This document discusses how data disruption is impacting the insurance industry. It describes how insurance companies have evolved from using internal demographic and agency data for pricing and underwriting to now integrating open data and real-time data streams. Examples discussed include how telematics data from devices in cars is now used for usage-based insurance. The document suggests that within 10 years, insurance may be offered as a platform where customer data is continuously collected and analyzed to price products, perform underwriting, and provide risk analytics services on a personalized, real-time basis. Entities like online advertising platforms that collect large amounts of user data may end up driving this user-based insurance model of the future.

1. Data disruption for Insurance
A Perspective From the Digital World
?

2. Data Disruption
Basics
6/12/2013 Dataiku2

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Dataiku
We help people
build their datalab
2013

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Why a data lab ?
Personalize for Survival
+ Sale Price
- Buy Price
- Discount
- Advertising Costs
- Indirect Advertising Costs
- Search Optimization Costs
- Cloud Marginal Costs
+ Recurrence
+ Loyalty ?
-----------
Predicted Deal Value
+ Sale Price
- Buy Price
~ SEO
-----------
Margin
Simple Funnel Model Multiple Contact Points Model
E-Commerce 2001 E-Commerce 2013

5.  New Team  New Tech
 New “M” Paradigm
◦ Let the machine decide,
not the meeting
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Data Lab
Business Guy Data Scientist
Tech Guy

6. Is your data lab ready ?
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Can you bring in …
What is your ability to integrate a new
smart guy and give him any
data he would need and any computing
power he would need to enhance
your product ?
?

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Insurance is already data driven

8. Data Usage Evolution
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Linear
Generalized
Linear
Model
CART
MARS
Neural Networks
PricingBusiness
Scope
Model
Complexity
Data
Scope
Pricing
Underwriting
Retention
Pricing
Underwriting
Retention
Fraud
Recruitment
Internal
Internal
Demographics
Agency Data
Internal
Demographics
Agency Data
Open Data
Real-Time Flow
1990’s 2000’s Soon

9. How do you combine data ?
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DATA
Price Score
Retention Score
Affiliate Score
Risk Score
…
Combine at
the strategic
or individual
level ?

10. What is your practice w.r.t Churn ?
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Data
Profitability
Analytics
Key Drivers
Strategic Objectives
Marketing Plans
Enhance Scorer
Effect
Measurement
1 year ? 5 years ?

11. Acquire, Manage, Release
each customer
individually, throughout
his life and key events
 Gather all relevant data,
even partial or inaccurate
 Share methods and
algorithms between CRM
and Risk Analytics
 Run Global A/B Tests.
Don’t decide from
reports.
Churn: The Digital Way
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New House
New Girlfriend?
Phone+Mail
Campaign
Liked “Vodka”
On Facebook
New Car
Specific Risk
Detected
Birth
Death
Mobile Info
Travel To China?
New Girlfriend?
New Car
Change Bank
Discount
Offering
Specific
Risk
Detected

12. From Evolution to Revolution

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Online Advertising Revolution
October 23, 2000
Large Amount of User Data Product Ability
New Business Model Data Processing And Predictive Capabilities

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Impact

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Insurance Telematics
New Services New Product Delivery
New Business Model Data Processing and Predictive Capabilities
Performance Monitoring
+ Theft recovery
+ Performance
+ Oil Savings
Progressive (2011):
2 billions miles of data

16. Progressive (Snapshot) - State Farm
- AllState (DriveWise) - Nationwide
(SmartRide) - Hartford (TrueLane) -
Esurance (DriveSense) - State Farm
(Ford Sync) - CSE (Save) - Elephant
(DriveIQ) - Dtric (Akamai) - Metro
Mile - Insure The Box - ….
Car Insurance Telematics:
From 1997 to 2013 and beyond …
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Source: ABI Research, “Insurance Telematics”, Q1 2012

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User Based Insurance
Next : Health ?
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Today: Data Generation
Health Digitalization Startups
Tomorrow
Personalized Insurance ?
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Insurance 2020 :
Water Leakage Insurance ?
Boston Chronicles,
18 April, 2018
Housing leader House Corp©
is offering a new water
leakage insurance service.
This service will be offered
to every customer renting a
new flat through the web
site, and will gather
information from …
Data from
House Sensors /
Product Sensors
Water Consumption
Weather
Internal Temperature
Product / Image Analytics

22. Washington Post,
3 April, 2019
Online Dating Service
MeetMatch© is offering a
marriage insurance as part
of its new premium service.
This new service will start at
5€/month, with a rate
evolving throughout your
lifetime, depending …
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Insurance 2020 :
Marriage Insurance ?
Data from
Facebook
Web Search
Online Profile
Divorce History
…..

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Online Advertising Revolution
October 23, 2000
Large Amount of User Data Product Ability
New Business Model Data Processing And Predictive Capabilities

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2013
Display Advertising / Platforms
Data Management Platform (User Data) AdNetworks (Distribution)
AdExchange Audience Optimizers
ADVERTISINGSLAVIA

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In 10 years:
Assurance as a platform ?
Collect Customer Data Pricing and Product Conception
Underwriting and
Distribution
Risk Analytics As A Service

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User Based Insurance in 10 years:
Who will…
Driive
Collect Customer Data Pricing and Product Conception
Underwriting and
Distribution
Risk Analytics As A Service

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Thank you !
@fdouetteau
http://www.dataiku.com