Io t613 what's the natural business model - final final presentation - september 25 2015

IMS Inc. Proprietary and Confidential

What’s the natural business model for the IoT? September 25, 2015


Purpose

• This presentation outlines the likely, core business model(s) for the Internet of things • Business model of IMS

• Business model of our customers

• Related business models

• Overall business model for the IoT


Background

• Definition: a business model is the way a company makes money


Scope of this business model


Business model derived from transportation

1.) Connected cars & Transportation & Auto insurance


Applicable to healthcare and life sciences

2.) Healthcare & Life Sciences 1.) Connected cars & Transportation & Auto insurance


Applicable to consumer & home

2.) Healthcare & Life Sciences

3.)Consumer & home



Applicable to buildings


3.)Consumer & home

4.)Buildings



Applicable to security & public safety


3.)Consumer & home

4.)Buildings 5.)Security & public safety



What’s the business model for IMS?

2a. 1.

2b.

2c. 3.

4.

5.

6. 7.


1.) What does IMS do related to the IoT?

Infotainment

Data analytics & In vehicle services

Telematics

1.

2.

3.


Hardware

& Sensors Connectivity

Data

Software

Processes

People

1a.) How does this relate to the IoT?

• IMS manages the hardware, connectivity, software and data related to the “Internet of cars” i.e., end-to-end data solution


1b.) Tracking health of our programs

•Our business centre help our customers track the health and progress of their programs


2.) Who does it help and how?

Auto

Insurance

firms

Fleets

& Individuals

Governments

a.)Who do we help? b.)How do we reach them? (Direct sales) c.)How do we interact? (Direct sales)


2a.) Insurance companies, fleets, individuals

Personal Lines UBI

Young Driver

Integrated Partner Analytics

Mobile


2b.) Telematics improves ability to price risk

Driver 1

Driver 2

35k kms

10 events

41 events

7 events

13 events

0%

12k kms

Traditional rating variables: Twin males, 30+, F150 truck, same postal code, drive about 15k kilometers/year

4%

19%

5%

3x

5x

4x

2x

5x


2c.) Governments and individuals


2d.) Continuous risk assessment

New

insurance model

Insurance

carrier

IoT Sensors Continuous

communicat-ions

Continuous risk Re-assessments

Opportunities for timely communications with consumers and up-sell

-Insurance -Warranty services

-Advertising

Implications for - Business model -Product -Underwriting -CRM


3. How do we do it?

• IMS provides an “end to end” solutions for our customers • Logistics

• Program design • Device selection • Forward/reverse logistics • Systems integration

• Analytics • Data capture • Analytics • Insights, intelligence and

decision making • Proprietary interfaces to

consume data


3b.) In-vehicle enablers

3.) “Plugged-in” Technology

6.) “Beamed in” Technology

(Over the air updates)

5.)“Hybrid” Technology

2.)“Bolted-in” Technology

1.) “Built-in” Technology

4.) “Brought-in” Technology


Data Dashboards

Scoring Analytics

Journey Summaries

PND Device OBD-2 Device Hardwire Device Mobile Device Applications

SE

AM

LE

SS

IN

TE

GR

AT

ION

Open Standard Vehicle Interface

Act

ive

Dat

a St

ore

s

Secu

re

Dat

a W

are

ho

use

Dat

a A

nal

ytic

s

Co

nte

xt &

Lo

cati

on

In

tegr

atio

n

Open Standard Export Interface

Mobile Interfaces

Advanced Data Compression

Par

tne

r C

on

ten

t In

tegr

atio

n

Web Interfaces 3rd Party Systems

Vehicle Health & Emissions

Event Alerts E

ND

TO

EN

D S

EC

UR

ITY

4. What do we need?

The IMS DriveSync Platform


5. Who helps IMS?

• Certified and qualified hardware partners

• 3PLs in each country

• Data partners e.g., Google Maps, Weather, Traffic, Posted speed limits

• Wireless carriers – Global SIMs

• Designers e.g., Akendi


6. IMS financials

How much will it cost?

- Human costs

- Set up at IMS

- Maintenance

- Customer care

- Cost of goods

- On-going 3rd party costs

- Licenses

- Wireless costs

How much will you make?

- Consulting revenue e.g., business models and program set up

- Outsource PMPs

- Hardware revenue

- Recurring (monthly) revenue


US barriers to growth

Making the economics work

Customer adoption

Management support

Understanding the data

43%

30%

15%

13%

Source: Survey of 400 Telematics Update contacts. August 2012.

6b.) Helping insurers overcome their barriers


Auto insurers business model for the IoT

Human resources costs Telematics costs - Devices &data - Monthly fees

Revenue drivers -Attract good drivers -Retain good drivers -Reduce claims costs -Sell value added services


From auto insurance to other verticals

• Study Connected cars and UBI as a practical use case

• Expand use cases to other areas of insurance

Connected ecosystem

Connected cars Connected commercial

buildings

Connected homes

Connected people

Usage based Insurance (UBI)

Smart home monitoring

Smart buildings Health monitoring & fitness


Vehicle location can reduce property risk

• Auto telematics data can be used for home and life insurance

• The entire business model can be used by other forms of insurance

Connected ecosystem


buildings

Connected homes

Connected people




A car parked at a home can reduce the risks related to the home

1.) Location data


Aggressiveness data can price life insurance

• Auto telematics data can be used for home and life insurance

• The entire business model can be used by other forms of insurance

Connected ecosystem


buildings

Connected homes

Connected people




Price life insurance 2.) Speeding and aggressiveness


Other business models are in play as well

1.) Auto sales and

distribution

2.) Car sharing

3.) Telematics

4.) Collision avoidance

5.) Auto-nomous vehicles

6.) Intell

-igent Transport

How will cars and insurance be sold in the future?

How fast will no. of policies decrease in urban markets?

How will Telematics transform

Pricing, CRM Claims?

How will liability shift from drivers To OEMs?

Will drivers and vehicles need separate policies?

How will this reduce accidents and claims?

• Connected car technology is transforming many areas of insurance


Key lessons from IMS

Issue Implication/indicated action

Change is certain in technology, competition and regulation

Need to be flexible and migrate one’s strategy over time

IoT enablers will increasingly be embedded with sensors

Need opportunities and often lower costs

Connectivity methods and pricing will decrease

Lower cost for data acquisition and service deployment

Processes and applications will improve

New opportunities and challenges will continuously emerge

Business models will change Evolution is mandatory


Extrapolation the learning

• So, what do the IMS and auto insurance business models mean for the Internet of things?


A natural business model for the IoT?

• “You know the way advertising turned out to be the native business model for the Internet? I think that insurance is going to be the native business model for the Internet of things.”

– Tim O’Reilly, May 2014


How the IoT ties in with the Internet?

Pre-digital

• People to people

• Mass media

Internet of content

• email

• Information (e.g., Web pages)

• Entertainment (e.g., YouTube)

Internet of services

• eCommerce

• Web 2.0

Internet of People

• Social media

• SMS

Internet of things

• M2M

• Telematics

• Smart home monitoring

•The IoT is a natural progression of digital technology

Time


The Internet and advertisers

• Nothing is “free”

• Pay with attention (ads)

• Pay with data (advertisers)

• Pay with credit cards

Consumers

• Create ads

• Sponsored links

• Ad targeting

Advertisers

(Facilitators) • Search engine use

• Social media access and content generation

The Internet


The IoT and insurers

• Nothing is free

• Pay with data (insurers)

• Pay with attention (Ads in future)

• Pay with credit cards (Parents for teens?)

Consumers

• Buy or encourage consumers to buy IoT devices

• Connected cars

• Home security

• Provide content

• Pay monthly costs

• Receive continuous feedback

Insurers

(Facilitators)

• Access to IoT hardware, sensors, connectivity and software, data

The IoT


Continuous risk assessment

New

insurance model

Insurance

carrier

IoT Sensors Continuous

communicat-ions

Continuous risk Re-assessments

Opportunities for timely communications with consumers and up-sell

-Insurance -Warranty services

-Advertising

Implications for - Business model -Product -Underwriting -CRM


IoT & Insurance start with high value assets


Questions? Blair Currie [email protected] Tel 416 529 7776

mailto:[email protected]

Io t613 what's the natural business model - final final presentation - september 25 2015

Internet

Transcript of Io t613 what's the natural business model - final final presentation - september 25 2015