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.consulting .solutions .partnership
Designing the Future of Insurance With Open Collaboration & Innovation2017 RAPA Fall ConferenceSven Roehl
Head of Innovation, EVP msg global solutions Canada & Co-founder Cookhouse Lab
© msg global solutions | 2017
Who we are – msg group11 %
Automotive
55 %
Insurance
21 %
Banking
1.4 %
Life Science
& Healthcare
1.2 %
Food
0.9 % Utilities
4.8 %
Public
Sector
2.1 %
Other
Industries
1.5 % Telco & Media
1.1 %
Travel & Logistics
Independent
25countries
1 bn $ revenue
Founded in
1980
6.500employees
© msg global solutions | 2017 3
We are committed to intelligent IT and
industry solutions — from consulting and
development to implementation. Our services
enable companies to maximize the
opportunities of digitalization and be more
profitable over the long-term.
VISION
Transform digital insurance .
Design and build the future .
Bring innovation to life .
MISSION
• Consulting
• Solutions
• Partnership
I N S P I R E D T O I N N O VAT E
.consulting .solutions .partnership
•
•
•
•
•
•
…let’s talk about disruption!
© msg global solutions | 2017
Conclave, Via Della Conciliazione, Rome 4.4.2005
…8 years later: Conclave, Via Della Conciliazione, Rome 13.3.2013
The Challenge – From Digital Insurance to Digital Excellence
Digital Insurance Digital Experience Digital Excellence
© msg global solutions | 2017
© msg global solutions | 2017
Everything is Changing
2/3 of the companies on The
Fortune 500 list for 1970 have
disappeared from it
Market Changes
Forces of creative disruption:
• IT (especially the Internet)
• Financial Markets
• Globalization
Mobile phones went from being
toys to tools for 3/4 of the earth's
population in 2 decades.
Speed Changes
The Internet has already
evolved from an asocial
into a social medium.
Successful companies are the
inverse of the behemoths of old:
people-short and asset light.
Business Changes
Today's winners have to be
willing to disrupt themselves
in order to avoid becoming
tomorrow's losers.
Innovation is at the Heart of a Company’s Success
Digital Innovation transforms every company into a
Software + Service Company!
Digital Innovation…
• Changes process workflows and transactions
• Enables process automation
• Leads to an easy worldwide access and distribution
• Enables the use of almost unlimited DATA and the
NETWORKING of various ACTORS
• Requires new business models and organizational
structure
Digital Innovation = Data + Community + User Experience
© msg global solutions | 2017
Cloud
Blockchain
Artificial Intelligence
Open Architecture (API)
Hyper Connectivity (IOT)
Natural Language Processing (NLP)
What are the Key Technologies?
© msg global solutions | 2017
AlphaGO vs. Lee SedolMarch 2016
…Computer wins
2:0
The Internet of Things
Internet of
ThingsBrain Voice 5 Senses
SensorsCodingComputer
+ +=
© msg global solutions | 2017
Why The Connected World Matters to Insurers
Internet of Things or transformative technologies can
impact insurance in many ways:
• Creates a new niche
• Provides transformative opportunities
• Shifts how certain risks are underwritten
• Transforms one’s business fundamentally
Insurable risks will shift to low-frequency, high-severity
events that are harder to price and predict.
© msg global solutions | 2017
The future is here, it’s just not evenly distributed yet.
William Gibson
What Can Insurers Do?
According to McKinsey 9 of 10 insurers
acknowledge that they are struggling to
develop the technology infrastructure they
need to support digitization
1
2
3
Anticipators
can create their own
future
Fast Followers
need to be agile enough to
recognize leaders and adapt
Survivors
can only focus on short-term
performance
The 3 types of insurers
Develop IT capabilities that run on 2 speeds:
1. A foundational IT architecture centered on
transaction systems (Systems of Record)
2. High-speed agile IT model that focuses on
customer engagement systems (Systems of
Engagement)
The Biggest Hurdle
The Solution
© msg global solutions | 2017
© msg global solutions | 2017
It’s All
About the
Customer
© msg global solutions | 2017
© msg global solutions | 2017
“It‘s not the customers job
to know what they want“
Steve Jobs
If I had asked people what
they wanted they would
have said faster horses.
- Henry Ford
Customers are shaped by their
digital experience with sophisticated
digital companies such as Amazon
or Uber. The digital expectations of
insurance customers are high.
Those insurers that understand and
meet the customers’ expectation will
build greater customer loyalty, cut
costs and improve profitability.
© msg global solutions | 2017
Key questions when developing innovation
© msg global solutions | 2017
Is it clear to the consumers that they have the
problem we are trying to solve?
If there was a solution available, would they
actually buy it now?
How does the solution need to look so that
they buy it from you?
Can we build a solution for that problem?
© msg global solutions | 2017
SOLUTION: IOT & LOYALTY
• Connect insurance to daily
used appliance
• Provide and collect information
• Reward the customer for using
and sharing
• Create online environment and
communities for users
C R E AT E A H O L I S T I C
B E H AV I O R - B A S E D
E X P E R I E N C E
PROBLEM
• Lack of interest of people in
financial products
• Understanding and
awareness is limited
• Few opportunities to interact
with policy holders
• Calculation based on fixed
attributes not behavior
Get interaction on regular basis, learn more
about your customers and include behavior
information in your calculat ion models.
I N S U R A N C E
D I L E M M A
© msg global solutions | 2017
A N A LY Z E E N G A G EC O L L E C T C A L C U L AT E
Policy Holder
Medical
Apps
Drones
Vehicles
Wearables
Home
sensors
• Device agnostic
• Transparency
IoT Analyzer
My…
HEALTH
HOME
SELFCOMPANY
MOBILITY• Across multiple
Lines of Business
• Multi-level analytics
and scoring
O p e r a t i o n a l i z i n g o f I n t e r n e t o f T h i n g s
© msg global solutions | 2017
I O T- B A S E D C U S T O M E R E N G A G E M E N T P R O C E S S
M e a s u r e – M o n i t o r – L e a r n - S t i m u l a t e
Input
• Visualize behavior and
progress
• Reward good behavior
• Age, Gender etc.
• Behavior, Interests etc.
• Fitbit, GPS trackers, Drones etc.
• Check where the scores are low
• Chose individual interaction method
• Define personal challenges
• Track individual improvements
• Has interaction improved behavior?
3
4
5
67
User Profile
Track Behavior
Define Challenges
RewardLearn
Monitor Progress
DIRECT VARIABLES
• Behavior
• Health user
INDIRECT VARIABLES
• Age/Gender
• Location/Education
• Score model
• Point collection rules
2
Rules
1
A moonshot, in a technology context, is
an ambitious, exploratory and ground-
breaking project undertaken without any
expectation of near-term profitability or
benefit and also, perhaps, without a full
investigation of potential risks and
benefits.
A project or proposal that:
1. Addresses a huge problem
2. Proposes a radical solution
3. Uses breakthrough technology
GOOGLE’s Moonshot
© msg global solutions | 2017
Design Thinking
© msg global solutions | 2017
Design Thinking – a Holistic Innovation Mindset
© msg global solutions | 2017
© msg global solutions | 2017
Co-Creation:
The process where
companies and
consumers work
together to create
better ideas,
products, and
services.
Open Collaboration:
Like co-creation, open collaboration is
also a means of collectively building
better ideas and solutions. However,
instead of limiting the input and
sharing of ideas, it considers mass
contributors, industry peers, and the
willingness to openly share the
contents that are eventually derived.
vs.
Collect topics, ideas, suggestions from customers,
employees and key stakeholders for future
development of products and services
Narrow down the attributes, features, and
characteristics of an identified product or service
Co-develop a prototype and eventually, an
investable new product or service
Why Open Collaboration?
31
Example of True Open
Collaboration & Innovation
32
Inspired by a test kitchen, Cookhouse
Lab is a collaborative space for
innovative thinkers. We welcome
insurance and reinsurance experts,
financial services professionals,
entrepreneurs and academics from
around the globe to join in on
developing solutions for the current
and future trends of InsurTech.
Make insurance better
Foster and encourages open
collaboration
Generate new business
models
Share & Collaborate
Design & Create
Accelerate Innovation &
Prototyping
33
Innovation Lab
Companies and Individuals looking
to work on insurance innovation
topics and projects through
open/collaborative approach with
the aim to produce Minimum Viable
Product (prototype) via a paid
membership.
34
Members
UNIQUE
RECIPE FOR
INNOVATION
OPEN
COLLABORATION
MODELS
GLOBAL
INSURANCE
EXPERT CROWD
FLEXIBLE
MEMBERSHIP
OPTIONS
+++
T O R O N T O , C a n a d a
U T R E C H T , N e t h e r l a n d s
M U N I C H , G e r m a n y Owned by
Lean Start Up Mentality
We enable teams to operate like start-ups by
empowering participants to make decisions and get
directly involved in completing project work.
Iterative Design Thinking Journey
We follow the design-thinking innovation
methodology to achieve timely results that are
customer-centric .
Innovation Through Co-Creation
We work with cross-functional teams of SMEs from
multiple organisations to ensure existing knowledge
and perspectives are captured in project outputs.
Understand the
customer need
Identify the
opportunity or
problem
Design a solution Build an Minimum
Viable Concept/
Product/ Service
Test solution and
gain customer
feedback
• Workshops
• Surveys
• Interviews
• Observations
• Secondary
Research
• Assumptions
• Personas
• Problem
statement
development
• Design Thinking
Exercises e.g.
Power of 10,
How Might We,
Journey
Mapping,
Random
Association,
Story-Boarding.
• Wireframes
• Applications
• Processes
• Products
• Strategies
• Use Cases
• Business Cases
• Workshops
• Surveys
• Interviews
• Demonstrations
• Observations
37
Challenge Idea New Product
Internal
Peer to Peer
Open MVP
Internal
Peer to Peer
Open
Ideation Lab Work AccelerationThe ideation process can
be initiated and executed
by single or multiple
partners in the Insurance
Expert Crowd Platform.
The development of an
MVP is performed in open
team structure (default)
but can also be done in a
closed team.
• Built your own
• Potential Startup
• Have a new product/
service developed
by Logiq3 & msg
Cookhouse Lab
38
Is The Insurance Industry
Willing to Openly
Co-Create? – some examples!
#Cookhouselab
1. Identified a $80MM+ opportunity in the
Canadian market and reduced processing time
from 60+ to 5 days
• APS centric Machine Learning modeling
• Underwriter focused medical information API
• New standardized guided digital APS form
2. Collaborating with InsurTech partners
3. Project MVP was a web application that
facilitates the APS process to be used by
medical clinics and underwriters.
Participating Members
Delivered: July 28, 2017
Delays in APS
40
Project # Organizations # Participants Organizations
Insurance Loyalty & Rewards 5 17 IRB RE, Foresters, Munich
Re/Temple, KPMG, Hannover Re
APS Life insurance reports and
consolidation
7 17 Hannover Re, IRB RE, KPMG,
Manulife, RGA, Cooperators,
Foresters
Blockchain Use Cases for Insurance 7 17 Munich Re, RSA, AIG, Marsh,
Cooperators, Manulife, Insurance-
Canada
Risk Exposure Data Warehouse 8 10 SAP, RSA, Cooperators, AIG,
Cowan, Munich Re, TMD
Drone Insurance 4 8 Cooperators, MunichRe,
Besurance, Jauntin
Millennials are not interested in Life
Insurance
4 10 Wawanesa, IRB RE, Manulife,
Cooperators/Cumis,
Sum 36 79
Average 6 13
Collaboration Model to Accelerate Innovation
© msg global solutions | 2017
LEARN IDEATE PROTOTYPEDEVELOPMENT &
IMPLEMENTATION
Ideation
Approach:
Designed as a catalyst that
transforms ideas into products
that radically improve
customer experience
Methodology:
• Implementation of concepts
for products, process and
organization
• Two-Speed IT and Startup
integration
• Strong partnerships with
legal, accounting,
community supporters,
incubators
Approach:
Open Collaboration of
transformative & customer-
centric innovations
Methodology:
• Crowdsourcing
• Co-creation
• Design Thinking / Lean
Startup
• Business Case and MVP
Development
Impementation
Conceptual Readiness
© msg 2016
Collaboration Model to Accelerate Innovation
Integration of Experts and
Customers with the Ideation
Platform
Development of the Business Idea
and a Minimum Viable Product
Product Development
and Implementation
Innovation LabCrowdsourcing Digital Development Lab
2-4Weeks
1-12 Weeks
3-6 Months
Questions?
.consulting .solutions .partnership
Sven Roehl
EVP msg global & co-Founder Cookhouse Lab
Tel: +1 416 668 4286
sven.roehl@msg-global.com
msg global solutions Canada Inc.
60 Adelaide Street East, Suite 1200
Toronto, Ontario, M5C 3E4, Canada
www.msg-global.com
SILVER
GOLD
PLATINUM
BASIC
© msg global solutions | 2017
1
E A R N P O I N T S
A C H I E V E A S P E C I A L S TAT U S
C L A I M Y O U R
R E W A R D S
CHALLENGES
Earn points by completing challenges
tailored for insurance domain such as
healthy living challenges and safe
driving challenges.
SOCIALIZING
Earn points by sharing information
and inviting friends on social media
AACTIVITIES
Earn points for daily activities
showing good risk-behavior
C O L L E C T B A D G E S
Use the collected points to claim rewards
from partner companies.
Such as:
Free weekly movie ticket
Gift vouchers for gas stations
B
C
TIERS
L O YA LT Y & R E WA R D
C u s t o m e r J o u r n e y
2
3
© msg global solutions | 2017
C O L L E C T B A D G E S
D A S H B O A R D S
C H A L L E N G E S
C L A I M
R E W A R D S
G A M I F I C A T I O N
S H O P T E M P L A T E
E A R N
P O I N T S
M E M B E R S H I P
M A N A G E M E N T
C U S TO M E R E N G A G E M E N T F E AT U R E S
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