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Re-evaluating Telematics for a New Era of Personal Mobility

Our new report explores the changes to mobility over the last 15 months, increased consumer interest in telematics and Usage-Based Insurance, and why now is the time to implement telematics into your business.

Introduction

Over the last 5 – 10 years, the tide in the motor insurance market has changed as technology and sensors have become more prevalent throughout our day-to-day lives, encompassing everything from smartphones to vehicles. 

This ability to collect journey and driver behaviour data has presented insurers with the opportunity to create an in-depth understanding of their drivers and their risk profiles, in order to price policies more accurately and develop new Connected Insurance products which add value to the policyholder.

The introduction of the smartphone into telematics allowed the technology to grow from event-based fleet tracking and young driver box-based policies, to offering comprehensive and engaging policies which provide all-important context to trips, and allows for the inclusion of driver coaching, rewards functionality and ultimately crash detection. 

A number of new incumbents and tech-savvy disruptors joined the market offering policies and solutions, such as pay-as-you-drive or pay-per-mile, which are flexible, affordable and easy to set up – with innovative product design and customer experience – to suit the requirements of an increasingly tech-led society.

This was something that many consumers were looking for, as McKinsey pointed out back in 2018, when they found that 84% of US consumers were willing to share their personal data on navigation and mobility. (Source: McKinsey and Company, ‘Telematics: Poised for Strong Global Growth’, April 2018)

The increased acceptance of technology within insurance policies presents a great opportunity for insurers to redefine their relationship with customers by harnessing the power of telematics. 

Due to the ongoing COVID-19 pandemic, the last 12 months have highlighted the need to effectively understand policyholder mobility and, crucially, we can now see that consumer attitudes have changed to the point where they are demanding a new type of insurance. The potential for telematics adoption continues to rapidly evolve and for insurers it is now more important than ever to acquire a solid understanding of driving behaviour.

The Floow has undertaken research to understand the impact of these market changes on consumer preferences and attitudes towards User Based Insurance. This paper considers the results from that research.