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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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.
Intelligent Mechatronic Systems (IMS)© . 2013
Analytics
Data
Devices & Deployment
(End-to-end solution)
Business Foundation (Market Experience, Business Model and
Adoption Programs)
UBI value chain
Intelligence
Intelligent Mechatronic Systems (IMS)© . 2013
Analytics
Data
Devices & Deployment
(End-to-end solution)
Business Foundation (Market Experience, Business Model and
Adoption Programs)
Business model is #1 barrier (43%)
Intelligence
Intelligent Mechatronic Systems (IMS)© . 2013
Business model today – B2B2C (Data is used to set rates)
Te
Telematics Services Provider
(B)
Insurance Carrier (B)
Policyholders (C)
Intelligent Mechatronic Systems (IMS) © . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS) © . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
Analytics
Data
Devices & Deployment
(End-to-end solution)
Business Foundation (Market Experience, Business Model and
Adoption Programs)
Adoption is #2 barrier (30%)
Intelligence
Intelligent Mechatronic Systems (IMS)© . 2013
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?
Intelligent Mechatronic Systems (IMS) © . 2013
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
Intelligent Mechatronic Systems (IMS) © . 2013
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
Intelligent Mechatronic Systems (IMS) © . 2013
Adoption option #2: IMS Green reports
Intelligent Mechatronic Systems (IMS) © . 2013
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!
Intelligent Mechatronic Systems (IMS) © . 2013
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
Intelligent Mechatronic Systems (IMS) © . 2013
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
Devices & Deployment
(End-to-end solution)
Business Foundation (Market Experience, Business Model and
Adoption Programs)
Devices & deployment
Intelligence
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
• 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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
29 Intelligent Mechatronic Systems (IMS)© . 2013
• High availability, redundant & scalable
• Fully virtualized “cloud” environment
• Real time monitoring
• Configurable data retention and warehousing
• ISO 27000 & ITIL compliant
IT infrastructure & data hosting
30 Intelligent Mechatronic Systems (IMS)© . 2013
Account management
• UBI is a relationship not a transaction
• Requires program management & partnership – Insurance carrier
– IMS
• Quality of service depends largely on account managers
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
Analytics
Data
Devices & Deployment
(End-to-end solution)
Business Foundation (Market Experience, Business Model and
Adoption Programs)
Data, analytics & intelligence
Intelligence
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
Summary: UBI Is Evolving Rapidly
• UBI 1.0 – Value for insurance
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
• UBI 2.0 – Value for insurance
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
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS)© . 2013
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
Intelligent Mechatronic Systems (IMS) © . 2013
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
www.intellimec.com
• IMS Boot Camp
ICTC 2013 – March 18th
Sheraton Centre, Toronto
Intelligent Mechatronic Systems (IMS)© . 2013