XVI SemPRe - Seminário Português de Resseguro, Lisbon, 24 September 2019Dr. Evangelos Avramakis, Head Digital Ecosystems R&D, Swiss Re Institute, Zurich

Emerging digital ecosystems and their impact for insurers

Digital Ecosystems

Access publication:Digital ecosystems: extending the boundaries of value creation in insurance

2

Japan Tsunami 2011

3

what was the

jobto be done?

(no telecom network available)

Source: Jones David (18.03.2011) 'We have been betrayed': Mayor of town near stricken Japanese nuclear plant claims his people have been 'abandoned’, Dailymail.co.ukImage Source: AFP Getty Imageshttp://www.dailymail.co.uk/news/article-1367208/Japan-tsunami-earthquake-Mayor-claims-people-abandoned.html

4

The potential solution was already here…

….but did not fit to the customer’s infrastructure (no windows messenger app)

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Line's messaging service was launched in 2011 by the Japanese unit of South Korean Internet service provider NaverCorp. after the quake-tsunami tragedy damaged telecoms infrastructure nationwide, forcing millions of people in Japan to resort to online resources to communicate.

Source: Agence France-Presse (04.08.2014) From Tsunami Lifeline to Listing, Chat App Line Sends Message to Rivals, gadgets.ndtv.comhttps://gadgets.ndtv.com/apps/features/from-tsunami-lifeline-to-listing-chat-app-line-sends-message-to-rivals-570291

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Viber (12/2010)

viber.com

WeChat (01/2011)

blog.wealthfront.com

Line (03/2010)

line.me

SnapChat (09/2011)

snapchat.com

Bought by Rakuten

for

0.9bn

USD

worth

>500bn

USD

IPO 2016worth

9 bn

USD

IPO 2017worth

33bn

USD

7

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Source: Typology Eyewear (Company Website) accessed 05.02.2019

www.topologyeyewear.com

https://itunes.apple.com/US/app/id1110119242

AR supported personalized eyewearStyle and preview your custom-tailored glasses

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Source: Genevieve Scarano (02.03.2019) You Can Virtually Try On Sneakers With This Cool App – Geek.com

https://www.geek.com/tech/you-can-virtually-try-on-sneakers-with-this-cool-app-1772785/

https://wanna.by/

https://itunes.apple.com/us/app/wanna-kicks/id1444049305?mt=8

on demandexperiences

10

11Source: Andreea Conway (22.07.2012) Audi with its new digital car showroom. auto-types.com

https://www.auto-types.com/autonews/audi-with-its-new-digital-car-showroom-8986.html

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Insurance crash experience (Australia)

Source: Lui Gough (24.03.2014) Visited: NRMA Crashed Car Showroom. Goughlui.comhttps://goughlui.com/2014/03/24/visited-nrma-crashed-car-showroom/

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…so it’s not all about TECHNOLOGY?

Source: Videvo

reducing customer

effortreducing customer

timereducing customer

costs

Source: Teixeira, T. S., & Piechota, G. (2019). Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption. Broadway Business

Video source: Pexels.

…it’s all about the customer experience !

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What needs to get fixed in the insu-rance industry

1Customer journey & experience as key driver in digital sales

2From digital products, to platforms, to ecosystems

3

Agenda

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45

0

40

35

30

25

20

15

10

5

Source: Hakim A et al. (1998) - Effects of walking on mortality among nonsmoking retired men. New England Journal of Medicine, 338(2), 94-99.

Onlineretailers

Local retailstores

National retailstores

Streaming TV /video/

music service

Mobile phone

providers

Credit card rewards/

frequent flyer programs

Banks Cable TV providers

InsuranceAuto or Home/Renter

InsuranceLife or

Annuity

Insurance as an industry might just be too complex for consumers!The Challenge: Complexity

Percentage of consumers who say these businesses’ products are easy to understand

~400~120~110~70~50~15~4~3~2 ~400~120~110~70~50~15~4~3~2

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The engagement gap in the Financial Services industry

Average interactions per year

>7'500

2'300-2'5002'100-2'300

1'400-1'600

800-1'000

LifeInsurance

Technology companies

Social media

Non-lifeInsurance

MotorInsurance

HealthInsurance

Retail Telco Banking

1 Adapted from: Berger-de Leon M. et all. (2016) McKinsey - Transforming life insurance with design thinking

30-50270-300

70-9060-70

The Challenge: The engagement

Estimated average number of customer contacts over 20 years1

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New competition arriving – this time from outside!…and a significant number considering introducing AI services

Aggregators Start-Ups“Challengers”

Intermediaries

Banks / Insurers

TechPlayers

Established market players New entrants

customers

The Challenge: New competition arriving

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Insurance already insideBusiness Insider (02.09.2016) - Tesla is planning to offer custom insurance planshttp://uk.businessinsider.com/tesla-is-planning-to-offer-custom-insurance-plans-2016-9

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B2CTRŌV DIRECT TRŌV EMBEDDEDTrōv’s flagship on-demand insurance application

B2B2CTRŌV PRIVATE LABEL Private labeled apps and web front ends for insurers (B2B2C)

B2BTRŌV PRODUCT LINEAPI accessed services offered from the platform, embedding Trōv capabilities

Source: Dowds M, Chief Strategy Officer Trov, Instech London, BT Center 20 June 2017http://www.instech.club/

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Airbnb's Host GuaranteeFree property damage protection of up to $1 million USD for every

listing

Experience Protection InsuranceFree liability insurance of up to

$1 million USD for most experiences

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APIs als the new golden standard:i.e. Lemonade API

Commerce Real Estate Marketplaces

Financial Service

Smart Home Security

Insurance As as Service (IaaS)

Everything Else

Adapted from: Lemonade.com (28.05.2018) https://www.lemonade.com/api

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NPS

70Renewal rate

97%Source: Lemonade Blog (20.06.2018) We suck, sometimesttps://stories.lemonade.com/lemonade-transparency-review-blog-eced69282ac8

the original the copy

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Healthcare and Health Insurance shakeup - big tech is preparing

Company

Strengths • Google Cloud Platform

• Al - Cloud infrastructure

• Oscar Health investment

• Verily Life Sciences

• AWS• Alexa• Supply delivery

• iPhone consumer base

• Apple Watch • App Store

frameworks

• Azure• Healthcare NExT• Microsoft

Genomics

Opportu-nities

• Personalized, low cost health insurance2

• Population health• Precision medicine• Clinical decision

support

• Personalized, low cost digital health insurance1

• Medical supply services

• Personalized health benefits

• Personalized health insurance

• Remote patient monitoring

• mHealth

• Population health• Precision medicine• Clinical decision

support

Source: Laurie Beaver (19.07.2018) BIG TECH IN HEALTHCARE: How Alphabet, Amazon, Apple, and Microsoft are shaking up healthcare — and what it means for the future of the industry. Business Insider

https://www.businessinsider.com/alphabet-amazon-apple-and-microsofts-influence-in-healthcare-2018-7?r=US&IR=T

1 Susan Morse (08.02.2018) What the Amazon, Berkshire Hathaway, JPMorgan deal means for payers. Healthcare Finance News

2 Lydia Ramsey & Zachary Tracer (26.03.2019) $3.2 billion startup Oscar Health is plotting its expansion into new states as it moves into a competitive insurance plan market. Business Insider

Source: Mike Peterson (04.05.2018) 7 Times an Apple Watch Helped Save Someone’s Life. Idropnewshttps://www.idropnews.com/news/apple-watch-news/7-times-apple-watch-helped-save-someones-life/70824/10/ 25

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Apple’s Watch can detect an abnormal

− heart rhythm with 97%1

− sleep apnea with 90%1

− diabetes with 85%1

− hypertension with 82%2

− AFib with 98%3

accuracy!

Source: 1 Tison, GH et al. (2017). Cardiovascular Risk Stratification Using Off-the-Shelf Wearables and a Multi-Task Deep Learning Algorithm, 2 Ballinger B et al. (2018) DeepHeart: Semi-Supervised Sequence Learning for Cardiovascular Risk Prediction, 3 Stanford (2018) Apple heart study

Afib = atrial fibrillation

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28Source: Lilla Laczo (05.11.2019) Top 5 HIIT Apps You Should Download For 2019. Shapescale.comhttps://shapescale.com/blog/fitness/top-3-hiit-apps-download/https://healthsolutions.fitbit.com/

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Source: https://lifesum.com/

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What needs to get fixed in the insu-rance industry

1Customer journey & experience as key driver in digital sales

2From digital products, to platforms, to ecosystems

3

Agenda

31

Source: Realotyeditor.org (2017) A Web-Based Tool for Controlling the Physical World (accessed: 12 June 2017)http://realityeditor.org/

Interactions beingdynamicallygeneratedthrough AI

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Sources: Modiface.com

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Source: Amanda Cosco (19.03.2018) L’Oreal acquires Toronto-based Modiface. Electricrunway.com

https://electricrunway.com/loreal-acquires-toronto-based-modiface/

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in % of total)

Source: AT Kearney (2017) Beauty and the E-Commerce Beasthttps://www.atkearney.com/retail/article?/a/beauty-and-the-e-commerce-beast

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Source: Kyle Wiggers (04.06.2019) Amazon and L’Oréal let you digitally try on makeup. VentureBeat.comhttps://venturebeat.com/2019/06/04/amazon-and-loreal-let-you-digitally-try-on-makeup/

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Do you know these brands?

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Mobile E-Commerce shopping apps – most active users (combined iPhone and Android, Q1 2019)

Source: App Annie (20.05.2019) What You Need to Know About Southeast Asia’s Growing M-Commerce Landscapehttps://www.appannie.com/en/insights/market-data/southeastasia-mcommerce/

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Portugal, Apple Store (Top apps, 12 September 2019)

Sources: Similarweb (12.09.2019)https://www.similarweb.com/apps/top/apple/store-rank/pt/social-networking/top-free/iphone

naturaltouchpoints

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Source: Whysker Blog (09.01.2018) Neural Networks at wyskerImage sources: https://steemit.com/machine-learning/@wysker/neural-networks-at-wyskerhttps://medium.com/wysker/the-wysker-app-play-discover-shop-76a8c59e7768

40Source: Ramotion (2016) Car Control - App Interface: in User Interface Design on Jan 28, 2016https://dribbble.com/shots/2487806-Car-Control-App-Interface

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Source: Marina Yalanska M. et al. (2018) Case Study: Tasty Burger. UI Design for Food Ordering Apphttps://tubikstudio.com/case-study-tasty-burger-ui-design-for-food-ordering-app/(accessed 20.04.2019)

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Fluid and smart interfaces

Source: Ramotion (2016) Car Control - App Interface: in User Interface Design on Jan 28, 2016https://dribbble.com/shots/2487806-Car-Control-App-Interface

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on demandexperiences

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Global InsurerSwitzerland (09.04.2018)

[ins.]

Global InsurerUK (09.04.2018)

[insurance]

Global InsurerItaly (09.04.2018)

[ins.]

Global InsurerGermany (09.04.2018)

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Snapsuresnapsure.de

Wealthfront.comblog.wealthfront.com

Tubikhttps://dribbble.com/Tubik

Oscar Healthmedium.com/oscar-tech70% (re)insurers believe they are failing to meet customer expectations

not meetingexpectations

meetingexpectations

don’t know

70%20%

10%

Source: Audi (30.08.2017) Audi launches Virtual Reality technology in dealerships

https://www.audi-mediacenter.com/en/press-releases/audi-launches-virtual-reality-technology-in-dealerships-9270

A variety of IoT and AI start-ups are developing solutions for the generation contextual and behavioural insights

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context360.com theneura.comsentience.com

47GPS

Motion/Acceleration

Gyroscope

Sentiance delivers insights into consumer behaviorhttps://itunes.apple.com/be/app/journeys-2/id984087229?mt=8 48

Sentiance delivers insights into consumer behaviorhttps://itunes.apple.com/be/app/journeys-2/id984087229?mt=8 49

Sentiance delivers insights into consumer behaviorhttps://itunes.apple.com/be/app/journeys-2/id984087229?mt=8 50

Cuvvacuvva.com

Carrotwww.carrotinsurance.com

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Rootwww.joinroot.com

InsureAppinsureapp.com

Visit onWebsite

Fingerprint

Tweet onProduct

Social Mapper

View add onInstagram

Social Mapper

User onLinkedIn

Social Mapper

Comments on Facebook

Fingerprint + SM

Facebook could collect 25% of an average user’s browsing history by linking website cookies with the Facebook account!

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Facebook use webFacebook accountwidgets are embedded in various sites around the web, and will send the address of the page you are viewing along with your Facebook cookie, enabling Facebook to build a list of sites you have visited. Facebook’s widget reaches 25% of pages loaded by our users that Facebook could collect 25% of an average user’s browsing history.

Source: Cliqz.com (accessed 10.08.2018) How Facebook knows exactly what turns you onhttps://cliqz.com/magazine/techblog-woher-facebook-genau-weiss-was-dir-gefaellt-2

DigitalFingerprint

Customer Journey

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Social Mapper uses facial recognition to correlate social media profiles across different sites on a large scale.

Sources: LinkedIn, Facebook, Twitter, GooglePlus, Instagram, Vkontakte, Weibo, Douban

Output: Organisations name, searching via LinkedIn, folder full of namedimages, CSV file with names andurl’s to images online

Source: GitHub (accessed: 13.08.2018) A Social Media Enumeration & Correlation Toolby Jacob Wilkin(Greenwolf)https://github.com/SpiderLabs/social_mapper

Contact Center

Understanding customer journeys is key for key insight generation.How to get insights into non owned touchpoints?

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Online (incl. mobile)

Agent / “Broker”

Contact Center(i.e. phone, chat)

Paper / E-Mail

Awareness Consideration Purchase

Owned Touch-Points Paid Touch-PointsEarned Touch-Points

Sources: adapted from: Swiss Re (2014) Sigma – Digitaler Vertrieb von Versicherungen, Helsana Marktforschung (Projekt Formutainment, 2013)

Friends & Family

Online Reviews(i.e Expert reviews)

Paid Touchpoint(i.e. Google, Facebook, …)

Customer 1

Customer 2

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What needs to get fixed in the insu-rance industry

1Customer journey & experience as key driver in digital sales

2From digital products, to platforms, to ecosystems

3

Agenda

….let focus on the future of mobilityear?

Source: Cooper Hewitt (2018) Photorealistic rendering based off of concepts in the NACTO Blueprint for Autonomous Urbanism. Copyright © 2017 Bloomberg Philanthropies. Source: Cooper Hewitt Explores The Future of Mobility in New Exhibitionhttps://www.si.edu/newsdesk/releases/cooper-hewitt-explores-future-mobility-new-exhibition 56

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digitalproducts / services

58

digitalplatforms

59

air travel

ride hailing

micromobility

public train

Managing mobility journeys

integratedmobility journey

60

61

How manymobility apps…?

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63

64

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66Source: CB Insights (2019) Tencent – Ant Financial

With 50% of WeChat users reportedly spending 90 minutes per day on the social network. Tencent earns fees from vendors’ commercial transactions as well as from users’ cash withdrawals and credit card repayments.

Alipay’s mobile payments service as the gateway to Ant’s broader suite of financial services. Ant has been aggressively investing in offline partnerships and strategic moves — such as Starbucks, its Hema, and public transportation systems.

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68

digitalecosystems

69

Do you intend to keep your

customer interactions?

Do you assume to loose full

control but stay relevant?

…and how do you plug-in into

these mobility ecosystems?

70Impage source: Unsplash.com

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What needs to get fixed in the insu-rance industry

1Customer journey & experience as key driver in digital sales

2From digital products, to platforms, to ecosystems

3

Summary

Thank you

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Dr. Evangelos AvramakisHead Digital Ecosystems R&DSwiss Re Management LtdMythenquai 50/608022 ZURICH, SWITZERLANDDirect +41 43 285 49 73 E-mail: Evangelos_Avramakis@swissre.com

ch.linkedin.com/in/avramakis

xing.com/profile/evangelos_avramakis

flipboard.com/@eavramakis

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