Insurance Telematics USA 2013“Winning through Differentiation”September 4, 2013

Why differentiate?

• All telematics programs starting to look alike

• Consumers can’t tell the difference

• Growth is only possible by doing something different– Differentiation– Segmentation

Ideas for differentiation

• Vary the audience• Think of past, present

and future• Work towards your

business goals• Lots of details

Differentiation options• Creating an offering

– Simple• Distance• Location• Seasonality and rare usage

– Complex• Behavioral

– Psychographic– Demographics– Coaching

• Contextual knowledge– Weather, traffic

Program progression

• Give yourself the best start possible– Meet your business goals– Prepare yourself for

increased competition– Ensure your solution

can leverage the future of telematics

Be goal oriented

• Use telematics to surpass your goals– Pricing models– Customer relationships– Driver education and coaching– Increasing risk tolerances– Market penetration

Program details

• Involve as many parts of your organization as possible

• Don’t forget your agents, brokers, member services, etc…

Segmentation• Personal lines

– Broad base– Young drivers– Mature drivers– Non standard

• Commercial/Professional Lines– “Behaviormatics™”

Young drivers programs

• Value for insurance carriers– Risky segment

• Value for parents– Peace of mind

• Value for teens– Safety and independence

Mature drivers programs

• Value for insurance carriers– Risky segment

• Value for guardians– Peace of mind

• Value for elderly – Safety and independence

Fleet program

• Value to the carrier– Method to enhance business

• Value to the fleet owner & manager– Better understanding of drivers– Immediate cost savings

• Value to the driver– Education & coaching

Multiple segments

• An insurance carrier can target multiple segments with same platform– e.g., Young Drivers

+ Usage-Based Insurance

Premium services

Source: Telematics Update Survey 2012

• Value added services help overcome key barriers to UBI growth– Consumer adoption– Business model

Main Barriers to UBI Program Growth

Making the economics work

Customer adoption

Management support

Understanding the data

43%

30%

15%

12%

Consumer Adoption

• Augment the value of the telematics proposition

• Start with pricing• Go beyond pricing

– Connected car services– Rewards & recognition

Business Model• Premium services can reduce

the insurance carriers costs– Policyholders will pay for value

in their connected vehicles– Third parties will pay to lease

part of the OBD-II port

• Telematics-Enhanced Roadside Assistance

• Vehicle Health Monitoring & Reporting

• Automatic Crash Notification

• Voice Powered In-Car Infotainment

• Connected Car services are going mainstream

Value of Premium Services

Think beyond data

• Leverage Connected Car technology as CRM Tool

• Increase revenue potential and reduce program costs

• Control high risk behavior– i.e. Texting & Driving

• Make adoption of UBI easier

On-going differentiation

• Differentiation is not a single step, it is achieved in an ongoing process

• Continuous innovation– Data acquisition– Analytics– Connectivity– UBI within the connected

vehicle ecosystem

Differentiating Elements:A Driver-Centric Perspective

Smart Data Acquisition

Context-Relevant Representation

Advanced Analysis and Visualization

Advanced Traveler-Centric Feedback Loops

Smart Data Acquisition:Relevant In-Vehicle Enablers

For Diverse Needs

Data Quality and Context-Relevant Representation

Extracting Value with Advanced Analysis and Visualization

Extracting Value with Advanced Analysis and Visualization

Frontal impact

Algorithms to Understand Driving and Driver Behavior

• Moving beyond harsh braking and acceleration• … Toward understanding driver intent

Data, Intelligence, and Feedback• Data management

– Density– Diversity– Frequency– Quality– Longevity– Latency– Privacy– …

• Data transformation– Insights– Intelligence– Decisions– Actions– …

Coffee taste wheel

Summary • Business objectives, goals, strategies and measures

will drive the selection of insurance telematics• Differentiation is the key to success

– Stand out from the crowd– Provide advantages over the competitors– Develop a roadmap of innovation

Conclusion

• The IMS DriveSync platform provides for all this differentiation

• www.intellimec.com/ITUSA for Presentation and Collateral resources