Moving from risk rating to claims adjusting
Another new trend was an increasing awareness that connected-car data can not only improve risk rating, it can also improve the process of dealing with claims. Of course, some vendors have been touting this for years; this year, it seemed closer to reality. From the first notice of a crash to the final settlement, data can be used to
Vance Loiselle, CEO of TrueMotion, noted that 40% of customer churn is down to a bad claims experience. If insurers can improve the claims experience, he said, churn will go down.
As Larry Thursby, vice-president of property and auto product/pricing for Nationwide, noted, in the six years since its SmartRide programme went live, Nationwide has integrated UBI data with its policy administration systems. The next task to be accomplished is integration of the claims adjustment systems. “There’s a powerful use case,” he said, “but now you have to integrate with one of the carrier’s biggest systems.”
Is mobility insurance the future?
One concept that was taken for a ride in several sessions was that, in a world where people increasingly use multiple modes of transportation, and are less likely to own a personal vehicle, insurance might be tied to a person instead of a car.
Eric Nordman, director of the Regulatory Services Division and the Center for Insurance Policy & Research, NAIC, made what he admitted was a wild proposal: “Every citizen is required to buy health insurance, and auto insurance gets dumped on when people don’t have medical insurance. Why not move the accident portion of coverage over to the health insurance world?”
Carla Bailo, head of mobility research and business development at Ohio State University, suggested that a new product, “mobility insurance,” might cover a person anytime he or she moved around, whether via public transport, a transportation network company, private vehicle – and even via bicycle or while walking.
Conclusion
Finally, Roosevelt Mosley, principal of Pinnacle Actuaries, delivered a cautionary note. Based on Pinnacle’s analysis of the Twitter sentiment about usage-based insurance and the companies that provide it, he warned, “The consumer focus changes over time; customer sentiment regarding UBI is still overwhelmingly negative, while reactions to autonomous vehicles are mixed.” Twitter sentiment tends to be polarised, he added – only those with a very positive or very negative experience tend to tweet about it.
But Matteo Carbone, a principal of Bain & Company, was able to back up the potential for improving customer satisfaction with some hard data from an unnamed insurer in Italy. He said that, instead of providing discounts, one carrier was able to charge customers 10% to 15% more by adding services that customers loved.
UBI is here to stay: Ptolemus estimates that, by 2030, 60M cars on the road will be insured by some form of UBI – approximately half of all vehicles. It’s up to the industry to make customers love it.
Now catch up with Day Two
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