Insurance Telematics Update 2014 – A Shift in Smartphone UBI Thinking

For those of you who weren’t able to participate, Insurance Telematics Update 2014 offered a spectacular opportunity to network and get the latest usage based insurance industry developments. Held in Chicago on September 3-4, the event delivered a glimpse into the future of auto insurance.

The tone this year was different than that of 2013. While last year, smartphone UBI was something interesting to consider, this year, it had a strong foothold in the strategies of most insurance executives. Why the change?

• Perhaps these executives are following the leadership of Allstate and others – pioneering auto insurers that have already announced intent and/or projects using smartphone telematics.
• Possibly, it’s that usage based insurance feels much more accessible to auto insurers of all sizes now that industry leaders have veered away from their history of using only proprietary technology.
• Maybe, changing perceptions can be attributed to the evolution of smartphone UBI and the fact that several reputable companies (Deloitte, Agero, Cognizant) have improved smartphone UBI apps to enhance the consumer experience. Many second and third generation smartphone apps have already eliminated battery drain and the need for start/stop buttons. And the most evolved are able to merge data collected in the car with power of cloud analytics for more accurate event interpretation.
• Most importantly, many insurers are investing great thought into how to use a smartphone telematics platform to revolutionize the insurance business model, connect with policyholders on a daily basis, coach them to improve driving behavior and interact positively and proactively. In a word: They crave customer-centricity and suspect that mobile telematics can take them there at the price they can afford and a timeline they can fathom. Insurers want to offer compelling driver portals, driver coaching and tips, gamification, social sharing, performance benchmarking, weather and traffic alerts, and even roadside assistance capabilities – all while collecting reliable UBI data.

It seemed that insurers have moved past the question of whether usage based insurance is a good idea. They mostly agree that it is the way of the future – perhaps a whole new model for connected consumer engagement – crucial in a digital economy.

They’ve also moved past the debate of whether smartphone UBI platforms can be trusted. If smartphone telematics is reliable enough for industry leaders, others are willing to jump on the bandwagon too. In fact, I spoke with several executives who said they knew for sure that their programs would not involve OBDs due to the added expense and consumer inconvenience. They fully intend to implement smartphone UBI platforms. After all, the smartphone platform is the only choice that can facilitate the customer-centricity they desire in their future business models.

So, it seems that the only question that remains for most is: WHO is the right partner?

There’s no question that usage based insurance poised for industry disruption. How soon will it happen? How long will it take for drivers to full engage with their insurers’ smartphone UBI programs? Only time will tell. For another perspective on the show and the future of usage based insurance, read this post.