Following the news that Carrot Insurance telematics has allegedly been recording faulty driving data – that is, according to the BBC coverage of some Carrot policyholder experiences – drivers are looking in detail at how accurate their telematics apps really are. If you live in a rural area with a patchy phone signal, then maybe your GPS location history isn’t as detailed as your insurer might like. Plus Bluetooth pairing with other devices could also confuse the driving coach/black box app it seems.
Ben Carey-Evans, Insurance Analyst at GlobalData, a leading data and analytics company, offers his view:
“The biggest challenge for insurtechs is making consumers trust them. While they may be able to offer quicker, easier, more digital and even cheaper products, consumers need persuading to move away from established brands.
“This is particularly true in key lines, such as motor insurance. Costs of claims can be high so consumers have to know they are covered properly, and it is not easy to trust start-ups. Bad press could be very damaging to these young companies.
“GlobalData’s 2019 Insurance Consumer survey data suggests consumers are already weary about having their driving assessed. It found that 36.3% of respondents who opted not to have a telematics policy did so because they have an issue with the idea of someone/thing grading their driving ability. This group will be split between those who do not want it because they know they drive fast or that they do not trust the devices to give accurate results.
“However, the damage will more likely be to start-ups, than telematics as a whole. The survey shows that the majority of consumers are willing to use telematics if the savings are clear (64% of non-users would for a cut of 20% or 30%). A rise of high-profile mistakes like this will likely see customers choose established telematics providers such as Aviva or Admiral over less experienced players.”