octo telematics - assoconsult · pay how you drive (phyd) investment by industrial partner crash...

Octo Telematics | © 2016 Octo Telematics | Strictly Private and Confidential

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STRICTLY PRIVATE AND CONFIDENTIAL

Roma 9 Giugno 2016

STRICTLY PRIVATE AND CONFIDENTIAL 1

Octo Telematics


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Agenda

2

4. Trasformation for future growth 16

3. Market and industry overview 13

1. Octo Overview 4

2. How Octo creates value 9


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3

1. Octo overview


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4

Transforming auto insurance through

behavioral, contextual and driving analytics


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Octo at a glance

5

The world’s leading insurance telematics provider

#1 Globally

36% Market Share

$35bn User-Based Insurance TAM

4mm Connected Users

25% Growth in Connected Users y-o-y

>90 Industry Partners

14 years Operating History

100bn Miles of Driving Data

250k Crashes Analyzed

Note: As of December 31, 2015. Estimated market data from Ptolemus Consulting Group; total addressable market data relates to a study commissioned by us.


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Overview of core solutions

6

Insights for

insurance companies Advanced analytics Data collection

Collecting over 2,000 parameter

combinations

Insurance Solutions Software, data and analytics Road Type

Distance

Collision

Direction

Location

Cornering

Braking

Duration

Claim

Management

Crash

Reconstruction Pricing Services

Emergency

Call

Stolen Vehicle

Recovery

Risk

Assessment

Digital

Solutions

• Raw data is processed into actionable

intelligence

• Risk correlation and actuarial

capabilities support industry leading

driver scoring models and pricing

algorithms

…transforming auto

insurance with our

telematics solutions

…feeding into a

proprietary analytics

platform…

Comprehensive set of

real-time driving data

from connected cars…

Continuous innovation


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Our key milestones

7

Rapid and

global

user base

expansion >1.0

3.2

4.0

2.2

Connected users (in millions)

1.5

2002 2004 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006

First Canadian partner

First leasing partner

Founded

by Fabio

Sbianchi /

funding by

Business

Angels

Key

corporate

events

London office

opened

HQ moved

to London

Expandin

g industry

partners

network

Innovation

track

record

Vehicle video

monitoring

Unipol

began

testing

telematics

solutions

Doubled

the number

of

insurance

companies

Partnered

with 8 out of

10 largest

insurance

companies in

Italy

New go-to market

route with major OEM

with data monetization

services

Long-term

rental

management

business

Early

pioneer in

insurance

telematics Telematics

services

for OEMs

Consolidation of

North American

operations

Introduction

of initial On-

board Unit

(OBU) Self installable

advanced

OBU

Octo Rider

First North

American

contract

Launch of

Kernel Module

First

partners

Investment

by private

equity funds

First

partner

outside

Italy First UK

partner

Pay How You

Drive (PHYD)

Investment

by industrial

partner

Crash recording

Mileage statistics

Traffic information

Crash

reconstruction

OEM

integration

Further US

wins


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Key metrics used to evaluate the business

(1) Adjusted EBITDA as profit/(loss) for the year before taxes on income, share of profit/(loss) of equity-accounted investees, financial expense, financial income, gain on investments, impairment on assets and other provisions,

impairment losses on non-current assets, depreciation and amortization, Share-based Compensation, social security costs incurred in connection with the Share-based Compensation, personnel expenses incurred in 2013 and 2014

under the LTIP, the Octo North America Earn-out, change in control costs, refinancing costs, Octo North America acquisition costs and group reorganization.

(2) Growth rate includes impact of full consolidation of Octo North America revenues from July 2015.

2013 2014 2015

(in €mm)

Attractive revenue growth

profile built on expanding

industry partnerships and

connected user base

Revenue

108,0 152,1

192,4 6,4

3,7

37,2

10,4

10,6

13,6

€ 124,8 € 166,4

€ 243,2 Services Devices Other

8

Strong profitability

development with 50%+

Adjusted EBITDA margins

expected to be sustained

Adjusted

EBITDA(1) € 75,6 € 101,5

€ 128,6

61% 61% 53% % Total

revenue

(in €mm)

Growing connected user

base driven by new

insurance partners and

increased penetration of

existing partners

Connected users 2,2 3,2

4,0

(in mm)


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9

2. How Octo creates value


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Octo creates value for all stakeholders

10

More accurate risk pricing reflects

true driver risk profile

More efficient claims process with

lower average cost and reduced

fraud

More frequent and better quality

interactions with policy holders

Broader telematics services

suite enhances overall

customer experience

Source: Study commissioned from a leading global management consulting firm; data collected by Ptolemus Consulting Group

(1) Combined ratio refers to the measure of profitability typically used by an insurance company, which may be determined by calculating the sum of its losses and expenses and dividing this result by the premiums recognized as earnings

(2) Insurers advertise up to 30% discounts for drivers

Insurance Up to 18% improvement in combined ratio(1)

Drivers Up to 30% discount on premiums(2)

Discounted insurance premiums

resulting from removal of costs in

the value chain

Strong incentive to drive more

safely due to possibility of lower

premiums

Significant time savings and

certainty in the claims process

Access to value-added services

such as stolen vehicle recovery

and emerging call


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Crash reconstruction & triage – Assessing severity of damage

11

- Crash is validated against FNOL data

- Severity ranking is set (mechanical and bodily) and crash report is produced

- Spare part magnitude need is set

- More complex crashes (multi-car pile up, severe accidents, etc.) are subject to

a second level of forensic reconstruction


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Pile-up accident

Direction and sequence of impact

Front Back

Left

Right

1○ 2

○

0 2 4 6 8 10 12 14 16

1○ 2○

Max acceleration during impact (g)

Pile-ups are a frequent type of crash in

urban areas

The greater the number of cars that are

involved, the greater the insured loss and

need to determine:

− Which car initiated the collision?

− Who is at fault?

Octo can reconstruct the precise

sequencing, 3D vehicle position and impact

forces of the crash on a milisecond basis

Complex accident reconstruction – Pile up

12


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3. Market and industry overview


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Octo targets a very large addressable market

14

Revenue today

Further upside

potential + eCall / bCall

+ Location based services

+ Diagnostic services

+ Long-term rental management services

+ Other telematics services

User-based insurance

TAM for telematics

service providers

$35bn

Geographic expansion P Expanded service offering P Rapid market penetration P


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Source: Ptolemus Consulting Group

(1) UBI in the US and Canada uses a rollover model where the telematics device is only used for a limited amount of

time. Policies using rollover models are considered as active UBI policies, even though the telematics device may no

longer be used the customer

US 50%

Italy 36%

UK 5%

RoW 9%

US, Italy and UK represent 91% of UBI policies

The US, Italy and UK represent the majority of the UBI

market and its growth

2% 10%

Global

4% 29%

13% 35%

1% 11%

1 12

93

0,2 6

49

0,9

4

11

1

4

2015 2020

0.2%

0.2%

2.8%

0.1%

2010

>0.1

(1)

Increasing penetration rates

Growing number of

UBI policies (mm) UBI policies by country (December 2015)


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4. Trasformation for future growth


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From Vision to Execution : 100 Days Plan “bootstrap”

17

Continuous Innovation

17

BASIC OBU

Thousands Customer Interactions Connected Things

Billions Trillions Millions

SELF INSTALL

ADVANCED OBU

SMART DEVICES

HOME BOX

BLUETOOTH LOW ENERGY

APP AS A DEVICE

SENSORS

Today 2005 2014

Business Value

Pro

du

cts

• Safety

• Crash Recording

• Mileage statistics (PAYD)

• Info Traffic

100 Days Plan

Se

rvic

es

2014 Near Real Time

innovation on going

• Crash Reporting

• Driving Behavior (PHYD)

• Fleet

• User Interface

• Eco

• Crash

Reconstruction

• FNOL

• SASD

• Advanced fleet

• B2C2B

• Home

• OEM

• VAS

Basic devices Vehicle transactions Customer Interactions

Trilions


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From Vision to Execution : 100 Days Plan “bootstrap”

OctoForce – the full digital customer engagement solution covering marketing, sales & service

Middleware & advanced algorithms backed by the 5 best universities for signal processing & integrated with insurers’ legacy systems on claim management

Our module for advanced analytics, or the journey “from driving behavior to driver genome"

Platform to support idea generation and service catalogue – our collective knowledge exceeds the sum of its parts

Foundation of the new platform covering all the service orchestration, data streaming and rules management & the technology “glue” keeping all other projects together

Knowledge Management

IT Transformation

Statistical & Actuarial

CRM

Crash & Claim

ERP Logistics and financial process integration – the “single source of truth” of our financials

18

Recent technology/service focuses and continuous

improvement as the core of our future success

octo telematics - assoconsult · pay how you drive (phyd) investment by industrial partner crash...

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