Vehicle-centric data will drive motor insurance’s future
Today we are witnessing a rapid increase in-vehicle connectivity, as well as advancements in vehicle safety technology and autonomous driving.
This is opening the potential for dynamic data from the car and static data about the car’s build to be used for insurance risk assessment and pricing.
All cars are expected to have connectivity by 2030, feeding a wide range of data into car manufacturers to help them better serve their customers and support their goals of zero emissions and zero fatalities. This includes offering Usage-Based Insurance (UBI) based on how the car is driven as well as the presence and activation of increasingly advanced Advanced Driver Assistance Systems (ADAS).
At the same time, the insurance sector needs to access vehicle-centric data to remain relevant in a world where consumer experience will trump products.
The formation of a connected car data platform and exchange with consumer consent, compliance and control at its heart is providing a solution to help both markets leverage connected car data. Here, driving data from motor manufacturers and insurers is normalised, contextualised and standardised then delivered back as an actuarial grade driving score for UBI, regardless of the vehicle make, model or device type.
But with connected car data still on its upward trajectory, we also need to look at what’s deliverable to the market right now.
Starting with clean and accurate vehicle-based data, it’s already possible to convert the Vehicle Registration to VIN to build a solid data foundation. So first the focus is on static data on the build of the vehicle, including its ADAS features. This is already well-advanced for use in pricing with testing of LexisNexis® Vehicle Build underway with a number of UK motor insurance providers.
Building on these foundations, using the car manufacturer’s embedded telematics, usage-based insurance programs and driver behaviour scoring can be delivered.
Distance readings directly from the odometer will end the need for estimations and the potential for error.
All this data from and on the car will support pay-how-you-drive options, where insurers can launch mass-market driver scoring and safety programs.
Soon, insurers will be able to access a suite of vehicle data products and multiple car manufacturers’ data in the same way they already access traditional data, to enable point-of-use delivery across the insurance value chain.
These developments are happening as consumer appetite for services based on vehicle data is growing. Research demonstrates that most consumers (80%) are between “somewhat” and “very willing” to share their data in return for a range of benefits, including lower prices, more relevant, personalised offers and alerts, and quicker claims processing.
Insurance providers already offering telematics will be in a stronger position to tap into this consumer demand and leverage the data to come from the connected car than those who have yet to get on board.
Connected car data is set to disrupt the market, but only for those who are least prepared.
This article was contributed by Martyn Mathews, Sr. Director at LexisNexis Risk Solutions
TrueMotion insurtech acquired by Cambridge Mobile Telematics
One of the world’s leading telematics insurtechs, Cambridge Mobile Telematics, was launched in 2010 and powers 65 enterprise programmes in 28 countries.
Meanwhile, TrueMotion, which launched in 2012, has enjoyed significant success as a telematics operator, raising US$10mn in its seed funding round in 2010, and then partnering with the motor insurtech Noblr in 2019.
TrueMotion has also entered the European market, collaborating with LB Forsikring to promote safe driving in Denmark.
The joining of the companies means TrueMotion’s 150-strong workforce will join Cambridge Mobile Telematic’s already established team, along with their client list, which includes Travelers, Farmers, and Progressive.
The new company will focus on increased interest in using telematics for crash reconstruction in personal lines claims and more innovation in the telematics space.
Speaking about the acquisition, William Powers, CEO, and co-founder of Cambridge Mobile Telematics, described the move as an opportunity to explore new markets, expand throughout the US and bring telematics to a much wider customer base.
"With this acquisition, we will use our world-class talent, technology, and scale to help our partners overcome the complex challenges of global road safety,” he added.
Ryan McMahon, VP of insurance and customer affairs for Cambridge Mobile Telematics, explained that expanding the company with additional talent and customers would help meet the demands of a growing telematics market. He also quoted data from a study by J.D. Power which revealed that personal auto telematics users have doubled in five years to 16% of policyholders.
McMahon told the press, “This market is rapidly expanding, and building more capabilities is more important than ever,” McMahon says. “Both companies follow similar philosophies and grew up in similar ecosystems, and now we’re bringing those cultures together.”
He continued, “Telematics is absolutely the future of commercial auto and rideshare, and it’s kind of a step up beyond the normal telematics."
McMahon added, “We will not only widen our lead in smartphone telematics, but also use our combined talent to invent new products for risk measurement, contextual telematics, and crash mitigation across emerging mobile, IoT, connected-car, video, and sensing technologies.”
Five reasons why telematics is in demand
- It reduces fuel costs and increases operational efficiency. This is a consideration for most commercial fleets given the rising costs of fuel
- The technology enables fleet managers to plan operations with greater precision by providing exact locations, timescales, and speeds of vehicles.
- It improves driving standards and monitors driver behaviour, reducing detours and ensuring responsible driving.
- It helps fleet health and maintenance by monitoring the health of operational vehicles.
- It increases corporate social responsibility in terms of care for the driver, the vehicle, the impact of driving in terms of emissions, and also the security of the vehicle itself.
Image credit: Getty