Connected cars offer a goldmine of driver data. For example, they provide a clear look at who’s behind the wheel and the unique conditions they face. This presents insurers with a tremendous opportunity to increase profits and to make driving safer and better for everyone.
At Blue Rocket, we conceive, design, and engineer products in the connected car space. If you are an insurer thinking about switching to a usage-based model, keep reading. What follows are the four biggest opportunities you should consider — and how to take advantage of them.
Opportunity #1: Leverage data to identify (and win) the best customers.
Connected cars tell us about how people drive (hard braking, distraction, fatigue), where they drive (accident prone intersections), and under what conditions (time of day, weather) than ever before. Leverage this data to change the way you do risk assessment, customer recruitment, and retention. Consequently, insurers who take advantage of telematics data report rising profits and upwards of 2% improvement in retention. Plus, leading consulting firms predict 26% penetration of vehicle data collection devices by 2020 — which means your data set will only get richer with time.
Opportunity #2: Better data means faster claims resolution and happier customers.
With connected cars, insurers know when a collision happens and can instantly contact their customers to provide support in a moment of need, such as automatic emergency services. The outcome is a differentiated the customer experience. The data also can trigger the speedy execution of the claims process and save money. Outside the United States these techniques already have been widely adopted and have proven profitable, but the U.S. market remains wide-open for disruption.
Opportunity #3: Deliver better driver feedback. Save money, save lives.
When drivers receive timely feedback it lets them spot problem areas and correct dangerous driving. The result is a significant drop in accident rate and accident severity. For example, over half of connected-car drivers report changing their behavior as a result of feedback from their insurer’s usage-based insurance program. That is why that as connected cars are more widely adopted we can expect costs to go down and accidents to decrease across the board.
Opportunity #4: Engage customers with new, better value propositions.
Unless they need claims support, people typically don’t want to hear from their insurance company. But personalized, relevant data is changing that. For instance, give your customers information they actually want — like check engine light translations, driver fatigue alerts, and tools for fighting distracted driving — and they will be much happier to hear from you.
Blue Rocket is a digital product development company based in San Francisco. Through strategy, design, and engineering, we help great companies build powerful digital experiences — the right way. Email us at email@example.com.