Rob Prime reports exclusively on this site from the world’s largest telematics insurance conference being held in Chicago. This report is from the morning session on the last day.
Much discussion this morning on which business model to adopt in order to recoup from the customer the value of the offered discounts.
‘Here is a simple example – the customer was paying £500 for car insurance – the use of either on-board device or app lowers this to £400. The question for the insurer is how to recoup this £100 value,’ Rob explained.
A range of solutions were being offered:
— you could say the telematics supported driver will drive more carefully resulting in fewer claims, resulting in fewer payments and cost out this value
— you could provide a value-added service – like road side assistance or bolt on to this real time traffic information or specifically adapted in-car entertainment
— you could say that the driver is likely to be more loyal to the insurance provider and cost out this value.
‘What struck me most noticeably is that no clear, authoritative, definitive answer was provided,’ Rob observed,’It could be that I am expecting clear answers to questions which are only just being formulated, but the field is really open’
‘I was discussing these issues with a delegate from Australia. There is no mass market there – and as yet, no product for the domestic driver market. The main application has been for vehicle fleets.’
There was a moment of amusement when the panel asked the delegates – there were about 400 present at the time – to show their hands if they were currently using a telematics device. To everyone’s amusement only about 15 people showed their hands – astonishing – is this skepticism?
‘As one delegate joked with me – it was like attending a church only to discover no-one believed in God. However, here is an important point. Again we were being offered advice on a product which very few of the experts were using. Of course they see the application in different ways – the careful drivers haemorrhaging off the books – the possibility of a new generation of careful, observant. electronically-guided drivers, but critically what is missing is experience of the technology in the eyes of the consumer’.
Rob Prime at the conference – Jonathan Coe reporting.
Report from the final afternoon session together with reviews and assessments of the conference will be found here in due course.
Telematics.com is one of the few independent observers at the US telematics insurance conference, Chicago.