How connected car data creates insurance personalization – Digital Insurance | CarTailz

Rapid advances in technology have been the backbone of the digitization of several consumer industries, with a focus on introducing improved simplicity, as well as an innovative and tailored service experience.

To meet customers’ expectations in the digital age, auto insurers are focusing on end-to-end digitized insurance plans, tailored to customers’ dynamic usage and needs.

Studies suggest the introduction of automation Reduce claims processing costs by up to 30% while insurers double profits over 5 years through the digitization of existing business channels. As a result, digitization is changing the way customers interact with insurers and choose services.

Digital insurance underpins a customer-centric approach to create more convenient and personalized insurance plans, with an emphasis on enhanced convenience and customer experience. From simplified and tailored coverage options and faster claims processing to risk analysis and reduced costs, the concept relies largely on intelligent software programs and extensive vehicle data.

Connected vehicle data from modern Autonomous, Connected and Electric (ACE) vehicles monitor vehicle functions, vehicle performance and driver behavior to identify risk factors that could affect safety on the road. For example, tracking historical driver data related to speeding and hard braking, along with real-time parameters such as speed, location, and cell phone usage, would allow insurers to create insurance plans tailored precisely to their needs and risk profile. Once the relevant data has been collected, AI and IoT technology will be used to improve the policy underwriting process by generating accurate driver reports in shorter timeframes and analyzing them against current mobility trends for optimized costs.

Usage Based
UBI uses connected car data to interpret insurance costs for policyholders by considering how well the driver performs on the road. UBI models assess risk profiles based on driving skills and embedded telematics data from connected vehicles to offer customers tailored plans based on their driving abilities.

Unlike traditional auto insurance, UBI does not consider passive factors such as creditworthiness, number of claims or place of residence to derive policy costs. Data-driven digital insurance plans such as PAYD (pay-as-you-drive) and PHYD (pay-how-you-drive) leverage UBI concepts to offer drivers enhanced personalization with minimal effort. The plans allow users with limited driving needs or safer risk profiles to enjoy comprehensive coverage at discounted premiums.

In response to the increasing global demand for tailored services, auto insurers around the world have shifted their focus from conventional auto insurance to usage-based insurance. So much so that the global The size of the UBI market is expected to grow from $19.6 billion in 2021 to $66.8 billion in 2026 at a CAGR growth of 27.7%.

Connected vehicle data
As data and connectivity form a clear pattern in UBI models, connected vehicle data is undeniably becoming the source of detailed data – essential to providing comprehensive coverage to customers.

UBI programs typically track vehicle mileage and driving habits, monitor risky on-road practices, and collision events or accidents. Connected vehicle data derived from monitoring aspects such as speed, acceleration, hard braking, hard cornering, mileage driven, time of day, phone usage while driving and more helps in accurate assessment of live location, breakdowns and vehicle malfunctions.

The data collected in this way provides intelligent insights that enable insurers to offer policyholders tailored plans, improved road safety and new products. While the industry has tried to provide solid UBI models through data from third-party apps or services, the in-vehicle data from embedded vehicle sensors is really a notch above in terms of data richness, reliability, convenience and cost-effectiveness.

It also removes privacy concerns from the current generation of users by sharing their private information and offers a level of convenience promised through a transparent data sharing process as well as compliance with global privacy laws.

Benefits for car owners
Telematics and data offer more than just an expansive view of the factors affecting auto insurance.

  • Mobility intelligence can reward safe drivers with lower premiums and discounts that match their driving behavior.
  • Increased road safety through driver behavior monitoring and incentive-based techniques to improve driving skills.
  • It can also give drivers regular feedback on their skills behind the wheel to encourage optimal road behavior.
  • Telematics-supported digitized insurance products can supplement accident investigations by reconstructing the course of the accident and thus significantly improve road safety.
  • The process also helps auto insurers streamline claims by reducing the timeframe for claims settlement and policy renewal, and effectively identifying fraud claims.
  • Digital Insurance sheds light on several vehicle parameters used, including odometer readings and fuel consumption, to help drivers make intelligent decisions to control overuse and increase fuel efficiency.
  • As a result, auto insurers can expect to strengthen their long-term relationships with customers through superior customer experiences, personalized plans, and value-added services with future-ready insurance products.

Leave a Comment