The connected ecosystem: A new business model for insurers THE impacts of new and developing tech nologies have dominated recent conver sations about the future of the insurance industry—and for good reason. Advances in robo advisory, AI, big data, analytics and more are reducing costs, increasing efficiency and improving customer service. Yet, in addition to the advances driven by insurtech and B2B technology innovations, a deeper transformation is underway. Instead of approaching insurtech from a technology perspective, forwardthinking insurers are embracing disruptive innovation to reimag ine the relationship between the insurer and the insured, to create a new insurance busi ness model. One particularly interesting area where we are seeing this type of transformation is in "connected insurance." Connected insurance envisions a new role for the insurer as an ac tive supporting participant in the customer's daily life. A new way to connect to customers TRADITIONALLY, a customer only thinks of insurance in the wake of a purchase or life event, whether that's buying a home or vehicle, going through a life change, or needing to make a claim. In recent years, insurers have been attempting to make the shift from providing protection from the impacts of unfortunate events, to helping prevent these events from occurring. Connected insuran.ce takes things one step further, creating an active role for the insurer in the customer's daily life and activi ties, from creating a meal plan to monitoring a pregnancy. While, historically, insurers have provided products based on customers' risk profiles, connected insurance requires the insurer to, instead, think about the customers' lifestyle. As lifestyle is often dependent on life stage and other demographic factors, insurers pur suing a connected insurance approach must focus on specific customer segments, develop an indepth understanding of that customer type, and then seek ways to seamlessly inte grate into the customer's lifestyle. Technology makes lifestyleintegrated in teractions possible. The advanced capabilities and widespread availability of consumerfo cused devices, such as smart phones, Internet of Things (IOT) enabled appliances, health monitors and more, are providing unparal leled abilities for individuals to manage their lives online. At the same time, big data, analytics and other tools employed by insurers can unlock powerful insights from this information that can be used to better understand the custom ers and provide the appropriate connections within the connected ecosystem. That data can then be used to enhance underwriting de cisions and refine pricing for smaller, targeted customer segments, as opposed to one, blended rate for all. Creating a connected ecosystem THERE are three core areas where we are cur rently seeing the development of connected insurance: health, home and transportation. In a connected health ecosystem, the insurer works as a fullservice customer concierge for medical care. Personal medical monitoring de vices and wearables allow customers to track health information, such as weight and BMI, heart rate and pulse, blood sugar, exercise ac tivity and more. With these devices connected through an app, the insurer could transfer data to a medical practitioner for ongoing monitor ing. Should concerns arise, the insurer could not only provide support to make medical appointments or expedite treatment but also to arrange transportation, from requesting a taxi to calling an ambulance. Lifestyle sup ports, such as recommending healthy meal plans, giving tips or reminders, or providing discounted gym memberships can also assist customers to lead healthier lives. Recently, KPMG professionals worked with an insurer in Singapore and developed a "con nected health" diabetesmanagement program, which allows the insurer to provide afford able health insurance to early stage diabetes patients, who would otherwise not be able to avail themselves of any medical coverage once the diabetes is detected. Networked IOT devices allow an insurer to provide roundtheclock support in the home, especially for seniors or other atrisk custom ers. Yet, in addition to medical monitoring and support, a connected home can also enable in surers to provide home owners and renters with greater comfort and security. Support could range from remote early detection of problems, such as leaks, shorts or floods, to arranging ap pointments with repair professionals. When it comes to automobile insurance, a connected car is an area of particular inter est. While early telematics were intrusive and had a correspondingly low adoption rate, new apps use the smartphones builtin gyroscope to seamlessly provide telematic data. This en ables the insurer to easily identify the driver, track behavioral driving patterns and reward drivers for positive driving habits. Insurers can then create recommended ecosystems of service providers or gas stations at which customers can spend their "good driving points" for free products or discounted service. Shifting mindset to create value WITH the rise of the gig economy and other factors increasingly pushing people from asset ownership towardassetusage, insurers will need to find ways to connect with customers and pro vide value in all aspects of their lives. Connected insurance uses technology to make the insurer a core partner in the customer's life, providing not only emergency assistance and preventa tive help but also ongoing, seamless support. The future of insurance is not about the prod uct or technology. Instead, the way forward requires a shift in mindset: making the customer the prior ity, with the insurer delivering daily value as the center of a wider ecosystem of trusted providers. The article "The connected ecosystem: A new business model for insurers" is written by Chia Tek Yew, KPMG in Singapore. © 2018 R.G. Manabat&Co., a Philippine part nership and amemberfirm ofthe KPMG network of independent memberfirms affiliated with KPMG International Cooperative ("KPMG Internation al"), a Swiss entity. All rights reserved. Printed in the Philippines. For more information on KPMG in the Philip pines, you may visit www.kpmg.com.ph. Headline The connected ecosystem: A new business model for insurers MediaTitle Business Mirror Date 05 Feb 2018 Section Banking and Finance Page No A11 Language English Journalist n/a Frequency Daily
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The connected ecosystem: A new business model for insurersTHE impacts of new and developing tech
nologies have dominated recent conversations about the future of the insurance
industry—and for good reason. Advances inrobo advisory, AI, big data, analytics and moreare reducing costs, increasing efficiency andimproving customer service.Yet, in addition to the advances driven by
insurtech and B2B technology innovations, adeeper transformation is underway. Insteadof approaching insurtech from a technologyperspective, forwardthinking insurers areembracing disruptive innovation to reimagine the relationship between the insurer andthe insured, to create a new insurance business model.
One particularly interesting area where weare seeing this type of transformation is in"connected insurance." Connected insuranceenvisions a new role for the insurer as an ac
tive supporting participant in the customer'sdaily life.
A new way to connect to customersTRADITIONALLY, a customer only thinks ofinsurance in the wake of a purchase or lifeevent, whether that's buying a home or vehicle,going through a life change, or needing to makea claim. In recent years, insurers have beenattempting to make the shift from providingprotection from the impacts of unfortunateevents, to helping prevent these events fromoccurring. Connected insuran.ce takes thingsone step further, creating an active role for theinsurer in the customer's daily life and activities, from creating a meal plan to monitoringa pregnancy.
While, historically, insurers have providedproducts based on customers' risk profiles,connected insurance requires the insurer to,instead, think about the customers' lifestyle.As lifestyle is often dependent on life stageand other demographic factors, insurers pursuing a connected insurance approach mustfocus on specific customer segments, developan indepth understanding of that customertype, and then seek ways to seamlessly integrate into the customer's lifestyle.Technology makes lifestyleintegrated in
teractions possible. The advanced capabilities
and widespread availability of consumerfocused devices, such as smart phones, Internetof Things (IOT) enabled appliances, healthmonitors and more, are providing unparalleled abilities for individuals to manage theirlives online.
At the same time, big data, analytics andother tools employed by insurers can unlockpowerful insights from this information thatcan be used to better understand the custom
ers and provide the appropriate connectionswithin the connected ecosystem. That datacan then be used to enhance underwriting decisions and refine pricing for smaller, targetedcustomer segments, as opposed to one, blendedrate for all.
Creating a connected ecosystemTHERE are three core areas where we are cur
rently seeing the development of connectedinsurance: health, home and transportation.
In a connected health ecosystem, the insurerworks as a fullservice customer concierge formedical care. Personal medical monitoring devices and wearables allow customers to track
health information, such as weight and BMI,heart rate and pulse, blood sugar, exercise activity and more. With these devices connectedthrough an app, the insurer could transfer datato a medical practitioner for ongoing monitoring. Should concerns arise, the insurer couldnot only provide support to make medicalappointments or expedite treatment but alsoto arrange transportation, from requesting ataxi to calling an ambulance. Lifestyle supports, such as recommending healthy mealplans, giving tips or reminders, or providingdiscounted gym memberships can also assistcustomers to lead healthier lives.
Recently, KPMG professionals worked withan insurer in Singapore and developed a "connected health" diabetesmanagement program,which allows the insurer to provide affordable health insurance to early stage diabetespatients, who would otherwise not be able toavail themselves of any medical coverage oncethe diabetes is detected.
Networked IOT devices allow an insurer toprovide roundtheclock support in the home,especially for seniors or other atrisk custom
ers. Yet, in addition to medical monitoring andsupport, a connected home can also enable insurers to provide home owners and renters withgreater comfort and security. Support couldrange from remote early detection of problems,such as leaks, shorts or floods, to arranging appointments with repair professionals.When it comes to automobile insurance, a
connected car is an area of particular interest. While early telematics were intrusive andhad a correspondingly low adoption rate, newapps use the smartphones builtin gyroscopeto seamlessly provide telematic data. This enables the insurer to easily identify the driver,track behavioral driving patterns and rewarddrivers for positive driving habits. Insurers canthen create recommended ecosystems of serviceproviders or gas stations at which customerscan spend their "good driving points" for freeproducts or discounted service.
Shifting mindset to create valueWITH the rise of the gig economy and otherfactors increasingly pushing people from assetownership towardassetusage, insurers will needto find ways to connect with customers and provide value in all aspects of their lives. Connectedinsurance uses technology to make the insurera core partner in the customer's life, providingnot only emergency assistance and preventative help but also ongoing, seamless support.The future of insurance is not about the product or technology.Instead, the way forward requires a shift
in mindset: making the customer the priority, with the insurer delivering daily value asthe center of a wider ecosystem of trustedproviders.
The article "The connected ecosystem: A newbusiness model for insurers" is written by Chia TekYew, KPMG in Singapore.
© 2018 R.G. Manabat&Co., a Philippine partnership and amemberfirm ofthe KPMG network ofindependent memberfirms affiliated with KPMGInternational Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printedin the Philippines.
For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.
Headline The connected ecosystem: A new business model for insurersMediaTitle Business MirrorDate 05 Feb 2018Section Banking and FinancePage No A11
Language EnglishJournalist n/aFrequency Daily
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