Last month, we hosted a webinar on accelerating insurance transformation with top insurance experts. Bill Costa, Managing Partner at Counsel Crew, and Geoff Werner, Managing Partner at Werner Advisory, brought over 30 years of insurance experience in pricing, innovation, and digital telematics products to the discussion. They spoke about today’s connected insurance trends and painted a vision for what telematics programs can look like when they’re optimized. They also shared insights on how insurers can accelerate the use of telematics to help their business. 3 key insights stood out throughout the webinar. 

[Watch the Accelerating Insurance Transformation Webinar]

1. SOCIAL AND ECONOMIC TRENDS ARE DRIVING TELEMATICS ADOPTION 

The webinar started with a look at the macroeconomic and social trends that are driving telematics adoption today. Bill spoke about the impact that the pandemic, supply disruptions, and inflation has had on risky driving behaviors, vehicle prices, and gas prices. With fewer miles driven and higher fatalities on the road, driving risk is much different than it was three years ago. “It’s a dynamic and difficult pattern to understand,” he said. 

[See the 2022 Distracted Driving Report for how Covid has impacted driving risk]

He also spoke about the increase in consumer willingness to opt in to telematics. With a reduction in miles driven and a jump in road risk, consumers saw more value in paying based on how they drive — and this sentiment is growing. Over 40% of customers are opting into telematics at point of sale.

Consumer expectations are also driving insurers to create seamless and personalized digital experiences. As a result, leading insurers are focused on enhancing their connected insurance programs to attract customers, get customers onboarded easily, and add new features to boost engagement.

More emerging driving data sources are becoming available, too. With more data sources available, leading insurers are creating and adapting products to further enhance risk segmentation and integrate with multiple data sources.

2. THE BEST TELEMATICS PROGRAMS ARE A COMBINATION OF VALUE STREAMS

Perhaps the biggest takeaway from the webinar was this: Insurers need to realize multiple value propositions to accelerate insurance transformation. 

Bill and Geoff broke down the value propositions: product, pricing, safety, and claims. These value propositions haven’t changed since the inception of telematics — and they remain win-wins for insurers and their customers.

Telematics provides insurers with a way to differentiate their products, while offering more choice to consumers. It provides pricing transparency for customers and customers are priced fairly based on how they drive. On the flip side, insurers can more accurately price customers with more granular driving data at their fingertips.

Telematics also helps mitigate risk for drivers and carriers. Customers can improve their driving and teach their teens to drive safer with safe driving programs. Insurers can help make their customers safer and make their business more profitable.

Digital crash data also presents a massive opportunity for claims. Digital crash data unlocks insights that enable a fast, efficient, effective, and proactive process. With contextual crash details like location, speed, severity, and more, telematics helps with coverage investigation to minimize disruption for customers. 

“The nirvana of telematics is optimizing the value streams in one program,” Bill said.

3. TELEMATICS ADOPTION WILL GAIN MOMENTUM

It’s clear that telematics is — and will be — a major product offering for carriers. Today, leading insurers have implemented telematics programs. They’re continuing to invest in their telematics programs to grow and expand them. Insurers that haven’t made telematics a strategic priority will have trouble catching up.

As more companies invest in programs and layer in more value streams, the value of telematics will gain momentum. A webinar poll showed that over 80% of respondents think telematics is a predominant product that will drive company financials.

Telematics takes strategic prioritization. It can be challenging for smaller to midsize insurance carriers. In fact, 28% of webinar viewers think that operational challenges are the biggest barrier for broader telematics adoption. Carriers looking to implement telematics should partner with a telematics service provider that has the technology, resources, and know-how to help guide them.