Glob a l trend s The sector conv erg ency im p a ct in the Insura - - PowerPoint PPT Presentation

Glob a l trend s

The sector conv erg ency im p a ct in the Insura nce eco sy stem

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Different sectors were completely separated and every “producer” was characterized as a specific part of the value chain, without connection with value chains of other sectors. Now Competition between producers is moving from the pure product to all other potential collateral elements, to

sell an “experience” and the barriers between sectors become less and less relevant.

Connectivity is key in this new environment

The sector conv erg ency im p a ct in the Insura nce eco sy stem – key d riv ers of the future Key d riv ers of the connectiv ity trend

Mobile devices Change in custom er needs Cost of devices Growth of inform ation providers Cost of connectivity

Access to multiple mobile devices enlarge the connectivity of the people Any Time, Any Where, Any Device

New Clients w a nt to b uy exp eriences, cov er a need , not p rod ucts AND INSURANCE IS A PRODUCT

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• These changes to traditional business models, cause

the Digital Disruption

• IT can impact new product development, marketing,

sourcing, distribution and service in entirely new ways Information Technology offers completely new possibilities, creating a revolution in the value chain of a product

• r a service

An example of Digital Disruption is the Google Car

Companies have to understand the power of digital technologies and adopt new types of products / services to offer to clients

The sector conv erg ency im p a ct in the Insura nce eco sy stem – The d ig ita l d isrup tion on a ll sectors

Bill Ford, president of Ford international declared: “All are saying that we well be destroyed as car producers by the digital companies” “I affirm that we, as car producers, have to scrap ourselves and enter in a completely new business: from car producers to mobility service providers”

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Commodity or niche provider Aggregator Alternative players offer the full service, aggregating across value chains, while the specific industry remains as as a component. The risk is then to become a commodity or a niche provider. This strategy can make sense only if there are real and defensible differentiators The provider aggregates products and services across all the connected value chains that define the customer’s experience and manages the relationship with the client

The sector conv erg ency im p a ct in the Insura nce eco sy stem – A stra teg ic d ecision to ta ke to be lea d er in the new era

• Volvo is moving
• Vodaphone is moving
• Google is moving
• Zurich is moving
• AXA is moving
• To do what???

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The Insura nce m a rket ha s sta rted to rea ct tow a rd s a g ility a nd into the d igita l era . W ha t d oes this m ea n?

PwC BPM Capability Statement január 2017

All big Insurers are transforming their core business starting with the replacement of their core insurance platform as enabler of the transformation. AXA, Zurich, AVIVA… using packages After years spent to improve the existing now to support the revolution we have to change the foundation

In the core insurance transform ation w e started w ith a “ horizontal approach” and in particular w ith claim s to m ove now in a “ vertical”

• ne, per Line of business, norm ally

starting from Motor

Telem a tic

A key elem ent of the m otor insura nce stra teg y

W e sta rted to w ork a round telem a tics m ore tha n 15 y ea rs a g o

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Adopted in massive way stratinmg from 2001 now it’s the key topic in all big Groups and all new cars will have a similar device on board starting from 2020.

Telem a tics - a rev olution for the ca r a nd insura nce m a rket

1. Initially thought as w ay to reduce the price and to privilege the drivers in bonus 2. After to reduce the fraud 3. NOW AS COMPONENT OF A MOBILITY PROGRAM Revenue potential

Low High

Video: On- dem and and real- tim e content Radio-m usic, news: Live news feed News, stocks & sports Other in-vehicle services enabled by cloud com puting Apps store Multim edia, internet services, social networking, etc. Navigation (point of interest, parking) Route

• ptim ization

Location based services Travel and traffic assistance/

• ff-board

route guidance Roadside assistance Em ergency notification Theft tracking Rem ote control of vehicle environm ent/ car features Vehicle health Scheduled m aintenance Service coupons Recall inform ation Electrical vehicle: Battery charge m onitoring/ control Usage based insurance Fleet m anagem ent Paym ent (tolling,parkin g, etc.) In car health services Traffic inform ation Driver warnings Threat and hazard sensing - 360 degree awareness of the position of

• ther vehicles

Pre-em ptive actions to avoid and m itigate crashes

Less popular Highly desirable

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The role of the insurers in the telem a tics business

Insurers are only one of the stakeholders of the telem atics eco-system

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The role of the insurers in the telem a tics business

If an insurer w nats to rem ain a leader in the m otor m arket of the future he has to becom e an aggregetor and change com pletely his business m odel and his value chain

v

Analy lytic ics, Insig ight & & Per ersonal alisat ation Tar arget eted ed Product & S & Ser ervice e Offe ffering Incentiv ivis ised Dig igit ital P l Proposit itio ion (Acquisition & R & Ren enew ewal als) Enhan anced ed , P Proac active e Clai aims Exper erien ence

1.New / Existing Customer Needs Car Insurance 2.Buys Telematics Policy via Smarthphone quick quote App, pays via Mobile Wallet 3.Downloads Telematics App from App Store 4.During initial period, Customer Drives Car, App monitors * transmits data 5.Customer Provided with a Driver Score & Report 6.Offered individual premium discount based

• n Score

7.Tailored Lifestyle / Loyalty Offerings Pushed to Customer 8.Regular Insurance/Vehicle Related Updates, Offers & Incentives

• Targeted, need-based, proactive, easy
• Provision of additional services for immediate

consumption (e.g. discounted mobile minutes, petrol vouchers)

• Opportunities for targeted cross sell and special
• ffers (e.g. related motoring products, green

card)

• Targeting of best customers for loyalty

programmes (e.g. bonus miles, renewal discounts, affinity offers)

• Value add services to create stickiness (e.g.

driver education, traffic alerts, assistance apps)

9.Additional Value Add Services 10.Customer involved in an accident with another car 11.Immediate contact from Call Centre – help / support provided at scene 12.Car taken to Garage for Repair & Courtesy Car Provided

“30 Days Free Insurance” Notification

• New methods of interaction, tailored to

customer preferences and behaviors (e.g. web portal, mobile /app, social, in-car)

• More frequent customer touch-points,

increased customer appetite for interaction, and opportunities to build intimacy (e.g. safety tips, how to save money

• Mobility/digital proposition offers a more an

immersive, social media enabled customer experience

• Access to new distribution channels (e.g.

telecoms, automotive) and markets (non standard, multi-risk, family/community)

• Improved driver behaviour and coaching resulting

in fewer claims

• Improved claims handling decisions through

accident diagnostic data (e.g. speed, airbag, sequence, passengers, location, weather)

• Faster and lower cost to capture relevant claim

data and agree actions to control (e.g. injury, 3rd party capture, liability decision)

• Immediate assistance (e.g. emergency response,
• n location advice, identification of proximate

services, value add services)

• Enhance claim segmentation and reserving with

better predictability into claim complexity and cost

• More granular understanding of losses enabling

superior risk selection and pricing

• New commercial models (e.g. PAYD, PHYD)

and product constructs (e.g. true monthly, rolling contract)

• Streamlined underwriting process and data

capture

• More granular, personalised and real time

insight to refine pricing (e.g. driver score)

• Verification of actual risk exposures to mitigate

abuse (e.g. actual v declared usage)

• Enrichment of risk profile with additional

contextual data and customer insight (e.g. lifestyle, journey patterns, preferences

• Social Media – share your score with your

friends and family

A new IT system able to support all that

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Telem a tics & Cla im s

Standard and advanced features

Data transfer and

• nline screen view

integration 3D cinematics Advanced cartography for automatic responsibility assignment and STP activation Standard information