EFFECTIVE COLLABORATION

LESSONS FROM THE INSURTECH WORLD

Sabine VanderLinden
18 years of expertise
Managing Director of

Top 20 InsurTech Influencer

@SabineVdL
@sbcInsurTech
Sabine VanderLinden
Definition of Insurtech
• Collectively, we call this startup talent “InsurTech.” As you may have guessed, “InsurTech” is
shorthand for “Insurance Tech.”
• Simply :
o InsurTech is a new tradename for a growing
class of apps, software, and startups that have
reinvented a tired and lackluster insurance
industry
• Also can be defined as
o A set of innovative business models, platforms
that bring in a new customer experience by
applying innovative technologies in the
insurance world

Introduction to Insurtech
13
Bringing together OLD & NEW worlds

CORPORATES THE NEXUS STARTUPS

Insurtech Origins
Circumstances that paved the way for InsurTechs
• Insurance companies were big, slow and too systemized to adapt.
• Gartner, one of the worlds leading research firms reported that 88% of insurance business leaders
consider that their organizations are digitally
• Over the past 3 years, more than $3 Billion has been poured in the Insurtech startups.
• This influx of capital and startup talent has created even more competition threatening the old largest
incumbent insurance companies.
• technologies in the insurance world
• So the scene is a slow moving incumbents on one side and a fast moving,
tech-driven startups on the other side.

Introduction to Insurtech 12
 Video
https://www.wtwco.com/en-AU/Insights/trending-topics/insurtech

https://www.wtwco.com/en-AU/Insights/trending-
topics/insurtech
Bringing together OLD & NEW worlds

CORPORATES THE NEXUS STARTUPS

What is the sharing economy

“The sharing economy is the value realized in

taking under-utilized assets and making them
accessible/ re-usable online to a community,
leading to a reduced need for ownership of those
assets.”
Alex Stephany – The Business of Sharing
The sharing economy involves a marketplace

A Digital
Buyers Sellers
Platform

Consumers Business-to-Consumer Suppliers

Riders Business-to-Business Drivers
Renters Peer-to-Peer Providers
Guests Business-to-Crowd Hosts
For the participants, this means:

▪ more flexibility
▪ the ability to access products and services whenever the
supplier desires
▪ efficient use of resources, reducing scarcity and
▪ a more sustainable way to consume products
 WHY?

▪ Digital literacy
▪ Easy access to digital technologies
▪ Entrepreneurial spirit
▪ Acceptance for emerging creative skills
▪ Ability to incubate young businesses
▪ Accelerating acceptance for sharing economy ventures
 “The vast majority of insurers have made little
headway in delivering solutions for the sharing
economy: just 10 % already have an offer in the
marketplace and another 3 5 % are only at the pilot or
strategy stage. 5 5 % have taken no steps towards
meeting these new insurance needs, potentially
missing out on a significant new line of business.”
Marketforce, The Future of General Insurance 2016, special report
 TRUST IS AT THE CORE OF EVERY RELATIONSHIP

Only 27% of consumers trust their insurance providers whilst

less than 50% actually turning to them for advice
RECONNECTING WITH CUSTOMERS
“There are many InsurTech startups doing a great job out there!”
Bringing together OLD & NEW worlds

CORPORATES THE NEXUS STARTUPS

Model 1: Understand The
Problem at Hand
 Today, many corporations interact with the start-up
community and do things they had never done before

1) Changing customer behaviors

Why? 2) Speed of digitization
3) Exploding product innovation
 No Red-Tape
 No Cubicle
 No suit

 Own schedule
 Autonomy
 Flexibility
“Many corporate leaders understand that
innovation comes from inside and
outside the walls of their
corporation. That’s why many big
companies want to engage with emerging
ones.”
The InsurTech Ecosystem – 6 Key Trends

Insurers were asked in

which areas they saw the
most important impact to
their business from start-
Enhance ups & Start-ups were
Meet changing interactions & Initiate strategic
customer needs build trusted relationships categorised accordingly
with new offering relationships

Sales and Customer

Product Distribution Underwriting Claims
Marketing Service

Customer Ecosystem
Leverage data & New Sophisticated
analytics to approaches operational
generate risk to underwrite capabilities
insights risk &
predict loss

Source: PwC Analysis, Startupbootcamp

InsurTech & PwC Data
Focus areas for startups based on applications

1 ENHANCE INTERACTIONS AND BUILD TRUSTED RELATIONSHIPS 35%

2 ENABLE THE BUSINESS WITH SOPHISTICATED OPERATIONAL CAPABILITIES 21%

3 MEET CHANGING CUSTOMER NEEDS WITH NEW OFFERINGS 20%

4 LEVERAGE EXISTING DATA & ANALYTICS TO GENERATE DEEP RISK INSIGHTS 15%

5 LEVERAGE BROADER ECOSYSTEMS 6%

DELIVER NEW APPROACHES TO UNDERWRITE RISK AND PREDICT LOSS 3%

6
Insurers’ point of view

4 ENHANCE INTERACTIONS AND BUILD TRUSTED RELATIONSHIPS 45%

5 ENABLE THE BUSINESS WITH SOPHISTICATED OPERATIONAL CAPABILITIES 38%

1 MEET CHANGING CUSTOMER NEEDS WITH NEW OFFERINGS 75%

2 LEVERAGE EXISTING DATA & ANALYTICS TO GENERATE DEEP RISK INSIGHTS 65%

6 LEVERAGE BROADER ECOSYSTEMS 27%

DELIVER NEW APPROACHES TO UNDERWRITE RISK AND PREDICT LOSS 54%

3
 1. Meet changing customer
needs with new offering

Introduction of flexible and

personalized offerings

 Micro-insurance (9%)
 Peer to peer insurance (7%)
 Sharing economies
 Lifestyle based insurance
 Robo-advice

These ventures are challenging traditional business models

Source: PwC Analysis, Startupbootcamp

InsurTech & PwC Data
 These ventures are challenging traditional business models
xx Company
Airbnb (xx)
Skillshare Year Founded
+37 million
+1,000 classes
nights stayed
(2010)
(2008)
Vinted Kickstarter
+14 million +US$ 1.7 billion
clothes listings pledges
(2008) (Latest Available
Data)
Streetbank TaskRabbit
+61,700 things
shared Netflix 1.25 million
57.4 million joiners 2013
(2010)
subscribers RelayRides (2008)
(1997) +2,300 cities
served
(2010)
LiquidSpace
+16,000 user
companies
(2010)

Elance
2.5 million
Uber
DogVacay employments
260 cities
+20,000 listed (1999)
Served Spinlister
pet sitters
(2010) 100+ countries
(2011)
(2012)

Source: Looking Ahead (research 2014)

Segments of the Sharing Economy

Peer 2 Peer On-Demand Collaborative

Accommodation Household Services Finance

Transportation Professional Services

 Transaction Values
Revenues & transaction values facilitated
by sharing economy platforms in Europe
(£Bn, 2015)

P2P Accommodation

P2P Transportation
Revenues

On-Demand Household Services

On-Demand Professional Services

Collaborative Finance

£ 3Bn (UK: £0.9Bn) £ 24Bn (UK: £7.4Bn)

Source: PwC UK, Sharing Economy Study, 2016
 Revenues & transaction values facilitated
Transaction Values
The sector is
by sharing economy platforms in Europe
(£Bn, 2015)
expected by 30%
per year over the
P2P Accommodation
next 10 years,
generating £18Bn of
P2P Transportation platform revenues
Revenues

On-Demand Household Services

and £140Bn of
On-Demand Professional Services
transactions
Collaborative Finance revenues in Europe
Source: PwC UK, Sharing Economy Study, 2016
£ 3Bn ( U K : £0.9Bn) £ 24Bn ( U K : £7.4Bn)
by 2025

Source: PwC UK, Sharing Economy Study, 2016

 2. Leverage existing data and
analytics

Search for more meaningful insights

from data sets to increase the
sophistication of analyses and
decision making

 Connected car / telematics

 Connected Health
 Remote data capture & analysis
 Quantification of emerging risks

93% of customers would welcome a

device that monitor and keep their
home safe

Source: PwC Analysis, Startupbootcamp

InsurTech & PwC Data
 4. Enhance interactions and
build trusted relationships

Leverage Artificial Intelligence,

Learning Machines, Robo-advisors
to deliver unique customer
experiences

 Omni-channel experience
 Aggregation and comparison
 Targeted engagement
 Consolidation of cover
 Education & engagement

Brolly

Source: PwC Analysis, Startupbootcamp

InsurTech & PwC Data
Model 2: Partner
 From OBSERVING to
COLLABORATING with start-ups on
real projects

However, often companies’ structures prevent

projects to materialize or move swiftly!
 Startup world Corporate
world
Uncertain Process heavy

Unforeseen risks Rules & boundaries

Highly dynamic Constrained

Designing the right innovation framework

CHECKLIST ONE

1. COULD YOU DESIGN A SMALL, BUT WELL DEFINED AND CONTAINED, PILOT WITH
CLEAR SET OF OUTCOMES?
2. WHAT IS THE MINIMUM SET OF STAKEHOLDERS WHO COULD SIGN-OFF THE PILOT?
3. CAN THE CLIENT FUND THE PILOT?
4. WHAT ARE THE MINIMUM CONTRACTUAL TERMS NEEDED FOR THE PILOT?
5. HOW CAN YOU GO AROUND/ MINIMISE INTERNAL RED TAPE OR HURDLE THAT CAN
PREVENT THE PILOT TO MOVE FORWARD?
6. WHAT WILL SUCCESS MEAN? HOW WILL YOU MEASURE IT?
7. IF THE PILOT IS SUCCESSFUL, HOW WILL YOU ENGAGE IN A LARGER ROLL-OUT?
Improving your likelihood of success

CHECKLIST TWO

1. CLEARLY DEFINE THE OUTCOMES YOU WANT TO ACHEIVE

2. IDENTIFY AN INTERNAL LIAISON/ AN ADVOCATE WHO WILL
MANAGE YOU WITHIN THE PROJECT ORGANISATION
3. ENSURE STRONG BUY-IN FROM SENIOR EXECUTIVES WHO MUST
SEE BENEFITS FROM THE PROJECT
4. DEFINE CLEAR METRICS AND AN INCENTIVE SYSTEM WHERE ALL
PARTICIPANTS ARE REWARDED FOR TRYING AND LEARNING
 How do corporates partner?

Source: PwC UK, InsurTech Research, July 2016

you tube video: https://www.youtube.com/watch?v=pXuLWnWminI
Model 3: Get funded
 $4.74Bn invested in InsurTech across 470 start-ups
deals since 2011...
This increased six fold over the past three years

$1.4Bn invested across 126 deals

between Q1 and Q3 2016

Source: CB Insights, FT.com, PwC

 “100 s global investors are pouring
billions of dollars into InsurTech start-
ups to give insurers a tech makeover”

 Andreessen Horowitz
 Intel Capital
 Sequoia Capital
 Google Ventures
 Balderton Capital
 Canaan Partners
 American Family Ventures
 MassMutual Ventures
 ACE Group Holding
 Y Combinator
 .....
Source: CB Insights, Startupbootcamp Analysis
Investors are looking for start-ups able to:
 Reinvent the way people buy insurance
 Transform the way insurers manage risk
 Leverage sharing economy-led business models
“ The most imminent effects of
disruption will be felt in the banking
sector; however, the greatest impact
of disruption is likely to be felt in the
insurance sector

Source: WEF, The Future of Financial Services, June 2015

 Financial Mgt Cyber Security Heath Monitoring

Data & Analytics Digital Broker Digital Broker

Smart Home Security Wellness Insights Business Insurance

Over $1Bn committed … ... to head off disruptive threats

Source: Startupboocamp InsurTech Research, July 2016
Leading Sharing Economy Insurance Brands

This snapshot is not meant to provide an exhaustive list

 “By supporting their
development and ambitions,
Exam MAIF intends to be the
insurer of reference of the
young actors of this new

ple: economy with which we

share the foundations.”

MAIF Pascal Demurger, Director,

MAIF group

–
 KEY QUESTIONS FOR YOU:

What will you do differently to ease engagement?

What will your priority be? What will your pilot be?

What metrics will you choose to drive value?

“ Being successful in the sharing economy means
building a business model that's based on
trust, authenticity and transparency
with your customers
”
.
Trust mechanisms promote buyer & seller satisfaction

Why
How
• Buyers are prepared to buy
goods and services from • ID check
strangers • Reputational rating
• Reduce the number of low- • Rate the experience
quality sellers • Messaging
• Reduce the risk of fraud • Feedback scores
• Incentives
• Personalized services
Once trust is in place, people share and collaborate
mostly for:

Social reasons “I want to meet new people”

Economic reasons “I want to save money”

Practical reasons “I want to save time”

Sustainability reasons “I want to protect the environment”

Accessibility reasons “I want to access new ways of ownership"

 THE SHARING
ECONOMY IS ALSO
ABOUT DESIGNING
UNIQUE EXPERIENCES/
NOT PRODUCTS
 THANK
YOU
@SabineVdL
@sbcInsurTech
Sabine VanderLinden

For more information, you can reach me on: [email protected]