IoT Analyzer: The benefits to insurers are downright futuristic.
In our previous post, we itemized some of the benefits and advantages of our Internet of Things Analyzer (msg.IoTA) and usage-based insurance (UBI) for policyholders. In our third post in this series, we’ll explore the corollary benefits and advantages for insurers.
Cost/Benefits
Even if we limit the discussion to auto insurance, some general truths abide: On one hand, there will be costs associated with acquiring the technologies required to employ UBI. (Nothing is free.) On the other hand, the benefits of employing UBI have the potential to more than offset those costs over time. Those benefits include — but need not be limited to — things like these:
- Better risk selection. By being able to analyze actual driving practices and records, insurers will be able to offer more attractive rates to better drivers. That has the effect of attracting like drivers who pose lower risks
- Better reputations. By selecting better risks and insuring good drivers at better rates, insurers will enhance their reputations and earn customer loyalty
- Better risks and lower accident rates yield lower claim costs for insurers
- The technology required for UBI, including our msg.IoTA, equates to a greater number of contacts and interactions between insurers and their policyholders
- The knowledge of their policyholders afforded by that greater interaction gives insurers opportunities to up-sell, cross-sell and add value by offering the policyholders more products and services
Logical Benefits
UBI also lets insurers put themselves in their policyholders’ drivers’ seats. Consider: If your policyholders that have UBI technology on board know their data is being monitored and recorded — and if they know that data will directly influence their premiums — they’re much more likely to drive even more safely. That benefits insurers (happier policyholders), it benefits the policyholders (fewer accidents), and it benefits everyone else on the road (potential casualties from the accidents of other drivers). Plus, with UBI’s ability to warn drivers of hazards (speed, hard braking, road conditions, et al.), UBI actually serves to improve road safety. That constitutes The Big Win.
And let’s not overlook fraud detection: UBI can help protect insurers from fraud by letting them know what really happens as it happens. Insurers can more readily identify everything from false claims to false addresses, from buying personal insurance for commercial driving purposes verifying the accuracy of claims data, from determining if vehicles have actually been stolen to tracking them if they have.
The Better Insurer Experience
We hear and read things about the customer experience all the time. That’s as it should be. Without customers, insurers wouldn’t be in business. But UBI and msg.IoTA can provide a better insurer experience — making it easier to do business, making it easier to write better business, making it easier to legitimize and pay claims, and making it easier to provide ongoing value to their policyholders. In short, it’s all upside for insurers and their policyholders.
In our next post, we’ll discuss some of the larger benefits for insurers. And we’ll indicate the ways in which UBI is the future of insurance.
