Telematics, smart home systems drive meaningful customer engagement in P&C insurance

Technological advancements and the superior customer experiences offered by BigTech firms are spurring insurance customers to demand digital, simplified, and personalized options.

A highly-personalized experience requires insurers to increase customer touchpoints and to provide personalized and meaningful engagement in each touchpoint. Personalization boosts customer satisfaction and loyalty while effectively managing the risk scenario.

P&C insurers are using telematics and smart home devices to improve customer engagement frequency and depth, notes the Top 10 Technology Trends in Property and Casualty Insurance: 2019. Globally, P&C insurance firms are piloting (73.3%) or deploying (50%) telematics and smart home ecosystem devices, according to the World Insurance Report 2018.

Telematics

Auto insurers use telematics to collect insights on how customers accelerate, brake, and drive during rush hour, or aggressively turn corners. Then, they use the collected data to personalize coverage with premiums based on a granular review of risk (usage-based insurance).

P&C insurer State Auto, Octo Telematics, and EverQuote, an online insurance marketplace in the United States that connects consumers with insurance providers, partnered last year to provide customers with personalized auto insurance discounts. Users of EverQuote’s social safe-driving app, EverDrive, can share their driving data to become eligible for discounts based on their driving behavior.[1]

Insurance firms are also using telematics data to offer customers value-added services. For example, American insurer Esurance launched DriveSafe in 2014 to help parents monitor their teens’ driving behavior through a telematics device. Esurance policyholders may install an in-car device that — in conjunction with an Esurance smartphone app installed on their teen driver’s phone — can limit the use of text, email, application usage, and phone calls when the car is in motion. Parents can opt for customized alerts for unsafe driving behavior and review trip details.[2]

Smart Home Devices

Smart home ecosystems are used to collect data about home conditions – such as temperature and humidity – that can be used to assess risk exposure and hazards and to improve pricing accuracy.

Real-time data from smart home devices can prevent an accident or provide timely alerts that can reduce incident severity. Insurers can also leverage data from smart home devices to provide customers with maintenance tips.

Liberty Mutual launched Dwellbeing, a home-monitoring tool that monitors plumbing, ventilation, and other home systems and appliances in early 2018. The platform notifies users when it detects that maintenance is required and provides tips on how to service the damaged items.[3]

Connected devices help P&C insurers to become risk-management partners

Source: Capgemini Financial Services Analysis, 2018.

Moreover, telematics and smart home devices can give insurers immediate first notice of loss (FNOL) warnings and insight into the cause and severity of the loss that can significantly reduce customer connection and claim-assessment time.

In short, telematics and smart home ecosystems can enhance customer experience via more frequent and meaningful engagements with truly differentiated value-added services and can help insurers to retain existing customers and attract qualified leads.

What’s more, connected devices enable insurance firms to perform more accurate underwriting and better risk pricing as today’s risk scenario evolves with the change in impact of existing risks and the emergence of new risks.

With connected devices, insurers can also provide suggestions on risk control and risk prevention and thus can reduce claim costs, which could lead to better profitability. Ultimately, telematics and smart home systems will enable insurers to become risk management partners.

To learn more about how insurers can leverage telematics and smart home systems, connect with me on social media.

[1] Business Wire, “Octo Telematics Signs First Partners to Octo DriveAbility Marketplace,” September 6, 2018, https://www.businesswire.com/news/home/20180906005705/en/Octo-Telematics-Signs-Partners-Octo-DriveAbility-Marketplace.

[2] Esurance website, “Introducing Esurance DriveSafe,” Jennifer Wood, http://blog.esurance.com/introducing-esurance-drivesafe, Accessed January 2019.

[3] Corporate Insight, “Liberty Mutual Brings Smart Home System to P&C Insurance with New Dwellbeing Tool,” Henry Marshall, February 2, 2018, http://corporateinsight.com/liberty-mutual-brings-smart-home-system-to-pc-insurance-with-new-dwellbeing-tool.

Vijay Amballa

Expert in Automation, Insurance Transformation

I bring the leadership , vision and journey of Digital Insurance for our external and internal clients by bringing the Power of One Capgemini and help drive transformation.