Octo Telematics

Octo Telematics
Roma 9 Giugno 2016
Octo Telematics | © 2016 Octo Telematics | Strictly Private and Confidential
STRICTLY PRIVATE AND CONFIDENTIAL
1
Agenda
1. Octo Overview
4
2. How Octo creates value
9
3. Market and industry overview
13
4. Trasformation for future growth
16
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1. Octo overview
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Transforming auto insurance through
behavioral, contextual and driving analytics
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Octo at a glance
The world’s leading insurance telematics provider
#1
36%
$35bn
Globally
Market Share
User-Based Insurance TAM
4mm
25%
>90
Connected Users
Growth in Connected Users y-o-y
Industry Partners
14 years
100bn
250k
Operating History
Miles of Driving Data
Crashes Analyzed
Note: As of December 31, 2015. Estimated market data from Ptolemus Consulting Group; total addressable market data relates to a study commissioned by us.
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Overview of core solutions
Data collection
Advanced analytics
Insights for
insurance companies
Comprehensive set of
real-time driving data
from connected cars…
…feeding into a
proprietary analytics
platform…
…transforming auto
insurance with our
telematics solutions
Continuous innovation
Location
Road Type
Cornering
Distance
Braking
Collision
Duration
Direction
Software, data and analytics
Risk
Assessment
•
•
Collecting over 2,000 parameter
combinations
Insurance Solutions
Raw data is processed into actionable
intelligence
Risk correlation and actuarial
capabilities support industry leading
driver scoring models and pricing
algorithms
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Pricing Services
Crash
Reconstruction
Claim
Management
Emergency
Call
Stolen Vehicle
Recovery
Digital
Solutions
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Our key milestones
2002
2004
2006
Key
corporate
events
Founded
by Fabio
Investment
Sbianchi /
by industrial
funding by
partner
Business
Angels
Expandin
g industry
partners
network
Unipol
began
testing
telematics
solutions
First
partners
2008
2009
2010
Doubled
the number
of
insurance
companies
First
partner
outside
Italy
Partnered
with 8 out of
10 largest
insurance
companies in
Italy
Early
pioneer in
insurance
telematics
Introduction
of initial Onboard Unit
(OBU)
Mileage statistics
Traffic information
2012
2013
2014
2015
2016
HQ moved
to London
Investment
by private
equity funds
Crash recording
Innovation
track
record
2011
London office
opened
Consolidation of
North American
operations
New go-to market
route with major OEM
with data monetization
services
First leasing
partner
First North
American
contract
First UK
partner
Further US
First Canadian
wins
partner
Long-term
rental
Pay How You
management Drive (PHYD)
business
Telematics Self installable
advanced
services
OBU
for OEMs
Vehicle video
monitoring
Octo Rider
Crash
reconstruction
Launch of
Kernel Module
OEM
integration
4.0
Rapid and
global
user base
expansion
3.2
>1.0
1.5
2.2
Connected users (in millions)
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Key metrics used to evaluate the business
2013
2014
2015
(in mm)
4,0
3,2
2,2
Connected users
Services
(in €mm)
Devices
€ 166,4
€ 124,8
Revenue
10,4
6,4
Other
€ 243,2
13,6
37,2
10,6
3,7
152,1
192,4
108,0
% Total
revenue
Adjusted
EBITDA(1)
61%
61%
€ 101,5
€ 75,6
Attractive revenue growth
profile built on expanding
industry partnerships and
connected user base
53%
€ 128,6
(in €mm)
Growing connected user
base driven by new
insurance partners and
increased penetration of
existing partners
Strong profitability
development with 50%+
Adjusted EBITDA margins
expected to be sustained
(1) Adjusted EBITDA as profit/(loss) for the year before taxes on income, share of profit/(loss) of equity-accounted investees, financial expense, financial income, gain on investments, impairment on assets and other provisions,
impairment losses on non-current assets, depreciation and amortization, Share-based Compensation, social security costs incurred in connection with the Share-based Compensation, personnel expenses incurred in 2013 and 2014
under the LTIP, the Octo North America Earn-out, change in control costs, refinancing costs, Octo North America acquisition costs and group reorganization.
(2) Growth rate includes impact of full consolidation of Octo North America revenues from July 2015.
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2. How Octo creates value
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Octo creates value for all stakeholders
Insurance
Up to 18% improvement in combined
Drivers
ratio(1)

More accurate risk pricing reflects
true driver risk profile

More efficient claims process with
lower average cost and reduced
fraud


More frequent and better quality
interactions with policy holders
Broader telematics services
suite enhances overall
customer experience
Up to 30% discount on premiums(2)

Discounted insurance premiums
resulting from removal of costs in
the value chain

Strong incentive to drive more
safely due to possibility of lower
premiums

Significant time savings and
certainty in the claims process

Access to value-added services
such as stolen vehicle recovery
and emerging call
Source: Study commissioned from a leading global management consulting firm; data collected by Ptolemus Consulting Group
(1) Combined ratio refers to the measure of profitability typically used by an insurance company, which may be determined by calculating the sum of its losses and expenses and dividing this result by the premiums recognized as earnings
(2) Insurers advertise up to 30% discounts for drivers
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Crash reconstruction & triage – Assessing severity of damage
- Crash is validated against FNOL data
- Severity ranking is set (mechanical and bodily) and crash report is produced
- Spare part magnitude need is set
- More complex crashes (multi-car pile up, severe accidents, etc.) are subject to
a second level of forensic reconstruction
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Complex accident reconstruction – Pile up
Pile-up accident
Direction and sequence of impact
Left
1
○
Back
Front
2
○
 Pile-ups are a frequent type of crash in
urban areas
 The greater the number of cars that are
involved, the greater the insured loss and
need to determine:
−
−
Right
Which car initiated the collision?
Who is at fault?
2○
0
 Octo can reconstruct the precise
sequencing, 3D vehicle position and impact
forces of the crash on a milisecond basis
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1○
4
6
8
10
12
14
16
Max acceleration during impact (g)
12
3. Market and industry overview
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Octo targets a very large addressable market
Further upside
potential
+ eCall / bCall
+ Location based services
+ Diagnostic services
+ Long-term rental management services
+ Other telematics services
$35bn
User-based insurance
TAM for telematics
service providers
Revenue today
P
Geographic expansion
P
Expanded service offering
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P
Rapid market penetration
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The US, Italy and UK represent the majority of the UBI
market and its growth
Increasing penetration rates
2010
2015
Growing number of
UBI policies (mm)
UBI policies by country (December 2015)
2020
RoW
9%
93
UK
5%
10%
Global
0.2%
2%
1
12
US
50%
49
(1)
29%
0.2%
4%
0,2
6
11
4
35%
2.8%
13%
Italy
36%
0,9
4
11%
0.1%
1
1%
>0.1
US, Italy and UK represent 91% of UBI policies
Source: Ptolemus Consulting Group
(1) UBI in the US and Canada uses a rollover model where the telematics device is only used for a limited amount of
time. Policies using rollover models are considered as active UBI policies, even though the telematics device may no
longer be used the customer
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4. Trasformation for future growth
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From Vision to Execution : 100 Days Plan “bootstrap”
Continuous Innovation
Business Value
100 Days Plan
2014
Near Real Time
SMART DEVICES
HOME BOX
BLUETOOTH LOW ENERGY
APP AS A DEVICE
SENSORS
ADVANCED OBU
BASIC OBU
Products
SELF INSTALL
Safety
Crash Recording
Mileage statistics (PAYD)
Info Traffic
•
•
•
•
•
Crash Reporting
Driving Behavior (PHYD)
Fleet
User Interface
Eco
• Crash
Reconstruction
• FNOL
• SASD
• Advanced fleet
•
•
•
•
B2C2B
Home
OEM
VAS
Services
•
•
•
•
innovation on going
2005
2014
Thousands
Basic devices
Millions
Vehicle transactions
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Today
Billions
Connected Things
Trillions
Trilions 17
Customer
Interactions
Customer
Interactions
17
From Vision to Execution : 100 Days Plan “bootstrap”
Recent technology/service focuses and continuous
improvement as the core of our future success
IT Transformation
Foundation of the new platform covering all the service
orchestration, data streaming and rules management & the
technology “glue” keeping all other projects together
Statistical &
Actuarial
Our module for advanced analytics, or the journey “from
driving behavior to driver genome"
Crash & Claim
Middleware & advanced algorithms backed by the 5 best
universities for signal processing & integrated with
insurers’ legacy systems on claim management
CRM
Knowledge
Management
ERP
OctoForce – the full digital customer engagement
solution covering marketing, sales & service
Platform to support idea generation and service catalogue
– our collective knowledge exceeds the sum of its parts
Logistics and financial process integration – the “single
source of truth” of our financials
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