“It’s high time Asia adopts telematics,” says expert

“It’s high time Asia adopts telematics,” says expert

“It’s high time Asia adopts telematics,” says expert
The adoption in Asia of usage-based motor insurance policies, which calculate premiums based on data collected by a device installed on the vehicle, may be less than in Western markets such as the UK and the US, but one expert thinks this is changing soon.
 
Pravar Gautam, vice president of sales at Scope Technologies, an international provider of telematics solutions that has been in the market for 18 years, said that telematics is slowly but surely changing the face of auto insurance, not just globally but also locally too.
 
Initially concentrated on fleet vehicle solutions, Scope Technologies shifted focus nine years ago to the telematics insurance market.

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Convincing insurers to adapt
“Some of the challenges that insurance companies have been facing can be answered by utilizing the technology,” Gautam told Insurance Business.
 
“We’ve seen in a number of countries that telematics helps improve loss ratios and customer retention rates, and assists with the claims management process. Telematics is starting to play a key role in the motor insurance market,” he added.
 
Among Asian markets, Singapore has been the one in which telematics has seen lots of traction. Several insurers are offering telematics policies on the market, giving consumers more choices. Scope Technologies was also involved in rolling out a telematics program for Thailand’s Bangkok insurance in 2015.
 
The key question in most insurers’ minds is how they can implement a telematics product correctly, shared Gautam. As such, he stressed that support from the technology provider is vital. 
 
In order to increase uptake, Scope Technologies offers end-to-end solutions for insurance carriers looking to implement telematics technology. Client engagement, gamification, and loyalty platform services are also offered, allowing insurance companies to further push their digital strategy.
 
Brokers’ concerns
On the other hand, brokers may have some reservations about telematics-based auto insurance, as this allows insurers to go direct to the customers because the device allows them to have a touchpoint with the consumer on an ongoing basis.
 
Gautam said that this is not necessarily the case. With Bangkok Insurance, for example, it was able to integrate brokers, who were its main distribution channel, into their telematics sales model, managing to satisfy the entire value chain.
 
“Insurance companies need to create an ecosystem which everybody must be part of,” he said. “Instead of leaving one particular chain behind completely, it’s better for them to have everyone taken along with them with the use of telematics and technology in general.”
 
The world is already warming up to telematics, with close to 12 million usage-based insurance policies worldwide. In the US, there are close to 2.8 million drivers using the technology, carried by large insurers such as Progressive. Meanwhile, there is also keen interest in the UK, with close to 750,000 such policies.

“I think it’s high time that the Asian insurance community takes steps to build and nurture the use of technology,” Gautam said.


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