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Telematics and Big Data to Drive Growth in Insurance

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Apps and Maps are something that’s driving us everywhere. Apps are for everything starting from groceries to galaxies. It has a big impact in the INSURANCE sector as well, but 80% of the customers are still unsatisfied with the app experience, that’s shocking, isn’t it?

Legacy technology and a slow pace of delivery are hindering the digital dreams of insurance companies. But at the same time, multiple platforms and devices are empowering users with the better transparency of insurance plans. Now with Telematics and Big Data, insurance companies can easily gain better visibility on customer behavior and buying patterns, let’s take a closer look into it.

Engagement and progressive personalization

Customers are not satisfied with the services of insurance companies. Why this happens so? Because, the current model of insurance focuses only on profiling users, rather than building an emotional connect with them. The reviews made on the social media, and other online channels influence user’s buying decisions, but insurance firms continue to be missing from the social space.

So, what’s the solution? Insurers need to work on building a strong relationship with customers and provide round the year care and not just a phone call on the policy renewal date. Social media channels can prove to be the indispensable tools to engage and influence tech-savvy consumers. Also by observing and analyzing customer’s updates on social media, insurers will reach the consumer at the right time, with the most effective advice.

Telematics and usage-based insurance

Telematics is a technology in which we combine computers and wireless technologies so that information can be streamed across different platforms. This can work really well for insurance companies and can play a huge role in reducing the risk involved. Smart cars, connected homes, and wearables will boost better visibility and connectivity between customers and insurers.

telematics

Telematics in automobiles will improve pricing accuracy. IoT sensors in automobiles can be used as warning systems, which in turn will reduce the frequency of claims and also bring clarity by tracing the location and circumstances of the situation. These will facilitate the cross-selling and up-selling of plans and introduction of usage-based pricing models.

Usage-based models like pay-as-you-drive (PAYD) based on actual miles driven, or pay-how-you-drive (PHYD), where pricing is based on driving patterns and driver’s behavior, will become more popular in future.

Big data will improve claim processing

The increase of customer touch points through social media and other channels will generate a lot of data in various formats. In insurance, this big data can be turned into actionable analytics for easy and quick claim processing capabilities. It will automate the claim assessment process and minimize fraud through predictive analysis. Insurance plans can also be customized based on the risk associated with the product.

big data

Harnessing the data of the users is a key to serving them better by bringing more credibility and a personalized experience to the user. It will also help companies in running targeted marketing campaigns. But firms have to proactively improve their data storage and processing capabilities to leverage the benefits of big data.

Fresh Air of New Technologies

The insurance industry is in the need of replacing the decade old legacy systems with future platforms, innovative practices, and processes. Insurers who have not started their journey towards these trends will find themselves at an increasingly competitive and functional disadvantage in the future. Multi-devices will bring unique features based on location, cameras and sensors to the table and with digitization, insurance will become more functional and connected.