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IMS Panel Discussion Insurance Telematics USA September 5, 2012
IMS Inc. Proprietary and Confidential
UBI 2.0: Taking it to the next level
Purpose
• This presents IMS
thoughts on how to
accelerate the success
of usage-based insurance
in UBI 2.0
2
UBI is evolving rapidly
• UBI 1.0 – Value for insurance
companies
– Linked to pricing
– Related only to auto insurance eco-system
– Technology plugged into OBDII
– Focus on cost
– Communications only on back-end
• UBI 2.0 – Value for insurance firms,
consumers & partners
– Linked to pricing & CRM
– Related to connected cars
– Technology becomes distributed – plugged-in, brought-in, built-in & beamed-in
– Focus on profitability
– In-vehicle communications starting
Telematics Update Survey
Barriers to growth
Making the economics work
Customer adoption
Management support
Understanding the data
43%
30%
15%
13%
Source: Survey of 400 Telematics Update contacts
Intel
Analytics
Analytics Data
Devices & Deployment
Business Foundation (Business Model and Adoption)
Value Chain – IMS Model
UBI Business Models
Intel
Analytics
Analytics Data
Devices & Deployment
Business Foundation (Business Model and Adoption
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Premium $ Distribution
Net Margin
(4%)
Taxes (2%)
Op Expenses
(24%)
Claims (70%)
Insurance Telematics Business Case
Reduce Claims
Increase Value of Premiums
Increase # of Policyholders
USA Today Poll
Telematics TCO - Trends
Operating Expenses
(Monthly)
• Wireless Transport
• Data Collection & Storage
• Device Management
• Analytics & Visualization
• Customer Care
• Telematics as a Service
• Lease
• BYOD
Alternate Models
• In 2013: $75 is in sight
Dedicated OBUs
Intel
Analytics
Analytics Data
Devices & Deployment
Business Foundation
(Business Model and Adoption)
UBI Best Practices
Adoption: Largely Driven To Date By Discounts. Is It The Right Way?
13%
39%
47%
0% 20% 40% 60% 80%
Would Participate For 10% Discount
Would Participate For Between 11-20% Discount
Want At Least 20% Discount to Participate
2011: What Discount Would It Take To Participate?
• Is a discount the most compelling reason to adopt?
• What happens when the incentives don’t lead to user adoption?
• What might these programs look like tomorrow?
Strategize. Choose Wisely. Treat Kindly.
Watch Your Relationships Grow.
Adoption as a KPI is key, but don’t forget about retention! Find new, compelling reasons to attract users.
Balance VAS offerings where appropriate to leverage the desires of your “best risk” drivers.
Encourage telematics as the only long term alternative. Be the right influence on tomorrow’s market.
Intel
Analytics
Analytics Data
Devices & Deployment
Business Foundation (Business Model and Adoption)
Devices & Deployment
UBI 1.0 Deployment
• Early eco-system driven largely by
– Auto insurance companies
– Wireless carriers
– Analytics companies
– Telematics service providers
UBI 2.0 Eco-system – The Evolution of Driver Intelligence Managed Services Integrated & Scalable Meaningful Data Personalized Experience
Premium Services / VAS
Auto vehicle locator (AVL) Roadside assistance Vehicle diagnostics Traffic alerts / routing Road charging Green reports Stolen vehicle recovery
Communication Protocols / Wireless Carrier GSM CDMA WCDMA Wi-Fi BT RFID
Data Visualization
Web or mobile based solutions Customized / Branded B2B / B2C portals Driving reports, coaching tips, scoring,
account and vehicle management
Business Intelligence
Data Analytics Non-actuarial Scoring Driver identification Behaviormatics
System & Data Management
Secure data warehousing System monitoring and scalability Data exports and analysis Administrative reports
Logistics & Fulfillment Solutions 3PL vendor selection Forward/Reverse logistics SIM provisioning Inventory management Personalization Enrolment models
Application
UBI Young driver Mature driver Fleet Road charging
Device Selection and Configuration
Location tracking: GPS or non-GPS Port: OBD or Cigarette Voltage: 12V or 24V Accelerometer options Data collection and transmission intervals OTA upgradeability Antenna selection Multi-network device Panic button Feedback channels: web, mobile, email,
SMS, 2-way radio, etc
Vehicle Supportability
OBD-2 or non OBD-2 support Gas , diesel, hybrid, and electric support Cars, vans, trucks, heavy duty Device agnostic TSPs
Systems Integration
Integration with enterprise systems Automation with exception handling Process engineering Single sign-on
Program Mgmt & Support
Training Adoption Support Retention
UBI 2.0 vs. 1.0 Devices
• More powerful
• More versatile – All vehicle types
– More ports
– Able to add value added services
• More connected – GSM/CDMA
– Bluetooth/RFID/Wi-Fi
• More reasonably priced
UBI 3.0 Connected Car Eco-system
Content Providers =
Enhanced VAS
Automotive OEMs (Built-In devices, etc)
Superior Innovation from Device Mfrs
More Robust Scoring – Data Analytics Partners
Seamless Integration
Sophisticated Mobile Applications
UBI 3.0 Connected Car
Policyholder Personalization
Data, Analytics & Intelligence
Intel
Analytics
Analytics Data
Device & Deployment
Business Foundation
(Business Model and Adoption)
Transforming Data Into Intelligence
Smart Data Acquisition
Context-Relevant Representation
Intelligent Analysis and Visualization
Advanced Traveler-Centric Feedback Loops
Smart Data Acquisition for Insurance Companies
• Extract Maximum Value From Data – Data is fundamental for understanding
– High quality data drives accurate insights
• Right Data, Right Time? – Variable frequency data collection
– Metadata & parameters describing • Precision
• Accuracy
• Relevance
Context-Relevant Representation
• Advanced Context-Relevant Algorithms – Aggressive acceleration
– Hard deceleration
– Rapid cornering
• Relevant Non-GPS Context – Distance and timing between intersections
– Identification of right turns, left turns, and roundabouts
– Aggressive maneuvers, etc.
• Relevant GPS Context – Weather
– Road Type
– Regions of interest …
Intelligent Analysis and Visualization
• Secure Transfers – Real-time, Event-Driven, On-Demand
– Optimal Compression
– Bidirectional Communication
• Distributed Intelligence – Low Latency Interaction
– Accessible Warehouses
High Precision Driving & Driver Info
Share Intelligence With Policyholders
• Non-actuarial scoring presents a new way to assess risk
• Also can start a Customer Relationship Mgt. program to bring users into the conversation
• Empower drivers with scoring, coaching & tips
• Employ PC and mobile portals
Employ Device For Uses Beyond UBI
Summary: UBI Is Evolving Rapidly
• UBI 1.0 – Value for insurance
companies only
– Linked to pricing
– Related only to auto insurance eco-system
– Technology is plugged into OBDII
– Focus on cost
– Communications only on back-end
• UBI 2.0 – Value for insurance
companies, consumers
& sub-lease to partners
– Linked to pricing & CRM
– Related to connected cars
– Technology becomes distributed – plugged-in, brought-in & built-in
– Focus on profitability
– In-vehicle communications starting
UBI 1.0 Eco-system Is Relatively Simple
• Based mainly on
– Auto insurance companies
– Wireless carriers
– Analytics partners
– Telematics service providers
UBI 2.0 Eco-system Is Attracting New Players
• Automotive
– OEMs
– Dealers
– Service providers
• Software platforms
• Device manufacturers
• Software players
• Content providers
• Others
UBI 2.0 Is Disruptive
• UBI 2.0 disrupts the auto insurance Industry
– Price model
– CRM models
• UBI 2.0 will disrupt the automotive industry by being the first mass market to connect cars
For more information on how you can benefit from IMS’ UBI 2.0
programs please call Blair Currie at +1 519 745 8887 or email