SLIDE 1 Look Looking int ing into t
he cr cryst ystal al ba ball: t ll: the he fut futur ure of ma
ine insur insurance ance
CBMU Spring Conference – May 2018
SLIDE 2 Andy Yeoman (CEO)
Ex-Trimble Inc., and GM of Commercial Vehicle Insurance Telematics and significant experience in Personal lines. Andy has significant start-up and M&A experience.
SLIDE 3
The current market is NOT sustainable
SLIDE 4 “The 2017 results are proof, if any were needed, that business as usual is not sustainable.”
- Bruce Carnegie-Brown, Chairman Lloyd’s of London
Commercial in Confidence
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$2bn 125% 42% 70% $5bn
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There is a Tsunami of data and technology coming at us Learn to surf or get ready to drown
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In 2012, insurers or reinsurers completed just one strategic investment to a private tech company. In 2016, they completed 100. CB Insights
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Who needs more data?
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- More or less data?
- More or less accurate?
- Increase or decrease in frequency?
- Diverse or harmonised?
- Ignored or integrated?
In the future…
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If you could have known you should have known The future is…. …only technology can save us
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But can we trust these technology sorts?
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Insurance
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Technologists
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InsureTech?
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Today we’ll explore
What the future could look like What can we learn from other industries What we can do today
SLIDE 16 Commercial in Confidence
PRICING POLICIES PLACEMENT.
Marine Insurance Areas of change
SLIDE 17
The 3 pillars of change
Pricing driven by demographics Policies are global and few exclusions Placement is offline and manual
1 2 3
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The 3 pillars of change
Pricing driven by demographics Policies are global and few exclusions Placement is offline and manual
1 2 3
SLIDE 19 ”Everything that can be digitised in our industry will be digitised.” – Maersk
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SLIDE 20 Every aspect of insured marine risks is being monitored in real-time - hull, machinery, cargo, contents
It’s forecast that there will be 50 billion sensors connected to the internet by 2020.
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SLIDE 21 We now live in an age where much of what was unknown or unknowable can now be known
This changes the fundamentals of commercial marine insurance
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SLIDE 22 What we derive:
- Routes
- Port visits
- Mileage
- Speed
- Accumulations
- Exposures
What the data shows
SLIDE 23
Seeing behaviour in real time means we gain new insight into risk…
SLIDE 24 Behavioural correlations & risk indicators
Good Risk Poor Risk Avoidable Risk
Static Demographic Factors
… Area of Operation Port Activity Owner Performance Benchmarking …
Behavioural Data Historical, Real-time & Predictive
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Developing a ‘score’ and weaponizing the data
… Class Flag Year built Yard built Tonnage …
SLIDE 25 Global Benchmarking
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Quest Marine is able combine the last ten years of global data to produce a global ranking of operators that includes additional features to demonstrate size and vessel type. Using our Global fleet ranking, Concirrus is able to benchmark a clients portfolio, identifying missing accounts that would be a suitable fit and poorly performing accounts that could be replaced. Due to the large number of operators,
- nly the top 30 are shown.
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SLIDE 27 Pricing models can undergo a seismic change…
Risk assessed and priced
articulated demographics
YESTERDAY TODAY
Risk assessed, priced and managed based
anticipated behaviour
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Active Risk Management becomes possible Precrime becomes Preclaim
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The 3 pillars of change
Pricing driven by demographics Policies are global and few exclusions Placement is offline and manual
1 2 3
SLIDE 30 Commercial in Confidence
Policies are global, annual and few exclusions….but why? Alternatives:
- 1. Continuous coverage
- 2. Fractional policies
- 3. On demand
SLIDE 31 Commercial in Confidence
SLIDE 32 Commercial in Confidence
Power-as-a-service
SLIDE 33
War zone
Elastic policies Automated coverage Automated Return of Premium
SLIDE 34 Commercial in Confidence
Data will uncover risks that are not insured today Only 10% of the World’s risk is insured
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The 3 pillars of change
Pricing driven by demographics Policies are global and few exclusions Placement is offline and manual
1 2 3
SLIDE 36 Commercial in Confidence
Placement moves from
to real-time and electronic
SLIDE 37 Commercial in Confidence
“Insurance transactions are currently far too tedious and frictional. Blockchain technology has the potential to facilitate the desired development that is long overdue.”
Lars Henneberg, Maersk’s head of risk and insurance
SLIDE 38 Owner/Operator Insurer Reinsurance Broker
Portfolio optimisation Targeted and connected cover Identifying account attributes
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Wins across the value chain – certain functions are redundant
Risk transfer and capital deployment
New reinsurance types
Broker
SLIDE 39 Commercial in Confidence
SLIDE 40 Commercial in Confidence
In Play betting
SLIDE 41 Commercial in Confidence
Size of the online gambling market from 2008 to 2018
Commercial in Confidence Source: Statista.com
SLIDE 42 Summary Conclusions
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SLIDE 43 Marine insurance future:
Risk is rated by demographics + + be behaviour Policies are el elast astic and and fr frac actional
Placement is onl
ne and and aut autom
ated ed
1 2 3
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How does this benefit insurers?
More premium and new target markets Improved loss ratios and better risk Active risk management in real time New, elastic policies
= more profit
1 2 3 4
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SLIDE 46
“The internet has not been a ‘disruptive technology’…”
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“It is difficult to think of a single example in which an internet company has supplanted a major ‘old economy’ firm”
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“The internet does not represent a revolutionary new business model”
SLIDE 49 “We always overestimate the change that will
- ccur in the next two years and underestimate
the change that will occur in the next ten. "Don’t let yourself be lulled into inaction.”
Commercial in Confidence
SLIDE 50
We need to work together…
SLIDE 51 The future belongs to those who create it
Commercial in Confidence The Leathermarket 17 Leathermarket Street London, SE1 3HN +44 (0) 845 5650549 info@concirrus.com
