Claims Corporation Network - International Insurance Forum 2017... · Connected Devices Available Prevention Potential Cause of Claims Risk Reduction Through Adoption of Smart Devices

Claims Corporation NetworkClaims Management in the ‘Digital Age’

Cees Werff, President & CEO

International Insurance Forum, 15th February 2017, Vienna, Austria

15 February 2017

InsurTech: Motor insurance digitalization in the CEE

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Claims Management in the ‘Digital Age’

The ‘Internet of Things’ has revolutionized many traditional markets…

….and many more (postal service, movies etc.), but also automotive industry (e.g. connected cars)

2 The Music IndustryA local record store and CDs: music is readily available on all sorts of platforms

3 Newspaper and Print MediaUsed to be primary source of information, now truly yesterday’s news

1 Travel AgenciesBooking a ticket, a hotel, a car: it is all done online with complete price transparency

4 (Electronic) RetailersOnline retailers have reshaped industry with low prices and free delivery

5 Taxi/Mobility marketTrend in behaviour to preferring paying for usage over ownership (less emotion)

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…. And The Digital Disruption Has Already Happened …….

• World largest taxi company owns no taxi’s (Uber)

• Largest accomodation providor owns no real estate (Airbnb)

• Largest phone companies own no telco infra (Skype, WeChat)

• World most valuable retailer has no inventory (Alibaba)

• Most populair media owner creates no content (Facebook)

• Fastest growing banks have no actual money (SocietyOne)

• World’s largest movie house owns no cinemas (Netflix)

• Largest software vendors don’t write the apps (Apple & Google)

• Best TPA’s owns no vendor service network (CCN)

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…and auto transformation will profoundly impact insurance as well...

Toda

yTo

mor

row

Futu

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• Car technology advances every day:• Telematics enabled policies• Software more advanced than air plane

• Changing altitude: ride sharing is becoming increasingly conventional

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• Importance digital services grows significantly

• Ride sharing has a rising impact on the automotive industry: estimated negative impact of 1% on unit sales in 2021

• Driverless cars will reduce the potential of traffic fatalities by 90%

• Battery costs expected to decrease by 60% • Up to 30% additional automotive revenue is

estimated to stem from data driven services and on-demand mobility(1)

(1) Currently cars are parked 92% of their lifetime

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…making InsurTech a top priority on executive board agendas

Technology Changes

• New options for customer interaction

• New ways of assessing and managing

risks & claims (Big Data, Internet of

Things)

• Challenging IT Legacy systems

Consumer Changes

• Shift to online channels: orientation,

comparison, review and actual

purchasing

• Increased need for consumer-centric

products

• Not willing to pay for face-to-face

services

Regulatory Changes

• Solvency II: requires substantial

investment in improving systems

• Conduct of business: trend toward

enhanced customer protection

• Data protection

New players will take over:e.g. Lemonade

Outsourcing non-core activities to ‘specialists’

How to keep ‘digital’ generation satisfied?

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Source: Insurance Europe

Gross written premiums (€bn) Nominal growth (%) 2013 2014 2015 2014 2015

Non-life 338 339 346 0.3% 2.4% Motor 133 130 133 -1.8% 2.2%Property 91 91 93 0.0% 1.9%General liability 33 34 36 1.6% 5.5%Accident 34 34 34 -0.1% 2.1%Other non-life 47 50 50 6.0% 1.7%

Benefits and claims paid (€bn) Nominal growth (%) 2013 2014 2015 2014 2015

Non-life 211 222 233 5.2% 4.3% Motor 99 100 103 0.2% 3.1%Property 57 52 55 -7.8% 4.4%Other non-life 55 70 75 27.5% 5.9%

Density (€) Nominal growth (%) 2013 2014 2015 2014 2015

Non-life 572 570 581 (0.3%) 1.9% Motor 225 220 223 -2.2% 1.4%Property 154 153 156 -0.6% 2.0%General liability 56 57 60 1.8% 5.3%Accident 56 57 60 1.8% 5.3%Other non-life 81 83 82 2.5% -1.2%

Non-life premiums have increased mostly driven by a surge of general liability premiums…

…and the average amount per capita spent on insurance (density) has risen as well…

…but benefits and claims paid outgrow both revenue metrics indicating lower profitability

…presenting an opportunity to lower benefits and claims paid…

…Digital Claims Management provides an opportunity for insurers to lower claims (preventive), and accompanying costs, and to serve customers more efficiently and satisfactorily…

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…but current online experience and satisfaction are relatively low…

• Legacy IT Systems Limit Agility

• Bias Toward Intermediated DistributionCha

lleng

es • Limited Innovation Focus

• Pressure on Investment Capacity

Insurance Lags Significantly in Customer Satisfaction With Online Experience Compared to Other Industries…

…With Satisfaction of Online Offering of Insurers Decreasing Past the Acquisition Stage

Average: ~7.3

4 28-25 -48 -49

Source: BCG digital satisfaction survey (March 2013), Morgan Stanley / BCG Global Consumer Survey (2014), Morgan Stanley Research

Net Promoter Score

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…whereby Millennials drive a change in customer preferences……Driving Changes in the Key Contributors to Customer Satisfaction with

Claims Experience in the Insurance IndustryThe Average Adult Population will

Comprise of >40% of Millennials(1) in 2020…

(1) Born between 1980 and 2000 (Source: US Census Bureau , Accenture, EY)

…Millennials’ expectations have been set by companies outside the insurance industry (e.g. Netflix, Uber) and thus they expect personalized, convenient, transparent and rapid service…

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…but the industry is at the brink of a technology-driven change…

• ‘Internet of Things’

• Telematics

• Disruptive threads

• Risk Selection

• Ecosystems

• Insurable risk pools

Connected Devices Available Prevention PotentialCause of Claims

Risk Reduction Through Adoption of Smart Devices

Home: Connected meters ~20 – 30%

Water leakage Active leakage detection devices ~70%

Fire Smart smoke detector ~70%

Theft Advanced alarm systems ~10 – 80%

Motor:

Poor drivingSafer driving & fraud detection through Telematics

~5%

False Claims ~10 – 20%

Current Risk/Losses


Future Potential Home Risks/Losses

40 – 60%Reduced Risk in Home

15 – 25%Reduced Risk in Motor

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…impacting the entire insurance value chain…

Product and Underwriting

Sales and Distribution

Policy Administration and Servicing

Claims Management

Enhance sales through marketing and digital online

front-end processes

-7.1pp

Better price policies through Big Data

-6.7pp

Optimise products and underwriting

processes through automation

-0.1pp

Support online sales through

digitally enabled distribution team

+1.1pp

Optimise policy administration and

servicing processes through

automation

-1.1pp

Improve fraud through Big Data

-1.5pp

Optimise process through automation

-1.2pp

Reduce reserves needed to cover claims volatility

through Big Data-0.1pp

Run modern IT systems and infrastructure -0.7pp

Optimise support functions through right sizing and automation -1.2pp

Combined Ratio (%)

Non Claims Expenses

Claims Expenses

99%

78-82%


…with an important role for claims management in achieving the potential cost savings by adopting technology…

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… but Claims Administration is largely based on the old ‘paper’ world

Claim Notification Damage Evaluation Settlement Closing & Recourse

Notification1

Estimation3

Settlement of Claim5 Billing & Payment6

Claim Opening2

Authorisation4

Recourse7

…The current claims process is not ‘lean’ and does not appeal to the ‘digital customer…

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…while technically digital solutions are already available….

Veris

k A

naly

tics

Fixi

co

…The claims industry lacks a platform that connects the different innovations already available…

…and many more smartphone and e-solutions for insurance products are being launched

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Take picture & Upload request

Receive quotes (within 24h)

Compare & Choose repair shop

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2

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Policy holder reports FNOL

Adjuster triages the claim with an appropriate response

Desk adjuster collaborates with policyholder using ClaimXperience

General Collaboration

Video Collaboration

Policyholder Self-Serve

Contents CollaborationContractor Collaboration

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…CCN provides overall solution for claims administration ….

… A transparent and efficient platform to manage your claims administration …

Claims Force One (NTT DATA)Claims Management System

Insurance Companies Agents Loss

AdjustersInvestigators

/ Stakeholders

Contractors / Repair

Professionals

Fast

, Eas

y &

Sim

ple

…Digitalisation of entire process + real-time access for all parties involved in the process

Insurance Customers

ClaimsSupport

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Claims management in the Digital Age

…. A platform that connects strong International Partners ….

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… more Innovative Digital InsurTech solutions on the horizon …. Road Mobility Service

• Usage Based Insurance solutions to support Driver Behaviour

• Policyholder will be supported locally

• Repair process through partnership program

Smart Home Service

• Policyholder choose partnership program over cash settlement

• Supplier receives list of required supplies

• Supplier outsource repairs to trusted contractors

Natural Catastrophe

• Use of drones in case of Earthquakes, floods & landslides

• Fast, Accurate, Save

• Ambulance drones to safe lives

• Inspection, survey, monitoring

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…and IoT developments will impact insurance spheres significantly…

Source: Publicly available information

• Cloud-based thermal imaging camera• Provides early fire detection by monitoring indoor

temperature• Its night vision recording feature also helps in

adding to home security

• Internet security solution• Protects customers’ home network and

connected devices (incl. e.g. thermostat and baby monitor) from cyberattacks by scanning for malicious activity

• Solar powered, autonomous robotic shade that tracks sunlight while acting as a speaker system

• Includes integrated camera for security• Also tied to other smart devices

• Detects levels of radon via temperature and humidity sensors

• Intelligent Personal Assistant• Able to provide people with more than 300

insurance terms and their definitions

• Intelligent Personal Assistant• Can potentially gather data

Fotric 123 Bitdefender BOX Shadecraft Sunflower

Airthings Wave Amazon Echo Google Home

…IoT devices provide better measurement and insights allowing better risk assessment and tailored product offering as well as ‘digital age’ service experience…

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…and provides the opportunity for you to join the digital revolution…

…Digital innovation happens fast, make sure you are not too late!

The ‘Facts’ CCN Contact Details

2 billion people are using a smartphone with internet connection. By the end of this decade, this will be 4 billion

Between ‘09 and ‘13 the mobile industry invested $ 1,800 billion in improving global telecom infrastructure

The download speed has increased 12,000x, while sending data still costs a few cents per megabyte

An average citizen uses his/her smartphone for two to four hours during each day. Teenager even substantially higher

Apple App Store and Google Play Store (OS on 82% of all smartphones) offer > 3 million apps

CEES WERFF

[email protected]+31 (0)6 1030 4927

NACHTWACHTLAAN 201058 EA AMSTERDAMWWW.CLAIMSCORPNETWORK.COM

CLAIMS CORPORATION NETWORK

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Road assist technology

• Continuous car condition and safety status monitoring

• Immediate post-crash reporting to centralised road assist centre

• Integration of this technology requires full service centres to assist drivers


…Volvo integrates safety features that affect the insurance market…Liability in autonomous mode

• Car manufacturers will force a change in the automotive value chain due to increasing high levels of integrated services

• Car manufacturers will accept liabilities and will enter insurance market (‘Trojan Horse’)

“Volvo will accept full liability whenever our cars are operating in autonomous mode”

Håkan SamuelssonCEO Volvo Cars

Safety assistance technology

• Fully operational technology decreases chances of impact and impact severity

• Will decrease the number of road-side accidents significantly

• Will improve road safety

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‘Future of Claims Management’

... TRANSFORM OPERATIONS TO MEET FUTURE NEEDS …

WELCOME IN THE 4TH. INDUSTRIAL REVOLUTION!

www.cla imscorpnetwork.com

info@cla imscorp.net

1058 EA, Amsterdam

Nachtwachtlaan 20 (Ringpark)

Claims Corporation Network

Documents

Claims Corporation Network - International Insurance Forum 2017... · Connected Devices Available Prevention Potential Cause of Claims Risk Reduction Through Adoption of Smart Devices