Telematics and How to Gain Value

Gaining Traction and Value from Telematics data​

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​In this series, I have deliberately kept the subject areas general. However, I believe  that there are opportunities within the vehicle leasing industry to gain more traction and value from Telematics data than is currently being achieved.

​This becomes even more important now as we look to move out of a difficult period for businesses and customers alike.

Amongst a wealth of data, Telematics also provides information about driving behaviour and habits. This data can enable insurers to both manage existing risk and develop the next generation of insurance risk and pricing models. It helps drive behavioural changes among users and enables insurers to create not only pay-as-you-drive but also pay-how-you-drive premium calculations.

This in turn leads to better understanding and management of risk as well as reduced premiums for good drivers.

Monetising the data
 
Driver data can also be monetised and repurposed in other ways, such as:

• Portfolio Steering / Risk Selection
• Cross selling opportunity for some insurers
• Reduced admin costs (quicker and easier to handle claims)
• Better client engagement and satisfaction scores
• Monitor portfolio performance
• Sales network optimisation

 
Diversifying risk
 
By charging premiums in exchange for cover, insurers can reinvest profits into other assets thus diversifying their risk even further.
 
For example road safety training, fuel efficient driving – especially useful for large fleets, hazard perception and RTA (road traffic accident) training (basic first aid skills, first response checklist for those encountering an RTA).
 
For vehicle leasing companies that also do insurance, this adds a whole new dimension to the risk assessment process, which leads to better pricing of premiums and increased profitability while enhancing the customer experience and building brand loyalty in the process.
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Leasing companies that offer fleet management products or services on a consultancy basis can also use Telematics data to help their clients’ own fleet managers achieve enhanced operational benefits.

A Telematics based model adds more data than just the traditional style models. With the addition of Telematics data, machine learning techniques can be used to estimate the frequency and severity of claims for more targeted insurance products and competitive pricing without cannibalising profitability.

Just do it

Doing more with Telematics data is a great way to gain competitive advantage so if you are not already doing it, you should. If you are, then are you doing all that you could with it and realising its full potential?

The final part of this series will recap the benefits of a strong analytics capability. When a business sees Data as a mission critical business Asset, the impact on growth, risk and compliance cannot be overstated. 

If you are interested in finding out more about extracting value from your Telematics data please contact us here to book your free Discovery consultation.

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Brendan Jayagopal

Founder & Managing Director. Blue Label Consulting