Out-Law News 2 min. read

Tech giants could benefit from rising popularity of telematics in car insurance industry, says survey

Major technology companies could gain a foothold in the insurance markets, according to a new survey commissioned by Accenture.

The survey, of 6,135 life, car or home insurance policy owners in 11 countries, found that 23% of respondents would consider buying insurance from online service providers such as Google and Amazon. Banks might attract up to 43% of insurance customers, according to the consultancy group's survey.

A fifth of respondents said they would consider buying cover from telecoms companies, home security businesses or other "home service providers", whilst 14% and 12% of respondents respectively would consider buying insurance products from retailers or car dealers, Accenture said.

The survey also showed a general appetite for "mobile insurance services" and a willingness of customers to select businesses other than traditional insurance companies as their insurance provider.

Accenture's study revealed that 35% of insurance customers would be willing to provide businesses with access to data about the way they behave if it meant they could get "better value for their insurance coverage" in return. Almost half of the respondents (47%) said their willingness to provide others with access to their data would be dependent on the type of information they would be giving access to.

"The mobile channel offers insurers the opportunity to take customer experience to the next level, enabling them to become partners of their customers’ everyday life by tailoring offers and interactions to the physical context, as location-based services can be highly relevant in insurance," Michael Lyman of Accenture said. 

"For example, travel insurance-suggested offers can be sent to customers’ mobile phones when landing in an airport abroad, or a claim can be submitted from an accident scene with supporting photos. Also, as consumers become more open to providing access to their personal data, adoption of usage-based insurance enabled by telematics technology will accelerate," he predicted.

'Telematics' is a term most commonly associated with the motor insurance industry. Insurance companies are increasingly recording information via devices in cars that allows them to set insurance premiums that reflect the driving style of motorists. The recorded data is often referred to as telematics data.

Accenture said that telematics technology helped to personalise car insurance cover and said that this can help enhance the loyalty customers have towards their insurer.

The survey also found that nearly half of all insurance customers (48%) would consider comments left on social media before deciding to buy insurance.

"Only those insurers with the digital capabilities and flexible operating model to adapt effectively to the changing demands of customers will be able to attract the large number of customers who are set to leave their less farsighted providers," Lyman said. "Visionary insurers must also be prepared to conceptualise their business more broadly, building online communities and offering non-insurance services ... and be willing to create ecosystems of partners who together can provide the total, personalised and convenient experience today’s customers expect."

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