InsurTech in the United States: A Changing Insurance Marketplace

Transcription

1 : A Changing Insurance Marketplace John F. Finston Drinker Biddle & Reath LLP June 7, 2018

2 InsurTech Basics Products, Platforms, Technology Regulatory Considerations Insurance, Cybersecurity and Data Protection Q&A at any time 2

3 InsurTech Basics What is InsurTech? - Innovation, broadly but applying technology and connectivity to the industry value chain from underwriting through to claims adjudication - Big data, IoT/connectivity, AI, bots, machine learning, telematics, predictive analytics, SaaS, API, sensors, etc - All lines of insurance Who are the players? - Tech entrepreneurs - Traditional/incumbents - Investors and capital providers - Consumers - Regulators 3

4 InsurTech Basics (cont d) What s driving the changes? - Lagging adoption by industry of tech advancements perception that industry is ripe for disruption - Industry economics: supply>demand=falling prices; low investment returns - Venture fund interest - Customers, e.g., millennials; growth of sharing economy-- Uber, Airbnb 4

5 InsurTech Basics (cont d) Disruption or something else? - What is disruption? o Examples of past disruption: steam engines, electricity, telephones - Disintermediation? - Efficiencies, e.g., claims algorithms - Expense savings, e.g., The Other 85% besides distribution costs - Enhancements, e.g., AI and Big Data 5

6 InsurTech Environment Sectors Product innovation Distribution Sales and marketing administration Data and analytics Claims and fraud 6

7 Products, Platforms, Technology Products - Pay as you go, e.g., auto, travel - Limited/micro-duration, e.g., drones, sharing economy, subcontractors - Coverages, e.g., parametric (earthquake, typhoon), traditional (homeowners, travel) - Customers, e.g., millennials, Uber, Airbnb 7

8 Products, Platforms, Technology (cont d) Platforms - User experience (UX), or customer journey, e.g., Lemonade, Hippo - Smartphone applications ophotos used for coverage and claims - Digital brokers - Joint ventures, online retail e-commerce/bank assurance 2.0 8

9 Products, Platforms, Technology (cont d) Technology - Claims - Underwriting - Public info, e.g., social media - Algorithms - Parametric - Wearable fitness/medical devices real time tracking - Sensors embedded in/on physical assets - IoT 9

10 Products, Platforms, Technology (cont d) Sharing Economy Company Slice ( Product Notes New suite of micro-duration insurance coverages for AirBnB hosts as small business owners Launched in U.S. in 2017 Surplus lines coverage 10

11 Products, Platforms, Technology (cont d) Millenials Company HIPPO ( Product Notes Customer centric Coverage provides homeowner insurance protection for what people own today and common household problems. Integration of IoT Coverage written as admitted (requiring rate and form filings in most states) 11

12 Products, Platforms, Technology (cont d) New Technology Company Verifly ( Product Notes Micro duration drone liability coverage Available in certain U.S. jurisdictions Admitted insurance 12

13 Regulatory Considerations Insurance generally - Licensing - Compensation - Disclosures - MGA vs MGU vs TPA - Electronic transactions/e-commerce basics 13

14 Regulatory Considerations (cont d) Insurance generally (cont d) - Admitted vs non-admitted/e&s - Marketing and advertising home/landing page and other basics - Bundling/tying - Enforcement - If/when to approach regulators 14

15 Regulatory Considerations (cont d) Insurance regulator views/concerns - Personal vs commercial lines - NAIC and State Regulators - Other, e.g., FTC/similar - Non-US - Regulatory sandboxes, e.g., FCA, Iowa, CDI, Pilots - Examples/cautionary tales (e.g., Zenefits) 15

16 Regulatory Considerations (cont d) Cyber security - NYDFS - NAIC - Compliance policies and execution - Reputation/consumer trust - Vendors/partners 16

17 Regulatory Considerations (cont d) Data protection and privacy - No uniform or overarching standard - HIPAA - GLB plus states - Anti-discrimination laws - GDPR - European Union - State privacy / breach notification laws - Opportunistic class action lawyers 17

18 Q&A 18