role of insurtech and connected insurance in the ... final... · micro-insurance connected...
TRANSCRIPT
Luxembourg, 27 June, 2017
Andrea Silvello
Role of insurtech and connected insurance
in the development of
micro-insurance solutions
Agenda
o O Overview of the Connected Insurance paradigm
o The impact of Connected Insurance on the health insurance
o The future of health insurance… is here to stay
o Why is micro-insurance a key trend in the insurtech industry
2
IoT
Artificial Intelligence
Micro-Insurance
Connected Insuranceo Motor, health and home are the main pillars of
connected insurance
o IoT (and Big Data) is becoming one of the main
enablers of connected insurance thanks to the
quantity and quality of data that is able to produce
o The new business model which is transversal
with respect to the 3 pillars is micro-insurance
o Artificial intelligence is seen as the digital
universe that we have yet to explore thoroughly
Connected Insurance is one of the main trends in the
insurance industry nowadays
3
Connected Insurance is any insurance solution based
on sensors for collecting data on the state of an insured risk and on telematics for remote
transmission and management of the data collected
Sustainability Perform a new virtuous role for society by providing
positive externalities for a sustainable society
Knowledge
creationCreate and consolidate knowledge about the risks
and the customer base
Frequency of
interaction
Enhance proximity and interaction frequency with
the customer while creating new customer
experience and offering additional services
Benefits on
the insurance
bottom line
Improve insurance profit & loss through
specialization
Source: Connected Insurance Observatory
Connected insurance: what’s in it for the insurance sector?
1
2
3
4
4
Combination of
insurance coverage
with hardware and
services
Current level of usage
21
Source: Matteo Carbone - Lo stato dell'arte della Connected Insurance
Connected insurance is an opportunity for insurers not fully
expoited yet
3
More frequent
interaction with
customers
Creation and
consolidation of risk
and customer
knowledge
5
User experience
arrangement
Big data
analytics
Specialization,
partnership
development
Agenda
o O Overview of the Connected Insurance paradigm
o The impact of Connected Insurance on the health insurance
o The future of health insurance… is here to stay
o Why is micro-insurance a key trend in the insurtech industry
6
Health insurance innovation is based on wellness and health
services to maximize value for clients and insurers…
HEALTH SERVICES
WELLNESS HEALTH ACCESS & TOOLS
INSURANCE
OPPORTUNITIESINSURANCE
COVERS
A
C
o Gamification and engagement based
on wearables and tailor-made goals
o Wellness contents (programs/diet) in
multiple formats
o Direct Personal Trainer consultation
via App
o Wellness agreements (services /
products)
o Professional medical advice
(messaging, call, video)
o “Discounted" prices for doctors and
structures which are part of preferred
network
o Online booking and payments for
medical visit (enhanced by
geolocation tool)
o Medical history and digital health
“agenda”
o Medical contents in multiple formats
o Call center for emergencies
o Pharmaceutical products ordering and home-delivery
o e-health with specific devices for specific target patients (elder, heart problems and
diabetes patients, etc.), including alerting on possible critical health conditions
B
Insurance health covers
(differentiated by client segments)
Expense management and
settlement process monitoring
Policy management tools
Add-on covers
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…affecting the whole insurance value chain and generating real value for insurance P&L
1
Connected
Insurance
impact
… affecting the whole insurance value chain and generating
real value for insurance P&L
Source: Telematics, Connected Insurance & Innovation Bain
Observatory
LOYALTY AND
"BEHAVIOR STEERING"
RISK SELECTION
RISK-BASED PRICING
LOSS CONTROL
o Enhancing the underwriting phase with a
temporary monitoring based on devices
o Underwriting process quality improvement
o Loyalty systems based on healthy
lifestyle and specific activities that
can be monitored
o Positive behavior encouragement
o Gamification logic 5 2
o Developing insurance policies with
pricing linked to client behaviors
o Adopting e-health and m-health
approach that are able to reduce health-
care costs through preventive actions
o Developing "early warnings" system
capable of anticipating more expensive
claims
o Improving reimbursement valuation
4
SERVICES
o …having high added value for customers
o Developing client tailored ancillary
services that allow the Insurer to be an
omni-channel medical concierge
3
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Experts estimate a potential reduction in loss ratio on
medical reimbursement around 50%
Health risk (losses) target
Current healthrisk (losses)
Drive the choices within preferred
network
Lower claim cost
Behavior “steering"
0%
20%
40%
60%
80%
100%
Best practices in
guiding choices
obtain 20% better
profitability than
market average
Apply m-health
procedures and
monitor if clients
respect the medical
treatment
- 20%
- 10%
- 15%
The first health
telematics tariff
offers 15% discount
after 5 years for
healthy behaviors
Predictive & preventive
alerts
A lot of players are
working to create
early warning
systems based on
behaviors and
medical data
50%
Potentially huge
benefit, still to be
proved
Source: Telematics, Connected Insurance & Innovation Bain
Observatory
100% - 5%
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Risk mitigation (how)
Target (who)
Healthy behavior steering
Healing process monitoring
Illness presence
check
Service quality/price monitoring
Early warning identification
Service (what)
With illness
Chronic/ elderly
At risk
Healthy
Indemnity
Medical service supply
Medical Expenses
Discount price purchase (negotiated by the company)
Traditional positioning of
Health Insurance companies
Company strategic role (why)
Such approach enables a gradual industry game change
Expansion opportunities
10
11
Insurers are starting to transition from a «cure» approach to
a «care» approach
Capacity of offering
better treatments with
the help of technology
Insurers are starting to use
wearable technology and
health apps to reduce risk
and improve technical
results
Educate customers on
looking after their own
health. Improve access to
treatment through
information
Technological
evolution
Stronger
customer
engagement
Promotion of
“self-help”
technology
Innovative
product
design
Big Data
gathering
and analysis
Improved
medical
services Improved design and
product pricing that
incourage clients to
adopt a healthier lifestyle
Understanding health sector trends
and evolution will result in improved
product design & better service offerings
I need a medical
consultation
I’m feeling good I’m ill
Person protection moves from «cure» to «care» meaning a
proactive approach towards insured
Insurance companies have begun to get closer to their customers even when they are in good health,
by offering innovative systems like for example the use of wearables and reward schemes
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Proactive approach Traditional approach
How changing lifestyle will impact the health insurance business model
Source: UNIQA Corporate Business Trends of mHealth Services due to IoT 13
The challenge for insurers is to change the structure of their
insured portfolio
Currently, financial support is focused on «paying the bills»
In the near future there will be a shif towards a prevention-based mindset
Role of insurer
=
Payer of incurred
medical expenses
Role of insurer
=
Partner in managing the
treatment of the person
14
Discovery’s health insurance model Vitality program overview
Competitive
advantage
Initial selection
Selective
lapsation
Behaviour change
Bent lapse and
claims experience
Healthier society
Members
Improved health,
better value
through improved
price and benefits
Society
Healthier society,
improved
productivity,
reduced healthcare
burden
Insurer
Lower claims,
higher margins,
positive selection
and lower lapses
Healthy
behavior
Insurer
servings
Member
incentives
Vitality Shared-Value Insurance Model
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Healthier people make better patients
Healthy behavior reduces the need for medical assistance
Discovery’s health insurance model Vitality is the first major example of focus on «care»
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Discovery’s health insurance model Vitality Shared-Value: engagement and risk improvement
Engagement Risk improvement by Vitality status Member value
o The success of the Vitality Shared-Value” insurance model is evidenced through the Company’s experience: wide-
spread member engagement in its programmes leads to a consequent reduction in risk, resulting in substantial
value returned to members through better health, lower mortality and significant financial incentives
o Globally it is the core element of the Company’s intellectual property offering for insurance partners in 14 markets.
It has resulted in the Global Vitality Network – an alliance of international insurers that have adopted the Vitality
Shared-Value Insurance model
Health insurance
claims
250 000 Vitality
Health Checks
per year
90 million
workouts tracked
per year
Source:: «Discovery integrated annual results, decmber 2016»
2 B$ in Life PayBack
and 1 B$ in Healthy
Food cash back paid
1 million discounted
flights booked a year
2.5 M discounted
movies watched a
year
1.5 million free Vitality
Active Rewards drinks
redeemed
Impact of the “Vitality Shared-Value” insurance model
Frequency
Pri
ze v
alu
e
% of discount based on Vitality member status
Additional benefits for store card according to
the status of partner
Discounts
Discount for HealthyFood
depending on the level of
engagement in the Vitality plan
Cashback on all purchases in
the retail store network,
depending on the vitality status
Complimentary coffee when
achieving objectives
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“Vitality” is based on client engagement and rewards to
push healthier behaviors
o O Overview of the Connected Insurance paradigm
o The impact of Connected Insurance on the health insurance
o The future of health insurance… is here to stay
o Why is micro-insurance a key trend in the insurtech industry
Agenda
18
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The world of wearable devicesSample of available products on the market and application areas
o Smart wearables are becoming
increasingly pervasive, also thanks to
the miniaturization of the electronic
components
o Thanks to the integration between
intelligence, connectivity and better
usability, wearable devices can offer
interesting opportunities in health
and activity monitoring, tracking,
personal notifications and virtual
assistance
o Currently, people’s most used devices are
the smart watches and the fitness
trackers, but the list of the smart
products available on the market is
considerably wide and includes patches,
fabrics, smart glasses, jewels and
many others
Sleep Sensors
Smart Glasses
Heads Up Displays
Smart Clothing
Fitness And Heart Rate Monitors
Activity Monitors
PERS
Smart Watches
Drug Delivery Products
Continuous Glucose Monitoring
Audio Earbuds
Hearing Aids
Defibrillators
ECG Monitors
Pulse Oximetry
Emotional Measurement
Foot Pods and Pedometers
Blood Pressure Monitors
Insulin Pumps
Patches
The world of wearable devicesDevice categories based on what they monitor
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o Wearable Socks Sensoria
Smart can monitor the
cadence of the steps made
by their users and measure
the impact of the feet on
different surfaces
o The Spree SmartCap
measures Heart Rate,
Temperature,
Movement and
Calories Burned
o CheckMe Pro from Vitaom
Technology includes ECG
recorder, Pulse oximeter
and Thermometer and uses
Bluetooth technology for
transmitting data
o Kolibree brush can analyze
the behavior and provide
personalized feedback
regarding the hygiene --
either at a glance within the
app or via a weekly email
report
o Biometric Tattoos can
monitor body
temperature and detect
if someone is stressed
based on sweat, heart
rate and hydration level
information
o Ringly bracelets and rings
connect with the smartphone
to send customized alerts
through vibration and light
while tracking the steps and
monitoring the calories burnt
throughout the day
The world of wearable devicesSome examples of available products on the market
o O Overview of the Connected Insurance paradigm
o The impact of Connected Insurance on the health insurance
o The future of health insurance… is here to stay
o Why is micro-insurance a key trend in the insurtech industry
Agenda
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Insurance purchase is not exciting, insurance is sold
not bought
When not compulsory, you have to stimulate the need!
23
The average attention
span of a goldfish is
The average human
attention span in 2000 was
Source: Statistic Brain
…And the attention is falling
9 seconds12 seconds
The average human
attention span in 2013 was
8 seconds
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«Push» micro-insurance based on contextual information
Personalised and close to people’s needs,
it has the potential to address the entire
Connected Generation (2/3 of $5 Trillion
global insurance market) and fill the
protection gap in developing countries
($3.5 Trillion)
The perfect insurance cover,
has to be there when the customer needs it,
directly on their smartphones
Seamless digital purchase experience of
insurance obtained through a capability of
“reading” behaviours and emotions
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Our solution: emotional impulse sale, at your fingertips
Would you like to protect your luggage?
Protect the customer
Where and when it matters most
With a plug-and-play platform for contextual
based insurance through smartphone
notifications
Disrupt the insurance
sales model
Enabling the AI Agent, an entire new
paradigm in addressing the customers’
protection needs
Add value to the insurer
Customer
insight
Personalized
protection
Nudging
... Win-win perspectives for the customer and the insurer
Insurer perspectiveCustomer perspective
“It’s already there”
When I need protection
“They notify me about my
protection needs”
Personalized, Relevant, Effective
“I buy it”
Conveniently, on my smartphone.
Untapped business opportunity
Close to my customers, closing the
protection gap.
Consistent profitability
Moral hazard avoidance
A digital insurance salesforce
Artificial Intelligence-powered virtual
insurance, to tame the Generation Y
and Millennial shift.
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Neosurance leverages Demand Aggregators
Our plug-and-play, partner-friendly system sells
insurances through a combined push-based cognitive
model and mobile SDKs
To leverage existing communities’ digital
customer journey
To leverage insurers’ customer base
The communities
(Demand aggregators)
Partner
(insurer or reinsurer)
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Microinsurance in developing countries
Microinsurance in developing countries: Africa, India and South America
In some African countries Insurance companies are already helping
small farmers to fight the consequences of natural disasters, to
improve financial resilience and to adapt to climate change
In India there are ongoing social protection programs involving
millions of people and providing insurance policies (partially
subsidized by the government) for life, crop and livestock
protection to which 160 million low-income citizens have adhered
In Africa and South America women working in farming or small
businesses are being offered a cover against accidents which
includes hospitalization costs – all made possible through
association agreements
Microinsurance in developing countries is not just a reduced cost coverage for poor
people: it’s an innovative way of selling insurance in a customer centric approach…
Fight natural disasters
Social protection programs
Hospitalization costs
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Will <push> insurance be the new approach to close the protection gap?
Insurtech solutions already exist in developing countries
African farmers, paying a small extra percentage on the purchase of seeds or
other agricultural products, are entitled to a code which, sent by SMS,
activates a cover. Through the data collected by satellites and solar-powered
stations in the territory, the area of residence of the farmer is identified and
weather conditions are monitored. If the data show that there was not
enough rain in a due period so as to allow germination, or if there was a
serious meteorological event causing the destruction of the crop, the
company will automatically compensate the farmer without the need for
inspection or on-the-spot checks.
In Nigeria taxi drivers can get medical and insurance coverage specifically
while in transit. Taxi drivers are able to purchase insurance making use
of USSID or a smart phone application enabling covers only for the time
that they are travelling (from collection point to destination) - an attractive
and cost effective proposition for the transport business.
… and the insurtech wave has a big role to play! In this context is the push approach
new disruptive solution?
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Thank-you for your attention!
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Founder & Managing Director, Business
Support
Experience and main credentials
Co-founder & Managing Director,
Digital Tech
Co-founder, Neosurance
+39 02 89013129
o More than 15 years of experience in business & strategy
consulting in multinationals like BCG and Bain &
Company and Founder & CEO of Business Support, a
strategy consulting boutique in Milan
o Columnist at The Indian Economist - online journal on
business & economics, policy, politics and culture & society
o Guest contributor at Insurance Thought Leadership
(USA), InsurTechNews (Italy) and Fùture Inese (Spain)
o 50insurtech influencer (insurtechnews.com) and Top
Fintech Influencer in Italy (letstalkpayments.com)
o Member of European Finance Association
o Master in Industrial Strategy at University of Sorbonne,
(Paris), Bachelor degree in Business Administration at
University of Torino and, Bachelor degree in
International Management at Université J. Moulin (Lyon)
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