ASHK Evening Talk - actuaries.org.hk · ASHK Evening Talk Actuaries in Insurtech Innovation ... Apr...
Transcript of ASHK Evening Talk - actuaries.org.hk · ASHK Evening Talk Actuaries in Insurtech Innovation ... Apr...
ASHK Evening TalkActuaries in Insurtech Innovation
Fred Ngan, Michael Chan
Co-founders
Coherent Capital Advisors Ltd. & Seasonalife Ltd.
Thursday, 20 October 2016
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Agenda
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1. The world is changing fast
2. Insurance (might) (finally) too
3. What others are trying
4. Our role as actuaries?
Look around
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> 65%of people in Hong Kong would miss their phones more than their walletsSource: Research Now NPS survey, 2015
How Customers Make Choices
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Clay Christensen:What job did you hire that product to do?
Getting information
Getting serviced
Being Engaged
Life insurance has an image problem.Insurance is a “misunderstood industry” – it promotes a meaningful social good but is often seen as a “necessary evil”
Finding information: Quality, independent information? Simple features and terms? Unbiased advice?
Ease of getting serviced: Modern user experience? Fast processes?
Engagement: Frequent touch points? Delightful experiences?
of premiums are paid to agents as commission
of respondents are satisfied with their interactions with insurance service providersSource: Morgan Stanley 2014
> 20% < 60%
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Average Net Promoter Score for life insurers in Hong KongSource: Bain & Co 2014
< -30
Consumer trust across industries
11Strictly ConfidentialSource: Edelman Trust Barometer
0% 10% 20% 30% 40% 50% 60% 70% 80%
Financial Advisory
Insurance
Financial Services (Aggregate)
Credit Cards
Banks
Chemicals
Energy
Metals
Food & Beverage
Consumer Electronics
Technology
Trust in Industries (Global)
Customer experience – Geographical
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Source: Capgemini and Efma (2015)
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Developing APAC
Developed APAC
Europe
North America
Customers with Positive Experience
Customer experience – Generational
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0% 10% 20% 30% 40% 50% 60% 70%
Developing APAC
Developed APAC
Europe
North America
Customers with Positive Experience
Other Gen Y
Source: Capgemini and Efma (2016)
Consumers interact less with insurers than any other industries
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Source: Morgan Stanley/BCG Global Consumer Survey 2014, BCG e-intensity index, Morgan Stanley Research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Search Engine Social MediaWebsite
Banks OnlineRetailer
MobileCompany
Energy UtilityCo
InsuranceBroker
Insurer
% o
f re
spo
nd
ents
Many times a day/Daily
Weekly
Monthly/Quarterly
Yearly
Less than once a year
Never
Insurance online experience lags behind
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Source: BCG digital satisfaction survey March 2013, Morgan Stanley Research
15.2
11.811.1
10.08.9 8.5 8.5
8.0
5.85.0
4.3 4.2 4.1 4.0 3.8 3.8
Per
son
alB
anki
ng
On
line
Mer
cha…
Med
iaR
etai
l
Elec
tro
nic
s R
etai
l
Ap
par
elR
etai
l
Air
lines
Inve
stm
en
ts
Ho
tels
Sup
erm
arke
ts
Elec
tric
ity,
Gas
,…
Au
tom
ob
ile
s
Go
vern
men
t…
Hea
lth
Car
e…
Insu
ran
ce
Rea
lEs
tate
Telc
o &
Cab
le
Rel
ativ
e sa
tisf
acti
on
uti
lity
sco
re
Consumer satisfaction with online experience, by industry
Average ~7.3
Hong Kong…
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-100%
-50%
0%
50%
100%
150%
200%M
exi
co
Ch
ina
Fran
ce
Jap
an
Spai
n
Ind
on
esi
a
Bra
zil
Sou
th K
ore
a
Can
ada
US
Mal
aysi
a
Au
stra
lia
Po
lan
d
UK
Ge
rman
y
Sin
gap
ore
Ital
y
Ho
ng
Ko
ng
Change in number of channels used per customer for P&C product purchase, 2016 vs. 2014
Digital
Phone
In-person
Source: Bain/Research Now NPS surveys, 2013-14 and 2016; Bain/SSI NPS survey 2013-14
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Value-creation shifts from assets to liabilities as markets mature
Macro trends: US$60 trillion insurance protection
gap across Asia Growing middle class and
savings Increased medical spending,
far above overall inflation Aging population: retirement
solutions
Regulatory capital updates tend to favor insurance over investment risks
Rise of ‘big data’ and analytics should further differentiate risk selection capabilities
5%15%
54% 59%
100%95% 100%85%
46% 41%
US Japan Korea Indonesia China India
Liabilities
Asset
Contribution to Earnings (before tax, extraordinary loss, and dividends provisions)
Source: McKinsey research
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200
14333
20 5
Poolablerisks
Equity/feeproducts
Spread Investment Total
US Insurer Earnings by Risk, 2000-2011(USD billions)
It pays to go back to basics
108
Average Capital Deployed (USD billions)
36 28 58 230Source: AM Best, McKinsey
Insurance technology is booming (overheating?)Investment deals in “insurtech” in 2016 YTD have already surpassed 2015
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$130 $348 $269 $859 $1,740 $1,393
$931
26
46
63
91
118 120
2011 2012 2013 2014 2015 2016 YTD
Insurance Tech Financing History2011 – 2016 YTD
Dollars ($M) ZhongAn ($M) DealsSource: CB Insights
Company Date Latest Funding Company Description
Jan – 2016 $1.8mm (Seed) Insurance document management
Jan – 2016 $2mm (Seed) Personalized car insurance
Feb – 2016 $2mm (Seed) Travel insurance
Feb – 2016 $400mm (Series C) Health insurance
Mar – 2016 $31m Chinese online insurance agency
Mar – 2016 $3.9mm (Seed) On-demand insurance
Mar – 2016 $13mm (Seed) Small business insurance
Mar – 2016 $2mm (Seed) Business insurance management platform
Mar – 2016 $4mm (Series A) Pet insurance
Apr – 2016 $25.5mm (Series C) On-demand insurance
May – 2016 $160mm Data-driven health insurance
Sep – 2016 $28mm Mobile insurance policy management
Sep – 2016 $50mm Pay-per-mile car insurance
22
2016 has been a busy year for insurtech funding
Increasing number of deals made by the industry
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14
27 61 56
2012 2013 2014 2015 2016 YTD
Tech startup investments by insurers/reinsurers2012 – 2016 YTD (Sep 2016)
2012 2013 2014 2015 2016 YTDSource: CB Insights
Company Insurance company Date Description
Cathay Insurance Sep-2015 Invested $188mm for 60% of the Shanghai-based company
CPIC Allianz Health insurance
Jul-2015 Formed strategic partnership to jointly promote health reform policies and explore commercial insurance services
eBaoTech Jul-2015 Partnered to launch eBaoCloud, an internet insurance cloundplatform.
Ping An Insurance Dec-2014 Founders of the two companies were among group of investors purchasing a $4.7bn stake in the insurance company
Zhong An Insurance Feb-2013 Founded by Alibaba, Tencent and Ping An Insurance for the first digital insurer in China, which raised $934mm in Jun-2015 and sold 1.6bn insurance policies
CITIC Guoan Group Sep-2015 Set up a joint venture for online insurance
Taikang Life Mar-2014 Allowing WeChat users to buy and gift health insurance to their friends
Bai An Insurance Nov-2015 Baidu, Allianz and investor Hillhouse launched the digital insurance company Bai An
Golo Jan-2015 Set up by Baidu and Ping An for vehicle telematics
AIRIO Life Insurance Sep-2012 Acquired and rebranded to Rakuten Life in 2013.
Growing interest from tech industry heavyweights
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Source: CB Insights
Lateral movements from fintechFintech entrepreneurs moving to insurance
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Source: CBI Insights
Fintech companies entering insurance
Marketplace Lending
Mobile Billing
Digital Banking
Most credible spokespeople are experts and peers
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0% 10% 20% 30% 40% 50% 60% 70% 80%
Blogger
Entertainer/athlete
Government
News anchor
Regular employee
CEO
Financial or industry analyst
Successful entrepeneur
A person like yourself
Product creator or inventor
Academic or expert issues
Technical expert
Credibility from a financial services industry “truster”
Source: Edelman
Seasonalife
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Who are we Our mission is to be people’s “private actuary” to help make insurance simple and friendly
again.
An online platform for millennials to research, evaluate and purchase insurance products in a smarter way
Moving towards the insurance robo-advisor
Hybrid approach (online plus in-person) delivers more value than in-person or digital alone
Closing Thoughts
Innovation is a culture
Take risks as an organization and on a personal level
Think digitally
Focus on the customer
Insurance takes a team to deliver –disruptive vs. cooperative
Look backwards and forwards:
Insurance was once a high-tech industry
Actuaries were ‘data scientists’ before it became hot
How many times can we miss the boat?
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"My conclusion: Insurtechstartups do not have all the answers but are best positioned to find them."- Tim Kunde Co-founder of Friendsurance
Stay in touch
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[email protected]; [email protected]
Facebook https://www.facebook.com/Seasonalife/
Value Chain
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Emerging ecosystems that could threaten traditional insurers along each point of the value chain
Majority of startup funding still in the US
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United States72%
China12%
Europe15%
Others1%
Tech Investments by (Re)insurers by Geography(2012-2016 September)
Source: CBI Insights
Increased early-stage funding from insurers
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7%
25% 23%
30%
33%
23%
26%
20%36%
38%18% 11%
5% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016
Tech Investment by (Re)insurers by Stage(2014-2016 Sept)
Other
Series C+
Series B
Series A
Seed
Source: CBI Insights