Auto insurance is a challenging business. With high acquisition expenses, increasing claims costs, and new insurtech entrants, the reality is that auto insurance isn’t getting any easier. Over the next 5 years, the auto insurance industry will see more changes than it has in the past 30.
As insurers work to get their footing in this changing landscape, it’s helpful to look at the new programs insurance and insurtech companies have brought to market. We’ve compiled a list of 10 telematics programs from around the world that offer a unique value proposition.
As a UBI pioneer in the U.S., Progressive has been using telematics to improve profitability through better risk segmentation during the new business policy term. Its program, “Snapshot,” started as a hardware-based program and has transformed to include a mobile solution. A Snapshot customer receives a discount usually after 6 months when they complete Progressive’s Snapshot program and renew their policy. The customer’s driving behavior results in a one-time premium adjustment at renewal. Bad drivers will see a surcharge. Undoubtedly, Progressive can leverage insight gained from operating these programs in the future.
Intact’s all about telematics for customer experience through more transparent pricing, continuous monitoring, and loyalty programs. Intact migrated its UBI product from hardware to mobile (with TrueMotion), and is now bringing its mobile telematics experience to its core app. This migration will include continuous monitoring of driving data. Due to the higher frequency of events, this is a fantastic tool to drive engagement. And you know what effective engagement means? Increased engagement, NPS, and retention!
GM and Hyundai are looking to monetize the data collected by connected cars and provide drivers more value at the same time. When buying a car, customers will be able to opt-in to share data to receive insurance offers. This will improve risk segmentation by making driving data available at point of sale. While this is promising, we shouldn’t get ahead of ourselves. It will take a long time for the entire vehicle fleet to turnover and users still need to opt in.
Cuvva hit the UK market in 2015 with a new approach – focusing on drivers who don’t own a car but occasionally drive. This group is not small. In the U.S. they represent ~10% of the population and are growing. Their on-demand and time-based app uses telematics to improve flexibility to meet changing customer needs. They also get bonus points for easy onboarding.
AAMI developed an app-based try-before-you-buy driving campaign, which made it available to the masses. The app was promoted with a limited-time campaign to name “Australia’s Best Driver.” AAMI leveraged TV spots and influencers to generate buzz for a Driver Duel concept, which resulted in over 150,000 downloads. This is a great reminder that creating driving data for non-customers is doable, but takes serious effort.
Making safe driving fun for teenage drivers isn’t an easy task. Props to Carrot for finding a way to do this using telematics. Carrot attracts and retains the safest young drivers by offering safe drivers benefits like free weekly prizes. But that’s not all. Drivers receive tailored driving feedback and earn rewards on a Carrot-branded credit card for every month they drive safely.
After Discovery launched Vitality Health, they expanded into driving. They use telematics to increase customer lifetime value through rewards and coaching, allowing participants to earn points for safe driving behavior, downloading online information, eye training, and even car tune-ups. Points can be redeemed for partner rewards like gas discounts, Uber discounts, and insurance savings. Even cooler? Young drivers can earn bigger discounts than seasoned drivers.
Unipol was an early adopter of hardware-based telematics. The primary use case for Unipol was to defend against fraud and increase profitability through enrollment discounts and other telematics-based features like roadside assistance.
If you live in the city, Metromile can be your best friend. Metromile uses telematics to help low-mileage drivers save money and create a new market segment — drivers who don’t drive much. How? They’re offering U.S. drivers an OBD2-based pay-per-mile insurance product. Customers download the app, install the device, and pay a fixed price per month. Customers also pay a variable price based on miles driven during that month. What’s even cooler is that its app focuses on helping urban drivers. Forgot about biweekly street sweeping? Metromile helps with a reminder so you avoid tickets and tows, making for an engaging app.
Grab uses telematics to make drivers and riders safer and improve the customer experience. Grab works to improve driving behavior through monitoring. They’ve offered free in-car dash cams to 3,500 top-performing drivers nationwide for added ride safety, embedded an emergency button in its app, and shared driving data with drivers to boost self-monitoring. Grab has seen positive results from these programs, showing that creating and displaying driving data can lead to safer behavior — and ultimately safer roads.
We’re always on the lookout for standout telematics programs. Know a good one? Share it with us on chat.
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December 1, 2020