What are the Core Activities and Focus Areas to Consider for a Successful Telematics Insurance Implementation?
There is no doubt that insurers evaluating telematics insurance technology generally recognize that launching a telematics insurance program which has also been referred to as a usage based insurance (UBI) program is a massive undertaking.
To gain a clear understanding of telematics insurance and to implement a successful program, insurers face a labyrinth of choices and must make informed decisions to align company resources and ensure company-wide buy-in to the technology proposition. Over a series of stages that extend from planning to deployment and beyond, those tasked with the program launch bear the responsibility for achieving key objectives and making certain that the completed program meets expectations.
We defined some best practices that can help you distinguish a successful telematics insurance implementation from one that struggles — or even fails completely. The core activities and focus areas can vary among different TSPs, but they should generally follow:
Project Start: A TSP or deployment specialist outlines the telematics insurance program, presenting a balanced view of the state of the market, benefits, and risks, and supporting technology. A roadmap details the steps for implementing the program and expectations are set for project milestones and resource requirements. By the end of your project kickoff, staff members of the insurer should have a solid understanding of telematics insurance principles and the path to follow for a successful implementation.
Plan: Next, the program goals, key performance indicators, and project team members are identified. Topics for consideration include communication with the customer, customer experience, marketing, sales, training, and operational considerations. During the planning cycle, the vision for the program is clearly defined and the functional areas have been described.
Design and Build: The product design and associated business processes are mapped out at this time, including integration with the organization’s infrastructure, mitigation of risks, the working team framework, details of the web presence, and type of marketing tactics to be decided. All key decisions on design, customization and business processes should be completed and the working team should have a clear direction in which to proceed. Then, the actual work of building the solution takes place. A sandbox portal is created for testing, and filings to the appropriate insurance regulatory agency should be submitted. At the completion of these activities, programming should be complete and operational tests should be underway.
Pilot: A pilot launch is completed, leading to the completion of a production-ready portal. All aspects of the program portal and business workflow should be tested and evaluated for operational readiness and reliability. Once the pilot testing is completed, formal approval should be granted for publicly launching the telematics insurance program.
Program Launch: A formal launch is initiated and follow-up support for program administration and management is begun. Plans for on-going support and product development should be established at this point. The selling of telematics insurance policies begins and internal support teams guide and oversee the ongoing effort.
What Prime Considerations and Guidelines Should be Followed to Improve the Opportunities for Success?
During the course of launching any telematics insurance program, you will be working very closely with a TSP and, in some cases, you may also be working with partners of the TSP. Your working relationship with these partners is a factor critical to success. Discuss any problems, concerns, or unresolved issues with them promptly and evaluate progress against the project plan on a frequent basis. Keep in mind that introducing a successful telematics program is more than a one-time transaction, and an ongoing relationship with an experienced TSP will strengthen the program offering and ensure that you will be able to take advantage of the latest advances in the industry as soon as they are introduced.
The following subsections outline those areas that should be prime considerations when implementing a telematics insurance program.
Developing an Effective Business Case
Without a strong business case underlying your telematics insurance strategy, you will be on a weak footing as you move toward implementation. To clarify the issues surrounding the business case, review the perspective on the strategic and financial considerations offered in “Building a Business Case for UBI / Telematics Insurance,” a free white paper available for download.
The following summarizes the key ideas for developing an effective business case:
Align with Corporate Objectives
Start by realistically assessing the potential revenues to be gained and cost savings from insurance telematics in relation to overall company objectives. Among the goals of which it may be worthwhile to focus on are:
- Market position: Can telematics help raise the market standing of your company?
- Segment position: What rank is achievable in a particular segment of the business?
- Channel position: Can telematics help achieve dominance of a specific insurance delivery channel (direct, agent, or broker)?
- Discipline strength: In what discipline could telematics help achieve recognition (for example, actuarial expertise, digital communications, technological excellence, or another area)?
- Consumer perception: Do you want to highlight price offerings, superior customer service, personalized features, or top-notch support?