Know what you are trying to achieve with telematics data

Media Release

February 2014

 

KNOW WHAT YOU ARE TRYING TO ACHIEVE WITH TELEMATICS DATA

 

An international survey conducted by SSP with 27 of the top international insurers showed that how insurers analyse and interpret the data generated by telematics depends on their specific objectives.

 

Competitive pricing, improved underwriting and lower claims ratios were rated as the top three objectives for utilising telematics to develop an information-based business.

 

SSP believe that these Insurer telematics objectives will change in the future as the impact of the newly available data may not be fully felt as yet. The likelihood is high that in the future these will be replaced with individualised offers, interactive adjustment of insurance and the ability to extend product and service offerings

 

Rhys Collins, Head of SSP’s African operations, says “In the UK nowadays for example,  insurance is often purchased through price comparison sites, which treat it as a commodity. The only way to win greater share of the business is therefore to offer lower prices. Information-based proposals depend on how much you know about your customer, and offering dramatically lower premiums based on a more-accurate understanding of risk will undercut the commodity markets and yet provide greater profitability.”

A behavioural based telematics proposition will also enable the Insurer to engage with their customer much more frequently and build a relationship based on more than just price.

 

Despite the apparent advantages, implementation is still very slow and adoption in South Africa is still some way off. However, those insurers wishing to remain at the leading edge need to start thinking about these things now.

 

Collins says the most formidable barriers to adopting this approach include difficulties with legacy systems, cost of investment, and practical workability of the technology. Fear of business disruption, loss of management time, and customer confusion are generally not seen as obstacles.  But like most other technology advancements, telematics and related technologies are maturing quickly and the  costs of implementing and operating the technology are also coming down, with a healthy market of service providers who are willing and able to help insurers get going.

 

Once the focus moves away from process efficiency, the path is clear for a major transformation in customer relationship management. With back-office systems seamlessly integrating billing, policy administration, claims handling and increasingly granular management information, insurers will be able to empower their marketing and sales staff in the front-line, creating a total customer experience that attracts, engages and retains customers.

SSP Worldwide logo