Insurance Edge wanted to get the latest on telematics and how this technology is not only migrating from black boxes to smartphones, but also appealing to older drivers, not just the under 25s. We chatted with Paul Stacy, founder of Wunelli and now Head of Global Business Development at IMS, to learn more.
IE; What brought you to IMS?
PS; My role at IMS is really the culmination of all I’ve learned since founding Wunelli, and then working at LexisNexis after the buy-out. I’ve always believed that telematics can go way beyond the traditional black box niche, because ultimately it is about data on journeys, no matter what kind of device gathers that information.
If you think back to when Wunelli started, say 2007, that was when the first smartphones came out, and now you can generate so much driver data from smartphone apps. Plus, I could see that OEM car makers were keener on using the in-car driver data for marketing their own services, rather than setting up new insurance policies. I am also an investor in IMS, as well as a Global Business Development person, so I truly do have an investment in the future.
IE; Smartphone technology has changed everything in telematics hasn’t it?
PS; Very much so, but that reduction in cost which has made the smartphone affordable as a mass market device is also affecting black boxes. IMS has a gadget called the Wedge, which is like a dongle and really low cost, we are talking under $10. So as an industry, we are getting to a point where the cost of gathering driver data is getting extremely low.
That means insurers can basically offer this sort of gadget as a standard component within a policy. It will become routine soon, you won’t even think about it.
IE; The key trend in say fleet telematics has been driver scores, which mean rewards for the smoothest drivers in the fleet. Is that the same for the private car market, do we need to offer rewards for data shared to make this go mass market?
PS; Rewards are a big part of it, but by that I don’t necessarily mean cheaper premiums.
For example, lots of policyholders want their point of view in an accident to be backed up by hard data, so that blame can be established very quickly, and then the business of sorting out the claim can proceed. That reassurance is a kind of reward
for the end user, and if only 0-15% of the total UK car market takes that view, then you have a mass market.
In the end, the other 85% will see that they are paying slightly more for the same cover, and more of them will migrate to using a Wedge or similar gadget.
The back-up when an incident happens is really important. It’s a stressful thing, even a low speed bump, so people will value that emergency response. What we have right now is people ringing their RAC or AA breakdown operator when an incident happens, but they aren’t gathering data as regards a claim. So what we need to do is use technology to encourage people to call their insurer first, check the data was gathered and then let the insurer triage the claim from there. The potential savings in time for everyone involved are huge.
IE; That is a trend that ThingCo noticed a few years back; older drivers value the emergency response in a minor shunt, knowing someone will call them.
PS; Exactly, knowing something happened and you calling the policyholder before they phone you, is a reversal of how things are right now and a big step forwards. Before you call the customer you know the vehicle, the ADAS systems on that model, the approximate value, plus the typical repair costs – all these things help triage that claim in the golden hour, the first hour after the incident.
IE; The global supply chain problems, plus increasing tech also means that a simple 25mph bump can be expensive too?
PS; If you check out the costs on a modern hybrid, a new bumper, packed with LiDAR, cameras, sensors etc. plus all the calibration required to sign off that car as safe when the job is done, could add up to over five grand. Knowing that data before you call helps you understand the likely consequences of a low speed impact.
IE; Do you think smartphone apps will eventually replace all black boxes?
PS; There is a place for a hard-wired device in the market, probably for young drivers, or with-convictions segments. But the other thing worth noting here is that smartphones are involved in one in three accidents now. Maybe not calls, but some sort of use or distraction. There is that balance between the usefulness of smartphone apps vs the distraction that driver apps can offer.
Italian insurer Sara Assicurazione found that half of all female driver accidents involved smartphone usage of some sort, or a distraction such as a social media alert. So, there is something to be said for a compact device like the Wedge which can be fitted in the lighter/USB socket and offers no distractions.
IE; Interesting insights Paul, thanks for your time.