Baoguan| Focus on Internet insurance in the past decade, property insurance business has generally shown a slow upward trend. However, in the past three years, the growth rate of actual premiums has continued to slow down, from 4.3% in 2015 to 2.8% in 2017.

protection|Focus on Internet insurance

In the past ten years, property insurance business has generally shown a slow upward trend. However, in the past three years (2015 to 2017), the actual premium growth rate of has continued to slow down , falling from 4.3% in 2015 to 2.8% in 2017. At the same time, the industry's profitability is also under pressure, with the return on equity (ROE) of global property insurance falling to 5.1% in 2017.

Among the eight major non-life insurance markets around the world, the comprehensive compensation rate of rose from 99.4% in 2016 to 101.8% in 2017. The main reason is the increase in the global natural disaster losses and the overall auto insurance claims cost . Among them, the insured natural disaster losses soared to US$135 billion in 2017, an increase of 165% year-on-year, becoming the most "loss" year since 1980. As for auto insurance, due to the increase in frequency and severity of claims, the cost of claims loss continues to rise. In addition, changes in customer expectations and technological progress are also "impacting" the company's interests.

In response to this, property insurance companies have begun to use technology to deal with the rapidly developing market environment. They use technologies such as artificial intelligence (AI) and advanced analytics in an innovative way to enhance customer engagement, improve operational efficiency, and better integrate with their ecosystem.

Kajie Consulting summarizes the top ten development trends of the global property insurance industry in 2019:

1

Value-added services to improve customer interaction

Key factors

◈ Customers, especially the younger generation, desire convenient, personalized, and multi-touch services;

◈ Insurance companies need to increase customer contact points to improve customer satisfaction;

◈ The increasing popularity of smartphones and mobile applications enables insurance companies to better deal with customers;

◈ The increasing popularity of smartphones and mobile applications enables insurance companies to better deal with customers;

◈ Connected devices such as security sensors and on-board applications make risk prevention and monitoring services possible.

Example brief description

interconnected devices help insurance companies add customer contacts and create a personalized product portfolio .

➤ American Allstate insurance Allstate cooperates with crowdsourcing navigation application Waze, allowing Waze users to request roadside assistance directly from Allstate through their App. In addition, Allstate's mobile application Drivewise can provide road safety tips and evaluate driving behavior.

➤ American church insurance company GuideOne focuses on to actively reduce risks . It partnered with smart home service provider Roost in early 2018 to provide customers with Roost's smart leak detector and icing detector for free.

enlightenment

➠ The form of mobile app has greatly increased customer access convenience;

➠ The interconnected devices help collect customer data, realizes personalized sales, upsells, and cross-sells ;

➠ Risk prevention can help reduce claims costs, and monetized services can also open up new sources of income.

2

Internet device, simplifies claims and improves customer participation

Key factors

◈ Insurance companies are facing the rising demand of customers for personalized and forward-looking services.

◈ Global market growth - is expected to have 125 billion connected devices put into use by 2030.

◈ Mobile App "transforms" smartphones into functional interconnected devices.

Example Brief description

➤ Real-time data supports "first-time loss notification" (FNOL), shortens the time for customer contact and claim evaluation .

─ Certified Collateral Corporation is a large provider of technologies such as cloud, mobile, , and . It provides insurance customers with a connected vehicle product that automatically detects vehicle accidents and sends text messages to customers to see if they need to file a claim.

➤ Personalized insurance, premium is based on the assessment of risks and uses .

─ American property insurance company State Auto, data analytics Octo Telematics and online insurance market EverQuote have reached a cooperation to provide customers with personalized auto insurance discounts. Users can share their driving data and receive premium discounts based on driving behavior by simply installing a driving app on their phones.

enlightenment

➠ Improve real-time data processing and execution capabilities.

➠ Achieve more accurate underwriting and risk pricing.

➠ Provide warnings, stop losses in a timely manner, reduce claims costs, and create a better customer experience.

3

Voice Assistant, enhances the value chain and enhances customer experience

Key factors

◈ Insurance companies need more experienced customer touch points;

◈ Advances in the field of artificial intelligence, such as natural language processing (NLP), voice recognition, etc.:

─ By 2021, the number of users of using voice assistants is expected to reach 1.83 billion .

─ The increase in voice assistant integration on mobile terminals has further increased the popularity of voice applications.

Example brief description

➤ Process simplification - Provide policy quotation, product information, terms and details, and agency appointments.

─Safeco Insurance has launched an application "Insurance Advisor". Users can use this service to allow Amazon voice assistant Alexa to popularize insurance knowledge and query insurance agents' contact information without leaving their home.

➤ Insurance Education - Provides an information database related to housing and automobile insurance.

─Progressive Insurance uses Google Home smart voice device to provide customers with vehicle and home care tips. The topics range from car buying and maintenance to smart home technology to relocation of new homes, aiming to increase customer stickiness and increase insurance conversion rate.

➤ Smart Assistant - Can be used for claim management.

─ Farmers Insurance has added an Amazon Alexa skill to allow customers to check the claim status and obtain contact information from their claim representatives. The feature also answers questions about insurance terms and policy coverage.

Inspiration

➠ Create a personalized claim experience to improve customer satisfaction.

➠ Fast and low-cost expansion of support services.

➠ Insurance companies need to overcome the network risks and privacy issues brought by voice assistants.

4

New business model, reaching the risk of uninsured

Key factors

◈ Customers require product innovation and acknowledge their unmet insurance needs.

◈ More data can be used to refine risk assessments to provide personalized insurance.

◈ Advances in real-time data acquisition and processing systems pave the way for complex business models.

Example briefly describes

explores new business models, such as on-demand insurance and parameterized insurance, thereby solving the current coverage gap and meeting customers' needs for personalized and convenient services.

➤ On-demand Insurance - The best-cost convenient protection

Travel Guard Canada, a Canadian travel rescue agency under the American International Group (AIG), has launched an online on-demand travel insurance . The solution can use the geolocation function of the phone to sense when the user arrives at the airport or border port and to actively ask whether to start insurance services.

➤ Parameterized insurance - expand coverage and quickly resolve claims

─ African Risk Capacity and risk analysis company Metabiota have launched a pilot cooperation to launch parameterized insurance , covering infectious diseases and epidemics in Africa.

─In the Central American country El Salvador , the Micro Insurance Catastrophe Risk Organization (MiCRO) has launched an parameterized agricultural product insurance , covering business interruption losses caused by excessive rainfall, severe drought or earthquake disasters.

Inspiration

➠ On-demand insurance is cost-effective, can improve customer satisfaction and open up the uninsured market.

➠ Parameter insurance speeds up compensation payment, thereby improving customer experience and retention rate.

➠ When providing dynamic insurance, insurance companies need to ensure the accuracy, security and real-timeness of parameter data.

5

Advanced tool, manage network risks

Key factors

◈ Network security incidents occur frequently, and comprehensive network protection has become a key business requirement.

◈ Massive data can be used to develop a comprehensive network risk assessment model.

◈ Advanced network risk management tools are the result of advances in data processing and risk modeling technologies.

Example Brief description

➤ Cyber ​​risk management and loss assessment tools make underwriting more accurate:

─ The American Guy Carpenter reinsurance brokerage company cooperates with insurance science and technology Cyber ​​Cube to create a network risk modeling platform, apply multidisciplinary analysis, and help insurance companies make better underwriting decisions.

➤ Help commercial customers understand risks and actively fill vulnerabilities:

─ FM Global provides customers with network detection tools to fully reveal the organization's risk exposure and evaluate its cybersecurity readiness.

➤ New participants are scrambling to enter the growing cybersecurity insurance market:

─ Insurance Science and Technology Innovation Kovrr has created a cyber risk management modeling platform to help mature insurance companies understand, quantify and manage cyber risks and provide support in underwriting.

Revelation

➠ Undertake new types of cyber risks and obtain additional revenue streams from the cybersecurity market.

➠ Insurers must invest in advanced analytics and data processing.

6

Blockchain technology, improve operational efficiency

Key factors

◈ By 2023, the market size of insurance blockchain is expected to grow from US$64.5 million in 2018 to US$1.3938 billion, with a compound annual growth rate of 84.9%.

◈ Insurance companies and ecosystem partners urgently need simple and secure data transfer capabilities.

Example Brief Description

➤ Blockchain simplifies transaction processing and claim verification:

─ Allianz Global Enterprises and Special Risk Company (AGCS) launches blockchain prototype for exclusive self-insured customers : simplifies and accelerates international insurance transactions; integrates with Citibank API to enable AGCS enterprise customers to pay.

➤ Smart contracts automate claims and transparently:

AXA Aviation Delay Insurance , a smart contract insurance product based on the Ethereum public chain. If the flight delay exceeds two hours, it will automatically receive compensation. Flight data is provided by a third party and is connected to smart contracts in different ways.

➤ Distributed general ledger technology (DLT) tracks assets and prevents fraud:

─ De Beers ( De Beers ), the world's largest diamond producer, launched , the first blockchain platform in the diamond industry, , providing valid digital proofs and tracking every transaction of diamonds.

enlightens

➠ DLT realizes data sharing and enhances the collaboration of the insurance ecosystem.

➠ Smart contracts accelerate claims payment and improve customer satisfaction and loyalty.

➠ Immutable, secure and transparent data storage helps insurers optimize costs and operational efficiency.

7

AI and analysis technology detect fraud and prevent losses

Key factors

◈ With the advancement of artificial intelligence and analysis technology, organizations are able to process large amounts of structured and unstructured data from multiple sources.

◈ High profit pressure forces property insurance companies to strengthen cost optimization and operational efficiency.

◈ It is estimated that insurance fraud causes $34 billion in losses to property insurance companies each year .

Example brief description

➤ Predict future loss events, and then prevent or minimize the impact of events:

─ Allianz (AGCS) cooperates with scientific analysis company Praedicat to predict future catastrophe liability risks through data analysis and prediction models.

➤ Use various data sources to enhance risk modeling capabilities and actively prevent losses:

─ The driving data extracted from its mobile app by the American auto insurance startup Root Insurance, measuring the risk characteristics of the driver, and setting premiums based on this.

➤ Improve fraud detection and prevention capabilities:

─ Allstate Insurance cooperates with startup Carpe Data, which uses social media to detect claims fraud.

enlightenment

➠ Predictive analysis technology-early risk mitigation and loss prevention, thereby reducing claims costs.

➠ Artificial Intelligence - Fraud detection and prevention, reducing the overall cost of the company.

➠ By assisting customers in proactively preventing losses, insurance companies can improve customer experience and gain loyalty.

8

Internal process automation to improve real-time data processing

《2018 World Insurance Report》 shows that 18.3% of respondents have developed a complete real-time data acquisition infrastructure; 24.4% of respondents are building a front-end interface for real-time data acquisition.

Key factors

◈ Provide seamless services, reduce business waiting time, and eliminate manual errors;

◈ Insurance companies’ systems need to have the ability to process large amounts of real-time data.

◈ The rapid development of technology has enabled the system to achieve intelligent automation.

Example brief description

➤ Invest in automation resources, such as Internet of Vehicles and interconnected devices, to process a large amount of available data:

─ US UBI auto insurance company Metromile provides "pay by mileage" insurance model , collects data on car driving and condition, provides drivers with simplified data and suggestions, and improves the claim journey.

➤ Use RPA (robot process automation) and AI to automate internal processes - from quotation, underwriting and policy services to loss reporting and claim handling:

— Allianz Global Assistance has launched SmartBenefits tool for travel insurance:

›› Undertaker monitors flights and automatically file claims on behalf of the customer when flights are delayed;

›› automatically pays for claims, providing customers with greater convenience.

enlightenment

➠ Internal process automation can enable insurance companies to optimize costs, improve operational efficiency, and thus improve profit margins.

➠ Automation can improve employee productivity, allowing them to focus on complex tasks or abnormal situations.

➠ Real-time data processing capabilities allow insurance companies to generate instant and actionable insights, provide customers with a high-quality insurance experience, and enhance customer loyalty.

9

InsurTech startup - The "R&D center" of the insurance industry

InsurTech is becoming the R&D center of insurance companies, providing various support services.

Key factors

◈ Customers’ demand for innovative and customized services is increasing.

◈ The cost of establishing and maintaining an internal R&D center is high, and the legacy system of the insurance company makes this challenge even more complicated.

◈ InsurTech collaboration provides a way to accelerate innovation and technology adoption.

Example Brief description

➤ Participate in incubator and accelerator programs, select the right InsurTech partners, and develop innovative technologies:

─ Startupbootcamp in London, Plug and Play in Silicon Valley , and Global Insurance Accelerator in Iowa, USA are all world-renowned insurance technology incubator projects. They provide financial support and entrepreneurial guidance for startups, and also bring opportunities for cooperation for insurance companies.

➤ Organize insurance competitions such as hackathons to promote continuous innovation:

─ Swiss Zurich insurance company sponsors the "Zurich Innovation World Bidding Competition" to select new technologies and identify future partners.

Inspiration

➠ Quickly meet customers' changing needs and expectations.

➠ Compared with developing internal projects, incubators and accelerators are more cost-effective.

➠ Inspire cultural innovation through short-term and long-term insurance technology partners and achieve success in the future competitive landscape.

10

Open platform, providing seamless insurance services

Insurance companies are establishing open platforms and APIs (application program interfaces) to more effectively cooperate with other ecosystem participants.

Key factors

◈ Integrate data from different sources to provide a seamless digital experience;

◈ Simplify insurance services and improve customer accessibility;

◈ Improve data sharing and collaboration with other stakeholders in the ecosystem.

instance brief description

➤ Flexible API-widening the cooperative network and providing supplementary services:

─ AXA Singapore (AXA Singapore) has launched a transaction API , which can be embedded in any digital ecosystem, and partners can use this API to provide real-time insurance coverage to customers.

➤ Open platform to improve data sharing and technical capabilities:

─ In early 2018, Allianz began to open some Allianz business system platforms for free for other insurance companies to jointly develop a sustainable insurance ecosystem.

➤ Insurance Science and Technology Innovation also proposed an open insurance to improve customers' journey across the entire insurance value chain:

─ American insurance technology company Lemonade has launched "Open Source Policy" , which is characterized by simple and transparent products, easy to understand terms, and actively encourages cooperation among the insurance community.

enlightenment

➠ Use API to open up cooperation channels, expand customer base, and promote revenue growth.

➠ Provide timely insurance products to improve customer journey through cooperative sites.

➠ Strengthen data sharing in the insurance ecosystem and improve customer service efficiency.