Disruption in financial services GAMA ELC by Pranav Pasricha

Disruption in Financial Services

Presenter: Pranav Pasricha, CEO GAMA ELC Meeting, September 16, 2016

“The future is here, it’s just not very evenly distributed” -‐ William Gibson

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Why talk of Disrup1on?

Change is the only constant in life

It's not the strongest of species that survive, it's

those that are most adap1ve to change. Darwin

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Why talk of Disrup1on?

We do NOT offer a physical product, only a technology enabled promise

Barriers to entry of compe11on and disrup1on are coming down quickly (apart from regula1on)

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The World As We Know it is Changing, and FAST !

•  3D prin1ng of body parts : Forbes expects market to reach $4Bn by 2018

•  Pay-‐per-‐mile car insurance : Metromile partnered with Uber

• Messaging transformed in 3 years : Aiming to be the Payment Network of the

Future, ValuaMon of Whatsapp $19Bn & Snapchat $20bn

•  Consumer and business robo1cs : market will be $1.5 billion by 2019

•  Smart home systems : forecast 31.4 million in North America by 2017

•  Connected devices : 4.3 per person on the planet by 2020

•  Self-‐driving cars are now a reality 5

Non Tradi1onal ‘Start ups’ have toppled giants

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Walmart : $220B Amazon : $356B

Comcast $154B, TimeWarner $57B Facebook $362B

Ford & GM $47B Tesla $29B Uber $62.5

Hilton $23B Marriot $17B AirBnB $30B

Market Capitalization / Implied Valuation as of Sept’ 14, 2016

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US Insurance Industry Premiums

The Insurance Industry Isn’t In a Happy Place

$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

2011 2012 2013 2014 2015

Life insurance Annuity Accident & Health Credit Life/ A&H P&C

Data Source : III

Imagine a world ….

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•  Delivery drones, driver less cars and trucks avoid all human caused road accidents •  IoT and Augumented Reality devices drive down work place accidents to near zero

•  Smart Homes eliminate most accidental damage except true ‘Acts of God’ events

•  Wearables & Gene1cs make Life Underwri1ng outdated and unnecessary

•  Ar1ficial Intelligence based Robo Advisers are ‘proven’ to suggest beger products and manage porholios beger

•  Commercial risks can be assessed and underwrigen automa1cally via Big Data and Ar1ficial Intelligence based plahorms

•  Insurance for personal valuables is via one click on Facebook

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Insurance WILL be disrupted!

•  Internet of Things (IoT) •  Drones, Autonomous Cars,

TelemaMcs

•  Big Data & ArMficial Intelligence •  GeneMcs & Wellness

•  Wearables

1 Smart

Machines

2 New Paradigms

3 Non Tradi1onal Compe11on

•  Property/Title centrally registered – globally (Blockchain)

•  New Risks appear, some dissapear

•  Switch on/Switch off coverage •  Consumer channels

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•  Social Insurance (Crowd sourced) •  Non-‐Insurance entrants •  Re-‐Insurers

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And a LOT of people are trying !

•  First GeneraMon of Smart Machines are everywhere…. Virtual Personal Assistants, Robots, Driverless vehicles, Process AutomaMon Bots, Chat Bots,

•  Opportunity to fundamentally revisit what humans do or NOT !

•  Fundamental impact on the nature of work, the workplace, and by consequence Insurance

Smart Machines…

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Machines and other Cogni1ve Compu1ng Systems that make decisions, solve problems and learn without human interven1on

Internet of Things

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Internet of Things (IoT) : Insurance impact

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Will driverless cars have accidents ?

•  Volvo claims to deliver Accident Free driving by 2020

If they do, how do you establish who is at fault and who is liable ?

Implications go beyond Insurance :

•  Taxi and Transport / Logistics Industry

•  Automotive manufacturing

•  Infotainment

•  Mobility services.

Driverless Car : Who Do you Insure and for What ?

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•  Non Deterministic, Cognitive analytics, where machines learn from experience and build associations, help develop technology systems that evolve hypothesis, draw conclusions and codify instincts and experience.

•  Parallel information processing, aided through chips custom designed for AI applications, help parallel processing of vast amounts of data.

•  Smarter redefined with the advances in sensor, cloud and machine learning technology, and pushes the boundary of smarter homes, cars, infrastructure and just about everything.

•  Deep learning approaches allow processing of raw data including images, speech and natural language; thus providing deeper insights.

•  Face-reading machines decipher micro facial expressions to build meaningful information on the emotional state of the user, improving human-computer interaction in areas of e-learning and e-therapy.

•  Intelligent automation combines automation with artificial intelligence that allows knowledge workers, from physicians to investment analysts to plant supervisors, to process, understand and use ballooning volumes of information.

Ar1ficial Intelligence : Learning without Teaching Volume, Velocity, Variety and Validity

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The problem with Insurance underwri1ng

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30 – 60 min Underwriters manually enter mulMple queries to search dozens of sources to begin the diligence process. OFAC PEP RCA MEDIA INTERNET

30-‐60 min Underwriters compile content associated with the subject of invesMgaMon. Culling internet search results Misspelled names

16 min Underwriters subjecMvely select which associated informaMon to review, arMcles to read etc. SubjecMve decision-‐making necessarily results in incomplete reviews

30 min Underwriters read arMcles and learn about the subject of invesMgaMon, idenMfying potenMal risk associated with the subject

20 min Underwriters designate certain informaMon/findings as risky based on their review and draw risk-‐based conclusions about the subject

20 min Underwriters report on their findings using document templates and boilerplate language

>70% of Underwriting Time Low Value

<30% of Underwriting Time High Value

Enter As Ligle as Company Name

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…are star1ng to learn Insurance and Wealth !

•  Wearables WILL transform health and medicine, fitness, aging, educaMon, gaming ,

finance, home and work automaMon, and many more

•  Wearable market predicted to exceed $6 billion in 2016 and $30 billion by 2020

•  By 2020, Smart Clothing Shipments Will Surpass 10.2 Million Units Annually, While Body

Sensor Shipments Will Reach 3.1 Million Units Annually

Bracelets Smart watch Glasses

Wearables

Hearable Contact Lenses

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Smart Clothes Smart

shoes

Gadgets will monitor your health and tell you more about person’s lifestyle than any medical exam

Sensory Fitness Socks- sensors communicate with Bluetooth- powered anklet all feeding data to your Smartphone

Continuous Glucose Monitoring- monitors and retrospectively review patients glucose

Sleep Sensor- tracks your sleep Smart Shoe Monitor that analyze running style, distance covered, daily routes etc

Smart clothing monitors biometric data on muscle activity, breathing rate, heart activity zones

Google Contact Lens

•  Google Contact Lenses Focus helping paMents with diabetes

•  PotenMally become billion dollars digital healthcare market

•  Measuring diabeMcs’ blood sugar levels directly from tear fluid on the surface of the eyeball.

•  The system sends data to a mobile device to keep the individual informed

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Augumented Reality : Revol1onizing Work Place Safety

Social Insurance The roots of Insurance

•  Growth in Peer to Peer social networks

•  Sharing Economy

•  Increasing Peer to Peer payment networks and Micro payment systems

•  Higher trust factor on Social Networks

•  Savings of Dis-Intermediation and returning to a Mutual concept

•  Potential for immediate gratification

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Social Insurance Examples

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Fellow social insurance start-ups like Friendsurance in Germany or France's Inspeer, are putting a new spin on modern insurance, in order to introduce a sense of control, trust and transparency.

Old Risk, New Risks Changing World and Changing Economy

UP DOWN ELIMINATED ? Car Insurance Voluntary Group Benefits

Cyber Risk Terrorism Pet Insurance Flood Insurance of Things ? Drones ? Robotic / AI Liability ?

Home ? Workers Comp ?

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Non Traditional Competition Waiting to be “Amagled”

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Tints of these colours are in the paleZe for use also Use other colours only excepMonal, eg Red/Amber/Green Font to be used is Calibri Lower then 16 points is usually not readable TP100.15 – Current version of the MS PowerPoint template for Intellect released in April 2015. Kindly check the ‘Central Vault’ on Octopus (Octopus > Project Rooms > MarkeNng Collateral > Documents) to ensure you have the latest version of this Corporate template.

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We make it that simple



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We are Insurance People Turned Techies

Pranav Pasricha

Chief Executive Officer

Laila Beane Head of Marketing &

Consulting

Lakshan De Silva

Chief Technology Officer

Bharath Venkatachari

Chief Operating Officer

Tony Cid Head of P&C

Kathy Awanis Head of Strategy and Partnerships

Chris Pinkerton Head of Life & Annuities

sector

Sriram N Head of Human

Resources



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Our Purpose

Xponential Insurance

How 1.  Replace traditional paradigms with scientific ones, that can create 10x value

2.  Provide a migration path to 10x value with latest technology in cost effective & low risk/low disruption manner

3.  Building a pervasive insurance platform that a.  Harmonizes inside & outside data for better decisions b.  Provides a seamless user experience : Omni Product, Channel & Device c.  Eliminates issues like silos and technology obsolescence



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The Real Fintech Machine Age : Beger Decisions & Process Elimina1on

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Manual process

Busine

ss Produ

c1vity

Time

Process Elimina1on &

Beger Outcomes

Process Automa1on



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Our Vision : Fundamental Transforma1on of Risk Assessment

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•  StaNsNcally Similar Unique Risk Propensity

Looking Backward Looking Forward



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Our Vision : Insurance Underwri1ng

Manual Assisted Supervised Automated

•  2x UnderwriNng ProducNvity

•  2% Loss RaNo ↓ •  0.5% Expense RaNo ↓

•  5x UnderwriNng ProducNvity

•  5% Loss RaNo ↓ •  1 – 2% Expense RaNo ↓

•  10x ProducNvity •  2x Growth •  10 – 15% NCOR ↓



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Our Aim : 10% -‐ 15% Improvement in NCOR on current baselines

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5-‐10% UW Profit

Loss raMo 60 – 70%

10 -‐ 15% AcquisiMon Cost / Commissions

15% – 18% Expense

15 – 25 % UW Profit

55 – 60% Loss raMo

6% -‐ 8% AcquisiMon / Commissions

10% -‐ 12% Expense

Effectiveness & Automation : New Business Underwriting

Effectiveness : Renewal Loss Ratio and Pricing

Direct online selling + effective marketing

Reduce HR + Overheads

NCOR Today 2-‐3%

3%-‐4%

5% -‐7%

3-‐4%



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INTELLECT DISTRIBUTION & SERVICE SUITE

1 Platform, 7 Apps All Channels, All Products, All Devices - Cloud or On Premise

LEAD CLOSER Only insurance-specific CRM

NEEDS ANALYSIS Engage and convince clients, drive sales

QUOTE AND ILLUSTRATION Simplify and inform

E-APP Submit or issue instantly

PROFILE MANAGEMENT 360º full account view

CUSTOMER SERVICING Agent and Customer self-service

PRODUCT CONFIGURATOR Launch new products in days

DISTRIBUTION

SERVICE

SERVICE

Thank You

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Disruption in financial services GAMA ELC by Pranav Pasricha

Technology

Transcript of Disruption in financial services GAMA ELC by Pranav Pasricha