If you own a car, home, pet or business, chances are that you’ll have insurance. When buying that policy, you would have agreed to share personal information about yourself in exchange for a service that would offer protection should the worst happen. Questions such as your age, where you live, the type of house or car you have and your job are the common things shared. However, through the emergence of technology, more detailed personal information is now available and insurers are now using this to create insurance policies that respond to the specific behaviours of individuals.
Some consumers feel this new approach to insurance is somewhat ‘Big Brother’ like and they don’t trust companies to use their data appropriately. If there was no value for the customer and the insurer was only using this data to benefit its business, it would be fair to take this view. However, where insurers are offering genuine value to consumers who are willing to share their data, then there’s a basis for a trust-based relationship. A good example of how this is already being achieved is through telematics — commonly known as “black-box” technology.
Telematics is not a new invention and has been used for over a decade in commercial vehicles, by the emergency services and Formula One teams. However, the technology is now widely being used in road cars. The way it works is that a “black-box” is fitted to a vehicle and the driver’s behaviour is monitored by taking account of factors such as acceleration, braking and speeding.
In the case of our MORE TH>N SMART WHEELS product, drivers can also download a mobile app and access a personalised web-based dashboard which provides feedback on the performance of their driving and offers tips on how to improve, helping them to become safer. Drivers also earn a quarterly cash reward related to their driving score, meaning the amount paid for the premium is reduced.
Drivers with telematics products see that we’re there to help them and understand that we’re creating value for them. This helps improve the perception of motor insurance. With telematics insurance now being bought by 30–40% of new young drivers, it’s clear that this has been a real success story for our industry. However, we’ve only been able to achieve this by ensuring that consumers get value for trusting us with their data. Anyone wondering how they can make the most of consumer data should make this consideration their number one priority.