If you’re not convinced about the value of telematics in the auto insurance space, you might be swayed after reading what Phil Ost, head of personal lines at Zurich Insurance Company, had to say during a virtual fireside chat at Connected Claims USA 2020.
Ost, who is responsible for running Zurich’s UK personal lines business across all distribution channels, gave three auto claim examples where telematics technology has really proven its worth and resulted in significant savings, not only for Zurich but also for Zurich’s policyholders.
The first claim involved a driver who was backing out of a parking spot when he collided with another vehicle that had four occupants in it. A claim was made against the driver (a Zurich policyholder), in which all four occupants were complaining of neck injuries caused by whiplash.
“We had a look at the data – and here’s the beauty of telematics. Our policyholder had a black box in their car, and the data soon told the story that the car was moving at less than one mile per hour when the collision occurred. [The impact] was registered at 0.6g, which I’m told is the same as shutting a car door. So basically, there was no way those four occupants could have had those injuries,” said Ost.
Via its partnership with Carrot - a UK-based, award-winning, telematics insurance business – the Zurich claims team put together a technical statement of the collision, which is a full summary report containing telematics data that can be given to the police and to solicitors to explain clearly what happened – in this case, suggesting the accident and claim were staged. When Zurich submitted the report to a third-party solicitor, they found that the claim had been dropped. Through the use of telematics, they achieved savings of around £10,000 to £15,000, and managed to prevent insurance fraud.
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“We also use telematics in low-speed impact collisions, basically trying to sort out disputes of liability,” said Ost. “One of our policyholders was at a T-junction and was looking to pull out onto the road, when, unfortunately, a motorcycle came from the other direction and there was an accident [in which] the motorcyclist suffered a bad leg injury.
“Without telematics data, you might assume it was our policyholder that caused the accident. However, on reconstructing the data and looking at the angle of the car – the deflection and the impact force – we could work out the speed of the motorcycle, and that motorcycle was going way beyond the speed limit. So, being able to reconstruct the collision and use the telematics data, we managed to reduce most of the liability of our policyholder and save a lot of money. Also, our customer could have been in trouble in terms of getting points against his license and maybe even a driving ban, but having telematics data to prove [he wasn’t at fault] meant that he didn’t get any fine or ban, and he was very pleased with the outcome.”
The third example Ost gave revolved around vehicle theft. While telematics technology cannot prevent theft, it can play a key role in vehicle recovery – once again leading to significant cost savings. As Ost explained: “If you’ve got a telematics box, or an app, or data to show you where the [stolen] car is, then it helps you to locate it. We had a policyholder who had his car stolen at work, he gave us a call, we managed to trace the vehicle, and then the police took over and recovered it.
“The amusing thing was, when we saw the data out of the box, we have a scoring mechanism of -10 (poor driving) to +10 (perfect driving), and the journey from when the car was stolen by the thief to when the thief parked it at their home scored a perfect 10. That’s pretty unusual. Our policyholders drive pretty well, but a perfect 10 is incredible. Even thieves can drive impeccably as well.”