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The Future of Legal Protection insurance (or a humble glance at the present and the future) RIAD Congress 2017
The Future of Legal Protection insurance(or a humble glance at the present and the future)
RIAD Congress 2017
1
Technology: why do we care?
Relevant technologies to legal protection insurers
Challenges for the industry as economic actors
Legal considerations
The future: threats and opportunities
Agenda
“There are two ways to extend a business. Take
inventory of what you're good at and extend out
from your skills. Or determine what your customers
need and work backward, even if it requires learning
new skills.”
Jeff Bezos
2
Financial services major disruption so far: FinTech
InsurTech is next: capital invested multiplied by 20 in last 5 years
Why do we care?
Source: ‘The Pulse of Fintech –Q3 2016’ a quarterly report created by KPMG & KPMG Enterprise’s Global Network for Innovative Startupsand CB Insights
3
What we refer to as InsurTech today will be
insurance tomorrow
The combination of technologies already has a
major impact on operations, business model,
regulation and supervision:
– Artificial intelligence (AI)
– Blockchain
– Internet of Things (IoT)
– Smart contracts
– Big data
– Etc.
Why do we care?
Accenture’s Insurance Technology Vision 2017
4
Gen Y Non-Gen Y
Likely to buy another product 36,2% 29,1%
Likely to stay with existing firm 48,6% 55%
Why do we care?
39,8% of customers
trust their insurers
26.3% of customers
trust InsurTechs
Source: World Insurance Report 2017 by Capgemini and Efma
5
Specificities of legal protection insurance
Providers of complex insurance services
Providers of legal services
Technology impacts the whole value cycle
customer experience
efficiency: cost optimisation, risk assessment and
management, fraud detection, compliance
“Companies that use data analytics extensively are more
than twice as likely to generate above average profits.”
DataMatics Survey, 2013
McKinsey & Company
Relevant technologies
6
The Guardian, 5 January2017
Relevant technologies: AI
7
Relevant technologies: AI
Recordings / Call transcription technology:
Natural language processing
Identify recurring questions
Measure conflict-resolution methodologies’ efficiency
Refine predefined answers / provide relevant instant
relevant information
Cognitive computing
Powered by IMB’s Watson, ROSS reads through the law,
gathers evidence, draws inferences and returns an
evidence-based answer
8
Relevant technologies: AI / ChatBots
ChatBots bring AI / Data Analytics to
customer-facing processes
Can provide automation for certain basic
claims coupled to other technologies
May facilitate accessibility of insurance
for otherwise non-insured segments of
the population thanks to cost
optimisation
9
Relevant technologies: Blockchain / Smart
Contracts
10
Competition or
complementarity?
What is the best way to
interact with InsurTech
in order to maximise
benefits?
What are the causes of
failure of frustration?
Challenges for the industry
Source: StartupBootcamp InsurTech & PwC, Ready for Take Off – How
InsurTechs are Poinsed to Transform Insurance (2017
11
Technology is fed by and impacts insurance consumption:
Clients expect increased interaction via technology
Technology is a facilitator and a marketing tool
Technology opens new opportunities: online / app-based / affinity / on-demand /
peer to peer which come with their own challenges in terms of applicable legal
framework
Possibility to aggregate insurance to other services and to integrate the claims
process to industrial / business cycles – how do you isolate the insurance
operation as required by applicable laws?
Insurance as a commodity – how do you adapt the complex obligations
applicable to the conclusion of insurance contracts?
Legal considerations
12
Technology participates in the transformation of distribution:
Affinity distribution and insurance bundling
Insurance distribution, sales and risk-bearing structure regulation but their
relevance to consumers of insurance is remote
Who owns the clients?
Who owns the data?
Legal considerations
13
Specific legal challenges
Regulation is domestic and activity-based, the market is global and client-driven
Products are evolving from covering a list of risks to providing services which
match client needs
Legal considerations
14
Specific legal challenges
Liability:
– Who is liable for ensuring the insurance product matches consumer needs?
– Product liability applied to AI
– Contractual liability and tort
– Issue of transparency of decision making
Data protection:
– What is data?
– Specific issues in relation to the nature and location of data
– AI or robot-generated data
Operational considerations:
HR
are current operational structures relevant (underwriting, claims, innovation,
digital, marketing etc.)?
Legal considerations
15
The initiatives under way:
Legal considerations
16
Regulators are increasingly speaking (to each other):
UK FCA and Hong Kong Insurance Authority co-operation agreement:
– boost the two bodies' collaboration on supporting innovation in the FinTech
sector
– share information on innovation
– refer suitable UK or Hong Kong firms looking to enter their counterpart's market
Financial Services Agency of Japan and Financial Services Regulatory Authority
of Abu Dhabi Global Market (‘ADGM’) complete framework for co-operation to
promote innovation in financial services in Japan and ADGM
United States and European Union bilateral agreement on prudential insurance
and reinsurance measures
IAIS “FinTech Developments in the Insurance Industry” (21 February 2017)
EIOPA’s InsurTech Roundtable: How technology and data are reshaping the
insurance landscape (28 April 2017)
Legal considerations
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Technology: threat and opportunities
Regulation is struggling to catch up
Uncertainty drives opportunities
Conclusions
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