look-after-the-elderly-in-their-own-homes-4394762/

Global Futures& Foresight

Engaged through technology

By 2019

• 3D virtual reality displays.

• Embedded in glasses/contact lenses.

• Primary interfaces to connect with other people, computers, the Web and virtual reality. Kurzweil

• Linking our senses with other people’s senses or machines.

Global Futures& Foresight

Cognitive computing

• Already improved doctor accuracy in diagnosing lung cancer by 40%.

http://cdn.nextgov.com/media/img/upload/2013/03/21/032113chipNG/nextgov-medium.jpg

http://www.industrytap.com/supercomputer-watson-increasing-medial-diagnoses-accuracy/1314

Watson

Global Futures& Foresight

Genomics

• £125 '23andMe' test can now be used in the UK with caution.

• The price for genome sequencing soon £66 ($100).

• NIB offer half-price genome scans from personal genomics.

http://science.slashdot.org/story/12/05/28/1849248/the-race-to-1000-human-genome-sequencing http://www.wired.com/wiredscience/2010/02/australian-insurance-company-offers-discounted-genome-scans-to-customers-read-the-fine-print/

http://bgiamericas.com/wp-content/uploads/2011/08/Cropped-DNA-01-1024x993.jpg

Global Futures& Foresight

Gamification

• Over 50% of firms will gamify their innovation processes this year.

• Increasing public participation in co-creating products and services.

http://mashable.com/2011/07/28/gamification/

http://www.yourcarma.com.au/article/News/Speed-Camera-Lottery.aspx?id=59

Global Futures& Foresight

Global Futures& Foresight

Pace of change

• 40% worry that ‘...their organisations will be unable to keep up with technology change and will lose their competitive edge.’

http://www.bloomberg.com/news/2014-01-23/davos-stalked-by-tech-disruption-as-intel-to-wal-mart-challenged.html http://venturebeat.com/2014/04/05/these-three-trends-will-transform-how-employees-use-their-phones/

http://www.visualphotos.com/photo/2x4577511/fast_moving_robot_technology_BLD017028.jpg

Technology is moving between 3-5 times faster than management.

Global Futures& Foresight

So much change

• New thinking• New culture• New behaviours• New partners• New channels• New insights and offers• New customer engagement• New technologies• New business models

Global Futures& Foresight

The future belongs to those who

prepare for it today

Global Futures& Foresight

If you want to get ahead – you need to look ahead

+44 7932 408901

david.smith@thegff.com

Imagine it

Thank you

www.linkedin.com/in/dasmith

www.thegff.com

davidsmithgff

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http://elm.neworldiq.comBack from the Future

The Future of L&P