Will Usage Based Insurance (UBI) disrupt the insurance industry?
13
Mateusz Maj Evangelist & Marketing Actuary Insurance 2.0 through AI & Engagement Mateusz Maj Evangelist & Marketing Actuary VivaDrive INNOVATE OR NOT TO INNOVATE … AND DIE? Will Usage Based Insurance (UBI) disrupt the insurance industry?
-
Upload
mateusz-maj -
Category
Business
-
view
225 -
download
0
Transcript of Will Usage Based Insurance (UBI) disrupt the insurance industry?
Mateusz Maj Evangelist & Marketing Actuary
Insurance 2.0 through AI & Engagement
Mateusz Maj Evangelist & Marketing Actuary
VivaDrive
INNOVATE OR NOT TO INNOVATE … AND DIE? Will Usage Based Insurance (UBI) disrupt the insurance industry?
THE FOURTH INDUSTRIAL REVOLUTION
Artificial Intelligence, robotics, IoT, uber-connectivity, quantum computing, …
INSURANCE SECTOR Will Auto Insurers survive their collision with new industrial revolution?
No brand loyalty U.S. auto insurance brands spent ~$6 billion on marketing with no improvement i.e. stagnant premium growth and very low NPS score. High acquisition cost Acquisition costs of 10-15% of expected Lifetime Premium – €500+ on the high end.
High retention cost with no guarantee on returns Still insurers focus on acquisition rather than retention, while attracting a new customer costs five times as much as keeping an existing one.
Low profitability due to high claims Claims constitute up to 90% of insurers’ costs.
Commoditization = price wars Every insurance brand sounds the same and they differentiate on price only. They all consider Google a potential rival.
AUTO INSURANCE – TRADITIONAL APPROACH
1980s Now
Profession
Engine power
Coverage
Bonus-malus
Coverage
Bonus-malus
Claims history
Traffic violation
history
Age of vehicle
Use of vehicle
Make of vehicle
Purchase price
Parking place
Occupation
No. of drivers
Age of drivers
Maritial status
Real estate
Driving license
Mileage
Registered owner
Credit rating
…
Do we need additional factors? Is something new and better necessary?
AUTO INSURANCE – RATING TRENDS
AUTO INSURANCE – USAGE-BASED-INSURANCE (UBI) – THE NEW NORMAL?
UBI is the new insurance scheme where insurance
premiums are calculated based on driver exposure and/or
behaviour taking into account mileage, speed, driving
dynamics among others.
AUTO INSURANCE – UBI BENEFITS
Insurer Insured
Better risk assessment Discounted premium
Positive selection of good drivers Safer driving
Improving customer-insurer
interaction
Additional services like roadside
assistance
Risk reduction through better
driving
Does it work and does it offer enough value for insurers and the insured?
AUTO INSURANCE – UBI BEST BEST PRACTICES - ITALY
4.8M
Information from Matteo Carbone – Bain & Company
26
16%
Black-boxes fitted in cars
Insurers offering UBI
Penetration rate
40%
Best practice best penetration rate
on the market
BUT
• UBI is semi-compulsory – every insurer needs to offer an option of UBI
• Italy is a high insurance rate country – possible to reach a positive business model
• Does not work elsewhere - the existing business model of UBI does not present enough
value, neither to the insurance company, nor to the end customer
AUTO INSURANCE – WORKING EXAMPLE – VITALITY DRIVE
• Provides a tangible value through
rewarding system (drive well, earn points &
exchange them to rewards);
• Viable business model through successful
ecosystem with multiple partners, where
rewards are offered by partners;
• Vitality program – foundation of a business
model making Discovery (former startup) a
global player with $8 bn market cap.
VIVADRIVE Make your own Vitality program
VivaDrive is a Platform-as-a-Service (PaaS) solution that a) analyses driving data; b) discovers insights about the driver and provides personalized feedback to the driver; c) uses gamification with a rewards program to change driving behavior d) builds a loyal community.
VivaDrive is bringing to the insurance industry lower customer acquisition and retention cost, brand loyalty improvement and claims reduction.
SOLUTION VivaDrive - community-driven magic formula
Stay away from ‘price wars’ and focus on more efficient ‘value wars’
1. PROFILING & FEEDBACK Use our personal driving coach and have all
the insight to become a better driver
2. GAMIFICATION & REWARDS Driver engagement through game
dynamics & personalized rewards
3. COMMUNITY Connect with other drivers. Share personal experience. Benefit from the community.
CONNECTED CAR Integrate with connected car platforms
CAR/RIDE SHARING Offer policies to new
sharing economy initiatives
TELECOM PARTNER Reach out to large user-base and link your app with a telecom bundle
FLEETS/LEASING Engage corporate communities
ROADSIDE ASSISTANCE VAS - Remote roadside assistance service
CREDIT CAR PARTNER Pre-paid loyalty card
Collaborative business model through coalition loyalty program
boosted with AI & personalization
LOYALTY PLATFORM Share costs with loyalty partners
GOVERNMENT & NGO Independent prevention platform
that unlocks a new acquisition channel
8 1
2
3
4 5
6
7
USE CASE VivaDrive – make your own successful ecosystem
Mateusz Maj Evangelist & Marketing Actuary
[email protected] 0032 494 899 891 0048 786 212 481
www.vivadrive.io
VivaDrive Pr. Roger van Overstraetenplein 2, 3000 Leuven
[email protected] 0032 484 899 891
