By Katherine Wellman, vice president of product at Cambridge Mobile Telematics
The next wave of innovation is sweeping the insurance industry as customers look for more personalization from their insurers. As policy needs and driving behaviors vary from customer to customer, there is no single perfect package. Customers demand personal treatment, and technology gives insurance providers the opportunity to follow suit. But, the more companies that move toward personalization, the more difficult it will be to stand out.
Just weeks ago, Root Insurance – a startup that offers customers a personalized auto insurance experience – sped up this transition with its latest round of funding and a $1 billion valuation. This heavy investment in behavior-based insurance (BBI), or rating consumers on their driving performance rather than factors like zip code or credit score, certainly won’t be the last. Other small startup insurance companies offer their customers a more tailored and personalized plan, as well. But will these smaller companies lead the industry into broadly applied personalized insurance models? Or, will major insurance companies with large-scale credibility and longtime reputation come to the forefront? Smartphone telematics, big data, and AI-powered analytics enable legacy companies with an extensive outreach to truly disrupt the industry. These longtime players can offer the personalized experience as well as the credibility and resources to shift the entire insurance landscape in a new, digital direction.