The InsurTech Landscape 2017: Business Models and Disruptive Potential ELSA/BVZL Investor Summit 2017 September 12, 2017 London Dr. Florian Schreiber
Agenda The InsurTech Landscape 2017 1. Introduction 2. The I.VW-HSG InsurTech Study 3. Selected Empirical Results 4. A Brief Insight Into the Blockchain Technology and Bitcoin 5. Summary 2
1 Introduction
These days FinTech and InsurTech are omnipresent! 4
InsurTech Cockpit 2017: Media, Startups, Geography, Funding InsurTech in the Media Number of Startups Geographical Distribution Financing Statistics Funding Rounds Investments by (Re)Insurers 5
2 The I.VW InsurTech Study
The I.VW InsurTech study (in cooperation with Swiss Re) InsurTech: What Do Do We We Know? Know? The Current InsurTech Landscape Navigating the the InsurTech Landscape Disruptive Potential and and Incumbent Responses Responses Empirical Analysis 7
Which business model patterns are inherent in InsurTech startups? Employing the ITEM-HSG business model navigator Comparison Portals Layer Player E-Commerce Benefitting from specialized know how Digital Brokers Affiliation E-Commerce Your success is my success Insurance Cross Sellers Cross Selling White Label E-Commerce Killing two birds with one stone P2P Insurance Peer to Peer E-Commerce Enable transactions between individuals On-Demand Insurance Pay-per-Use Aikido E-Commerce Pay as you go Digital Insurers Digitization Cash Machine Direct Selling E-Commerce Digitizing physical products Big Data Analytics / Insurance Software Subscription Layer Player Taking a season ticket to services Distribution 8 Internet of Things Leverage Customer Data Layer Player Making use of what you know Risk Carriers Blockchain / Smart Contracts Licensing Subscription Commercializing intellectual property Technology
3 Selected Empirical Results
In particular reinsurers and brokers are alarmed 10
but for opposing reasons 11
InsurTechs consider most incumbents as cooperation partners 12
4 A Brief Insight Into the Blockchain Technology and Bitcoin
Blockchain as one of the hottest topics in today s FinTech/InsurTech Barclays Financial Times Deloitte Handelsblatt The Economist Wirtschaftswoche Die Zeit WEF Capital UK Government Source: Allianz, 2017 14
Blockchain activities and financing operations are on the rise Blockchain Deals Investments and Investors Investments by Financial Institutions Geographic Breakdown Source: CB Insights; Allianz, 2017 15
But, what is that Blockchain animal? The two main components of the Blockchain Asymmetric Cryptography + Distributed = Network Blockchain Immutuable Records Verifiability Secure Transactions Peer-to-Peer Network Computing Power and Data Storage from participating nodes Chain of Blocks (=Transactions) Transactions with timestamps Source: Allianz, 2017 16
Symmetric vs. asymmetric cryptography Symmetric Asymmetric Key Public Key unencrypted encrypted unencrypted encrypted Key Private Key 17
Centralized vs. decentralized networks Centralized Decentralized ( Peer-to-Peer 18
Physical vs. digital transactions Physical Digital (without Blockchain) Decentral Real-time settlement (change of ownership) Paper money as element of trust Anonymous Central Trust in central authority required Transaction fees for central authority Complex processes Source: Allianz, 2017 19
Bitcoin: the very first Blockchain application Goal Problem The Bitcoin inventor wanted to create digital cash Digital assets don t know scarcity double spending problem 20
Bitcoin solves the double spending problem Solution Blockchain achieves the replication of the advantages of a physical money exchange transaction to a digital transaction: Decentral Real-time settlement (change of ownership) Paper money Cryptography as element of trust Anonymous 21
Blockchain s features that are interesting for the insurance industry What is disruptive? Source: Allianz, 2017 22
Today s impact on the value chain of the insurance industry Source: Allianz, 2017 23
Contact Details Dr. Florian Schreiber Institute of Insurance Economics University of St. Gallen Tannenstrasse 19 9000 St. Gallen Switzerland florian.schreiber@unisg.ch 24