As insurance telematics and usage-based insurance (UBI) programmes continue to grow globally, insurers increasingly have opportunities to tap into consumer behaviour and use this data to create more personalised services. Sharona Sagi, Director of Business Applications at Earnix, writes
The scores that insurers give customers are just the tip of the iceberg, starting with accurate data collection. However, there is a wealth of information that lies behind this, further enhancing the customer profile and helping insurers to understand the psychological habits of drivers. Getting to know the risk profile of customers and assessing how they can respond to this to create value is the game changer for the industry.
Insurers can start by looking at which roads people take, do they drive at night, what features are they using in their cars? This starts to compliment the initial data enabling providers to understand risk profiles and assess how to respond.
This can be taken further by using telematics in real time. For example, what if the insurer were to identify a customer who changes their parking spot to a potentially riskier area? This can start a conversation highlighting ways customers can park in safer places, reducing risk for the provider and creating meaningful connections with the consumer. Using these types of optics gives the industry more opportunities to speak to customers beyond the point of renewal.
A key issue in the industry is how to convince customers to install telematics in the first place. There are varying reasons, but a typical motivator is price. Someone who is price sensitive might go for a programme in which they save on miles if they don’t drive as much or are interested in a discount. But the industry can be even more creative and think about other motivators to install telematics. For instance, a ‘peace of mind’ app will be hugely attractive to parents who could track information about how their children are driving or to view, in real time, if they have taken the car out in the first place. It could be a way to coach novice drivers to drive safely. An offer like this can’t be replaced by another carrier simply offering a discount on telematics, because it creates deeper value for the customer’s lifestyle.
A fast track to claims app is another invaluable tool if the consumer is unlucky enough to have an accident. A crash is traumatic enough without the added burden of thinking about the claim. Using an app will make the situation smoother by guiding the user to tell them what to do at the scene of the crash and how to go through the claims process. Insurers can also be creative in their pricing, if customers use the telematics app to claim and receive the money within a guarantee of 30 days this is also a persuader and reason to install telematics.
Insurers have a golden opportunity to cluster the data gained from telematics not just to relate with the kind of customers they have in the business but also to segment them. For instance, how can insurers approach a group of drivers with high mileage and a low telematics score? Think about how to reduce their risk, perhaps issuing special offers, assessing if it is worth keeping this segment on the books. These are the aspects to consider by understanding the wealth of data not yet leveraged.
The value of personalisation and the real promise of insurance is to work with customers about the risk they are exposed to and ensure they have appropriate cover. If someone drives at night look to see if they are covered for 24 hours roadside assistance and if not – promote this. It’s not about upselling, this covers services that they need and directly speaks to the customer as an individual.
Retention is far more than meeting the customer at claims or renewal. It’s about engaging with them, being proactive, and building trust through communication. Telematics is where insurers can improve retention by leveraging data, understanding the different risk parameters of the driver, all by using telematics creatively.