Headline Verdana BoldEuropean Motor Insurance StudyThe rise of digitally-enabled motor insurance22 November 2016
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Contents
Welcome
Recent developments in the law relating
to general damages
Statistical review of the Irish Motor Market
Deloitte European Motor Study 2016
Motor Insurance reimagined
Cyber Risk and Data Privacy
The Future of Mobility
James Johnston│Senior Consultant, Financial Services, Strategy & Operations
Glenn Gillard│Partner and Head of Insurance
David Nolan SC│
Carmel Nivan│Actuarial Senior Manager
Darren Shaughnessy│Actuarial Manager
Ger Power│Actuarial Manager
Jacky Fox│Director, Enterprise Risk Services
John Kilbride│Director, Consulting
© 2016 Deloitte
Milestones
Nov 2015
RussellCase
Feb 2016
Oct 2016
Book of Quantum
Sep 2016
Mar 2016
Nov 2016
PPO published bill expected
Premiums
July 2016
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Irish Motor Market
Environmental and Market Analysis
Carmel Niven
Darren Shaughnessy
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•Form 2 & Form 8 data
•CBI Insurance Statistics 2015
•An Garda Síochána Traffic Statistics
•Central Statistics Office (CSO)
•Department of Transport, Tourism and Sport
•Road Safety Authority
•Injuries Board
Data Sources
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Aviva have been excluded due to inconsistencies in the data.
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Aviva have been excluded due to inconsistencies in the data.
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European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 37© 2016 Deloitte. All rights reserved
Overview of the study
The European motor market in numbers
Data sharing
Who is the digitally-enabled motor insurance customer?
What does the digitally-enabled motor insurance customer want?
App or dedicated device?
Customer concerns
Agenda
European Motor Insurance Study 2016
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 38© 2016 Deloitte. All rights reserved
• Objective of the study
• Conducted by over 20 Deloitte actuaries in 11 European countries:
• Austria, Belgium, France, Germany, Ireland, Italy, Netherlands, Poland, Spain, Switzerland, UK
• 2 main data sources –
• Large pan-European consumer survey
• Publicly available information on the size of each country’s personal motor market
Overview of the study
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 39© 2016 Deloitte. All rights reserved
Consumer survey
• The online survey contained a scenario-based conjoint analysis alongside a range of traditional questions
Overview of the study
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 40© 2016 Deloitte. All rights reserved
The European motor market in numbers
Personal lines motor insurance-GWP 2015 (€bn)
Estimated target market share of digitally enabled motor insurance for 2020 (%)
* Total market motor insurance market size (personal and commercial).
** The figure reflects the sum of the eleven surveyed countries and it includes commercial segments for some countries.
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 41© 2016 Deloitte. All rights reserved
The European motor market in numbers
Personal lines motor insurance-GWP 2015 (€bn)
Estimated target market share of digitally enabled motor insurance for 2020 (%)
* Total market motor insurance market size (personal and commercial).
** The figure reflects the sum of the eleven surveyed countries and it includes commercial segments for some countries.
Ireland
Our estimate of the penetration rate in
Ireland is above the European average.
This reflects a willingness both to switch
(greater than our study last year) and accept
data sharing
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 42© 2016 Deloitte. All rights reserved
The European motor market in numbers
Personal lines motor insurance-GWP 2015 (€bn)
Estimated target market share of digitally enabled motor insurance for 2020 (%)
* Total market motor insurance market size (personal and commercial).
** The figure reflects the sum of the eleven surveyed countries and it includes commercial segments for some countries.
United Kingdom
Along with Italy, the United Kingdom is the only country with
sizeable telematics solutions that are up and running. Although
telematics remains a niche market, we estimate that there is
a huge potential for digitally-enabled motor insurance. A
prerequisite may be to move to value added services and away from
price-orientated offers, in order to avoid becoming trapped in the
highly commoditized motor insurance market in the United Kingdom
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 43© 2016 Deloitte. All rights reserved
The European motor market in numbers
Personal lines motor insurance-GWP 2015 (€bn)
Estimated target market share of digitally enabled motor insurance for 2020 (%)
* Total market motor insurance market size (personal and commercial).
** The figure reflects the sum of the eleven surveyed countries and it includes commercial segments for some countries.
Italy
In Italy, the telematics market share is
already 15%, and our projection indicates that
by 2020 digitally enabled motor insurance
could represent as much as 27% of the
motor insurance market
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 44© 2016 Deloitte. All rights reserved
The European motor market in numbers
Personal lines motor insurance-GWP 2015 (€bn)
Estimated target market share of digitally enabled motor insurance for 2020 (%)
* Total market motor insurance market size (personal and commercial).
** The figure reflects the sum of the eleven surveyed countries and it includes commercial segments for some countries.
Germany
Data sharing is a sensitive topic in Germany.
Nevertheless, assuming this issue is tackled, given
the size of the domestic market and the level of
willingness to switch, our projections point to it being
one of the biggest European markets for digitally-
enabled motor insurance.
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 45© 2016 Deloitte. All rights reserved
Data sharing
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 46© 2016 Deloitte. All rights reserved
Who is the digitally-enabled motor insurance customer?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 47© 2016 Deloitte. All rights reserved
What does the customer for digitally-enabled insurance want?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 48© 2016 Deloitte. All rights reserved
What does the customer for digitally-enabled insurance want?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 49© 2016 Deloitte. All rights reserved
How to best serve your customers?
European Motor Insurance Study
Digitally-enabled motor insurance could be the opportunity for insurers to start a new type ofrelationship and product offering with their policyholders.
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 50© 2016 Deloitte. All rights reserved
How to best serve your customers?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 51© 2016 Deloitte. All rights reserved
App or dedicated device?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 52© 2016 Deloitte. All rights reserved
App or dedicated device?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 53© 2016 Deloitte. All rights reserved
App or dedicated device?
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 54© 2016 Deloitte. All rights reserved
Customer concerns
European Motor Insurance Study
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 55
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Conclusion
European Motor Insurance Study
Digitally-enabled motor insurance opens up a window of opportunity for motor insurers to extend the value proposition from claims-related services to a larger scope of services related to mobility.
Motor insurance
reimagined
James Johnston Senior Consultant, Financial Services, Strategy & Operations
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Could a digital proposition provide the opportunity for insurers to create frequent and meaningful engagement - breaking the traditional low touchpoint engagement cycle?
The engagement challenge
Policy Renewal
First Contact Claim Paid
I wait for an answer
I decide to buy
I receive the renewal
Premium increase of 30%
No I submit a claim
I contact the company
Positive impact
Negative impact
Engagement Points
Purchase at higher price than last year
12 Months
CURRENT CUSTOMER
ENGAGEMENT CYCLE
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Real-time Notifications Journey Assessments
Reactive Rewards
Car ConciergeAuto Claims Support
Green Driving
Usage Based
Motor re-imagined – through a digital proposition
Thinking outside of traditional product parameters, what features could be included to create meaningful engagement with customers?
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Getting on the road – usage based
Barry has provided his personal details to his insurer. He’s downloaded their app and permitted access to his digital wallet to pay his monthly usage based premium. He is now ready to get behind the wheel.
A discount in premium is the most important factor when deciding to
purchase a telematics product
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Real-time Notifications
Barry sets off to go Christmas shopping. There has been a crash on the M50, which is the route Barry takes to Dundrum. His insurer notifies Barry of this ahead of time and re-directs him to the fastest route.
53% of Irish customers are very comfortable with sharing vehicle data and 65% very/somewhat comfortable
with sharing geographical data
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Journey Assessment
On his way to Dundrum, Barry did not break any speed limits or use his phone while driving. He has earned 3 reward points as a result. He is now top of the leader board in his household and maintains his 5 star rating.
Irish customers are comfortable with sharing behaviour data (44% Very
and 33% Somewhat)
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Reactive Rewards
Barry receives an alert while in Dundrum to let him know he can use his rewards points to pick up a free coffee in Butlers, who are one of the affinity partners linked to his policy.
Almost two thirds of Irish customers are willing to share data in return for
geo-notification discounts
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Auto-claim SupportWhen Barry returns to his car, his windscreen is broken. Barry takes a picture which notifies his insurer of the damage in real-time and who dispatch a mobile glass repair vehicle to Barry’s location.
Over 50% of Irish customers would share driver data for assistance-related services
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Car ConciergeBarry has allowed his insurer access to his personal calendar via Microsoft office. His NCT is due in the next month so his insurer schedules this in his calendar and books it at a time that suits him over the Christmas period.
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Real-time Notifications Journey Assessments
Reactive Rewards
Car ConciergeAuto Claims Support
Green Driving
Usage Based
Green driving rating
Snap evidence of your claimAdvice on next best action
Digital wallet settlement
Auto-breakdown assistanceEmergency services
Tips & tricks for environmentally friendly driving
Real-time routing
Vehicle Diagnostics & Servicing
Accident Area Avoidance
Personal Planner
NCT booking & tax renewal Service reminders
Car rental Airport parking booking
Location-based offers
Rewards Partnerships
Safety index rating
Geo-fencing
Societal & domestic leader board
Rewards tokens based on scorePremium discount
Behaviour based premium
Digital wallet
Individual driver record
67© 2016 Deloitte. All rights reserved
Jacky Fox
Cyber & Data
Securing your data - a regulatory perspective
Central Bank Focus
• Governance• Cyber Risk management• Security awareness training• Security Operations • Threat intelligence• Incident management• Data management• Identity and Access management• Management of outsourcing/third
parties
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Cyber video: Companies like yours
http://www2.deloitte.com/global/en/pages/risk/articles/cybervideo-companies-like-yours.html
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• GDPR is a regulation as opposed to a local implementation of a directive
• Is your organisation ready for May 2018?
− governance, policies & procedures, DPO
• Has your organisation started preparing from a technology perspective?
− your legacy systems
− data analytics
− marketing
• Highlights of how GDPR affects some technology aspects of the data lifecycle
Overview
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• Data subjects are entitled to compensationfrom all data controllers in the chain of abreach
• Administrative fines for infringements ofcertain provisions the maximum fines are€10M or 2% global turnover
• Administrative fines for infringements ofArticles 5,6,7 & 9 or non-compliance with anorder from the supervisory can result in finesup to a maximum of €20M or 4% globalturnover
GDPR has Sanctions
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Authority to collect can be by contract, consentor other legal requirement e.g. tax authority
“Consent is presumed not to be freely given if itdoes not allow separate consent to be given todifferent data processing operations” (34)
• Systems need to explicitly demonstratepurpose of collection - this needs to be clearand transparent
• Record consent(s) - determine how to keepthis record
• Data elements needs to be proportionate insupport of data minimisation
Point of collection
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What about data that you already have collectedor extrapolated? How do you acquireretrospective consent.
• redesign of databases/repositories toaccommodate this
• How do you approach this from a systemperspective - campaign vs next contact
Full understanding of data third parties hold onyour behalf, data held in non-EEA countries andthe impact of events like Brexit
• Put systems in place to map data lifecycle andaudit and monitor compliance
Storage
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Processing needs to be compatible with theoriginal collection. “The controller should be ableto demonstrate that the data subject has givenconsent to the processing operation”
• Ability to restrict analytics on data in yourpossession e.g. marketing processes need tobe able to exclude non-consent subjects
• Need to modify apps & databases to put flagsin for various permissions e.g. share datawith other organisations
• Maintain and produce a record of processingactivities (Article 28)
• Subject is entitled to request details of thepurpose of processing activity (51)
Processing
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Setting a retention period is one thingimplementing this is practice is another.
Data spawns and replicates within organisationsand beyond e.g. insuring a car, crash, claim,points
• Systems will need to remove, anonymise orpseudonymise data when it is no longerrequired
• Designing or modifying a system to supportthe right to be forgotten (53)
• Designing systems that extend this right outfrom the original publisher to links andreplications (54) e.g. John Doe charged withassault
Removal & Right to be Forgotten
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“A subject should be able to receive the personaldata concerning him or her which he or she hasprovided to the controller in a structured,commonly used, machine-readable andinteroperable format” (55)
• To easily support this systems will need to bedesigned to easily extract and communicatesubject data. This process may need tosupport partial transfers and consider theprivacy of other subjects
• Controller to controller transfer may need tobe supported e.g. Utilities, banks, insurance
Portability
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Profiling includes the processing of data in orderto analyse or predict personal preferences,behaviours, and attitudes (21)
• Systems need to be in place to informsubjects of the existence and nature ofprofiling and record consent andpreferences. They also need to explain whatmight be lost for non-consent e.g. a betterphone or no claims bonus (48)
Profiling
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The required response period has decreasedfrom 40 days to one month. SARs will now beFOC.
• Controllers will need to provide systems toaccept SARs electronically
• Where possible a remote access securesystem for self service should be provided
− this would need to protect accidentalexposures (51) e.g. brother test
− Challenge around unstructured data
• Systems need to support rectification of data– this could be challenging for extrapolated orretrieved data
Subject Access Requests & Rectification
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• Data protection by design and by default(Article 23)
− Proportionality
− Consent
− Appropriate processing
− Access Control
• Data privacy impact assessments need to bepreformed on certain systems. This involvesmapping out data repositories, usage, access,consent (Article 33)
Privacy by Design & DPIA
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• Predict that pseudonymisation for historictrend and marketing analysis will be common,systems should be designed with this abilitybuilt in
• Smart use of encryption can greatly reducethe risk to your subjects
• Certification in some shape or form will beintroduced - (Article 39)
• Access control systems will be required
• Systems need to be designed to resistaccidental or unlawful events (39)
Security
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Some food for thought….Conclusion
The GDPR regulation does not differentiate between Legacy vs New systems - do not underestimate the budget and effort required to comply
If you do not have a register of your data assets and how they are used – how can you offer assurance that they are protected?
It is likely that CBI thematic inspections will focus on areas raised in the September 2016 report
Organisations need to review their Cyber Security Governance and embed a culture of Security and Privacy by design
€20M/4% of global turnover is significant
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Jacky Fox
Cyber & IT Forensic Lead
Deloitte
Thanks for listening
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Insuring the future of mobility video: Insurance industry business models under consideration
https://dupress.deloitte.com/dup-us-en/multimedia/videos/mobility-ecosystem-future-of-auto-insurance.html
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Converging forces transforming the future evolution of automotive transportation and mobility
Source: Deloitte Future of mobility analysis
Maturing powertrain technology
Lightweight materials
Rapid advances in connected vehicles
Shift in mobility preferences
Emergence of autonomous vehicles
Battery and fuel-cell electric vehicles offer higher energy efficiency, lower emissions, greater energy diversity and new vehicle designs
Stronger and lighter materials are reducing vehicle weight without sacrificing passenger safety
New vehicles are being outfitted with vehicle-to-infrastructure (V2I) vehicle-to-vehicle (V2V), and communications technologies, so every car can know precisely where every other car is on the road.
Younger generations are leading the way toward pay-per-use-mobility in place of owning a car; nearly 50% of Gen Y consumers like using a smartphone app for transport and already plan travel so they can multitask
Autonomous-drive technology is no longer a case of science fiction; the question is when and how will it become more mainstream and widely adopted?
87© 2016 Deloitte. All rights reserved
Our view on the future states of mobility
3
1
4
2
Extent to which autonomous vehicle technologies become pervasive
• Depends upon several key factors as catalysts or deterrents- e.g., technology, regulation, social acceptance
• Vehicle technologies will increasingly become "smart"; the human-machine interface shifts toward greater machine control
The driverless revolution
A new age of accessible autonomy
Incremental change
A world of carsharing
Extent to which vehicles are personally owned or shared• Depends upon personal preferences and economics• Higher degree of shared ownership increases system-wide asset efficiency
Low High
Personal Shared Vehicle ownership
Veh
icle
Co
ntr
ol
Assis
tD
river
Auto
nom
ous*
Future states of mobility
Source: Deloitte Future of mobility analysis
88© 2016 Deloitte. All rights reserved
Profound disruption will extend far beyond just the automotive industry
Motor Vehicles: decrease in personally-owned vehicle sales and increase in fleet vehicle sales.
Energy: Lower energy consumption from improved vehicle efficiency and the cost of commuting drops
Finance: Growth in fleet financing in place of auto loans and leasing
Insurance: Shifts from personal liability to catastrophic system-failure insurance
Media: Increase in consumption of multimedia and information due to not driving
Medical & Legal: Reduction of costs for emergency medical services and related legal fees because of fewer accidents
Retail: Increase in sales due to increased mobility of underserved segments (e.g. seniors)
Telecom: Additional bandwidth requirements to meet increased demand for connectivity and reliability
Technology: Emergence of automotive drive operating system players
Transportation: Substitution of demand for traditional taxis, limos, and rental vehicles with shared fleet vehicles
European Insurance Motor Study 2016 – The rise of digitally-enabled motor insurance 90© 2016 Deloitte. All rights reserved
Output from the study
European Motor Insurance Study
European Motor Study report Interactive Tableau dashboard
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