INSURTECH CONFERENCE SEPTEMBER Oliver Wyman

Transcription

1 INSURTECH CONFERENCE SEPTEMBER 2017 Oliver Wyman

2 CONFIDENTIALITY Our clients industries are extremely competitive, and the maintenance of confidentiality with respect to our clients plans and data is critical. Oliver Wyman rigorously applies internal confidentiality practices to protect the confidentiality of all client information. Similarly, our industry is very competitive. We view our approaches and insights as proprietary and therefore look to our clients to protect our interests in our proposals, presentations, methodologies and analytical techniques. Under no circumstances should this material be shared with any third party without the prior written consent of Oliver Wyman. Oliver Wyman

3 A new value proposition emerges The switch from event driven to actively managed propositions SHIFTING THE FOCUS OF THE PROPOSITION MOVE FROM TO CUSTOMER EXPERIENCE Periodic Continuous TARGET MARKET Mass market Tailored VALUE PROPOSITION Event driven Actively Managed PRICING Tiered Utility / Behaviour-based CAPABILITIES Everything at scale Specialist ORIENTATION Process Data CELENT 2

4 Adjacencies friend or foe? AUTOMOTIVE INDUSTRIAL HEALTH DIGITAL PLATFORMS towards autonomous transport and a shift in asset ownership towards active safety management and loss prevention towards active wellbeing and preventative healthcare towards micro transactions linked to our digital identity CELENT 3

5 Los autos inteligentes están cambiando la industria automotriz y también cambiará la de seguros CELENT 4

6 Una promesa con enorme importancia para la industria de seguros nada cambiará? CELENT 5

7 y estos cambios no se limitan a líneas personales CELENT 6

8 también llegan a la industria Source: GE CELENT 7

9 Maquinas que nunca fallan? CELENT 8

10 y también llegan a las grandes estructuras Source: Digitexx.com 2015 Celent, a division of Oliver Wyman 9

11 y llegan a nuestras vidas: Centenarians 3D Printing Use of AI in medicine Genome Project Personal genome service CELENT 10

12 Preventing diseases for $199 CELENT 11

13 CBien a platform to aid sharing CELENT 12

14 Escenarios posibles?

15 Scenario analysis Scenario implications for the Primary Insurance Market How will the primary insurance market size change? Smaller Larger Same How much will the relationship with the customer change? How much will the existing business model, including capabilities/skills required for success change? What is the predominant threat of competition to primary market? What is your view of the urgency to address this scenario? CELENT 14 Much the same Slightly different Very different No impact Small impact Slight impact Large impact Incumbent primary insurers Distribution (e.g. aggregators) Reinsurer Adjacent industry New entrants Address immediately Address in the mid-term Address in the long-term (7+ years) No need to address

16 Escenario 1 Cambios en el seguro: de indemnizatorio a preventivo

17 Scenario 1: Product changes from indemnity to loss avoidance Scenario description The product is moving to pre event from post event. In the future the product will include less and less of the loss compensation element and more services designed to avoid/mitigate losses. This is already evident through auto telematics and feedback provided to drivers in UBI programs. These include alerts for safe driving while on a trip, expected weather, condition of roads, riskiness of route, car status, and driving monitoring. CELENT 16

18 Automoviles

19 Programas UBI usando telemática para influenciar comportamiento CELENT 18

20 P&C

21 Recién comenzando alrededor de la casa conectada USAA offers discounts for using the Protection 1 package of connected home services State Farm s homeowner and renters iris (connected home) discounts range from 2% to 10% Allstate Canada offers 25% discount on homeowners for installed smart home system American Family and Micosoft Ventures: Home monitoring by Sentri BNP Cardif H@bitat with a branded HomeBox installation and assistance services Intesa SanPaolo acasaconme home insurance with a branded box and assistance services Source: Insurer websites and various media 2015 Celent, a division of Oliver Wyman 20

22 y moviéndose al sector comercial Using sensor technology to remotely monitor business equipment and facilities could prevent millions of dollars in losses for insurers and their policyholders. The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re, introduced an Internet of Things based turnkey service to help insurers manage risk. HSB using sensors to help insurers and customers reduce property losses. The rapid advances of new technologies are increasing the demand for value-added services that are included with insurance coverage, said Greg Barats, president and chief executive officer of Hartford Steam Boiler. HSB has used its extensive equipment data and experience with IoT-based systems to develop an early warning system for insurers and customers. In a pilot program with Church Mutual Insurance Company, HSB s IoT service saved customers more than $500,000 by avoiding property losses from frozen pipe leaks. HSB and Church Mutual are expanding the service to thousands of additional houses of worship insured by Church Mutual. HSB continues to develop its IoT service offerings targeted at insurers, installing sensors at commercial locations insured by its client insurance companies to monitor conditions that pose potential risks. The program is customized for each insurer to reflect the types of businesses it covers and can focus on the challenging classes of business in its portfolio. CELENT 21

23 Vida y Salud

24 Programa Vitality de John Hancock Vincula menores primas en la renovación al monitoreo biométrico y de estilo de vida del asegurado Puede el Internet de las Cosas (IoT) superar a las tablas actuariales? Source: Celent, a division of Oliver Wyman 23

25 Insurers are seeking ways to increase and improve customer engagement Case study Vitality Vitality is using mobile to increase the frequency of customer engagement CELENT 24

26 La experiencia Vitality CELENT 25

27 Este tipo de programas se esta extendiendo rápidamente 2015 Celent, a division of Oliver Wyman 26

28 Y algunos productos de vida ya ofrecen devolucion de primas si no hay siniestro 2015 Celent, a division of Oliver Wyman 27

29 Escenario 2 Pago por uso - Microseguros (PAYG)

30 Scenario 2: Products are more transparent Move from pay as you rate to pay as you go Scenario description Metered use products such as motor insurance by the mile results in different pricing mechanisms for products. People/businesses activities determine pricing. Instead of basing rates on rating categories, grouped according to general characteristics, individual risk units are underwritten. CELENT 29

31 One-time insurance Short-term simple insurance sold via mobile phone in Japan to cover potential risks from sporadic and short-term events Lines: Sport, travel insurance and one day auto Tokio Marine & Nichido, through its partnership with NTT Docomo, Japan's largest mobile carrier Coverage tend to be for short periods like one day, and usually around a few hundred yen in price (US$4.00) Docomo handles sales and premium payments, Tokio Marine & Nichido responsible for u/w policies and dealing with claims procedures NTT Docomo automatically fills information about its subscribers from its database Customer only specifies the insurance type and time period Premium is included in the subscriber's phone bill Goal: Cultivate the untapped market for small-amount, short-term insurance and attract a new customer segment that typically does not have an interest in insurance CELENT 30

32 Process one day auto insurance Pre-register Buy Pay Premium is added on the monthly mobile phone bill Read QR Code (agency code embedded) Register Name Birthday Address address Driver s License No. License expiry date Input License plate No. Date of driving CELENT 31

33 Pay per mile / kilometer / hour CELENT 32

34 Your valuables and what you care most, on the go CELENT 33

35 Escenario 3 Seguro entre pares (P2P)

36 Scenario 3: Peer to peer insurance becomes the norm Scenario description Risk sharing among closed groups, either fully covering the risk or covering a certain aspect of insurance (i.e. deductibles) becomes normal. Claims experience of the group determines final cost. Moral hazard and adverse selection is mitigated by the use of closed groups. Efficiencies are carried over to customers while P2P platform charges for administration and any risk that assumes. CELENT 35

37 Seguros entre pares (P2P) y modelos similares Habilitando una practica aseguradora de larga data en un mundo digital CELENT 36

38 Escenario 4 Los robots toman el control del seguro

39 Scenario 4: Robots and AI take control of the insurance value chain Scenario description Human intervention in areas such as sales, claims, operations, IT operations, and HR are minimal. Robots can handle most of the tasks, not only providing efficiency but more accuracy than humans. All process based tasks become automated and people is needed only for strategic and creative tasks. CELENT 38

40 A few recent headlines.the 2017 story so far CELENT 39

41 Startups are redefining insurance s tech and behavioral underpinnings Case study Lemonade Technology super fast bot and machine learning based quotes and payments Behavioral insights flat fee and paying leftover premiums to charities removes conflicts between insurers and insured CELENT 40

42 Insurance is not short of chatbots Meet Arvi, Ava, Jim, Maya, Kate, Melody, Eve, Nadia, Kevin and a Ninja CELENT 41

43 Hasta donde pueden llegar las maquinas? CELENT 43

44 QUALIFICATIONS, ASSUMPTIONS AND LIMITING CONDITIONS This report is for the exclusive use of the Oliver Wyman client named herein. This report is not intended for general circulation or publication, nor is it to be reproduced, quoted or distributed for any purpose without the prior written permission of Oliver Wyman. There are no third party beneficiaries with respect to this report, and Oliver Wyman does not accept any liability to any third party. Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been independently verified, unless otherwise expressly indicated. Public information and industry and statistical data are from sources we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information. The findings contained in this report may contain predictions based on current data and historical trends. Any such predictions are subject to inherent risks and uncertainties. Oliver Wyman accepts no responsibility for actual results or future events. The opinions expressed in this report are valid only for the purpose stated herein and as of the date of this report. No obligation is assumed to revise this report to reflect changes, events or conditions, which occur subsequent to the date hereof. All decisions in connection with the implementation or use of advice or recommendations contained in this report are the sole responsibility of the client. This report does not represent investment advice nor does it provide an opinion regarding the fairness of any transaction to any and all parties.