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NEXT GAME CHANGER IN INSURANCE: THE INTERNET OF THINGS Jinwei Zhang Senior IoT Solution Manager, Huawei

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Page 1: NEXT GAME CHANGER IN INSURANCE: THE INTERNET OF THINGSiizim.co.zw/wp-content/uploads/2018/02/NEXT-GAME... · Send alarm to Mobile & monitor center Win the time for life escaping &

NEXT GAME CHANGER IN INSURANCE:

THE INTERNET OF THINGS

Jinwei Zhang

Senior IoT Solution Manager, Huawei

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2

“Internet +” or “+ Internet” …

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X + IoT = New Possibilities

Sharing Economy

33 Major Cities

1M Bicycles

17M Active Users

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4

Africa is Changing with IoT as well

• UBI in South Africa

• Kick off in 2011, 145K users in 2016

• Great claim ratio and cost reduction

• AMII in Nigeria

• More revenue collection and

cash flow improvementMarket Penetration Rate

Mark

et

Gro

wth

Rate

0%

FMS

UBI

Smart

Water

Smart

Home

AMI

Car

Tracking

AMI

20%

50%

200%

Smart

Geyer

Star

Cash Cows Dogs

Question Marks

wearable

Gas

Meter

Animal

M2M

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5

What is IoT?

NB-IoT2/3G/LTEFTTx AR5G

IoT Platform

BigDataCloud Intelligence

Intelligence

Society

Industry 4.0 Smart Home Connected CarUtility

ALL Things

Sensing

ALL Things

Connected

ALL Things

Intelligence

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6

How can IoT Make a Difference?

data data data data data data …

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The key Question…

Does it matter to Insurance?

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How Insurance works today?

Choose

MKT

Product

DesignPricing &

UnderwritingClaimDistribution

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How can IoT make a difference? – MKT & Product

✓ More data to support MKT STP and Mix

✓ More data to innovate product design

✓ Expand product portfolio

✓ More possibilities for VAS

✓ Cooperation with more partners

Vertical marketing Lateral marketing

MKT

requirements

Products

MKT

Mix

Niche market

+ Data analysis

+ Sensor,

+ Intelligence,

+ Mobile APP

+ Intelligence,

+ Social media

Make market

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How can IoT make a difference? – Pricing & Underwriting

More real-time

More data dimensions

Dynamic

Pricing

Strategy

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How can IoT make a difference? – Distribution & Claim

Agent Channel Direct Channel

Damage Estimation

Simplify claim process

Improve claim efficiency

Decrease intermediary cost

INSURERINSURER

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12

How can IoT make a difference? – Customer Experience

Customer touch points of motor insuranceCustomer touch points of motor insurance redesigned by telematics

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Innovators adopted IoT in different sectors of Insurance

Car Insurance Health Insurance

Home Insurance Captive Insurance

Afterwards compensation beforehand prevention

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Every thing is about Business Case!!!

Technology is ready, but…

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What is UBI?

+

Driving Data

Harsh acceleration/braking/

turn, over speeding, fatigue

driving…

Mileage, time…

Driving behavior

Driving data

Location data

Dangerous road / area

Real-time location…

Driving risk evaluation data

Accident rate, compensation cost

Personal/Insurance Profiles

Driver basic Info

Vehicle type, price, age…

Gender, age, driving age,

occupation, address…

Vehicle basic Info

Insurance Info

Illegal driving Info

Traditional risk evaluation data

A. PAYD=Pay As Your Drive

(mileage and time)

B. PHYD=Pay How Your Drive

(drive behaviors)

C. PWYD=Pay Where & When Your Drive

(drive behaviors, driving road, driving

time, etc.)

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UBI Value for End Customers

Driving

Behavior

Improvement

Accident

Reduction

Premium

Reduction

~15%~40%~60%

Pay As You Drive

Pay How You Drive

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Benefits of UBI for Insurers

Better

Customer

Engagement

Reduce

Claim Cost

Improve

Customer

Retention

Improve

Operation

Efficiency

Reduce Fraud

&Theft

15% reduction in churn.

Avg customer lifetime increased from 6 to 7 years

30% less claim cost in young clients

Claim rate reduced to half

Avg customer life time increased by 20%

Reduced claim frequency by 75%

in young driver segment(Claim from 1 in 5 in first 6 month to 1 in 20)

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UBI Per customer Business Case Study

Before UBI After UBI

Customer Life Time Value Change Break-down

Value increase items Cost increase items

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Shanghai Unicom Smart Parking Yingtan Smart Street Light

Sinopec Jiujiang Smart FactorySchindler IoEE MTN UBI

Telefonica Smart Home

Shenzhen Smart Water

ofo Bicycle Sharing

More…

Haier Intelligent Air ConditionerDHL Smart Post Box

Unitel Internet of Goats

Nigeria AMI

Huawei is Driving Verticals to Digitization using IoT

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Huawei Connected Car Solution for UBI

Data Collection

Data report

Network Connected Car Platform

• Report driving behaviors, location, time and driving score data

Data Processing

GPS Time, Longitude, Latitude, Height,

Direction

Location module

X/Y/Z acceleration

sensorX.Y.Z Three acceleration value

OBDCANBUS/

• Instrument speed / engine speed /

Coolant temperature / air flow rate

/ Intake manifold absolute pressure

• Fault code

• Accelerator pedal position(%)

• Fuel input (%)

• Specific fuel consumption(L/h)

Harsh acceleration

Harsh deceleration

Harsh turning

Harsh braking

• B2B insurance

OBD SIM Card

+• B2C insurance

Insurance Premium and Rewards Program

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OBD for End Consumer – Easy Installation, Full Data

GPS module

Plug-&-Play Installation

Standard OBD II Compliant

Tri-axis motion sensor

OBD dongle

WiFi hotspot support

Micro-SIM card

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Gamification Designed APP for End Consumer

Build Comm. channel between two parties

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Portal for Insurer – Valuable Data and Analytics

Process of data mining

Calculate averageIdentify Driver

behavior risk level

Personalized differential pricing

Price depends on driving behavior

Customer Clustering Remark

Negative value customer The highest proportion of

compensation

Low value customer Needs to be caution

Medium value customer Main customers

High value customer Keep maintaining

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Reference: 14.69% Retention Increase for Sunshine China

Sunshine insurance started the UBI pilot in Q1 of

2015, and launched the UBI solution in Q4 of 2016.

Key Results:

• Risk factor based driving score regarding automobile damage

insurance differs about 1.5 times.

• Risk factor based driving score regarding third-party insurance

differs about 2 times.

✓ Hardware binding rate: 97.35%

✓ Average hardware online rate (monthly): 92.29%

✓ App active rate (monthly): 86.65%

✓ Average loss ratio: 48.24%

✓ Average loss ratio of users over 80 scores: 29.78%

✓ Renewal rate increase: 14.69%

3 commercial launches in China:

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Huawei Smart Home Solution

Smart

Lock

Smart lamp

curtain

controller

Smart PlugOne Button Flooding Smoke CameraThermostat

Home GW

Partner

Surveillance

Security

Automation

Energy Management

Entertainment

Partner

IoT Platform

Zigbee/Z-wave

Wall plugDoorBell

MultiSensor Siren

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Home Protect: Actively decrease the lost of hazard

Smoke

sensor

Send alarm to

Mobile &

monitor center

Win the time for life

escaping & firefighting

Detect smoke①

Evacuate

immediately

Dispatch

fireman

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Huawei Connected Livestock Management Solution

Grow GTM

IoT

Temperature, Sport activities, Location…Exporting

Farm

Government

Disease

Early-warning

If find Temperature and sport activities

are abnormal, notify government to

handle

E-Quarantine

Meat’s Information is online, custom can

get any information from IOT, also can

be traceable

Scan

Get everything

Scan QR of meat, know the anything of these meat.

Green MeatMedical Meat

80 CNY/Kilo 142 CNY/Kilo

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Cooperate with Global Vendors Cultivate Local Ecosystem Offering to Vertical

Module

Utilities

IoVehicle

Smart

Wearable

Smart City

Logistics

Smart Home

Smart

Agriculture

Manufacturing

=

Smart Home

Smart Parking

Smart Metering

IoVehicle

………

Huawei LiteOS | Chipset | Module

2G/3G/4G/NB-IoT Home Gateway/Agile Gateway

Huawei IoT Offering

‘GLocal’ Ecosystem Empowers ‘IoT as a Service’

IaaS / PaaS

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New Possibilities

How to embrace this era?

INTERNET of

THINGSInsurance

Home vehicle

LifeCaptive

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Copyright©2015 Huawei Technologies Co., Ltd. All Rights Reserved.

The information in this document may contain predictive statements including, without limitation, statements regarding the future financial

and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and

developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for

reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.

Thank you