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Does telematics really work for insurance?
#insurancetelematics
POSTED ON:
September 9, 2021
- Telematics doesn’t work in insurance.
- Fender Stratocaster doesn’t sound in Zahar’s hands.
- The drums don’t keep the pace when Alex plays them.
All that has one thing in common – a workman always blames his tools. Just like the guitar or drums don’t do the musician, telematics won't do insurers’ job.
Telematics collects data, analyses it, and grants the insights to insurers to build data-driven services and products. But the insurer should make the most of this data and scale the business on top of it.
Considering the latest mobility dynamics, it’s obvious that both business and personal customers don’t want to pay for the envelopes anymore. They expect a new level of service and products that are tailored to their way of living and working.
- Fender Stratocaster doesn’t sound in Zahar’s hands.
- The drums don’t keep the pace when Alex plays them.
All that has one thing in common – a workman always blames his tools. Just like the guitar or drums don’t do the musician, telematics won't do insurers’ job.
Telematics collects data, analyses it, and grants the insights to insurers to build data-driven services and products. But the insurer should make the most of this data and scale the business on top of it.
Considering the latest mobility dynamics, it’s obvious that both business and personal customers don’t want to pay for the envelopes anymore. They expect a new level of service and products that are tailored to their way of living and working.
TAGS:
Draivn, insurance telematics,
open mobility, telematics service provider, insurtech
open mobility, telematics service provider, insurtech
Allstate is a perfect example of making telematics work in insurance. They started with basics and added new features incrementally, validating every hypothesis they had. In the end, Allstate set up a separate entity in charge of the telematics data. It took them ten years of constant attempts and experiments, but it was worth the effort:
- 20% of their customers are involved in telematics and the number is growing
- 3rd largest telematics portfolio in the world to boast
- Improved operational efficiency and new services added on a regular basis
Please get me right, putting your dongle into the customer’s vehicle and offering a 30% discount for that doesn’t mean having a telematics program. It means selling your product cheaper – the same product that you have been selling for ages.
Insurance telematics is not another loyalty program, but a fully-fledged business stream within your organisation. It’s like Agile transformation for development companies – it concerns everyone from employees to C-level, demands a clear understanding of why they do it, and quick expansion of expertise across the organisation. Such an initiative gets supported at all levels and becomes a success. Otherwise, be ready to blame some implementation, marketing, or innovation team for another non-working telematics insurance program.
- 20% of their customers are involved in telematics and the number is growing
- 3rd largest telematics portfolio in the world to boast
- Improved operational efficiency and new services added on a regular basis
Please get me right, putting your dongle into the customer’s vehicle and offering a 30% discount for that doesn’t mean having a telematics program. It means selling your product cheaper – the same product that you have been selling for ages.
Insurance telematics is not another loyalty program, but a fully-fledged business stream within your organisation. It’s like Agile transformation for development companies – it concerns everyone from employees to C-level, demands a clear understanding of why they do it, and quick expansion of expertise across the organisation. Such an initiative gets supported at all levels and becomes a success. Otherwise, be ready to blame some implementation, marketing, or innovation team for another non-working telematics insurance program.
Telematics is no longer a product of FOMO – it becomes a new standard.
The paradox is that telematics was born as a purely B2B product (GPS tracking for fleets, commercial vehicles, construction equipment, etc), but in the insurance sector the penetration in commercial lines is much less compared to personal ones. But things change.
In 2021, commercial insurance telematics looks like a boy who grew tall over a single summer before High School. A year back, nobody expected this little chap to become a quarterback, and now he blows the opponent’s team to glory. Telematics, alike, came a long way for a short time.
Over the past few years, the demand of commercial insurance customers went beyond traditional UBI to fleet management, data exchange, and PAYD/PHYD services. Commercial carriers reckon on telematics to stay viable in the ever-changing environment.
As the number of vehicles, industries, and data points are involved, the value from telematics in commercial insurance not only grows exponentially, but bilaterally.
- The insurer adjusts the unique selling proposition to what clients really need and retains profitability despite the emerging challenges, even such as the pandemic.
- The commercial fleet optimizes insurance payments and cuts operational costs based on personalized data from the insurer.
How to get the most value? Let’s consider a few things:
- Mobility is moving from B2C towards B2B and B2B2C
- The commercial segment will clearly dominate the niche in the decade
- Investment into telematics takes at least 5 years to return
Knowing that, it’s obvious that first movers will gain a substantial advantage here. All others of course will follow after missing the bus, but for many of them, it will be too late.
Now about boarding this bus.
The paradox is that telematics was born as a purely B2B product (GPS tracking for fleets, commercial vehicles, construction equipment, etc), but in the insurance sector the penetration in commercial lines is much less compared to personal ones. But things change.
In 2021, commercial insurance telematics looks like a boy who grew tall over a single summer before High School. A year back, nobody expected this little chap to become a quarterback, and now he blows the opponent’s team to glory. Telematics, alike, came a long way for a short time.
Over the past few years, the demand of commercial insurance customers went beyond traditional UBI to fleet management, data exchange, and PAYD/PHYD services. Commercial carriers reckon on telematics to stay viable in the ever-changing environment.
As the number of vehicles, industries, and data points are involved, the value from telematics in commercial insurance not only grows exponentially, but bilaterally.
- The insurer adjusts the unique selling proposition to what clients really need and retains profitability despite the emerging challenges, even such as the pandemic.
- The commercial fleet optimizes insurance payments and cuts operational costs based on personalized data from the insurer.
How to get the most value? Let’s consider a few things:
- Mobility is moving from B2C towards B2B and B2B2C
- The commercial segment will clearly dominate the niche in the decade
- Investment into telematics takes at least 5 years to return
Knowing that, it’s obvious that first movers will gain a substantial advantage here. All others of course will follow after missing the bus, but for many of them, it will be too late.
Now about boarding this bus.
If Mythbusters had been on air, we would have asked them to demolish the following myth:
“The only way to build an insurance telematics program is to partner with a telematics service provider and white-label a solution.”
In that case, insurers invest in software, data handling infrastructure, GPS devices, installations, and logistics, etc. In the end, these costs fall on the shoulders of carriers – such insurance premiums they can’t afford. If it was the only option, all the attempts to implement commercial insurance telematics would fail.
Now, insurance service providers don’t need a single closed white label solution. They can retrieve data from OEMs and fleet management systems, ELD service providers, data aggregation platforms, and much more. Harmonized and enriched with analytics, the data drives underwriting, risk management, claims, and smart insurance services to a new level.
This is what Draivn – brings insurance telematics to commercial fleets globally. We are bridging this gap that just recently required years to be closed. So stop wasting your time and innovation budget – start your first steps in telematics with Draivn.
“The only way to build an insurance telematics program is to partner with a telematics service provider and white-label a solution.”
In that case, insurers invest in software, data handling infrastructure, GPS devices, installations, and logistics, etc. In the end, these costs fall on the shoulders of carriers – such insurance premiums they can’t afford. If it was the only option, all the attempts to implement commercial insurance telematics would fail.
Now, insurance service providers don’t need a single closed white label solution. They can retrieve data from OEMs and fleet management systems, ELD service providers, data aggregation platforms, and much more. Harmonized and enriched with analytics, the data drives underwriting, risk management, claims, and smart insurance services to a new level.
This is what Draivn – brings insurance telematics to commercial fleets globally. We are bridging this gap that just recently required years to be closed. So stop wasting your time and innovation budget – start your first steps in telematics with Draivn.
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