Motor underwriters will be avalanched with data as telematics takes off. When sifting through it all, where should underwriters look for insight into the ethical issues thrown up by this controversial technology? Here are four metrics that an underwriter should consider including:
Education – are you getting your message across?
Metric: the number of telematics policyholders who are choosing not to renew on a telematics basis.
This can indicate concerns about privacy and fairness.
Engagement – are policyholders taking an interest in how they’re driving?
Metric: the percentage of telematics policyholders who check into their online dashboards at least once a week.
Insurers have to encourage policyholders to engage with their driving behaviours, in order to deliver on the technology’s promise to improve road safety.
Impact – is your approach to telematics actually improving drivers’ behaviour?
Metric: the trend of the portfolio’s overall telematics score.
Customers’ overall experience of telematics will determine if the technology’s promise to improve road safety is being delivered
Cancellations – are you handling difficult cases fairly?
Metric: the number of telematics policyholders whose policies are cancelled or not renewed by the insurer.
How insurers treat poor performing policyholders, especially those with no accident record, will set the tone for policyholders’ trust of telematics.
Of the four metrics, the one that worries policyholders the most is cancellation. They fear having their telematics policy cancelled due to a speeding incident. Insurers could transform this attitude by taking concrete steps on a united front to reassure policyholders on how such situations will be handled.