How can the industry best take advantage of InsurTech and venture into new risk territory?
With $14 billion in investment to date, InsurTech is turning heads and insurance will likely never be the same again. One characteristic that marks this period of business disruption: a level of partnership and co-operation between industry incumbents and tech startups.
Collaboration vs. Competition
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Embracing disruption – both managing it and anticipating it – is crucial for businesses to thrive during this change. But what constitutes disruption and how does it differ from innovation?
Disruptive Innovation: Challenges & Opportunities
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Economies, demographics, and geopolitics – amplified by technological advancements – are creating a new reality for companies across the world. Which risks are on the horizon and how ready are you?
Global Risk Management Survey
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Growth opportunities are emerging from the ‘disruption’ of the insurance sector, which is encouraging insurers to pursue ‘open architecture’ innovation with data and technology providers, in order to further the industry’s capabilities and product offerings.
Global Insurance Market Opportunities Report
records from leaked databases due to cyber security incidents (Stroz Friedberg)
1 billion
known cyber incidents (Aon)
45,000
IP addresses for Amazon data centers in the US alone (Cyence)
32 million
unique kinds of malware identified daily (Cisco)
1.5 million
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The internet has revolutionized how we work and live, but in the process has created an evolving threat from cyber risk. Insurance coverages keep changing in response
Cyber: Is Technology a Friend or Foe?
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Autonomous
Vehicles
On-Demand
Economy
InsurTech
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Experts
The mega-trend of autonomous vehicles will result in a dramatic reduction in traditional accidents which are mostly caused by human error, shifting responsibility for remaining claims in the direction of vehicle manufacturers, infrastructure providers and mobility services.
-Mark Buningh
-Evert-jeen
van der Meer
-Evert-jeen
van der Meer
-Michael Stankard
47%
94%
Automobile insurance has become the largest segment of the overall insurance industry – amounting to 47% of global insurance premiums
A major premise of autonomous vehicles is the hope that they will prevent 94% of current accidents involving human error
Autonomous vehicles promise increased safety. As the automobile industry changes, what is the future of insurance? If human decision making is replaced by machine, where will the liability lie, and who will be responsible for this emerging risk?
Millennials underpin these trends
Social and Environmental
Spurs ODE suppliers to earn extra income where possible
Economic
Realities
These trends promote the ODE through a desire for authentic experiences
Values
Changing consumer expectations for convenience of services
Technological Innovation
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One major implication of the on-demand economy will be a rethinking of how insurance products are designed. Reflect on how retailing (with same day delivery) and transportation (with rent by the minute) is evolving. Can traditional risk products serve these emerging and commercial needs?
Industry projections estimate that independent workers will form 40 percent of the total US workforce by 2020
-Eric Boyum
-Randy Nornes
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Experts
The On-Demand Economy will continue to create global opportunities – how can insurers keep pace?
The pace of change in the insurance industry is accelerating – from how customers purchase coverage to what information is available to evaluate risk, to how capital providers engage. The pressure on insurers to innovate is clearly growing and capital is flowing into the insurance sector as investors see an opportunity to disrupt the more than USD 5 trillion marketplace
In 2016, more than 200 InsurTech
start-ups attracted USD 9 billion in investment
Today there are more than 550 with nearly USD 14B in investment
-Jobay Cooney
-Chris Gallo
-Parr Schoolman
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Experts
InsurTech is one of the fastest growing entrepreneurial segments. How can incumbent insurers respond
and adapt to the changing risk landscape?
Technology and connectivity are changing how we work, how we travel, and how we shop – insurance is adapting to this changing landscape
What's Changing the Industry?
It turns out that existing participants in our industry are very active in spurring on the InsurTech phenomenon
One in 10 people in the world become sick from foodborne illnesses each year – innovations in analytics
and insurance can help combat this threat
There are well known complexities that are challenging our industry as we address the volatility that
Cyber brings to our clients
3
2
1
-Jon Laux
-Paul Mang, Global CEO, Aon Analytics
Emerging areas will be the foundation for growth in the sector for the next 3 – 5 years
The uncertainty of technology can be a driver of growth
A pay as you go personal auto insurer
Metromile
Mobile phone based claims
solution for auto insurers –
streamlines the process for
customers to manage auto repair estimates and bidding
Snapsheet
Uses chatbots to replace lengthy forms which arguably improve the customer experience; when a Lemonade client makes a claim, AI is used to check if the claim is fraudulent
Lemonade
A company that uses connected
devices to monitor the home for
break-ins, fires and leaks, and
also provides an insurance policy if a loss occurs
Neos
Allows groups of people to pool
insurance premiums and offers
annual no-claims rewards, using
social networks to bring
customers together
Friendsurance
The world’s first Risk Transfer Exchange serving both mainstream and alternative Insurance and Re-Insurance industries through provision of non-modeled data
AUDEAMUS RISK
Startup leveraging blockchain
technology for self-managing
communities to pool risk
Bandboo
China’s online-only P&C insurer
Zhong an
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References to organizations, or their services, do not constitute or imply the endorsement or recommendation by Aon plc or its affiliates
Connected devices, Artificial Intelligence, Telematics and Mobile technology are just a few technologies that are being applied to insurance
Click the map to see examples of innovation in insurance
50%
Even in the US, which accounts for 56% of global insured losses, but only 28% of global economic losses, the protection gap was nearly 50%.
Total economic losses continue to dwarf insured losses: in 2016, global economic losses were USD 210 billion / insured losses were USD 54 billion – giving a “protection gap” of USD 156 billion.
210 Billion USD
Economic Losses
54 Billion USD
Insured Losses
156 Billion USD
Protection Gap
How prepared are we to address data and analytics skills gaps in our talent pool?
If risks are not insured, who is absorbing these losses and at what cost to society and the wider economy?
What role does analytics play in helping business leaders seize new opportunities?
How are companies pursuing innovation across risk, capital, and data and analytics?
How can the c-suite be active participants in innovation?
What opportunities does technology bring the insurance industry?
Aon’s 2017 Global Insurance Market Opportunities Report addresses these questions, and more.
As industries evolve and business models shift, new opportunities arise and new risks are created
Innovation - the answer to or the cause of risk?
Get the latest insights from the 2017 Global Insurance Market Opportunities report
Technology has transformed industries –
how can innovation enable growth of the insurance sector?
How Technology Opens Up New
Markets - And Risks
disruption – or opportunity?
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