Mohsen Mohseninia, VP of Market Development, Aeris, explains how usage-based pricing has enabled its partner Redtail Telematics to tap into new markets.
Telematics is transforming the transport industry. Track and trace capabilities have made it possible for fleet managers to keep track of their vehicles, insurers to offer their customers a range of usage-based insurance (UBI) policies, and governments to obtain vital information about the traffic network.
UBI uses granular data insights to align driving behavior with determining insurance premiums. It has become extremely popular with drivers in the last few years. According to The British Insurance Brokers’ Association (BIBA) the number of live telematics based policies reached almost one million last year in the UK.
UBI is a popular choice among drivers to help reduce premiums, but greater access to in-depth telematics enables insurance providers to assess a driver’s behaviour, evaluate risk and develop customised UBI policies based on various insights.
To provide accurate, data-driven insights for insurers, it is essential that telematics companies can track and collect data in real-time, regardless of location, carrier or type of connectivity. The challenge for telematics companies is implementing a solution that can deal with the high quantity of data. Companies need a SIM, that can switch network provider on-the-fly to maintain always-on connectivity and ensure data is not lost.
If a connection is lost, the device does not collect all of the data needed. Insurers are left with incomplete insights and cannot identify high-risk drivers accurately. Additionally, access to timely and robust data increases both claims-room efficiency and consumers’ satisfaction with their insurer’s management of the claims process.
Redtail Telematics: Connectivity is key
Telematics service provider Redtail Telematics has partnered Aeris, the carrier-agnostic IoT solutions provider, to provide a solution that collects precise, high-quality data about the driver to enable insurance partners to offer vehicle insurance based on real, rather than perceived, risk.
Aeris’ global support of cellular technology, such as GSM, CDMA, and LTE, means Redtail can avoid a network outages and data gaps. This has enabled Redtail to have more flexibility for its customers and opened up connectivity options as well as the potential for growth around the globe.
High connectivity from Aeris means Redtail can provide insurers with accurate insights to assess the risk associated with each driver. The data can be used retrospectively to determine premium costs from behaviour across a six-month period, or to intervene, helping to identify a potentially risky driver and coach them in better driving habits to improve road safety.
Using a SIM that provides constant connectivity, Redtail can provide clear and concise information to both consumers and dealers at the right time. For example, it can post alerts on car makers’ apps when there is a red flag around a vehicle’s battery life, preventing dangerous issues by catching the problem and resolving it before it escalates.
Competing on cost
With one of the main pressures on telematics companies being cost, Redtail needed to stand out from its competitors and offer dynamic pricing that would suit the insurance industry. Aeris’ technical and contractual flexibility ensures Redtail is not charged for devices when they are not in use meaning so Redtail can offer a greater range in terms of price, and differentiated solutions to match individual customer’s needs.
Due to this, Redtail has been able to tap into new markets, with the flexibility to offer affordable solutions and guarantee quality and accurate data insights, even where communications infrastructure is poor.
Redtail is working with local authorities and highway agencies to improve roads because it can provide them with granular data on everything from potholes that are causing driving issues to the reasons why people have accidents on particular motorways. This will be fundamental to the development of the UK’s transport infrastructure.
While UBI is being used to provide more accurate data on drivers to help ensure insurers are offering the right policies, the capabilities of telematics in the industry are expanding. With access to constant connectivity and never before accessed insights, telematics companies have the opportunity to create an ecosystem that works for the driver, the insurer and the government – a way to provide a full picture on all journeys.
The author of this blog is Mohsen Mohseninia, VP of Market Development, Aeris