How can insurance-based apps disrupt and benefit the industry?
In the complex world of insurance, apps provide a simple and cost-effective solution for consumers and the industry alike, and this is certainly true for telematics.
Over the last few months, the motor market has continued to harden, with the latest AA Shoparound index showing a 16.3% rise in motor premiums for the year to October 2016. During those 12 months, the measures introduced in successive Budgets have seen Insurance Premium Tax (IPT) increase from 6% to 10%, yet these have proved to be false summits.
Following the latest Autumn Statement, IPT is set to rise to 12% from June 2017, bringing with it a further upsurge in motor premiums. With prices expected to increase in 2017 for the third year in a row, the AA predicts next June’s rise alone will add around £10 a year to the average car insurance premium.
All of this means that telematics is now proving a very attractive proposition. Having been around since the mid-1990s, telematics is certainly not new to the motor industry, and the introduction
of smartphone apps, such as SSP’s SoteriaDrive, has taken this mainstream.
In addition to the reduced cost of ownership with app solutions, the added value telematics provides is well-proven. Drivers under 25 will be particularly affected by the latest IPT rise, with an average increase of £35 on their premiums. It is hardly surprising then that Consumer Intelligence research found the proportion of the five cheapest quotes for this age group that came from telematics providers has leapt 16 percentage points to 55% in the last three years.
Yet the benefits of telematics go beyond achieving a price that reflects an individual’s true driving behaviour. The data provided has already been used to prove that a motorist was speeding during a fatal hit-and-run incident, a claim he initially denied. Conversely, telemetry enabled the driver of a cloned car to prove his vehicle was nowhere near the scene of an alleged speeding offence involving the clone.
And therein lies the key to success with a telematics solution: making it relevant to the audience.
SSP’s SoteriaDrive is the first app-led integrated telematics solution to be sold via high street brokers. The potential market of over 1,000 SS P brokers can obtain a quotation via their existing
SSP system from the panel of SoteriaDrive insurers, giving consumers a wider choice for their motor cover.
First published on bobsguide.
About the author
Adrian joined SSP in 2005 and has over 20 years’ experience in the market across broking, distribution, business development and technology. After 15 years in the broking industry, ten of which were with A-Plan, Adrian has spent the last 11 years at SSP. As Customer and Marketing Managing Director, he is part of the executive team, and his expertise in data and innovation ensure SSP's customers are at the leading edge of advancements in the insurance industry. Adrian has been instrumental in developing SSP's real-time pricing and telematics strategies and shaping its data strategy across all territories.Follow on Twitter More content by Adrian Coupland