Telematics, connected cars, driverless cars—could the not-so-distant future mean a world of safer drivers and fewer claims? That would be good news for insurers, who will benefit from lower claims expenses. And, given Accenture research showing that customers who have filed a claim are twice as likely to switch carriers than those who haven’t, fewer claims may translate into higher customer retention rates.
However, in an environment where driver behavior becomes less important, insurers will have to re-evaluate how they select and underwrite risks. And, to make the most of the opportunities presented by technology, they will likely have to make some substantial digital investments.
One of the much-touted benefits of the Internet of Things is its projected ability to provide insurers with more and better customer data. In turn, insurers have the opportunity to leverage analytics and predictive models to better understand their customers and offer more personalized products and services.
Of course, data on its own is of little use. To be useful, it must be correct, accurate and up-to-date. In addition, insurers must have the data and analytics capabilities to derive insights from it, and then be able to leverage it throughout the insurance value chain. For most insurers, this means examining up- and downstream data uses, understanding how data fits into legacy systems—and equipping themselves with analytics talent.
Speaking of talent, next week I’ll look at how these technological changes—telematics, connected cars and driverless cars—may affect the claims workforce.
For more information:
- Read Connected cars and the insurance opportunity, part 1: Telematics, customer retention and risk management.
- Read Connected cars and the insurance opportunity, part 2: From connected cars to driverless cars.
- Register to download Insurance telematics: A game-changing opportunity for the industry (PDF).
- Learn about trends in connected cars and the opportunities across industries in The Connected Car Shifts into High Gear (PDF).
- Learn about the opportunities and potential impacts for autonomous cars in Realizing the Benefits of Autonomous Vehicles (PDF).