Sunsurance Part 1

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

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Sunsurance©
Part 1
A Unique Holistic Insurance Concept

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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!
“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 -

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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.
Monitor Predict Alert Act
(with services
and/or
compensation)
Adding Subscription Fees to the Premium.

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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

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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

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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
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.
A brighter life with Sunsurance©

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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.”
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…

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The Game is the Same
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.

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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:

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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.

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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).

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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.

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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!

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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)

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AI
Components
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

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

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Implementation
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

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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

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Sunsurance Part 1

Sunsurance Part 1

Sunfield Consultancy

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