As digital and data become key innovation enablers, insurers face new threats and opportunities. New entrants are disrupting long standing paradigms of how insurance risk is assessed, how products are distributed, and how insurers service customers. Digitalization and Analytics acquire new strategic relevance in this context and will fundamentally alter the relationship insurers have with customers and agents. This panel will discuss some of these trends and options available to insurers to address these opportunities. Presented at Pegaworld 2016.

1. Mahendra Nambiar
Vice President, Global Insurance
Solutions & Innovation Head
This information is not a commitment, promise or legal obligation to deliver any material, code, or functionality and the development, release and timing of any features or functionality described for our products remains at our sole discretion. 2016. Confidential. Pegasystems, Inc.
©2016 Pegasystems Inc.

2. 2

3. 3
1990’s
•Early 90’s: Credit-
based insurance scores
(CBIS) introduced
•Online/direct channel
opens
•Late 90’s: CBIS’s widely
adopted by P&C
insurers
2000’s
•NCOIL regulations
introduced
•Data, analytics,
modeling become
major part of process
•3rd party data
introduced
2010’s
•Telematics/UBI
•Behavioral data
•Connected economy
•Sharing economy
•Comparing economy

4. 4
The Insurance Industry is about to change
radically and rapidly, creating a massive
opportunity for innovative companies to
emerge and improve massively on the way
insurance is built, bought, and
experienced.

5. Leading insights on global insurance industry
15,500
150+
Survey responses
in the Customer
Experience Index
executive
Insurance
Interviews
9
th
year of
publication
■ Customer
Experience
■ Spotlight on Future of
Insurance in a Connected
World
■ Country Snapshots
30
Insurance
markets
covered
3Report
Features

6. 6
48.8%
51.6%
59.3%
56.6%
64.7%
56.2%
33.9%
36.0%
35.4%
34.6%
40.3%
35.5%
Developing
Asia-Pacific
Developed
Asia-Pacific
Latin
America
Europe
North
America
Global
OthersGen Y
40.7%
44.7%
47.3%
49.9%
51.6%
48.2%
33.3%
29.0%
32.3%
29.0%
36.2%
30.5%
Developing
Asia-Pacific
Developed
Asia-Pacific
Latin
America
Europe
North
America
Global
Positive Experience in Traditional Channels,
by Age and Region (%), 2015
Positive Experience in Digital Channels,
by Age and Region (%), 2015
PP Gap
24.4
22.0
23.9
15.5
14.9
20.7
15.3
20.9
15.0
15.7
7.3
17.7
PP Gap

7. Connectivity
and Artificial
Intelligence
Customer
Centricity
Transparency

8. OMNI-CHANNEL CUSTOMER EXPERIENCE
CUSTOMER ENGAGEMENT &
EXPERIENCE EXPECTATIONSCONNECTED DEVICES, IOT, &
USAGE BASED INSURANCE
NEW RISKS
& NEW MARKETS
THE SHARING ECONOMY
DISRUPTIVE ENTRANTS
& BUSINESS MODELS
REGULATORY
ENVIRONMENT SHIFTS

9. Largest Taxi Service That Owns
No Taxis
- Founded in 2009
Largest Accommodation
Provider That Owns No Real
Estate
- Founded in 2008
Largest Phone Company That
Owns No Telco Infra
- Founded in 2003
Most Valuable Retailer That Has
No Inventory
- Founded in 1999
Biggest Media Owner Creates No
Content
- Founded in 2004
World’s Largest Movie House
Owns No Cinemas
- Founded in 1997

10. 10

12. Within the US, Approximately 70% of insurance tech deals went to
non-health insurance areas

13. For Insurance Carriers For Policy Holders
 Self selected pools offer lower risk
profiles
 Less likely to report small claims
 Reduces moral hazard of
insurance
 Premium Discounts if there are no
claims
 Ability to pool risk with cohesive groups
to minimize risk
 Have a vested interested in spreading
the word and getting friends to join

14. Using anonymized social and search
engine data. BBM identifies unmet
insurance needs. Builds affinity
groups and negotiates deals with
insurers. Sells through social
networks.
Bought By Many was named Fintech
Innovation of the Year in 2015.
Partnership with Ping An in China
Acquired an Insurance Broker in the
UK
Social Distribution
https://www.youtube.com/watch?v=3h8-GEX159M
This is an online life insurance
company underwritten by Scottish
Friendly Assurance Society. Beagle
Street started in 2012 and is
designed to allow people who have
experienced a major life moment
such as buying a house, getting
married or having a baby to get
affordable life insurance quickly.
This company has refocused the
relationship with the insured to that of
an advisor, a life events guide. The
model is tuned to reinforce trust with
the end customer.
Events Partner
This is an example of bringing
insurance products to the customers
journeys rather than creating a new
insurance journey.
Alibaba and ANT achieve this by
offering products that are integrated
into the ecommerce journey, shipping
insurance for example.
In 2013, Ant Financial set up its own
insurance company called Zhong An.
Integrated Insurance
https://www.youtube.com/watch?v=K7mNiY6ts2k

15. Whatever path you chose to accelerate the transformation
of your business, three things are of paramount importance:
1. Fully Understand Your Starting Point (& Your Target!)
2. Focus More On Management Intensity Than Technology Intensity
3. Capability Optimization Is Not Innovation
4. Leverage Data And Insights As The Fundamental Catalyst For
Innovation