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InsurTechThe Changing Distribution Model

Jeremy Heinnickel, Esq., CPCU Saul Ewing Arnstein & Lehr LLP

Michael B.C. Fitzgibbon, CIPChief Underwriting Officer – Slice Insurance

Technologies Inc.

The provision and receipt of the information in this presentation (a) is not legal advice, (b) does not create a lawyer-client relationship, and (c) should not be acted on without seeking professional counsel who have been informed of the specific facts.

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InsurTech – What is it?  

• Subset of FinTech

• Technology-enabled innovations in the insurance industry

• Disruptive force or remarkable opportunity?

• Willis Towers Watson Q4 InsurTech Briefing

o 2017 InsurTech Funding - $2.3 billion, a 36% increase from $1.7 billion recorded in 2016

o 1500 InsurTech Startup Companies

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DisruptionLeading VC fund Andreessen Horowitz: “It has to be a radical product. It has to be something where, when people look at it, at first they say, I don’t get it, I don’t understand it.”

Consensus Non‐Consensus 

Success

Failure

Enhancement• Sobering of InsurTech?

o Incumbent investment (65%) – focuses on enhancing existing value chain

o Incumbents outsourcing functions to highly specialized new entrants

• TW survey - Four most innovative companies: (Munich Re, Lemonade, AXA and Swiss Re)

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Disruption or Enhancement?

• A little of both  • Combining old world and new world

• Millennials are the largest living generation

• Changing consumer demands

o Amazon / Apple / Google / Facebook o Online applicationso 24-hour access to account information through multiple

channelso Quick turnaround on underwriting and claims decisions

• Technological Advancementso Big Datao Artificial Intelligenceo Blockchain o Smart Contractso Chatbots

o Internet of Thingso Droneso Wearableso Mobile Deviceso VR/AR

Opportunity

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• Regulation continues to be a significant barrier

• NAIC Innovation & Technology Task Force

• Insurance Innovation Regulatory Variance or Waiver Act

• Regulatory Sandboxes

Hurdles To Innovation

According to the AIA, regulatory sandboxes must have:

• Regulatory Flexibility

• Consumer Protections

• Protection for Trade Secrets

• Strategy for Maintaining a Level Playing Field

Regulatory Sandboxes

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• A few states introduce regulatory sandbox bills

• Some states have existing laws that may provide sufficient flexibility

• To date, no state has adopted legislation that would apply to insurance companies

Regulatory Sandboxes

• Technological expertise

• Cost of technology to review/oversee new advancements

Challenges for Regulators

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InsurTech Potential

Distribution Underwriting Administration Claims

The Changing Distribution Model

• Distribution highest area of focus and investment

• Digital insurance distribution

o Slice

o Lemonade

o Goji

o Alexa?

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Licensing for Partners

• Selling, Soliciting, Negotiating

• Solicitation vs. Advertising

• N.Y. O.G.C. Opinions

Regulatory / Legal Hurdles

• Compensation for Non-licensees

• Required Producer Involvement?

Regulatory / Legal Hurdles

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• Cross-Border Issues

• Rebating Laws

• Electronic Signature Laws

• CAN-SPAM / TCPA

Regulatory / Legal Hurdles

The Changing Distribution ModelInsurTech Session with Saul Ewing Arnstein & Lehr LLP

Michael B.C. Fitzgibbon, CIPChief Underwriting Officer – Slice Insurance Technologies Inc.

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Slice Services

Insurance Cloud Services

An insurance company “in the box”, with or without insurance

products.

Mind

Using the data we collect for

underwriting, actuarial, fraud prevention and

claims innovation.

Insurance

Insurance products for personal lines and

commercial operations.

OnDemand Insurance

OnDemand Insurance

for an OnDemand

World

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Frictionless Insurance

No application form

Seconds for a quote

Instant policy via

smartphone

Pay-as-you-go

Homeshare Insurance

Comprehensive, primary, commercial insurance coverage

only for the period of time the home is rented through

platforms such as Airbnb or HomeAway.

Entirely digital and onDemand at the tap of a smartphone

application.

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Rideshare Insurance

Primary and comprehensive commercial automobile

coverage for drivers using platforms like Uber and Lyft.

Entirely digital and onDemand, from “app-on to app-off” with no

time period restrictions.

OnDemand Concept

Monthly Subscription

Pay-as-you-go / Cancel any time

CoverageOnDemand

CoverageOnDemand

CoverageOnDemand

CoverageOnDemand

CoverageOnDemand

CoverageOnDemand

CoverageOnDemand

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Pricing ConceptsRisk Grade

Time

Base Rate

Modified Rate

Premium

Underwriting Factors

Regulatory Environment

• Regulations never contemplated…

• Short-term insurance• Pay-per-use insurance• On-Demand insurance• Individuals operating as a business • Coverage nuance• Technology-driven insurance products• Cloud-based insurance services

…and the regulations are not changing fast enough!

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Regulatory Challenges

Signed DisclosuresExporting Diligence

Non-Solicitation Rules

50 State Licensing

E&S Taxes & Fees

Regulatory Approach

• We meet regularly with DOI’s across the country…

• Introduce Slice, who we are, and the product we intend to offer• Address how we comply with existing E&S regulations• Get DOI input on our interpretation of specific regulations• Undertake export list qualification• Provide preview of policy and process• Answer all questions thoroughly• Follow-through on commitments

…with few exceptions, regulators are comfortable with our products

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© 2017 Slice Labs Inc. ** Confidential **

Thank you/slice-labs-inc-

/slicelabs

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Slice Labs, Inc. 33 Irving Place, Suite 4017BNew York, NY 10003www.slice.is