Telematics Usage Based Insurance (UBI)

Capture detailed driving and other data to assess actual risk and improve motor insurance pricing

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Challenges

Differentiate to capitalise

Unlocking The Opportunity For Business Growth

The private motor insurance market has faced a number of long-term challenges. Relatively short purchasing cycles mean that motor insurance policies typically come up for renewal every six to 12 months. The industry has a high churn rate, and competition is fierce for the more profitable low-risk drivers in the more favourable geographies.

The removing of gender as an underwriting factor (EC Gender Directive) is beginning to have a major impact on premiums.

Profitability has been the main focus for many providers, with premiums being too low and claims inflation going through the roof.. There has been a concerted effort by the industry to rectify this by pushing through major increases in premium levels.

Consumers are now faced with a multitude of choices, with an array of insurance now available at their fingertips. It is essential for insurance providers to differentiate themselves in both marketing and sales processes from the competition if they want to attract new and also retain existing business.

Telematics Usage Based Insurance provides a solution.

Solutions

A new approach to motor insurance

Vodafone Global M2M and Towers Watson have formed a strategic partnership to provide an industry-leading UBI solution that enables motor insurance providers to capture dynamic per second driving behaviour and contextual environment data to improve underwriting and pricing approaches, cost management and overall profitability.

We provide the tools and insight required to address a number of key operational areas that have put insurers under pressure such as better handling of claims and capturing first notification of loss (FNOL), detection of fraud and asset management.

In addition to measuring risk more accurately, UBI can actually reduce risk. Providing drivers with a combination of feedback and meaningful incentives has already been shown to reduce accident frequency. When accidents do happen, value added services like FNOL and Emergency Call(eCall) can help the company respond quickly, keep claim costs down and potentially also save lives through improving response rates for the emergency services. Product offerings can be differentiated in line with individual driver profiles, making it possible to engage in ongoing dialogue with policyholders, which can help to build brand loyalty, reduce churn and gain competitive advantage.

Alongside helping drivers to influence the cost of their car insurance, UBI can also be used to tap into growing consumer and government interest in lowering fuel consumption and emissions and reducing road accidents.

UBI provides a route to market for a wide range of value added services that can be provided using the connected M2M device by enabling various safety and security related services such as eCall, breakdown call and roadside assistance services for an incremental service fee. As the relevant data and service capabilities reside on the backend, these service solutions can be enabled cost effectively for the insurer.

Vodafone and Towers Watson Telematics Usage Based Insurance is a comprehensive and complete UBI solution that includes strategy, device selection, analytics and ongoing policyholder support. You will benefit from a service-led relationship that will help you dramatically to cut the time required to launch your own successful telematics enabled UBI solution.

Benefits

Measurable improvements throughout your business process

  • Powerful risk segmentation: car insurance premiums can be calculated on actual usage and driving behaviour, significantly improving profitability. Granular data in particular allows a deep understanding of behaviour and risk.
  • Improve customer acquisition and retention process: transform the way you engage with your policyholders and replace sporadic and often transactional services with new, value-added services that will help you build brand loyalty, attract new customers and increase customer retention.
  • Improve operational efficiency: streamline claims processes, improve first notice of loss (FNOL) response times and more efficiently and accurately settle claims.
  • Improve fraud prevention: capture real-time information about accidents when they happen, augment driving behaviour models with fraud and crash monitoring data, to recreate scenarios that can help in the detection and prevention of false claims.
  • Increased competitive advantage: early adoption of a telematics-based UBI scheme can provide you with initial benefit from attracting self selecting profitable customers and more generally an opportunity to offer a more comprehensive and differentiated portfolio of products than your competitors.