The role of big data, analytics and
innovation in developing risk financing
strategy
© 2014 Aon Corporation Australia Limited ABN 58 004 756 772
Panel Members
Stephen Cross
Chief Innovation Officer,
Aon Risk Solutions
Lambros Lambrou
CEO Australia,
Aon Risk Solutions
Stephen Mildenhall
Global CEO of Analytics
for Aon
Agenda
 What is Big Data?
 What does it do for you as an insurance buyer?
 Broader implications / The future
 Questions
What is Big Data?
 Volume
 Variety
 Velocity
Internet of Things
Tracking the panel
… But we like some of this & it’s valuable to us!
Flight QF32 - Nov 4, 2010 Airbus A380
Aon GRIP: largest global repository of insurance data
•
$126 billion + premium
•
2 million transaction opportunities
•
$90 trillion limit
•
1,330 carriers
•
8,000 users
•
66,084 clients
•
52 lines of business
•
43 source systems
•
37 countries
•
130 People
Client Local Name
PFLEIDERER AG
Pfleiderer AG
Pfleiderer Unternehmens- verwaltung GmbH & Co. KG
Wyrzykowski Pfleiderer AG Pawel
Pfleiderer Service GmbH
PFLEIDERER AG
PFLEIDERER EUROPOLES GMBH
PFLEIDERER EUROPOLES
PFLEIDERER AG
Pfleiderer (Pergo)
PFLEIDERER AG
PFLEIDERER GERMANY
PFLEIDERER AG
Client Street Address
Ingolstädter Straße 51
Ingolstädter Straße 51
Ingolstädter Straße 51
Ingolstädter Straße 51
Ingolstädter Straße 51
INGOLSTADTER STR. 51
.
INGOLSTADTER STRASSE 51
Ingolstaedter Strasse, 51
INGOLSTADTER STR. 51
Total Insured Value Comparison
Global
Local
XYZ Ltd
XYZ Ltd
(2013)
(2013)
These charts depicts how the Total Insured Value for XYZ Limited compares against selected peers for Property both on a local and
global basis. The year denotes the effective year of the placement.
Source: Aon Global Risk Insight Platform (GRIP)
8
Per-Occurrence Deductible Comparison
Local
XYZ Ltd
Global
XYZ Ltd
(2013)
(2013)
These charts depict how the per occurrence deductible for XYZ Limited and how it compares against selected peers for Property both
on a local and global basis. The year denotes the effective year of the placement.
Source: Aon Global Risk Insight Platform (GRIP)
9
Premium per $10,000 Total Insured Value
Local
Global
XYZ Ltd
(2013)
XYZ Ltd
(2013)
These charts illustrate where XYZ Limited is placed in the market in relation to selected peers for Property both on a local and global
basis. The Rate is defined as premium per exposure. The year denotes the effective year of the placement.
Source: Aon Global Risk Insight Platform (GRIP)
10
Increase Limit Factor (“ILF”) Curve
How Clients Benefit from Aon Benfield Global Reach, Analytics & Scale
•
Market Dynamics: scale and analytics allow us to provide accurate market forecasts to determine
the best time to enter the market, and achieve the best price, and terms & conditions available in
the market
•
Our forecast for flat to declining rates in the U.S. at the June/July 2011 renewal period was not
shared by other brokers
The Insider (7/6/2011)
Aon Benfield remains the sole dissenting
voice on rate increase at mid-term
renewals reporting pricing flat to down 5%
•
The Insider (9/11/2011)
VS
Broker X recorded rate rises of 5%-10% for
June and July renewal for U.S. Property Cat
Aon Benfield’s out-performance in the market of 5% to 10% on $1.7B in ceded premium during
June/July 2011 renewals represents savings delivered to our clients between $85M and $170M
Market Knowledge | Analytic Insight | Superior Client Execution
Big data and insurance: be careful what you wish for
Insurable
Insurable, but expensive
Not Insurable
Old School
Flood
Genetics
4% of 100%
50% of 8%
100% of 4%
Top Global Risks – are we close to a tipping point of relevance?
Combined Hazard Information Platform (CHIP)
Exposure, geographic and hazard data combined in a single
dataset to allow country wide natural peril pricing and risk
profiling…
Bushfire
Vegetation and Digital
Elevation Data
Flood Hydraulic Flood
Modelling and GIS
watercourse data
Street Address
Postcode
City / Suburb
State
Latitude
Longitude
Cyclone Coastal GIS
boundaries and
historyical wind
speed data
20 HOWARD ROAD
3763
KINGLAKE
VIC
-37.53623
145.37361
Location Street Address data
where available or Variable
Resolution Grids
Policy Quotation
Request
Underwriting System
Address validation
and Geocoding/GNAF
Match
CHIP
Base Premium
Calculation
(database embedded into underwriting system)
Flood Table
Earthquake
Cyclone Table
Storm IntensityFrequency-Duration
rainfall and historical
wind data
Bushfire Table
Hazard
Earthquake Probabilistic EQ hazard
maps
Metrics
Technical Peril Loadings
 Flood AAL
 Bushfire AAL
 Earthquake AAL
 Cyclone AAL
AAL is the Average Annual Loss or technical premium for a particular peril
Premium
calculation with
peril loadings
Policy
Quote
The Google Flu Trends story…the need for a theory
Predictions
Mobile Everything
Self - Learning
Virtual Currency
Telematics
Micro Insurance
New competitors
in traditional
space
Crowd funding
Virtual Exchanges
Google Insurance
Automated Advice
New risks from new technology
Amazon Insurance
Virtual Markets
Prescriptive Fraud Prevention
Walking Wallets
Self - driving cars
Facebook Insurance
Are we too old to change?
“I skate to where the puck is
going to be, not where it’s been”
Wayne Gretzky
Canadian Ice Hockey Player
Questions?
Risk. Reinsurance. Human Resources.