Telematics software advantages for insurance providers from

View source

Insurance companies that implement telematics usually benefit from the following:

Underwriting profit increase. Insurers improve their profitability by accurately assessing risk and pricing their products accordingly. As their plans become more diversely priced for low- and high-risk drivers, insurance companies avoid turning away low-risk clients who find the flat rate unfair. This way, insurers expand their client base and collect more revenue. They are also better prepared to cover potential claim costs as they avoid undercharging the high-risk drivers and plan their budget with more precision.

Increased customer engagement and satisfaction due to dynamic discount models. Policyholders appreciate the chance to pay less while receiving the same coverage. This results in increased customer loyalty and reduced churn.

New insurance product development. Insurers can split policyholders into groups based on their driving habits (e.g., new drivers or senior citizens) and design tailored insurance products that address the unique risk profiles of each segment.

Fraudulent claim detection based on driving patterns’ analysis. For example, a sudden increase in hard braking followed by a claim submission might be associated with a staged accident or an exaggerated claim.

More effective risk management strategies and overall claims cost reduction. Insurance providers can identify high-risk policyholders and engage them in risk mitigation initiatives, lowering the possibility of costly claims. The mitigation measures can include additional education for drivers, vehicle maintenance reminders or surcharges for dangerous driving – all geared towards influencing more cautious driver behavior.

Click here to read full article