disrupt or be disrupted: 2016 ey sensor data survey
TRANSCRIPT
Disrupt or be disrupted2016 EY Sensor Data Survey
16 March 2016
Page 2
Today’s moderator
Kevin D. KoenigGlobal Insurance Analytics & Data ExcellenceAdvisory leaderErnst & Young LLP
Steve W. LaVallePrincipal, Financial Services AdvisoryErnst & Young LLP
Page 3
Today’s agenda
► Optimizing and monetizing the collision of sensor data► Leaders vs. laggards► The road ahead
Page 4
Today’s presenters
Tim LecamSenior Manager, GlobalInsurance Practice,UnderwritingErnst & Young LLP (US)
Bernard Klein WassinkPrincipal, Global InsurancePractice, Customer & GrowthErnst & Young LLP (US)
Imran AhmedPartner, Global AdvisoryServices, ClaimsErnst & Young LLP (UK)
Page 5
OverviewEY’s 2016 Sensor Data Survey
► First-of-its-kind survey on the impacts ofsensor-based technology
► Conducted by EY’s global insurance practice► Participants in seven countries
► C-suite (75%)► VP or above (97%)
► 1,782 organizations globally, including 400 insurers
SectorsInsurance Banking Electronics Retail Travel Automotive Telecom
Key takeaways► The impact of sensor and emerging
technologies on the insurance industrywill be extensive, profound and lasting
► New mindsets and capabilities, differentbusiness models and the integration of newdata and technologies are necessary forsurvival in a changing market
Page 6
Defining “sensor data”
Wearable orpersonal technology,
sometimescalled “fit tech”
Sensors on objects– personal and
commercial vehiclesand shippingcontainers
Location-basedsensors in factories,warehouses, officesand homes – “smart”thermostats, alarms
and cameras
Geographicinformation systemsand satellites providing
geophysical,topographical,
climatological andhydrological data
Page 7
Implications and takeaways
Direct, unmediated customer relationshipsmay soon become the rule as insurers gaindirect access to objective and unfiltered data.
Truly individualized relationships will replacegeneric segmenting and rudimentary targetingof the past.
The days of selling just insurance arenumbered.
1
2
3
Page 8
Insurers need self-reported data today morethan any other industry
Insurers arepositioned tobecome muchless reliant onagents andcustomers toprovide data.
Page 9
Leaders vs. laggards
Page 10
Customer centricity is not a performancedifferentiator
Most defining centricity
31%
18%
15%
11%
9%
8%
7%
30%
10%
20%
11%
13%
11%
6%
Customer
Innovation
Finance
Brand
Compliance
Self
+8 points
-5 points
-4 points
Sales
Leaders Laggards
Leaders and laggards are comparably customer- and sales-centric
Page 11
Impacts► Leaders: better differentiation and risk pool management► Laggards: adverse customer self-selection, lower margins and higher risk
Some customersget LESS value
Some customersget MORE value
100% Agree 100% AgreeDisagree
66%
42%
18% 22%
46%
69%
A new age of personalization anddifferentiationImpact of new data sources
Downselling► Limited bundling► Generic offers► Higher prices for
high-risk features
Upselling► Unique bundles► Tailored offers► Lower prices for
low-risk features
Leaders
All respondents
$ $
Laggards
Page 12
Insurers lag in using insights from newdata sourcesPercentage of respondents, by sector, reporting that their companiescan use insights from new data sources to boost customer value
InsuranceElectronicsTransportationAutomotive
54% 36%50% 47% 47% 46%47%
Retail TelecomBanking/financialservices
Page 13
Auditable assurances that datawas used only for the agreed-uponintended purposes
Commitment to data protectionboth now and in the future
Benefit improvements throughpricing, convenience, safety,offer relevancy or product features
Customers will share data when rewardsoutweigh risksAccountability and added value are more important to customers than controlwhen it comes to sharing data
Accountability and added value
Control
38%
37%
36%
35%
Ability to approve or deny the types ofinformation collected/used and makechanges over time
Needs to be legal and routine to providetheir information
Ability to easily understand theirinformation and unilaterally correct errors
Ability to permanently delete or maskinformation at end of relationship
Do not believe that customerswould share their data
28%
27%
23%
5%
25%
%
40
10
20
30
Fully transparent, declarationson how data will be stored andused including for how long
Page 14
Leaders seek more context while laggardsoptimize status quoOrganizational data priorities
1. Improving confidence in the data2. Protecting the data3. Reducing cost of data management4. Ensuring freshness at point-of-use5. Connecting disparate data sources
Shared top priorities
35%20%
35%24%
39%29%
33%24%
30%23%
34%29%
33%28%
Integrating externaldata sources
Adding granularity to thedata collected today
Adhering togovernance policies
Enabling morebusiness users
Reducing complexityof data environment
Adding new typesof information not
collected today
Defining dataconsistently throughout
the organization
Sorted by difference
Leaders Laggards
Page 15
Advanced analytics are common andperformed throughout organizationsFunctions performing advanced analytics
Sorted by difference
Page 16
Leaders see opportunities across the board
Leaders believe new data sources drive improvements in how they
Leaders see
3x“”
Market and sell75%Laggards 28%
Differentiate value71%Laggards 27%
Engage customers71%Laggards 27%
Set strategy69%Laggards 23%
Work with others69%Laggards 22%
Model and manage risk70%Laggards 24%
more
opportunity
Page 17
The road ahead: the action plan for insurers
Recognize the profound impacts andtransformational nature of sensor data –especially relative to competitive threats.
Engage customers to help formulate the rightdata strategy.
Start solving for technology – partner, developor takeover?
Err on the side of share.
Move forward or move on.
1
2
3
4
5
Page 18
Further reading
To learn more, visit:ey.com/InsuranceSensorSurvey
Page 19
Further reading
Health insurer ofthe future
2015 Retail LifeInsurance andAnnuityExecutive Survey
Global ConsumerInsurance Survey2014
The future ofunderwriting
Page 20
Thank you!
Page 21
EY | Assurance | Tax | Transactions | Advisory
About EYEY is a global leader in assurance, tax, transaction andadvisory services. The insights and quality services we deliverhelp build trust and confidence in the capital markets and ineconomies the world over. We develop outstanding leaderswho team to deliver on our promises to all of our stakeholders.In so doing, we play a critical role in building a better workingworld for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to oneor more, of the member firms of Ernst & Young Global Limited,each of which is a separate legal entity. Ernst & Young GlobalLimited, a UK company limited by guarantee, does not provideservices to clients. For more information about ourorganization, please visit ey.com.
© 2016 EYGM Limited.All Rights Reserved.
EYG no. EG0324ED None
This material has been prepared for general informational purposes only and is notintended to be relied upon as accounting, tax or other professional advice. Pleaserefer to your advisors for specific advice.