Insurers in the UK are "unable to fully appreciate the benefits of telematics" compared to decision-makers in the EU, according to a new survey.
More than nine in ten (95%) insurance chiefs can see clear benefits of using telematics and the data science that powers it – although UK insurers are falling behind their European counterparts in fully appreciating the impact that telematics can have beyond risk modelling and potentially reducing car insurance premiums.
The Floow surveyed insurance decision makers in the UK, mainland Europe and the US, asking them how they thought telematics could help the motor insurance industry in the years ahead.
In the UK, decision makers had a clear, if narrow, sense on how telematics could help. Compared to European decision makers, UK respondents were most likely to focus on improving risk modelling for high risk drivers (44% compared to 38% of decision makers in mainland Europe) and reducing insurance premiums for drivers (40% versus 34%).
Decision makers in mainland Europe were far more likely to identify a broader range of benefits that telematics could bring to the industry. Factors mentioned here included:
- providing the data science that makes car sharing/ ride sharing a scalable reality (43% Vs. 20% in the UK);
- improving the insurance industry's understanding of mobility (38% Vs. 20% in the UK);
- managing traffic congestion (34% Vs. 18%).
As a result, European insurance decision makers were more likely than their UK counterparts to see the difference that the adoption of telematics could make on improving road safety in general (47% compared to 20%).
Moreover, The Floow’s research suggests that compared to the UK, European respondents were far more likely to identify a variety of benefits in harnessing telematics beyond lowering premiums and risk modelling.
David James, chief operating officer at The Floow said: “Our findings reveal differences in how insurers around the world quantify the value of telematics. Whilst those in mainland Europe are leaving no stone unturned, it appears that decision makers in the UK insurance industry are yet to look beyond the impact on insurance premiums.
Telematics will make roads safer and, used properly by insurers, telematics will become key to helping them retain customers and build loyalty. The impact telematics can have on lowering insurance premiums for high risk drivers is just the beginning of the telematics story.”
The research was conducted by YouGov for The Floow among 280 Board Directors and Department heads from insurance companies based in the UK, USA and from mainland Europe – France, Italy and Sweden.