Motor Insurance Companies have been battling low profitability for more than a decade now.
Telematics should be looked at as a strategic initiative that can expand into new markets, provide better services, and create more optimized insurance products. You can virtually use the telematics data for delivering value in any direction of the value-chain, with a comprehensive platform like Kruzr.
E&Y data shows that over 88% of all new cars produced in 2025 will carry a pre-installed telematics system.
Insurance companies that extensively focus on customer experience have an 80% higher chance of retaining a customer.
According to the DXC Insurance Survey 2020, over 87% of consumers were ready to share their personal data for more affordable insurance rates. While this can help consumers get more tailor-made insurance solutions, it can also promote safe driving at the individual level.
What android did to the smartphone business, telematics, and data analytics are doing to the insurance business.
Instead of being in the same market, populated by companies with deeper pockets and existing market share, competing for the same consumer mind-share, you can segment the market into innovative categories with more relevant and accessible products for the consumers.
Most insurers that did not have a healthy margin or reserve allocation system would find it exceedingly difficult to continue in the business without having to increase the price and losing market share almost every year.
Solving the underwriting losses problem will require several systemic changes from the auto insurance industry. However, taking up technological innovation is still in the hands of the auto insurance company. So, essentially, profitable underwriting is still in your control.
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