Claire Alleaume explains why every auto insurer should be a little concerned
Claire Alleaume, the Head of Market Strategy and Business Development at IMS , joined Coverager to discuss telematics – here and there (overseas), leveraging driving data throughout the sales and claims process and of course, Tesla Insurance.
– Describe your background before you joined IMS.
I’ve worked in telematics and connected insurance for over 10 years. I first joined telematics specialist Quartix in the UK, where I helped establish the business in France and the US and managed the global marketing operation pre- and post-IPO. I then headed up the European marketing function at insurer Assurant, working on great projects from smart home insurance to travel protection programs with leading MNOs, banks, insurers, and tech businesses. Looking further back, I actually started my career selling titanium in the aerospace industry when I first moved to the UK from my native France, but that’s another story!
– What do you currently do at IMS?
I initially joined IMS (Trak Global at the time) as Head of Marketing but moved into a more strategic role 3 years ago and now head up market strategy. It’s a varied role working globally on market and commercial strategy, leading on research and insights and analyst relations, as well as supporting our corporate development efforts. Having moved to North America from Europe earlier this year, I am also helping business development across the US and Canada. Finally, I enjoy working with our clients and prospects on proposition development to ensure they run and deploy successful programs in the market.
– How can/do carriers work with IMS?
In short, IMS fuels UBI and telematics-based programs across both personal and commercial auto lines. We use driving and vehicle data from multiple sources and help build, launch and run successful behavioral-based and mileage-based programs, as well as provide specialized solutions for rewards and engagement, automated impact detection, and connected claims.
Uniquely, we ran our own digital insurance company in the UK, Carrot , for nearly a decade. Our Group has recently completed the process of selling Carrot to Granite, and IMS will continue being a key strategic partner moving forward. It’s a win-win for the market and we are really excited to continue developing our special relationship. In Carrot we’ve experimented, tested and collected a huge amount of data, helping us create products built to fuel truly successful telematics programs. From pioneering the use of rewards for behavioral change to honing onboarding UX and using telematics data throughout the claims process, it’s been invaluable to do it ourselves in the real world. We’ve made all the mistakes so our partners don’t have to! And this privileged access to claims data has enabled us to develop driver scoring which is highly predictive of risk, and ultimately, of claims.
Beyond our learnings from Carrot, we pride ourselves on our flexibility, adaptability, and configurability. We work very closely with our customers and are able to bring a lot more added value than just technology – a lot of our leadership team are insurance people, so we speak our customers’ language. Since IMS is data source-agnostic – with live deployments in the market leveraging all types of data including from mobiles, beacons, OBD dongles, and connected cars – we can not only build the right proposition for each program but also truly evolve with our customers as the technological landscape changes. We apply that configurability into all our solutions too, such as our app development framework One App which enables us to build dynamic apps that offer every policyholder a personalized experience.
– American telematics doesn’t have a good track record; given that IMS is a global company how would you go about explaining the differences and nuances between telematics programs in Europe and the US?
The market is certainly very different between the US, UK, Italy, and elsewhere, and there are a lot of learnings to be shared. The initial growth factors for the development of insurance telematics in those territories were different, which means the market evolved at a different pace and focused on different capabilities and outcomes. In the UK, for example, it grew in response to an unsustainable situation around new and young driver premiums – the market was underperforming for insurers, and premiums were unaffordable for policyholders. The introduction of telematics into that young driver market unblocked the bottleneck, and significantly contributed to reduced accident rates within that segment. In Italy, the focus was more on fighting fraud, stolen vehicle recovery, and resolving claims. In the US, some telematics programs have been very successful for new business acquisitions, but the use of telematics data throughout the value chain has been lighter, with a lot of programs based around a trial period. However, we are definitely seeing growth in continuous programs, which is where a lot of the benefits can be reached, both from an insurer and a policyholder’s perspective – for in-life risk management, engagement, claims, mileage, and ultimately improving loss ratio.
– We’re seeing interest in smartphone-based, usage-based insurance. What contributes to a successful launch?
We’ve been running smartphone-based programs for years, and are one of the early pioneers in this space – actually patenting the use of a mobile phone to collect driving data about a vehicle in an insurance telematics proposition, even before the first iPhone was released! It’s been really exciting to develop those technological capabilities to get to where we are today.
The choice of sensor for a program should really be based on what you are trying to achieve, balancing out a number of elements including the type of data you want to collect, the reliability of that data, the policyholder experience, the types of vehicles, and drivers, the level of premium, etc. There isn’t a one size fits all approach, and some clear differences in capabilities, which is why we continue to leverage multiple sensor types. But naturally, the use of a smartphone, either on its own or paired with a beacon, has grown rapidly, which is tremendously exciting and notably because the lower price point means UBI can be introduced to mass-market segments, geographical markets where premiums are low, etc. Historically the price of the technology has meant it’s been prohibitive for certain segments or countries, but that is no longer the case.
There are some specific considerations when designing a smartphone-based proposition, particularly if using without a beacon. Data collection is dependent on reliable, continued access to phone functions such as GPS, so a robust ongoing monitoring process of those functions and in-life user engagement is crucial. There are also some limitations around reliable detection and collection of detailed claims data if using a smartphone only. So while a smartphone-only approach can absolutely be the right solution, it’s important to understand the parameters and ensure it can fulfill the program goals.
Smartphone-based UBI leveraging an IoT device such as our patented Wedge device is really exciting because it solves a lot of those challenges while retaining all the benefits of the smartphone. The Wedge is discreet, self-powered, extremely easy to set up via a one-off pairing process, and enables advanced impact detection and claims data, as well as very high fidelity and reliability of driving data. And, crucially, at an extremely competitive price point.
Plenty of considerations therefore for carriers… Regardless of the technology used, the most successful programs tend to be the ones focused on reducing claims through pro-active (but automated!) risk management, while delivering a great policyholder experience.
– We don’t talk enough about the complexities of starting a usage-based insurance program; what are the roadblocks to a successful launch?
I completely agree that this is often overlooked. The proposition design is crucial for the success of the program, but also the launch itself. There are a number of elements that are essential to a successful launch, but here are three I’d highlight from experience. Firstly, a big consideration will of course be the distribution model, as requirements for a good launch will dramatically differ between a program sold on a price comparison website versus one sold via agents, for example… Ensuring the launch and marketing campaigns are integrated across all the different stakeholders is therefore critical. Secondly, ensuring every audience – whether an agent or broker, or policyholder – fully understands the product is surprisingly often underestimated. Driving adoption can’t happen if the product, and its benefits, aren’t easy to grasp! Finally, we’ve certainly seen programs in markets launched as pilots but not reach their potential due to a lack of cross-functional backing within their organization. While it makes sense to do a controlled pilot in certain situations, it is likely to fail if the focus is too siloed.
At IMS we often support insurers with the launch process, notably through our Labs team which is made up of marketers, designers, strategists, and UX professionals specialized in connected insurance. We provide additional services such as marketing support, conversion rate optimization, launch planning, the production of onboarding videos, agent training materials, and much more.
– We’re seeing car markers partner directly with insurance companies (e.g. Volvo and Liberty) and/or partner with data aggregators. What are the advantages or disadvantages of working with OEMs?
This is a really exciting area. There are so many advantages to using in-built vehicle sensors, and we are very eager to be able to use more and more OEM data in the future. We are already leading in this space, partnering directly with many major OEMs and ingesting their connected data into our Vehicle Data Exchange platform for live deployments in the market. Unfortunately, there are still a lot of challenges for insurance use cases, however, notably around the availability of data that’s good enough for accurate driver behavior scoring and claims, and price. But some use cases can leverage OEM data today, and we collaborate closely with OEMs to help shape their strategies and capabilities in this space.
Collecting data from different OEMs demands a complex effort in terms of cleansing, processing, and normalizing. Carriers need a solution that works across multiple OEMs and that enables the data to be leveraged in a simple way. That’s where a player like IMS, or an aggregator like Otonomo, comes in. One of the advantages of how IMS leverages the data is that we can provide vehicle-specific, real-time data, which is needed for UBI use cases – vs anonymous and/or aggregated data. Our experience with complex consent management is a real asset here.
I certainly think insurers should be actively monitoring the developments in this space, and, where it makes sense, starting pilots leveraging OEM data or developing partnerships with individual OEMs. Starting to play in this space and learning from it now will be crucial to insurers’ success in the long term.
– What do you tell the auto insurance carrier that’s concerned with Tesla Insurance?
I think every auto carrier should be a little concerned! It’s healthy to be kept on your toes. With the amount of data that Teslas collect, it makes sense for them to offer tailored insurance. It is still early days, and Tesla is encountering challenges already, notably in offering competitive pricing. But they will of course develop their capabilities.
Certainly, carriers that are not leveraging driving data for personalized pricing and experiences should be concerned, as they will be left behind. The best way to alleviate the threat is to also offer great products that deliver value to the policyholder and enable competitive pricing. Carriers have exceptional assets and expertise which they can leverage – with the right data and partners they can absolutely challenge the likes of Tesla Insurance.
– Do you see a future where there will be more carriers tapping into connected car data than smartphone-based telematics?
Great question! Based on our experience today, I wouldn’t foresee this happening within the next 5 years notably due to car parc connectivity, OEM production cycles, data costs, and challenges associated with consumer consent management at OEM level. But it is certainly possible, and an exciting prospect. I think in reality we’ll continue to see a mix of data sources being used to serve different use cases in different territories, and that both connected car data and smartphone-based data will work alongside each other for a long time to come.
Ultimately, however, how the data is collected is not the most crucial element. The most important thing is what’s done with that data once collected. The key is to drive value from the data for the carrier, policyholder, fleet, and of course society as a whole by improving road safety. Reducing accidents is the core premise of insurance telematics, and we should never lose sight of that goal!