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IoT Blog | August, 2017

Roberto Polli

Roberto Polli
Head of Telematics Sales Services, Vodafone Automotive


IoT can take your usage-based insurance up a gear

Customer expectations are increasing. And that’s changing the way motor insurers need to do business. You want to build strong relationships and grow your customers’ loyalty, but that isn’t as easy as it sounds. People often see insurance as a tax on driving and treat the whole experience as a chore. How can you deliver better experiences for your customers and create a lasting relationship — and, at the same time, increase operational efficiency and drive down costs?

Drivers are shopping around

It’s never been simpler for policyholders to take their business elsewhere. Customers are now using more of the online resources at their disposal to get the best deal possible. There’s an abundance of price comparison websites that take customers straight to providers’ websites. From there, it only takes a few clicks to switch.

So how can you keep your existing customers and win new ones? How can you avoid getting into a destructive “race to the bottom”? The answer is by adding value to the whole customer experience. Insurance shouldn’t just be an annual email with a big bill attached. You need to show how you add value even when no claim is made. You need to become a lifelong companion that customers can trust.

Make it personal

The Internet of Things (IoT), and specifically telematics, enables you to build these stronger relationships with your customers. And a big part of how it does that is through personalization. A telematics solution, whether using an on-board device or a smartphone sensor, will provide you with the data you need to tailor policy prices based on how many miles someone has driven and how they drive — not just an estimate at the time of purchase. That enables you to offer customers a personal price — and match risks to costs more accurately.

And if you give them a mobile app, your policyholders will be empowered to track their own driving habits and be encouraged to improve them to lower their premiums — and your costs. You’ll also be able to offer rewards when your customers reach particular levels of safe driving, strengthening your relationship further.

Be there when it matters

Critically, telematics makes it possible to be there when a driver most needs help — when there’s an accident. An IoT device can detect that there’s been an incident and initiate a call to the policyholder to establish details of the event and provide immediate support. Telematics helps you speed up the claims process, get a more accurate understanding of the incident, and create a positive, frictionless experience for the customer. And that can result in priceless “word of mouth” recommendations.

Streamline claims and reduce fraud

Insurance telematics can also help you take control of a claim and help reduce the costs. Data from the IoT sensors can give you a much clearer picture of what happened leading up to, during and after an accident. That means you can make more informed decisions about liability and whether to contest a claim. This can help you improve the quality of decision making, detect fraudulent and exaggerated claims, and protect genuine customers — all of which will contribute to your bottom line.

New opportunities

Deploying IoT could also present you with the opportunity to open new sales channels. Imagine if there was a way to get ahead of the competition and position your business as the default insurer for drivers. Now there is. Insurance companies can benefit from data generated by vehicles already equipped with telematics devices by vehicle manufacturers to become the default option for new vehicle owners.

This proposition benefits every party involved. OEMs can offer a more complete service, drivers get a competitive insurance offer and lose the hassle of device installation, and insurers get a prime position in a new sales channel. Little wonder then that 72% of insurers are planning to form new distribution partnerships in the near future, or have already done so1.

Get the support you need

Analysts expect nearly 50% of the world’s vehicles to be covered by a usage-based policy by 20302. So you can’t afford to ignore the opportunity. It’s time to realise the true value IoT can bring to your insurance offering. To make a real success of insurance telematics, you’ll need a partner with the knowledge and experience in the insurance industry to support you.

That’s Vodafone Automotive. With over 800,000 telematics customers enjoying our services today, we’re confident our expertise can help you achieve your IoT goals3. Start out on your journey by reading our new white paper. It will show you how IoT can help you manage risk, drive efficiency and create customer intimacy, and build a more profitable and sustainable business.


3. Insurance telematics: The five stages of value, Vodafone, 2017

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