Insurance Nexus organizes an event around connected insurance on June 11th in London and publishes a white paper to support it named “IOT is just a technology“. Continue reading “Insurance Nexus – IOT is just a technology”
Key points to remember about UBS insurtech Shifting Asia
- Asia is one of the least insurance-covered markets and there are huge catch-up prospects
- Insurtechs have the opportunity to transform this market more than any other. They could generate, for example, up to $ 300 billion in savings by 2025.
- Competition is tough on the continent and forces to improve the quality of service as well as to find differentiation criteria
- Customers are going to be the big winners of the arrival of insurtechs.
- Incentive prevention actions could lead to significant effects on risky portfolios and thus significant improvements for the benefit of society.
Oxbow Partners is a UK-based consulting firm dedicated to the world of insurance. More specifically, they are specialized in topics that are changing the world of insurance, through 3 entry points: strategy, digital, and M&A. They just released a report called “ The 25 insurtechs Oxbow 2018 ” .
I share the point of departure of Oxbow Partners, according to which there is no reliable criterion of comparison of insurtechs currently.
Some are interested in raised funds. However, I think financially speaking, raising money is not necessarily a positive criterion for a startup. Indeed, if it is necessary to pass caps, it can mean that it can not finance its growth alone.
I decided to classify them according to their contribution to the business value chain, but it is just as debatable because I do not take into account their economic sustainability.
In short, Oxbow Partners made its selection according to the following criteria:
In addition, they take up a concept now commonly accepted: insurtechs today are not only distributors (B2C), but are facilitators or accelerators in B2B.
Last interesting element, represented under the diagram below, they consider that after the abandonment of a phase of competition, in favor of the collaboration between big groups and insurtechs, one should see reappearing soon a competition of another kind . This could be explained, according to Oxbow Partners, in the event of insufficient commitment by insurers.
Selection of 25 insurtechs Oxbow 2018
The selected startups belong to 4 categories:
- Distribution: These players are looking for end customers and need insurers or reinsurers to provide them with products
- Data & analytics
- Claims and fraud
These last 3 categories are actors who need insurers as clients.
Here is the selection presented differently.
The last pages of the report present a summary in 1 or 2 pages for each of the selected solutions.
When we look at the connected objects of vehicles, or more technically what is called telematics, a major problem appears: the exploitation of data! The startup Otoconnect focuses on this segment and is working on the provision of multiple connectors, around a first target, the portability of contracts under the GDPR regulation. Continue reading “Otoconnect – Vehicle’s data platform”
Here is a little overview of articles that caught my attention and deserve to appear in the press review of January 30th 2018!
Astonishing experimentation of CPAM
The question of personal data and above all health data is really sensitive in France. Market players are also very focused on these issues in the context of the arrival of the GDPR regulation. However, this is the moment chosen by the Social Security to try an initiative really out of the ordinary. In an attempt to fight absenteeism, the Social Security has communicated to companies, whose absentee rate was 4 to 5 times higher than the average, the reasons for work stoppages, and first those related to MSDs ( Musculoskeletal disorders) and those of the PSR (Psycho-Social Risks).
The stated objective, in agreement with the trade unions, is to encourage the company to question the practices, and to consider prevention solutions upstream.
We are here in a very interesting process of exploitation of health data for the purpose of prevention! Crossing sources now allows this type of analysis, and it is interesting to note that neither the French CNIL nor the unions have opposed the approach, which shows the quality of the exercise!
Case to follow in a few months, with the first results of the test and an extension of the companies concerned.
Expanding Google’s artificial intelligence in Paris
Following his visit to Paris on the road to Davos, Sundar Pichai, CEO of Google has announced its desire to strengthen, in Paris, his team dedicated to artificial intelligence. France is positioning itself as a real actor for the future on the subject.
More interesting, it turns out that Google’s offer tends to a SaaS offer, on the shelf, intended to be accessible to everyone, even without knowing how to code. This is the goal of Cloud AutoML vision (ML for machine learning).
Note: There is a free trial, I note in my todo to go try for you! If you have a specific use case (why not the pictures during claim’s FNOL), let’s do it together!
Emotional intelligence, or the complement to artificial intelligence
A reminder of what is emotional intelligence and how it is now essential! In a context where artificial intelligence seems to take more and more space, it is interesting to follow a subject for which the role of the human seems to remain necessary!
The event to be
Novarica and the IOT insurance observatory offer a webinar on their research on February 28:
Matteo Carbone is an opinion leader in the insurtech industry today as one of the most prominent on the market. He created the Connected Insurance Observatory, an international working group, first in Europe, then in North America, dedicated to insurtechs. Matteo participates in numerous conferences around the world throughout the year. He unfolds his theory of 4P’s of insurtechs, and I wanted to make a presentation for a long time.
The 4P’s of insurtechs
First of all, you can listen to Matteo Carbone in his presentation at the 2017 Global Insurance Symposium in Des Moines.
You can also find slides at this link, if you are an aficionado of his prose, without listening to his wonderful English accent!
Key points to remember
According to Matteo Carbone, insurtechs can intervene on 4 axes:
- Productivity : be more efficient
Profitability : get a better technical result
Proximity : to be closer to the customer and his needs
Sustainability of the portfolio (the term it uses is “Persistency” which means persistence over time, and therefore no attrition): Build a profitable portfolio on the long run term, with a small rotation.
In the absence of these objectives, there is no interest in innovating because the solution will not bring anything useful.
The second subject addressed in this presentation is telematics, because it is one of the key topics of Matteo Carbone. The Swiss Re report which I was echoing a few months ago is directly worked with him, when it comes to the Italian example.
3 topics to consider:
- The connected object : often a black box connected to the vehicle
- Insurance coverage : and the notion of incentive reduction associated with it
- Associated services : access to a set of additional services that can be provided for a fixed fee.
Under the arguments that telematics allows of itself and of course a selection of the best risks ( Note: it is questionable ) and a better controls of the compensations ( Note: that on the other hand, I share ), he comes to the conclusion that the financial result of the insurer is improved thanks to this technology.
It is also possible to rework the customer experience on all of its use of the vehicle and the different needs that might be relevant. Note: this aspect is absolutely essential, because it is from the use that one deduces the exploitation that one can make technologies.
Finally, the figures it presents show that attrition will be lower with telematics than without (11% instead of 14%).
In short, that positive points!
I share a lot of Matteo’s conclusions.
By reading, you will understand that the questions of use and business need interest me first. The 4P’s of insurtechs are a key to reading that is interesting to keep in the lead.
As it is frequent at the beginning of the year, I too will fall into the game of predictions for the coming year. With my 6 topics for 2018, here are the 6 points that I think will be 2018 on innovation in insurance:
I think the moment is good to launch complete offers around telematics embedded in cars, smart homes or wearables. When I think of complete offers, it does not just mean capturing user data. It is also, above all, and before all, providing services to these policyholders or using these tools to implement new prevention policies.
This may be the consequence of the previous point, but a little wider, a redesign of offers. It’s time to think about offering insurance products as the structuring element of the insurance value chain, from prevention, to disaster, to adding service. For example, the improvement of claims management will only pass a complementary course when products are designed to be managed quickly and simply.
I often talk here about decomposing the value chain with the setting up of experts at all levels, namely, risk bearers, distributors and managers, for the purely insurance part, but also service providers. ecosystems that will need to be mobilized intelligently. The advent of the platforms will aim to move towards this type of organization where everyone will find his place!
As a direct consequence of the previous point, if the same contract must concern multiple interlocutors, the notion of interface between them is essential. Maturity on these issues has greatly increased in recent years. Simple EDI flows (like those still used for third-party payment for example), we moved to advanced webservices but sometimes complicated to set up. Then, we now come to expose real complete services, through webservices or APIs to access the data without necessarily changing the technical architectures in a structuring way.
The needs in this segment are exploding, and it will be an intelligent response that avoids the pitfall of systemic risk! For me, here more than elsewhere, it means helping to prevent and reduce risks upstream to avoid the most frequent attacks. On the technological side, the weakest link is always first and foremost the human, it is about takins this into consideration! By the way, how do you manage your passwords?
A user experience at the heart of all steps
The last few years have been mostly devoted (except for the more advanced ones) to work around the efficiency of processes, and how to do it for less! It is now to be interested in doing better for the same price, or better for less expensive. Better means here better from the point of view of the customer, because the essential thing is to simplify his life, to eliminate irritants. It is therefore customer demand that must be at the center of future optimizations.
It goes without saying that Siltéa and I are able to accompany you on these 6 topics for 2018! Feel free to contact me .
And you? What do you think? Do you have others?
Insurance Innovators (an offshoot of Market Force, which I had already talked about here for their report under the same title ) has just published the future of insurance 2017 (Future of General Insurance Report 2017).
7 themes are discussed (for a better readability I separated into several pages):
- Innovation and Disruption
- A changing regulatory environment
- The future of underwriting and pricing
- Value-added services
- Touch Millenial Generation
- Insurance in the Age of Machine Intelligence
- Fraud in a connected world.
Written in partnership with the Chartered Insurance Institute , and sponsored by IBM, Sas and Smart Communications , this report is generic, but of quality. Market Force believes that insurers are poised to innovate and transform to keep pace with insurance companies, but the pace of transformation is still too slow. A tip: Act now! Continue reading “Insurance innovators – Future of insurance 2017”
Accenture publishes its last report dedicated to the transformation of insurance distribution . The ambition is Reimagining insurance distribution. The latest version of this report was from early 2016.
Digitization transforms insurance distribution
The report is based on a survey of 400 industry managers around the world. The first lesson is that the vast majority of actors are working or planning to work on a restructuration of the distribution model, including by leveraging the benefits of digital. Only 1 in 5 actors do not think about it.
Accenture brings out six trends:
- Digital channels
- User experiences improved by customer knowledge
- Changing the role of the agent
- Future of aggregators
- The role of ecosystems
- The Internet of Things.
Besides, Accenture gives insights on what they call the “living services”, all the services that the insurer can provide in addition to its customers based upon collected data in particular.
1. Digital channels
All stages of the distribution chain are affected by digitization and a search for omnichannel. Thus, this trend does not question traditional networks, but questions what should be the respective place and added value of each. Accenture also confirms the rise of selfcare, which has two objectives: satisfaction of customer demand and a desire to reduce distribution costs.
2. Customizing the customer experience
Insurers are clearly switching from a” product-oriented” posture to a” customer-oriented” one. ( Note: By the way, it will be necessary for Accenture to explain the difference between the concept of sales of products based on the needs and the notion of customer-oriented model, because I am not sure to understand… ).
This involves mastering the collection and use of data for:
- To estimate correctly the potential of each one
- Choosing the right channel for each customer
- Identify the best time to initiate a contact
- Choose the best offers and the right messages.
This involves the use of predictive models to adapt to a changing population.
3. Changing the role of the agent
Almost 2/3 of insurers work with their agents to ensure the best positioning in the value chain. It is about bringing them in when their added value is the most important. Another essential element with these populations, 79% of insurers rework the models of remuneration in a digital and omni-channel context.
Thus, the remuneration should aim to encourage a certain number of activities, around the customer relationship.
Finally, this type of questioning brings another trend, heavier and longer term. This involves reviewing the profiles sought for new recruits. ( Note: a legend in Figure 8 would not have been a luxury to ensure understanding … )
4. Future of aggregators
The aggregators confirm a dominant position and still growing. Respondents believe that they will be even more used, especially in the upstream phases of the distribution (search for information or tariff).
Therefore, the question is to choose the strategy to adopt against these actors: use the brand to generate commitment or use a dedicated brand or sell white label. The answer is very variable according to the geography and the penetration rates of the comparators. There is therefore no single answer. On the other hand, we still see a tendency to favor the use of a secondary brand for these channels. ( Note: One nuance, it does not seem relevant to me to treat in the same way the respondents who say they may be ready to do it within 3 years, and those who do not know. It affects seriously the result).
Finally, last step observed, the creation of proprietary aggregators. ( Note: I do not dwell on this point, too few details are given by the report on what is understood in this terminology, it is too vague to be exploitable! )
5. Ecosystems: end-to-end experiences
One point on which I agree with the conclusions of the report: the future of insurance goes beyond insurance. It is the emergence of service ecosystems that aim to improve the response to customer needs by offering new services or products. It’s about building partnerships and thinking more about what can generate engagement.
Note: This point is a really insufficiently treated.
6. The Internet of Things: The New Paradigm
Whereas the focus was previously on the embedded telematics (of which I speak regularly), connected objects now move the lines. In 1 year, investments have exploded and the number of services or associated products has been multiplied by 2 or 3. It affects all types, including smart homes, health or other wearables.
This allows a change of posture, from the role of indemnifier to the role of prevention, more positive. In addition, insurers can now offer their clients self-assessment of their risk, thanks to tools whose prices have fallen significantly.
Digital leaders show the way
Accenture reveals a difference between digital leaders on one side and followers on the other. Where the former seek to truly transform their profession, the latter are more willing to catch up.
By comparing the relative positions of each one, it makes it possible to better appreciate the differences between the most advanced actors and the others.
On the question of connected objects, we can also better measure the difference in taking into account the problem.
A recommendation: become a digital insurer
Accenture’s recommendations focus on four areas:
- Choose your business and distribution models, and stick to them!
- Define the desired position in ecosystems, models of cooperation or partnerships (yes!)
- Switch from a compensation mode to real-time protection
- Make innovation and customer focus the cornerstones of distribution strategies
- Seeking simplicity first and foremost for access, transactions or offers
- Emphasize the human contact of agents on advice, value-added and more complex customer relationships.
Conclusion of Reimagining insurance distribution: Transforming to Secure the Future
Conform to the standards of all reports of this kind, Accenture does not know how to close a report! To write:” The only thing we are sure of is that the insurance company of tomorrow will be different from today’s” is of an appalling banality …
In short, since the results are based on studies and surveys, it provides a confirmation / disregard of a number of concepts. In this sense, this report brings real interesting points. However, being too hand-to-mouth, swallowing the analysis and for all that depriving oneself of carrying convictions is very disappointing for this type of player on the market. If Accenture hopes reimagining insurance distribution will be that simple, they’re wrong: it will take a little more.