Working Collaboratively with Insurers and State Regulators to Bring Innovative Products to Market

Steven Brown CIC CRM - December 17th, 2020

steven brown

At The Floow, we pride ourselves on the collaborative way we work with our clients and regulators. Our collaborative actions enable quick-to-market solutions which can evolve into unique scoring intellectual property, aligned with each insurer’s portfolio of risks.

Our partnerships with clients and regulators have allowed us to design engaging customer experiences, and to produce fair and predictive scoring based on true driving behaviors. We believe it is extremely important to form true and lasting partnerships so insurers and their policyholders get the most from connected insurance products.

One area in particular where we work closely with our US partners, is the filing of telematics scores, to ensure state regulators can understand and support the scores we provide. As Chief Insurance Officer at The Floow, I regularly draw upon my 30+ years experience in the insurance sector to help our partners through this filing process and provide them with the information I know they, and the regulators, will require for a successful launch of their insurance telematics solution in a particular state.

The filing process

Insurance programs in the US are regulated by individual states, and insurance policies covering risks must meet state law requirements to ensure fairness and protection for insurance customers and the market. How a program gets “approved” varies by state, but our collaborative process is foundational in creating a common understanding of the technical aspects of telematics-based rating.

Despite the regulations and sometimes rigorous filing processes, we have found that state regulators are extremely open to innovation within the insurance market as long as it benefits the consumer. As a result, telematics has been positively welcomed by many regulators looking for new technologies and solutions to make insurance fairer for drivers.

Collaboration with insurers and regulators has helped us to take proactive steps in developing a shared understanding of telematics technology. This fact-based approach, accompanied by a shared understanding of telematics, will be even more important in the future as innovation surrounding insurance products continues.

Using telematics scores within insurance propositions

When an insurer partners with The Floow, they utilize our insights and scores to gain a true picture of the driving behavior of their policyholders. This detailed picture provided by our scores highlights the specific driving behaviors that have a strong correlation to risk. Insurers can use this information to price their policies more accurately, or to identify alternative options which will help them to accomplish their strategic goals.

As our predictive and behavioral scores heavily influence an insurer’s understanding of a specific driver’s risk profile, it is important that our scoring mechanisms are reliable and robust. As a result, we have worked hard over the last eight years to create, and consistently improve, our world-class scoring algorithm and the out-of-the-box scores insurance carriers receive from us.

Over the last 12 months, our R&D focus has been on improving the quality of the data we work with so that consistent scores are delivered regardless of the data source used. We do this by normalizing the trip data collected to ensure consistency, providing the added benefit of a device-agnostic program with uncompromised score quality.

By ensuring our scores remain fair and highly predictive of risk, state regulators have confidence that our solutions are reliable, and that insurers are able to make accurate policy pricing decisions from the insights we provide to them.

Collaborating with clients

We work with our insurance partners, and each DOI, as needed to understand their exact filing requirements and concerns. Our support services during the filing process include documentation, analysis and statistics, and even attendance at inquiry meetings right alongside the insurer, to ensure a successful outcome.

Sometimes, adjustments to scores, user interfaces, communication, and other analyses is necessary to meet the requirements of a particular state. Our platform was built to host multiple product versions for our clients so that the correct scores and analytics are delivered by state and / or other business rules.

Many of our insurance partners start their journey with The Floow, using our standard out-of-the-box scores which can be used for variable pricing. We also provide the added ability to create unique scoring IP by training scores against unique claims data to more accurately reflect the risk of their policyholders and build competitive advantage. We have found this unique approach can double the lift provided by our scores, as well as foster innovative new products and customer experiences.

This scoring IP is not only more predictive of driver risk but it is something which is viewed favorably by state regulators, who prefer the uniqueness of these scores as they are more representative of the risks found on an insurer’s book.

To date, we have been successful in achieving approvals for our partner’s insurance filings in every state we have entered (34 and counting). We believe this is due to our collaborative way of working with clients and regulators. By understanding the concerns and requirements of our insurance partners and state regulators, we have been able to craft acceptable telematics-based insurance solutions.

Our collaborative process helps insurers gain approval and get out to market much quicker with their insurance telematics solutions. It also allows us to better understand our partner’s challenges so we can create innovative, future-focused solutions which fulfil their needs, and which are acceptable to state regulators.

The future of filing and telematics

Over the coming months and years, we expect to see states continue to evaluate their stance on telematics-based insurance scoring. We expect various positions to develop on what is viewed as fair and how telematics-based scores can be used within insurance propositions.

At The Floow, we have always believed the use of a policyholder’s actual driving behavior is the fairest and most accurate method of pricing policies. We remain committed to working with insurers to provide them with the data that supports the continued use of telematics-based scoring within insurance products.

The COVID-19 pandemic highlighted the need for insurers to quickly adapt and accurately understand changing driver behaviors in a dynamic market. As you will recall, during the height of the pandemic, many insurers chose to, or were required to, provide refunds to customers. Those insurers who didn’t have real-time telematics-based insights were not as precise as they could have been in making those decisions. Going forward, pay-as-you-drive and pay-how-you-drive policies are also going to become more popular as people continue to drive less, and an understanding of actual driver behavior is necessary to develop profitable solutions.

As mobility continues to change and insurers strive to remain competitive, it is clear telematics will remain at the forefront of insurance product innovation. It is easier than ever to collect trip data from telematics-enabled devices, making The Floow’s data refinery model even more important, as it can ingest data from any device to create consistent, predictive scores for each trip a driver completes.

We see it as vitally important to continue to work collaboratively with our clients and state DOI’s to ensure telematics is understood and viewed favorably. We see a great appetite for fair, innovative and high-quality insurance propositions which deliver engaging and rewarding experiences to policyholders.

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