Digital Innovation - A Quick Overview

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Digital Innovation Talks

III Conferencia Internacional de la Industria Aseguradora

Asociación de Aseguradores de Chile, AG

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Emerging Tech Speeds Up the Creation of

New Business Models

Source: UBER; Airbnb; The Wall Street Journal; Mundiventures

The world's largest

hotel chain, without

owning a single

hotel

Accommodation

Taxi Services

The world's largest

taxi company,

without owning a

single car

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Agenda



Definitions:

Digitalization

&

Millennials



Unicorns in Insurance Tech:

Zenefits

&

Oscar

&

Zhong An



Munich Re & Insurance Industry Approach to Digital Innovation



Top Global Digital Innovation Trends & Insurance Impact



An Overview to Digital Insurance Innovation in Latin America

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Innovation:

The alteration of

what is established by the

introduction of new elements or

forms.

Digitalization

Image: Getty Images/ANDRZEJ WOJCICKI/Science Photo LibraryRF

Technology:

The branch of

knowledge dealing with the

mechanical arts and applied

sciences.

Digital electronic device

: That

makes use of data in digital

form.

Typically contrasted with

analogue.

Is the creation of

business in the digital

world.

Digitalization

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Unicorns in Insurance Tech:

Zenefits & Oscar & Zhong An

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Source: Zenefits III Conferencia Internacional de la Industria Aseguradora

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Source: CB Insights

Oscar

(10)

Source: CB Insights; Munich Re

ZhongAn

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Unicorns in Insurance Tech

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Munich Re & Insurance Industry

Approach to Digital Innovation

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Source: Munich Re

Munich Re: The Digital Innovation Circle

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10 Startups

Leading Accelerator

looking for

based in London

to rock the world

of insurance!

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Source: Munich Re

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Source: Mundiventures; CB Insights

Global Insurance Response to Digitalization

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Top Global Digital Innovation Trends

& Insurance Impact

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III Conferencia Internacional de la Industria Aseguradora Information of Everything Internet of Things Cyber- security Digitalization

The Device Mesh

Autonomous Agents Loc-based Services Robotics/Drones Smart Home Wearable Devices Adaptive Security Architecture Haptic Technologies Context-aware Computing Autonomous Vehicles Open Data Data driven Decisions Predictive Analytics Industrialization 4.0 Web 5.0

Cloud/Client Architecture Telematics

Smart Machines

Digital Health Services

3D Printing Materials

Augmented and Virtual Worlds

User Centered Design New Payment Models

Digital Identity

Collaborative Consumption

Artificial General Intelligence Ambient User Experience

Blockchain Technology Algorithmic Business Web-Scale IT Smart Dust

Advanced Machine Learning

Crowd Sourcing

Quantum Computing

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T r e n d

Description

Related Trends Level of relevance

Adopt Trial Assess Hold

Examples and Initiatives

External examples

Internal initiatives

Benefits

 Artificial General Intelligence describes the ability

of computers to simulate higher cognitive

abilities of humans.

 Some of the scopes in Artificial General

Intelligence are natural language processing,

speech recognition and image processing.

 The development of Artificial General Intelligence

is not a technology trend, but serves as a basic

technology for trends like algorithmic business, advanced machine learning or

autonomous agents.

Artificial General Intelligence

 Toyota invests $1 Billon in a Artificial Intelligence Research Institute in the silicon valley focusing on

safer driving technologies.

 Google Deep Mind is capable of learning for themselves directly from raw experience or data,

and are general in that they can perform well

across a wide variety of tasks

 Allen institute conducting high-impact research

and engineering in the field of artificial intelligence

 Algorithmic Business  Advanced Machine Learning  Autonomous Agents

 Artificial General intelligence will not

create a single market (in insurance

sector), but will aggregate markets

and drive technologies based on

Smart Machines and Advanced Machine Learning.

III Conferencia Internacional de la Industria Aseguradora Source: Munich Re

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Source: IBM

Artificial General Intelligence

(Cognitive Learning)

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T r e n d

Description

Examples and Initiatives

Benefits

 Wearable Devices incorporate advanced

electronic technologies and can be worn by the

users, mostly on the wrist.

 They track several body related data, like health and fitness information such as movement, steps and heart rate. Often, they have the opportunity to

sync data from the mobile phone, e. g.: messages, phone calls or appointments.

Wearable Devices

 Vitaliti is a wearable health system with sensors measuring and supervising body functions – all simultaneously, logging to the cloud and a connected smartphone or tablet.

 The Ralph Lauren polotech shirt works with iPhone or Apple watch and transmits real-time workout data to your device.

 Intelligent working suit recognizes work-overload.

 Internet of Things

 Loc-based Services

 Digital Health

Services

 Smart Home

 Wearables serve as means of

operational health promotion and

should be considered in health

insurance products.

 They offer an additional on

demand channel for customer services of primary insurers.

 CRM-systems can be integrated in

wearables and strengthen

customer loyalty.

 Wearables provide an opportunity

of collecting data about the insurance holder which help customizing insurance products.

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Wearable Devices

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T r e n d

Description

Examples and Initiatives

Benefits

 In general, Robots and drones are machines that

solve problems using Artificial intelligence (AI).

 Commonly used in manufacturing, robots are

entering the markets for private usage including

imitating human behavior.

 After CES 2015’s “Year of the drones” in 2016

more functionalities

in real estate, law enforcement or disaster relief are introduced.

Robotics/Drones

 AeroVironment developed the Nano Drone to develop a new class of air vehicle systems

 Pepper is the first humanoid robot with the ability to recognize and react to people’s emotions. The Robot is already used in Japan to interact with customers in stores.

 Skycatch is a drone-meets-industrial-big-data startup that provides unmanned aerial vehicles for autonomous aerial data capture

 Artificial General Intelligence  Internet of Things  Smart Machines  Advanced Machine Learning

 Perform well under challenging conditions such as inclement weather.

 Drones can be usefully applied in

major claim settlement: They enable a deeper analysis of major damages as they enter areas or acquire data humans are not able to gather.

 Drones hold vast potential for

streamlining and reducing the cost of insurance-related processes — from claims

adjustment and risk-engineering, to post-catastrophe claims

settlements for customers, to weeding out fraudulent agricultural claims.

 The data it captures can then be

visualized and analyzed by workers on the ground via user interface and data analysis tools

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Drones

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T r e n d

Description

Examples and Initiatives

Benefits

 The giant amount of produced data offers a wide

range of analytical usage – not only describing processes using data, but predicting them.

Predictive analytics enable forecasting by

extending existing data into the future.

 Predictive Analytics serve as a basis for

optimizing and even for automating decision

processes. For this purpose, its major challenge

is to filter the amount of data provided, keep

the analysis process itself lean and generate reliable statements.

Predictive Analytics

 Chalmers develops a system that forecasts innate behavior in the moment of steering the car in critical situations and corrects them.

 Mixpanel analyses the behavior of website user. User can be recognized based on statistics and actions can be foreseen.

 Public Sonar Detect events. Track incidents. Manage crises via real time social media

 Algorithmic Business  Data driven Decisions  Advanced Machine Learning

 Predictive Analytics make a big

contribution to risk prediction for

ERGO and Munich Re: increase of confidence, reduction of uncertainty.

 Implementation of data filters and

tracking tools to test effectivity and raise efficiency.

 Discovering meaningful data

patterns, enabling future

scenarios and forecasts.

 Prescriptive analytics automates the recommendation and action process and generally is based on

machine learning techniques

that evaluate the impact of future decisions and adjust model parameters based on the

difference between predicted and

actual outcomes. Source: Munich Re 0.7 0.75 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 1.25 SA ≤ 25k 25k < SA ≤ 50k 50k < SA ≤ 80k80k < SA ≤ 110k110k < SA ≤ 180k 180k < SA ≤ 260k SA > 260k R e la ti ve E xp e ri e n ce

Sum Assured Band

Best Group Medium Group Worst Group

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T r e n d

Description

Examples and Initiatives

Benefits

 Telematics combines technologies of

telecommunications with transportation.

 Telematics give insights about the location-based

usage of objects, often cars, and open up new

possibilities of real-time services like usage-based car insurance.

Telematics

 AXA telematics app: the driveability of young

drivers is being assessed based on user generated data

 Generali acquires English start-up My Drive Solutions which uses data analysis for the development of new smart insurance products.

 Loc-based services

 Smart Home

 Collaborative

Consumption

 Telematics give the possibility of

flexible car insurances based on tracked (and shared) Telematics application data.

 Through the Telematics application

helpful data can be collected. That

data improve the products, for example cars and increases the safety for human and material.

 New business models like usage

based car insurance with real-time sync.

 Better analysis of crashes and

damage regulation by providing more and richer data.

III Conferencia Internacional de la Industria Aseguradora Source: Munich Re

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Telematics

III Conferencia Internacional de la Industria Aseguradora Source: Insure the box

What information does the box

record?

The data from a telematics box tells us:



the time of day or night you drive



the speed you drive at on different sorts of

roads



if you brake or accelerate sharply



if you take breaks on long journeys



your motorway miles



your total mileage

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T r e n d

Description

Examples and Initiatives

Benefits

 Autonomous vehicles are vehicles which can drive

themselves without human supervision or

input.

 In addition to unmanned vehicles autonomous

vehicles are not just controlled remotely, but

control themselves or drive through a controlled environment.

 Vehicles can also operate semi-autonomously:

taking some control of aspects of their driving, whilst a human driver retains control of others.

Autonomous Vehicles

 Robottaxis are driving cabs that combine self-driving technology with internet-powered services and are currently operating in Japan.

 Wepods are driver-less mini-busses circulating within the public transport system.

 John Deere AutoTrac: Self-driving system for smart tractors makes use of past harvest data for higher harvesting

 Context-aware

Computing

 Robotics/Drones

 Higher safety and minimization of

damage (“Reduce human mistake

interaction”).

 Transformation of the third-party

liability risk is needed.

 Hacking autonomous systems as a

major threat and potential for

insurance product development.

 see also: Cybersecurity

 Considerations: Insurance not longer necessary, because of the reduction of damage.

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Autonomous Vehicles

III Conferencia Internacional de la Industria Aseguradora Source: ABC; NHTSA

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T r e n d

Description

Examples and Initiatives

Benefits

 Technology allows us to make the processes of

purchase transparent. Social media boosts the

idea of a sharing economy/”shareconomy” in

which the act of purchase goods is replaced by

sharing them with others.

 Successful “shareconomy” business models

implementing collaborative consumption:

 transport: carsharing (“Uber”, “DriveNow”)

 accomodation (“AirBnB”)

 finance: crowdfunding (“Kickstarter”)

 working: coworking spaces (“Betahaus

Berlin”)

Collaborative Consumption

 Insurance sharing platform Friendsurance with 6

new management hires till end of 2015.

 Transfercar is a service that helps rental car companies to transfer cars between their branches, while offering a way for travellers to travel for free.

 Sharing electricity: Yeloha is a Solar Sharing

Network.

 Crowd Sourcing

 The Device Mesh

 New Payment

Models

 Collaborative consumption of

goods reduces waste production

and raises resources-consciousness.

 Connecting people, goods and

services, it will have a deep

impact on insurance holders and their needs.

 Consideration: Will collaborative consumption transform clients of insurance companies?

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Source: Friendsinsurance

Collaborative Consumption

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Source: Munich Re

Collaborative Consumption

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Source: Guevara

Collaborative Consumption

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An Overview to Digital Insurance Innovation in

Latin America

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Source: Munich Re

The Critical Path for Digital Insurance Innovation

III Conferencia Internacional de la Industria Aseguradora

Timeline

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Source: Munich Re III Conferencia Internacional de la Industria Aseguradora

Digital Back-end:

Risk Inspection & Claims Digital Apps

Timeline L e v e l o f d ig ita li z a tio n

Munich Re can no guarantee that information is accurate as of today or that it will continue to be accurate in the future.

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Source: Munich Re

Digital Back-end:

Drones

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Source: Munich Re

Digital Front-end:

Point of Sale Automatic Underwriting

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Source: Munich Re

Digital Front-end:

Predictive Analytics

Portfolio of fully

underwritten

applications &

UW decisions

Customer data

Link data using

name, DOB and address

Customer data

Portfolio of fully

underwritten

applications &

UW decisions

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 1 2 3 4 5 6 7 8 9 10 Postponed / Declined High Rating Low Rating Standard Segment

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Source: Munich Re

Digital Front-end:

Wearables

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Source: Munich Re

Other Digital Innovation Initiatives

Telematics

Artificial General Intelligence

(Cognitive Learning)

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Source: Munich Re

Brand New Digital

ThinkSeg – Venture Capital

Youse – Caixa Seguradora & CNP

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Source: Munich Re; Mundiventures; Mundilab III Conferencia Internacional de la Industria Aseguradora

Insurance tech startups in Latin America

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Source: Munich Re

The (good) old days¡

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Source: Munich Re

Target Picture 2020

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Digital Innovation Talks

III Conferencia Internacional de la Industria Aseguradora

Asociación de Aseguradores de Chile, AG

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