April 2015 Sunsurance©2015 1 S U N F I E L D C O N S U L T A N C Y STANDING ON THE FRONTIER WHERE INSURANCE AND TECHNOLOGY MEET

Sunsurance© Part 1 A Unique Holistic Insurance Concept

Innovation Innovation is always a must but now it’s getting unavoidable!  There are too many signs that traditional insurance business is lagging and needs a drastic review of the current business models;  What we see so far in all possible trials to innovate is mostly more of the same but in a different guise. This presentation introduces an entirely new concept! April 2015 Sunsurance©2015 3 “In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.” - Eric Hoffer -

Future of Insurance Future insurers will focus on providing services that prevent dangerous situations and accidents. Making a safe environment for their customers at home and on the road. April 2015 Sunsurance©2015 4 Monitor Predict Alert Act (with services and/or compensation) Adding Subscription Fees to the Premium.

The Challenge 1. Profitability 2. Dynamic 3. Interactive 4. Agile 5. New 6. Holistic 7. Customer and data driven 8. No aggregators 9. Move cover from object to driver/user 10.For Vehicles: No history (NCD – Bonus/Malus)/No External Databases 11.Premium linear to risk/no discounts 12.Future proof April 2015 Sunsurance©2015 5

Objectives 1. Customer centric 2. Easy to understand and to control 3. No worries, questions or hassle (attractive, useful and rewarding) 4. Maximum use of new technology 5. One policy for a household 6. Optimized risk analysis and coverage, no redundancy 7. Fully integrated claims system with FNOL and (guest) mobile tracking 8. Agile development and maintenance 9. Customer interaction – engagement, loyalty (high retention) 10. Low acquisition costs 11. Competitive edge 12. Profitability April 2015 Sunsurance©2015 6

Ingredients 1. Entrepreneurship 2. Insurance & Claims expertise 3. Creative, fresh and open minded multi-disciplinary team 4. Capital for development, solvency and marketing 5. Digital environment (state-of-the-art) 6. Holistic approach (household lifestyle centered with no walls/silo’s) 7. Transversal data (health + home + transportation) 8. Data scientists and actuaries 9. Personal Risk Management Expert System (digital advisor) 10. Artificial Intelligence with dynamic SUN Rules Engine (Specific Underwriting Node) 11. Prevention tools and programs/early warning systems 12. Agile and scalable insurance & claims factory with real-time MI and integrated CRM April 2015 Sunsurance©2015 7 All ripened by the

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Concept - Customer Value Proposition This concept is called Sunsurance© and offers the customer:  A personalized cover/financial offer for her/his complete household and the associated lifestyle including relevant services.  Based on a minimum core (sun) and instant automatic data driven expansion in case required or desired (beams). Where the customer is fully in (mobile) control.  Premium and fees will be charged monthly in arrears in line with the risks actually exposed to and within an agreed bandwidth. April 2015 Sunsurance©2015 9 A brighter life with Sunsurance©

Insurance Businesswise Insurance Europe: “Insurance is a cornerstone of modern life. Without insurance, many aspects of today’s society and economy could not function. The insurance industry provides the cover for economic, climatic, technological, political and demographic risks that enables individuals to go about their daily life and companies to operate, innovate and develop.” April 2015 Sunsurance©2015 10 Insurance Europe is the European insurance and reinsurance federation. Through its 34 member bodies - the national insurance associations - Insurance Europe represents all types of insurance and reinsurance undertakings, e.g. pan-European companies, monoliners, mutuals and SMEs. Insurance Europe, which is based in Brussels, represents undertakings that account for around 95% of total European premium income. Insurance makes a major contribution to Europe’s economic growth and development. European insurers generate premium income of over €1 100bn, employ nearly one million people and invest almost €7 500bn in the economy. That is not going to change…

The Game is the Same April 2015 Sunsurance©2015 11 Well-known and understood risks Standard P&C  Car  Driver  Passenger  Motorbike  Bike  House  Content  Valuables  Liability  Pet  Burial  Accident  Boat  Legal expenses  Travel  Gap  Credit  Trailer  Assistance Add-ons  Deductibles New risk(-views)  Driver  Passenger  User  Liability  Robot (Robo-car)  Drone Game is the Same Insurance is the transfer of risk. It transfers the risk of financial losses as a result of specified but unpredictable events from an individual or entity to an insurer in return for a fee or premium. If a specified event occurs, the individual or entity can claim compensation or a service from the insurer. Insurance is therefore a means of reducing uncertainty. In return for buying an insurance policy for a smaller, known premium, the possibility of a larger loss is removed. By pooling premiums and insured events, the financial impact of an event that could be disastrous for one policyholder is spread among a wider group. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated or serviced. In a later stage  Health  Life  Banking & Pension  Commercial lines Risk management The practice of appraising and controlling risk.

Compliance & Fairness Sunsurance© is compliant with and supports the current insurance principles, like:  The risk must be definable and financially measurable;  The risk should be random and independent;  The insured must have an insurable interest;  The insurer must be able to calculate a fair premium for the risk;  The likelihood of the risk must be calculable;  There should be limited risk of catastrophically large losses;  Coverage is generally only for indemnity (no profit allowed); And: April 2015 Sunsurance©2015 12

Compliance & Fairness - Different Underwriting  Differentiation is the fairest way to ensure that the premium charged accurately reflects the risk. It is also the fairest way to ensure that a maximum number of people can be offered insurance at an affordable price;  Risk-based pricing encourages insurers to innovate so that they can compete more effectively both on price and on products which is in favor of the customer;  Each policyholder should pay a fair premium according to the risk of loss that they bring to the pool;  Reduce moral hazard, adverse selection and fraud. On those last 4 Sunsurance© will make however the difference from an underwriting standpoint 1. Risk based, 2. accurate and 3. fair pricing, 4. while reducing moral hazard, adverse selection and fraud. April 2015 Sunsurance©2015 13

Usage Based Insurance (UBI) Common practice so far is that the probability of a certain claim is determined by analyzing historical data from homogeneous groups representing similar risks and by forward-looking risk analysis. So in fact the traditional premium is based on historical data from a group in which the customer (insured) is classified. New: Real and accurate data will be used as much as possible to move away from rating by proxy to rating by real life (so called UBI). April 2015 Sunsurance©2015 14

Fairness in combinations Other issues to deal with: 1. Overlaps in products which means confusion and double (or more) premium; 2. Cross product risks (e.g. if the family goes on vacation by plane there is a drastic shift in various risks); 3. The various risks and insurance needs change constantly depending on lifestyle, events and composition of household. April 2015 Sunsurance©2015 15

Taking the Customer Serious And then the customer, our client. Current insurance practice from a consumer standpoint is:  Low interest product, a commodity (easy to exchange);  Badly understood;  Very traditional;  Not interactive;  Hardly offering modern tools (Gen Y & Z);  Rated with low satisfaction and low positive experience;  Even distrusted (as a financial service). So there is a lot of work to do! April 2015 Sunsurance©2015 16

Sun . Insure . Uninsure Sunsurance© With the (flexible) core normal life is insured. The beams allow to insure and un-insure depending on the deviations in life. This can be done:  automatically by data transmitted  or by click Based on lifestyle and requirements the customer can select out of 3 luxury levels: 1. Yellow (standard sunshine) 2. Orange (some more glow) 3. Gold (really shiny) April 2015 Sunsurance©2015 17

AI Components April 2015 Sunsurance©2015 18 API Insurance Customer Policy Holder Extracted Standard Data SUN Insurance & Claims Platform Private Domain Vehicle(s) Telematics Wearables MIK App House(s) Domotics Household Data synchronization RDB Customer Data Pool Backup Members & Devices Systematic Innovation Stepwise - scalable Proven track record on green components Aggregator Module Robotics Personal Smart Device DWH Real-Time MI BI Claims Engine NewCo and/or Blockchain Insurer(s) My Insurance Kit External Info/Data Other Obj. & IoT VRM Life Management Platform (Data Clearing House) PRM Digital Advisor Personal Support CRM

User = My Account Holder 2 3 Infrastructure April 2015 Sunsurance©2015 19 Databases eMail sms pdf Policyholder 1 Sales Website Apps Social Media Insure Y/N ? External Services Aggregators CRM

Implementation April 2015 Sunsurance©2015 20 Traditional Business Sunsurance© Stepwise Migration Improve existing business Use tools and learning from Sunsurance© Track 1 Track 2 Start from scratch and learn Cooperation Time Now

Sunsurance© End of Part 1 More question than answers? Good. I’m happy to go into more detail and share my views towards the future on the various components. Let’s go for Part 2 April 2015 Sunsurance©2015 21