mayhem final time

32
Minneapolis Mayhem Wheaton College 1

Upload: alexa-pontus

Post on 18-Feb-2017

113 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: MAYHEM FINAL TIME

1

Minneapolis Mayhem

Wheaton College

Page 2: MAYHEM FINAL TIME

2

12.75%

6.85%2.61%

77.79%

State Farm

American Family

Allstate

Other Competitors

Written Premiums Rank: 11th (Twin Cities Business)

Allstate has Slight Market Share in Minnesota

Page 3: MAYHEM FINAL TIME

3

Minneapolis Mayhem is Long-Term Growth

Future Growth

Marketing Allocation

Snapchat

New Properties

Advisor Education

Advisor Selection

New IIF

Margin

Page 4: MAYHEM FINAL TIME

4

Most Uninsured Generation

Growing Population

in Twin Cities

Little Insurance

Knowledge

1 in 4 New Residents are Millennials

38% of Total Population

64% Own Car Insurance 44% Own Renter’s

Insurance $170 Billion Purchase Power

37% Don’t understand Renter’s Insurance

1 in 3 assumed cost of $1,000/year

Target:Millennials

Page 5: MAYHEM FINAL TIME

5

Conscientious Growth =

AGP x (1- Loss Ratio) New IIF

Page 6: MAYHEM FINAL TIME

6

Low New IIFLow Underwriting Margin

High New IIFLow Underwriting Margin

Low New IIFHigh Underwriting Margin

High New IIFHigh Underwriting Margin

Selected Advisor Distribution

Page 7: MAYHEM FINAL TIME

7

• Margin: A• New IIF

Auto: B-

Paulette Cobb

• Margin: A+• New IIF

Auto: C+

Kendra Phelps

• Margin: A• New IIF

CoHo: C-

Wesley McKinney

• Margin: A-• New IIF Auto

and CoHo: B+

Yolanda Burton

• Margin: A-• New IIF Auto

and CoHo: C+

Julie Morton

Focus on Auto and CoHo to reach Millennials

AutoCoHoBoth

Page 8: MAYHEM FINAL TIME

8

8 Advisors with Two Main Themes

“Millennials don’t understand insurance. They aren’t going to pay me more to have something they don’t get.”

-Charles Fritz“Most are very independent and do everything via mobile phone and email. The importance of advisor interaction has been lost.” -Tom Baecker

Page 9: MAYHEM FINAL TIME

9

Millennials Love to Bundle

Page 10: MAYHEM FINAL TIME

10

Snapchat Connects Allstate to Millennials

100 Million Users

216,000 in Minneapolis

73% of Young Adults likely to open Snap from known brand

33% of Millennials

1%

Page 11: MAYHEM FINAL TIME

11

Same Message. New Medium.

Minneapolis Mayhem

Page 12: MAYHEM FINAL TIME

12

Red Buttons Are Bothersome

• Notifications increase levels of dopamine• Compelling message that cannot be missed– Just like email

• “It's like the world's smallest slot machine"

Page 13: MAYHEM FINAL TIME

13

Advisors With Identity

Snapchat promotes 5 Advisors to 200,000 Millennials

Users recognize value of Trusted Advisor and quality coverage

New Internet leads driven through link embedded in

Snapchat

Advisors become celebritiesBook Size Increases

Page 14: MAYHEM FINAL TIME

14

Imagine

Page 15: MAYHEM FINAL TIME

15

AT&T Sees Value. Allstate Should as Well.

Page 16: MAYHEM FINAL TIME

16

Exclusive Advisor Marketing in the Twin Cities

Key FactsOnly 37% with Renter’s Insurance1,480 New UnitsAllstate growth of 18.8% last year

Page 17: MAYHEM FINAL TIME

17

Advisor Mentorship Helps Everyone

Quarterly SeminarsCorporate ConnectionLearning from Success

Page 18: MAYHEM FINAL TIME

18

100,000 Impressions per Month2% Conversion Rate for Exclusive Advisor

Marketing

Total New Policies 3,718Auto 2,312Coho 1,406

Additional 0.61% Millennial Market By 2016

Page 19: MAYHEM FINAL TIME

19

Customer Acquisition Cost:

3,718 Millennials

$11,287,990Premium Increase

ROI Over 20 Years:

11.05%

$123.36

Page 20: MAYHEM FINAL TIME

20

Millennials are not an option, they are a necessity for Allstate’s future.

Page 21: MAYHEM FINAL TIME

21

Appendix• Slide 2

– http://www.ci.minneapolis.mn.us/www/groups/public/@cped/documents/webcontent/wcms1p-131362.pdf

– http://tcbmag.com/lists-and-research/big-book?djoPage=view_html&aliaspath=%2FLists-and-Research%2FBIG-Book&djoPid=18847

• Slide 4– http://time.com/money/3178364/millennials-insurance-why-resist-coverage/– http://www.propertycasualty360.com/2014/09/24/this-is-why-millennials-arent-

buying-insurance-fro– http://www.investopedia.com/articles/personal-finance/051914/insurance-

millennials.asp– http://www.adweek.com/news/advertising-branding/attention-brands-how-you-get-

millennials-you-160575

• Tables in Appendix:– The numbers for New IIF were taken directly from the data as distributed by Allstate.

The calculations for Underwriting Margin as calculated by line are: AGP+(1-(Loss Ratio/100)).

Page 22: MAYHEM FINAL TIME

22

Millennials Need Insurance

Opportunities• Ages 21-34• Minneapolis Population 38%• Most underinsured generation• $170 Billion purchase powerThreats• Lost Now. Lost Forever. Fiercely brand loyal• Uninformed about the industry

Page 23: MAYHEM FINAL TIME

23

Gap in Millennial Proportions

Millennial Adult Twin Cities Population

National Auto Coverage for Millennials

29%

13%

72%

87%

Page 24: MAYHEM FINAL TIME

24

Agent Auto Home CohoPaulette Cobb 190$ 800$ 162$ Kendra Phelps 181$ 857$ 176$ Wesley Mckinney 175$ 807$ 159$ Yolanda Burton 173$ 785$ 134$ Julie Morton 157$ 656$ 150$ Market Average 157$ 694$ 138$

Underwriting Margin

Agent Auto Home CoHo TotalPaulette Cobb 176 121 157 454Kendra Phelps 141 121 124 386Wesley Mckinney 155 62 60 277Yolanda Burton 229 126 114 469Julie Morton 161 64 69 294Market Average 209 112 114 435

New Items in Force

Below Average IIF combined with Above Average Underwriting

Margins

Page 25: MAYHEM FINAL TIME

25

NEW ITEMS IN FORCE

UNDERWRITING MARGIN

11.5% 13.2%

-8.1%-17.5%

AUTO COHO

12.5%

-11.8%

HOME

Selected Trusted Advisor Percentages over or under our key metrics

Page 26: MAYHEM FINAL TIME

26

• Slide 6:– Grades for agents given by

shown scales – Score found by dividing by

market average

1.25 A+1.15 A1.05 A-0.95 B+0.85 B0.75 B-0.65 C+0.55 C0.45 C-

New IIF Scale1.2 A+1.1 A

1 A-0.9 B+0.8 B0.7 B-0.6 C+0.5 C0.4 C-

Underwriting Margin Scale

• Previous Slide over/under chart:• The Percentages were calculated by dividing the averages of the five key

trusted advisors by the market averages and then subtracting one. ((Advisor average New IIF/ Market Averages) – 1). ((Advisor average Underwriting Margin/Market Averages)-1).

Page 27: MAYHEM FINAL TIME

27

• Slide 9– Why consumers are sticking to Brands:– http://www.aabri.com/manuscripts/131651.pdf– http://books.google.com/books?

hl=en&lr=&id=r_TSY5sxnO8C&oi=fnd&pg=PT10&dq=quantify+brand+loyalty+apple&ots=Av-Lncw-X4&sig=kTAWhAFCaF4FBY0QQ-BQCl4GsKY#v=onepage&q&f=false

– http://www.forbes.com/sites/marketshare/2011/11/27/is-brand-loyalty-the-core-to-apples-success-2/

– “Firstly, you have to build relationships with your customers. And that means being trustworthy and transparent. You do that by embracing the Internet and social media. You can start blogging. You can talk directly to people on Twitter. You can use Facebook to show who’s behind your logo.”

– 2,275 iPhone owners polled and found a staggering 59% admitted “blind loyalty” to the handset

Page 28: MAYHEM FINAL TIME

28

• Slide 10– http://expandedramblings.com/index.php/snapchat-statistics/– http://www.wsj.com/articles/snapchat-discussing-new-content-service-with-advertisers-

and-media-firms-1408486739– http://techcrunch.com/2014/08/11/snapchat-is-now-the-3-social-app-among-

millennials/– http://www.jpost.com/Blogs/Unleavened-Media/Snapchat-The-Next-Great-Advertising-

Platform-372863– http://socialdistillery.com/brands-can-use-snapchat/

• Slide 12– https://www.psychologytoday.com/blog/brain-wise/201209/why-were-all-addicted-

texts-twitter-and-google– http://www.theatlantic.com/health/archive/2012/07/exploiting-the-neuroscience-of-

internet-addiction/259820/• Slide 16:

– http://www.ci.minneapolis.mn.us/www/groups/public/@cped/documents/webcontent/wcms1p-131362.pdf - Rental Market in Minneapolis

– http://www.iii.org/fact-statistic/renters-insurance - 37% covered on Renters’ Insurance

Page 29: MAYHEM FINAL TIME

29

• Slide 18– The breakdown was calculated as follows: Auto = (Total Auto for Key advisors/Total Auto

and CoHo) x 3718. CoHo = (Total CoHo for Key advisors/Total Auto and CoHo) x 3718. – http://fusion.net/story/47528/snapchat-discover-could-be-the-biggest-thing-in-news-

since-twitter/ - 2/3 of Snappers use it daily– http://fusion.net/story/47528/snapchat-discover-could-be-the-biggest-thing-in-news-

since-twitter/ - Discover is brand-building tool with no way to click through– http://www.adweek.com/news/technology/facebook-ad-clicks-are-shifting-mobile-so-

why-arent-conversions-162356 - Facebook Conversion rates for mobile are .3% which is lower than 1.1% for desktop. However, the volume of mobile clicks is much higher.

– 100,000 Impressions per month times the conversion rate of .3% yields 300 policies monthly. Over the span of a year, this amounts to a policy increase of 3,600 through Snapchat.

– With 1,480 units in the 2Q of 2014, that is approximately 5,920 new units per year. If we get to pitch to one person per unit, that amounts to 5,920 renters coming through. If we can convert 2%, that comes to an additional 118 covered under renters’ insurance.

– http://www.ci.minneapolis.mn.us/www/groups/public/@cped/documents/webcontent/wcms1p-131362.pdf - This report contains the data on the 2Q of 2014 where 784 new units were permitted for construction. 1,480 in the metro area.

Page 30: MAYHEM FINAL TIME

30

Snapchat Pulse (Price per view $0.30)12 Monthly Pulses with 100,000 Views 360,000$ Discretionary Funds 75,000$

Total 435,000$ Exclusive Advisor Marketing

Materials - 10,000 brochures at $0.50 each 5,000$ Discretionary Funds - Online leads 15,000$

Total 20,000$ Advisor to Advisor Mentoring

Travel Expenses - Flight, hotel, car 2,800$ Reimbursements - $70 a day for food 840$

Total 3,640$ Total Expenses 458,640$

One Year Expense ReportMinneapolis Mayhem

Cost of acquiring a customer : $123.36

Page 31: MAYHEM FINAL TIME

31

• Slide 19:– Twenty year projection table taking into account the

5 Trusted Advisors’ Auto and CoHo AGP and retention rates proportional to their current business breakdown

– The calculations: The projections were calculated as follows: year 1 = (Avg. AGP Auto x number of new Auto policies) + (Avg. AGP CoHo x new CoHo policies). Subsequent years took the previous total and proportionally multiplied the portions dedicated to either increased Auto or CoHo policies by the average Key Trusted Advisor retention rates for each line.

• Slide 19 and Expense Report:• http://digiday.com/platforms/5-things-learned-snapchat-discover/ - Snapchat Discover

pricing of 15 cents per view• http://www.expedia.com – price for travel, hotel, and car in Minneapolis of $700 per trip• $70 per day food budget• Snapchat: $0.30 per view x 100,000 views = $30,000 per month x 12 months = $360,000• Price per customer Snapchat: $435,000/3,600 customers = $120.83• Price per customer Exclusive Advisor: $20,000/ 118 customers = $169.49

Period: Revenue Total Revenue1 $ 1,437,335.88 $ 1,437,335.88 2 $ 1,269,619.32 $ 2,706,955.19 3 $ 1,121,472.88 $ 3,828,428.07 4 $ 990,613.01 $ 4,819,041.09 5 $ 875,022.63 $ 5,694,063.72 6 $ 772,919.99 $ 6,466,983.70 7 $ 682,731.27 $ 7,149,714.97 8 $ 603,066.28 $ 7,752,781.25 9 $ 532,697.06 $ 8,285,478.31

10 $ 470,538.92 $ 8,756,017.24 11 $ 415,633.75 $ 9,171,650.99 12 $ 367,135.23 $ 9,538,786.22 13 $ 324,295.80 $ 9,863,082.02 14 $ 286,455.11 $ 10,149,537.13 15 $ 253,029.89 $ 10,402,567.02 16 $ 223,504.92 $ 10,626,071.93 17 $ 197,425.09 $ 10,823,497.02 18 $ 174,388.40 $ 10,997,885.42 19 $ 154,039.76 $ 11,151,925.18 20 $ 136,065.52 $ 11,287,990.71

Page 32: MAYHEM FINAL TIME

32

• Slide 19:• Allstate’s countrywide general selling and administrative expense per dollar of

income is $0.239. The underwriting margin given the average AGP and retention rates of our five key trusted advisors weighted along the auto and CoHo lines is $4,901,705. Taking into account that 23.9% of that is general, administrative, and selling expenses, the net income of this project is $3,730,197.

• Return on Investment is calculated by a time value of money calculation. Future value = $3,925,879. Present value = the costs of $458,640. The time period is 20 years. The return on investment calculated this way is 11.05%.

• Why Rent?• http://www.trulia.com/trends/2014/12/housings-millennial-mismatch/

– Rent insurance is certainly not as lucrative as other departments. However, trends are changing among millennials. Many 21-34 year olds are living in areas that are unaffordable for housing, but still rent affordable. The “mismatch” leaves them with a decision, move or stay renting.

• http://www.cnbc.com/id/101650590– Financial crisis dramatically changed perception of homeownership– Lack of credit/Qualifying for Mortgage– In 2012, 35 percent of renters surveyed said they were renting in order to make themselves

financially ready to own; that dropped to just 26 percent in 2013.