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NEXT GAME CHANGER IN INSURANCE:
THE INTERNET OF THINGS
Jinwei Zhang
Senior IoT Solution Manager, Huawei
2
“Internet +” or “+ Internet” …
3
X + IoT = New Possibilities
Sharing Economy
33 Major Cities
1M Bicycles
17M Active Users
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
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
6
How can IoT Make a Difference?
data data data data data data …
7
The key Question…
Does it matter to Insurance?
8
How Insurance works today?
Choose
MKT
Product
DesignPricing &
UnderwritingClaimDistribution
9
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
10
How can IoT make a difference? – Pricing & Underwriting
More real-time
More data dimensions
Dynamic
Pricing
Strategy
11
How can IoT make a difference? – Distribution & Claim
Agent Channel Direct Channel
Damage Estimation
Simplify claim process
Improve claim efficiency
Decrease intermediary cost
INSURERINSURER
12
How can IoT make a difference? – Customer Experience
Customer touch points of motor insuranceCustomer touch points of motor insurance redesigned by telematics
13
Innovators adopted IoT in different sectors of Insurance
Car Insurance Health Insurance
Home Insurance Captive Insurance
Afterwards compensation beforehand prevention
14
Every thing is about Business Case!!!
Technology is ready, but…
15
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.)
16
UBI Value for End Customers
Driving
Behavior
Improvement
Accident
Reduction
Premium
Reduction
~15%~40%~60%
Pay As You Drive
Pay How You Drive
17
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)
18
UBI Per customer Business Case Study
Before UBI After UBI
Customer Life Time Value Change Break-down
Value increase items Cost increase items
19
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
20
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
21
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
22
Gamification Designed APP for End Consumer
Build Comm. channel between two parties
23
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
24
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:
25
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
26
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
②
③
Evacuate
immediately
④
Dispatch
fireman
28
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
29
…
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
30
New Possibilities
How to embrace this era?
INTERNET of
THINGSInsurance
Home vehicle
LifeCaptive
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