The New Auto Insurance Ecosystem – Cognizant Report
Article Synopsis :
Telematics is the latest innovation in the field of auto insurance underwriting, a move from proxy-based underwriting models to real-time behavioural data assessment.
The use of telematics in auto insurance has many benefits for both the insurer and customer
In the report “The New Auto Insurance Ecosystem: Telematics, Mobility and the Connected Car”, the Cognizant team highlight how insurers and auto manufacturers worldwide have set their focus on telematics as the next wave of creating deeper customer relationships. The report presents a high level perspective on the key drivers, financial benefits and key challenges insurers will face while building the telematics ecosystem. Cognizant believe that the growth of the usage-based insurance (UBI) market will be fuelled primarily by the following forces:
- Evolution of a new insurance ecosystem
- Growth of embedded telematics solutions
- Connected vehicles
- Mobility’s impact on UBI
- Increasing adoption of UBI by carriers and customers
- Regulatory changes supporting telematics adoption
The report also lists the key challenges insurers will face while implementing the telematics-based UBI:
- Regulatory issues
- Privacy issues
- Operational issues
- Challenges with smartphone-based telematics
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Digital Insurer's Comments
Insurers are increasingly adopting telematics for a number of reasons. It helps them gather real-time information and thus helps to minimise ‘guesstimation’ while measuring risk. In addition, the societal benefits resulting from improved driver behaviour is another reason for the rapid adoption. The surge is also being supplemented by digitisation, which continues to substantially enhance the performance and accuracy of telematics devices. As telematics enter the main stream, insurers that act now and who engage with hardware vendors to pick the best solution that aligns with their telematics strategy will be better positioned to tackle the competition.Link to Source:: click here
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Hugh Terry
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Hugh Terry
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