How democratizing driver safety can benefit insurers and their customers
If mobile telematics costs were reduced, the insurance industry would be in an optimal position to make driving intelligence available to the general public. Think of reduced insurance premiums and improved loss ratios, but also a decrease in accidents and saving lives; a move towards a positive contribution towards all of humanity. We sat down with Oliver Bath, VP Growth Cloud Driving Insights at Sentiance, an intelligence-driven data science and behaviour change company, to answer the question: “How can the insurance industry effectively disseminate driving insights, driver coaching, and ultimately prevention measures to the general public on a large scale?”
Oliver, can you tell us why making driving intelligence available to the public should be of interest to insurers?
The insurance industry can seriously benefit from democratizing driving intelligence by providing a free mobile telematics offering to the market. There are several reasons, but let me give you the five most important ones. First: Increased affordability. By reducing the cost of mobile telematics, insurance companies can make this technology more accessible to a wider range of customers. This affordability factor can attract more policyholders and expand the insurer’s customer base.
Secondly: Enhanced risk assessment. Mobile telematics provides detailed data on driving behaviour, such as speed, acceleration, braking, and mileage. By leveraging this data, insurance companies can gain better insights into individual drivers’ risk profiles. This allows them to offer personalized and more accurate insurance premiums based on actual driving habits, resulting in fairer pricing for policyholders.
The third reason: Improved loss ratios. With better risk assessment, insurance companies can identify high-risk drivers more effectively and adjust premiums accordingly. By encouraging safer driving habits through telematics-based incentives or feedback systems, insurers can potentially reduce the frequency and severity of claims. This, in turn, can improve their loss ratios and profitability.
Fourth: Accident prevention. Mobile telematics not only enables insurers to assess risk but also helps drivers become more aware of their own driving behaviours. By providing feedback and insights based on real-time data, telematics can encourage safer driving habits, such as avoiding aggressive manoeuvres or distracted driving. By reducing accidents, insurance companies can save on claim payouts and operational costs.
The fifth and final reason is Positive brand image and customer loyalty. By actively promoting and incorporating mobile telematics, insurance companies demonstrate their commitment to road safety and customer well-being. This proactive approach can enhance their brand image and foster loyalty among policyholders who appreciate the added value of personalized, data-driven insurance solutions.
Which insurance value chain elements can be impacted positively?
Providing a free mobile telematics offering to the market, regardless of whether the user is linked to a policy, can significantly change the way insurance businesses operate. It impacts multiple elements of the insurance value chain such as distribution, customer acquisition and retention, risk assessment and underwriting, customer experience, and product development. It also holds relevance for insurance customers as it offers insurance customers the benefits of improved engagement, personalized offerings, and the potential for better pricing based on their driving behaviour.
This sounds amazing! Are there other examples where insurers provide a free valuable service to people without a policy?
Insurance companies can offer free disaster preparedness and education programs to the general public, regardless of whether they hold a policy with the company. These programs aim to educate individuals and communities on how to mitigate risks, prepare for natural disasters, and recover effectively. Unique elements of these initiatives include Community Engagement, Risk Mitigation, Brand Reputation and Trust and Business Growth Potential.
Initiatives such as free disaster preparedness and education programs showcase the unique elements of insurers providing valuable services to people without policies. They differentiate themselves from traditional insurance practices by emphasizing relationship-building, social impact, and a broader value proposition that extends beyond policy sales.
What is your long-term vision of democratizing driving intelligence in the insurance industry?
I see a transformative shift in how driving is understood, insured, and approached. Revolutionizing the insurance industry’s approach to driving, fostering safer behaviours, reducing accidents, and making a positive contribution to humanity. I envision a future where technology, data, and personalized insights empower individuals to become safer drivers and create a safer, more responsible driving culture.
Are there any challenges for the future?
While providing free valuable services to people without insurance policies can be beneficial, there are several challenges that the insurance industry may face in this regard such as cost and resource allocation, return on investment, targeting the right audience, awareness and engagement, sustainability and long-term commitment, regulatory considerations, and collaboration and partnerships.
Addressing these challenges requires strategic planning, adequate resources, effective marketing, and a long-term commitment from insurers. By overcoming these hurdles, insurers can successfully provide free valuable services to non-policyholders, benefit humanity, and create opportunities for sustainable business growth. The successful insurer of the future will adopt a customer-centric approach, leverage data, and analytics capabilities, integrate technology effectively, collaborate with ecosystem partners, build brand reputation and trust, adapt to regulatory changes, and foster a culture of continuous innovation. By aligning with these future success factors, insurers can position themselves as leaders in the industry, drive sustainable growth, and meet the evolving needs of customers and society.
What role can insurtechs play?
Insurtechs play a crucial role in the insurance industry by driving technological innovation, enhancing the customer experience, leveraging data analytics, fostering collaboration, and challenging traditional practices. They introduce new solutions, improve processes, and prioritize customer-centric approaches. Insurtechs operate with agility, flexibility, and a focus on data-driven decision-making. Their contributions lead to industry-wide transformation and shape the future of insurance.
ITC DIA Europe 2023
Sentiance, founded in 2015, is an intelligence-driven data science and behaviour change company, where motion is turned into insights. We are honoured that Oliver took the Deep Dive stage at ITC DIA Europe 2023 to share these insights.
Sentiance’s mission is to help companies worldwide revolutionize their user experience and build sustainable, personalized, and safer solutions by turning motion data into mobility insights. The intelligence-driven Sentiance platform turns mobile sensor data into actionable insights about the user’s behaviour and lifestyle, which companies can then apply to personalize and engage with their users, as well as positively change behaviour. The Sentiance technology and products are meant for today’s human-centric economy where the user is in control of their data.