April 20, 2020 - Presented to CFO and senior management at Northbridge for my second co-op term

1. Navigating Insurtech & Innovation
April 20, 2020
Mitchell Li

2. Hi, I’m Mitchell!
2Mitchell Li
2B – Mathematics & Business
@ University of Waterloo
mt8li@uwaterloo.ca

3. Agenda
3Mitchell Li
1 Background
2
Implications on
Insurance Firms
3 Recommendation
4 Implementation
5 Insurtech Spotlight
6 Conclusion

4. Source: McKinsey Panorama 4Mitchell Li
AutomationTargeted
Connectivity
Digitalization
Data-driven
Engagement
Key characteristics of insurtechs
Insurtechs are leveraging digital expertise to
maximize value within the value chain
Big Data & AI
Machine Learning
Internet of Things (IoT)
Robotics
Blockchain
Digital Customer Interfaces
New technologies adopted by insurtechs

5. The rise of insurtechs
0.14
0.27
2.7
2.3
6.37
0
50
100
150
200
250
300
350
0
1
2
3
4
5
6
7
2011 2013 2015 2017 2019
NumberofDeals
InvestmentsInBillions,USD
Source: McKinsey, Willis Towers Watson 5Mitchell Li
1. Over the last decade,
venture capital
investments in
insurtech has grown
4,450%, from $140
million USD to 6.37
billion USD
2. The global insurtech
market is expected to
grow 41% annually
over the next 3 years
Key Insights
Number of deals increasing at 60.65% per two years

6. Agenda
6Mitchell Li
1 Background
2
Implications on
Insurance Firms
3 Recommendation
4 Implementation
5 Insurtech Spotlight
6 Conclusion

7. The rise of technology is a concern for insurance firms
Source: PricewaterhouseCoopers (PwC), Deloitte 7Mitchell Li
of insurance industry respondents indicated that cultivating a
engaged and innovative culture was their top challenge
of Insurance CEOs were concerned by the speed of technological
change as a threat to growth
93%
68%

8. Agenda
8Mitchell Li
1 Background
2
Implications on
Insurance Firms
3 Recommendation
4 Implementation
5 Insurtech Spotlight
6 Appendix

9. Fairfax’s response to rise of insurtechs
Canada’s first direct-to-
consumer small business
insurance provider
Leveraging AI to improve
customer experience through
chatbots
Source: Fairfax Financial Holdings 9Mitchell Li
TruShield
Onlia is a fully digital P&C
insurer with digital safety
products.
This is a result of a partnership
between Fairfax and Achmea
Onlia FairVentures Lab
Fairfax’s innovation lab is in
place to explore emerging
technologies to facilitate
innovation within Fairfax
companies, including
Northbridge
Fairfax has responded deftly to the rise of new technologies within insurance

10. Source: Jon Medel, Adam Scarth 10
Artificial Intelligence
models are being
developed to increase
accuracy of fraud detection
Machine Learning
Algorithms are being
implemented to automate
business classification with
underwriting
Artificial Intelligence and
Machine Learning
Algorithms are being
utilized to enhance the end
to end claims process
Mitchell Li
Northbridge is currently leveraging analytics and
technology for the following three main purposes
Fraud Detection Underwriting Process Claims Processing

11. 11Mitchell Li
1. Run skills & innovation workshops to equip employees with
the capabilities to innovate Northbridge
2. Allow employees to innovate within all aspects of their job
3. Build up an innovation infrastructure to allow concepts to go
beyond ideation and into implementation
1. Evolve from an internal Northbridge competition to a national
start-up innovation competition
2. Develop a pipeline of innovative ideas and enable
opportunities to partner with insurtech start-ups
Enable innovation
within Northbridge
Northbridge
Innovation
Challenge
Northbridge should continue to foster innovation on
a holistic level across the company

12. Agenda
12Mitchell Li
1 Background
2
Implications on
Insurance Firms
3 Recommendation
4 Implementation
5 Insurtech Spotlight
6 Conclusion

13. Expanding the Northbridge Innovation Challenge
13Mitchell Li
Identify ground-breaking
ideas for services and/or
products within insurance to
potentially implement with
Northbridge
Goal:
Northbridge Innovation Challenge Competition will establish an pipeline of innovative ideas
and enable opportunities to partner with industry driving insurtech start-ups
1. Submissions are open
to the Canadian public
2. Winners will be given
the opportunity to work
with Northbridge to
bring their
service/product to life
Details:

14. Enablement of innovation within Northbridge
Source: Harvard Business Review, CSAA Insurance Group 14Mitchell Li
Innovation Training Idea Implementation Engagement
Design Thinking
Interdisciplinary
ideation sessions
Skills and Innovation
Workshops
Innovation Hub
Department
Innovation Leads
Post-training
consultations
Motivate employees
Reward and
recognize innovation
Innovation contests
and challenges

15. Agenda
15Mitchell Li
1 Background
2
Implications on
Insurance Firms
3 Recommendation
4 Implementation
5 Insurtech Spotlight
6 Conclusion

16. Company Profile: Lemonade
Source: Doughroller, Lemonade 16Mitchell Li
Provides renters and homeowners insurance
through a peer-to-peer model
20% to cover
operations
30% of all claims are
handled instantly
All premiums are paid into communal claims pool
% goes towards
reinsurance
Rest goes
towards claims
payments
Boasts a 3 second world
record in claim handling
If there is money left over in the claims pool, it will go to charity
10.2% of its annual
revenue donated in 2017
$631,540 donated to
charity in 2019

17. Company Profile: Chisel AI
Source: InsurTech North, Chisel AI 17Mitchell Li
Product:
Natural Language Processing
(NLP) & Machine Learning (ML)
400x faster than a human in
reading unstructured data, a 50%
increase in underwriting capacity
Data-Extraction Tool for
Commercial Insurance Carriers
How it works:
Capabilities:

18. Company Profile: Zesty.ai
Source: Yahoo Finance, Zesty.ai 18Mitchell Li
Developed an AI-based Risk Analytics Platform for
P&C insurance that provides insurers with property,
climate, and change insights
Analyzes over 115 billion data points across 140
million structures through satellite and drone
imagery, aircraft and weather data
Recognized as one of the top 100 most innovative
AI startups in the world in 2020

19. Illustrative: Zesty.ai
Source: Vimeo – Zesty.ai 19Mitchell Li

20. Agenda
20Mitchell Li
1 Background
2
Implications on
Insurance Firms
3 Recommendation
4 Implementation
5 Insurtech Spotlight
6 Conclusion

21. Summary
21
How should
Northbridge
navigate the
advancement of
technology in
the insurance
industry?
Enable
partnerships with
insurtech startups
Expand
Northbridge
Innovation
Challenge
KALM & Co.
Rate of
technological
change
IssuesObjective Recommendations Impact
Culture of
innovation
Develop innovation
infrastructure within
Northbridge
Increase in
continuous
improvement
innovations
>
>