Telematics: Misunderstood but Key to Insurance's Future
ThingCo's founder, Mike Brockman, brings a wealth of experience to the table, having pioneered the world's first telematics-only insurer in 2008. This background provides ThingCo with a distinctive edge in understanding the intricacies of insurance operations. "We are all insurance experts, having been in the industry for many years," Brockman states. "Regardless of the technology, if you don't understand all aspects of how insurance, and in particular, motor insurance works, you will never be able to engage with your customers and truly understand the issues that they are facing.
"This insurer-centric approach is fundamental to ThingCo's mission. "We have the objective of delivering the lowest loss ratio with the lowest premium," Brockman explains. "To do that takes unique knowledge, knowledge that our competitors don't have."
Advanced Telematics Technology: The Theo Device and AWS Platform
At the heart of ThingCo's offering is its sophisticated telematics technology, comprising two key components: the Theo device and the AWS-powered platform."The Platform processes the data in real-time using Amazon Web Services (AWS) serverless technology," Brockman says. "It is designed to scale to any size and can be deployed in any country in minutes."
The Theo device, a solar-powered, wireless unit that can be easily fitted to any vehicle, collects high-quality data without interfering with the car's functionality. "It is the data that can be turned into gold, if you know how to do it," Brockman continues.ThingCo has also developed a suite of software tools, including a Customer Relationship Management (CRM) facility for communication with consumers and partners. "These tools will help insurers risk manage their customers including at First Notification of Loss (FNOL) and fraud detection and help deliver lower loss ratios," Brockman explains.
Revolutionising Customer Experience and Risk Management
ThingCo's approach to telematics is reshaping the customer experience in motor insurance. Brockman emphasises the importance of identifying and rewarding good drivers: "The good customers, however, you want to keep and reward them for their good (safer) driving by giving them lower premiums. "Moreover, the technology plays an active role in reducing accident risk. "When it is done well, telematics can also play an active role in cutting accident risk by allowing insurance providers to engage and educate customers in a way that leads to a direct correction of driving behaviour," Brockman states.
Challenges and Opportunities for Insurers
While telematics offers significant benefits, Brockman acknowledges the challenges insurers face in implementing these solutions effectively. "Telematics is the hardest business model in motor insurance, and that's why so many insurers have tried but only succeeded to a certain extent," he says. "Dealing in real-time is not a natural environment for an insurer. "However, for those willing to invest the effort, the rewards can be substantial. "If done right, [telematics] will deliver better loss ratios and with insurer support deliver lower premiums and therefore volume," Brockman explains.
Data Privacy and Security: A Top Priority
In an age of increasing data concerns, ThingCo places paramount importance on data privacy and security. "All data is encrypted at device level and platform level," Brockman assures. "The only data that is accessed is the trip data and crash alerts." The company leverages AWS security protocols and adheres strictly to GDPR conditions. "It is vital that all Terms and Conditions explain how data is used and what actions brokers and/or insurers can take in both policy documents and any Apps," adds Brockman.
The Future of Motor Insurance
Looking ahead, Brockman sees telematics as a crucial stepping stone towards a future where all cars will be connected. "Those insurers who do not embrace it will fail in the long term," he warns. "Unfortunately, there is a very short-term culture within the industry, and this will come back to bite them." Despite the challenges, Brockman remains optimistic about the potential for telematics to become mainstream in motor insurance. "From my point of view, my biggest challenge is to get telematics mainstream which I think is very possible, but insurers need to wake up," he concludes. "As always though, the early bird will catch the worm!"
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