INSURANCE INNOVATION EXECUTIVE BOARD STATE OF INSURTECH Tim Hoying October 26, 2017
UPDATE ON INSURTECH INVESTMENT
$USD, in millions THE INSURTECH LANDSCAPE IS GROWING WITH CLOSE TO $7.1 BILLION INVESTED TO DATE VC FUNDING OF INSURTECH COMPANIES, IN MILLIONS $USD 1,800 1,600 1,400 1,200 1,000 800 600 400 200-17 # OF DEALS 145 151 36 49 63 442 Excludes Zenefits ($500M) and Zhong An ($931M) 312 852 1,302 1,630 1,052 2010 2011 2012 2013 2014 2015 2016 H1 17 The invested amount has not been disclosed for 158 deals out of 722 (22% of the database) 102 139 214 102 H2 17 TBD 2016 is the second consecutive year that the amount of investment was above the $1bn threshold (even when excluding Zenefits and Zhong An) The number of deals has increased more than tenfold between 2010 and 2016 Copyright 2017 Accenture Security. All rights reserved. Source: Accenture Research based on data from CB Insights 3
NORTH AMERICA REMAINS THE LARGEST MARKET FOR INSURTECH INVESTMENTS Geographic Split 2010-2017 Top 10 By $ invested to date US North America 219 companies 485 deals $5.0b Europe 93 companies 144 deals $690m RoW 20 companies 37 deals $43m APAC 37 companies 56 deals $1.3b CHINA UK&I - The bubble size reflects the total invested volume between 2010 and H117. - The invested amount has not been disclosed for 158 deals out of 722 (22% of the database) Copyright 2017 Accenture Security. All rights reserved. Source: Accenture Research based on data from CB Insights 4
THE LARGEST AMOUNT OF VC INVESTMENT IS IN DISTRIBUTION & MARKETING 2016 VC FUNDING 2016 SHARE OF VC FUNDING ACROSS EACH STEP IN THE TRADITIONAL INSURANCE VALUE CHAIN ($USD, in millions) Distribution & Marketing $1,028, 63% Underwriting & Risk Management $241, 15% Operations & Claims $280, 17% Cross Value Chain $76, 5% EXAMPLES OF 2016 TOP INVESTED INSURTECHS AND THEIR VALUE CHAIN FOCUS DISTRIBUTION & MARKETING Peer-to-peer brokers, digital advice, user-friendly customer experiences UNDERWRITING & RISK MANAGEMENT Underwriting optimization, intelligent automation, underwriting analytics OPERATIONS & CLAIMS Predictive claims and risk analytics, intelligent claims automation Copyright 2017 Accenture Security. All rights reserved. Source: Accenture Research based on data from CB Insights 5
$USD, in millions INVESTMENTS IN LIFE AND MULTILINE ARE GROWING, ESPECIALLY IN 2017 WHILE HEALTH AND P&C HAVE HISTORICALLY BEEN THE LARGEST SECTORS TO RECEIVE INSURTECH FUNDING 900 800 700 600 500 400 300 200 100 - Insurance sector, VC funding ($USD, in millions) 2015 excludes Zhong An s $931M (P&C), Zenefits $500M (Health) and Ins110.com $83M (Travel). Health P&C Life & Multiline 2012 2013 2014 2015 2016 THERE HAS BEEN CONSIDERABLE GROWTH IN LIFE & MULTILINE INVESTMENTS Insurance sector, total and share of VC funding ($USD, in millions) 2016 H1 17 $268, 17% $559, 34% $802, 49% $434, 41% $350, 34% $262, 25% 4-year CAGR Health P&C Life & Multiline 36% 60% 83% Health P&C Life & Multiline Copyright 2017 Accenture Security. All rights reserved. Source: Accenture Research based on data from CB Insights 6
INTELLIGENT AUTOMATION AND AI INVESTMENTS ARE GAINING MOMENTUM INSURANCE SECTOR, VC NUMBER OF DEALS IOT/ Connected Insurance Analytics/ Big Data 6 11 8 24 27 47 65 The number of VC deals in IOT/Connected Insurance and Analytics/Big Data has dropped significantly in H1 2017 in comparison to previous years 15 Intelligent Automation/ Artificial Intelligence 10 20 23 31 The number of AI/Intelligent automation deals in H1 2017 has already surpassed the total for 2015 and is on track to surpass 2016 2014 2015 2016 H1 2017 Copyright 2017 Accenture Security. All rights reserved. Source: Accenture Research based on data from CB Insights 7
WHEN IT COMES TO STARTUPS, INSURERS LAG BEHIND RETAIL BANKS Insurtech is not a silver bullet the real challenge for insurers is to become more innovative in their everyday business. This means not holding new technologies at arm s length, and not taking a piecemeal approach to innovation % of firms that work with startups or universities on digital initiatives 38% 70% % of firms that provide monetary or non monetary (e.g. coaching) support to digital startups) 26% 56% % of firms that host incubators (e.g. provide office space or facilities) for digital startups 14% 32% % of firms that have an in-house venture capital fund (or similar) that focuses on digital 17% 32% Retail Banks Insurers Copyright 2017 Accenture Security. All rights reserved. Source: Accenture Research, The Rise of InsurTech (May 2017). Activities of more than 200 insurers and 80 retail banks worldwide 8
INTRODUCTION TO OUR INSURTECH INNOVATION LAB
OVER THE PAST 7 YEARS, ACCENTURE S 4 FINTECH LABS HAVE MENTORED 135 STARTUPS LONDON NEW YORK CITY (EST. 2011) 16 partner banks / 13 associate banks 38 alumni Sample alumni: DUBLIN (EST. 2014) 8 partner banks 12 alumni Sample alumni: (EST. 2012) 23 partner banks / 5 associate banks 36 alumni Sample alumni: HONG KONG (EST. 2014) 12 partner banks / 8 associate banks 15 alumni Sample alumni: OUTCOMES 260+ PoCs initiated $535M Capital Raised post FinTech 475+ Jobs created post FinTech Copyright 2017 Accenture Security. All rights reserved. 10
OUR INSURTECH LABS BRINGS SENIOR EXECUTIVES AND STARTUPS TOGETHER A three month accelerator program, bringing senior executives together with InsurTech start-ups The program is designed to help start-ups mature their offerings and build valuable relationships with decision makers and investors within the industry WHAT WE DO The objective of the lab is to progress offerings from proof-of-value to proof-of-concept The program has a series of structured activities to create engagement between the start-ups and senior executives from our partners, banks and insurers. Copyright 2017 Accenture Security. All rights reserved. 11
THERE ARE FOUR CORE COMPONENTS OF OUR INSURTECH LABS FINANCIAL INSTITUTION & VC MENTORSHIP EXECUTIVES IN RESIDENCE ENTREPRENEURS NETWORK LEADERSHIP PROGRAM Mentors from at least three of the participating financial services firms technology teams Access to users / business units within the financial services firms for product feedback Current or former executives with backgrounds in various disciplines (e.g., technology, business, regulatory) May also include members of the academic community (e.g., data science, Artificial Intelligence) Mentorship from the participating VC firms Opportunities for one-onone mentoring sessions with FinTech and InsurTech entrepreneurs Access to speakers on issues relevant to early stage companies Regular interaction with senior executives from the financial services community Copyright 2017 Accenture Security. All rights reserved. 12
WE LAUNCHED OUR FIRST INSURTECH LAB IN LONDON WITH 13 PARTNER COMPANIES Copyright 2017 Accenture Security. All rights reserved. 13
IN YEAR 1, WE RECEIVED 102 APPLICATIONS FROM A DIVERSE RANGE OF OFFERINGS 15% Analytics 17% Unique Commercial Breakdown of Total InsurTech Applications 7.5% LP&I 27% Other 5% Social Media 5% API Platform 2% Chatbot Breakdown of Other InsurTech Applications 5% CRM Application 10% P2P 7.5% Smart Contracts + Blockchain 7.5% On Demand / Push Insurance 5% Telematics 5% Mobile Platform Copyright 2017 Accenture Security. All rights reserved. 14
FIVE INSURTECH FIRMS MAKE UP OUR 2017 COHORT TELEMATICS PLATFORM Kabzy provides the facts surrounding road accidents by capturing live data to create a 3D reconstruction of the event. API PLATFORM Kasko offer an insurance API to quickly digitalise and integrate insurance products within websites and apps CHABOT SPIXII is a smart Chatbot for selling insurance that adapts the way it communicates depending on who it is talking to. RENTAL INSURANCE ECOSYSTEM InsureStreet replace rent deposits with an insurance product, costing a 5-10% to deposit value, based on micro risk and pricing. SOCIAL MEDIA Digital FinePrint turns social media data into insurance data, allowing customers to Autofill with Facebook or LinkedIn. Copyright 2017 Accenture Security. All rights reserved. 15
WE ARE IN THE PROCESS OF ROLLING OUT AN INSURTECH LAB IN NEW YORK CITY 2011 2012 2014 2017 New York FinTech Lab Launch London FinTech Lab Launch Dublin & Hong Kong FinTech Lab Launch London InsurTech Lab Launch New York InsurTech Lab Launch Areas that will be of interest include: Leveraging new data sources for underwriting and claims Applying artificial intelligence to the underwriting and claims process Facilitate a benefits marketplace Develop new products for microbusiness and large employers Tackle core infrastructure tools (cybersecurity, cloud enabling) PARTNERS Copyright 2017 Accenture Security. All rights reserved. 16
SPOTLIGHT ON INSURE TECH STARTUPS
AppBus is a platform that securely integrates enterprise applications on consumer devices over the public internet without a VPN or requiring changes to the underlying application code. Airware provides everything enterprises need to collect, manage, and analyze aerial data. Our customers use our enterprise drone solutions to translate aerial data into actionable business intelligence. DemystData s innovative data gateway unlocks financial services as scale. Access, match, and structure a myriad of data into a single platform to make the right customer decisions in real-time. Copyright 2017 Accenture Security. All rights reserved. 18