Insurers recognize the importance of discounts to penetrate the American and Canadian markets. But this requires the combination of product features.
Something seriously required in favor of automobile insurance policy holders in the United States of America and Canada. UBI adoption is progressing at a breakneck pace in North America according to figures released by BI Research. Market watchers are closely watching the growth of auto insurance and the factors that can pose challenges to the auto insurance industry. The figures represent a pink image. The growth of telematics-based auto insurance rose from 4.1% in 2015 to 6% in 2016 in North America. Growth is set at 19.2% in 2019. What is the role of telematics expertise in expanding the market? Can discounts increase the subscriber base? Is there a trap? Let us explore.
Insurers are constantly looking for cost-effective ways to do business with telematics. But convincing the insured seems to be their challenge. The know-how of yesterday has passed with new and sophisticated knowledge developing on the ICT front. Data collection and customer engagement are the keys to success in the cable world today. Aspiring policyholders can be convinced by insurers with advanced technologies such as: driving data capture, direct marketing channel, roadside assistance (NSD partner), geographic analysis and gamification to avoid quote only a few. Generation Y and Generation Z are tech savvy demographics for the telematics market.
Technical specifications are for risk mitigation and discounts are for cost reduction. If the two factors are combined, market penetration is easier. At this point, an expert takes a balanced position. Donald Light, director of Celent, a research and consulting firm, believes that a combination of discounts and surcharges can offer a bright future for telematics in Canada. He shared his point of view at 'Insurance Telematics Canada 2016' in Toronto. We all know that supplements are extra bonuses against risky behavior. And Light suggests this to change the driver's perception of his driving.
What perception does light want to change? People pay a price for a product or service based on their perception of quality. The same theory applies to one's perception of driving. If one thinks that he is a "better driver" and not an average driver, which he really is, encouraging them to implement a mobile telematics application to benefit from discounts will become a demanding task. Because his self-esteem is a way to improve his driving behavior and to accept the driving score as the ultimate criterion for improving his driving. It is at this stage that only education is needed to change perceptions.
The very purpose of the UBI is to reward drivers who behave well on criteria such as speed, acceleration, telephone use, etc. A large part of the population is mobile and it makes sense for them to implement a mobile telematics application on their mobile devices to mitigate accidents. as a reader score gain to benefit from the policy premium discounts Education is needed to change driver misconceptions in order to accept UBI as fair and to understand what standard driving behavior is.
Education should be expanded to ensure cybersecurity, since mobile telematics applications are also prone to cyber attacks. This should be seen in the context where 60% of cars and trucks will be connected to the net by 2017. This means that personalized telematics services should also solve the cybersecurity problem to gain market acceptance.
Switching to telematics is a good option; it is also promising for the insurance sector, which wishes to extend its reach. State-of-the-art technical features, discounts for driving scorecards and supplements for erroneous driving behavior can increase the acceptability of mobile telematics, thereby attracting new mobile subscribers. If these problems are resolved, entering the auto insurance market will become easy.