The IoT Insurance Observatory and Co-founder Matteo Carbone know a great deal about IoT, telematics, and viable use cases. So wise to take note of this report in collaboration with the Automotive and Mobility Solutions team at Swiss Re. 

The first conclusion that caught my eye was a split in customers between "telematics sponsors" and "telematic distractors".

Telematics Sponsors

The study of 10,000 policyholders found that, in all countries, younger individuals – mostly millennials (23–41 years old) and people in Generation X (42–57 years old) – are more attracted to telematic solutions, as well as more likely to recommend a telematics motor insurance app to a friend.

This group was named ‘telematic sponsors’, and it represented 54% of the sample.

Telematics Distractors

On the other hand, ‘telematic detractors’, a category that represents 21% of the sample, are unlikely or not at all likely to recommend a telematics motor insurance app to a friend. This group comprised mainly baby boomers.

Swiss Re analysts said: “Although both groups (sponsors and detractors) have different opinions about telematics, they still prioritise the same two main factors when it comes to choosing their motor insurer: Price and service quality.

“In general, the survey shows the need for a 'phygital' (physical + digital) approach when targeting telematics sponsors. In every phase of the policy lifecycle, telematics sponsors use both the insurer’s website and personal interaction; they tend to rely on a broker’s app/website or a comparison website, especially in the initial phase (ie to collect information and get a quote) and mostly use the insurer’s call centre when the policy is already active, ie to file a claim.”

This shows the importance of personalisation to address the explicit motivations of different personas - to read more see Nine customer types defining the next wave of insurance 

Look at it from one carrier's strategic point of view- Baloise Group.

Patrick Wirth Vice President of Mobility has harnessed the group's clear commitment to personalising mobility services by investing in and nurturing mobility companies and providing a continuum of services that caters to the evolving needs and resources of customers.

Lisa may start booking one-time rides with GoMore and, as her confidence and need for mobility expands, explores and then rents a car via GoMore or Ben. She gets busier and busier and decides she needs a long-term car and has a choice of subscription with GoMOre or Gowago. 

She then sees that with the Baloise mobility ecosystem, she can actually rent out her car when she's not using it. More than that, whilst driving the vehicle she is offered free parking for up to 10  hours.

Baloise is building out an expanding range of value-add services and, of course, offering embedded insurance. The Siss Re report states "22% would like to receive a reimbursement of their monthly fuel bill based on their driving behaviour, and agree with a premium increase at renewal if the driving style was dangerous". Plenty of opportunity for personalisation. 

Building such an ecosystem is no mean task as this illustration shows.

The project required vision, leadership, careful planning and resourcing and commitment across the carrier.

But it will be worth the effort. 

Now Baloise has invested in TRONITY. A platform that helps EV drivers to analyze and evaluate their vehicle data.  

Probably timely to tell you that I have no commercial involvement with Baloise; I met Patrick at a Fintech/Insurtech conference, was impressed by the program and he kindly allowed me to share parts of his presentation.

 The report states that: -  "60% of telematics sponsors would accept to bear the risk of an increase in their motor insurance premium based on their driving behaviour, highlighting an openness not only to rewards in case of safe driving but also to penalties in case of risky driving behaviour.

Even though the price is one of the main buying criteria for policyholders, the value of additional services that telematics can offer is significant, analysts added.

The most attractive services for telematics sponsors are the ones around the crash, rewards for safe driving (available in different forms) and security services. This has proven to be true across all age categories and in all countries.

The top three value-added services for respondents open to telematics include: 52% would welcome to have an automatic emergency system in case of severe crashes; 52% would like to receive rewards for safe driving such as vouchers; and 50% would prefer an anti-theft device to track their car in case it is hijacked.

Even though the anti-theft device cannot be offered with an app-only telematics solution and 

requires the installation of a tag in customers’ cars, 73% of telematics sponsors would be open to having a hardware tag on the dashboard of their cars.

In the survey, participants were also asked to associate a monthly monetary value to the service of their choice. Telematics sponsors are willing to pay €16 on average in Europe and $25 in the US (vs €10 and $10 for telematics detractors).

Suggest you read the full article, consider the IoT Observatory/Swiss Re report and benchmark your mobility services offering against Baloise Group.

Also, consider carefully your business and technology models and architecture which are vital to allow for the ecosystem business model with the agility and capabilities to innovate in this space.  

Carriers esure and ageas are re-platforming to the EIS native cloud, microservices architecture with API-rich integration whilst smaller carriers and brokers/MGAs look to CoreTech such as ICE, Instanda and Genasys. esure also chose RightIndem as its claims technology partner with a prime goal of developing technology ecosystems that favour innovation of product development and claims transformation. Not to mention help manage claims inflation better. 

Further Reading

The Future of Auto Insurance- Connected: Embedded: Subscribed 

Mobility Ecosystems, Insurers and Auto OEMs 

Want to talk more about this? Drop me a line to Mike.Daly@RightIndem.com

Thanks