Telematics provider says growth in the technology will continue as consumers drive it into the mainstream
Octo Telematics has broken the 2.5 million connected vehicles barrier as telematics continues to grow in popularity.
Octo chief marketing officer Jonathan Hewett said that while Italy still provided most of the company’s customers, the UK was experiencing some of the fastest growth in policy numbers.
“We have in excess of 2.5 million vehicles that are out in the world today connected for insurance telematics purposes,” he said. “The pace of growth is very rapid. We are finding that, while the cradle of our company is in Italy, the fastest growth we are seeing is in the UK and US markets.”
And Hewett said that this increase in popularity was partly driven by insurers recognising the benefits telematics brought beyond more accurate pricing.
“Insurers are very comfortable with the idea that telematics can help them rate policies more accurately, but increasingly they are starting to really see the benefits of proactive FNOL [First Notification of Loss] and claims management services,” he said. “Those areas are now making some quite significant improvements in loss ratios and financial performance.
“The realisation now is that the advantages telematics can give you when assessing a claim are very substantial in terms of savings you can make by knowing, at a forensic level of detail, where liability sits and what the cost of repair is likely to be, as well as the likelihood of whiplash or soft-tissue injuries.”
Despite this, Hewett said that consumers would be the driving force that would take telematics out of the niche sectors into a broader market.
“Consumers will drive telematics into the mainstream,” he said. “There’s a huge global phenomenon around the quantified self, self-tracking and wearable devices. Consumers are starting to understand the information they can collect on themselves for themselves allows them to trade that for a better deal or improved service.”
He also believes that telematics policies can help build brand loyalty for the insurers that use it right.
“For too long the thinking around motor insurance acquisition and retention has been dominated by the single instrument of price,” he said. “What we have now is the ability through the digital channel to build significantly greater brand equity and loyalty by providing information to the customer in a simple, easy and engaging way.
“[Insurers can also] provide access to some of the services that car insurance should be providing, such as safety, security and assistance features. They can all be contained in the smartphone app [provided with the telematics policy].”
He added: “Digitally enabled loyalty and growing brand equity are currently the unrealised benefits that telematics can really begin to enable.”