What is happening?
On 28 May 2021, the Financial Conduct Authority in the UK issued a policy statement for insurers and insurance distributors defining the rules to manage the relations with the policyholders, starting 1 January 2022. Notably the new rules include a long list of factors that must be considered by the firm when measuring value for money, including the “type and quality of services provided to customers” and more.
OCTO perspective
Shifting the approach to needs-based individual pricing is somewhat more challenging but technology, data and advanced analytics combined can help insurers navigate to a new world where customization and profiling help consumers to get the product relevant for their needs, something that can increase touchpoints due to digital interactions will define a new customer journey.
Telematics is the game changer in this new playground: granular data combined with advanced analytics can help ensure the individual risk profile is understood and priced accordingly. Value-add services such as crash response, driving advice and risk avoidance tools can support the push toward a product-based future.
The advantage of telematics use can be seen when looking at future-proofing business activity; telematics-based insurance cover can provide an opportunity to manage short-term losses and mitigate long-term risk. As a result, smart telematics are becoming increasingly attractive. What may once have been seen as a ‘nice to have’ is fast becoming a necessity.
Putting in place a telematics-based model can aid in protecting against loss and premium increases and also helps empower policyholders to take a much greater stake in their own cover by encouraging responsibility and positive consumer behaviour. This could then deliver further savings on premiums in the long run.
By making the switch to telematics-based insurance cover, insurance providers will not only be able to provide much more attractive new business rates to their customer base in the light of the FCA announcement but will also be able to empower customers with new value-added services that will ensure more loyal customers.
OCTO Telematics helps clients harvest the vast insight available from driving data to help insurers price more accurately and help the shift towards true risk-based pricing. At the same time our solutions allow insurers to develop innovative products that help shift the focus toward a compelling and seamless customer journey for their customers competition on product features rather than simply on price.
OCTO can support insurers in developing new propositions such as “pay-per-mile” and “pay-how you drive” enabling tailored pricing that accurately reflects the specific risk profile of an individual driver. Our extensive experience in this area means we can help insurers get moving quickly and with a minimum of effort to respond quickly to new regulatory approach.
OCTO offering is constantly shaped by what the company has called Vision Zero – zero crashes, zero traffic, zero pollution; the company’s data-based solutions can be a great asset in improving the drivers’ behaviour and in optimizing the use of the vehicle in a greener and cost-saving manner. OCTO’s Vision Zero adds to the need of addressing the sustainability issue and helps companies belonging to the mobility ecosystem contribute to reaching some of the UN Sustainable Development Goals.”
OCTO Telematics
Founded in 2002, OCTO is a leading provider of telematic services and advanced data analytics for the Insurance sector, and increasingly one of the leading companies offering solutions for Fleet Telematics and Smart Mobility. With OCTO’s unique propositions already established in the field of Insurtech and Smart Mobility, OCTO continues to expand in new sectors and international markets. In the context of an increasingly connected world, OCTO’s advanced analytics and it’s set of IoT Big Data, generates actionable analytics giving life to a new era of Smart Telematics. For more information, visit octotelematics.com