It’s been a while since IE caught up with ThingCo CEO Mike Brockman, in fact it was pre-pandemic. In those days, lots of people still used cars for commuting to work, but WFH has changed all that for millions of Brits. Then there’s the loyalty discount ruling from the FCA to think about.
What else is new? Let’s find out.
IE; What have the last couple of years been like Mike?
MB; It’s been tough in some ways, but good in others. On the upside ThingCo has been signing up brokers which is excellent, but having never worked with brokers before it’s been a learning curve for us. Modern telematics is about improving the FNOL process, or verifying customer ID, far more than it is about tracking speeding incidents. The old days of the black box have gone so we have spent time educating brokers about the value that ThingCo offers.
You have to convince brokers that they can get a better panel deal by utilising tech like ThingCo, which they can. Ultimately both insurer and broker stand to benefit because the technology allows you to understand much more about driver behaviour – the real stuff – not what someone is filling in online in a comparison site.
IE; Is there still too much emphasis on selling car insurance on price, not value?
MB; Definitely. Aggregators sell purely on price, so where is the money coming from when the loyalty discount is applied? You don’t know anything about the consumer beyond what they’re telling you at point of quote. I can see new business premiums going up substantially soon because that’s the only way you can then offer a discount next year.
But the thing about renewals is that you have to price them on data, loads more data, because that way you are sifting the good drivers from the reckless ones, the owners who service their cars rather than just hope for the best and so on. As cars become more connected and people gradually understand that they can get a better value insurance deal by sharing their data, the market will evolve.
IE; Is part of the reason telematics has never really gone mainstream because the industry doesn’t sell that `sharing’ benefit?
MB; Yeah partly. You know I did a talk for the CII recently and some people say telematics hasn’t worked that well, hasn’t delivered on its promise from nearly two decades ago. But I’d say the industry is poor at using the data and in some regards, in-car telematics isn’t big enough for insurers to grasp its potential.
The reality is that data can identify the 15% or so of drivers who keep speeding, having accidents or are involved in some other rule-breaking activity. But you need the big picture, to separate the 85% of generally good drivers from the rest . Data sharing also helps you understand who is doing what in their vehicle. It goes way beyond a comparison site form-filling exercise. You can see who is doing say weekend food delivery by location, routes, hours of use for example. The value of telematics is that richness of data, the way you can join the dots on someone’s habits or lifestyle – it actually goes way beyond car insurance as you begin to see extra risks.
IE; ThingCo has forged partnerships in the last year or so, with Co-op/Markerstudy, Insenture and Provincewide to name a few, what have you learned from those deals and the what are the wider benefits of partnerships in general?
MB; Overall, I’d say that expectations about the technology itself can be unrealistic. It’s like when Elon Musk built the first Space X rocket and it blew up, everyone said `oh he’s no idea what he’s doing,’ but every technological jump forward has to start with testing ideas and some failures on the way. Telematics has evolved from the old black box hard-wired into the car, but it’s still evolving now.
If you look at Tesla you see a car brand that built its own insurance product built around the driver data, plus the vehicle’s updates. That level of connectivity for the cars of the future means you’ll only really understand risk by building up a detailed view of the data.
Another plus point has been helping those who market insurance on commission that cancelling cover doesn’t just mean losing commission. In the end you’re protecting the insurer by sifting out the high risk drivers and that builds a partnership between broker/MGA and insurer long term.
IE; Does the true value of telematics lie in that golden hour of FNOL?
MB; Great deal of it, yeah. We are finding older drivers really value the idea that if an accident is detected a human voice is going to speak to them asking if everything is OK, do they need breakdown cover?
In general, the conversations that happen immediately after an incident, plus the snapshot of data taken from the device can help start the claims process down the right road much faster than any phone calls the next day, online forms, smartphone photos and emails.
I recently had to make my first ever insurance claim and it isn’t an easy process. Even basic stuff like finding the right phone number to call is buried deep in company websites and after 4 weeks I’m still waiting for a courtesy car. It’s not a good experience and insurance brands have to do better on the customer claims experience by utilising technology.
IE; As brands use telematics more, they’re actually building a long-term database of incidents, which AI can use to identify parts/repair costs, local hire cars available and much more, so future claims can progress faster?
MB; Exactly, you’re giving each claim a role in determining an overall risk factor, not just an individual driver. Thing is, the way telematics has been sold – as a free gadget for younger drivers – isn’t the right approach. In reality it should be about the value it offers to the customer in getting a claim settled much, much faster. Getting paid out, or your car fixed quicker, has a value to many people – we should be selling that benefit.
One big problem is that although the FCA have changed the rules fundamentally in the market, the comparison sites haven’t changed a bit. Same questions, same results based on price. Why?
Surely it’s time to offer people bespoke, customised cover based on their lifestyle and needs, not just price? So we have an problem in that we have an outdated shop window, which has all the cheap stuff at the front and very little of value on display. I mean no retailer would put the cheapest stuff in their window, they showcase the best products, the luxury stuff first. That’s the future; sell the best cover for you, based on your lifestyle.
IE; Interesting insights Mike, thanks for your time.