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2 Financial Services Forum
Gordon Wilson Group Managing Director Welcome to our Life & Pensions Executive Dinner Guest Speaker – David Smith – “Back from the Future”

3 Financial Services Forum
Jon May Head of Sales, Financial Services Welcome to our Life & Pensions Executive Dinner

4 Mobile apps overtake PC internet usage
Providers grapple with charge cap and AMD ban Pension freedoms and choice RDR impact now clear TPR slams providers masquerading as master trusts Webb wants bulk transfers from high charging plans Mobile apps overtake PC internet usage SOLVENCY II “Annuity sales plans have potential” Group risk experts welcome Fit For Work launch Legacy pensions audit underway

5 Technology drives customer engagement Pot Follows Member goes ahead
Will Collective DC fly? Providers face AE capacity crunch Technology drives customer engagement Merger creates legacy issues Pot Follows Member goes ahead Are Lifestyle Funds dead? Providers go direct UK life and pensions industry hit by drop in annuities sales Insurers slammed over pension wake-up packs Webb backs pension passport plans Bulk annuities take off

6 Software Solutions new world product propositions
digitally enabled customer centric omni-channel straight through processing workflow driven new world product propositions retirement income innovation worksite delivery heritage transformation new world: flexible architecture for building protects from components; omnichannel distribution; higher service quality; speed to market at retirement: integrated accumulation and income; innovation & flexibility; end to end solution worksite: strategic channel; cost & risk reduction; product innovation heritage transformation: comprehensive and proven platform; digitalise estate; agile and open;

7 Introducing David Smith Global Futures and Foresight
Guest Speaker Back from the Future Introducing David Smith Chief Executive Global Futures and Foresight A unique insight into the future and how to prepare for it new world: flexible architecture for building protects from components; omnichannel distribution; higher service quality; speed to market at retirement: integrated accumulation and income; innovation & flexibility; end to end solution worksite: strategic channel; cost & risk reduction; product innovation heritage transformation: comprehensive and proven platform; digitalise estate; agile and open;

8 New Whitepaper new world: flexible architecture for building protects from components; omnichannel distribution; higher service quality; speed to market at retirement: integrated accumulation and income; innovation & flexibility; end to end solution worksite: strategic channel; cost & risk reduction; product innovation heritage transformation: comprehensive and proven platform; digitalise estate; agile and open;

9 David Smith Chief Executive Global Futures and Foresight
Copyright © 2015 Global Futures and Foresight Limited

10 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.

11 ... 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

12 We now buy small computers that also make calls.
Nokia was a phone company in a world that stopped buying phones. We now buy small computers that also make calls. Motorola dominated mobile even in 2003. Failed to focus on smartphones. Its cell phone division became a perennial money-loser. It once ‘owned’ the smartphone world. New rivals redefined the market. RIM responded with a string of devices that were: Late to market. Missed the mark. Global mobile market share peaked at 40% in 2008. Strategic mistake: Assumed emerging markets would buy old phones. Many leaped to smartphones. Despite history of innovation, Nokia never really transitioned to new age. Nokia was a very smart phone company and a very dumb computer company. That why, today, it's barely a company at all.

13 1858 1810 Innovation 48 Years 1810 started 1846 mass production
1858 first tin can opener 1870 classic can opener 1925 improved with serated edge 1858 1810 Ezra Warner of Waterbury, Connecticut patented the first can opener

14 With change comes risk Root causes of declines in public companies’ value: 60% strategic risks. 30% operational risks. 10% financial risks. "the assumptions on which the organization has been built and is being run no longer fit reality.“ Peter Drucker Only 71 companies remain today from the original 1955 Fortune 500 list. Studies have found that strategic risks represented ~60% of the root causes of significant declines in public companies’ market value. Next are operational risks (~30%) and financial risks (~10%). Strategic risk mgmt represents a significant opportunity for ERM integration. Source: Society of Actuaries (2013) : Enterprise Risk Management: Looking Forward

15 Mega trends Globalization Technology Environment Changes in work
Demographics & people Consumption Globalization Global business, multi-regional, local CSR Energy and resources Towards a sustainable future Climate change and environmental pollution Finding solutions Technology Health, communications, transport, leisure, entertainment, food, energy, business models … New consumption patterns Moral economy, informed consumers and Asia Changes in the world of work Talent, ageing, connected and mobile Globalisation The social and environmental impact of business operations and products is increasingly measured on a global scale. Today it matters how Chinese suppliers treat their workers and whether Peruvian coffee is grown under fair trade conditions. Companies that lead the field in CSR often have a competitive advantage over their rivals; in an increasingly moral economy product features like fairtrade can be a powerful value-adding feature. As a result, CSR will continue to spread across the supply chain and across borders. Climate change, urbanisation, and poverty are global challenges that require global solutions. With their capital, power, and innovative potential, firms have a moral responsibility to help solve these problems. As a result, CSR has to consider an ever increasing range of social and environmental factors from around the globe. Finally, globalisation results in an intensified scramble for resources, capital, labour and market share. CSR helps companies to raise their attractiveness as a customer, partner, employer, or supplier. New consumption pattern s Over the past years consumption has changed dramatically. Environmental awareness, rising health concerns, and a widespread call for effi ciency have fostered consumers that long for a more sustainable and healthy lifestyle (LOHAS). In the United States 79 percent of consumers say that the sustainability of a product matters when making a buying decision. Ethical consumerism is the new moral benchmark, reflecting not only one’s social status, but also one’s norms and values. CSR helps to ensure that the products and services a company offers adhere to the social and environmental standards consumers are seeking. In a customer-driven economy companies have to reinvent themselves. Through the emergence of Web 2.0 and social commerce privacy and secrecy have been replaced by transparency and publicity. Companies that do wrong are punished by an outcry of public anger and a subsequent devaluation of their public image. Those that rely heavily on intangible assets, like reputation, brand image, and trust are particularly vulnerable. CSR can manage these risks, avoid scandals, and help companies gain a unique selling position. Changes in the world of work - winning the war for talent The worldwide war for talent will continue to expand. The modern worker is much more mobile, and qualified workers are increasingly scarce. Companies must provide the right incentives to retain and attract employees. In countries like Denmark, where unemployment is low, a company’s CSR policy is a key determinant of its attractiveness as an employer. In a survey of privately held businesses (Grant Thornton) 65 percent of the respondents cited that recruitment and retention of staff was the most important factor for doing CSR. Saving the planet came fi fth. CSR is the new measure of corporate culture, the binding component between different departments, and a key determinant of a company’s innovation policy. Energy and resources - Towards sustainable business Until 2030, global energy demand is predicted to grow by 55 percent. At the same time the amount of available resources will continue to decline. By 2025, the number of people living with extreme water scarcity will rise to a quarter of the world’s population. In the future, the scramble for resources will be a major cause of confl ict. The solution is to be more effi cient and promote sustainability. CSR-led initiatives can offset rising prices, provide a competitive advantage, and act as a major tool for the aversion of social crisis. CSR is no longer just about being good, managing the public image, or improving products: Sustainability and effi ciency initiatives save costs and increase the value of the company. The FTSE4Good Index and the emergence of external CSR rankings (for instance Sustainable Value) highlight how companies are increasingly assessed in terms of their sustainability and CSR activities. Climate change and environmental pollution - Finding solutions Climate change is perhaps the biggest social, economic and environmental challenge facing the planet. Rising sea levels, increasing droughts and famine, and a decrease in water availability will have dramatic impacts. Environmental pollution will cause further health problems. Companies play a key role in addressing these problems. They have the capital and innovative potential to provide solutions. Solution-oriented CSR is the key vehicle to promote sustainability and avert widespread disaster. CSR could be the business blueprint for the future. It will reshape business ecosystems, changing the way companies are organized and engage with their stakeholders. In a customer-driven economy, CSR will be actively managed, an integral part of company strategy, and a hard factor for company success. It will impact the nature of competition, foster the development of sustainability related innovations, and facilitate the emergence of new, more successful, business models. 15

16 GLOBAL

17 Global population growth
Recent forecast by UN 9.2bn by 2050 up 100m based on life expectancy increasing faster than expected. Plus Chinese baby boom in the year of the Golden-pig – last year. Comes around every 60 years. Lucky. 1.75bn of next 2.5bn will be muslim The global population is expected to rise from 6.5bn in 2005 to 7.7bn in 2020 and 9.6bn in 2050 Source: Population Research Bureau 17 17

18 “The size of the world economy will triple
over the next four decades as emerging- market economies wield increasing power” 2010 $62 trillion 2030 $142 trillion As the economic crisis fades in the rearview mirror, some analysts on Wall Street and in Washington expect the world economy to enter a supercycle, a prolonged global growth spurt powered by the emerging markets. This isn't just some fringe theory: The "Super-Cycle Report" by Standard Chartered Bank posits that world GDP will double in the next two decade as a result of "industrialization and urbanization of emerging markets and global trade." The sentiment was widely shared among the attendees of the latest World Economic Forum in Davos, Switzerland, and among such heavyweights as Goldman Sachs and PricewaterhouseCoopers. Emerging markets, rising to make up half the world economy by 2017, are expected to pull the sluggish, debt-laden advanced economies -- United States, Europe, and Japan -- along. In this bifurcated world, the emerging juggernauts such as China, South Korea, and India will decouple from the advanced nations, relegating the mantra "when the U.S. economy sneezes, the world catches a cold" to the ash heap of history. “World GDP to double within two decades”

19 Emerging global economic growth
70% from emerging economies 6/10 fastest growing economies are African. By 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. APac will be dominant driver of world insurance growth. Nearly half (€1t) of the estimated additional global primary insurance premiums (€2.2t) to forecast to be generated in Apac. Emerging Asia to contribute 70% (about €670bn). 25% of global growth from China. The Asean economy will double by 2020. GDP increases from $2 trillion in 2012 to $4.7 trillion. IHS 46% large firms headquartered in emerging markets. 68% of new billion-dollar firms. 30% of GDP in 75 cities. 30 in China. 13 in USA 3 in Europe “the rise of emerging markets is forcing insurers to re-think their current business models...’

20 ‘Middle Class’ consumption
100 million becoming ‘Middle Class’ every year By 2030 59% and 66% respectively. High Net Worth Individuals. x7 in China. x6 in India. Women control roughly $28tn of total consumer spending globally

21 Global ageing by 2050 Over 60’s: 25% of China’s people over 65.
Mature economies - 22% to 33%. Developing world % to 20%. 25% of China’s people over 65. Japan alone has 30% over 60. 64 countries will have by 2050. The proportion of people over 60 in mature economies is expected to rise from 22 to 33% between 2009 and 2050 In the developing world, it is forecast to grow from 9 to 20% over the same period. By 2050 more than a quarter of China’s population will be over 65 years old . By the time a person born today is 80, their life expectancy would have gone well past 110.

22 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 The life expectancy of some girls (2/3) being born in England is 100+. Life expectancy for all women may reach 100 for girls born in 2062: ONS AGEING CURED 22

23 10% of adults could have type 2 diabetes.
Health and wellness We are living longer but not necessarily healthier. By 2030 Overweight & obese doubles to 3.3bn. Non-communicable diseases to cost £29tn. Cancer rates jump 75%. 10% of adults could have type 2 diabetes. mHealth: $23bn by 2017 eHealth: $160bn in 2015. Growth of 12-16% pa.  Medical tourism market: $100bn in 2012. $500bn by 2020. Non-communicable Diseases to Cost $47 trillion by 2030.  Jiang He and his colleagues at Tulane University have estimated that by 2030 the global number of overweight and obese people may double to 3.3 billion. Worldwide cancer rates are set to jump more than 75% by If the new predictions hold, 22.2 million new cancer cases will be diagnosed in 2030, compared with 12.7 million in 2008. We are living longer but necessarily healthier.

24 HEALTHCARE

25 In 2015, those aged 40+ will outnumber under-40s
Getting older 10m people over 65 years. One in 6 people.  By ½m more +65’s. By 2050 one in four. By 2020 3m more over 70. 36% of workers over 50. 10m people over 65 years.  5½m more elderly people in 2030. While one-in-six of the UK population is currently aged 65 and over, by 2050 one in-four will be. By 2020, 36% of UK working population will be aged over 50. U.K. consumers aged reported the highest annual income in 2010 at $49,635, followed by the 40-44 ($49,003), 50-54 ($48,397) and 35-39 ($47,556) cohorts. Euromonitor The "recession baby-boom" may be coming to an end after new figures revealed that the number of pregnancies has fallen to the lowest level in five years. During the economic downturn Britain's population grew faster than any other in Europe, fuelled by the biggest surge in births for 40 years. The high birth rate was attributed to immigration and a new generation of "recession babies", with couples choosing to have a second or third child rather than both return to work. In 2012, there were an estimated 884,748 conceptions in women of all ages, compared with 909,109 in 2011, a decrease of 2.7%. However, the Office for National Statistics has disclosed that in 2012 the number of pregnancies in England and Wales fell in every age group except the over 35s. Related Articles UK fastest growing population in EU with 48 more people an hour  08 Aug 2013 28 Sep 2011 ONS: A quarter of Britons have 'no religion at all'  Councils coping with higher population figures than was thought  30 Apr 2013 Authorities failed to register 500,000 migrants, ONS admits  07 May 2013 Migrants to send UK population soaring  26 Oct 2011 We must break down the barriers of Britain’s ghettos  10 Aug 2013 The declining birth rate comes as the economy begins to recover from the downturn. Dr Jonathan Cave, an economist and population expert at Warwick University, said: "I think it's very reasonable to assume that the fertility rates would go down. Work can disincentivise people from having children. "If people are primarily returning to work and re-identifying with workplace participation, they will shift their productive efforts away from having children." The number of teenage pregnancies continues to drop, but the proportion of young girls keeping their babies has risen slightly, according to new figures. The number of pregnancies in those under 18 fell to 27,834 in 2012 compared with 31,051 in 2011 – a 10% drop. Some 5,432 under-16s fell pregnant in 2012, compared with 5,991 in 2011 (a fall of 9.3%). Data from the Office for National Statistics (ONS) reveals that the under-18 conception rate remains the lowest since 1969 at 27.9 per 1,000 women aged 15 to 17. However, the percentage of pregnancies in young girls resulting in abortion has fallen slightly. Among under-16s, some 3,251 pregnancies resulted in abortion – 59.8% of the total. This is down on 60.2% the previous year and 62.5% the year before that. Between 2011 and 2012, pregnancy rates increased for women aged 35 years and over, and decreased for those under 35. The conception rate for women aged 40 and over has more than doubled since 1990, while the number of women in this age group conceiving has risen from 12,032 in 1990 to almost 29,000 in 2011 and 2012. The largest percentage increase in conception rates occurred among women aged 35 to 39 (up 1%), and by 0.7% for women aged 40 and over. For women aged 40 and over, the percentage of conceptions leading to abortion fell from 43% in 1990 to 28% in 2010, 2011 and 2012. The ONS said: "Reasons for an increased number of women conceiving at ages 30 and above include increased participation in higher education, increased female participation in the labour force, the increasing importance of a career, the rising opportunity costs of childbearing, labour market uncertainty, housing factors and instability of partnerships." The data also revealed a continuing rise in the number of pregnancies and births outside marriage. In 2012, conceptions outside of a marriage or civil partnership accounted for 57% of all conceptions, compared with 54% in 2002 and 44% in 1992. "In 2012 the proportion of conceptions outside marriage/civil partnership which resulted in a maternity (birth) was 69%, compared with 92% of conceptions inside marriage/civil partnership," the ONS said In 2015, those aged 40+ will outnumber under-40s

26 UK Lifestyles 95% not even doing minimum amount of physical activity.
Sedentary lifestyles leads to more than 40 chronic diseases. 95% of the UK population not even doing minimum recommended amounts of physical activity. Sedentary lifestyles lead to more than 40 medically recognised chronic diseases. Sedentary leisure time is expected to rise in the UK by 52 hours per week by 2030. Sedentary leisure time is expected to rise in the UK by 52 hours per week by 2030.

27 Health outlook 15m live with a long-term condition.
18m within 20 years. By 2030 one in two UK workers could have a long-term condition. 15m people in England live with at least one long-term condition. This figure is expected to hit 18 million within 20 years. By 2030, some believe that one in two UK workers will have a long-term condition.

28 REDEFINING LATER LIFE

29 @65 More than 1,700 British people reach 65 every day. 10.3m over 65.
15.5m by 2030. The annual pension savings gap across Europe stands at €1.9 trillion (19% of GDP) 60% of European workers have no workplace pension provision at all. A third of European consumers do not have any form of savings product Aviva Source: The TUC 35% of UK workers not contributing to any savings.

30 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.  , spending by over-50s in the UK grew by £100 bn. Avg year old has over x2 the personal wealth of the average year old. Over 50’s control 80% of UK wealth. People in their 60s own a quarter (£993 bn) of all property wealth in the UK.  As such, the UK life insurance ecosystem has an opportunity to become the retail interface between the UK’s workforce and pensioners and their retirement savings. An alternative prognosis could be that ownership of bricks and mortar becomes the preferred and most trusted form of funding for old age.

31 2028: 1 in 4 UK employees could work until they’re 70.
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. 2028: 1 in 4 UK employees could work until they’re 70.

32 BUSINESS

33 Changed Dynamics Porter’s 5 Forces

34 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. However, ...‘to make equity release sustainable we either need to see some product innovation to shorten the duration of loan or the government needs to remove the tail risk.’ Mike Kellard, CEO, Axa Wealth. 2013, older homeowners raised £1bn in home equity release. 60% of people use equity release to pay for home and garden improvements. 21% use it to clear debt. Car upgrades, holidays and helping younger relatives financially also feature.

35 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 Within the industry 30% believe new emerging market insurers will move into the developed world to become global insurers. 28% foresee truly global markets. “the rise of emerging markets is forcing insurers to re-think their current business models...’

36 Emerging competition 89% of insurers say competition intensifies in distribution in 3 years. 64% say from non-insurance players - Google, Amazon, Walmart… 89% of insurers expect competition to intensify in the insurance distribution market over the next three years. 64% believe that this competition will come from non-insurance players, such as Google, or e-commerce giants like Amazon.

37 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. Customers trust L&P providers least among all financial companies. Only 31% of L&P customers can manage their policy the way they want. 39% strongly agree that products are too complicated & unnecessarily confusing. 38% say their L&P provider offers value for money 37% say their insurer provides clear and transparent comms. Too complicated and confusing, difficult to engage with and not great value for money https://www.bcgperspectives.com/content/articles/insurance_financial_institutions_improve_p_c_profitability_premium_growth/

38 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 L&P providers face lower levels of engagement and satisfaction than even banks (44% vs. 60%)

39 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) By 2017: 50%+ of FMCGs will accrue 75% of their consumer innovation & R&D capabilities from crowdsourced solutions. Virtual teams can lead to increased efficiency and better business results. 80% of executives worldwide say enterprise- wide collaboration is the key to success Global Survey Enterprise Collaboration

40 TECHNOLOGY & COMMUNICATIONS
Change is coming

41 Three Horizons Entrepreneur Leader Manager Point of greatest confusion
Out there Leader In 2008 Horizon 2 New Manager Horizon 1 Core Extend and defend Build emerging businesses Create viable options

42 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 By 2017 'digital natives' dominate the market.

43 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 Holographics 3D printing (on a commercial scale) Automation (widespread) Unmanned Autonomous Vehicles (select industries/depends on country) Instant language translation Cognitive computing (Watson 3.0) Haptics technology Electronic nose RNA based therapeutics Vocal health diagnostics via smartphone Next generation neuropharmacology Electrochemical manufacturing

44 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 Quantum computing Prescriptive analytics Smart dust Programmable material Neuroprosthetics Brain-to-computer interfaces Brain-to-brain interfaces Geoengineering Microscale 3D printing (i.e. blood vessels) Anti ageing interventions (telomere lengthening etc)

45 First we do things differently Then we do different things
Not just doing things differently But doing different things

46 Mobile to 2018 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. £29.99 Ubislate 7Ci The 7-inch UbiSlate 7Ci runs the 2011 Android Ice Cream Sandwich software and comes with just 4GB of storage, although this can be expanded up to 32GB using a microSD card. T he 7-inch UbiSlate 7Ci from London-based firm Datawind Read more: http://www.dailymail.co.uk/sciencetech/article /Worlds-cheapest-tablet-UbiSlate-7Ci-costing-just-30-launches-Britain.html#ixzz3K0PGuNnT  Follow on Twitter | DailyMail on Facebook Its price makes it £50 cheaper than Aldi's Lifetab, £70 cheaper than Argos' MyTablet and almost £90 cheaper than the Hudl by Tesco. Read more: http://www.dailymail.co.uk/sciencetech/article /Worlds-cheapest-tablet-UbiSlate-7Ci-costing-just-30-launches-Britain.html#ixzz3JzPcPUut  Follow on Twitter | DailyMail on Facebook  The Cisco VNI Global Mobile Data Traffic Forecast projects future mobile data traffic over cellular networks—for example, second-, third-, or fourth-generation (2G, 3G, or 4G) networks or radio networks. The mobile datatraffic forecast is part of the comprehensive Cisco VNI study. The Cisco VNI Global Mobile Data Traffic Forecast is published annually in February. The comprehensive Cisco VNI Forecast is published annually inJune, and it includes a fixed IP traffic forecast as well as the updated Mobile Data Traffic Forecast of the same year. A. Although mobile data traffic has historically been a small percentage of overall global IP traffic, mobile data traffic is expected to grow at a 61 percent compound annual growth rate (CAGR) from 2013 to 2018, three times faster than the growth of global IP fixed traffic during the same period. Given the rapid growth and changing dynamics in the mobile data space, this data is of great interest to Cisco. We also expect that ourcustomers (in all segments) and the industry at large can benefit from our findings. Q. Why does Cisco develop and maintain the Cisco VNI Global Mobile Data Traffic Forecast? Q. Does the Cisco VNI Global Mobile Data Traffic Forecast include Wi-Fi? A. Wi-Fi is not included, except in the calculation of traffic offloaded from the mobile network (along with femtocell). Wi-Fi is included as a fixed network component in the comprehensive Cisco VNI Traffic Forecast. For the purposes of this study, offload pertains to traffic from dual mode devices (i.e., supports cellular and Wi‑Fi connectivity; excluding laptops) over Wi-Fi and small cell networks. Offloading occurs at the user/device level when one switches from a cellular connection to Wi-Fi/small cell access. Our mobile offload projections include traffic from both public hotspots as well as residential Wi-Fi networks. Q. What was the global mobile data traffic growth rate in 2013? A. In 2013, global mobile data traffic grew more than 81 percent, year over year, to 1.5 exabytes per month. Mobile data traffic growth varied by region, with the slowest year-over-year growth experienced by Western Europe at 57percent. The highest growth rates were experienced by the Middle East and Africa (107 percent) and Latin America (105). Q. What were the reasons behind the comparatively slower mobile data traffic growth rates in Western Europe in2013? A. There are three key reasons for the lower mobile data traffic growth in Europe last year: ● The ongoing implementation of tiered mobile data packages: First introduced in 2009 and 2010, the majority of mobile users have now been migrated to tiered plans. Many operators across the globe have eliminated unlimited data plans. ● A continued slowdown in the number of mobile-connected laptop net additions: The number of mobile-connected laptops in Western Europe grew only 6 percent last year, reaching nearly 39 million at the end of2013. Western Europe was the only region to experience single-digit laptop growth; all other regions exhibited at least 17 percent or higher laptop growth. Because mobile-connected laptops have historically been a major contributor to mobile data traffic volume, the slowing growth has had a significant impact on our estimates. ● An increase in the amount of mobile traffic offloaded to the fixed network: Operators have encouraged the offload of traffic onto Wi-Fi networks, and offload rates continue to be high around the world. Tablet traffic that might have migrated to mobile networks has largely remained on fixed networks. Q. What is the future outlook for mobile data traffic growth based on the updated forecast? A. Major findings of the Cisco VNI Global Mobile Data Forecast, 2013–2018 include the following points: ● By 2018, global mobile data traffic will reach 15.9 exabytes per month, or a run rate of 190 exabytes annually. ● Smartphones will be 66 percent of total mobile data traffic in 2018, compared to 62 percent in 2013. ● Globally, the average mobile network connection speed increased 2.6-fold in 2013 (1.4 Mbps) and willnearly double by 2018, reaching 2.5 Mbps. ● 4G connections will be 15 percent of total mobile connections in 2018 and will account for 51 percent ofmobile data traffic. ● 52 percent of global mobile data traffic will be offloaded in 2018, up from 45 percent in 2013. ● By 2018, 69 percent of the world’s mobile data traffic will be video, up from 53 percent in 2013. ● The Middle East and Africa will have the strongest mobile data traffic growth of any region over the forecastperiod, with a 70 percent CAGR, followed by Central and Eastern Europe at 68 percent and AsiaPacific at 67 percent. ● Globally, 79 percent of smartphones and tablets will be IPv6-capable in 2018, up from 46 percent in 2013. Q. In the 2013 Cisco VNI Global Mobile Data Forecast, you predicted a 2012–2017 global CAGR of 66 percent. In this update, you predict a 2013–2018 global CAGR of 61 percent. Why is the projected global growth rate slowing? A. The slight slowing in the growth rate is a typical example of S-curve growth, but the actual amount of traffic continues to represent significant growth. Although the growth in 2018 is projected to be less than 50 percent year over year, down from 81 percent in 2013, the incremental amount of traffic being added to the mobile Internet just between 2017 and 2018 is 5.1 exabytes per month—a little over three times the estimated size ofthe entire mobile Internet in 2013 (1.5 exabytes per month). Mobile will remake insurance business models by 2020

47 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. 21% of UK adults already use either a wearable device or a health-related mobile app. 40% interested in a device that tracks heart rate, blood pressure 34% in a device that tracks steps and sleep. ‘For businesses - implications for systems development, insight and analytics, leadership & competitive advantage.’

48 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 Context-aware technologies could make a  $96 billion dollar impact on annual consumer spending across the globe by 2015. Could be worth $120 billion by 2018. Microsoft Research Asia has a system able to infer a user's mood with 93% accuracy when sufficiently familiar with an individual.

49 Social networks The post e-mail era
Adds $1.3tn per year – 66% through collaboration 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. 20-25% improvement in productivity of knowledge workers. Social technologies could add $1.3 trillion per year. Collaboration accounts for two-thirds of that value. 20-25% improvement in productivity of knowledge workers. Social Media McKinsey Global Institute pdf, July 2012, ‘The Social Economy: Unlocking value and productivity through social technologies.’

50 Internet of ‘Things’ By 2020
One trillion sensors embedded in humans and machines. We will each own 50 internet connected devices. Creates $14.4tn of value to 2023. 99.4% of the 1.5 trillion physical objects in the world are still unconnected.

51 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). Quintillion USA 1 (18 0’s) UK 1 (30 0’s) 90% of data created in the past 2 years. BCG says 75 percent of all insurance purchases will be online by If these predictions are accurate, it will give Google a dominant position as the primary sales channel for the insurance industry.

52 Phil Loney, Group Chief Executive, Royal London Group.
Predictive analytics 41% of FS org’s say predictive analytics is more about minimising risk than exploiting opportunities: SAP 73% say it would help them to make better offers to their customers. Analytics can grow profits and productivity by 5-6%. By 2020, more than 35% of all data could be considered useful. ‘For those who can master it, ‘ big data,’ will become a business of its own.’ As with many new technologies, these concerns are not uncommon. However, the opportunity to obtain competitive advantage through increased customer loyalty and the ability to identify new opportunities cannot be ignored. Perceived roadblocks: data volumes are too high (57%) disparate systems (45%), specialist skills are needed (55%), ROI is unknown (35%). ‘Life companies have been shockingly bad at using customer data effectively.’ Phil Loney, Group Chief Executive, Royal London Group.

53 Engaging with technology
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: 53 53

54 Avatars Avatars are evolving into sophisticated computer generated images. Could monitor heart rate and blood pressure as well as provide medication reminders. The avatar could potentially analyse a person’s speech, movement and facial expression to detect mood and formulate an appropriate response. Diagnostics are becoming decoupled (at least physically) from professional service providers thanks to technology and this could help consumers from both an economic perspective and in terms of wellbeing.

55 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. And auditory "lenses,"

56 Cognitive computing Already improved doctor accuracy in diagnosing lung cancer by 40%. Watson Cognitive computing systems learn and interact naturally with people to extend human/machine capability. Helps human experts make better decisions by penetrating the complexity of Big Data.

57 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. £125 '23andMe' test can now be used in the UK with caution. The price for genome sequencing soon £66 ($100). In 2010 it was announced that a major Australian insurance company, NIB, was planning to offer half-price genome scans from personal genomics company Navigenics to 5,000 of its customers. Test is designed to give details about a person's health risks based on their DNA. Several legal issues will almost certainly arise, but it has been noted that ‘...banning insurance companies from using genetic data undermines the entire premise that insurance is based on.’ Since genomic based health predictions could allow customers to purchase a more appropriate level of coverage, using privacy arguments to disqualify insurance companies from calculating premiums based on the same information could destabilise the current insurance system. If insurers cannot use this information to calculate premiums then the system is untenable, but issues surrounding the weight given to genetic data in calculating premiums could be controversial given inherent privacy issues.

58 Gamification Over 50% of firms will gamify their innovation processes this year. Increasing public participation in co- creating products and services. Gartner believes that ‘...the application of game mechanics will give Property &Casualty(P&C) and life insurers a new tool to change agent behaviours, create stronger partnerships with agents and generate new sales

59 This study, which I did with G
This study, which I did with G. Elliott Wimmer and Brian Knutson at Stanford, was the first to use fMRI technology to document the disconnect people feel with their future selves. But it built on existing research. For example, one study asked people how many hours they’d be willing to spend tutoring someone immediately and in the future and how much time they thought their classmates could donate immediately. They were stingy with their own time in the present but more willing to volunteer their time in the future and their classmates’ time in the present, which suggests they thought of their future selves and other people in the same way. Studies have also shown that we have a third-person perspective on ourselves in the distant future. So, if you imagine your birthday next year, you’ll envision the scene as if you were looking out from your own eyes. But if you imagine it 20 years from now, you’ll probably picture an older version of yourself blowing out the candles. This is true for most but not all people. The scans revealed that some subjects did think of their current and future selves as the same person, and in our asset allocation task, those people were more likely to delay their gains. That’s why we wanted to see if we could change the attitudes of everyone else. Could we help people get to know—and show more regard for—their future selves?

60 Technology is moving between 3-5 times faster than management.
Pace of change 40% worry that ‘...their organisations will be unable to keep up with technology change and will lose their competitive edge.’ Some 35% of large companies don't believe their web infrastructures will be able to meet demands of mobile. The bigger issue though, and one that is often missed, relates to how technology meshes with people, structures and business models. Technology can’t exist as an abstract or be layered upon old foundations; in many cases going digital requires a whole new business culture and set of operations if it is to be a success. Technology is moving between 3-5 times faster than management.

61 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

62 The future belongs to those who prepare for it today

63 Imagine it If you want to get ahead – you need to look ahead Thank you davidsmithgff gfftv Back from the Future The Future of L&P 63 63


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