1

The Esurance StoryInnovation in the Real World

2

John Swigart, Former CMOEsurance

John is a 4th generation “insurance guy” (too boring?)

John rides a Burton Custom 160

3

Esurance Growth History

$4 $29 $33 $87$177

$321

$564

$766 $794 $753 $812 $847$1,003

$1,291

$1,484$1,563

$1,689

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Premium Written($millions)

4

• Relentless focus on our customers

• Understanding what customers value

• Intense focus on data to drive decisions

How Did We Do It?

5

Who Are Your Customers?

Policyholders Agents

6

Evolve With Your Customers

Erin Esurance Insurance for the Modern World

7

Value Vs. Commodity – Getting in the Consideration Set

8

How are Customer Expectations Set?Small Business Financial Services and Tools

Small Business Digital Tools

Personal Insurance and Finance

9

Using Data To Identify Value

• Policy level loss estimates

• Policy level lifetime value estimates

• Quote value scoring

10

Policy Level Loss Estimates

1Q 2Q

3Q 4Q

Google Online Agents

Mobile Web Buyers

Standard accident period loss calculations …

Would be disaggregated at the policy level…

And reaggregated into useful groups for analysis and decisions

11

It Is Not Easy

• Direct distribution and service is expensive to build (scale really matters)

• Accounting is not your friend in direct distribution

12

Direct Distribution is Expensive to BuildQuoting and Selling Mobile App Customer Self-Service

13

Powerful Lifetime Unit Economics – Horrible GAAP Accounting Result

Total Lifetime

Cumulative Renewals

First Term(6 months)Personal Auto Example

$4,000$3,200$800Premium

71%70%78%Loss and LAE Ratio

9%3%

-3%10%

0%2%0%2%

40%9%

-10%39%

MarketingSalesAgency Offset (3rd party products)Total Marketing

13%12%18%Other Operating Expenses

94%84%135%Combined Ratio

$232$512$(280)Underwriting Profit

14

Thank you!

jcswigart@gmail.com