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CPCU 2016 future of underwriting insurtech
- 1. CPCU ANNUAL MEETING Future of underwriting September 2016
- 2. TECHNOLOGY IS DRIVING SEISMIC SHIFTS 1
- 3. 2 1. The Manual to Digital Shift Driverless cars Smart machines with ability to think Wearable devices Technology is fundamentally challenging assumptions about what is a machine – covering all aspects of life making work easier, simpler, better – almost like a super-human assistant There is a superhuman assistant for all your needs….
- 4. 3 2. Mobility and Flexibility Technology is changing how things are done , mobile work from home, closer collaborations – sharing screen data, editing one video, one document being worked upon by multiple people, social networks Time and place no longer matter – anywhere anytime is the buzz-word Source: Citrix.com
- 5. 4 3. Immediacy Instant gratification – 24 by 7 convenience, faster way to do everything, simpler, objective interpretations, on demand, information at finger tips Everything is available at a click, on demand
- 6. 5 4. Nature of Data is Changing Simpler, visual, aggregated, easily available, greater ability to learn big data, complex data is turned into meaningful bytes easily, businesses using big data, 3D imaging – data is more real
- 7. 6 5. Many in One – The era of more Multi-tasking, ability to be in many places at once, as geographical distance does not matter, automate tasks, connected devices with one touch control, smart home appliances
- 8. 7 6. Time is the new currency Time-saved is money saved, improvement in productivity, time efficient technologies, everything is faster than before - automate tasks to save time, smart CRM systems, paper to online, get all data in one place for a meeting to start
- 9. 8 7. Open cultures – less hierarchy, less predefinitions Roles are not strictly pre-defined, more collaboration, ability to cross-task, functional and organizational hierarchies are disappearing, less formal, social networking, collaboration tools
- 10. 8. The Workspace of Future 9 Fast, Information at a Click Ease of Collaboration Manual to Digital Segregated to Integrated Time consuming to Within minutes Individual to Collaborative Formal to Flexible Textual to Visual Cluttered to Simplified
- 11. LEADING TO CHANGE MAJOR CHANGES IN INSURANCE 10
- 12. Expectations: Insurance Innovation 11 Source Hype Cycle for P&C Insurance, 2016“, Gartner, June 2016 Expectations: Insurance Analytics Next 2 to 5 Years • Advanced Analytics Solutions • Insurance Data Models • Agency Portal Solution Digitization • Use of Social Media Next 5 to 10 Years • Smart Machines • P&C Insurance APP Store • Telematics • Insurance Data Models • Wearables Expectations: Near and Mid Term
- 13. Insurance will be disrupted! • Internet of Things (IoT) • Drones, Autonomous Cars, Telematics • Big Data & Artificial Intelligence • Genetics & Wellness 1 Smart Machines 2 New Paradigms 3 Non Traditional Competition • Property/Title centrally registered – globally (Blockchain) • New Risks appear, some dissapear • Switch on/Switch off coverage • Consumer channels 12 • What are core capabilities for future success? • How will you prepare and when do you move? • What impact does it have on your Capital? • Social Insurance (Crowd sourced) • Non-Insurance entrants • Re-Insurers
- 14. HOW WILL ROLE OF THE UNDERWRITER CHANGE? 13
- 15. Evolution: Commercial Insurance Underwriting Manual Automation • 2x Underwriting Productivity • 2% Loss Ratio ↓ • 0.5% Expense Ratio ↓
- 16. 15 How underwriters have been traditionally - 70% time spent on low value tasks - Trouble getting information in one place - Swivel chair and integration issues - Challenge comparing data from multiple sources - Communication gaps when collaborating with experts and brokers Solution: Work Smarter
- 18. WAKE UP!!! 17
- 19. 1 8 Experian, Lexis Nexis, PAS Call Credit, Telematics…. Unstructured EXTERNAL INTERNAL PAS, Datawarehouse, Claims, Billing…... Search, Aggregate, Analyse, Visualize and Learn Processes Transformed 1. Case Underwriting 2. Renewal Analysis 3. Portfolio Analysis 4. Data Validation (e.g. Quote information validation, Automated Premium Audit for WC) 5. Form Filling (e.g. Enabling B2C SME Business, Quick quote, etc.) 6. Large Loss Investigation 7. Proactive Marketing Structured EXTERNAL The Future of Commercial Underwriting
- 20. *Includes machine learning and deep learning Descriptive Analytics What is happening Confirm Hindsight Analytical Technique Outcome Process Traditional Approach Form Theory Observe Data Diagnostic Analytics Why did it happen Predictive Analytics What is likely to happen Form Theory Foresight New Approach Observe Data *Identify Pattern Prescriptive Analytics What should I do about it 19 Commercial Underwriting
- 21. Fundamental: Transformation of Risk Assessment 20 • Statistically Similar Unique Risk Propensity Looking Backward Looking Forward
- 22. Evolution: Commercial Insurance Underwriting Manual AssistedAutomation Artificial Intelligence • 2x Underwriting Productivity • 2% Loss Ratio ↓ • 0.5% Expense Ratio ↓ • 5x Underwriting Productivity • 5% Loss Ratio ↓ • 1 – 2% Expense Ratio ↓ • 10x Productivity • 2x Growth • 10 – 15% NCOR ↓
- 23. • More strategic Understand the big picture about customers and hence predict desirable leads, cross-selling opportunities, messaging • More innovative Help with product development by defining requirements, pricing frameworks, key trends based on third party data and customer behavior – unique insights • More customer centric Build and enable a “team approach” to account servicing via collaborative tools and democratic information access. Leading to better solutions and increased customer loyalty. • More data savvy Machine learning, AI and big data enable to use analytical approach to improve precision and new kinds of data prediction and predictive modeling. 22 The Evolving Role of Underwriter Source : E&Y Underwriter of tomorrow will straddle multiple roles, beyond the current job predefinitions.
- 24. Underwriters of The Future
- 25. 24
- 26. © 2016, Intellect Design Arena Limited. All rights reserved. These materials are confidential and proprietary to Intellect and no part of these materials should be reproduced, published in any form by any means, electronic or mechanical including photocopy or any information storage or retrieval system nor should the materials be disclosed to third parties without the express written authorization of Intellect Design Arena Limited.
- 27. Expectations: Insurance Innovation 26 Source Hype Cycle for P&C Insurance, 2016“, Gartner, June 2016
- 28. Expectations: Insurance Analytics 27 Source Hype Cycle for P&C Insurance, 2016“, Gartner, June 2016
Editor's Notes
- A McKinsey Global Institute study found that high-skill knowledge workers spend 19 percent of their average workweek searching for and gathering information. That’s an incredible amount of lost productivity time. “What this new generation of platforms is doing it pulling it all together “You get the information you need for the business moment you’re in.”