InsureTechWhat is it and what could it mean for insurers?

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With you today…

Matthew G SmithDirector, Global Strategy GroupKPMG in the UK

+44 7464 493615 matthewg.smith@kpmg.co.uk

3© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

The world is changing

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The drivers of disruption

1

2

3

Sector Convergence

Client experience

Extracting value

5© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Its already started for personal insurance….

60% online

6© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

…and its already emerging in Commercial Lines

Forces of

change

LargeSmallThe Mid market

Risk AggregationSmarter pricing

Better end-to-end solutions

Excess Capital and Capacity

Solutions vs Products

Collaborate vs BUY/BUILD

Increased growth in Captives

Emerging Risks

Sophisticated Analytics

Legacy operating models

7© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

And we see similar trends in Life & HealthInsurers are partnering with wearables startups

+Users accumulate “Vitality points” that enable them to qualify for shopping and travel points, and select users

will qualify for 15% premium reduction

Offers AXA customers a free WiThings Pulse as well as possible insurance discounts based on usage+

+ Links patients and their wearable devices to a plan that offers cash rewards for reaching health goals and specific

outcomes

8© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Venture capital has insurance squarely in its targets

Insurance Tech Financing 2011 to Present

Series A – $931M

Series B – $145M

Source: CB Insights

9© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Where is the money heading?

1,918

1,120

800 740600

390

150 140 110 50

6277

104

39

131

15

28

49

23 25

0

35

70

105

140

0

500

1,000

1,500

2,000

Health Auto InfrastructureLife & HomeComparison Product UserAcquisition

Data/Intelligence

ConsumerPlatforms

P2P

VC Investment ($M)Source: Venture Scanner, as of Jan 2016Source: 1 – Venture Scanner

Venture Capital Investment ($M)

Number of Companies

10© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Risk and Finance

Sales & Distribution

Underwriting & Risk

ManagementProduct

ManagementMarketing and

branding

Policy administration

& ServicingClaims

Management

Investments and capital

management

Product Peer 2 Peer

Internet of Things Telematics Data Analytics

Disrupters are active across the value chain

11© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

How to make the best choices

Creating a winning strategy and driving profitable growth

Vision

Higher PurposeHow will we win?

Where will we play?

What will we be famous for?

What role(s) do we want to play in clients’ lives?

— Financial Model— Business Model— Operating Model

Impacts:

12© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

What will it take

1

2

3

Organizational & Leadership clarity

Enterprise wide design of solutions

Partner and Collaborate

Thank you

kpmg.ca

© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

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