Why Telematics Is a Major Disruptor in Insurance?

The vehicle telematics system and User-Based Insurance (UBI) are key trends in the auto insurance industry and expect a disruptive change in the near future.

Digital technology is transforming the insurance marketplace enormously and the insurers are investing significant attention to meet the customer expectations by adopting vehicle telematics system. The customer vehicle integrated with the telematics system helps to calculate insurance premiums which is dependent on the distance covered by the vehicle, the speed the driver maintains while driving, and also the overall driving habits of customers as this information can be read and stored by the telematics app and made accessible to not only the insurers but also all stakeholders.

Vehicle telematics is recalibrating the auto insurance industry expectations and opening new ways to reach out to the clients. The rise of vehicle telematics not only changing the policyholders’ demands, but also disrupting the way it should be supplied. Many insurers are offering more personalized insurance policies to each and every individual.

Telematics as a major disruptor

The digitization process that telematics has brought in recently has made the total insurance industry to stand up and take notice and eventually catch-up with this change. Recent research studies have revealed that vehicle telematics is playing a prominent role to disrupt the auto insurance industry for positive business outcomes. In this way, Big Data is playing a vital role in helping insurers to solve various challenges such as data mining, handling, warehouse data, building data path for user applications and among many others by adopting extensive and varied data structure, which are made easily accessible to vehicle telematics system with the influence of cloud computing. The access control of the vehicle, real-time updates of traffic congestion and weather forecasts and many other vehicle telematics options are remotely accessed with the help of cloud computing, for both customers and insurers. The big data and cloud computing technologies are the mainstream of vehicle telematics system and hence are attracting new customers towards insurance policies by providing convenience and comfort in service.

Over the years, the auto insurance companies have successfully reduced the gap between insurers and customers. The vehicle telematics-enabled usage-based insurance is gaining momentum to meet the customer satisfaction with a flexible pricing model over the traditional pricing model and as a result policyholders can pay the insurance rates based on their driving behavior. It is an ultimate transformation that is giving customers complete control over their insurance premiums. To help policyholders for their driving risks, User-Based Insurance (UBI) model encourages individuals to drive safe and lower the risk of accidents happening through live feedback even as they can save money by improving their driving skills.

In the US, Insurance companies are implementing different approaches in User-Based Insurance model and the simplest, auto insurance policies are trending in the auto insurance market, such as Pay As You Drive (PAYD) is one among them. Rather than paying a fixed annual premium charge, PAYD ensures premiums are calculated based on the number of miles/kilometers driven by the policyholder with the help of vehicle telematics system.

United States is considering the UBI model as their grid. The spate of recent successes has confirmed immense response of policyholders towards this new approach. Even in many European countries, insurers moved to the next level of Pay-How-You-Drive (PHYD) right after the huge success of Pay-As-You-Drive (PAYD) model.

The Pay How You Drive (PHYD) monitors the driver behavior and driving style, the premium charges are reduced accordingly with improvements in driver behavior.The UBI has a great potential gateway to digitally enhance customers, as a result, PHYD has created a remarkable platform for auto insurance policies, but a number of insurers have started looking beyond the Pay How You Drive (PHYD)model for better user experience, as a development Manage How You Drive (MHYD) considered as the next move of UBI. Manage How You Drive (MHYD) offers a discount to safe drivers and also intimates the policyholders about driving performance through monthly feedback depending on their driving score.

Vehicle telematics benefits:

• Experienced drivers often pay unreasonably high premium charges which can be reduced easily.
• Encourages policyholders to drive safely and reduce the risk of accidents.
• If the policyholder drives very often then he/she will get fewer premium charges.
• Continuous monitoring of the driver helps to improve the driving behavior.
• It’s very easy to track vehicle health and fuel consumption of the vehicle.

The vehicle telematics system and User-Based Insurance system is imparting a major disruptive change in the auto insurance industry with innovative insurance policy models for customer convenience. However, insurers are implementing different strategies to improve the marketing and sales process of UBI model to maintain the balance in insurance policies, perhaps the priority is also given to the risk management and price calculation from the customers’ stand point. The disruptive vehicle telematics system can trigger the process of auto insurance policies and can be sustained without any major change in the insurance company structure, business model, and strategy. The vehicle telematics system is known for its conservative posture and disruption is never really easy for such systems, especially in the auto insurance industry. But the year 2016 can be a year of continuing transformation of vehicle telematics system, in which the insurance companies who remain as innovators will be those who are willing to engage in significant rethinking.

Why an Independent Insurance Agency?

Whether you are in the market for homeowners, renters, auto, commercial, property, workers comp, life, umbrella, or any other insurance, you want the most tailored plan at the cheapest quote. As a layman though, it all seems so puzzling. Besides the complicated insurance jargon, it certainly is difficult for you to assess your needs accurately – let alone find the precise insurance source to get you the right policy at the right price.

What you need is a specialist – someone who really comprehends all the ins and outs of the insurance world – someone who will gladly take the time to review your individual situation along with any existing coverage that you may have. Moreover, you need a trusted source that will be able to configure every aspect of customized protection to your benefit.

To whom do you turn to for matters as important as protecting assets, property, business and the like? Ask anyone in the know about the industry and they will steer you to an independent agency that has rights to do direct dealings with many of the leading insurance companies. As opposed to a dependent agency or a single company representing itself, the independent agency has no ulterior motive in directing you to one insurance company over the other. Partnered with an extensive network of underwriters, this type of agency searches its set of connections to come up with what works best for you. Equipped with a list of all sorts of policies there is no reason to settle on anything but the optimum.

The Independent Agent – piecing the puzzle pieces together for the customer

An experienced independent agency has your best interest in mind as it
– Emphasizes the client’s needs above all else
– Clarifies any questions about the differing policies
– Goes to great length to locate tailored coverage with a pleasing quote

Finding the agency that looks out for the customer the way you want it also requires some research, however. This is because not all independent agencies are alike in excellence. Though any insurer may claim to harbor a close connection with any given strong insurance company, there are variances to the type of bond they enjoy. In order to gain from dealing with a truly winning broker, the customer must link itself with an establishment that has superior access to the indemnity that matches requirements. In addition, it’s imperative to find an agency that is all-rounded – from before the sale, during the sale and after the sale – willing to act as your staunch advocate even when there is a claim.

The Best Way To Protect Yourself

It is true that nothing is permanent and life is full of risks. Hence, nothing is better than having an insurance plan. If you are looking to have an insurance plan, then you will not find it hard to get a one as selling an insurance plans as become a profitable business. And thus, many companies and agencies are getting started to involve in this business. But before taking any plan, it is vital to know and understand the policy clearly. But what are the actual types of insurance? If this is your question, then look at the below-mentioned types of insurance.

Pet Insurance: In the case of a pet insurance, the insurer will pay veterinary expenses if the pet is wounded or suffering from illness. Pet insurance is also validated if the pet gets die, lost or stolen.

Health Insurance: A health insurance is a policy that says the insurer (who sold insurance) will pay a lump sum amount to the insured (who purchased insurance) person if the insured person gets injured by accident or falls sick by a disease.

Travel Insurance: As the name suggests, travel insurance is related to the loss that occurs while traveling. It covers theft of baggage, delayed luggage, personal possessions, emergency emigration, accidental death, etc.

Life insurance: Is a policy which states that the insurer will pay an amount to the nominee or the family of the insured person if the insured person dies. For this, the insured person needs to pay the premiums on a regular basis.

Dental Insurance: It is similar to the health insurance, but the difference is that the insurer will be liable to pay if the insured person finds something unusual in his dental care. Thus, dental insurance benefits in case of sudden dental costs.

Auto Insurance: The insurance which is related to the automobiles is called auto insurance. In this policy, if the vehicle gets damaged due to the accident or other traffic issues then the insurer will have to pay a certain amount to the owner. In the case of a huge damage, some auto companies replace the vehicles totally.

You have to inquire about the eligibility criteria and choose the discounts that apply to you. Also, a few good discount for going through a driver’s training course and other driver learning programs. If you want to reap the benefit of this offer, you just need to go through a certified course and then show the insurer your certificate. This can save you about 10% on premiums, which adds up. Remember that different types of auto models have different auto insurance coverage and rate.

You can ask the companies about their rates as well

Often, sports and expensive automobiles bring in the highest rates. If your automobile has an excellent and satisfactory maintenance rating, there is a better chance for you getting lower insurance rates. You also need to know some basics about auto insurance premiums before applying for it. Apart from those points above, such as maintenance rating and the driver learning program, there are some other criteria too included in the pricing policy structure. For instance, gender is a big component, the monthly mileage driven and even the color of the automobile.