1) The document discusses key drivers of change and opportunities for large insurers, including a fast-changing economic environment, pressure on profitability, digital disruption, and increasing regulation. 2) It outlines capabilities insurers need to develop, including becoming more agile, analytic, client-centric, and innovative. This involves capabilities like predictive analytics, personalized client experiences, and new products. 3) The document identifies four enablers insurers can leverage: technology, operating models, talent management, and an integrated approach to compliance. This includes developing a risk-adjusted operating model and compliance culture.

1. 4th Annual RiskMinds Insurance Conference
Stream B: The future of Insurance Regulation
“What will the market look like and how will it behave?
Drivers of change and opportunities for Insurers”
Eric Jeanne & Markus Salchegger

2. Drivers Of Change and Opportunities for Big Insurers
Agenda
Major trends, risks and opportunities to address
1
What should Insurers be capable of to face this?
Key enablers and helpers
2
3
Copyright © 2015 Accenture All rights reserved. 2

3. Market trends & perspectives
Big Insurers Face an Unprecedented Business Context
Pressure on
profitability
Perfect
storm
Regulatory
escalation
Digital
revolution
(SMAC)
Fast changing
economic
environment
Copyright © 2015 Accenture All rights reserved. 3

4. Market trends and perspectives
1 - Fast-changing economic environment
Big Insurers face a deep evolution of clients’ utilization of insurance, and
a corresponding reshuffling of market forces and regulation
Revamping of
market forces
Radical
evolutions in
clients
behavior
Building
industry
boundaries
Pressure on
profitability
Emerging
regulation
(data privacy)
New
competitors in
the digital era
Insure profiles
& uses, not
persons &
goods
Increased
client volatility
Copyright © 2015 Accenture All rights reserved. 4

5. Market trends and perspectives
2 - Pressure on Profitability
Through Innovation CFO and CRO are changing their mission from
excellent Business Operator to Trusted Advisors, helping CEOs to
navigate current industry challenges
“Back to Insurance basics”
Better pricing, underwriting discipline,
portfolio management…
Low-yield environment
Persisting low yields in most traditional
asset classes, limiting financial
performance
Capital Management Optimization
Investment / Disinvestment decisions, Risk
Portfolio’s deleveraging….
Lack of profit opportunities
‘Saving glut’, heavy capital charges for
traditionally profitable investments
Flexible Operating Models
Innovative sourcing arrangements,
industrialization and cost-effectiveness…
Additional performance levers
necessary
Sourcing & flexible cross-industries
collaboration / internal cost effectiveness
Copyright © 2015 Accenture All rights reserved. 5

6. More accurate performance
management
• Faster, richer, more relevant MI
• Improved decision-making
New prospective capabilities
• Anticipate social / customer trends
and expectations
Market trends and perspectives
3 - Digital revolution
Digital pervades all business domains, and its implications carry new
opportunities and risks
Copyright © 2015 Accenture All rights reserved. 6
In-depth client understanding
• Customer behavior and habits
• Customer expectations and
new products / services
• Customer interactions
Embedded Risk Management
• Informed understanding of risk
• ‘Natural’ inclusion in key business
decisions

7. Market trends and perspectives
4 - Regulatory escalation
Increasing regulatory complexity tackling both Finance & Risk
Management and Business sides
Copyright © 2015 Accenture All rights reserved. 7
Key value drivers for insurers are:
• Speed and accuracy
• Implementation synergies between different regulations (e.g. Solvency II and IFRS)
Selected insurance compliance areas
Insurer
Solvency II
Financial
Reporting
(IFRS 4)
G-SIIs
ICS
Unclaimed
policies
Data Security
and Privacy
Tax
Fraud, AML
Stakeholders-
driven
regulation
(social protection)
Financial
stability and
prudential-
driven
regulation
(sustainability)

8. Drivers Of Change and Opportunities for Big Insurers
Agenda
Major trends, risks and opportunities to address
1
What should Insurers be capable of to face this?
Key enablers and helpers
2
3
Copyright © 2015 Accenture All rights reserved. 8

9. Required capabilities
High performance insurers in the digital age demonstrate four
fundamental characteristics
Agile
Client
centric
Innovative
Analytic
Copyright © 2015 Accenture All rights reserved. 9
The ‘Agile’ Insurer
• Intelligent sourcing approach
• Early warning and rapid response mechanisms
• Greater, faster and cheaper change
The ‘Analytic’ Insurer
• Richer insights, smarter decisions
• Next gen predictive tools and techniques
• Real-time decision support
The ‘Client-centric’ Insurer
• Brand new client experience
• Richer, real-time interaction with clients…
• …leveraged to develop client bases
The ‘Innovative’ Insurer
• Leverage on new capabilities
• Develop innovative products (e.g. UBI)
• Bring new services to the market

10. Required capabilities
1 - The ‘Agile’ Insurer shall reshape its organization to reconcile
management of stocks and flows
Copyright © 2015 Accenture All rights reserved. 10
Reinvent The ModelBecome A Utility
Capture all growth
opportunities
• Differentiation of client
experience
• Multiple interactions,
tailored solutions
• Innovative go-to-market
processes
• Real-time analytics
Optimize current
business portfolio
• Industrialization
of key business
processes
• Underwriting excellence
• Capital efficiency and
optimization
• Beyond compliance –
operational efficiency

11. Required capabilities
2 - The ‘Analytic’ Insurer will drive business impact from big data and
advanced analytics
Copyright © 2015 Accenture All rights reserved. 11
Auto Insurer
10+ billion driving
miles, more captured
every second
Competitive rates
Low claims ratio
Usage-based
Pricing
Life Insurer
More precise risk
estimates using big
data (e.g. clinical,
drug & customer
history)
Underwriting
New Risks
Underwriting
HIV Patients
Medical
Insurer
Leveraging extensive
data (demographics,
policy, surveyor,
provider etc.) to
identify fraud in
accident portfolio
5% reduction
in loss
Fraud
P&C Insurer
Combining live
weather data with
historical patterns to
optimize catastrophe
loss rates
Optimal rates
Underwriting
Life Insurer
Predictive Models
Selectively
Replacing Medical
Tests
Lower Cost of
Underwriting
Automating
Underwriting

12. Required capabilities
3 - The ‘Client-centric’ Insurer will leverage Digital enablers of the
customer-centricity journey
Customer
Knowledge
Copyright © 2015 Accenture All rights reserved. 12
Customer
Satisfaction
Organization redesign and change management
Customer
understanding
• Social Media
• Mobility
• Digital Marketing
• Analysis
Customer-oriented
offering
• Social Media
• Mobility
• Digital Marketing
• Analytics
Multi-modal interaction
management
• Social Media
• Mobility
• Digital Marketing
• Analytics
Customer experience
management
• Social Media
• Mobility
• Digital Marketing
• Analytics
Digital Foundation
(Global network, unified communication and collaboration, multi-channel contact center)

13. Required capabilities
4 - The ‘Innovative’ Insurer will develop offers, services and sales
approach that address changing expectations in the marketplace
Copyright © 2015 Accenture All rights reserved. 13
New Products
& Services
From “product”
to “usage”
approach
• Usage-based insurance to account
for >6% of auto premium within 3 years
• Enhanced understanding of clients
behaviors through utilization of internal
data and/or cross-check with external
sources (Google, Facebook…)
New Distribution
Channels From selling
products to
providing
solutions
• Comprehensive / reactive strategy for
emerging social media
• Integrated approach to client interactions,
allowing for co-construction of client
experience

14. Drivers Of Change and Opportunities for Big Insurers
Agenda
Major trends, risks and opportunities to address
1
What should Insurers be capable of to face this?
Key enablers and helpers
2
3
Copyright © 2015 Accenture All rights reserved. 14

15. Key enablers and helpers
Big Insurers will leverage on 4 key enablers to develop the capabilities allowing
them to navigate this ‘perfect storm’
Adoption of new digital and technological enablers by process
and technology innovation and integration in a broader risk
management context
Technology
Value and competitive advantage generation with the
development and implementation of a reactive and cost-effective
approach on compliance
Risk &
Compliance
Operating model transformation for enhanced profitability,
reduced costs, increased collaboration among functions as well
as value enhancing usage of digitalization trends
Operating
Model
Workforce transformation to ensure the optimal mix of skills and
talent in the “new” environment and is the precondition for future
growth
Talent &
Organization
Copyright © 2015 Accenture All rights reserved. 15

16. Key enablers and helpers
1 - Leverage regulatory efforts to improve performance, reduce costs and
complexity and generate value with a Risk-Adjusted Operating Model (=RAOM)
Developing and implementing a RAOM requires transformation at
multiple levels
16Copyright © 2015 Accenture All rights reserved.
Key components of a
Risk-Adjusted Operating Model Transformation of Strategy, Risk,
Capital, Financial and Performance
Management by alignment of
organization, processes, technology,
data
Tailored implementation of key
measures: e.g.: risk-adjusted strategic
planning, risk-based capital optimization
and risk-adjusted performance
management
Adaptation of a centralized capital
optimization and steering approach
covering all phases from planning, to
evaluation and monitoring, to execution.

17. In order to make use of digital enablers Insurers will have to respond to
Digital Enablers
Key enablers and helpers
2 - Technology is empowering Digital Transformation in
client interaction
Mobility
Multi-devices,
anytime and
anywhere access
are drivers for
interaction and
engagement
* eg.: EU, Dir 95/46 EC and forthcoming EU General Data Protection Regulation
Copyright © 2015 Accenture All rights reserved. 17
Cloud
Enabler of operating
model scalability as
well as reducing
transaction unit cost
Analytics
From transactional
and open data
sources enabling
scientific decision
making
Social
Manage social to
influence
and build
communities, listen
to social for needs
Interactive
Leverage to build
new products aimed
at specific segment
and user
experiences across
digital touchpoints
New regulatory developments
manage compliance with upcoming
regulatory frameworks in the area of data
protection and privacy *
Enhanced risk management methods
new risk landscape such as reputation, business
continuity/operational, cyber risk and IT security
management as well respective risk transfer
capabilities

18. Key enablers and helpers
3 - The transformation can only be delivered through a workforce with the right
culture, skills and empowerment to execute the strategy
Copyright © 2015 Accenture All rights reserved. 18
Optimal mix of skills & talents – precondition for the effective execution of strategy
• Companywide understanding of strategic implications and “how to put the strategy into practice” for leaders and
managers
• Anticipate the competency demand for tomorrow and develop ad-hoc programs and recruitment plans to ensure the
adequate mix of skills and talents
• Empower managers and the workforce to innovate continuously
Integration of regulation, compliance and risk management aspects requires the
establishment of a risk and compliance culture within all levels of the organization
Strategic
transformation
Define adapted strategic setup
under consideration of new risks
and challenges including top-down
communication of strategic impacts
Cultural
transformation
Implement new companywide
mindset reflecting strategic changes
(e.g. agility, client centricity,
digitalization, innovation, new risks)
Workforce
transformation
Competency model alignment and
specific skills ramp up programs
with a focus on new dimensions
(regulation, digital, analytics, data,
new emerging risk capabilities) as
well as focus ion enhanced
collaboration between risk and
business functions

19. Key enablers and helpers
4 - An integrated approach to compliance will leverage on synergies between
frameworks and ensure cost-effective implementation
Copyright © 2015 Accenture All rights reserved. 19
A comprehensive ‘Compliance Office’ Capability
• Ability to identify and assess new requirements - and design a proper response
• Capability to roll-out operational solutions and revamp the ongoing operating model
• Change management – ability to drive people towards new processes, tools, behaviors
Infusing a companywide compliance culture, executing operational excellence in
managing multiple regulatory frameworks and effectively integrate and adopt risk
management capabilities can turn compliance and risk into a competitive advantage
Compliance
objectives
and culture
Defintion of rules and
objectives as well as
enhance importance of
compliance („tone from
the top“)
Adopt
changing
regulatory
landscape
Implementation of
effective measures and
processes to ensure
ongoing compliance with
changing regulation
Risk and
Compliance
framework
Integrated risk and
compliance organizational
setup and centralization of
competence
Risk
assessment
and controls
culture
Identification of substantial
compliance risks,
systematic control and risk
assessment

20. Conclusion
Proper management of risk & regulatory evolutions is key to harvest benefits
from new technologies and operating model transformations
Copyright © 2015 Accenture All rights reserved. 20
Improve
customer
satisfaction
Help identify
gaps for
products and
services
Maintain
shareholder
value
Avoid legal
issues
Better work
environment
• Better client
retention
• Higher
purchase rates
• Trust in
products and
advertising
• Improve
products
and services
• Market
and trends
awareness
• Maintain
stock price
• Lower
credit cost
• Better access
to capital
markets
• Reduce risk
of litigation
• Reduce legal
losses
• Better
employees
retention
• Higher
productivity
Sound risk & regulatory management