Innovations in Reinsurance...Blackberry Tom Tom Share price (local currency) RDG Presentation |...

Innovations in ReinsuranceAndre Eisele, Swiss Re Head of Client Management P&C ANZRDG Presentation8 March 2017

RDG Presentation | Swiss Re 2

Innovations in Reinsurance

Agenda

1/ Coverage of the Presentation – scope and purpose?

2/ Why Innovation is key & what kind of culture drives it?

3/ Technology as the “catalyst” and engine of innovation/change

4/ Swiss Re “innovative” product/solution examples



Agenda







What this Presentation is Not about ->1/ Does not give all the answers to what Innovation is all about2/ Not about Blockchain, Wearables, Cyber, Self-drive cars, Drones, and new digital apps3/ Does not distinguish between reinsurance and insurance (also not about RI structures)4/ What all reinsurers are doing, it does focus more on Swiss Re examples5/ Not specific to ANZ market

What this Presentation is about ->1/ Provides a view into the culture and importance of Innovation in our industry2/ Talks about one of the key drivers of innovation in (re)insurance -> Technology3/ Presents several specific Swiss Re “innovative” products/solutions4/ Presents ideas and products/solutions from a global marketplace5/ Hopefully leaves all of you with “fresh thoughts” around innovation in our industry



Agenda






Body Sensors & WearablesTiny, wearable, sensors collect data without inferringwith our daily lives in order to make better, more informedquantifiable decisions.

Smart Toilets: Doctors in Your Bathroom

Smart Homes

RDG Presentation | Swiss Re

0

20

40

60

80

100

120

140

160

7

Nokia

‘Digital Darwinism’ – The consequence of not adaptingbusiness models

Eastman Kodak

Blackberry

Tom Tom

Share price (local currency)


Most Innovative Companies report published by BCGsince 2005

• For the 10th year, BCG published alist of the 50 Most InnovativeCompanies

• Findings represent the responsesof more than 1,500 seniorexecutives across various roles /functions, regions, and industries

• The Most Innovative Companiesreports are the most widely readreports of consultancies

• Survey addresses most innovativecompanies as well as respondents'company's innovation practices

RDG Presentation | Swiss ReSource: BCG Global Innovation Survey, 2015.

The World's most Innovative Companies 2015

1 11 21 31 41

2 12 22 32 42

3 13 23 33 43

4 14 24 34 44

5 15 25 35 45

6 16 26 36 46

7 17 27 37 47

8 18 28 38 48

9 19 29 39 49

10 20 30 40 50


Innovation Remains at the Top of Most Companies’Agendas

19

40

23 23 25 26 24 24 22 22

47

32

43 43 3945 52 53

5357

0

20

40

60

80

2007

66

2006

72

2005

66

2015

79% respondents

Top priority

Top-three priority

2014

75

2013

77

2012

76

2010

72

2009

64

2008

66

Where does innovation/product development rank among your company'stop strategic priorities?

Source: BCG Global Innovation Survey, 2005–2015.

CAGR2%


Speed of adoption

Four main differentiators between leading innovatorsand the rest

Lean Methodologies

• Defined product specifications• Modularized product lines• Parallel development with stringent funnel• Intelligent launch plan• Short cycles and iterations• Standardized processes• Strong project manager• Meaningful KPIs• Systematic cross-functional integration• Accepts failure• Global knowledge management system• Designs quickly modeled and tested

Strong role of central teams Leveraging most impactful levers

Which of the following areas of innovation/R&D/productdevelopment will have the most impact on your industry over thenext three to five years?

8922

50

20

40

Change in % respondents citing significant impact, 2014–2015

Operationsprocess

Technologyplatforms

Big-dataanalytic

s

Speed ofadopting

newtech


Cultural conditions must be modified to supportinnovation agenda

Innovationconditions Definitions

Time outside day-to-day activities to think of new ideasTime to think

Freedom to experiment

Balance of creativity &functional expertise

Collaborative teaming

Link to language

Aligned incentives

Freedom to think, as well as walking-around space in which thoseactivities are expected, even protected

Ability to possess or obtain a great deal of knowledge about an issue,problem, or inquiry and develop creative solutions

Engagement with cross-functional, cross-geographic teams to increaseexposure to ideas, experiences beyond innovation team

Common language agreed upon to describe desired culture and keyactivities – used across functions and geographies

Incentives to encourage idea generation



Agenda






Technology has three major implications for the insuranceindustry

Catalysts / Inhibitors(e.g. technological diffusion, regulation, consumer, competitors)

Technological advancements(e.g. internet of things, blockchain)

Implications for the industry

Changein risk pools

(e.g. new risks)

Transformationof value chain

(e.g. automation)

Disruption ofindustry structure

(e.g. changing roles, newecosystems)

1 2 3


Technology is transforming the industry

Exponential increase of data on people andthingsExponential increase of data on people andthings

Common and secure use of distributed dataCommon and secure use of distributed data

Ability to recognize patterns in dataAbility to recognize patterns in data

More natural interaction between humans andmachinesMore natural interaction between humans andmachines

Impact of technological advancements

Digital engagementof consumers

Improved riskmeasurement

& modeling

Faster and moreinsightful processing

Automated, trustedtransactions


Current prediction show, that by 2019, approx. 213mwearables will be shipped (up from 88m)


Technology investments to date

17

Remaining on the cusp of business innovation

Distribution channel for micro insurance

• Combines mobile technology with insurance, reaches out to affinity groups in African markets

Monitor wearables

• As well as offering medical-grade devices Biovotion is building a platform to analyse data, whichcould help with automated underwriting

Individual data aggregation

• Provides individuals with one platform for their social media data, to be expanded to cover healthand financial data

• Individuals can then choose what to share for personalised benefits and services

Online health platform

• A variety of costumer engagement mechanisms are combined in a single platform

1 100% acquisition, not part of “tech fund”

App based telematics solution1

• Provide a customised, app based telematics solution to primary insurers


Potential new entrants or attackers

Search engines• Google• Facebook• Yahoo

Social media• Amazon• Whatsapp.• Facebook

Those who own the route toknowledge

Telecommunication/Internet

Retailers• Tesco• Carrefour• Walmart

• Telekom• Vodafone

Those who have big customerbases used to buying

• Samsung• Microsoft• IBM

Technology andElectronics

Data and Research• Apple (via HealthKit and

ResearchKit)• Samsung (via SAMI)

Those who have access tonew data and insights

Online shops• Amazon• Ebay

Payment providers• American Express• TransferWise• PayPal

Those who own thetransaction relationship


Risks mitigationand prevention will

decrease existing riskpools

19

The size of today’s risk pools will change

Existing RiskPool

OtherReinsurers

Brokers

Swiss Re

New risks increase theoverall risk pool

Primary InsuranceTerritory

Change in risk pools

New technologies willcreate shifting risk pools

Greater systemic riskincreases need for

reinsurance

Technology – Innovation / Changes to (RI) Landscape



Agenda






• 1/ Culture is key to innovation and innovation is key to success – let’s allplay our parts

• 2/ Technology is the biggest “catalyst for innovation” – let’s embrace itfurther and “make it part of us”

• 3/ The (re)insurance landscape will drastically change over the next 10years – let’s drive these changes instead of being changed……

• 4/ (Re)insurance markets should work close together in driving change –still too much silo mentalities in our industry

• 5/ Swiss Re is ready to drive “innovation changes” and wants to be moreactive in ANZ with you as key partners

AE Conclusions


Legal notice

25

©2017 Swiss Re. All rights reserved. You are not permitted to create any modificationsor derivative works of this presentation or to use it for commercial or other public purposeswithout the prior written permission of Swiss Re.

The information and opinions contained in the presentation are provided as at the date ofthe presentation and are subject to change without notice. Although the information usedwas taken from reliable sources, Swiss Re does not accept any responsibility for the accuracyor comprehensiveness of the details given. All liability for the accuracy and completenessthereof or for any damage or loss resulting from the use of the information contained in thispresentation is expressly excluded. Under no circumstances shall Swiss Re or its Groupcompanies be liable for any financial or consequential loss relating to this presentation.

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