Steve Kerrigan, Senior Manager, Telematics and Connected Car, UK and Ireland, at LexisNexis Risk Solutions takes a look at car data, and how it can add more insight into your customer base.
After more than two months of cars sitting idle, for those who can’t work from home, driving to the workplace is now encouraged if walking or cycling is not an option. Understandably, consumers aren’t in a rush to get back on the bus, train or tube – a survey by independent UK watchdog Transport Focus found 60% of 2,000 respondents would rather drive than use public transport once travel restrictions were relaxed.
For the vast majority of motor insurance providers, the changing risk during lockdown and now as restrictions are gradually eased, is only seen through claims experience The insurance providers providing a return of premium or discount have done so as a broad goodwill gesture based on a significant fall in claims across their book.
In the UK, 44% of people worked from home during the lockdown. It is likely that the changes we have seen to work, will remain for some time to come. Three out of five people in a study would like to work from home more often than they did before the lockdown and almost half of respondents believe it will be at least four months before their working life returns to normal.
Most insurance providers can only know this change in behaviour through claims experience and the official ONS data.
The global pandemic has underlined the value vehicle centric data can bring in complementing traditional proxies for risk with actual real world data on how, when, where and how far cars are driven. The potential of vehicle centric data to drive renewal strategies, consumer segmentation and opportunities to provide enhanced customer experiences need to be realised.
It starts from clean and accurate vehicle base data. Converting the Vehicle Registration to VIN – is the first step – it provides a solid data foundation to know more about the vehicle. This capability is already far advanced through the work we have been doing to help the market price for the presence of ADAS features.
For many consumers, the annual mileage bracket stated when securing cover may now bear little relation to reality. As accurate mileage information becomes even more important to the insurance sector with the expected change in working/commuting behaviour, distance readings directly from the odometer can spell the end of estimation, forecasts, and the potential for error or deliberate mis-states. Knowing the mileage incurred opens the door to Pay-How-You-Drive options that may have particular appeal to those who envisage lower car usage in the future.
Once you have core mileage and location data from the vehicle you can take advantage of simple scoring solutions to predict risk driver risk.
Then of course data from the car enables insurance providers to get on the front foot to manage claims from the point of impact through to claim resolution.
These are not new ideas. What is new is the change we are seeing in travel behaviours and how this may play out in the longer term. Attitudes to motor insurance may shift – some consumers may want more flexibility from their insurance provider, more support to make their journeys safer, more tailored services to make them feel valued.
Data from the car and on the car holds the key. It’s a simple concept but there is a huge amount of complexity in making both the static and dynamic data from the car accessible and usable in the insurance environment. The good news is we are already well down that road to bring vehicle centric data to insurance providers at pricing, renewal, MTA and claim.