Mahendra Nambiar

Vice President, Global Insurance

Solutions & Innovation Head

This information is not a commitment, promise or legal obligation to deliver any material, code, or functionality and the development, release and timing of any features or functionality described for our products remains at our sole discretion. 2016. Confidential. Pegasystems, Inc.

©2016 Pegasystems Inc.

2

3

1990’s

•Early 90’s: Credit-based insurance scores (CBIS) introduced

•Online/direct channel opens

•Late 90’s: CBIS’s widely adopted by P&C insurers

2000’s

•NCOIL regulations introduced

•Data, analytics, modeling become major part of process

•3rd party data introduced

2010’s

•Telematics/UBI

•Behavioral data

•Connected economy

•Sharing economy

•Comparing economy

4

The Insurance Industry is about to change

radically and rapidly, creating a massive

opportunity for innovative companies to

emerge and improve massively on the way

insurance is built, bought, and

experienced.

Leading insights on global insurance industry

15,500

150+

Survey responses

in the Customer

Experience Index

executive

Insurance

Interviews

9th

year of

publication

■ Customer

Experience

■ Spotlight on Future of

Insurance in a Connected

World

■ Country Snapshots

30Insurance

markets

covered

3ReportFeatures

6

48.8%

51.6%

59.3%

56.6%

64.7%

56.2%

33.9%

36.0%

35.4%

34.6%

40.3%

35.5%

DevelopingAsia-Pacific

DevelopedAsia-Pacific

LatinAmerica

Europe

NorthAmerica

Global

OthersGen Y

40.7%

44.7%

47.3%

49.9%

51.6%

48.2%

33.3%

29.0%

32.3%

29.0%

36.2%

30.5%

DevelopingAsia-Pacific

DevelopedAsia-Pacific

LatinAmerica

Europe

NorthAmerica

Global

Positive Experience in Traditional Channels,

by Age and Region (%), 2015

Positive Experience in Digital Channels,

by Age and Region (%), 2015

PP Gap

24.4

22.0

23.9

15.5

14.9

20.7

15.3

20.9

15.0

15.7

7.3

17.7

PP Gap

Connectivity and Artificial Intelligence

Customer Centricity

Transparency

OMNI-CHANNEL CUSTOMER EXPERIENCE

CUSTOMER ENGAGEMENT &

EXPERIENCE EXPECTATIONSCONNECTED DEVICES, IOT, &

USAGE BASED INSURANCE

NEW RISKS

& NEW MARKETS

THE SHARING ECONOMY

DISRUPTIVE ENTRANTS

& BUSINESS MODELSREGULATORY

ENVIRONMENT SHIFTS

Largest Taxi Service That Owns

No Taxis

- Founded in 2009

Largest Accommodation

Provider That Owns No Real

Estate

- Founded in 2008

Largest Phone Company That

Owns No Telco Infra

- Founded in 2003

Most Valuable Retailer That Has

No Inventory

- Founded in 1999

Biggest Media Owner Creates No

Content

- Founded in 2004

World’s Largest Movie House

Owns No Cinemas

- Founded in 1997

10

Within the US, Approximately 70% of insurance tech deals went to

non-health insurance areas

For Insurance Carriers For Policy Holders

Self selected pools offer lower risk

profiles

Less likely to report small claims

Reduces moral hazard of

insurance

Premium Discounts if there are no

claims

Ability to pool risk with cohesive groups

to minimize risk

Have a vested interested in spreading

the word and getting friends to join

Using anonymized social and search

engine data. BBM identifies unmet

insurance needs. Builds affinity

groups and negotiates deals with

insurers. Sells through social

networks.

Bought By Many was named Fintech

Innovation of the Year in 2015.

Partnership with Ping An in China

Acquired an Insurance Broker in the

UK

Social Distribution

https://www.youtube.com/watch?v=3h8-GEX159M

This is an online life insurance

company underwritten by Scottish

Friendly Assurance Society. Beagle

Street started in 2012 and is

designed to allow people who have

experienced a major life moment

such as buying a house, getting

married or having a baby to get

affordable life insurance quickly.

This company has refocused the

relationship with the insured to that of

an advisor, a life events guide. The

model is tuned to reinforce trust with

the end customer.

Events Partner

This is an example of bringing

insurance products to the customers

journeys rather than creating a new

insurance journey.

Alibaba and ANT achieve this by

offering products that are integrated

into the ecommerce journey, shipping

insurance for example.

In 2013, Ant Financial set up its own

insurance company called Zhong An.

Integrated Insurance

https://www.youtube.com/watch?v=K7mNiY6ts2k

Whatever path you chose to accelerate the transformation of your business, three things are of paramount importance:

1. Fully Understand Your Starting Point (& Your Target!)

2. Focus More On Management Intensity Than Technology Intensity

3. Capability Optimization Is Not Innovation

4. Leverage Data And Insights As The Fundamental Catalyst For Innovation