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TRANSCRIPT
the geospatial future of insurance
Hugh Saalmans, IAG
Location Science Manager
[email protected] @minus34
“May you live in
interesting times…” We are in the age of digital disruption: a customer-led, data driven,
technology enabled age
An age where your ability to empower customers and citizens will
determine your future success
An age where change is the only constant
“May you live in
interesting times…” ancient curse
IAG
(digital) disruption
the enablers
insurance is changing
the geospatial future of insurance
IAG is ANZ’s largest general insurer
IAG is ANZ’s largest general insurer
With revenues approaching $11bn and $2tn in assets
protected; including millions of homes & cars and
100,000’s of businesses
Our brands date back to
almost 160 years ago
We’re heavy users of geospatial tech and data, across
many areas of the business.
The key things we use geospatial for - are fundamental to
insurance
For example:
2012 flood risk data
Risk based pricing: using a combination of GNAF, natural peril
data and HERE’s road data and POIs, for example, to determine
each customer’s individual risk at the property level
Asset Data: using building & property data, such as PSMA’s
Geoscape, to improve risk modelling & simplify the quotation
process for our customers
Major Event Mapping: using live weather & bushfire feeds to
be alerted to disasters before they happen; to respond more
quickly to impacted customers
Australian Business Roundtable: using our geospatial & peril modelling
expertise to generate reports into the cost of disasters through the
Australian Business Roundtable.
The Australian Business Roundtable champions disaster resilience &
community safety and is comprised of the organisations above
IAG is ANZ’s largest general insurer
and…
IAG is ANZ’s largest general insurer
and…
A customer led, data-driven
organisation
The Group’s strategy is to deliver great
customer experiences by leveraging
our market leadership to create value for
our customers, people, partners,
shareholders and the community.
STRATEGY
1.maintain leading market position in personal and
commercial insurance in Australia & New Zealand;
2.grow Asian footprint and its earnings contribution;
3.accelerate digital transformation; and
4.create deeper customer insights & an agile
response
PRIORITIES
1.maintain leading market position in personal and
commercial insurance in Australia & New Zealand;
2.grow Asian footprint and its earnings contribution;
3.accelerate digital transformation; and
4.create deeper customer insights & an agile
response
PRIORITIES
Why are we focussing on this…?
disruption
IAG is focussing on digital transformation and creating
deeper customer insights to limit the impact of
disruption to our business.
What is disruption? – there are 2 perceptions…
disruption?
First - there’s this big, scary digital wave coming that could
impact your industry, but you haven’t worked out:
Whether it’ll impact your organisation? How it’ll impact
your organisation? How big the impact will be? or How to
mitigate it’s impact?
disruption?
Or there’s this exciting opportunity to ride the digital wave and:
- create a new service that fills an existing gap in the market; or
- create a new way of doing business that provides superior
customer experiences, and gains you market share
Perceptions aside,
What is disruption?
Changes enabled by digital
technologies; occurring at
a speed & scale that
disrupt existing ways of
doing business
What it’s doing is shifting the power of
choice from institutions to the individual
Which is why this era is also referred to as
“the age of the customer”
disruption may be tech enabled,
but it’s still people led
At disruption’s heart is a deep understanding of what people want, what
motivates them, their personal preferences, their lifestyle choices & how
they want to be treated by an organisation
Traditional energy providers offer:
Lock-in plans
Limited billing options
Pricing transparency issues
Result: Low customer satisfaction
case study
The disrupter offers:
No lock-in
Purchase on the go (via app)
Clear pricing & specials
Result: Industry leading satisfaction
case study
the enablers
What’s enabling disruption, from both a
technology & work practices point of view?
the enablers smartphones
DevOps
infrastructure as code
open source
data & analytics
smartphones
In under 10 years, smartphones have become all pervasive
Pope Benedict’s appointment in 2005…
Pope Francis’ appointment in 2013…
With the smartphone came the expectation that your
services are available on any device, at any time.
Smartphones, and subsequently tablets, fundamentally
changed how easily and quickly customers expect to
interact with your organisation
DevOps
DevOps is a approach that gives
developers full ownership of an
application or API from the first line
of code, through to testing,
deployment & maintenance
DevOps
It allows organisations such as Facebook, Uber & Google
to rapidly create & update their apps and APIs at a speed
and frequency that wasn’t previously possible
DevOps
The cornerstones of DevOps are:
• Version control, task management &
collaboration using tools such as Git & JIRA
• Automated testing and deployment using
tools such as Atlassian’s Bamboo
infrastructure
as code Complementary to DevOps is the ability to
script the repeated and rapid creation of
server resources, at any scale.
The foundation of this is cloud computing,
virtual machines and containerisation.
What’s containerisation?
infrastructure
as code Containerisation allows you to run single
purpose software inside a stripped down
operating system, making it highly reliable
and less resource hungry.
By chaining containers together – e.g. a db
container, a geo server container & a web
server container – you can have your geo-
app or API running in no time at all
infrastructure
as code
The best known container platform is Docker,
which runs well inside the best known cloud
computing platform – Amazon
infrastructure
as code Here’s a sample Docker script to build a
Geoserver container from scratch in a few
minutes. Using a few more scripts you
could deploy that container to Amazon,
across 100 servers if you want to.
No system architect required, no network
administrator, no hardware procurement!
open source
open source
Open source allows you to deploy your apps and APIs cost effectively
It’s another key reason why startups and disrupters have low
operating costs
Zero licensing costs, regular updates, proven reliability & scalability,
established developer & user communities, tools that are designed for
DevOps & infrastructure as code – open source ticks many boxes
open source
It’s the combination of open source + code based infrastructure +
DevOps that allows Facebook to change 10 lines of code and then
redeploy their app globally on 10,000 servers, several times a day if
needed!
…and here’s a big threat - as more organisations move towards a
more disruptive approach - this combination will slow the growth of
the IT industry as organisations become more self-sufficient
…and the geospatial industry will not be immune to this!
data & analytics
In the disruptive world – data and your ability to use data,
through analytics, makes the difference between bad,
good and great
Having large amounts of your own customer data can be
an advantage here, but only if you can access and use it!
If you’re a start-up, then you’re going to have to lean
heavily on external datasets – and this is where open
data, and open Government data in particular becomes
valuable.
data & analytics
The best open data example in Australia
being the PSMA’s recently opened GNAF
By having access to a national,
geocoded, validated address set –
disrupters can now validate their
customer data and analyse it down to the
property level, with minimal startup costs
A powerful capability!
data & analytics
Other good examples of open data
include:
- Weather and bushfire alert feeds from
BoM and fire authorities
- The entire Landsat library from GA and
others
data & analytics Your customer data will be similar to
your competitors; and everyone has
access to the same open data…
So, your analytical capability needs to
be the thing that separates you from
your competitors
In other words: the better your analysis
driven insights are into your customers
and your organisation - the better your
decision making will be
insurance
is changing Recent research from PwC found that the global insurance industry ranked
second only behind media and entertainment as the industry most
significantly affected by technological change.
When you couple that with consistently low customer satisfaction across the
industry – you realise that disruptors have both the tech and the motivation
to enter the market
There are a lot of disruptors targeting the insurance industry right now.
There’s obviously a lot of hype surrounding Insuretech, but there’s also a
lot of money being thrown at it
In 2013, the total funding for InsurTech startups was US$600 million. In
2015 it was over US$1.4 billion!
trends On-demand, micro & P2P insurance
Usage based insurance
• Telematics
• Home sensors (IoT)
Autonomous vehicles
Improving the customer experience
on-demand, micro
& P2P insurance
In an effort to make insurance more
meaningful and affordable…
You can now get time based
insurance in the UK for your car
e.g. I want to insure my car from
9am to 12pm on Saturday
on-demand, micro
& P2P insurance
You can also now insure
individual items of value,
(known as micro-insurance),
through sites such as IAG’s
Insurance4That
on-demand, micro
& P2P insurance
Peer 2 Peer insurance is also growing
with German based Friendsurance
starting up in Australia soon
It’s based on the simple premise that
customers pay a premium into a
communal pool, and then get some
money back if the pool isn’t emptied
throughout the year by claims
on-demand, micro
& P2P insurance For P2P insurance to work it needs
accurate, property level risk ratings
(as IAG’s done for a number of years)
using spatial data
This is because each customer’s
contribution is based on their
individual, location based risk
Again, this highlights the value of
open datasets such as GNAF
UBI - telematics
UBI - telematics
Telematics, or pay as you drive, products account for ~5% of the US &
UK personal motor insurance markets and have a small penetration in
Australia through products like Insurance Box
UBI - telematics
UBI - telematics Whilst the data collected from telematics sounds like a gold mine of
location enabled, behavioural big data - the reality is that the product in
Australia is niche and self selecting. Safe drivers are mainly the ones
using the products.
Also, most of the risk of each driver is primarily based on how many km
they drive, not how they drive. So the behavioural insights are limited
The impact of telematics in the insurance industry is real, but not on the
same scale as autonomous vehicles…
UBI - home sensors
UBI - home sensors
Home sensors are already impacting the insurance market - both Liberty
Mutual in the US and Allianz in Germany have partnerships with Google
Nest and Panasonic.
Install a home safety or security device, hook it up the internet and get a
discount on your insurance!
UBI - home sensors
UBI - home sensors
But this is where it gets interesting…
As smart doorbells, home security and weather sensors become
commonplace in Australian & NZ homes over the next 5-10 years…
We can foresee a future where there are 100,000’s of weather and
security sensors across each city!
UBI - home sensors
Imagine what impact that data will have on:
• Insurers’ understanding of risk; and
• Emergency responders & insurers’ ability to understand what’s
happening in a disaster;
As well as potentially improving weather forecasting itself
Autonomous
vehicles
Autonomous
vehicles
A 2015 KPMG report estimates that autonomous vehicles will reduce the
size of the personal motor insurance market by 60% within the next 25
years.
Given the personal motor insurance is the most profitable product line in
general insurance – the impact of this will be profound
Autonomous
vehicles
The effect of this will start to be felt in the next few years as semi-
autonomous vehicles fitted with sensors & vehicle to vehicle (V2V)
communications enter the market
Autonomous
vehicles To offset this steep decline in revenue - insurers are now turning to 3 key
areas for growth:
1. Liability insurance for autonomous vehicle manufacturers and car
share service providers;
2. Advanced customer analytics to help improve the customer
experience; and
3. A more advanced understanding of home insurance risk
Autonomous
vehicles
A more advanced understanding of home insurance risk is heavily
geospatial and will rely on acquiring large amounts of property asset data
(such as PSMA’s Geoscape)
This will allow us to start asking complex questions like – “what’s the
chance of the tin roofed house next door damaging our customer’s house
in a storm” or “what’s the tallest tree that could fall on the house”
Autonomous
vehicles
The data that autonomous vehicles capture is big!
They capture and analyse up to 1Gb of LIDAR, radar, imagery & high
precision GPS data per second
Autonomous
vehicles
Now, let’s jump to the future - 15-20 years from now when there will be
100,000’s of autonomous cars on the road capturing this data...
…if processing power and wireless internet speeds continue to grow
exponentially over this time – then we can imagine a future where entire
city streetscapes will be mapped in 3D, every day
What impact will that have on insurance and geospatial industries?
the customer
experience
Right now, the smart insurers are focussed on improving their processes
and capabilities to enable both incremental and groundbreaking changes
to the way customers experience their brands
I’d like to finish off with a couple of recent, real world examples of this…
the customer
experience
A year ago, a combination of severe storms due to an East Coast Low,
combined with a severe hailstorm 7 days later – left us facing ~50,000
claims – the largest number in the history of IAG
This would’ve have normally taken over a year to process and settle
Instead, we were able to settle 90% of all claims in 90 days (the target
we quietly set ourselves)
the customer
experience
This was achieved by re-engineering our processes, the rapid
deployment of micro-sites on our web site and bringing analytics into the
process to better understand how to help our customers…
the customer
experience
…as well as using new geospatial techniques to visualise the impact
the customer
experience
More recently, we became the first insurer in Australia to deploy drones
after a major event
After the Wye River bushfires last Xmas, the area was cordoned off due
to asbestos contamination
the customer
experience
With our assessors unable to get into the area, IAG got permission from
the CFA and our customers to fly drone missions over the area and
capture images of the damaged & destroyed homes
This allowed us to help customers who had lost everything by giving
them some certainty about their future soon after the event
I hope some of the themes around customer centricity &
technology enablement - and their impact on insurance &
the geospatial industry - have resonated with you and got
you thinking about the future of your organisation
I’d like to leave you with this quote, which best summarises
how to respond to the Age of Disruption
“Don't create a
digital strategy…
Create a strategy
for the digital age”