(As published on Property Casualty 360.)
Something is missing from the current discussion around telematics. Usage-based insurance (UBI) gets a lot of well-deserved attention, discussions around how telematics can be used in claims is growing, and the connected car vs. mobile vs. onboard diagnostics (OBD) as the dominate/preferred data collection method is being debated.
But, how is any of this actually going to work? Let us wax nostalgic.
Do you remember when a phone (even mobile) was a phone; when a personal music player (even the first generation iPod and mp3 players) just played music; and, do you remember searching the internet using a browser? Who knew these would converge and become so ubiquitous that they would be in the hands of 4 year-olds in the form of a “phablet”? Or that you would buy lunch using your thumbprint while listening to streaming internet music apps without taking your earbuds out! That has all happened in the last 10 years.
These examples demonstrate the power of technology platforms, enabling networks and data working together. And, this killer combination is familiar to insurance carriers – especially those in claims.
Think back to late the 90s, early 2000’s. Direct repair programs (DRPs) were emerging for claims, connecting auto insurers with repairers to improve communication and help with more efficient claims handling. The first tools to support this were effective point solutions that utilized the best technology available at the time. We know now that they weren’t without limitations; insurers and repairers often had to buy multiple products, use multiple logins to access disparate applications and endure multiple integrations and product updates. The real limitation came with a lack of true continuity – both in process and data.
The underpinning of what ushered in claims transformation was the development of a unifying, cloud-based platform. CCC Information Services Inc. (CCC) has made a substantial investment in this technology and has helped users realize the transactional power, insights, and performance and operational benefits that would come from a single connection to the partners, technologies and data the industry needs. It worked. Here are just two examples of how:
- Networked information. Shared guidelines gave authorized parties electronic access to carrier-established guidelines when writing estimates. The power of automatically sharing these carrier-established guidelines at the outset of the process improves communication and helps repairers create estimates more aligned with carrier expectations, helping support high levels of customer satisfaction through improved cycle time.
- Intelligence-based decision-making. A network with critical mass generates a lot of data over 30 years. CCC leverages data to offer recommendations at first notice of loss (FNOL) to effectively route claims with a high degree of accuracy, which can shrink cycle time by two days or more.
Putting Telematics into Action
Telematics represents as much potential for growth as the insurance industry has seen in decades – maybe longer. Connected car data from OEMs and insurance UBI programs are proving meaningful to product management, actuarial and underwriting groups; and scoring driver behavior has become prevalent, allowing carriers to acquire additional information that may be factored into risk profiles. But these singular applications feel a bit limited, considering telematics is an opportunity with enterprise-level value. A real telematics platform approach will bring cohesion, connections and continuity to driving data and processes, unlocking opportunities for growth, policyholder protection in the event of an accident, and product, service and engagement opportunities throughout the policyholder continuum.
Check out our view of auto insurance AFTER telematics.
What Does this Mean for Claims?
In short, telematics can improve cycle time and transform the claims experience to help insurers create service differentiation. That same data feeds back to support the business objectives of marketing, product development and underwriting. More specifically, insurers will start getting driving data feed into their existing systems, making it immediately and effortlessly actionable. Here’s how it works.
Driving data is collected and upon impact, detailed information about the pre-accident driving behavior and the crash itself are instantly run through CCC’s predictive analytics engine, which is powered by the insights gleaned from CCC and its affiliated companies and includes millions of claims transactions, and more than 20 years of injury data, and thousands of human crash tests. The vehicle can immediately and automatically send an alert to the insurance carrier’s FNOL representative, presenting the facts of the accident in map and dashboard formats, indicating the vehicle’s location, direction of travel prior to the accident, speed, braking and steering movements, and impact severity. This data can be collected from any source – mobile, embedded or connected car.
In addition to crash notification, FNOL representatives can receive near-immediate insights, derived from established predictive solutions, helping them determine whether the vehicle is likely to be repairable or totaled, the best appraisal option if repairable (using the carriers’ established guidelines), if an injury is likely, and if emergency and/or tow services should be dispatched. Without telematics, these steps and decisions can take days. With CCC DRIVE™ telematics-enabled claims solutions, they may only take minutes or even seconds, delivering performance and service improvements, including:
- Ability for insurers to proactively engage their insured, beginning right at the accident scene.
- Reduce cycle time (and related costs) by two-to-four days.
- Reduce injury handling costs, including better management of build-up in low velocity crashes, and better handling of trauma events.
Telematics is here and embracing its full power will require a comprehensive approach that offers continuity, cohesion and context. The winners of tomorrow will find ways to not only improve each functional area – marketing, underwriting and claims – but to also unite them in a way that creates a virtuous circle of value through each.