ICTA Nomination: CAA Insurance Reaps Early Benefits of Telematics

2015 ICTA Nomination.   Technology by Quindell Solutions.

This project covers the application of vehicle telematics as it applies to automobile insurance, vehicle relationship management and connected car solutions for CAA Insurance customers, which is marketed using the brand name CAA Connect™. CAA Insurance is working with Quindell Solutions as the provider of the technology and outsource services to support this ambitious program.

This project is a major undertaking for CAA Insurance involving in-car technology; network services for data transfer; data capture, analytics and product development, actuarial and rating and smart device and online portal for telematics users.

The technology will lead to new products and services in three channels:

  • i) Usage Based Insurance: Measure vehicle usage more accurately to improve driver behaviour, lower claims costs resulting in lower insurance premiums.
  • ii) Vehicle Relationship management: Vehicle diagnostics and proactive maintenance to improve vehicle health and driver peace-of-mind.
  • iii) Connected car: Connect the device within the car via internet connectivity to enhance the driving experience in a myriad of ways.

Customer Benefits

  • Policy Premiums are now based on various driving patterns which include: distance travelled, hours of operation, speed and other driving behaviours.
  • Telematics efforts connect the customer to CAA Insurance through frequent interaction, enabling CAA Insurance to deliver driver safety messages, programs, and driving tips. The goal over a multi-year time frame is to significantly improve driving behaviours and vehicle diagnostics.
  • Lower insurance premiums – target segments receiving the telematics devices are receiving discounts based on driving behavior, which is ongoing.
  • CAA Insurance is introducing new products and providing consumers more choice.
  • Improved driving behavior which in turn improves road safety.

Insurer Benefits

  • Lower Costs: Safe driving equates to fewer claims and lower claims costs.
  • Stronger client relationships – telematics customers receive value-add services. As a result they are less likely to switch providers, and more likely to perceive their insurer as a partner thereby maintaining a longer term relationship and increasing policy retention.

The solution involves multiple applications of technology, new systems and hardware. What follows represents the core business uses of the technology:

(A) In-car technology

In-car devices are technology rich, providing advanced data collection features that enable CAA Insurance to effectively collect and analyze driver behavior, better assess risk, and derive more accurate pricing while proactively recognizing and rewarding superior driving behaviors. Devices are not removed from the vehicle, they remain as long as the vehicle is operational in order to continually influence driver behavior and facilitate diagnostic capabilities. The devices plug into the vehicles OBDII port, which is located under the dash of most North American vehicles.

(B) Network provisions

The in-car device captures data every second, stores the information and transmits it to CAA Insurance every minute.

(C) Data Capture

CAA Insurance IT resources created a data warehouse that captures the submitted data and, using proprietary analytical tools, evaluates the results to optimize product development.

The goal is to significantly improve both driver and vehicle performance through vehicle diagnostics. Insurance premiums will decrease – target segments receiving the telematics device receive discounts. The initial enrollment discount of 5% can increase up to 15% after one year in the program. CAA Members, along with their CAA Member discount, can save up to 30%.

Renewal retention is projected to increase and the loss ratio is expected to improve for telematics customers participating in the program.

(D) Customer interface

An innovative website allows program participants frequent access to view driving behaviours, information and launching soon, premium savings. Technology widgets enable the driver to view the dashboard and drill into specific areas of interest. Drivers need to understand how they are driving, how this impacts their insurance rates and most importantly how drivers can manage their driving behaviours. Viewing is optimized on a web browser and is also designed for tablet and smart phone presentation.

Communication with the driver is one of the most critical issues for a successful telematics program. The analytics are presented “post-trip”, so as not to interfere with the task of driving, yet while it is still top-of-mind for the driver.

Some of the specific details available in the portal include:

  • GPS Vehicle Locator;
  • Driving Score;
  • Journey Map;
  • Reminders and events;
  • Basic Vehicle diagnostics.

Consumer feedback has been positive. For those participating in the program, CAA Connect is seen as a timely, informative and powerful program that provides benefits and addresses a need.

Participants in the program receive vehicle diagnostic alerts tied to vehicle issues or maintenance needs. For example, battery-charging ability can be captured and presented. A dead battery is a huge inconvenience and a large time-waster. The telematics vehicle diagnostic service enables customers to avoid this problem, saving them time, money and the disruption in their travels.

CAA is consistently looking to strength Member allegiance to the auto club. The opportunity to do this through enhanced and frequent touch points may include in the future loyalty partner programs as well as repair facility location mapping. We continue to provide our Members with the security and peace of mind they have come to expect from CAA.

About CAA Insurance Company

CAA South Central Ontario offers a variety of services including roadside assistance, automotive care, travel and insurance. For more information, visit www.caasco.com.

Source: CAA Insurance Company