Shaping the Digital Future

Alexa Health Skills - New chance to satisfy and monetize the digital demands

in healthcare of Generation YAugust 2018

2

Generation Y challenges health insurances with their technology affinity and high desire for individualization, both regarding healthcare and insurance topics.

Customer desiresCustomer habits

‘For the vast majority of Generation Y it is

absolutely normal to search for references

online – the search for healthcare topics is

the logical consequence.’

Nuance Communication

‘Individualization is one of the biggest mega

trends.’

Trend researcher Prof. Peter Wippermann

54 % of Generation Y initially use the internet for

healthcare questions

37 % of Generation Y have already booked an

insurance service online

67 % of Generation Y desire personal advice for

complex topics like health insurance services

50 % of Generation Y would provide personal

data, so that products are 100 % individualized

Analysis of Generation Y customers

Source: Mücke, Sturm & Company; World Insurance Report 2016; Nuance Communications; Bain & Company; Microsoft Trendstudie; QVC Zukunftsstudie; Springer Professional

3

To meet the changing customer expectations, health insurances offer digital services along the health value chain; they concentrate on Treatment & Monitoring.

Source: Mücke, Sturm & Company; 1 Exemplary digital services of 42 analyzed digital services by MSC; 2 Public health insurances only; 3 Private health insurances only; 4 The 13

analyzed public insurances offer in total 7 digital services in the area administration.

Digital insurance services – German market overview

Prevention

▪ Administration

▪ Electronic Health Card 2

▪ Invoice app 3

▪ Live chats

▪ Electronic patient record

▪ …

▪ Stress/Well-being support

▪ Fitness program

▪ Diet

▪ Vaccinations

▪ Digital bonus program

▪ …

▪ Addiction

▪ Back pain

▪ Sleeping disorder

▪ Medication management

▪ Diabetes

▪ …

17 % 45 %

22 % 56 %

Administration Diagnosis Treatment & Monitoring

▪ Second expert opinion

▪ Symptom checker

▪ Health information

21 % 10 %21 % 48 %

Public

Private

Exemplary

digital services1

Focal points

of insurances

4

TK and AXA provide the most digital services; on average, the public health insurances offer 6 digital services more than their private peers.

24

17 17

14 1413

12 12

1110

8

6 6

Number of digital 1 service categories 2

(private)

27

24

2221 21

19 19

17 17

1514

13

11

Number of digital 1 service categories 2

(public)

Ø18

Ø13

Digital insurance service categories of public and private health insurances

Source: Mücke, Sturm & Company; MSC study ‘Der Wandel der Krankenversicherungen vom Kostenerstatter zum ganzheitlichen Gesundheitsdienstleister’, June 2018; 1 Accessible using

any digital device incl. smartphone, tablet, laptop, computer, digital assistant, smartwatch; 2 Categories can encompass several, single services e.g. the category vaccination can include

the digital vaccination pass and reminders for vaccination check-up

5

Health insurances should reflect upon the emerging trend of digital assistants and consider the potential to create new touchpoints, especially with Generation Y. Digital assistants as a new digital trend

Available digital assistants Growing importance of digital assistants Generation Y as the most prolific

customer group

Source: Mücke, Sturm & Company; Company information; 1Tractica 2017; 2 Business Insider 2017

Home

Assistant

Eigener

Assistent

Eigener

Assistent

Home

Assistant

Eigener

Assistent

Home

AssistantHome

Assistant

Eigener

Assistent

Home

Assistant

Eigener

Assistent

Revenue of digital assistants sold to end consumers 1

(in million US$, worldwide)

# Users of digital assistants 1

(in million, worldwide)

390 504710

2015 2016 2017* 2018* 2019* 2020* 2021*

Usage of voice-based assistants2

(worldwide)

31% 23%14% 7%

20%

15%13%

8%

33%

32%35%

35%

16%30% 38%

50%

Yes, regularly.

Yes, lately.

No, but interested.

No and not interested.

18 105 689

2015 2016 2017* 2018* 2019* 2020* 2021*

2,260

5,314

8,728

11,861

1,0161,376

1,6421,831

6

Amazon currently leads this market. They have created an extensive platform with their assistant Amazon Alexa which also offers applications on healthcare matters.

Amazon dominates the digital assistant market

of German consumers are aware of Amazon Alexa

of German consumers already use their own Amazon

Alexa device

78 %

37 %

Amazon Alexa as one digital assistant

Amazon Alexa is currently usable on five devices 1

Echo

(99.99 €)

Echo Show

(219.99 €)

Echo Dot

(59.99 €)

Echo Spot

(99.99 €)

Echo Plus

(149.99 €)

Source: Mücke, Sturm & Company; Amazon; Statista; OMR; PWC; Strategy Analytics; 1 Availability in Germany as of June 2018

Free Alexa Skills in the area of healthcare

Exem

pla

ry s

kill

s

Psychological

advice

Support for

chronical diseases

Patient security in

mycare clinics

BMI

calculation

Hard

ware

Questions on

medication

The first Alexa device was launched for the German market in 2016

91,7%

6,7%

71,3%

14,7%

2016 2017

Worldwide smart speaker market share

Amazon Alexa

Google Home

Other

Hardware with the pre-installed digital assistant Alexa

7

Source: Mücke, Sturm & Company

TK Smart Relax Skill

Barmer Alexa Skill

Schlafenszeit

Axa Biowetter

Allianz

Allianz Beratung

Allianz Rentenscore

‘Alexa, ask Schlafenszeit which sleeping aids are available!’

‘Alexa, open Smart Relax and start a Cool down!’

‘Alexa, start Biowetter!’

‘Alexa, ask Allianz where the next consultant is located!’

‘Alexa, start Allianz Beratung!’

‘Alexa, ask Allianz Rente what dynamic means!’

Options to relax e.g. meditation

Options to fall asleep better e.g.

soft music

Weather information e.g. pollen

dispersal

Information about the Allianz e.g.

nearby consultants or offers

Questions for customers on 12

topics to prepare the consultant

for the meeting

Calculation of a desired pension

amount

Health insurances are slowly adapting to the new trend of digital assistants. TK and Barmer as public and AXA and Allianz as private insurances offer Alexa skills. Current Alexa skills offered by German health insurances

Public

in

sura

nces

Private

in

sura

nces

Skill name Exemplary customer instructions/questions Skill DescriptionInsurance

8

Yes, certainly. Yes, probably. I'm not sure. No, probably not. No, certainly not.

Source: Mücke, Sturm & Company; MSC study ‘Alexa Health Skills – Die neue Kassenleistung für Generation Y?; June 2018; Note:Ranking based on the sum of the answers

‘Yes, certainly.’ and ‘Yes, probably.’ to the question ‘Would you use the following health skills?’; 1 Reminder: medication intake of a relative

50 %

Unfortunately, the majority of the health skills which insurances currently offer are not attractive to Generation Y as a recent survey by MSC shows. Desired Alexa skills by Generation Y compared to skills offered by German health insurances

Health s

kill

s

by in

sura

nces

Skill

s d

em

anded b

y

Genera

tio

n Y

9

Specifically, the MSC survey suggests that Generation Y desires simple organizational and individual health skills such as reminder of check-ups or diet tips. Desired Alexa skills by Generation Y – Deep dive

Source: Mücke, Sturm & Company; 1 Agreement: the sum of the answers ‘Yes, certainly.’ and ‘Yes, probably.’; 2 Exemplary skills of 33 skills analyzed by MSC

Simple organizational skills with low

customer consequences

Individual health skills which enable

the customer to actively influence their

health status

General, publicly accessible information skills

and complex organizational skills with high

customer consequences

71 – 44 % agreement 1 44 - 32 % agreement 30 – 8 % agreement

▪ Emergency pharmacies

▪ Reminder of doctors‘ appointments

▪ Reminder of check-ups

▪ Food information

▪ …

▪ Symptom checker

▪ Mental fitness exercises

▪ Diet tips

▪ Illness encyclopedia

▪ …

▪ Pollen dispersal info

▪ Air pollution info

▪ UV degradation info

▪ Sleeping aid

▪ …

▪ Booking extra

insurance services

▪ Advice on contract

improvements

▪ …

Exem

pla

ry

skill

s 2

Would you use the following skill provided by your health insurance?

10

Nevertheless, offering the skills which Generation Y expects can be profitable; they would pay up to 17 € per month for a Premium + Alexa option.

Basic option Basic option + Alexa 1 Premium option Premium option + Alexa 1

Average price 3.47 €/month 5.79 €/month 14.81 €/month 17.33 €/month

100 % 100 % 100 % 100 %

37 % 48 % 26 % 35 %

Maximum

ability to pay

Ability to pay of

questioned

Generation Y

Ability to pay for desired Alexa skills

Source: Mücke, Sturm & Company; 1 This option also includes an Alexa device e.g. Amazon Echo.

Option with the highest sales

potentialOption with the potential to create

the most customer touchpoints

Exemplary

skills

General fitness exercises, Sleeping aid, Mental fitness,

Illness encyclopedia, Food information, Symptom

checker, Reminders e.g. check-up …

Personal fitness exercises, Online-video doctors‘ appointment,

Individual information for treatment, Personal diet tips, Meditation,

Information on vital measures…

11

By providing Alexa skills, health insurances can increase customer satisfaction, improve efficiency and gain new insights through additional customer touchpoints.

Source: Mücke, Sturm & Company

Y

Advantages for health insurances

Increase of customer satisfaction Increase of efficiency Generation of new customer insights

Simplified access

Direct communication channel

Attraction for tech-affine

customers

Customer empowerment

Reduced internal

administration costs

Reduced treatment costs

Reduced workload for employees,

enhancing overall efficiency

Personalized health insurance

offers

Input to product design and risk

calculation

Marketing input to target new

customers

Creation of a new customer

touchpoint

12

Mücke, Sturm & Company would like to get in touch with you to discuss the design and implementation options of health skill to expand your service portfolio.

Headoffice MunichTheresienhöhe 12

80339 Munich

Germany

T +49 89 461399 0

F +49 89 461399 777

www.muecke-sturm.de

Michael MückeManaging Partner at

Mücke, Sturm & Company

We can support you with topics like… s

▪ Which Alexa skills should health insurances provide?

▪ How can skills increase your customer satisfaction?

▪ How can skills generate additional revenue?

▪ Which new market segments become accessible through

the implementation of skills?

▪ What hurdles should you expect when implementing

skills as a new insurance service?

▪ Which additional customer touchpoints can you address

by offering skills?

▪ How can you generate leads via skills?

13

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This document is intended for personal use only.

Distribution is only permitted without any changes or omissions – publication, in

whole or in parts, requires prior written consent by MÜCKE, STURM & COMPANY

and correct citation of sources.

All mentioned company names, logos, brands, brand symbols and other copyrighted

material are the sole properties of the respective company; they are only used for

illustrative purposes.

14Source: Mücke, Sturm & Company

TK Smart Relax Skill

Barmer Alexa Skill

Schlafenszeit

Axa Biowetter

Allianz

Allianz Beratung

Allianz Rentenscore

‘Alexa, start Schlafenszeit!’

‘Alexa, open Smart Relax!’

ABC

ABC

ABC

ABC

Options to relax e.g.

meditation

Options to fall asleep

better e.g. soft music

Weather information

e.g. pollen dispersal

Info on the Allianz as a

private health insurance

Specific advice on

Allianz insurance offers

Calculation of a desired

pension amount

‘Would you like to listen to the

Playlist Klangwelten?’

‘Would you like to start a

meditation?

ABC

ABC

ABC

ABC

Health insurances are slowly emerging into this new segment. The TK and Barmer as public and the AXA and Allianz as private insurances offer Alexa skills. (version 2)

New delivery channel of digital insurance services

15

To meet the changing customer expectations, insurances offer digital services along the health value chain; they are concentrated on Treatment & Monitoring. (v2)

Source: Mücke, Sturm & Company; 1 Exemplary services of 42 analyzed services by MSC; 2 Public insurances only; 3 Private insurances only

Digital insurance services – Overview per value chain area and insurance system

Prevention

▪ Administration

▪ Electronic Health Card 2

▪ Calculation app 3

▪ Live chats

▪ Electronic patient record

▪ …

▪ Stress/Well-being support

▪ Fitness program

▪ Diet

▪ Vaccinations

▪ Digital bonus program

▪ …

▪ Addiction

▪ Back pain

▪ Sleeping disorder

▪ Medication management

▪ Diabetes

▪ …

Administration DiagnosisTreatment &

Monitoring

▪ Second expert opinion

▪ Symptom checker

▪ Health information

Public

insurances

Private

insurances

Exem

pla

ry

serv

ices 1

To

tal

am

ount

7 9 3 23

7 9 2 23

7 7 3 16

16

Amazon currently leads this market. They have created an extensive platform with their devices which also offers applications on healthcare matters.

Amazon dominates the digital assistant market

of German consumers are aware of Amazon Alexa

of German consumers already use their own Amazon

Alexa device

78 %

37 %

Amazon Alexa as one digital assistant

Amazon Alexa is currently usable on five devices 1

Echo

(99.99 €)

Echo Show

(219.99 €)

Echo Dot

(59.99 €)

Echo Spot

(99.99 €)

Echo Plus

(149.99 €)

Source: Mücke, Sturm & Company; Amazon; Statista; OMR; PWC; Strategy Analytics; 1 Availability in Germany as of June 2018

Alexa skills can be downloaded from the Alexa Skills Store for free.

They also address healthcare topics.

Exem

pla

ry s

kill

s

Psychological

advice

Support for

chronical diseases

Patient security in

mycare clinics

BMI

calculation

Hard

ware

Questions on

medication

The first Alexa device was launched for the German market in 2016

4,19,7

0,4

6,7

0

10

Q4 2016 Q4 2017

Worldwide smart speaker shipments (million units)

Amazon Google Other

17

Nevertheless, offering the skills which Generation Y expects can be profitable; they would pay up to 17 € per month for a Premium + Alexa option. (version 1)

Basic option Basic option + Alexa Premium option Premium option + Alexa

Average price 3.47 €/month 5.79 €/month 14.81 €/month 17.33 €/month

100 % 100 % 100 % 100 %

37 % 48 % 26 % 35 %

Maximum

ability to pay

Ability to pay of

questioned

generation Y

Ability to pay for desired Alexa skills

Source: Mücke, Sturm & Company

Option with the potential to create

the most consumer touchpoints

Option with the highest sales

potential

Basic options Premium options

▪ Personal fitness exercises

▪ Online-video doctors‘ appointment

▪ Individual information for treatment

▪ …

Exemplary

skills

▪ General fitness exercises

▪ Sleeping aid

▪ Mental fitness

▪ …