TU talks to Richard Burtner, general manager and vice president of the LBS Group, Numerex, about how M2M providers can seize the insurance telematics opportunity.
What does your company/department do?
Numerex is a 17-year-old, publicly traded machine-to-machine (M2M) company that provides end-to-end business services for a number of customers in the transportation, utility, healthcare, and security markets. Numerex offers an extensive range of wireless products and services to support business initiatives. From stationary monitoring, measuring, and metering applications to asset tracking on a global scale, our team of technical consultants, engineers, and developers assists with planning, building, and managing M2M solutions for a wide range of industries. Our packaged products are infused with Numerex DNA®: the device, network, and application components integral to a successful and efficient market launch.
What is your role and experience in the Insurance Telematics market?
Numerex’s competency lies in providing our insurance customers with the entire value chain of telematics services for the implementation of a successful vehicle intelligence program. The Numerex 6D™ process has proven to be efficient and stems from the multitude of industries we have served. After strategic business objectives have been identified, we work with our partners to execute a seamless path for the technology and module integration, allow global connectivity of those devices through one point of contact, and provide custom application development and support. Numerex’s web-based management platform offers remote device management, hosting services, as well as the ability to engage in additional business services such as warehouse and fulfillment, RMA and warranty services, or billing services and flexible payment solutions.
How important is the role of Telematics currently throughout the Insurance market space?
As insurance companies seek new ways to differentiate themselves from their competitors, they are looking for simple, web-based tools that will provide them with both the real-time and historical data for charting future programs. Companies are looking for M2M vendors with proven market expertise and strong partnerships that allow both the hardware and software technologies to blend together seamlessly for these niche markets, allowing quicker deployment times and the ability to count on one vendor for service management and to deliver proven ROI models.
What is needed for the large-scale success of PAYD/Usage Based Insurance?
The success of PAYD/Usage Based Insurance is dependent on being proactive with market trends and in sync with market research through some of the prominent analyst firms in the space. It’s also about making smart decisions and partnering with the right solution provider for your program. Consumer awareness will also need to increase. PAYD programs are not widely known about or understood. As customers get more exposure to the concept and realize they can save money on their premiums, the market will really start to grow.
Which trends will impact the industry the most in the coming years and why?
The trends that will impact the industry the most in the coming years will be the need for insurance companies to enhance their ability in scoring premiums. This information and the capability to gather data is still in the early stages of maturation. Telematics can play a key role especially from a cost standpoint, by providing more accurate information than simply pulling credit reports and will offer a better correlation based on telematics information. There has also been a significant change in the willingness of people to share information with not only their friends, but with companies they do business with. This trend will continue and many more people will opt into programs that save them money in exchange for behavioral data.
How do you view the role of Auto OEMs in the Insurance Telematics arena?
In the short term, there is an aftermarket need and opportunity while OEMs work towards built-in solutions. Cars today are more technology savvy with increasing telematics features. In the next few years the aftermarket opportunity for telematics solutions will be coordinated with OEMs.
Where do you see the Insurance Telematics Industry heading in the next five years?
In the next three to seven years, we see the Insurance Telematics industry focused in aftermarket opportunities. A key to the future of the industry will be partnering with someone in tune with the current market requirements. More information generally leads to more customized offerings. As insurance providers get a better understanding of the driving behavior of their customers, they will create additional and more specific products that will benefit both consumers and the insurance provider.
For more on the Insurance Telematics market, join the sector’s key players at Insurance Telematics USA 2011 on September 8-9 in Chicago.