Here Come More Telematics Options for Insurers

I've just arrived in Chicago for the Insurance Telematics USA conference, which kicks off tomorrow and promises to deliver a number of intriguing story lines. One that's been emerging over the past couple years, however, is the aggressive moves mobile carriers are making to leverage their expertise in cellular infrastructure in the usage-based insurance arena.

And, that means more than just powering black boxes that collect driving data. Today, Sprint announced two new offerings under its insurance solutions umbrella that take different approaches to reducing policyholders' risk than the standard rate adjustment for sound driving practices. First, Sprint worked with Modus to develop an OBD-mounted device that blocks text messages and web surfing on a drivers' phone. The company also announced a partnership with IMS for not just usage-based insurance, but a number of connected car services including vehicle health and trip reports, accident detection, roadside assistance and voice-powered infotainment. Sprint announced a partnership with another UBI vendor, HIMEX.

Bill Faresich, senior product manager for usage-based insurance at Sprint, told me in an interview that insurers are looking for services that add value to telematics to try and spark adoption. Progressive CEO Glenn Renwick said earlier this year that take-up of the company's Snapshot offering has been less vibrant than expected.

"Last year insurers began talking about 'UBI 2.0' where they wanted value-added features," he says. "People assume the discount's going to be there, and now insurers need to offer more value."

Insurers can go in several different directions in trying to build a UBI book of business, Faresich adds: the safest drivers, teens, seniors, or even drivers with multiple points who need to prove that they're insurable again. Some of those groups are responsive to messaging around scoring and incentives, and he says IMS's social media capabilities offer opportunities to appeal to those drivers.

"It typically had been the actuary [who came in to talk about UBI], but once we show them what we can do from a social media perspective they want marketing departments to come in and see it," he says. "We encourage them to get their marketing teams involved, figure out the segment they want to go after, and then offer a trial rate to help get off the ground."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio