Presented by Patrick Vice, Insurance-Canada.ca ORBiT Annual Members' Meeting, Nov 11th 2014 ORBiT's Annual Members' Meeting is our industry learning, sharing and strategic planning event, focused on shaping the real time agenda for the coming year.

1. Next Generation of the
Previously Unthinkable
ORBiT Annual Members’ Meeting
November 11, 2014
Patrick Vice
Insurance-Canada.ca, Inc.

2. Overview
1. Three Generations of the Previously
Unthinkable & Business/Technology
Relationships
2. Emerging Technologies, Trends, and
Insurance 2024
3. The Next Generation of the Previously
Unthinkable
4. What Does All This Mean Today?

3. Warm up
• What does the future of insurance look like?
• What does the future of technology look like?
• What don’t we know?

4. Let’s Travel to the Present
1. Three Generations of the Previously
Unthinkable & Business/Technology
Relationships
2. Emerging Technologies, Trends, and
Insurance 2024
3. The Next Generation of the Previously
Unthinkable
4. What Does All This Mean Today?

5. 5
The 3 Generations of the
‘Previously Unthinkable’*
1.The Mainframe
Computer (1960s)
2.The Personal
Computer (1980s)
3.The Commercial
Internet (1990s)
*Thanks Willie

6. Business and the ‘Unthinkable’
• Functionality that could not be imagined
without technology having been deployed
• Technology that could not be imagined
without other other technology having been
deployed
• This implies that technology precedes business
• After which business shapes and values
technology

7. The Internet
11:59PM
31 Dec 99
Dot Bomb
The GR
MainFrames
PCs
Computing Access
External Linkage
Impact
Business/IT Relationship Cycle

8. Evolution of Business/IT
Partnership
CRM
is going to
be great!
IT is stupid.
Never ask for
money again.
Cut costs now.
Ah, we’re
in an info
business,
we need IT
We need new
capabilities
-- FAST
1995 2000 2005 2010
FAITH AND EXPECTATIONS
Dot Bomb
Y2K
Great Reset
“Help us,
Obi Wan Kenobi,
You’re Our Only
Hope”
© 2009

9. The Internet
11:59PM
31 Dec 99
Dot Bomb
The GR
MainFrames
PCs
Computing Access
External Linkage
Impact
Business/IT Relationship Cycle
Legacy
replacmt,
CAMS

10. Yes, We CAMS!
• Cloud – Applications and Data held outside
the enterprise, Pay as you go model
• Analytics – Increased use of data for
descriptive, predictive, prescriptive activities
• Mobile
• Social
And add these to mainframe, pc, and
internet applications (busy enough yet?)

11. The Current IT-Insurer Relationship: A
Few Data Points*
• 78% - Changing customer demands are driving
technology investment
• 28% Believe current technology strategy is fully
aligned with strategic priority
• 17% are ‘Leader Companies’
*Source: StateStreet commissioned Economist survey of 321 insurer managers/execs

12. What makes a Leader Company*
Innovation is
rapid
Tech managers
are proactive
Bus Managers
exploit new tech
Tech Leaders 82% 70% 69%
All Respondents 53% 23% 22%
*Source: StateStreet commissioned Economist survey of 321 insurer managers/execs

13. Let’s Take a ….
13

14. Let’s Continue
1. Three Generations of the Previously
Unthinkable & Business/Technology
Relationships
2. Emerging Technologies, Trends, and
Insurance 2024
3. The Next Generation of the Previously
Unthinkable
4. What Does All This Mean Today?

15. Remember Moore’s Law?
• Computer resources, disk space, Bandwidth,
etc. tend to double every 18-24 months.
• SMA has described this as irrelevant,
compared to the power of emerging
technologies
• “because they are coming faster, and they are
more formidable than ever before. “

16. Selected Emerging Technologies
Impacting Insurance
Technology Hits Tipping Point (30%) Ubiquitous Use (70+%)
Internet of Things 2017 2021
Wearable Devices 2016 2021
Drones, Ariel Imaging 2017 2021
Artificial Intelligence 2017 2024
Driverless Vehicles 2018 2024
Semantic Technologies 2019 2024
3-D Printing 2016 2020
All of these have traditional insurance practices
in their sites (busier still?)

17. Internet of Things
© 2014 Celent a division of Oliver Wyman

18. How Will Insurance Look in 2024*
• Mature markets commoditize
• There will be lose of risk premium in auto and other
lines
• Growth comes from new segments, markets &
products
• Prospective, not retrospective, risk management
– Variable risk profiles
– Just in time coverage
• Renewed focus on independent distribution to
differentiate and gain mindshare of customer
• Greater collaboration
* Various presentations at the ICEF2014

19. Crop insurance - Google-style
The Climate Corporation
• Crop insurance company, founded by ex-Googlers
• Crunches mass data from climate models, weather
measurements and billions of soil observations
• 50 tb of live data are in its systems
• Policies for specific plantings
• Paid on specific events – not on impact
• Acquired recently by Monsanto for $930 MM
Thanks to Donald Light, Celent

20. The Customer … *
• …is not Your Customer alone
• Best-in-class experiences had in one industry,
are now expected in all industries, for every
definition of a “customer”
• Gap
– 80% of CEOs think they deliver a superior
customer experience
– 8% of Customers agree (ibid.)
* Peter Pleckaitis, IBM at the ICEF2014

21. How will distribution look like in 2024*
• Social Distribution Networks
– End to end process for all parties
– Relationship focused
– Premium is on communications
• Producer Big Data
– Deliver specific market demographics
• Outcome based compensation
* Various presentations at the ICEF2014

22. Summary
• We are at a place where the 3rd Generation of the
unthinkable is now routine
• The Internet allowed us to get more information
from new sources, but
• IT/Business relationships are strained trying to
cope with CAMS and legacy systems
• Knowledge workers are at a limit of being able to
digest the information and maintain meaningful
contact through all the networking options
available

23. Time for Another ….
23

24. Let’s Continue
1. Three Generations of the Previously
Unthinkable & Business/Technology
Relationships
2. Emerging Technologies, Trends, and
Insurance 2024
3. The Next Generation of the Previously
Unthinkable
4. What Does All This Mean Today?

25. What will drive the 4th Gen?
• Big Data
• Big Networks
• Analytics
• New Business Models
• Inability of knowledge workers to exploit
data, analytics, and networking in an
actionable time frame

26. Assume: Innovation is needed to add
virtual knowledge worker capacity
• Cognitive Computing may be the answer
• What is Cognitive Computing?
– In dynamic, information-rich, and shifting
situations, data tends to change frequently, and it
is often conflicting. Cognitive computing system
offers a synthesis not just of information sources
but of influences, contexts, and insights. Systems
weigh conflicting evidence and suggest an answer
that is “best” rather than “right”.

27. Example: Watson
• Jeopardy winner 2011
• In production with a number of large- scale
medical research/treatment pilots
• Entering P&C Insurance

28. Let’s Continue
1. Three Generations of the Previously
Unthinkable & Business/Technology
Relationships
2. Emerging Technologies, Trends, and
Insurance 2024
3. The Next Generation of the Previously
Unthinkable
4. What Does All This Mean Today?

29. Brokers today ….
• Know your customers and communicate –
using their preferred methods
• Become 24x7
• Run an efficient operation
• And seek efficiencies from their partners – this
includes connectivity
• What else can you do?

30. What else?
• Learn more about CAMS – especially
– Mobile
– Analytics
• Determine segments of your book
– Determine growth potential
– Determine how you could package this
• Determine your markets’ segments
• Discuss digital and customer strategies with markets
• Involve staff in all of the above – look for candidates to
participate projects

31. Thanks, and
Now a …
… to refresh
31

32. Next Generation of the
Previously Unthinkable
ORBiT Annual Members Meeting
November 11, 2014
Patrick Vice
Insurance-Canada.ca, Inc.