World Finance: Know your customer. It's not
just a compliance issue: for pension providers
it's about understanding savers' lives, sometimes
even better than they understand themselves.
Danica Pension has found an ingenious path
to these insights; joining me is executive
VP John Glottrup.
John, you're working with a team of anthropologists
to gain insight into the lives of your consumers.
So tell me about that collaboration
and what insights it's brought you.
John Glottrup: We work with a company called
Red Associates: very insightful, very skilled.
They work with some of the best brands in
the world. And what they do is, they leverage
a range of techniques such as ethnography
and anthropology, which is about more in-depth
studies of what really goes on
when consumers make decisions.
So, we can ask a consumer what's most important
for them when they pick out an insurance policy,
and people will give us the standard answers.
It's the cost, the expected return, the service,
that people are friendly, and all of that.
And not to say that these factors are not
important, but when we pose the second line
of questioning – what did you pay in costs
last year, what was your return, when was
the last time you actually used our service?
– people will go blank.
They will have no answer.
If you don't understand, and you can't remember,
these things simply cannot be the reason why
you decided to go in one or another direction.
What the anthropologists came back to us and
said was actually, what makes sense is to
understand what goes on in peoples' lives.
World Finance: So how have you changed,
based on the understanding
you've gained from these insights?
John Glottrup: So what we're doing now is
basically concentrating our efforts – not
to say that segments are not important – but
we are more focusing on life events. What
is it that's happening in the lives of our
consumers? Because that is where we need to
be, at the right points in time, with the
right services and the right products.
Let me give you just one example. Around the
age of 55, something starts to happen. We
see it very clearly in our data: activity
picks up. People engage with us, they ask
questions, they will ask for quotations on
changes to their policies or their services.
And we also see a lot of churn.
We had the anthropologists take a closer look,
and what they came back with was that at 55,
it's just a symptom of something else going
on. Because on average at 55, you become independent
from your kids, so to speak. Kids leave the
house, or they graduate from college. So you've
got plenty of time, and potentially some more
financial legroom. And you start wondering:
so, how am I doing with my pension? Have I
been saving enough? Should I be saving more?
What's going to happen for the next years
of my life?
That's the very narrow financial view. But
the anthropologists uncovered that actually
a lot more is going on. Because people start
thinking about, should I buy a new house?
Should I go back to college? Should I buy
this flat in southern Europe to enjoy life
a bit more? And once you understand that,
it becomes a lot easier to actually craft
a concept, a service model, and then an advisory
event, that caters for what really goes on
in the mind of the consumer.
World Finance: So how does it change
the conversations that you have?
John Glottrup: As opposed to having a very
product-centric conversation around the right
insurance coverage, the right amount of savings,
and the right life insurance, then it became
more a conversation around: how am I doing
with my finances in general?
So, do I have the financial situation that
I want to be in? How would that look 10 years
or 15 years out? Should I be saving more,
or should I be saving less and spending more?
So we've done this digital pension check,
and we've done a completely new
consumer interface.
What it is, is a traffic light.
Red, yellow or green. Very simple.
How are you doing?
Are you okay against what would
be our professional recommendation?
And if we put that tool in front of the consumers,
what we uncover is that more than half of
consumers will receive at least one red light.
At least one. Which just tells us, we haven't
done the job. We have by no means met the
target of actually making our consumers financially
confident, and ensuring that they can use
the pension for what it should be used for.
So it becomes a broader conversation which
is not just about pensions, but is also about
other sums of money, which is about all your
financial assets, and your entire life situation.
I hate the word holistic, but in the absence
of something better, that is actually the
word. It becomes more of a package.
World Finance: The insights you're getting
really seem to have applications across the
board, for peoples' entire financial lives.
So, you're a subsidiary of Danskebank; is
this insight informing its whole service?
John Glottrup: Absolutely – and when I say
I hate the word holistic, it is just because
it is a somewhat overused phrase. I don't
think that many financial institutions can
claim that, you know, we've actually been
able to deliver that kind of service.
What we are doing in collaboration with Danskebank
is actually, enriching the picture. So, moving
from a product-centric lens that is all about
pension; to a broader perspective on your
entire financial situation. And we have a
vision in the group that actually, what we
want to provide is financial confidence. In
order to do that, we have to be trusted. And
trust is something that you earn.
So, we need to enlighten and inform and help
our consumers in managing their financial
situations – not just on a pension, but
on the entire financial situation. And that's
the only way we can build trust. That we do
that in a reliable, and credible way.
World Finance: John, thank you very much.
John Glottrup: Thank you.
Thank you for watching. You can find out more about Danica Pension at www.worldfinance.com
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