We’re always looking ahead here at Insurance Edge, which is why we met up with Adam Gooch, Commercial Director at Insure Telematics Solutions earlier this week. We wanted to fire some questions at Adam regarding the latest developments in `blackbox’ tech, and get an idea of where the motor insurance and claims sectors are heading.
Can algorithms, AI and in-car telematics revolutionise the motor premiums market for brokers and insurers alike? How much privacy will consumers give up to save money and protect themselves from fraud or theft?
IE: A professor at Salford Uni once told me an algorithm is like watching water going down the plug, with numbered paper boats in the water, and you can predict the speed and the way each boat filters down, the more you watch – is that how an algorithm works?
AG: Yes pretty much, ours is predictive, intuitive software that looks for patterns within the data. So in a crash the black box is transmitting all the data to do with that incident; where the vehicle was exactly, speed, braking, g-force – everything. The AI is also comparing that data to historic information we have from other road collisions. It really is examining data at a granular level and providing hard evidence, instantly.
IE: That snapshot of data is the FNOL basically, it saves the customer phoning to record an accident and going through lots of questions?
AG: Yes it does. All the data leading up to that incident is sent as back-up immediately and automatically notifies the broker or insurer.
IE: Do you think the current call centre model of claims handling, with people assessing FNOL calls, arranging recovery, then damage assessment etc is bound to change radically in the next say 5 – 10 years?
AG: Yes without a doubt. We work with a company near Manchester, WNS Assistance, and theirs is a call centre operation. The advantage that telematics offers is that the customer and call centre have the hard data immediately. Those big changes within claims handling are something that we – along with WNS – are helping to facilitate. It is a rapid process of transformation and I think as an industry we will be in a very different landscape in just a few years.
IE: OK, I’ve had a bump in my car – what if there’s a weak signal, will the data still be uploaded?
AG: Yes, the black box can operate on a GPRS signal, but if a driver was in a remote part of the UK without any signal, then the data is stored and sent as soon as the telematics unit finds a local signal. So if a crashed vehicle was recovered then the data would move to the cloud as soon as a signal was detected.
IE: Things are changing rapidly in the motor sector, what do you feel is the biggest change we will see in the future?
AG: Telematics and AI actually offers more than anti-fraud, accident handling and theft protection by tracking vehicles. In the future it can be part of a greatly enhanced customer experience. One of the main complaints that you see on social media is that claims aren’t progressing rapidly, or the decision on blame is being held up whilst witness statements are checked, Police records accessed and so on. Advanced telematics systems can offer an independent witness, and the data may well tell a different story than a witness at the scene, who might be in an emotional state.
The greatest change will probably be the move to smartphone app policy dashboards where the customer is managing their own driving, cover level and any claims – that detailed control and input is probably going to make people feel that the process of having an accident, and sorting out a claim, is something they can influence and keep track of 24/7. Personally, I’d want such a thing dealt with efficiently, and feel that things were being sorted out – that’s where AI can really help.
IE: But will insurance still need the human touch?
AG: Yes, for some time ahead. Let me give you an example; I have colleagues who have over 20 years experience in anti-fraud and there is an instinct, a feeling that something isn’t quite right, in certain claims. That’s something which we as humans will have to teach to machines and algorithms over time. The other aspect is that claims handlers will have much more evidence to work with, thanks to new technology, and that enables humans to make a better judgement.
IE: Will every insurer and broker in the motor sector eventually need their own smartphone interface, do you see that as being inevitable?
AG: Yes, every policyholder is going to expect some type of portal where they can login and manage all aspects of their cover; travel, motor, home – everything. Both the claims handler and the customer will expect an interactive view of the claim as it moves forwards.
IE: Tell us about your company’s Microsoft partner work.
AG: The Microsoft project has been largely focussed on the development of AI models for us at Insure Telematics. By that I mean improving the usefulness, the sheer detail within the data capture, plus the way it’s being analysed. The most valuable thing from any insurers point of view has to be the way Microsoft has helped us improve the software platform that looks for subtle clues of staged, or slightly suspicious accidents. Fraudsters aren’t using the same techniques of say 4 or 5 years ago, things have moved on. But AI can undoubtedly help every company sift the real accidents from the ones which need further investigation.
IE: Is the most important factor in trying to separate staged from genuine crashes braking control – many people panic brake in a genuine incident for example?
AG: Certainly measuring the braking force is a crucial part of building up an overall picture of the incident itself. There are other bits of data that help tell the story and all we can say is that working with Microsoft has helped us improve our ability to detect crashes by over 300 percent. It’s helped us enormously.
IE: There’s a move now towards PAYG policies – is that another area where AI and telematics has room for growth?
AG: There is an opportunity for sure. It is interesting when you look at companies keen to offer cover on a PAYG basis to high risk road users such as couriers and food delivery drivers. Fleet owners could have a telematics unit fitted to a scooter or motorcycle, so that regular routes, average speeds, particular stop-off points etc are all logged. Equally, those who are insuring consumers for Social, Domestic and Pleasure policies could see that every Friday and Saturday evening that vehicle is outside a takeaway, and then in a particular area, so there’s an advantage there when it comes to discovering true occupations and primary users.
IE: Do you think we can reach a point where freelancers are happy being tracked in order to obtain insurance at an affordable rate?
AG: Yes, it’s possible. The thing is that devices are shrinking in size and there’s always the smartphone, which everyone carries nowadays. That allows users to login at their gig, get covered for a few hours, or all day, and get insurance on the go. There are bound to be more players in the gig economy insurance market in future, it’s too big to ignore.
IE: We ran a story recently about how older drivers are now embracing telematics, what are the reasons behind that shift in attitudes?
AG: There are always concerns about data sharing, but older drivers seem more relaxed about it and willing to trade data for things like theft protection. Knowing where your vehicle is, at any time, is important for many drivers in the 35-55 age range, especially if there’s a second driver. Also those who have classic cars are very conscious that a parked or stored vehicle is still a target for thieves, so keeping tabs on your classic via telematics is a big selling point.
The other factor with older drivers is not having to go `knock for knock’ on some road incidents. If there are no independent witnesses then it can be tricky to apportion blame and this is where data really scores – there’s usually no argument once a driver points out that a black box is recording things. That is an advantage that more experienced drivers often appreciate.
IE: Do you think that traditional year long, fully comp policies are in decline and that the market is becoming more bespoke?
AG: There is a realisation amongst consumers that paying 12 months, having to pay fees to change details or cancel, isn’t perhaps the best way for them, especially if they have more than one vehicle in their household. Also, assessing motor insurance risk by postcode doesn’t assess lifestyle; what type of car do you own, or have access to, and what is it being used for? How often do you drive in rush hour, or is your travel off-peak? Modern telematics can offer a snapshot of your usage on any given day and that will inevitably lead to day rates, or PAYG, for some drivers.
We see more data sharing by consumers, in return for rewards, as being the biggest step-change in the industry over the next few years. There is a massive opportunity for car insurers to offer an AI/telematics policy as a standard, best value option, to the market. Things like bespoke options, PAYG convenience and claims control through an app, are arguably going to be the biggest selling points in the future.
IE: Cheers Adam, thank you for your time.
Over to you insurance specialists – what are your thoughts on future trends in telematics, AI and motor premiums? Post a comment below.