disrupt or be disrupted: 2016 ey sensor data survey

Disrupt or be disrupted2016 EY Sensor Data Survey

16 March 2016

Today’s moderator

Kevin D. KoenigGlobal Insurance Analytics & Data ExcellenceAdvisory leaderErnst & Young LLP

Steve W. LaVallePrincipal, Financial Services AdvisoryErnst & Young LLP

Today’s agenda

► Optimizing and monetizing the collision of sensor data► Leaders vs. laggards► The road ahead

Today’s presenters

Tim LecamSenior Manager, GlobalInsurance Practice,UnderwritingErnst & Young LLP (US)

Bernard Klein WassinkPrincipal, Global InsurancePractice, Customer & GrowthErnst & Young LLP (US)

Imran AhmedPartner, Global AdvisoryServices, ClaimsErnst & Young LLP (UK)

OverviewEY’s 2016 Sensor Data Survey

► First-of-its-kind survey on the impacts ofsensor-based technology

► Conducted by EY’s global insurance practice► Participants in seven countries

► C-suite (75%)► VP or above (97%)

► 1,782 organizations globally, including 400 insurers

SectorsInsurance Banking Electronics Retail Travel Automotive Telecom

Key takeaways► The impact of sensor and emerging

technologies on the insurance industrywill be extensive, profound and lasting

► New mindsets and capabilities, differentbusiness models and the integration of newdata and technologies are necessary forsurvival in a changing market

Defining “sensor data”

Wearable orpersonal technology,

sometimescalled “fit tech”

Sensors on objects– personal and

commercial vehiclesand shippingcontainers

Location-basedsensors in factories,warehouses, officesand homes – “smart”thermostats, alarms

and cameras

Geographicinformation systemsand satellites providing

geophysical,topographical,

climatological andhydrological data

Implications and takeaways

Direct, unmediated customer relationshipsmay soon become the rule as insurers gaindirect access to objective and unfiltered data.

Truly individualized relationships will replacegeneric segmenting and rudimentary targetingof the past.

The days of selling just insurance arenumbered.

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Insurers need self-reported data today morethan any other industry

Insurers arepositioned tobecome muchless reliant onagents andcustomers toprovide data.

Leaders vs. laggards

Customer centricity is not a performancedifferentiator

Most defining centricity

31%

18%

15%

11%

9%

8%

7%

30%

10%

20%

11%

13%

11%

6%

Customer

Innovation

Finance

Brand

Compliance

Self

+8 points

-5 points

-4 points

Sales

Leaders Laggards

Leaders and laggards are comparably customer- and sales-centric

Impacts► Leaders: better differentiation and risk pool management► Laggards: adverse customer self-selection, lower margins and higher risk

Some customersget LESS value

Some customersget MORE value

100% Agree 100% AgreeDisagree

66%

42%

18% 22%

46%

69%

A new age of personalization anddifferentiationImpact of new data sources

Downselling► Limited bundling► Generic offers► Higher prices for

high-risk features

Upselling► Unique bundles► Tailored offers► Lower prices for

low-risk features

Leaders

All respondents

$ $

Laggards

Insurers lag in using insights from newdata sourcesPercentage of respondents, by sector, reporting that their companiescan use insights from new data sources to boost customer value

InsuranceElectronicsTransportationAutomotive

54% 36%50% 47% 47% 46%47%

Retail TelecomBanking/financialservices

Auditable assurances that datawas used only for the agreed-uponintended purposes

Commitment to data protectionboth now and in the future

Benefit improvements throughpricing, convenience, safety,offer relevancy or product features

Customers will share data when rewardsoutweigh risksAccountability and added value are more important to customers than controlwhen it comes to sharing data

Accountability and added value

Control

38%

37%

36%

35%

Ability to approve or deny the types ofinformation collected/used and makechanges over time

Needs to be legal and routine to providetheir information

Ability to easily understand theirinformation and unilaterally correct errors

Ability to permanently delete or maskinformation at end of relationship

Do not believe that customerswould share their data

28%

27%

23%

5%

25%

%

40

10

20

30

Fully transparent, declarationson how data will be stored andused including for how long

Leaders seek more context while laggardsoptimize status quoOrganizational data priorities

1. Improving confidence in the data2. Protecting the data3. Reducing cost of data management4. Ensuring freshness at point-of-use5. Connecting disparate data sources

Shared top priorities

35%20%

35%24%

39%29%

33%24%

30%23%

34%29%

33%28%

Integrating externaldata sources

Adding granularity to thedata collected today

Adhering togovernance policies

Enabling morebusiness users

Reducing complexityof data environment

Adding new typesof information not

collected today

Defining dataconsistently throughout

the organization

Sorted by difference

Leaders Laggards

Advanced analytics are common andperformed throughout organizationsFunctions performing advanced analytics

Sorted by difference

Leaders see opportunities across the board

Leaders believe new data sources drive improvements in how they

Leaders see

3x“”

Market and sell75%Laggards 28%

Differentiate value71%Laggards 27%

Engage customers71%Laggards 27%

Set strategy69%Laggards 23%

Work with others69%Laggards 22%

Model and manage risk70%Laggards 24%

more

opportunity

The road ahead: the action plan for insurers

Recognize the profound impacts andtransformational nature of sensor data –especially relative to competitive threats.

Engage customers to help formulate the rightdata strategy.

Start solving for technology – partner, developor takeover?

Err on the side of share.

Move forward or move on.

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Further reading

To learn more, visit:ey.com/InsuranceSensorSurvey

Further reading

Health insurer ofthe future

2015 Retail LifeInsurance andAnnuityExecutive Survey

Global ConsumerInsurance Survey2014

The future ofunderwriting

Thank you!

EY | Assurance | Tax | Transactions | Advisory

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© 2016 EYGM Limited.All Rights Reserved.

EYG no. EG0324ED None

This material has been prepared for general informational purposes only and is notintended to be relied upon as accounting, tax or other professional advice. Pleaserefer to your advisors for specific advice.

disrupt or be disrupted: 2016 ey sensor data survey

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