Jan Stojaspal takes stock ahead of Telematics Update's largest ever conference devoted to insurance telematics.
On the eve of Insurance Telematics USA 2013, attendees of an exclusive networking event see an industry that is poised for strong growth.
The tentativeness that characterized last year’s attitudes towards insurance telematics (usage-based insurance or UBI) is largely gone, says Raymond Alvarado, enterprise account executive with Intelligent Mechatronic Systems (IMS), and it has been replaced by commitment in the form of commercial launches by as many as 13 of the top 15 UBI insurers in North America. “The hesitancy is no longer there,” he says. “Now the biggest push is to figure out how to increase adoption rates.”
Although insurance discounts have served the industry well when it comes to increasing adoption rates, there is a growing consensus that other incentives will be needed as insurance telematics matures.
According to Frikkie Koen, CEO of Tag N Go, a Colorado Springs, CO-based telematics service provider, the way forward is through “unlocking value” around UBI products, which includes options like driver coaching and engagement not just around the vehicle but around the driver’s entire family.
It will also take more explaining of what that value is. “The consumer doesn’t know what they don’t know,” Koen says. “Once they understand the value proposition, the adoption will be much higher.”
David Edington, Epsilon’s SVP of client services, insurance, agrees that discounts are no longer sufficient, pointing to the fact that 60% of consumers are already aware of insurance telematics – 40% of those are very or somewhat familiar with it – yet conversion rates remain disappointing. According to him, insurance telematics is made for a points-based rewards systems – much like those used by airlines or credit card companies – something it was not in the position to do when contact with the insured person was once a year.
In addition to UBI business models, the Insurance Telematics USA 2013 agenda will cover data collection, management and analysis (a big deal as data capture improves, and data sets expand), technology and intellectual property, UBI marketing and insurance telematics for fleets.
Most of this year’s 600 or so attendees no longer need convincing that insurance telematics is the next “disruptive force in the auto insurance sector,” as Andrew Goldberg, director, Deloitte, calls it. Still, some are still waiting to be swayed.
“Key issue is determining if telematics is really the ‘next big thing’ or is it only wishful thinking?” says James Bielak, program manager, property & casualty, ACORD. “It may be working out for some insurers, others would like to get into the game. But is there really a consumer need/desire to engage, and how will insurers ultimately afford it? You can only discount so many driver premiums.”
The following two days with their 30+ sessions tailored around five distinct conference tracks are guaranteed to provide at least some of the answers.
Jan Stojaspal is the editor of Telematics Update.
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For our coverage of Insurance Telematics Europe 2013, see Insurance Telematics Europe: Day One, Video: Making driving scores cool to young drivers, Video: Holistic approach to insurance telematics, Video: Insurance telematics and the young U.K. driver, Video: Insurance telematics and real-time driver feedback, Video: The tipping point for insurance telematics in Europe, Video: Getting insurance telematics right, Video: Learning to walk before running with insurance telematics, Video: Insurance telematics and the smartphone and Video: Insurance telematics and the customer-centric approach.
For all the latest telematics trends, check out Telematics Brazil & LATAM 2013 on Sept. 11-12 in Sao Paulo, Brazil, Telematics Japan/China 2013 on Oct. 8-10 in Tokyo, Telematics Munich 2013 on Nov. 11-12 in Munich, Germany, Telematics for Fleet Management USA 2013 on Nov. 20-21 in Atlanta, Georgia, and Content and Apps for Automotive USA 2013 on Dec. 11-12 in San Francisco.
For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.