Outdated demographics prevent insurance companies from retaining customers through competitive discounts and rewards. The cost of high-risk drivers can derail efforts to provide incentives to keep and attract loyal policyholders. Today’s smart sensor technology can help insurance companies accurately identify high-risk drivers while keeping costs low and providing competitively priced insurance premiums.
Connectivity enables companies to efficiently operate based on collected data. The Internet of Things (IoT) is disrupting the insurance industry by providing meaningful data that helps insurance providers make key decisions to minimize loss from high-risk customers.
are “Telematics devices”?
“Telematics devices”, also known as tracking devices, help drivers save money on car insurance premiums by using smart sensors to capture and store data such as speed, braking habits and vehicle usage from the car’s computer.
How Telematics Work
Most telematics devices are in the form of compact hardware that plugs into the OBD-II port of the vehicle. The vehicle has its own IP address, and appliances are connected and controlled by the ‘internet of things’, or IoT.
Taking a step further, at Raxel we realised that in order to engage more with the customers insurance companies can not rely on customers installing a device. So we bridge the gap by taking the deep technology straight from smart phone sensors.
The insurance company can program the device or mobile app to gather specific data from the vehicle and transmit the information to the insurance company via wireless technology. The data is used to determine risk factors and offer rewards and discounts to good drivers. The data is also used to provide recommendations and incentives to improve driving habits for high-risk drivers.
What Do Smart Sensors & Smart Phones Track?
While an OBD-II-based tracker is capable of finding, storing, and transmitting any bit of data in the car’s computer, most insurance companies are interested in data that gives insight into driver habits, especially habits that can cost money for insurance claims.
For example, the speed of a driver along with how often the driver brakes hard are both indicators of inattentiveness that could result in a collision.
With a smart phone sensor, we are on able to collect all the information of a driver’s habits, analysing and making sense of that data for insurance companies.
Aside from these factors, insurance companies can also determine the location of the vehicle, and use the speeds and braking distance data to recreate the scene of the collision to determine fault. This is useful information to consider when evaluating witness statements.
Overview of Data Collected by Smart Sensors:
- When the car was used
- Distance driven
- Time spent driving
Typicalspeed of the driver
- How often the driver brakes hard
- Is the customer operating best practice to protect their assets from a risk event? Does the particular environment at each customer lead to
greateror lesser risk of a loss event?
How Insurance Providers Can Use This Data to Minimise Costs?
Use this data to identify behaviour patterns of each policyholder. Then, use that same data as a benchmark for new policyholders. Insurance companies can also use the data to identify patterns of high risk behaviour, such as warning signals for risky behaviour.
Once more data is collected, information can be used to determine whether a policy holder falls in a high risk or low risk category. Using this information, insurance companies can set the insurance premiums accordingly. With this data, insurance providers can take preventative measures to minimise loss or prevent it from happening altogether.
How Insurance Companies Can Be Seen as Trusted Advisors
When insurance providers present the data to policyholders and also recommend steps to correct the behaviour by offering recommendations for preventative measures, the insurance company is seen as a trusted advisor rather than an insurance product. Policyholders will correct their behaviour in hopes of earning rewards and discounts, and the road will be safer for all.
Incentives Drive Action
With positive recommendations for improving their driving score, policyholders will have a clear incentive to take the suggestions and lower their premiums by engaging in safer driving habits. The data will help the policyholder improve their quality of life and save money on insurance. The insurance company will benefit from having a higher rate of good drivers that are eligible for promotions and discounts – everyone wins!
Replace Outdated Information with Precise Technology
Telematics can help break through outdated demographic assumptions and disrupt the insurance industry by relying on hard data that equally benefits the insurance company and the policyholder.
Use Data to Provide Targeted Discounts
Aside from safe driving habits, policyholders who drive less can get discounted “mileage policies”, and drivers who avoid rush hour can be given a discount for driving at hours where the risk for accidents is lower.
Over time, the information and intelligence from sensor data can equally benefit the insurer and policyholder. Sensor data will not only help insurance providers make cost-effective decisions that will improve their bottom line
With Raxel’s technology on your side, you can collect, analyse and implement the data to reward good drivers and offer competitive rates. Find out more about how we at Raxel, help insurance providers cut their marketing costs and increase their leads.