new needs, new data

September 2016

Customer Centricity Conference

© 2016 Willis Towers Watson. All rights reserved.

New needs, new data

Duncan Anderson

© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 2

New needs and

new data


New

needs

New

needs

New

data

New

data

So?So?

New needs and

new data


Driverless cars


Full self-driving4

Limited self-driving3

Combined function technologies2

Function-specific driver assisted technologies1

No automation0

Levels of vehicle automation (NHTSA)

Driverless cars


Driverless cars


Insurance risk

Other parties now involved

OEMs

Traditional suppliers

New suppliers eg Software providers

(Cyber crime)

Map providers

Telecoms

Infrastructure

The algorithm

of

death

Driverless cars


Insurance risk

Risk will shift from personal to "product"

Fragmentation of risk

New insurance needs

Reduction in risk

Personal motor risk down by 1-3% pa over next few years?

Frequency effect offset by increased cost of repairs

Short term: vehicle option data important

Driverless cars

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCK_UrNKmksYCFUks2wod3-YASA&url=http://www.coldstonecreamery.com/cakes/signaturecakes/&ei=yxV_Ve_CCcnY7AbfzYPABA&bvm=bv.95515949,d.ZGU&psig=AFQjCNGMiAQVyZdsKXUqs14kI5aUldYtXg&ust=1434478403267193

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCK_UrNKmksYCFUks2wod3-YASA&url=http://www.coldstonecreamery.com/cakes/signaturecakes/&ei=yxV_Ve_CCcnY7AbfzYPABA&bvm=bv.95515949,d.ZGU&psig=AFQjCNGMiAQVyZdsKXUqs14kI5aUldYtXg&ust=1434478403267193


Telematics

$1,000 $1,000 $1,000 $1,000

$800

20+%Average discounts: 12% - 25%

Maximum discounts: 30% - 50%

Self-selection

Pricing

10xDifferential in loss ratio

from TW DriveAbility score

Retention

40%Improvement in retention

cited by Progressive http://media.corporate-ir.net/media_files/IROL/81/81824/clip-415391-dl_aud-

en.mp3

Behaviour

change

30+%Reduction in claims costs

Young driver: 30% - 40%

Commercial fleet : 54% - 93%

Driverless cars

http://media.corporate-ir.net/media_files/IROL/81/81824/clip-415391-dl_aud-en.mp3


Home devices

Cause of

ClaimConnected Devices

Prevention

Potential

Water

Leakage

Connected Meters

Connected Electronic

Manometers

(pressure)

Active Leakage

Detections Devices

Smoke Detectors

CO2 Detectors

Fire

Theft IP DIY Alarm Systems

Advanced Alarm

Systems

~20% - 30%

~70%

~70%

10 - 80%

40 - 60%

Water

Damage

Electrical

Current Risks

40 - 60%

Reduced

Risk

Water

Damage

Electrical

Telematics

Driverless cars


Sharing economy

Taxi

Home devices

Telematics

Driverless cars

2013 2014 2015 2016

Global bookings revenue in billions

$0.69$2.91

$10.84

$26.12

(Projected)


Sharing economy

Taxi

Home devices

Telematics

Driverless cars

Car

rental


Sharing economy

Taxi

Home devices

Telematics

Driverless cars

Car

rentalHitchiking


0

5

10

15

20

25

2011 2012 2013 2014 2015 2016

Value ~$1.6bn

30 million members

22 countries

>10 million travellers per quarter

>2 million trips available in the future at any given time

>3 billion miles shared

Average car occupancy 1.6 → 2.8

Bla bla car members, millions(Source: Wall Street Journal)

Sharing economy

Taxi

Home devices

Telematics

Driverless cars

Car

rentalHitchiking


“Slugging”

Washington DC, San Francisco

Multiple occupancy vehicle lanes

~ 10,000 routinely share

Sharing economy

Taxi

Home devices

Telematics

Driverless cars

Car

rentalHitchiking


Consumer

expectations

Sharing economy

Home devices

Telematics

Driverless cars



Deflationary pressure

Distribution changes





So…

Package more - insure all a customer's (fragmented) needs?

Up game in customer analytics

Ease of purchase - few (or no) questions asked

Enhance engagement

For which, more data helps…


New

needs

New

needs

New

data

New

data

So?So?

New needs and

new data

New

data

New

data

New needs and

new data


“Basics”

Standard factors

Cross-holdings

Enrichment

Retail partners

Banking partners


Ambient location

“Basics”


iPhone:

Settings >

Privacy >

Location Services >

System Services >

Frequent Locations

Ambient location

“Basics”


Ambient location

“Basics”

Apple

Conference

Hotel

Nice restaurant

Guinness

Brewery


Ambient location

“Basics”

GoogleApple


Ambient location

“Basics”

App providers

GoogleApple


Ambient location

“Basics”

Telecom providers

App providers

GoogleApple


Ambient location

“Basics”

TSPs

Telecom providers

App providers

GoogleApple


Ambient location

“Basics”

OEMs

TSPs

Telecom providers

App providers

GoogleApple


Ambient location

“Basics”

OEMs

AirlinesTSPs

Telecom providers

App providers

GoogleApple


Ambient location

“Basics”

OEMs

Airlines

BanksTSPs

Telecom providers

App providers

GoogleApple


Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Wearable providers

Telecom providers


Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras

Wearable providers

Telecom providers


Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras

Wearable providers

Wifi

Telecom providers


Other

Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras

Wearable providers

Wifi

Telecom providers


Other

Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras

Home sensors

Wearable providers

Wifi

Telecom providers


Other

Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras

Home sensorsMedia companies

Wearable providers

Wifi

Telecom providers


Other

Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras


IOT

Wearable providers

Wifi

0

5

10

15

20

25

2014 2015 2016 2020Nu

mb

er

of

un

its in

sta

lled

(b

illio

n)

Internet of Things – Millions of units

Consumer Business

Telecom providers


Other

Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras


IOT

Web analytic providers

Wearable providers

Wifi

Telecom providers


Other

Ambient location

“Basics”

OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras


IOT

Web analytic providersSocial media companies

Wearable providers

Wifi

Telecom providers


OEMs

TSPs

App providers

GoogleApple OEMs

Airlines

Banks

Traffic cameras


IOT

Web analytic providers

Wearable providers

Social media companies

Wifi

Telecom providers

Standard factors

Cross-holdings

Enrichment

Retail partners

Banking partners


New

needs

New

needs

New

data

New

data

So?So?

New needs and

new data

So?So?

New needs and

new data


Assuming you can access and use the data…

Risk

Marketing

Services

Potential Customers

Underwriting Policies

Unmonitored

traditional

policy

UBI

Policy

Insurers / Agents /

Brokers /

Aggregators

Marketing

Traditional data

Insurer A

Insurer C

Insurer B

Insurer D

OEMs

Telecoms

Mobile OS

App

Monitored

traditionalpolicy


Motor telematics example

Potential Customers


Unmonitored

traditional

policy

UBI

Policy

Insurer partners

and/or panel

Insurers / Agents /

Brokers /

Aggregators

Marketing

Traditional data

OEMs

Telecoms

Mobile OS

App

Insurer A

Insurer C

Insurer B

Insurer D

Traditional +

telematics data

Monitored

traditionalpolicyInsurer C

Insurer B

Insurer E





Potential Customers


Unmonitored

traditional

policy

UBI

Policy

Insurer partners

and/or panel

Insurers / Agents /

Brokers /

Aggregators

Marketing

Traditional data

OEMs

Telecoms

Mobile OS

App

Insurer A

Insurer C

Insurer B

Insurer D

Monitored

traditionalpolicyInsurer C

Insurer B

Insurer E

Preview


06/14

09/13

06/15

12/13

Smart home /

security

Smart home /

security

Digital health /

wearables

Smart home /

security

UBI / telematics

Motor repair /

maintenance

Smart home /

security

Smart home /

security

Home sharing /

travel

Smart home /

security

05/16

07/15

06/14

07/15

11/15

09/15

12/13Digital health /

wearables

UBI / telematics

09/15

Distribution disruption / disintermediation risk

Partnerships with data owners and tech players

Tech start-ups




Tech start-ups

Privacy, regulation, brand

Anonymisation by third parties?




Tech start-ups



IT capability

Cyber risk




Tech start-ups



IT capability

Cyber risk

New skills!

Big data management and related analytics




Tech start-ups



IT capability

Cyber risk

New skills!


Culture




Tech start-ups



IT capability

Cyber risk

New skills!


Culture

Clear strategy:

Partnerships

Product

Distribution

Data strategy

Operating model

Culture


New

needs

New

needs

So?So?

New

data

New

data

New needs and

new data