Re/Insurance? Dr. Andreas Schertzinger IVW St. Gallen, Future.Talk 1 - - PowerPoint PPT Presentation

InsurTech – Growth Opportunity for Re/Insurance?

• Dr. Andreas Schertzinger

IVW St. Gallen, Future.Talk 1 / 2017, May 3rd

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The buzz continues

Continued growth in number and volume of deals

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Deal Volume 6 15 2 2 26 12 11 14 33 9 58 26 103 98 56 41 87 73 100 65 84 152 156 117 Deals 3 7 4 1 10 4 10 10 12 5 11 8 11 11 21 14 15 16 18 29 39 18 28 30

5 10 15 20 25 30 35 40 20 40 60 80 100 120 140 160 180

Sources: CBInsights

Early-stage start-up investments

Number of deals and total deal volume by quarter

# of deals Deal volume in USDm

Risks change

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Consumers expect exerience “Digital value chain” possible Catalysts / Inhibitors (technological diffusion / consumer adoption and technology convergion)

There is a real opportunity

New risks, unmet consumer demands, and the ability to serve consumers better

• More extreme risks
• More insurable risks
• New risks
• Risk mitigation
• Digital (with human option)
• Other industries more advanced
• Vast amount of data
• Secure sharing of data
• Analytics as commodity
• Digital consumer interaction

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• Digital advisors buy insurance

for the consumer

• Alternative distribution channels

(Google, Facebook etc.)

• Improved awareness and

engagement, much lower cost

• Digital claims automatically file

and process claims

• Fraud detection

Claims & Inforce Solutions & Services Pricing & Underwriting Distribution Smart analytics and cognitive computing help:

• Simplify/speed up underwriting
• Select and price risks more

appropriately and dynamically Operations

• Policy administration costs

reduced by [50%]

• Retention management
• Financial partnerships
• Seemless solution partnerships

to compose consumer solutions

• Customer expectations shift from

financial compensation to services and prevention

Moving towards the “digital value chain”

Capturing more of the insurance premium with technology

• Consumers –

Increasing risk awareness (pension, catastrophe), and potentially value added by insurer

• Microinsurance –

Providing access and affordability to the underinsured

• New middle class in high growth markets –

Fast growing demand for services and protection

• Small & Medium enterprises –

Traditional distribution (and claims) too expensive

• Increased risks –

Pricing cyber, supply chain, and other new risks

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Example: Natural catastrophe protection gap Losses, USD trillion

The larger opportunity: Closing the protection gap

Growing the insurance premium with technology

Uninsured 1.3 (70%) 0.5 (30%) Insured

“InsurTech regulation” Uncertainty around data usage and potential new requirements

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Challenges to capture the opportunities

Costs and major uncertainties in times of soft markets

Digital advise Training the advisory algorithms and documenting the rationale is harder than for online shopping Consumer ownership Loss of relationship to digital native brokers, platforms or OEMs & ubiquitious advisors (“SiRi”) Data usage Limits to risk selection and pricing to enforce pooling & affordability Digital claims Automated event identification and loss amount estimation from available data non-trivial Business case High immediate costs (IOT devices, analytics, premium discount), underestimated future costs, uncertain value (customer growth, loss ratio)

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