Ims ibc presentation final - feburary 12, 2013

IBC Presentation – UBI 2.0 February 12, 2013

Insurance is more than a snapshot.

Intelligent Mechatronic Systems (IMS) © Confidential

Purpose

• This presents IMS’

Point of view on how

Canadian insurance

carriers can succeed with

Usage based insurance

(UBI).

2 Intelligent Mechatronic Systems (IMS)© . 2013

Reference: Isaac Newton (1643-1727)

• “If I see farther it’s because I am standing on the shoulders of giants”

– Learn from US & UK

– Leapfrog existing business models

Intelligent Mechatronic Systems (IMS)© . 2013

UBI is evolving

• UBI 1.0 – Value for insurance

companies only – Linked to pricing – Related only to auto

insurance eco-system – Technology plugged into

OBDII in US/mobile in UK – Focus on cost – Communications only from

car to back-end

• UBI 2.0 – Value for insurance carriers,

consumers & partners – Linked to pricing & CRM – Connected car ecosystem – Technology becomes

distributed – plugged-in, brought-in, built-in & beamed-in

– Focus on profitability over time

– Two-way In-vehicle communications developing


UBI 1.0

• Key players

– Insurance Carriers

– Telematics Service Providers (TSP’s)

– Wireless Carriers

– Analytics Partners

Intelligent Mechatronic Systems (IMS) © . 2013

UBI 2.0: sophisticated ecosystem

Business Process

Consultants

Auto OEMs

Auto dealers

Device players

Analysts

Content provider

Value Added Service


US barriers to growth

Making the economics work

Customer adoption

Management support

Understanding the data

43%

30%

15%

13%

Source: Survey of 400 Telematics Update contacts. August 2012.


Analytics

Data

Devices & Deployment

(End-to-end solution)

Business Foundation (Market Experience, Business Model and

Adoption Programs)

UBI value chain

Intelligence


Analytics

Data




Adoption Programs)

Business model is #1 barrier (43%)

Intelligence


Business model today – B2B2C (Data is used to set rates)

Te

Telematics Services Provider

(B)

Insurance Carrier (B)

Policyholders (C)


Business model tomorrow – B2B2C (Consumers pay for VAS)

Te

Telematics Services Provider

(B)

Insurance Carrier (B)

Policyholders (C)

Value added services Intelligent Mechatronic Systems (IMS) © . 2013

Future business model: employ device beyond UBI


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Premium $ Distribution

Net Margin

(4%)

Taxes (2%)

Op Expenses

(24%)

Claims (70%)

UBI business case

Reduce Claims

Increase Value of Premiums

Increase # of Good drivers

USA Today Poll


UBI: total cost of ownership

Operating Expenses

(Monthly)

• Wireless charges

• Data Collection & Storage

• Device Management

• Analytics & Visualization

• Customer Care

• Telematics as a Service

• Lease

• BYOD

Alternate Models

• In 2013: $75 device is in sight

Dedicated OBUs


Analytics

Data




Adoption Programs)

Adoption is #2 barrier (30%)

Intelligence


Adoption: driven by discounts

• US discussion focused on Price

• Price story favours price players

– Progressive

– Geiko (BH)

• Are discounts the only proposition?

• What if discounts fail?

13%

39%

47%

0% 20% 40% 60% 80%

Would Participate For 10% Discount

Would Participate For Between 11-

20% Discount

Want At Least 20% Discount to

Participate

2011: What Discount Would It Take To

Participate?


Strategy & tactics for adoption • Strategy

– Price is key rational consideration

– Consider other rational drivers e.g., Value added services

– Build emotional drivers

• Tactics

– Programs to enhance adoption


Adoption option #1: IMS Chronicle

• Broaden the dialogue beyond price

• Start a CRM system

• Driver coaching & tips

• Can be used to involve 3rd parties

– Brokers

– Advertisers


Adoption option #2: IMS Green reports


Adoption option #3: start with teens or mature drivers

• Co-op coaching program • Insurance carrier

• Parents

• Young Drivers

• Stand-along product or UBI extension

• Key market differentiator

• Helps lifetime family coverage

• Saves lives!


21

Option #3 cont’d.: Coaching tips & alerts for parents & young drivers

Behavior-specific Coaching Tips and Alerts will be provided to Young Drivers (and their Parents) based on their driving style


Policyholder adoption tools • Adoption requires effort from the Insurance carrier

broker and TSP to ensure full enrollment

• “Carrots” and “sticks”

22 Intelligent Mechatronic Systems (IMS) © . 2013

Analytics

Data




Adoption Programs)

Devices & deployment

Intelligence


UBI end-to-end solution

Research &

Development

Design &

Manufacturing

Intelligent Apps &

Web Portals

Fully Managed

IT Infrastructure

Systems Integration

Logistics

Customer Care &

Ongoing program support

24

Analytics, visualization & Intelligence


• Turnkey: complete end-to-end solution

• Scalable: IMS platform is designed to scale

• Customizable: All programs can be customized through IMS Professional Services

• Proven: IMS has UBI experience with 8 of the top 25 US Insurance Companies

25

IMS turnkey solution


Device options

OBDII Port options

Professionally installed options

•Device selection based on Program/data requirements • Built-to-order designs

GSM / GPRS HSPA / WCDMA and CDMA. Bluetooth and Wi-Fi


UBI 2.0 vs. 1.0 devices • More powerful

• More versatile – Infotainment enhanced

– All vehicle types

– More ports

– Able to add value added services

• More connected – GSM/CDMA

– Bluetooth/RFID/Wi-Fi

• More reasonably priced


IMS mobile options

1. Mobile Portal – Mobile option for PC-based portal

– Enables real-time, mobile access to driving feedback

2. Standalone UBI app – Fast & economical way to start UBI program

– Captures a base level of data, utilizing a smartphone gateway

3. Connected UBI app – Providing value-added Premium Services

to customers

– Offers new revenue streams 28

Fulfillment & logistics

• Forward & reverse logistics

• Re-use & refurbishment programs

• Numerous courier companies

• Currently process shipments within 24 hours (excl. holidays and weekends)

• Real time inventory tracking


• High availability, redundant & scalable

• Fully virtualized “cloud” environment

• Real time monitoring

• Configurable data retention and warehousing

• ISO 27000 & ITIL compliant

IT infrastructure & data hosting


Account management

• UBI is a relationship not a transaction

• Requires program management & partnership – Insurance carrier

– IMS

• Quality of service depends largely on account managers


Customer care • Service quality relies on

excellent care

• Tier 1 support usually handled by insurance carriers

• Tier 2 & 3 support outsourced to IMS

• Regular business hours – M to F: 8-9 ET

– Sat.: 10-6 ET

– Sun.: 10-4 ET


Mth. 1 Mth. 2 Mth. 3 Mth. 4 Mth. 5 Mth. 6 Mth.7

Agreements MSA/ SOW

X X X

Ins. Carrier Integration

Req. review

Reqs. review

Customization

Testing UAT

Hardware Acquisition

P.O. X X Delivery

Process mapping

X X X

Infrastructure setup

X X

Joint program launch

Trials

Roll-out Pilot Launch

High level project plan


Analytics

Data




Adoption Programs)

Data, analytics & intelligence

Intelligence


IMS transforms data into Intelligence

1.) Smart data acquisition

2.) Context-relevant

representation - Charts

3.) Intelligent analysis and visualization

-Trends -Scores

4.) Traveler-centric feedback

-Portals -In vehicle


Data analysis - driving event recognition

Advanced scoring algorithms - samples

Blend of OBD2 & context relevant data

Data quality – key IMS differentiator

Yellow = Raw GPS Red = IMS Derived Path

Actual Driving Data (Toronto)

Share intelligence with policyholders

• Non-actuarial scoring presents a new way to assess risk

• Also can start a Customer Relationship Mgt. program to bring users into the conversation

• Empower drivers with scoring, coaching & tips

• Employ PC and mobile portals


Summary: UBI Is Evolving Rapidly


companies only

– Linked to pricing

– Related only to auto insurance eco-system

– Technology is plugged into OBDII

– Focus on cost

– Communications only on back-end


companies, consumers

& sub-lease to partners

– Linked to pricing & CRM

– Related to connected cars

– Technology becomes distributed – plugged-in, brought-in & built-in

– Focus on profitability

– In-vehicle communications starting


UBI 2.0: sophisticated ecosystem

Business Process

Consultants

Auto OEMs

Auto dealers

Device players

Analysts

Content provider

Value Added Service


UBI 2.0 is disruptive

• UBI 2.0 disrupts the auto insurance Industry

– Price model

– CRM models

• UBI 2.0 will disrupt the automotive industry by being the first mass market to connect cars


IMS Highlights • Privately held technology company, founded in 1999

• HQ in Waterloo, Ontario with 100+ highly qualified employees

• Strong links with University of Waterloo: Joint research projects

• Over 130 connected vehicle patents for informatics, driver analytics & vehicle safety

• ISO 9001, ISO 14000 Certified, ISO 27001 & ITIL Compliant

• IMS enables Usage-based insurance (UBI) with 8 of the top 25 US carriers

• Member of ITS America, ITS Canada, ngConnect, & APMA Connected Vehicle Group

• Recipient of numerous international awards


IMS is a unique blend of Telematics & Infotainment

45 Intelligent Mechatronic Systems (IMS) © . 2013

For more information on IMS

• Blair Currie

VP Marketing

Intelligent Mechatronic

Systems (IMS)

435 King Street North

Waterloo, Ontario

Tel 519 745 8887 x. 4310

[email protected]

www.intellimec.com

• IMS Boot Camp

ICTC 2013 – March 18th

Sheraton Centre, Toronto


mailto:[email protected]

Ims ibc presentation final - feburary 12, 2013

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