We have blogged in the past about some of the isolated examples of insurers using Telematics – use of technology to monitor vehicles – (e.g., see comments on Commercial Underwriting) as well as on-going debate by some insurers as to the utility of the approach. A recent posting by Jamie Yoder, principal at PwC’s Diamond Advisory Services in Insurance Networking News, suggests that insures should look at some of the service providers that are already implementing the technology and seek opportunities there.
Yoder notes that there are maturing applications that enable smart phone users to monitor critical elements of their vehicles’ performance. It is no stretch to think that these same applications could be uses in risk management strategies to help safety systems perform optimally and reduce risk of accidents. “Access to vehicle-specific data from mobile telematics applications also can help insurance companies fight fraud, and basic vehicle data can help determine the cause of an accident or why a car has disappeared.”
Rather than looking at the technology in isolation from an insurance perspective, Yoder suggests that insurers would do well to look at the applications being developed by others and seek ways to leverage these. Yoder writes: “Insurers should consider creating strategic partnerships with technology enablers in an effort to begin to offer truly unique products and services. Combining standard coverage with features never before associated with car insurance, such as navigation assistance, traffic avoidance, itinerary planning and vehicle diagnostics, will allow insurers to offer truly customized and personalized services.”
As we contemplate the possible continuation of a soft insurance market, this might look like an appealing growth strategy. Yoder counsels that this requires some quick thinking: “The overall success of a mobile telematics strategy will depend on an insurers ability to make a case that is clear and compelling to its customers as well as get in the game before its competition does.”