InsurTech / Insurance 2.0: Competing & …...Used a cloud-based software application with a monthly subscription fee (e g Microsoft Office) 36% 24% 16% 16% Paid for something with

InsurTech/Insurance2.0:Competing&CollaboratingInaDigitallyConnectedIndustry

October2017

2©2017Majesco.Allrightsreserved

PressureonInsuranceIndustry:DrivingNewExpectations,InnovationsandCompetition

INSURANCECOMPANIES

NEWINNOVATIONS

People

Changingcustomer

expectations

Psychology/

BehavioralEconomics

Changingcustomer

demographics

Impactsofeconomic

conditions

Shiftsinneedsand

riskprofiles

Technology

Pay-As-You-Need

InsuranceEnterprisePlatformSolutions

Emerging

Technologies

Explosionof

NewData

MarketBoundaries

InsurTechCompetitionfor

talentandcapital

NewCompetitorsand

ProductInnovation

Shiftingand

expandingChannels

Shiftingandchanging

MarketBoundaries

Source:Majesco2017FutureTrends– TheShiftGainsMomentum


DisruptionModel- DigitalRevolution

Silent

Boomer

GenX

Millennial

GenZ

INDUSTRIALAGE INFORMATIONAGE DIGITALAGE

Mainframe

Client-Server

PCs

Internet

SOA

Open-

Source

Cloud

Mobile

Apps

IoT

Wearables

Autonomous

Vehicles

Blockchain

Artificial

Intelligence

Teletype

Adding

Machine PunchCards

IBM305

RAMAC

Calculators

DefinedIndustryBoundaries

Single-PurposeProducts

CompetitionasZero-Sum

GameProducer+UserRoles

BusinessEcosystemsPlatforms

ConnectedMulti-Purpose

ProductsStrategic

CooperationUserasProducer,Co-creation

BuyingEconomy SharingEconomy

Revolutionary

CHAN

GEANDDISR

UPT

ION

Evolutionary

MarketS

hift

MarketS

hift

Innovation

Effectiveness

Efficiency

Automation


4

People

NewExpectations


Consumers:InsuranceNotEasyToDoBusinessWith

Source:MajescoTheRiseoftheNewInsuranceCustomer,TheRiseoftheSmall-MediumBusinessInsuranceCustomer


SMB:InsuranceNotEasytoDoBusinessWith

Source:MajescoTheRiseoftheNewInsuranceSMBResearch


BehaviorsandNewExpectationsImpactingInsurers

GenZ(1995-1999)Millennials(1977-

1994) GenX(1965-1976)

Pre-RetirementBoomers(1953-

1964)

Paidforsomethingwithacompany’sapp(egAmazon,Starbucks) 62% 63% 42% 30%Paidfortransportationthrougharidesharingservicel ikeUberorLyft 45% 49% 35% 29%Useafitnesstrackerl ikeFitbit,Garmin,etc 41% 46% 39% 34%Usedacloud-basedsoftwareapplicationwithamonthlysubscriptionfee(egMicrosoftOffice) 36% 24% 16% 16%PaidforsomethingwithApplePay,SamsungPayorsimilar 34% 35% 24% 11%Purchasedauto,home/renterorl ifeinsurancefromawebsite 31% 38% 22% 27%Owned/usedasmarthomedevicel ikeathermostat,smokedetector,etc(egNest) 30% 23% 16% 17%Boughtinsuranceforanitemoreventforaspecificperiodoftime(egcamera,vacation,wedding,etc) 23% 29% 21% 27%Usedanapporservicetomonitoryourhome(egRing,ADT,etc) 18% 16% 15% 15%Rentedsomeoneelse'sroomorhomethroughaservicel ikeairbnborVRBO 17% 23% 18% 17%Usedadeviceinyourcarthatrecordsdrivingusageandbehavior 17% 17% 11% 14%Useda3Dprinteroranitemproducedbyone 16% 10% 5% 4%Purchasedhealthinsurancethroughanonlineexchange 16% 11% 12% 13%Rentedacarthroughaservicel ikeZipcarorTuro 14% 6% 5% 3%Used/operatedadrone 14% 13% 8% 10%Workedasanindependentcontractor/freelancer 13% 17% 17% 20%Rentedoutyourownroomorhomethroughaservicel ikeAirbnborVRBO 10% 7% 2% 1%Boughtpetinsurance 10% 5% 7% 7%Workedasadriverforaridesharingservicel ikeUberorLyft 7% 4% 3% 1%Rentedoutyourowncarthroughacarsharingservicel ikeTuroorGetaround 6% 2% 2% 2%PaidforsomethingwithBitcoin 5% 2% 1% 0%Noneoftheabove 6% 5% 15% 16%

Source:NewUpcomingConsumerResearchReport


InterestinNew,InnovativeProducts&ChannelsRapidlyGrowingforConsumers

Alarge“swinggroupoftheyoungergenerations”accelerateadoption

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

GenZ GenY GenX Boomer Silent GenZ GenY GenX Boomer Silent GenZ GenY GenX Boomer Silent GenZ GenY GenX Boomer Silent GenZ GenY GenX Boomer Silent GenZ GenY GenX Boomer Silent

Getchargedforautoinsurancebased

onhowmanymilesyoudrive

Letyourautoinsurancepricebe

partiallybasedondatayousharefroma

devicethattracksyourdriving

performance

Haveinsuranceintegratedintothenext

car,house,orotheritemyoupurchase

– andnotpurchasedseparately

Letyourlifeorhealthinsuranceprice

bepartiallybasedondatayoushare

fromafitnesstracker

Letyourhomeorrentersinsurance

pricebepartiallybasedondatayou

sharefromaconnecteddevicelikea

thermostat,smokedetectororhome

securitysystem

On-demandinsurance- Buyinsurance

foraspecificitemorevent(likearental

car,cameraoratrip)forasetperiodof

time(likeanhouroraday)whenever

youneeditVeryLikely5 4 SwingGroup

Paypermile BehaviorBased PreventionLifestyle&

BehaviorBundled

On-Demand

Source:TheRiseoftheNewInsuranceConsumerResearch


InterestinNew,InnovativeProducts&ChannelsRapidlyGrowingforSMBs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1-9

employees

10-99

employees

100-499

employees

1-9

employees

10-99

employees

100-499

employees

1-9

employees

10-99

employees

100-499

employees

1-9

employees

10-99

employees

100-499

employees

1-9

employees

10-99

employees

100-499

employees

1-9

employees

10-99

employees

100-499

employees

Getchargedforautoinsurancebased

onhowmanymilesyoudrive

Joinagroupofotherbusinessesto

sharethecostsofinsurancepremiums

andsmallclaims,butalsosharerebates

ifthegroupdoesn’tfileanyclaimsina

year

Buyservicesthatpreventaccidentsor

claimsinsteadofbuyinginsurancethat

paysyouafteryou’vehadanaccidentor

claim

Letyourcommercialpropertyinsurance

pricebepartiallybasedondatayou

sharefromaconnecteddevicelikea

thermostat,smokedetectororhome

securitysystem

Letyourautoinsurancepricebe

partiallybasedondatayousharefroma

devicethattracksyour/employees’

drivingperformance

On-demandinsurance- Buyinsurance

foraspecificitemorevent(likearental

car,cameraoratrip)forasetperiodof

time(likeanhouroraday)whenever

youneedit

VeryLikely- 5 4 SwingGroup- 3

Alarge“swinggroup”couldgreatlyaccelerateadoption

Paypermile P2P PreventionConnected

property

Payhowyou

driveOn-Demand

Source:TheRiseoftheNewInsuranceSMBResearch

10

Technology

NewInnovations


AdvancesinTechnologyCreateChallengesandOpportunitiesAutonomousVehicles• PremiumDecline

• EmbedinsuranceinSubscription

• RentalFleets

• CommercialFleets

Cognitive/AI• DigitalIntelligence

• CustomerEngagement

• Game-changingknowledge

• Learn&adapt

• Talentexpansion

InternetofThings• Vehicle

• Property

• Safety

• Rehab/Recovery

AlternativePayments• Mobile(ApplePay)

• PayPal

• MessengerServices

• Bitcoin

Drones• Underwriting

• Claims

• Vehicle&Property

• CatEvents

Blockchain• Commercial&Wholesalemarkets

• Reinsurance&LondonMarketConsortiums

• USMarket– TheInstitutes Consortium

Chatbots/Robotics• 80%businessuseby2020

• Newnativeapp&replace“mobileapps”

• Robo Advisors/Agents


Virtual/AugmentedReality• Claims

• LossControl

• Rehab/Recovery


• Training



ExplosionofDataOffersChallengesandOpportunities

Source:MajescoWinninginaNewAgeofInsurance:InsuranceMoneyball


RiseofthePlatformEconomyPlatforms:DisruptiveForceRedefiningBusinessModels,Industries,Economies,&Society

Source:UpcomingCloudBusinessPlatformReport

14©2017Majesco.AllrightsreservedSource:NewUpcomingConsumerResearchReport

NewInnovationsAttractivetoConsumers

15©2017Majesco.AllrightsreservedSource:NewUpcomingSMBResearchReport

NewInnovationsAttractivetoSMBs

16

MarketBoundaries

NewCompetition


BlurredIndustryandLOBBoundariesFocusonCreatingCustomerValue+LeveragingEcosystems=NewBlurredInsuranceOfferings

Life/Health

Wellness

Mobility&Safety

SmartProducts,PhysicalAssets,Facilities&Infrastructure

Source:UpcomingCloudBusinessPlatformReport


Multi-ChannelDominates

Consumersrelyonmultiple

sourcesandchannels

Businessesusemultiplesourcesand

channels– particularlylargerones

Source:TheRiseoftheNewInsuranceCustomerandSMBResearch


LiveInteractionandMulti-ChannelDominateBuyingProcess

Consumers

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Bankrepresentative+Face-to-face

Insurancecomparisonservice/website+

Website

Insuranceagent/broker+e-mail

Insurancecompany+Website

Insurancecompany+Face-to-face

Insuranceagent/broker+Phone

Insurancecompany+Phone

Insuranceagent/broker+Face-to-face

65%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Accountant/Taxadvisor+Website

Employeebenefitsbroker+Phone

Accountant/Taxadvisor+Face-to-face

Insurancecomparisonservice/website+…

Insuranceagent/broker+Website

Employeebenefitsbroker+Website

Employeebenefitsbroker+E-mail

Non-insurancecompany+Phone

Insurancecompany+E-mail


Insuranceagent/broker+Videochat

Insurancecomparisonservice/website+…


Bankrepresentative+Phone

Employeebenefitsbroker+Face-to-face

Insuranceagent/broker+E-mail



Source+ChannelPurchaseCombinations- AllPolicyTypes

55%

SMBs



RenewalsShift

Consumers- moreimpersonal

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Insuranceagent/broker+e-mail

Insuranceagent/broker+Website

Insurancecomparisonservice/website+

Website


Insuranceagent/broker+Mail




Insurancecompany+Mail

Insurancecompany+Website

48%

0% 5% 10% 15% 20% 25%

Employeebenefits

broker+Face-to-…

Insurancecompany

+Mail

Insurancecompany

+Face-to-face

Insurance

agent/broker+Mail

Insurancecompany

+Phone

Insurance

agent/broker+E-…

Insurancecompany

+Website

Insurance

agent/broker+…

Insurance

agent/broker+…

Source+ChannelRenewalCombinations- AllPolicyTypes

63%

SMBs- moreimpersonal



ConsumerInterestinNewOfferings

P2P AI+mobileapp On-demand+individualitems Onlinelife1 Onlinelife2



ComparisontoCurrentInsurer:Consumers

GenZ(1995-1999) Millennials(1977-1994) GenX(1965-1976)Pre-RetirementBoomer

(1953-1964)

Iseasiertouse? 2.50 2.55 2.54 2.46

Iseasiertounderstand? 2.31 2.50 2.58 2.33

Meetsyourneedsbetter? 2.69 2.72 2.80 2.68

Iseasiertouse? 2.93 2.65 2.35 2.26



Iseasiertouse? 2.91 2.76 2.53 2.31



Iseasiertouse? 2.91 2.84 2.71 2.40



Iseasiertouse? 2.78 3.07 2.99 2.84



P2P

AI+mobileapp

On-demand+individualitems

Onlinelife1

Onlinelife2


23

IndustryResponse


IndustryPressuresandtheKnowing– DoingGap

NEWINNOVATIONS

� �Paceofchange

� �Emergingtech

� �Customerexpectations

� �Businessmodels

� �Competitionfrom

outsidetheindustry

� �Digital

� �Legacysystems

� �Data&Analytics

� �Security

� �Talent

Hits

� �Competitionfrom

insidetheindustry

Misses

KNOWING

Whatcompaniesare

worriedabout

PLANNING

Whatcompanies’

prioritiesare

DOING

Companies’responsesto

changingmarket

� �Customerexperience

� �Digitalstrategy

� �Productinnovation

� �Channelexpansion

� �Legacyreplacement

� �Data&Analytics

� �Costreduction

Hits

� �InsurTechengagement

Misses

� �Businessmodeldev.

� �Newmarketsegments

� �NewLOBs

Borderline

� �Productinnovation

� �Channelexpansion

� �Legacyreplacement

Hits

� �Sharingeconomy,Techforwell-

being,Gigeconomy,Healthcare

� �Chatbot,Payments,AI,

Wearables,Blockchain,Drones,

Gamification,Connectedcars

&homes,Driverlesscars,

3Dprinting

Misses

� �Customerexperience

� �Businessmodeldev.

� �Demographics

Borderline

REALITY

� �“New”Issues

� �“Traditional”Issues

Source:Majesco2017StrategicInitiatives:Knowingvs.Doing


ResponsetoTechnologyTrends…isWeak


ResponsetoBusinessTrendsBetter…ButNotGreat

26

ThePathForward


DigitalAge– DrivingaRevolutionofDisruptionandChange

INDUSTRIALAGE INFORMATIONAGE DIGITALAGE

RevolutionaryEvolutionary

Insurance2.0BusinessModeldesignedto

supportanewmarket,

technologyanddemographic

assumptionsforGenZ,

Millennial&someGenX

Insurance1.0BusinessModeldesignedto

supportatraditionalmarket,

technologyanddemographic

assumptionsforSilent,

Boomer&someGenX

NEWIN

NOVA

TIONS

Knowing

Planning

Doing

Source:UpcomingCloudBusinessPlatformResearch


DigitalInsurance2.0Platform

APPSDISTRIBUTION&INTEGRATION

SYSTEMSOFRECORD(CORE)

SYSTEMSOFINSIGHT

(DATA&ANALYTICS)

SYSTEMSOFENGAGEMENT(DIGITAL)

CUSTOMERJOURNEYS MOBILE

ATOMICAPICLOUD

OPTIMIZED

REGULATORY IOT

SOCIALLOCALIZATION

CONTENTPartnerDigitalEcoSystems



Yin-YangofCoreInsuranceandInsurTech

yin-yang (�� )describehowseeminglyoppositeorcontraryforcesmayactuallybecomplementary,interconnected,andinterdependentinthenaturalworld,andhowtheymaygiverisetoeachotherastheyinterrelatetooneanother.

SEEMINGLY

OPPOSITES

CORESYSTEMS INSURTECHS

• SUPPORTSTRADITIONALBUSINESSMODELS

• PROCESS/TRANSACTIONORIENTED

• BACKOFFICESYSTEMS

• DEEPINSURANCEROOTS

• SUPPORTSNEWBUSINESSMODELS

• ANALYTICS/ENGAGEMENTORIENTED

• FRONTOFFICESYSTEMS

• DEEPTECHNOLOGYROOTS

COMPLEMENTARY

INTERCONNECTED

INTERDEPENDENT

• CUSTOMERFOCUSEDOPERATIONALLYEFFICIENT&COMPLIANT

• FUSIONOFTECHNOLOGYANDINSURANCE– EFFECTIVESOLUTION

• SUPPORTFORTRADITIONAL&NEWINSURANCEBUSINESSMODELS

FUSIONOFCORESYSTEMSANDINSURETECHSARESHAPINGDIGITALINSURANCEPLATFORMS



RacetotheFuture– ThePathForward

MARKETD

RIV

ERS

Modernization/

Transformation

Programs&Cloud

Keep&GrowExistingBusiness-

Transform&replacelegacy

Optimizeexistingbusinesswhile

creatingnew

DigitalFront-End

andEngagement

NewBusinessModelforNew

GenerationofBuyers

Greenfield&

StartupInitiatives

4x

17x

3x

1.5x

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Expanded/wereexpanding

channels

Developed/weredeveloping

newbusinessmodels

Developed/weredeveloping

newproducts

Replaced/werereplacing

legacysystems

%whosaidtheircompany…

CompaniesthathadLowerGrowthinpastyear(1-6) CompaniesthathadHigherGrowthinpastyear(7-10)



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Documents

InsurTech / Insurance 2.0: Competing & …...Used a cloud-based software application with a monthly subscription fee (e g Microsoft Office) 36% 24% 16% 16% Paid for something with