Sophia Van, Swiss Re, Presentation at The Chief Data & Analytics Officer Forum, Singapore

Big Data and its impact on the insurance industrySophia VanVP, Strategy & Innovation, Asia, Swiss ReinsuranceJuly 2016

2Swissnex risk dialogue | Matthias Weber | 15 April 2015

Where are we and where are we going?

3

In 2009, Uber received the first seed funding of US$200,000. How much is Uber’s estimated valuation today?

a. 250.1 million

b. 1 billion

c. 50.5 billion

d. 62.5 billion

4

"At $831.5 million, investment in insurance tech this year is already up nearly ______ times what it was in 2010"

a. 3

b. 6

c. >10

5

How many Innovation Labs/ Centres have been set up in Singapore last 24 months (for all industries)?

a. Around 4

b. Around 10

c. Around 18 or more

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Industrial Revolution I & II

7

Digital Revolution

8

The Fourth Industrial Revolution?Internet of Things + Big Data

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"I never think about the future – it comes soon enough"

- Albert Einstein

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Technology + Consumers + Governments

Who changes the world?

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Technology

12

Consumers

13

What we share with one another every second

http://pennystocks.la/internet-in-real-time/




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Governments

Smart Engergy

Smart WaterSmart Building

Smart Transport

Smart Health

Smart Cities

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052000

60,000

20201510

50,000

40,000

30,000

20,000

10,000

0

Data availability is increasing exponentially

25.0 94.0 99.0 99.9

x % of data in digital form

Big Data & Smart Analytics are about:▪ Creating and extracting information from large amounts of available data (internal and external)▪ Applying innovative approaches/methodologies in analysing available data to expand the reach of

knowledge and customer insights

Examples

Source: McKinsey research, Forbes, Internet World Stats, IBM, The Economist

By 2020, 29.5 Billion Connected Things globally and 1/3 is in APAC.

83% of IT Executives see Smart Analytics and Big Data as part of their strategic vision80% of all data is unstruc-tured, only 20% of available data are leveraged from traditional systems

in Exabytes

The new world of Big Data & Smart Analytics

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APAC will not escape the “Big Data tsunami”

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Singapore

• Smart Health is an important pillar under Singapore Smart Nation vision• Analytics is defined as a key enabler capability• Variety of fundings for Innovation & Analytics available. 17 Regional Innovation / Analytics

Centers of substantial scale set up in Singapore utilizing government fundings. • Environmental data collected via sensors are published at data.gov.sg• Three main ideas unveiled: smart logistics with interoperability across supply chain,

Smart Nation Tech Challenges, and Smart Health Assists in Jurong Lake District.

China • 200+ Smart Cities Initiative• IoT and Connectivity are expected to be the emphasis of the 13th 5 year plan (starting in

2016)• The State Council issued some guidelines promoting commercial health insurance

development in 2014, encouraging information sharing and the creation of health insurance information systems.

South Korea Songdo –the world's first smart city close to final completion in 2016.

India • 100 Smart Cities Initiative announced in Union Budget 2014 with US$1.1 billion provided to be launched soon in 2015.

• Smart Health is the lifeline for Smart Cities

Japan Pilot projects are running in 4 cities (Yokohama, Toyota City, Keihanna Eco City, Kitakyushu)

Malaysia Industry-led IoT data centre and research lab set up with Feb 2015 with focus on wearables in healthcare

APAC will not escape the "Big Data tsunami"APAC will take the lead over in Smart Cities by 2025

22 out of 37 major smart cities across the globe are in APAC by 2022 with the investment of 63.4 billion from 2014 to 2023

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Singapore Smart Nation

Healthcare Transport

Logistic Environment Analytics

Security

Sensors Smart Cities

5G/ HetNet

Singapore Smart NationSmart Nation is built on data & the ability to move, collect and make sense

of it before we can glean insights that can improve lives.1

Singapore as a global Analytics Hub

Key areas Enabling Capabilities

1. source from IDA

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APAC is the opportunity land for Big Data“Asia is a hotbed of digital

adoption”1

By 2020, 1/3 of connected things (8.6 billion) will be in

APAC2

Huge protection gap is the opportunity for

innovation

US$58 trillion

mortality gap in 20143

Source: 1. Master Card. 2. IDA 3. Swiss Re Mortality Protection Gap report 2015


Technology advance and Big Data is transforming the way insurance is underwritten, sold, and engaged

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Changing risk landscape will require insurers to adapt their underwriting capabilities

Risks change hands New risk pools will emerge

Some risks will shrinkand some potentially become

more extreme

CyberSupply Chain

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New data sources will revolutionize underwriting

Sensors

Genomics

Platforms

Real-time. Personalized. Fast. Accurate. Transparent. Disruptive

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Wearable sensors

Smart lenses

Smart garments

Smart Pill

Enhanced monitoring of our behaviours

Source: www.proteus.com

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Genomics is a big data problem

6 billion DNA letters

22,000 genes

313 Exabytes if everyone in the US has their genes sequenced

which gene mutation are associated with which diseases

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Genomic sequencingIncreasing speed of developments

Sanger (capillary) sequencing

2020? ~1day?? $500

2005~3 years

~$ 20million

2010~1month$9,500

(Illumina)

AML

Mel

anom

aSm

all-c

ell

lung

Brea

st

2008~4 months

~$ 1.5million

Lung

(N

SCLC

)

Cancer Genomics

2000~10 years

~$ 3.5 billion

Mye

lom

a

Hepa

toce

llul

ar CLL

Mou

se A

ML

Next generation sequencing

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PatientsLikeMeNew communities for patient-led data sharing

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The New World of Connected Health

Pharmacy

Non-living things linked to living things

Smart wheelchair

RFID tags

Companion Robot

Mobile & apps

Wearables

Public Authority

Care Providers

Connected Health

Labs Smart Home

Smart Appliances

Environment

Weather Station

Air pollution sensor

Source: CitiSenseSource: wikimedia

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Technology makes the mission possible!

Machine LearningCognitive Computing

Text MiningVoice Mining

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Predictive Underwriting

Innovations in UnderwritingNew data sources (genetic data, behavior, wearables, etc.)

New tools and technology (text analytics, etc.)

Better Risk Assessment

Efficiency

Differentiator

Evidenced-Based

Underwriting

Automated Underwritin

g

Real-time. Personalized. Fast. Accurate. Transparent. Disruptive

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Evidence-Based Underwriting

Lab DataMedical Journals

Biomedical databases

Prescription Data

Information Exchange

Government Agencies

Wearable Device Data

Genetic Info

?

?

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Smoker Propensity Model

The model could be used to simplify application process

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Automated Underwriting

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New data sources and engagement mechanism create opportunities to insure the uninsurable

Beha

vioral

Econ

omics

Hea

lth

y Beha

vior

Unh

ealt

hy

Beha

vio

r

Unhealthy Healthy

Controlled

Educate & Motivate

Gamific

ation

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The way insurance is sold and engaged is ripe for disruption

Trends Risks Opportunities• Emergence of online market places and new ecosystems

• Increased adoption of internet & mobile-based channels

• Ubiquity of connected devices

• Behavior Economics

• Gamification

• P2P/ Blockchain

• Commoditize personal & small commercial risks

• Lose ownership of customer relationship

• Fail to secure partnership in the new ecosystems

Increase loyalty, reach, & differentiation by:

• Innovative bundled engagement services

• Better customer insight (granular segmentation) and personalized products

• Context-based / UBI/ On-demand solutions

• Simplification


What is happening in the insurance industry?

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Startups are invading insurance tech

X3 (2014-2015)In 2014, less than $700M in funding is for insurance tech. By Q3 2015, insurance tech startups have attracted more than three times as much funding. funding.

Funding to global insurance tech startups

VC investors

X7(2011-2015)Less than 50 investors in 2011. Through Q3’15, the number has jumped past 380. Key players in insurance tech space

120+ startups, VCs, corporate investors, accelerators

source: CBINSIGHTS

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Multiple tech giants have moved into insurance

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Increasing spending on evolutionary innovation

Legal & Compliance

Customer Management

Pricing, Risk Assessment and Selection

Distribution and Service Management

Innovative Products

Claims & Fraud Management

Opportunities

Source: Global Digital Insurance 2015, Bain

24%in life

27%in P&C

Average growth in annualized spending on

analytics

Corporate

Ventures

Innovation Labs/

Centres

Startup Deals

Partnership

Some re/insurers and intermediaries have made bold steps

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Disrupt or Not to Disrupt?“I think insurance is in the Stone Age while other people are circling Mars.”–Mark Wilson CEO, Aviva plc, October 2015

“(Insurance) is an industry that has been lagging behind every other industry –it has been paralyzed.Either you understand it and you move towards the forefront of change…or this industry will disappear.”–Mario Greco CEO, GeneraliGroup, May 2015

“Asia Ripe for Life Insurance Disruption” –Jay Walker, founder of Priceline.com

“In my previous life as a McKinsey consultant, I advised the top insurance companies on projects that were, at their core, incremental. They were always about increasing the productivity of the agent-based salesforce, or improving the efficiency of paper-based claims operations. In other words, what I was doing was putting the dinosaur on a diet and prodding it with a stick.” –Jennifer Fitzgerald, Founder & CEO, PolicyGenius

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Big Data is important for the insurance industry…… because insurance is an information based business!

Legal & Compliance

Fina

ncia

l

Operational

Ethical

Risks

Legal and Compliance

Data Business Model

Technology Skills

Foundation

Customer Management

Pricing, Risk Assessment and Selection

Distribution and Service Management

Innovative Products

Claims & Fraud Management

Opportunities

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Organization Key Capabilities to Capitalize Big Data


Thank you

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