Aviva Group Strategy Confidential

Customers & Innovation

Serge TaborinGroup Digital Innovation Director

Aviva

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Agenda

• World of change• Incremental vs. Disruptive Innovation• Startups vs. Corporates• Innovation & Insurance

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Technology Consumer Adoption

New Services

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What is innovation

Creating a value proposition that solves the problem better than available

alternatives

But…

• Understanding the new thing• Time to learn how to use it• Risk• Natural resistance to change

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A bit of wisdom…

Anyone can have a perfect strategy until they get punched on the nose

Mike Tyson

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Incremental vs. Disruptive

Incremental Innovation

- Doing what we do today, better -

• Known product characteristics• Well understood• Established value chain for

delivery• Established business model• Ready-made customer base• Fast adoption• Steady-state, predictable

Disruptive Innovation

- New value paradigm -

• New product characteristics• Little existing understanding• New value chain• New business model• Different customer base• Slow adoption – requires market

education• Exponential growth

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“iPhone isn’t a threat to RIM’s core business. It’s not secure, it has a rapid battery drain and a lousy keyboard.”

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“The development of mobile phones will be similar in PCs. Even with the Mac, Apple has attracted much attention at first, but they have still remained a niche manufacturer. That will be in mobile phones as well”

Anssi Vanjoki, Nokia's chief strategist

“There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item.”

Steve Ballmer, Microsoft CEO

“Is there a toaster that also knows how to brew coffee? There is no such combined device, because it would not make anything better than an individual toaster or coffee machine : it is important to have

specialized devices.”Jon Rubinstein, Palm CEO

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Corporates have:- Brand- Lots of customers- Proven business model(s)- Processes- Understanding of ecosystem

- Difficult to upset the ecosystem

- Legacy processes/tech etc- Multiple projects- Fail fast and move on- Have quarterly/annual targets- It’s a job

Startups have:- No customers- No brand- Little money/resource- Unproven product- Unproven business model

- Nothing to protect- Best tools for the job- Laser focus on opportunity- Learn fast and evolve- Targets based on adoption- It’s their life

BUT…

Corporates vs. Startups

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The “Big Idea”

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Insurance & Innovation

Ticking every disruption box:

• Dominated by a (relatively) low number of incumbents• Low customer satisfaction levels• Significant inefficiencies• Lack of transparency• Huge industry• Transformational role of technology• Softening regulation

Customer Disconnect

• Focus on products rather than solutions• Complexity of offerings• Muddled value proposition• Wording/labelling• Millennial challenge

Our World is Changing

• IOT• Genetics• Artificial Intelligence• Blockchain• Drones• Augmented reality / Virtual

Reality• Messenger platforms• APIs

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Providing sufficient focus to activities that could one day transform or replace the current

business model

Innovators Dilemma

Think what you stand for, not what you do today

Aviva Group Strategy Confidential

Thank you