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Turn Now! Insurance Brokers Reset Directions on the Road to Telematics/UBI

With a single stroke, insurance brokers in Ontario have shifted the direction of the conversation about Telematics/Usage-Based Insurance (UBI) in Canada.  The question now is how will it change the operational direction and rate of adoption.  There will be opportunities to get more information, the first of which will be the Insurance 2023 Forum on October 3, 2013 in Toronto.  And we’d really like your thoughts.

From an undefined role…

Until the Insurance Brokers Association of Ontario (IBAO) stepped in on September 19, conversations in the world of Telematics UBI were dominated by insurers and telematics service providers (TSPs).  The reality is that, at present, the majority of UBI implementations are from direct writers.

References to brokers and agents were rare.  Most often, carriers and suppliers wondered how, if at all, the brokers would fit into the mix.  However, we got a sense that independent distributors were taking a more acute interest at the Insurance Telematics USA conference in Chicago.  We blogged on this, noting that independent agents and selected insurers saw the brokers’ role as ‘crucial.’

To the reality of a new world…

On September 19, IBAO announced that its for-profit subsidiary, Independent Broker Resources Inc. (IBRI) had signed a partnership agreement with Quindell Portfolio Plc to provide telematics services. 

(Quindell provides telematics services to insurers in the UK, including  Ingenie – see our post from last November.  From a Canadian perspective, Quindell purchased the Canadian software supplier, iTer8 earlier this year as an entry point to North America and just announced acquisition of 26% of PT Health, a Canadian Rehabilitation Service Provider.)

With Quindell managing the technical, analytical, and logistic aspects of the Telematics offering, IBRI is positioned to manage the marketing.  The primary differentiation factors to offer the consumer are choice and expertise.  Two key elements:

  1. The consumer will get the benefit of professional advice.  Brokers will get information and tools from IBRI to help the consumer in selecting the best market based on a variety of factors, including her telematics profile.
  2. The data collected by the Telematics devices will be owned by the consumer.  This will provide for market changes with a minimum of disruption to the consumer.

So, what’s in it for the insurers….

For insurers which are just considering a UBI offering, there is plenty of value.  IBRI will be taking on much of the broker education and training.  As or more significantly, the insurers will be able to tap into the IBRI data to assist in rate establishment and filing.

For insurers which have established a relationship with a TSP, there is less immediate value, however the broker coordination/training could reduce some costs.  Moreover, insurers will be under pressure to conform to a proposed standard.

Standardization is a two-edged sword.  To the extent that insurers plan to look at unique driving characteristics, there could be a challenge getting these included in a standardized data stream from the designated TSP.  And it may be cjhallenging to keep unique rating elements as  ‘proprietary’ information from other participants in the data pool.

Where to from here?

The Telematics/UBI game in Canada now has a major new player.  We expect there will be lots of discussion,  and consideration.  We expect to hear more detail at various industry events, including the IBAO Convention October 23-25 and the Insurance 2023 Forum this coming Thursday, October 3.  We will provide information as we know more.

Meantime, we’d like your views.  Is this a game-changer for Telematics/UBI in Canada?  Will this accelerate, slow, or have no effect on the speed of adoption of UBI in Canada?  Is it positive, negative, or neutral for you in your work now?

Don’t drive yourself crazy… Take a brake … Shift your comments into the space below.

 

 

One Comment

Catherine Kargas

This was an excellent and unique event that allowed participants to discuss and exchange with the speakers. There was so much value delivered for those who were interested in getting a glimpse into the future. Congratulations to the Insurance Canada team.

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