INSURANCE INDUSTRY TRENDS #4 TELEMATICS
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INSURANCE INDUSTRY TRENDS
#4 TELEMATICS
1. Big data & analytics
2. Mobility
3. Cloud computing
4. Telematics/IoT
What’s'hot'in'insurance'
Telematics explained
Telematics use cases
Telematics drivers
Deploying cloud computing in insurance
What can be done by using vehicle OBD?
Smartphone applications for telematics &
challenges
Telematics'in'insurance
Telematics'explained
Making insurance fun through gamification -provide incentives for behaviour that reduces
loss
Vehicles can create terabytes of data
in one hour
Data velocity – insurance companies have to deal
with the real time consumption of data from millions of connected cars
The first UBI programs began to surface in the U.S. about a decade ago, when Progressive Insurance Company and General Motors Assurance Company (GMAC) began to
offer mileage-linked discounts through combined GPS technology and cellular systems that tracked miles driven. T
85,5 million expected telematics
subscriber base by 2018
80%Expected global sales growth of insurance
telematics products by 2018
Usage-Based Insurance (UBI) is a recent innovation by auto insurers that aligns driving
behaviors with premium rates for auto insurance.
Mandatory use of telematics in vehicles, enforced by various governments, is expected to increase the penetration of insurance telematics by 2018. Insurers already offer telematics based
value added services bundled with other insurance services to differentiate
Emergency services, product
innovation
Telematics'use'cases
Feedback on how to drive
safer
Capture real-time intelligence about an
accident situation through mobile devices and mobile
applications
Automated first notice of loss – notify emergency services, car rental, or
replacement vehicles and fleet
Automated notice of loss – Report incident, begin
claims process and estimate severity
Auto Insurance pricing based on driver behavior
Geo fencing – alerting customers to road
hazards by analyzing data from nearby
vehicles; parental alerts
Embedded vehicles –embedded applications that
improve the driving experience
Enables a service oriented business models and applications that give access to new customers and markets & increase customer loyalty and
retention
Pay as you drive
Locating lost or stolen cars
Roadside assistance or claim
notifications in case of accident
“The genie is out of the bottle. The industry as a whole is not likely to go back to relying only on its traditional methods of assessing auto risks”
Telematics'drivers
How open are drivers to having their behavior monitored?Percentage of those who would allow driving to be tracked via mobile device
Telematics'drivers
How much do UBI policy holders expect to save on insurance?Size of discount required to allow driving behavior to be monitored
Telematics'drivers
How open are customers to telematics?Percentage of those who would allow monitorization based on potential for
premium discount (by age)
Changes'in'the'insurance'industry
What'can'be'done'by'using'vehicle'OBD?
• OBD: On-Board Diagnostics gives access to the status of various vehicle sub-systems• OBD was originally designed to reduce emissions by monitoring performance of
major components• Modern OBD implementations use standardized communication port and a set of
and a set of diagnostic trouble codes that provide real time data
Ptolemus Consulting
Telematics'smartphone'applications
Monthly fees are hard to implement, therefore automakers consider the hybrid mode
interesting
Capture real-time intelligence about an accident situation through mobile devices and mobile
applications
18.7 million unitsNorth American market for navigation
systems by 2016 (Frost & Sullivan
“In 2017, we forecast over 20 million connected cars
globally. That's just a drop in the ocean.” ABI Research
The hybrid phone/embedded solution is a more desirable means of
delivering UBI services
Using the phone for connectivity—perhaps connecting to an in-car screen
for display—is the model that will continue to gain traction.
"Quite possibly, maps on your phone will be more up-to-date than a map stored on an SD card,” John
Canali
36,1 million by 2016the telematics service subscribers installed base
(including OnStar, SYNC, BlueLink, UConnect, etc) in North America
Telematics'Smartphone'applications
MORE TH>N application tracks2information2about2the2driver2automatically,2using2what2it2calls2“Autostart Technology”2 to2detect2when2a2person2is2driving,2taking2into2consideration2speed2and2general2driving2habits2and2using2the2phone’s2onboard2GPS2to2track2it.2The2app2gives2the2user2a2score2out2of21002for2their2driving2&2compare2the2score2with2friends,2to2stimulate2safe2driving2through2gamification
Direct Line Drive Plus goes2for2a2hybrid2 telematics2route.2It2utilizes2a2bespoke2tracking2unit2for2picking2up2all2relevant2metrics2to2figure2out2how2safe2someone’s2driving2is,2but2it2provides2a2smartphone2application2for2analytics2and2feedback. It2also2keeps2track2of2everything2 from2speed,2braking,2acceleration2and2miles2driven,2live2journey2map.2For2safe2driving2Direct2Line2offers2discounts
Admiral Appdriver – smartphone2exclusive2app.2They2encourages2everybody2 (not2only2customers)2to2download2the2app.2If2users2drive2up2 to22502miles2with2the2app2running2and2achieve2a2driver2 score2that2is2the2same2of2better2than2the2top210%2of2safest2Admiral2drivers,2users2will2be2given2a2discount2code2 that2when2they2sign2up2 for2a2new2policy2entitles2them2to225%2off2right2away. Drivers2can2look2up2information2about2their2habits2on2the2app2itself and2those2that2like2competing2can2win2badges2and2awards2
Telematics S an2application2built2for2the2fleet2managers2that2don’t2want2to2invest2in2bespoke2hardware2tracking2solutions,2not2to2help2people2improve2their2driving2habits.2The2Man2Group2application2gives2basic2fleet2tracking2capabilities2at2HQ2– for2drivers2that2have2the2app2on2their2phones.2When2set2up,2managers2can2look2at2a2live2map2of2vehicle2locations,2as2well2as2profiles2for2each2of2the2drivers,2giving2them2a2heads2up2if2excessive2speeding2has2taken2place,2or2if2a2particular2employee2has2quite2an2aggressive2driving2style
Smartphone'&'telematics'@ challenges
In vehicle identification without using Electronic Control Unit Interaction. Some luxury cars enable provide connection to OnBoard diagnostics and reporting
systems via Bluetooth – can’t expect this from smartphone users
Activation at driving –smartphone needs to be on active/running phase
Detecting accidents – smartphone needs to be connected to OBD port to detect
acceleration/deceleration, airbag deployment & communicate with emergency systems
Hard to prevent false alarms – eg: same effect as vehicle accident can be perceived as result of phone accidentally being droped
BENEFITS:• minimizes2fraudulent2claims2
• Attracts2and2retains2lowSrisk2drivers2with2lower2cost2incentives,2increasing2user2base2
• Encourages2highSrisk2drivers2to2change2their2driving2habits
• Provides2customers2with2online2portalS to2study2and2improve2their2driving2skills2
Use'case
A telematics-driven Big Data (Cloudera)
• Auto2insurer2uses2telematics2to2gather,2store,2analyze2data2in2realStime2from2devices2installed2on2client2vehicles;2it2adjusts2rates2and2deductibles2based2on2each2individual’s2driving2patterns2&2creates2predictions2of2a2customer’s2likelihood2of2involvement2in2collisions2or2other2claimsSrelated2events
• Cloud Computing for Insurance, Inside the drive toward new business model, IBM
• Telematics in the insurance industry, deloitte http://www.slideshare.net/LudovicP/deloitte-telematics-intheinsuranceindustryvfinal?qid=89fb2db7-b8b9-4e48-bd1e-e4177c5cedba&v=qf1&b=&from_search=3
• Telematics the game changer – reinventing auto insurance AT kearneyanalysis
• Intel and cloudera use analytics to personalize auto insurance coverage – use case, big data enablement – automotive, telematics based
• Telematics in auto insurance – tcs whitepaper
• The role of obd in usage based insurance, PTOLEMUS CONSULTING• http://www.telematics.com/top-telematics-smartphone-apps/
Resources
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