23 Apr / Author: SK Tirumala

Think Rewards Not Discounts

Fear and money are significant motivators to influence behavioral change and works better than simply advise and education. This is particularly applicable for auto insurers who are trying to encourage their insured to drive more responsibly. Analysts who regularly survey the market report that nearly 20% of US insurers are already offering telematics solutions to promote safe driving in exchange for premium discounts. While these early adopters need to further optimize their programs to drive greater adoption and profitable growth, what about the other 80%?

While telematics-based auto insurance is picking up steam, many insurers are still on the sidelines in a “wait and watch” mode. In my own interactions, I found that these insurers are quick to assume that a telematics program means a hit to their topline revenue with no real assurance of positive impact to loss ratio. They believe in the theory but are unwilling to move forward until there is more proof from the market, a well-tested UBI product, more attractive pricing factors, and better ways to prevent gaming of the system. They also fear losing loyal customers due to the negative perception of “big brother watching”.

Their reasons do make sense, but I believe that the trick to successfully lowering risks and staying profitable using telematics lies in having a good end-to-end strategy and roadmap that balances the current opportunity with innovative ideas, adequate preparedness, and a well-orchestrated roadmap that delivers desired outcomes. Moreover, maintaining the status quo could eventually hurt the books when good drivers gravitate towards insurers offering more tailored products and pricing, leaving behind only risky drivers with higher claims exposure. Insurers who wait will then be compelled to take counter measures such as raising premiums to protect margins, causing further erosion of the book.

Insurers should not rush towards UBI if they are not ready, but should at least consider providing cost-effective safe driving tools based on telematics as a free value-added service to their current policyholders without sacrificing any premium. Just as for good health, exercise and eating healthy are necessary, and much easier to achieve with tracking tools to monitor progress. Telematics would provide factual insights into how safely one drives and unsafe habits they ought to change. To further show that their insurer cares about their safety, creative opt-in “cash back” schemes using gamification and safe-driving contests would drive their adoption of safety tools. Best of all, the driving behavior data derived from the insured participating in these opt-in programs, would be an invaluable asset when the business is ready to compete in the UBI market more aggressively. I would call that a win-win-win game plan.

Harold Leitner

VP, Business Development

With over 25 years of technology sales, business development, and account management experience Harold leads Xemplar’s business development team. He has successfully driven business growth for early stage technology providers across a range of industries including e-commerce, finance, IOT, connected fleet technology and telematics. Harold holds an MBA from Northern Illinois University and a degree in International Business from Illinois State University.

SriKrishna “SK” Tirumala

CEO & Co-Founder

Over the last 24+ years, SK has been at the forefront of delivering technology solutions in Property & Casualty. For the last few years, he has been spearheading the development of risk management solutions at Xemplar Insights, LLC. As the head of the business, SK passionately leads R&D and product engineering teams to advance the Xemplar product portfolio. He is continuously associated with customers, prospects and industry partners in solving their chronic business issues with cutting-edge technology.

Xemplar Solutions Suite

XEMPLAR AUTO is a comprehensive mobile, cloud, and web solution that enables personal auto insurers to close gaps in their digital capabilities. Designed to support loss containment strategies using state-of-the-art smartphone telematics, it can also include policy self-service capabilities to drive adoption and lower servicing costs. Insurers get a powerful analytics portal to analyze where, when, and how risk occurs in their book of business. Granular data can be used develop new rating variables for Usage Based Insurance (UBI).

Personal and Commercial P&C policyholders value the ease-of-doing business with their insurers over mobile and web channels. They are attracted to insurers with better digital capabilities for convenience and better service. Insurers understand that building relationships and creating loyalty with policyholders is key to their on-going profitability and success. The Xemplar Engage solution enables insurers to rapidly innovate and advance their digital transformation strategy with self-service features on mobile and web channels, resulting in significant competitive advantages with improved customer experience.

Xemplar Drive – Business was designed as a non-white-labeled option for Commercial Auto Insurers that believe that the policyholders will be apprehensive about using a data gathering solution provided by their insurance carrier. Xemplar Drive – Business would be referred by the insurer to the Commercial Auto policyholders (small businesses to large fleet owners) as a solution for risk prevention and loss control.
Xemplar Drive – Business is also available as a white-labeled off-the-shelf B2C subscription-based solution (SaaS or private) sold directly to Large Corporates, Commercial Businesses, and other Institutions that operate a fleet of vehicles, as a self-administered risk management solution.

Xemplar Drive – Business is a branded off-the-shelf, B2C subscription-based solution sold through distribution channels such as driving schools or not-for-profit organizations to individuals and/or parents of teens as means to analyze driving habits of themselves, or young drivers as they gain driving experience and develop good driving habits.

Xemplar Stack’s suite of licensable and adaptable software feature frameworks, platform architectures, design patterns, and data model assets helps businesses save development time and costs and jumpstart the creation of tailored software solutions for unique business cases.

About Xemplar Insights

Our journey began in early 2015 while experimenting with smartphone technology to analyze motion patterns that led us to develop an innovative and economical smartphone telematics solution for loss containment. We then extended our capabilities to include numerous new features including policy and claim services, and developed turn-key solutions for Personal and Commercial P&C Insurers. Today, Xemplar is an established digital solutions company that offers both pre-configured and tailor-made solutions to insurers and commercial businesses, with many companies using our products and services to drive their digital transformation.