Are Consumers Asking About Telematics?

[Brian Anderson]

Posted an article (link below) about how things like fitness monitors and other telematic devices are growing in consumer use and acceptance, and are expected to have a big effect on the way property and casualty coverages are bought and sold.

A quote from the article:
“The way we’ve done insurance compared to what we can do is sloppy. We’re taking tens of thousands of people and saying they all have the same risk profile—when in fact they don’t. Most people are actually overpaying.”

We know insurers are actively working on these types of things and that they will become the rule rather than the exception at some point. But right now are many clients asking about these things or requesting them as a way to lower their insurance premiums? Progressive’s Snapshot has been around for a while now, but I haven’t heard much about it lately. Wondering if consumer demand exists, or won’t really gain momentum until more of these things are actually implemented?

Insurance Forums | Wearables and telematics on verge of huge impact in P&C markets

 

[JWP]

Maybe 2% of my leads have brought up the subject themselves.

I was selling Snapshot with just about every Progressive policy last year, when the carrier was offering us a bonus to sell it. They took away the bonus to us agents, so I don't push it as hard. Now I give them a quote without snapshot but also tell them how much they'll save by trying it out.

The group from last year that finished are not seeing much savings after they complete the program. Plus if you read the fine print, they make no guarantee that those savings will continue . Another few reasons not to push the product.

Now that I don't push it, 3/4th of the people don't want to be bothered (monitored). I still probably place it on 25%, maybe these are the customers who will end up getting more savings due to driving habits. Will know for sure, at next years renewals.

Same can be said for Safeco's RightTrack, but my volume with that carrier is a lot smaller, so tougher to get a decent opinion from their program.

 

[InsCommentary]

“The way we’ve done insurance compared to what we can do is sloppy. We’re taking tens of thousands of people and saying they all have the same risk profile—when in fact they don’t. Most people are actually overpaying.”

It isn't true that all insureds have the same risk profile. Insurers have used various rating factors for eons. The info from a telematics device is just another one. There is a limit, from an actuarial credibility standpoint, to how customized a rate/premium can be for an individual. At some point, it's not insurance anymore.

It's like the movie Minority Report where they can predict that an individual will commit a particular type of crime then apprehend and sentence them before they do. Sometimes when i read articles about "big data" and predictive modeling, I think data scientists believe they can predict loss experience on the individual exposure unit level. At least that's what the people selling data analytics service might want potential customers to think.

One thing that bothers me about auto dongles is, what's going to be done with that information? How many consumers have read the licensing agreement. Even if it says their data won't be sold or identified for any other reasons than underwriting or rating, most licenses for any product or software say they can change without notice.

I read a year or two ago that Allstate was considering whether the data they gather has resale value. My son is a data analyst for a large medical conglomerate. His job is to analyze every bit of information they acquire and determine how it can be used to generate income or reduce expenses. What if an insurer decides to let local police departments access their dongle's GPS information to identify what drivers stop by the local beer joint every payday after work?