Glob a l trend s The sector conv erg ency im p a ct in the Insura nce eco sy stem
The sector conv erg ency im p a ct in the Insura nce eco sy stem – key d riv ers of the future 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 Key d riv ers of the connectiv ity trend Cost of devices Growth of inform ation Cost of connectivity providers New Clients w a nt to Mobile devices Change in custom er b uy exp eriences, Access to multiple mobile devices needs cov er a need , not enlarge the connectivity of the Any Time, Any Where, Any Device people p rod ucts AND INSURANCE IS A PRODUCT 2 PwC
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 Information Technology offers completely new possibilities, creating a revolution in the value chain of a product or a service • 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 Companies have to understand the power of digital technologies and adopt new An example of Digital Disruption is the Google Car types of products / services to offer to clients 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” 3 PwC
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 Alternative players offer the full service, aggregating across value chains, while the specific industry • Volvo is moving remains as as a component. Commodity or niche • Vodaphone is moving The risk is then to become a provider • Google is moving commodity or a niche provider. This • Zurich is moving strategy can make sense only if there • AXA is moving are real and defensible differentiators The provider aggregates products and services across all the connected value Aggregator • To do what??? chains that define the customer’s experience and manages the relationship with the client 4 PwC
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? 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” one, per Line of business, norm ally starting from Motor PwC BPM Capability Statement január 2017 5 PwC
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
Telem a tics - a rev olution for the ca r a nd insura nce m a rket 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. 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 Video: On- News, Radio-m usic, dem and and real- stocks & news: Live tim e content sports news feed Usage based Other in-vehicle insurance Navigation services enabled High (point of by cloud Scheduled Paym ent interest, com puting Apps store m aintenance (tolling,parkin parking) Revenue potential g, etc.) Multim edia, Location Fleet In car health internet Route based m anagem ent services, social services optim ization services networking, etc. Threat and Electrical vehicle: Battery hazard sensing - Driver 360 degree Em ergency charge warnings Rem ote m onitoring/ awareness of notification Low control of control the position of Roadside vehicle other vehicles assistance Travel and environm ent/ Theft traffic car features tracking Pre-em ptive assistance/ Traffic actions to avoid off-board Vehicle inform ation Recall and m itigate Service route health inform ation crashes coupons guidance Less popular Highly desirable 7 PwC
The role of the insurers in the telem a tics business Insurers are only one of the stakeholders of the telem atics eco-system 8 PwC
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 Incentiv ivis ised Dig igit ital P l Proposit itio ion Analy lytic ics, Insig ight & & Tar arget eted ed Product & S & Ser ervice e Enhan anced ed , P Proac active e Clai aims (Acquisition & R & Ren enew ewal als) Per ersonal alisat ation Offe ffering Exper erien ence 1.New / Existing Customer 3.Downloads Telematics App 5.Customer Provided with a Driver 7.Tailored Lifestyle / Loyalty Offerings 9.Additional Value Add Services 11.Immediate contact from Call Centre – help / Needs Car Insurance from App Store Score & Report Pushed to Customer support provided at scene “30 Days Free Insurance” Notification 2.Buys Telematics Policy via Smarthphone 4.During initial period, Customer 6.Offered individual 8.Regular Insurance/Vehicle Related 10.Customer involved in an 12.Car taken to Garage for Repair & quick quote App, pays via Mobile Wallet Drives Car, App monitors * premium discount based Updates, Offers & Incentives accident with another car Courtesy Car Provided transmits data on Score • New commercial models (e.g. PAYD, PHYD) • Improved driver behaviour and coaching resulting • Targeted, need-based, proactive, easy • New methods of interaction, tailored to in fewer claims and product constructs (e.g. true monthly, customer preferences and behaviors (e.g. web • Provision of additional services for immediate rolling contract) • Improved claims handling decisions through portal, mobile /app, social, in-car) consumption (e.g. discounted mobile minutes, accident diagnostic data (e.g. speed, airbag, • Streamlined underwriting process and data petrol vouchers) • More frequent customer touch-points, sequence, passengers, location, weather) capture increased customer appetite for interaction, • Opportunities for targeted cross sell and special • Faster and lower cost to capture relevant claim • More granular, personalised and real time and opportunities to build intimacy (e.g. safety offers (e.g. related motoring products, green data and agree actions to control (e.g. injury, 3 rd insight to refine pricing (e.g. driver score) tips, how to save money card) v party capture, liability decision) • Verification of actual risk exposures to mitigate • Mobility/digital proposition offers a more an • Targeting of best customers for loyalty • Immediate assistance (e.g. emergency response, abuse (e.g. actual v declared usage) immersive, social media enabled customer programmes (e.g. bonus miles, renewal on location advice, identification of proximate experience services, value add services) discounts, affinity offers) • Enrichment of risk profile with additional • Access to new distribution channels (e.g. contextual data and customer insight (e.g. • Enhance claim segmentation and reserving with • Value add services to create stickiness (e.g. better predictability into claim complexity and telecoms, automotive) and markets (non lifestyle, journey patterns, preferences driver education, traffic alerts, assistance apps) cost standard, multi-risk, family/community) • Social Media – share your score with your • More granular understanding of losses enabling friends and family superior risk selection and pricing A new IT system able to support all that 9 PwC
Telem a tics & Cla im s Standard and advanced features Data transfer and online screen view integration Standard information Advanced cartography for automatic responsibility 3D cinematics assignment and STP activation 10 PwC
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