October 26, 2017 INNOVATION EXECUTIVE BOARD · EXECUTIVES AND STARTUPS TOGETHER • A three month...

STATE OFINSURTECHTim Hoying

October 26, 2017INSURANCEINNOVATIONEXECUTIVEBOARD

UPDATE ON INSURTECHINVESTMENT

145 151

442

312

852

1,302

1,630

1,052

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2010 2011 2012 2013 2014 2015 2016 H1 17

$U

SD

, in

mil

lio

ns

THE INSURTECH LANDSCAPE IS GROWING WITH CLOSE TO $7.1 BILLION INVESTED TO DATE

The invested amount has not been disclosed for 158 deals out of 722 (22% of the database)

Excludes Zenefits ($500M) and Zhong An ($931M)

H2 17 TBD

17 36 49 63102

139

214# OF DEALS

102

VC FUNDING OF INSURTECH COMPANIES, IN MILLIONS $USD

• 2016 is the second consecutive year that the amount of investment was above the $1bn threshold(even when excluding Zenefits and Zhong An)

• The number of deals has increased more than tenfold between 2010 and 2016

Source: Accenture Research based on data from CB InsightsCopyright © 2017 Accenture Security. All rights reserved. 3

NORTH AMERICA REMAINS THE LARGEST MARKET FOR INSURTECH INVESTMENTS

Geographic Split2010-2017

North America219 companies485 deals$5.0b

Europe93 companies144 deals$690m APAC

37 companies56 deals$1.3b

RoW20 companies37 deals$43m

- The bubble size reflects the total invested volume between 2010 and H117.- The invested amount has not been disclosed for 158 deals out of 722 (22% of the database)

Top 10By $ invested to date

US

CHINA UK&I

Copyright © 2017 Accenture Security. All rights reserved. 4Source: Accenture Research based on data from CB Insights

THE LARGEST AMOUNT OF VC INVESTMENT IS IN DISTRIBUTION & MARKETING

UNDERWRITING & RISK MANAGEMENT

DISTRIBUTION & MARKETING OPERATIONS & CLAIMS

Peer-to-peer brokers, digital advice, user-friendly customer experiences

Underwriting optimization, intelligent automation, underwriting analytics

Predictive claims and risk analytics, intelligent claims automation

EXAMPLES OF 2016 TOP INVESTED INSURTECHS AND THEIR VALUE CHAIN FOCUS

$1,028 ,

63%

$241 ,

15%

$280 ,

17%

$76 ,

5%

2016 SHARE OF VC FUNDING ACROSS EACH STEP IN THE TRADITIONAL INSURANCE VALUE CHAIN($USD, in millions)

2016 VC FUNDING

Distribution & MarketingUnderwriting & Risk

Management

Operations & Claims

Cross Value Chain

Source: Accenture Research based on data from CB InsightsCopyright © 2017 Accenture Security. All rights reserved. 5

$802 , 49%

$559 , 34%

$268 , 17%

$350 , 34%

$262 , 25%

$434 , 41%

INVESTMENTS IN LIFE AND MULTILINE ARE GROWING, ESPECIALLY IN 2017

-

100

200

300

400

500

600

700

800

900

2012 2013 2014 2015 2016

$U

SD

, in

mil

lio

ns

Health P&C Life & Multiline

2015 excludes Zhong An’s $931M

(P&C), Zenefits $500M (Health) and Ins110.com $83M (Travel).

2016 H1 17

WHILE HEALTH AND P&C HAVE HISTORICALLY BEEN THE LARGEST SECTORS TO RECEIVE INSURTECH FUNDING…

…THERE HAS BEEN CONSIDERABLE GROWTH IN LIFE & MULTILINE INVESTMENTS

Health P&C Life & Multiline4-year CAGR

Health P&C Life & Multiline

36% 60% 83%

Insurance sector, total and share of VC funding ($USD, in millions)

Insurance sector, VC funding ($USD, in millions)


INTELLIGENT AUTOMATION AND AI INVESTMENTS ARE GAINING MOMENTUM

IOT/Connected Insurance

Analytics/ Big Data

Intelligent Automation/ Artificial Intelligence

INSURANCE SECTOR, VC NUMBER OF DEALS

▪ The number of VC deals in IOT/Connected Insurance and Analytics/Big Data has dropped significantly in H1 2017 in comparison to previous years

23

15

8

31

65

27

20

47

11

10

24

6

2014 2015 2016 H1 2017

▪ The number of AI/Intelligent automation deals in H1 2017 has already surpassed the total for 2015 and is on track to surpass 2016


Copyright © 2017 Accenture Security. All rights reserved. 8

WHEN IT COMES TO STARTUPS, INSURERS LAG BEHIND RETAIL BANKS

Insurtech is not a silver bullet – the real challenge for insurers is to become more innovative in their everyday business. This means not holding new technologies at arm’s length, and not taking a piecemeal approach to innovation…

70%

56%

32%

32%

38%

26%

14%

17%

Retail Banks

Insurers

% of firms that work with startups or universities on digital initiatives

% of firms that provide monetary or non monetary (e.g. coaching) support to digital startups)

% of firms that host incubators (e.g. provide office space or facilities) for digital startups

% of firms that have an in-house venture capital fund (or similar) that focuses on digital

Source: Accenture Research, “The Rise of InsurTech” (May 2017). Activities of more than 200 insurers and 80 retail banks worldwide

INTRODUCTION TO OUR INSURTECHINNOVATION LAB


OVER THE PAST 7 YEARS, ACCENTURE’S4 FINTECH LABS HAVE MENTORED 135 STARTUPS

LONDON (EST. 2012)

• 23 partner banks / 5 associate banks• 36 alumniSample alumni:

NEW YORK CITY (EST. 2011)

• 16 partner banks / 13 associate banks• 38 alumni

Sample alumni:

DUBLIN (EST. 2014)

• 8 partner banks• 12 alumni

Sample alumni:

HONG KONG (EST. 2014)

• 12 partner banks / 8 associate banks• 15 alumniSample alumni:

260+ PoCs initiated

$535M Capital Raised post

FinTech

475+ Jobs created post

FinTechOUTCOMES


OUR INSURTECH LABS BRINGS SENIOR EXECUTIVES AND STARTUPS TOGETHER

• A three month accelerator program, bringing senior executives together with InsurTech start-ups

• The program is designed to help start-ups mature their offerings and build valuable relationships with decision makers and investors within the industry

• The objective of the lab is to progress offerings from proof-of-value to proof-of-concept

• The program has a series of structured activities to create engagement between the start-ups and senior executives from our partners, banks and insurers.

WHAT WE DO


THERE ARE FOUR CORE COMPONENTS OF OUR INSURTECH LABS

FINANCIAL INSTITUTION & VC MENTORSHIP

Mentors from at least three of the participating financial services firms’ technology teams

Access to users / business units within the financial services firms for product feedback

EXECUTIVES IN RESIDENCE

Current or former executives with backgrounds in various disciplines (e.g., technology, business, regulatory)

May also include members of the academic community (e.g., data science, Artificial Intelligence)

LEADERSHIP PROGRAM

Access to speakers on issues relevant to early stage companies

Regular interaction with senior executives from the financial services community

ENTREPRENEURS NETWORK

Mentorship from the participating VC firms

Opportunities for one-on-one mentoring sessions with FinTech and InsurTech entrepreneurs


WE LAUNCHED OUR FIRST INSURTECH LAB IN LONDON WITH 13 PARTNER COMPANIES


IN YEAR 1, WE RECEIVED 102 APPLICATIONS FROM A DIVERSE RANGE OF OFFERINGS

17%Unique Commercial

15%Analytics

10%P2P

7.5%LP&I

7.5%On Demand / Push Insurance

7.5%Smart Contracts + Blockchain

Breakdown of Total

InsurTech Applications

27%Other 5%

Social Media

5%CRM Application

5%Mobile Platform

5%Telematics

5%APIPlatform

2%Chatbot

Breakdown of Other

InsurTech Applications


FIVE INSURTECH FIRMS MAKE UP OUR 2017 COHORT

TELEMATICS PLATFORM

Kabzy provides the facts

surrounding road accidents by

capturing live data to create a

3D reconstruction of the event.

API PLATFORM

Kasko offer an insurance API to

quickly digitalise and integrate

insurance products within

websites and apps

RENTAL INSURANCE ECOSYSTEM

InsureStreet replace rent

deposits with an insurance

product, costing a 5-10% to

deposit value, based on micro

risk and pricing.

SOCIAL MEDIA

Digital FinePrint turns social

media data into insurance data,

allowing customers to ‘Autofill

with’ Facebook or LinkedIn.

CHABOT

SPIXII is a smart Chatbot for

selling insurance that adapts

the way it communicates

depending on who it is talking

to.


WE ARE IN THE PROCESS OF ROLLING OUT AN INSURTECH LAB IN NEW YORK CITY

LondonFinTech Lab

Launch

Dublin & Hong Kong

FinTech Lab Launch

New YorkFinTech Lab

Launch

LondonInsurTech Lab

Launch

2011 2012 2014 2017

New YorkInsurTech Lab Launch

• Areas that will be of interest include: • Leveraging new data sources for underwriting and

claims • Applying artificial intelligence to the underwriting

and claims process• Facilitate a benefits marketplace• Develop new products for microbusiness and large

employers• Tackle core infrastructure tools (cybersecurity,

cloud enabling)

PARTNERS

SPOTLIGHT ON INSURE TECHSTARTUPS


AppBus is a platform that securely integrates enterprise applications on consumer devices over the public internet without a VPN or requiring changes to the underlying application code.

Airware provides everything enterprises need to collect, manage, and analyze aerial data. Our customers use our enterprise drone solutions to translate aerial data into actionable business intelligence.

DemystData’s innovative data gateway unlocks financial services as scale. Access, match, and structure a myriad of data into a single platform to make the right customer decisions in real-time.

October 26, 2017 INNOVATION EXECUTIVE BOARD · EXECUTIVES AND STARTUPS TOGETHER • A three month...

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