Risk listening: monitoring for profitable growth

2. 2 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Emerging Tech, Real-time data and the Connected World Smart Cities and Buildings Smart Factories / Commercial Connected Life / Health / Medicine IoT / Robotics Telematics Shared Economy Smart Homes Cyber / AI / Analytics

3. 3 © Hortonworks Inc. 2011–2018. All rights reserved. Hortonworks confidential and proprietary information Individual and business customers are increasingly residing in cities The world’s population continues to migrate to cities, passing 50% urbanization and projected to exceed 70% urbanization by 2050 The entities underwriting risk, and the liability in an automated, smart world, may change significantly Smart city projects and technologies introduce new risks. For example, cyber-risk and many different liability exposures are much higher for smart cities Smart technologies have the potential to dramatically reduce risks for vehicles and property and improve people’s health and well- being The evolution of smart cities is changing the risks of both individual and business customers The Connected World Is Reshaping the Nature of Insurance Risks Connected vehicles estimated to generate 300 TB of data per year, or 25GB per hour!

4. 4 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Insurance Industry Data Sources in the Connected Digital World Catastrophic Event Data Customer Onboarding Data Seismic Data Biometrics Data Usage-Based Driver Data Cyber Threat Metadata Drones & Aerial Imagery Claims Docs, Notes & Diaries Weather & Environment News Feeds Policy Histories Photos Telematics Connected Devices/IoT/ Sensors Chat Bots Call Transcripts RISK & UNDERWRITING ANALYSIS USAGE-BASED INSURANCE CLAIMS ANALYTICS NEW PRODUCT DEVELOPMENT CYBER RISK ANALYTICS CRM

6. 6 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Insurers Planning for Connected World Data (company illustration) BatchReal-time Datavelocity Dimensional/Structured Behavioral/Unstructured Data variety Semi-structured Climate / air quality / weather events Drone image feeds Social media / Sentiment Sensors/ Wearables (IoT) Geo-location Deposition recording Notes and diary Medical bills Transcriptions Photos Investigation TPA invoices FNOL intake Claims triage Vendor invoices Forms and letters Claim payments Policy verification Applications / Submissions 3rd party risk models Prior loss runs Customer Profiles Currently using for analytics Currently available, but unable to use for analytics Plan to use in next 12 months Plan to use in next 24 months 1 3 1 3 1 1 1 1 3 1 1 1 Historical Weather-events1 Population data1 Call center Chat bots3

7. 7 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Enhanced Risk Models – Geospatial Opportunities  Product Development & Prospecting – Underpenetrated Regions  Catastrophic event models – Model comparison – Supplement with near/real-time data  Understanding Risk at Location Level vs Acct Level – Sharing of data across LOBs – Risk Aggregation vs. Account/Customer Aggregation Location Sharing vs. Account View Events vs. Policy

8. 8 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Immediate Access to post-storm for timely and accurate event analysis  Within hours of an event, stream storm event information (hail swath) – date, time and details of hail size data using open data sources such as USGS.gov or other weather sources – streaming data delivered via Hortonworks Data Flow  Overlay and compare data with policy information (structure information, building footprints stored in HDP) with geocoded location and events  Evaluate the impact on the policy book of business: – to simulate impact to the business – for reporting individual and aggregate information to the business – for comparison to incoming FNOL and claim investigation assisting with resource deployment and potential fraud (hard and soft fraud) * Queries are executed directly in HDP (Apache Hive tables) for fast and full portfolio analysis

9. 9 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Traditional “PAYD” “PHYD”/”MHYD”* Shift from Usage-Based Auto Insurance Programs to Behavioral Rating Risk Proxies Utilization Simple Behaviors Using Event Counters • Estimated Mileage • Garage location • Prior claim history • Maneuvers • Anticipation • Aggression • Adaptability • Acceleration • Braking • Cornering • Excess speed • Approximate location (GPS)• Number of trips • Time of day • Mileage Method Adoption • Vary by geography and locations due to data availability, cost and regulations • Companies have struggled with data storage and analysis due to volume, variety and velocity • Programs are evolving as technology changes Data / Analytics Impacts • Changes in data storage and analysis due to volume, variety and velocity • Need to provide additional “context” to the driving data such as location, weather, road conditions, accident data * MHYD = Manage How You Drive

10. 10 © Hortonworks Inc. 2011 – 2018. All Rights Reserved New Opportunities for Personal Auto & Fleet Insurers UBI with Connected Car & Infotainment Systems Enhance Customer Relationships Enhance Customer Relationships  Leverage new data sources such as Data.gov  Historical accident prone roadways & streets  Dept of Transportation + driver behavior  Recommend alternate “safer routes”  Driver behavior analysis Vehicle Concierge Service replaces “roadside assist offering” Data Drives the Connected Vehicle Enhance Customer Relationship Vehicle Concierge Service replaces “roadside assist offering” Loss Expense Optimization  Maintenance reminder  Roadside assistance  Parking management  Travel discounts  Service discounts  Stolen Vehicle Location Assistance Enhance Claim settlement/subrogation  Product Liability: Vehicle manufacturer at fault (e.g. faulty airbag)  Speed claims settlement process  Accident investigation (camera, distance of vehicle)

11. 11 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Evaluating and Inspecting Property Risk & Damage Risk Inspection – Roofs – Buildings – Survey of construction “site safety” Claims / Catastrophe Inspections – Hurricanes -- Residential and Commercial Property inspection – Hail inspection – Floods – Fires – Crop Insurance monitoring (verification)

13. 13 © Hortonworks Inc. 2011 – 2016. All Rights Reserved Real-time analysis and risk monitoring/listening Insurer wanted on-going views into its bio-med industry customers for current/future potential liability claims External data sources were monitored in real-time (news feeds, content from the customer’s website, stock/financial analysts commentary) for 50 of top customers for potential liability claims. • Expanded to 1K customers by end of 2016 as underwriters, product managers and the claims organization found it very useful for individual risks. • Product management and actuarial also are using data to better understand the risk correlations for the bio-med industry. • In 2017, expanding and collecting data on 50K customers/target market. Outcomes Approach Business Challenge 1 2 3 Global P&C: Personal and Commercial CAPABILITIES: Blending of a new predictive model with risk monitoring for high-risk attributes. Expanded insights to a customer market segment

14. 14 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Telematics analytics (machine learning) to understand context of driving conditions A ”still” view taken from the car’s dashcam. Through machine learning understanding the context of the location attributes (orange vs. grey fields) Conditions of the road surface, where extreme values show the presence of speed bumps (as seen in the picture). Shows driver behavior/speed in this situation Shows geo- location Street view to compare with the dashcam view. Powered by SynerScopeusing HDP and HDF

15. 15 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Public Accident Information (personal lines insurer) Public Accident Data: Real-time camera-view, accidents by highway Accident data per highway, live camera-cam highway viewCorrelation of all accident data, vehicle type, weight of vehicle, brand of vehicle

17. 17 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Satellite • Situation post-event GPS Location • Drone path (green) • Water Level Monitors (black) • Water Level Crowd Reporting (orange) Aerial Pictures • Drones. Helicopters, Planes Satellite • Situation pre-event Water Levels • Showing surge patterns AI Clustering • Detecting similarity of events in unstructured (C) 2017 SynerScope MANY DATA LAYERS FUSED WITH AI and ADVANCED VISUALIZATION TECHNOLOGY

18. 18 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Risk Monitoring (listening) Use Cases Fire Event Monitoring Predictive Analytics • A fully automated monitoring of 7,000 digital news channels with a daily volume of 250 gigabytes allows fire losses in the United Kingdom and the USA to be recorded more quickly and cheaply. • Comparing this data with the risks in portfolios allows for better identification of risk patterns, so that claims management can be faster and more effective. Global Reinsurer Needs based coverage • Micro-insurance policies for agriculture provided in South Africa that utilize real-time weather data and mobile money transfer to create affordable and accurately priced micro- insurance policies for farmers. Real-time/Streaming “Brand Watch” • Insurer is conducting “brand watch” of its insurance customers who are in the biomedical industry. • External data sources are monitored in real-time (news feeds, content from the customer’s website, stock/financial analysts commentary) of its customers for potential liability claims. • Initially launched with a pilot started with collecting data for 50 customers and expanded to 1K customers by end of 2016 as underwriters, product managers and the claims organization found it very useful for individual risks. • Product management and actuarial also are using data to better understand the risk correlations for the bio-med industry. • In 2017, will be expanding and collecting data on 50K customers/target market. • Leverages HDF and SparkGraphX. Global Specialty Carrier Real-time analysis and risk monitoring International Specialty Carrier

20. 20 © Hortonworks Inc. 2011 – 2018. All Rights Reserved Preparing for the Connected World & Risk Listening  Track Emerging Tech: All insurers should actively follow those emerging technologies that will have the highest impact on their business, such as autonomous vehicles, AI, drones, the IoT, blockchain, and many others.  Follow Smart City Projects: Be aware of the projects that are underway, especially those in nearby cities or cities where you have a large customer base.  Engage in Initiatives: Where appropriate, join consortiums or partner with local governments to promote smart city projects, especially those aimed at reducing risks and improving public safety.  Build Big Data and Analytics Capabilities: In any future scenario for insurers, having the platforms and expertise to manage, analyze, and act upon large streams of real-time data will be essential.  Design New Products: Leverage innovation to develop new products and coverages that address new or increased risks created by smart cities, or provide insurance in new areas or to new customer segments.

Risk listening: monitoring for profitable growth

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Risk listening: monitoring for profitable growth

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