Session 10- Disruptive technologies and other trends:

Impact on insurance and the actuarial profession

Cindy Forbes

Executive Vice President & Chief Actuary, Manulife

Source: Certify, Google Finance

60

40

20

0 1960 1975 1990 2005 2020

Average company lifespan on S&P index, (in years)

56

15

2

Average company lifespan on the S&P index has shortened

A Business Disrupted: Blockbuster

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1.5

3.0

0.0

0.5

9.5

2.5

1.0

2.0

4.0

3.5

Netflix

2007: Netflix introduced online streaming

2010:Blockbuster files for bankruptcy M

arke

t C

ap

(B

)

2000: Netflix introduced monthly subscription model

3

Disruptive technologies are turning data into business insights

4

Mobile Internet

Social media

Internet of things

Business Insight Disruptive Technology Data Proliferation

Risk Selection

Product & Pricing

Customer Interface

Customer Insights

Claims Management

Daily Operations

Longevity Protection

Medical Nanotechnology

Cloud

Computing

Advanced Analytics

Simpler customer interfaces being created

New uses of data and analytics being explored

5

Fitbit

Within our industry, some early signs… (1 of 2)

6

Non-traditional players entering adjacent spaces

New business models being developed

Google compare

Within our industry, some early signs… (2 of 2)

Key trends driving disruption across industries

7

Advanced analytics driving real value

creation

6

Consumers expect greater control of their

well-being

3

Advancements in medical technology

extending average life expectancies

5

Data is ubiquitous and becoming more interconnected

2

The breadth and depth of mobile devices are

rapidly increasing

1

Cloud computing provides unlimited

capacity to analyze data

4

The breadth and depth of mobile devices are rapidly increasing

8

1

World Population

7.2 Billion 7.6 Billion

Connected Devices

25 Billion 50 Billion

Connected Devices

per person 3.5 6.6

2015 2020

15.1

10.3

6.7

4.2

2.5

1.4

0

2

4

6

8

10

12

14

16

2018 2017 2016 2015 2014 2013

Global Mobile traffic forecast to grow 11x by 2018

Exabytes1 /month

11x

Source: BCG analysis, Cisco IBSG; 1. Exabytes: unit of computer data storage, equivalent to 1018 bytes

Data is ubiquitous…

9

Every 60 seconds…

98,000+ tweets

695,000 status updates

698,445 Google searches

11 million instant messages

168 million+ emails sent

1,820TB of data created

2

… and becoming more interconnected

10

2

Internet of Things (IoT)

Source: Intel.com

Consumers expect greater control of their well-being…

11

Connected devices

The Quantified Self

+

=

3

I want to control my well-being

… and are looking to peers for advice

12

3

Cloud computing provides unlimited capacity to analyze data

13

4

Advanced medical technology extending life expectancies

14

3D Printing

Next-generation genomics

Longevity dividend to slow aging

5

Google is launching a venture to extend human life span

Low cost of genome sequencing

15

5

Moore’s Law in effect

$1,000 to sequence one human genome

Cost of genome sequencing

Source: National Human Genome Research Institute

Possible counter trends to future mortality improvements

16

Obesity Pollution Infectious diseases

5

Advanced analytics driving real value creation

17

6 V

alu

e C

reat

ion

Complexity

Hindsight Insight Foresight

Actuarial

model

The new ROI: Return on data

18

6

THEN NOW

Data overload without easy access for execs

Real-time analytics

Data dividend:

69% Increased revenue

43% Improved productivity

66% Lowered costs

= $ 1.6 trillion

Return on data + +

Source: IDC Study: Realizing the Data Dividend, 2014

19

Putting it all together

Mobile Internet

Social media

Internet of things

Business Insight Disruptive Technology Data Proliferation

Risk Selection

Product & Pricing

Customer Interface

Customer Insights

Claims Management

Daily Operations

Longevity Protection

Medical Nanotechnology

Cloud

Computing

Advanced Analytics