Telematics transforming the future of auto insurance
Telematics-based insurance policies are on course to hit 100 million worldwide in the next three years, fast transforming the way auto insurers conduct their business.
Aldo Monteforte, founder and chief executive of telematics provider The Floow, says the growth in telematics is testament to the rising demand among drivers for a fairer, bespoke premium and it is a trend that shows no signs of slowing. In an age where the customer is king and taking business elsewhere has never been easier, insurers need to place onus on maximising customer experience and forging long-term, meaningful relationships.
He explains: “Insurers have made a commitment to their clients to follow through on a promise in the face of a negative event, but the challenge they face is getting the price right; it must reflect the risk they take, while ensuring customers feel satisfied with the cost.”
According to Mr Monteforte, insurance based on traditional methods of age or postcode fail to represent truly someone’s driving ability, with behaviour the cornerstone of risk.
“Behaviour remains the single biggest indicator of someone’s propensity to claim, and telematics provides an accurate way of capturing a driver’s ability and nuances, such as time of day or mobile phone usage,” he says.
Since its inception in 2012, The Floow has worked tirelessly to create an innovative proposition, based on science. Its unique technology has sought to tackle the obstacles of rising costs of premiums for the customer, and interpreting the vast array of data, from traditional and new data pools for insurers, cementing its position as UK leader in the telematics space.
Working with insurers on a global basis, The Floow’s magnum opus is that it’s a device-neutral approach, which allows it to collect data from a number of sources, including black boxes, wireless tags, onboard sensors and, arguably its biggest coup, the smartphone.
The data is interpreted so that it delivers scores with demonstrably superior predictive power to insurers, far surpassing proxy-based models, enabling them to create new and engaging experiences with their customers.
In addition to being able to more accurately predict claims, thus creating fairer premiums, The Floow’s industry-leading approach helps educate drivers, leading to smarter and safer driving.
The benefits have made usage-based insurance one of the fastest-growing segments of the auto insurance industry
“Data science has a huge role to play in what we do,” says Mr Montefore. “Our multi-disciplinary team of data scientists extract all the relevant data so that we can provide insurance firms with insights into driving behaviour, while providing a driver score. It is the granularity of our data which our clients really value.
“Data can provide positive interventions to create improved driving behaviours; it can notify the driver not only of their performance, but also of events such as speed, braking, mobile usage, erratic movements and crash detection.”
It comes as little surprise then that The Floow has harnessed its wealth of data to develop end-user applications, which can prove useful for insurers looking to enhance their customer offering.
Apps such as Shotgun, aimed at the 18 to 25-year-old market, which allows users to unlock instant rewards in accordance with good driving, have proved particularly popular. In turn, it has helped make the young-driver market more accessible and less risky.
Unsurprisingly, the benefits have made usage-based insurance one of the fastest-growing segments of the auto insurance industry. IHS estimates that the number of consumers using such technology will reach 142 million globally by 2023.
“We are at a point where it is beyond any doubt that telematics is part and parcel of the operational infrastructure of insurers. An insurer can’t run a modern insurance operation without this type of technology,” says Mr Monteforte.
“New possibilities are emerging every day, with the application of our data insights lending themselves to informing the ‘smart cities’ agenda. We are only at the beginning of what promises to be a huge turning point for the insurance industry and beyond.”
For more information please visit www.thefloow.com