Auto Insurance Telematics: Where the Data Meets the Road – Deloitte
Article Synopsis :
What is the state of the telematics market?
In the report “Auto Insurance Telematics: Where the Data Meets the Road”, Deloitte presents an in-depth analysis of UBI and telematics. The report highlights the challenges surrounding UBI adoption and details the role of driver data in improving the performance and viability of UBI programs. UBI is here to stay, the report asserts, even if the customer response remains mixed:
- 26% of survey respondents would allow monitoring, without stipulating any specific minimum discount in return
- 47% of survey respondents would not be interested in having their driving monitored under any circumstances
- 27%of survey respondents might get on board with UBI if the price were right
What percentage discount would it take to make a driver consider UBI? What are the age and income breakdowns for UBI acceptance? All here in this well-researched report.
Insurers offering UBI products are looking for new ways to differentiate themselves within the space. Some examples include:
- Real-time road condition alerts
- Gamification and related rewards / incentives
- Real-time roadside assistance
- Green driving monitoring
- Traffic alerts on preferred routes
- Co-marketing of location based services
- Stolen vehicle location services
- Real-time claim notification
At a basic level, UBI is about data – complex data at that. The report identifies and discusses four key data-specific steps in the telematics journey, essential for newcomers to the game:
- Collecting the data
- Achieving a critical mass of data
- Operationalizing the data
- Implementing a UBI program
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Digital Insurer's CommentsThe paradox of UBI in primarily auto insurance (other lines of business eventually) is the technology and expertise required to excel at UBI is both challenging and expensive, and the customer expects lower rates in return.
As a result, most insurers have yet to enter the game. It’s our view early adapters, experimenting with UBI and telematics, building capabilities in real-time data monitoring, robust analytics, mobility and cloud computing, toward innovation in risk pricing, product development, and claims will have the edge not only in UBI but the broader, richer area of data analytics and the digital business models they enable.
Crunching the data streaming from telematics devices is the core competency of digital insurers. Balking at UBI for its complexity delays a journey every insurer must embark upon eventually.
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