Connected Car Data Benefits Auto Insurance Lifecycle

Data derived from connected cars on the road today can improve auto insurance from both the insurer and insured perspective, according to Dawn Mortimer, AVP – IoT/Telematics Product Management at Verisk Insurance Solutions.

The data collected by connected cars can benefit the underwriting, actuarial and claims departments, while insureds benefit from more accurate rates and personalized services.

While the data collected is varied, said Mortimer, it details driver behavior such as evidence of harsh braking, time stamps significant events and GPS coordinates of event locations.

“Information that can help an insurer understand what is happening in the vehicle as that customer is driving it,” she said.

In addition, insurers can use the data to understand vehicle equipment and functionality that enables safer driving. More importantly, said Mortimer, insurers can determine if drivers are enabling vehicle safety features.

“Understanding what is happening in that vehicle gives greater insights to the insurer as to how to appropriately price and underwrite that policy,” she said.

Pricing based on information discerned from motor vehicle reports is a challenge because it only identifies the events where a driver was caught,” she explained. Whereas connected vehicle data offers the insurer the opportunity to evaluate driving on a day to day basis, she added.

This gives insurers the ability to understand who the best drivers are even before the business is written.

As cars become more connected, there is less need for dongles and mobile applications, making it easier for the customer. Mortimer said the passive collection of data by connected vehicles means customers don’t have to do anything.

By offering coaching and driver feedback, insurers become a trusted adviser, something they want to have with their customers, she said.