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Parul Green - AXA

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Parul Green - AXA

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Parul Green - AXA

  1. 1. INSURTECH AND LOOMING THREAT OF DISRUPTIVE INNOVATION IN INSURANCE Strategy  and  Innovation   World  Forum,  London 2nd February  2017 CONFIDENTIALITY LEVEL Parul  Kaul-­Green Head  of  M&A  and  Innovation,  AXA  UK
  2. 2. What this talk is about what • Disruptive  Innovation  and  its  characteristics why • Why  Insurance  is  Disrupted • Why  Insurtech  is  Disruptee how • AXA  semi  open  eco-­system  approach  to  disruption
  3. 3. Disruptive Innovation A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. *Clayton Christensen, The Innovator’s Dilemma
  4. 4. q SMALLER TARGET MARKET q lower  tiers  of  customer   segments q LOWER GROSS MARGINS q unattractive  to  incumbents q SIMPLER PRODUCTS AND SERVICES q basic  features q fewer/no  bells  and   whistles q opportunity  for   performance  improvement Characteristics of disruptive businesses 4 | Focus on initial stages Disruptor Disruptee Mobile  phones Fixed  line  technology Personal  computers Mainframe and  mini   computers Online  and  Mobile  banking Traditional  Branch  banking Peer  to  Peer  Lending Retail and  commercial  bank   Lending
  5. 5. Why Insurance 5 | • Global industry of $ 4 trillion premium per year • complex-­ sophisticated  and  opaque  risk  pricing,   • capital  intensive  –relatively  long  payback  period, • highly  regulated-­ increasing  regulatory  burden Significant opportunities for growth, globally Shortfall  in  non-­life  insurance   premiums*  exceeds  US$150   billions Mortality  protection  gap in  the   Asia  Pacific  region  US$58   trillion* * Non Life Insurance estimates from Lloyds of London study of 42 sample countries *Life Insurance estimate from Swiss Re regional study
  6. 6. INTERNET OF THINGS ARTIFICIAL INTELLIGENCE DISINTERMEDIATION generate   large  amounts   of  data  that  result  in   more  accurate  risk   assessment  of  each   individual   policyholder reduce  information   asymmetry  and  drive   major  changes  in   insurers’  risk-­pricing   models Translating   data  in  to   analytics  through   Inference,  pattern   recognition   and  logical   AI Applications  include   Virtual  Assistants  and   Bots  in  User  Acquisition   and  Claims  Journey,   Pattern  recognition  in   fraud  detection   and   claims  assessment Peer  to  Peer  and   Blockchain  displace  the   trusted  third  party   element   required  risk   pooling   central  to   Insurance Disruptive forces supporting Insurtech 6 |
  7. 7. Rise and rise of Insurtech 7 | 0 50 100 150 200 0 0.5 1 1.5 2 2.5 3 2011 2012 2013 2014 2015 2016 Amount $ bn Deals Insurtech Amount Focus $14M Home   insurance $20M Lifecycle  software $34M Home   &  renters $14M AI  Software  for underwriting Insurtech Annual Financing trend Recent Insurtech deals More than 1,500 Insurtech start-ups Using advances in technology and data analytics to transform the entire insurance value chain, q from customer acquisition and product development q to underwriting and q claims management. Source CB Insights Insurance Tech Insights, Jan 2017
  8. 8. AXA uses both external and internal innovation ü Advancement  of  core   business  -­ BPR,  Product   development ü Transformation through: § BAU  Functions § Start-­in-­Crowd   sourcing  Internal   innovation Internal  innovation ü Business  model  innovation,  scouting,  culture,  pilot External  innovation ü €100m  InsurTech incubator ü Strategic  partnership  business development ü €235  M  venture  capital  fund AXA NEXT AXA   Strategic   Ventures Kamet AXA   Partners
  9. 9. Thank You

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