John Lucker, Principal at Deloitte Consulting LLP – Global Advanced Analytics Market Leader, spoke with Insurance Business and backed a revolutionary idea – which he called a 'driving résumé' – which could shake up the entire industry.
“There are things that I think can be done with telematics data, for example, that would actually be very positive for consumers and actually would provide certain aggregators of telematics data with a real value proposition,” Lucker said.
“One of the things that I’m intrigued by is at what point in time will consumers generate enough telematics data, through various mechanisms, that they can actually purchase or generate a ‘driving résumé’, for lack of a better term, that they can then use to market themselves to insurers.
“So it’s almost like a reverse auction. Here’s my driving résumé, it portrays me as a responsible and safe driver. And I’m looking to buy insurance. Who wants to sell it to me?”
Lucker noted that it won’t just be personal lines that face a challenge thanks to the rise of telematics, as commercial lines will also be affected by the increased use of technology and brokers can play a key role.
“On the commercial side, I think monitoring the behaviour of fleets and the movement of fleets could be a very valuable thing for an insurance company,” Lucker said.
“From the broker perspective, I think if a broker could arrange the relationship with the fleet owner to install telematics capabilities in their vehicles, the broker could actually facilitate that ‘driving résumé.’
“That could be very valuable for that broker to be able to get great product and service and price to the fleet owner, and that fleet owner could potentially have that résumé as well.”
With one major US insurer looking to sell-off the data it has collected on consumers using telematics, Lucker stressed that as long as certain parameters are met, consumers may not care about their data.
“A lot of the surveys show that the public doesn’t necessarily care, as long as a couple of things happen.
“Number one is that their privacy is maintained, and also that the consumer believes that they’re getting value for what they’re giving up. When things become lob-sided from a value perspective, that’s when I think things really get sticky. So when a person actually recognises that they might be paying more for something, and then their data or their behaviours are being sold to the value of the insurer, that’s when things get improper.”
Noting the differences between a dongle-based telematics system and a mobile app, Lucker said that one has a distinct advantage over the other when it comes to data.
“So with a dongle, you know where the car went and when the car went there, but you don’t have the view of the ‘who’ of the problem. But with a smartphone, you actually know the ‘when,’ the ‘where’ and the ‘who’ because, in general, people are very guarded…you don’t typically let somebody else take your phone with them.
“Phones have evolved into being like somebody’s wallet. You never leave home without it.
“So companies that have moved towards gathering telematics data through mobile apps, I think, are going to be the long-term winners here.”
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