Short introduction to UBI presented during the 1st Fintech Summit in Brussels. http://fintechsummit.be/

1. Mateusz Maj
Evangelist & Marketing Actuary
Insurance 2.0 through
AI & Engagement
Mateusz Maj
Evangelist & Marketing Actuary
VivaDrive
INNOVATE OR NOT TO INNOVATE … AND DIE?
Will Usage Based Insurance (UBI) disrupt the insurance industry?

2. THE FOURTH INDUSTRIAL REVOLUTION
Artificial Intelligence,
robotics, IoT, uber-
connectivity, quantum
computing, …

3. INSURANCE SECTOR
Will Auto Insurers survive their collision with new industrial revolution?
No brand loyalty
U.S. auto insurance brands spent ~$6 billion on marketing with no improvement i.e. stagnant premium growth and
very low NPS score.
High acquisition cost
Acquisition costs of 10-15% of expected Lifetime Premium – €500+ on the high end.
High retention cost with no guarantee on returns
Still insurers focus on acquisition rather than retention, while attracting a new customer costs five times as much
as keeping an existing one.
Low profitability due to high claims
Claims constitute up to 90% of insurers’ costs.
Commoditization = price wars
Every insurance brand sounds the same and they differentiate on price only. They all consider Google a potential
rival.

4. AUTO INSURANCE – TRADITIONAL APPROACH

5. 1980s Now
Profession
Engine power
Coverage
Bonus-malus
Coverage
Bonus-malus
Claims history
Traffic violation
history
Age of vehicle
Use of vehicle
Make of vehicle
Purchase price
Parking place
Occupation
No. of drivers
Age of drivers
Maritial status
Real estate
Driving license
Mileage
Registered owner
Credit rating
…
Do we need additional factors? Is something new and better necessary?
AUTO INSURANCE – RATING TRENDS

6. AUTO INSURANCE – USAGE-BASED-INSURANCE (UBI) – THE NEW NORMAL?
UBI is the new insurance scheme where insurance
premiums are calculated based on driver exposure and/or
behaviour taking into account mileage, speed, driving
dynamics among others.

7. AUTO INSURANCE – UBI BENEFITS
Insurer Insured
Better risk assessment Discounted premium
Positive selection of good drivers Safer driving
Improving customer-insurer
interaction
Additional services like roadside
assistance
Risk reduction through better
driving
Does it work and does it offer enough value for insurers and the insured?

8. AUTO INSURANCE – UBI BEST BEST PRACTICES - ITALY
4.8M
Information from Matteo Carbone – Bain & Company
26 16%
Black-boxes
fitted in cars
Insurers
offering UBI Penetration rate
40%
Best practice
best penetration rate
on the market
BUT
• UBI is semi-compulsory – every insurer needs to offer an option of UBI
• Italy is a high insurance rate country – possible to reach a positive business model
• Does not work elsewhere - the existing business model of UBI does not present enough
value, neither to the insurance company, nor to the end customer

9. AUTO INSURANCE – WORKING EXAMPLE – VITALITY DRIVE
• Provides a tangible value through
rewarding system (drive well, earn points &
exchange them to rewards);
• Viable business model through successful
ecosystem with multiple partners, where
rewards are offered by partners;
• Vitality program – foundation of a business
model making Discovery (former startup) a
global player with $8 bn market cap.

10. VIVADRIVE
Make your own Vitality program
VivaDrive is a Platform-as-a-Service (PaaS) solution that
a) analyses driving data;
b) discovers insights about the driver and provides personalized feedback to
the driver;
c) uses gamification with a rewards program to change driving behavior
d) builds a loyal community.
VivaDrive is bringing to the insurance industry lower customer acquisition
and retention cost, brand loyalty improvement and claims reduction.

11. SOLUTION
VivaDrive - community-driven magic formula
Stay away from ‘price wars’ and focus on more efficient ‘value wars’
1. PROFILING & FEEDBACK
Use our personal driving coach and have all
the insight to become a better driver
2. GAMIFICATION & REWARDS
Driver engagement through game
dynamics & personalized rewards
3. COMMUNITY
Connect with other drivers. Share
personal experience. Benefit from the
community.

12. CONNECTED CAR
Integrate with connected car platforms
CAR/RIDE SHARING
Offer policies to new
sharing economy initiatives
TELECOM PARTNER
Reach out to large user-base and link your
app with a telecom bundle
FLEETS/LEASING
Engage corporate communities
ROADSIDE ASSISTANCE
VAS - Remote roadside assistance service
CREDIT CAR PARTNER
Pre-paid loyalty card
Collaborative business model
through coalition loyalty program
boosted with AI & personalization
LOYALTY PLATFORM
Share costs with loyalty partners
GOVERNMENT & NGO
Independent prevention platform
that unlocks a new acquisition channel
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USE CASE
VivaDrive – make your own successful ecosystem

13. Mateusz Maj
Evangelist & Marketing Actuary
mat@vivadrive.io
0032 494 899 891
0048 786 212 481
www.vivadrive.io
VivaDrive
Pr. Roger van Overstraetenplein 2, 3000 Leuven
contact@vivadrive.io
0032 484 899 891