Fintech in insurance. Focus on RoboAdvice - Changing the face of wealth management landscape on back of trend of “self-service”, disintermediation, automation spurred by the internet.

1. FINTECH IN INSURANCE
A focus on Roboadvice
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Johannesburg | Cape Tow n

2. DISRUPTION
• Microinvesting / Microsaving /
Automated saving
• Roboinvesting & Roboadvice
• Multiplatform/Omni-channel or
mobile first?
• Peer-to-Peer & disintermediation
– cut out middle man, save time,
cost
• Self-service
• AI/Behavioural tracking/ General
automation (chatbots, datamining)
• Sharing economy (Uber, AirBNB)
• Personalisation/Customisation
• Integration: aggregate financial info
from 3rd parties (Yodlee etc)
• Blockchain in insurance (very
early, but developing)
• Gamification
• Growth hacking – cash incentives/
invite friends to lower fees on
product
• Mobile coupons

3. B2B Solutions
Blockchain
Remittance
Education
Security & ID
Data Analytics
Investments
Payments
Lending
Insurance
Personal Finance
SA’s FINTECH ECOSYSTEM 2016

4. Where is Fintech
innovation happening
predominantly?

5. The rise of Big insurance investments in Fintech
Source: CBInsights
Some of the largest insurance providersin the world are rapidly
increasing their investment activity to private tech start-up
companies. According to CB Insights, tech start-up deal activity by
insurance companies and their corporateventure arms rose 460%
YoY in 2014.

6. 6
Since 2010, insurance
corporations have
participated in $1.78B in
funding to tech start-ups
“
”- CBInsights 2015

7. TRENDS
• Millennial generation comfortable
with using the internet, mobile
• “Direct” perceived to be cheaper
and faster
• Plentiful financial information online
– people are doing own research,
comparing products & prices online
• Users are not just shopping locally
but overseas too
• Convenience
• Being more in control, instant
gratification
• Seeing investment in realtime
• Seeing advanced visualizations and
analysis of investment, networth
• Low trust of intermediaries, some
trust a neutral algorithm more
Why are people going increasingly
Online, and increasingly mobile, to
manage their money?

8. • 3- year study of industry disruption are frightening for banks but
great for fintech startups: 1 in 3 Millennials would switch banks in
next 90 days
• More than half of the 10,000+ respondents don’t think their banks
offer anything different than other banks
• Millennials are looking to financial technology startups to change
the face of the industry
• 70% of Millennials said they would be more excited about a new
financial services offering from Google, Amazon, Apple, Paypal,
or Square than from current provider
MILLENNIAL DISRUPTION INDEX

9. ROBO
ADVICE
• Crude, but evolving
• Pureplay & hybrid versions
• Automated rebalancing & tax loss
harvesting
• Fully electronic/online onboarding
process
• Excellent, clear, simple client
experience through technology
• Often a distribution channel for ETFs
• Crudely matches client profile to
investment
• Achieve low costs by eliminating
intermediaries
• But not completely eliminating brokers
(eg: used for low margin clients)
• Some advice robots can’t ever give
(persuasion, validation, context)
• Uber moment of financial services
industry?
Changing the face of wealth management
landscape on back of trend of “self-
service”, disintermediation, automation
spurred by the internet.

10. Factor in target market. Mature investors prefer human financial advice: What they
are used to & affairs more complicated. Millennials more comfortable with the
algorithm: More comfortable with technology, simpler financial affairs, “beginner
investors”. Roboadvice likely to form a % of mature investor’s portfolio.

11. DIGITAL-TRADITIONAL PARTNERSHIP
Roboadvice has only a miniscule share of assets under management (AUM),
but because it presents investors with a compelling value proposition of price
reductions of as much as 70 percent for some services, its rate of growth
has been both rapid and accelerating.
Overall, Accenture believe Roboadvice capabilities will effect profound and
permanent changes in the way advice is delivered.
- Accenture 2016

12. DIGITAL-TRADITIONAL PARTNERSHIP
Not the end of brokers (ever). Discount brokers will use Roboadvice to push
further into advice delivery while still using their traditional engagement
model. Full-service advisors are looking at Roboadvice as a way to serve
smaller accounts and increase advisor productivity. Roboadvice capabilities
allows insurance companies to expand their presence in wealth management
while allowing agents to maintain their focus on insurance sales.
- Accenture 2016

13. Roboadvisors/ Startups Hybrids/Traditionals

16. The Robo(t) Future
• Current roboadvice capabilities are fairly basic, with simple surveys to profile
clients, not meeting even moderately complex financial needs.
• BUT competition, innovation and new technology is dramatically increasing
roboadvice capabilities in the near future. Future versions will consider the
client’s complexities by adapting questions based on earlier responses.
• In developing a financial plan, will assimilate multiple goals, including university
savings, planned home purchases, retirement, protection needs, estate
planning, health care or long term care coverage.
….what roboadvisors can (and will) do for wealth management

17. The Robo(t) Future
• Will help clients understand their portfolios by providing information and learning
in the context of the financial results and market information being presented.
• Over the next decade and beyond, emerging technologies, such as cognitive
computing, will power major advances in roboadvice capabilities.
• We anticipate a rapid evolution towards an automated advisor assistant that will
provide complex advice, and that will also allow clients to constantly interact
with the automated assistant.
….what roboadvisors can (and will) do for wealth management

19. roboadvisors SET to increase68% annually
To run $2,2-trillion by 2020 (Bloomberg)

20. Fintech /
INSURETECH
PRODUCT
• Omnichannel, with strong mobile app
• Great educational content &
whitepapers
• Integration: Integrates into the
ecosystem & user accounts
• Takes away intimidation/ complication
factor of investing: Visual, simple and
easy to use
• Special offers & loyalty
• Innovative - latest mobile tech non-
negotiable: TouchID, Alerts
• Creates goals & shows visually the
effects of saving behaviour
• Transparentabout costs
• Doesn’t ask for all the info upfront
• Takes burden off customer
• Creates a sense of Trust, Secure
• RETENTION & CROSS SELL
What makes a great
digital product?

29. INSPIRATION

31. Acorns: Innovative micro-investing
• Allows users to round up their daily purchases and automatically invest the
change into a portfolio of ETFs
• Founded in 2012, with more than $62-million in investment. Now has 650,000
members with $25m saved cumulatively, comprising mostly of millennials.
• Acorns connects to a debit or credit card to "round up" the spare change to the
next dollar on all purchases. Once the roundups reach $5, it withdraws the
money and invests in a personalized stock portfolio
• Added a rewards programme, where companies provide cashback that is
automatically invested

32. Top Insuretech Startups of 2016
Knip: Swiss ‘mobile-first’ digital insurance broker essentially moves the insurance brokerage and policy
management process onto mobile phone.
Lemonade: Uses peer-to-peer technology to challenge the way insurance companies work. Small groups
of policyholders pay premiums into a claims pool. Members are refunded, if there’s money left over.
Kasko: White-label option for instant insurance purchases on affiliate platforms. Kasko connects
insurance carriers at the point of sale and provides insurance cover as a secondary purchase.
FitSense: Helps life and health insurers leverage data from wearables.
MassUp: Uses APIs to connect insurers to retailers so people can quickly and easily add coverage to
new purchases.
Worry+Peace: Customer centric approach with a emphasis on innovation, offering a range of products
from some leading UK insurers.
HeyBrolly: provides single place to hold, store, and organise multiple insurance policies. Maps the cover
you have against your needs and identify the gaps and any duplication.
Cuvva: a digital insurance platform for short-term motor cover. On-boarding process is simple and
quick. Within minutes you can buy as little as one hour of cover.

33. 33
As customers demand personalised insurance
products and companies increasingly look to cut
costs, the rise of FinTech in the insurance industry
is a disruptive force that should not be ignored.
However, while 90 percent of insurers fear they will
lose business to a FinTech start-up, only 43 percent
say they have put FinTech at the heart of their
corporate strategies
“
”
- Price Waterhouse Coopers, June 2016

34. THANK YOU
TWITTER: @matthewbuckland
EMAIL: matthew@creativespark.co.za