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August 2016
Introduction to InsurTech
ApplicationsWhat is InsurTech
• Insurance industry is undergoing a
profound change where any
advances in technology are
in...
3
InsurTech: Innovations & Applications
Technological innovation has led to more opportunities for the insurance industry
...
InsurTech: Innovations & Application
Financial
• Gov. Spending
• Health Reform
• Alternative
Financial/
Business
Models
• ...
Company
assess risk
of accident
Driver’s
behaviour
monitored by
telematics
Information
transmitted to
insurance
company
Ch...
Internet of Things (IoT)
The Development of IoT
1975
10,000 (Connected Devices)
2003
500 Million
2009
2.5 Billion
2014
10 ...
IoT: Snapshot
Connected Devices
6.3 Billion 6.8 Billion 7.3 Billion 7.6 Billion
500 Million 12.5 Billion 25 Billion 50 Bil...
IoT: Value Loop
Value Loop
Magnitude
Scope Scale Frequency
RISK
Security Reliability
Accuracy
Time
Latency Timeliness
Act
...
9
IoT: Applications
Environmental
Identity &
Tracking
Farming
Connected Cars
Energy
Grid
Personalized
Insurance
Social &
L...
ApplicationsWhat is Smart Home?
A smart home, is a home that
incorporates advanced automation
systems to provide the inhab...
IoT: Artificial Intelligence
Artificial Intelligence is a multi-dimensional subject area
Aspects of
Artificial
Intelligenc...
12
IoT: Insurance Industry
Area IoT Applications Insurance
Auto Smart cars; telematics
Improved risk assessment, reduced l...
Health Technology
Six
Disruptive
Trends
1. Chronic Disease Crisis
Customers are looking
for solutions that provide
more ef...
Health Technology: Benefits
Leveraging technology and data to make insurance more transparent
Simple,
Fast,
Integrated
Low...
Health Technology: Underwriting
Applying Statistical Techniques to Past Data to Find New Health “Predictors”
Agent/Broker ...
Health Technology: Strategy
Process &
Operations
In-force
Management
Capital, Risk
& Finance
Customer &
Marketing
Sales &
...
Auto Technology
Telecommunications Informatics
Telematics enables wireless data communication in your vehicles
Web Access
...
Auto Technology: Telematics
Insurance Telematics
Geo-Location and trip
data; Driver scoring; etc.
Web based application;
S...
Auto Technology: Benefits
Benefits of Automotive Technology
For Insurers For Customers
Reduce customer acquisition cost
In...
Investment Trends
20
Source: Accenture
Global investments in InsurTech are surging
• Number of investors willing to invest...
Investment Trends: Changing Landscape
21
Source: Accenture
Collaboration vs. Disruption
• Insurers are no different from o...
Investment Trends: Disruptions Drivers
22
Source: Accenture
New needs for radical innovations in insurance solutions
Custo...
Customers now expect personalized
insurance solutions. One size simply does
not fit all anymore.
Usage-based models are pa...
2. Augment existing capabilities
The insurance industry historically has
included intermediaries, service
providers and re...
3. Leverage data analytics to generate risk insights
Established insurers traditionally have
had the advantage over prospe...
4. Use new approaches to underwrite risk and predict losses
Protection-based models are shifting
to more sophisticated pre...
5. Enable businesses with sophisticated operational capabilities
Effective core systems enable insurers
to operate at a la...
Property Casualty/Auto Infrastructure/ Backend
Data Analytics/ IoT
Life/Health Insurance
Enterprise Insurance
User Acquisi...
InsurTech Landscape: APAC
Property Casualty/ Auto Infrastructure/Backend
P2P Insurance
Data Analytics/ Iot
Enterprise Insu...
30
27-28 September 2016
Suntec Convention & Exhibition
Singapore
www.InsurTechconf.com
InsurTech 2016 aims to be the knowl...
The Singapore FinTech Consortium - Introduction to InsurTech
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When you hear of “insurance”, the words “innovation” and “technology” would not come to mind intuitively – but they should now. At this day and age, insurance technology has the potential to affect nearly every essential insurance function, ranging from distribution methods to actuarial number crunching. InsurTech is now being implemented across every stage of the insurance value chain.

InsurTech 2016 Conference is a global gathering of the world's leading thinkers and doers in Insurance innovations and technology. It's a gathering of the planet's businesses, large and small, who are being impacted by new innovations to want to meet the demands of the insurance market.

This year, over 300 attendees will make the trip from all corners of the globe to hear from 80 industry thought leaders who will deliver the knowledge you're looking for to succeed in this arena.

InsurTech 2016 will assure that you meet the top insurance and technology professionals - leading 22 interactive and insightful sessions across all the insurtech spectrum, including:
Digital distribution channel
Blockchain
Data Analytics
Wealth Management
IoT & Telematics
Auto Tech
Health Tech & Wearables

Book your delegate ticket now for additional 15% Discount @ http://bit.ly/2bmXVxG

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The Singapore FinTech Consortium - Introduction to InsurTech

  1. 1. August 2016 Introduction to InsurTech
  2. 2. ApplicationsWhat is InsurTech • Insurance industry is undergoing a profound change where any advances in technology are incorporated in the insurance sector. • In recent years, many insurance companies are building up their technology landscape and evolving their business strategies due to the rise in InsurTech start-ups. • From the graph below, we are able to see an the trend of increasing deals and investment funds in InsurTech. Source: Startupbootcamp, what is an Insurtech startup? [Infographic], 2015 Insurance Technology 2 InsurTech 4 Sensors Provenance Vehicle Telematics Asset and Home Security I o T 1 Digital Claims Process Online Policy Market-place Omni Channels CRM Customer Engagement 6 Pay Per Use Insurance Dynamic Underwriting Personalised Package Risk Mitigation Data Analytics 5 Algorithm Asset Management Pension Management Digital Savings Plans Wealth Management 2 Digital Contracts Identity Verification Automated Compliance Law& Regulations 3 Fraud Detection Cyber Breach Risk Management Data Storage Information Security
  3. 3. 3 InsurTech: Innovations & Applications Technological innovation has led to more opportunities for the insurance industry Reduce Costs Improve Efficiency Create Innovative Products New Revenue Stream IoT’s Impacts on the Insurance Industry • Detect and analyze data trends by aggregating sensor data • Benefit from more real time risk data enabling tailored products, sales, underwriting and pricing • Increase quality of life through intelligent vehicles, buildings, healthcare IoT Changes the Business of Insurance • Change in risk profiles • Change in product/organizational profiles • Change in business models
  4. 4. InsurTech: Innovations & Application Financial • Gov. Spending • Health Reform • Alternative Financial/ Business Models • Public/Private Partnerships Demographics • Aging Population • Chronic Diseases • Communicable Diseases • Access • Consumer Engagement Operational • Infrastructure • Waste • Alternative Care Delivery, Operational Models • Talents • M&A Regulatory • Patients and Product Safety • Cybersecurity • Fraud & Abuse Innovation • Medical Advances • Digital Connected Health • Data/Analytics Defragmentation Effective, Efficient and Equitable Care Population Health / Volume to Value 4 Technological innovation has led to more opportunities for the insurance industry Health Technology
  5. 5. Company assess risk of accident Driver’s behaviour monitored by telematics Information transmitted to insurance company Charges insurance premium accordingly InsurTech: Innovations & Applications 1 2 3 4 • Responsible Driving: Drivers who drive responsibly will be charged lesser premiums. • Customer engagement: Enhanced direct interaction with the end user. • Subcriptions: Global insurance telematics subscription could increase by 1800% in the next 5 years. • Accident Rates: Trials conducted show that signing up for telematics insurance had a 20% lower accident rate. Impacts 5 Technological innovation has led to more opportunities for the insurance industry Auto Technology
  6. 6. Internet of Things (IoT) The Development of IoT 1975 10,000 (Connected Devices) 2003 500 Million 2009 2.5 Billion 2014 10 Billion 2020 30 Billion …which has triggered an explosion in the number of computing devices. 6 Everyday objects now have network connectivity…
  7. 7. IoT: Snapshot Connected Devices 6.3 Billion 6.8 Billion 7.3 Billion 7.6 Billion 500 Million 12.5 Billion 25 Billion 50 Billion 0.08 1.84 3.47 6.58 World Proportion Connected Devices Connected Devices Per Person More Connected Device than people 2003 2010 2015 2020 7
  8. 8. IoT: Value Loop Value Loop Magnitude Scope Scale Frequency RISK Security Reliability Accuracy Time Latency Timeliness Act Create ExchangeAggregate Analyze Augmented Behavior Standards Sensor Augmented Intelligence 8 Network
  9. 9. 9 IoT: Applications Environmental Identity & Tracking Farming Connected Cars Energy Grid Personalized Insurance Social & Local Healthcare Logistics & Shipping Building Management Home Automation
  10. 10. ApplicationsWhat is Smart Home? A smart home, is a home that incorporates advanced automation systems to provide the inhabitants with sophisticated monitoring and control over the building's functions IoT: Smart Home The Smart Home 0 1 2 3 4 5 6 7 8 2010 2011 2012 2013 2014 2015 2016 2020 Smart Home Market Germany (€ Billions) Smart Home Installation Smart Home Services Smart Home Hardware Smart Security Smart Temperature Smart Lighting Smart Appliances Smart Entertainment Smart Safety 10
  11. 11. IoT: Artificial Intelligence Artificial Intelligence is a multi-dimensional subject area Aspects of Artificial Intelligence Knowledge Representation Machine Learning Visualization Deep Learning Natural Language Processing Natural Language Generation Deep Q&A Systems Virtual Personal Assistance Social Network Analysis Graph Analysis Sensors/ Internet of Things Robotics Recommender Systems Simulation Modelling Soft Robotics Audio/ Speech Analytics Image Analytics 11
  12. 12. 12 IoT: Insurance Industry Area IoT Applications Insurance Auto Smart cars; telematics Improved risk assessment, reduced losses/loss severity Home Smart house; safety & security, flood Improved risk management, reduced losses/loss severity Health Smart bodies; personal health devices Improved health and wellness; reduced loss severity Vehicles Smart trucks/fleets; telematics Improved driving safety, fewer and less severe accidents Buildings Smart builidings; safety & security, physical hazard detection Improved risk management, loss mitigation Workers Comp Smart workplace; health & safety Reduced injuries; improved risk controls
  13. 13. Health Technology Six Disruptive Trends 1. Chronic Disease Crisis Customers are looking for solutions that provide more efffective healthcare outcomes and economic value. 2. Better Outcomes, Values Payers, employers, governments not incentivized to change long- term behaviours. 3. M-Health Technology Mobile solutions are Increasingly popular amongst patients and doctors. 4. Big Data Revolution Pulling together streams of information across different health entities to form one single data picture. 5. Customer Centricity Connecting insurers to customers for greater transparency and freedom of choice. 6. Underwriting Constraints on income, profit are putting the underwriting business under pressure. Healthcare is entering the era of technology, but insurance companies aren’t… 13
  14. 14. Health Technology: Benefits Leveraging technology and data to make insurance more transparent Simple, Fast, Integrated Lower Capital Expenses • Fewer human resources • Lower administrative costs More Economic • Cheaper consultation fee  cheaper claim • Lower service cost Patient Independence • A mobile working solution guarantees easier access to health information 14
  15. 15. Health Technology: Underwriting Applying Statistical Techniques to Past Data to Find New Health “Predictors” Agent/Broker Data Suitable if the data is held by all brokers in a consistent way General Insurance Data Suitable for predictive analytics of risk, purchase and lapse; but this data is typically quite shallow, with only a few variables held consistently on each customer Third Party Data Sources These can have very strong predictive power in markets where the data source has good breadth and depth 15
  16. 16. Health Technology: Strategy Process & Operations In-force Management Capital, Risk & Finance Customer & Marketing Sales & Distribution Pricing & Underwriting Strategy & Growth Future impacts of changing consumer demographic and socio-economic forces impact demand for our products? What about macro- economic and regulatory changes? How can we best utilize social media to acquire new customers and facilitate relationships with the existing customers? How can be improve customer loyalty? What is the growth opportunity of our products and services? Can we optimize pricing by capturing new health data to apply to our underwriting process? How should we structure customer experience through different sales channels to maximize sales and profits? What are the implications of refocusing distribution channels? What operations or technology initiatives will reduce costs without limiting our growth? How do we optimize the multi-channel customer service experience for each of our segments? How do we improve our policyholder persistency? How do we analyze mortality and morbidity results to improve pricing? How do we identify emerging experiences more accurately? What should be our capital allocation strategy in order to respond to different economic and regulatory changes? How do we optimize our portfolio of investments given our external constraints? 16
  17. 17. Auto Technology Telecommunications Informatics Telematics enables wireless data communication in your vehicles Web Access Cellular Security Repair Info & Diagnosis Roadside Assistance Email Navigation & Directions Music & Entertainment 17
  18. 18. Auto Technology: Telematics Insurance Telematics Geo-Location and trip data; Driver scoring; etc. Web based application; Social media engagement; etc. Emergency, medical and roadside assistance; Vehicle tracking; incentive and loyalty schemes; etc. Risk rating engine, algorithms and scorecards; Driver behavior analysis; etc Different driver detection; Theft and hi-jacking Detection; etc. Vehicle damage and injury Estimations; Vehicle usage Activities; etc. Insurance Telematics Risk Profiling Driver Style Profile Vehicle Claim Re- construction Real time Driver Behavior Consumer Interaction Lifestyle Services 18
  19. 19. Auto Technology: Benefits Benefits of Automotive Technology For Insurers For Customers Reduce customer acquisition cost Insurers get early access to potential customer and learn more about their actual risk Reduce claim costs & fraud Insurers benefit from self selection, reduced fraud & improved claims management Increase customer life-time-value Insurers increase customer lifetime by creating engagement via unique technology solutions & improved customer experience Better rates for safe driver Customers can learn about their driving style & how to improve in order to get better pricing Reduced risk & better assistance They receive an individual premium based on their driving behavior & benefit from tailored services Fringe Benefits Customers get a better & additional services. The insurance company becomes a partner instead of opponent 19
  20. 20. Investment Trends 20 Source: Accenture Global investments in InsurTech are surging • Number of investors willing to invest with insurance startups have increased by 40% in 2016. • Q1 of 2016 saw a record high of more than 45 deals totalling more than $650 million in funding. • Total InsurTech startup investments in 2016 is on track to top investments from last year by over 42%. • Most prominently, US-based startup, Oscar, led by Fidelity Investments, received over $400 million in funding from participants like Goldman Sachs and Google Capital. 80% of funding went to non- life insurance innovation 6% of all underwriting jobs will give way to automation in the next 5 years 67% of all InsurTech deals have been in insurance automation
  21. 21. Investment Trends: Changing Landscape 21 Source: Accenture Collaboration vs. Disruption • Insurers are no different from other financial sector players when identifying top threats to their business models, and the potential of FinTech in the long run. • Three out of four insurance companies believe that some part of their business is at risk of disruption, while 65% of insurers are actively dealing with InsurTech solutions. • In the past year, 70% of global investments went into ventures that enhanced the propositions of existing incumbents • Over $1.4 billion of funding have gone into insurance startups, intermediaries and reinsurance companies in 2015.
  22. 22. Investment Trends: Disruptions Drivers 22 Source: Accenture New needs for radical innovations in insurance solutions Customer Expectation Widespread adoption of new consumer technologies has created new needs for and expectations of insurance solution and interactive channels. Pace of Innovation With the demands of the shared economy, usage-based models, internet-of-things (IoT), autonomous cars, and wearables, therein lies possibilities of radical innovations and new business models. Startup Emergence With easy access to open source frameworks, scaled cloud computing and development on-demand, technology barriers to entry have been lowered – which new players are able to take advantage of.
  23. 23. Customers now expect personalized insurance solutions. One size simply does not fit all anymore. Usage-based models are partially addressing these expectations, but the sharing economy is also challenging existing, more traditional insurance products. New players are also able to work from a clean slate and leverage on a variety of available resources to fill market gaps. Overview Companies MetroMile - Entered a partnership with Uber that allows them to switch from personal to Uber Insurance. USAA - Invested $24m in Automatic Labs, a telematic platform with a full suite of integrated apps (including wearables) Sureify - Developed a platform that allows insurers to underwrite life insurance based on lifestyle data inputs. Key Opportunities #1 1. Changing Needs 23
  24. 24. 2. Augment existing capabilities The insurance industry historically has included intermediaries, service providers and reinsurers. In most cases, the carrier has led the business relationship because of its retail market position and scale. However, companies increasingly are peers. Accordingly, joint ventures and partnerships are a good way to augment existing capabilities and establish symbiotic relationships. Overview Companies BIMA Mobile – Partnered with mobile telecom companies to provide life insurance solutions to uninsured segments in less developed countries. AXA – Acquired an 8% stake in Africa Internet Group for €75million, opening new opportunities for the company in unpenetrated markets. Flock – Offers free HR and benefits solutions to fellow B2C market entrants. Key Opportunities #2 24
  25. 25. 3. Leverage data analytics to generate risk insights Established insurers traditionally have had the advantage over prospective newcomers of being able to leverage many years of detailed risk data. However, data – and new types of it – now can be captured in real-time and is available from external sources. As a result, there are new market entrants who have the ability to generate meaningful risk insights in very specific areas. Overview Companies Mnubo - Provide analytics that generate insights from sensor- based data and additional external data sources like telematics and real-time weather observation. American Family - investing in drone technology in order to facilitate real-time data collection and explore new approaches to access and capture risk data. Key Opportunities #3 25
  26. 26. 4. Use new approaches to underwrite risk and predict losses Protection-based models are shifting to more sophisticated preventive models that facilitate loss mitigation in all insurance segments. More deterministic models like the ones that now exist for crop insurance, are starting to emerge and new entrants are offering both risk prevention (not just loss protection) and a more service- oriented delivery model. For example: Overview Companies Discovery - managing genetic risks in advance can benefit both the end-consumer and the insurer with the aim of avoiding long-term health problems and associated expenses. Nauto - Offers visual context and telematics with actionable information about driving behavior, including distracted driving. Aims to help insurers design new pricing strategies and pinpoint areas of premiumthat they otherwise may not notice. leakage Key Opportunities #4 26
  27. 27. 5. Enable businesses with sophisticated operational capabilities Effective core systems enable insurers to operate at a large scale. Because of cost, establishing these systems has traditionally been a barrier to market entry. However, access to cloud-based core solutions has facilitated scalability and flexibility. Developments like this, combined with new developments like robotics and automation, have provided new market entrants compelling market differentiators. Overview Companies OutsideIQ - Offers artificial intelligence solutions via an as-a- service underwriting and claims workbench that uses big data to address complex risk-based problems. Tyche - Offers a solution that uses analytics to help clients estimate the value of legal claims. In addition, automating claims can improve efficiency and also effectively assess losses. Key Opportunities #5 27
  28. 28. Property Casualty/Auto Infrastructure/ Backend Data Analytics/ IoT Life/Health Insurance Enterprise Insurance User AcquisitionP2P Insurance Product Insurance Reinsurance Blockchain Customer Engagement Comparison/ Marketplace InsurTech Landscape: Global 28
  29. 29. InsurTech Landscape: APAC Property Casualty/ Auto Infrastructure/Backend P2P Insurance Data Analytics/ Iot Enterprise Insurance Wealth / Robo Advisory Comparison/ MarketPlace Life/Health Insurance Product Insurance Consumer Engagement BlockChain Bank Bazaar 29
  30. 30. 30 27-28 September 2016 Suntec Convention & Exhibition Singapore www.InsurTechconf.com InsurTech 2016 aims to be the knowledge-exchange platform to foster synergies among market players to find solutions to implement and promote best innovative insurance practices in a collaborative, open and transparent manner. InsurTech Conference @insurtechconf
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When you hear of “insurance”, the words “innovation” and “technology” would not come to mind intuitively – but they should now. At this day and age, insurance technology has the potential to affect nearly every essential insurance function, ranging from distribution methods to actuarial number crunching. InsurTech is now being implemented across every stage of the insurance value chain. InsurTech 2016 Conference is a global gathering of the world's leading thinkers and doers in Insurance innovations and technology. It's a gathering of the planet's businesses, large and small, who are being impacted by new innovations to want to meet the demands of the insurance market. This year, over 300 attendees will make the trip from all corners of the globe to hear from 80 industry thought leaders who will deliver the knowledge you're looking for to succeed in this arena. InsurTech 2016 will assure that you meet the top insurance and technology professionals - leading 22 interactive and insightful sessions across all the insurtech spectrum, including: Digital distribution channel Blockchain Data Analytics Wealth Management IoT & Telematics Auto Tech Health Tech & Wearables Book your delegate ticket now for additional 15% Discount @ http://bit.ly/2bmXVxG

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