Real-time data analysis can provide insurers with insight into customer driving patterns. But if drivers are reluctant to grant access, what’s the alternative?
The latest trend in auto insurance is telematics, the analysis of real-time driver data gathered from vehicles’ built-in computers. Going beyond common ‘safe driver’ discounts, telematics allows auto insurers to drill down into driver behaviors—including whether he or she is more accident-prone than most—informing the cost of the driver’s insurance premiums.
But according to a recent Deloitte report, this new trend has not been met with consumer approval. 74 percent of individuals say they are at least hesitant to let their driving patterns be monitored. In response, insurers are offering opt-in telematics programs for customers who are willing to share this real-time data, allowing them to save more on their insurance premiums based on their driving confidence. Even so, the Deloitte report also found that 31 percent of those same individuals said they would have to receive a discount greater than 20 percent in order to allow an insurer to monitor their driving—a hefty sum.
There are also opportunities to apply telematics outside standard auto insurance coverage. At Fortegra, we offer service contracts and roadside assistance that provide additional protection beyond the scope of a traditional auto policy. These offerings could benefit from real-time data reporting—like how often or how far a vehicle is driven—to allocate appropriate levels of protection. And while these applications aren’t currently as common as using real-time driving data to determine insurance premiums, the potential for insurers to couple these protection options to provide a combined rate based on driver behavior is there.
The industry still has a ways to go before insurance rate optimization via consumer data analysis becomes the norm. Until then, we’re already perfecting the customer experience with our industry-leading service contracts and roadside assistance options, ensuring customers get the best service at the most competitive rates.
Contact us today to find out how we can help your customers Experience More.