On September 4-5 I had the opportunity to attend and host a roundtable discussion at the Connected Car Insurance 2019 conference in Chicago, hosted by TU Automotive. It was a conference intensely focused on automotive telematics. Here are five major themes from the programs and panels.
Insurers and vendors are looking towards applications beyond UBI, but there’s no consensus on what those offerings will look like. There was lots of talk about claims applications and driver behavior improvement (which was the topic of my roundtable), but less agreement on exactly what those applications should be and what’s most crucial to enable next. Various offerings in these spaces are in-flight at insurers now, so it will be interesting to see what gets the most traction. (Insurers watching the space should note, though, that not all these capabilities are customer-facing, so applications like claims fraud prevention may be tougher to analyze from the outside.)
Telematics offerings are also customer engagement, branding, and data orchestration efforts. A common theme of all those possible offerings is a service and experience that goes beyond just offering a discount, which in turn means that a comprehensive telematics program is an effort that will touch many functions within an insurer. Effective program design, movement of data, and unified messaging across the organization will be critical to execute such a program.
The value proposition is still unclear for smaller insurers. Midsize and regional insurers have smaller budgets for innovation initiatives, so expansive claims/improvement/engagement apps might be a stretch for them. But at the same time, many have personal auto books that are working for them, and they’re understandably reluctant to disrupt by introducing a simple discount.
Commercial lines are likewise unclear. Commercial auto posted a combined ratio of 108 last year, up from 107 the year before (as noted by one attendee the morning of the first day). Telematics can help reduce claims costs and improve risk selection, but it requires upfront investment for uncertain return, which can be politically difficult when an insurer is already losing money. Many insurers have already exited commercial auto, and others prefer to adjust the factors they know (appetite and pricing) rather than invest in innovation.
Autonomous vehicles are still far-future. There were a few presentations on autonomous vehicle technology and some side comments in various panels, but the overall attitude seemed to be that it will be a while before they’re here and that insurers and the industry will have more opportunities to deal with them while they arrive.
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