How telematics is a game-changer for claims

Telematics, which allows insurance companies to measure client driving behaviour, has largely been used by carriers in the underwriting process, but it may prove to be equally as useful for claims, says one telematics provider.

Claims telematics can be used to detect crashes in real-time, a step up from how the current claims process is automated, says Cornelius Young, vice president of product, crash and claims at Cambridge Mobile Telematics.  

Telematics was first used in the Canadian auto insurance market in 2013, but it wasn’t until 2018 that U.S. and Canadian insurers realized the data could also be useful for claims, Young observes. “Over the last five years or so, there’s really been a focus on leveraging telematics data in the claims process, and there’s a couple of key ways that we do this.”  

The Number 1 way is by detecting crashes in real-time. “The fact that we’re able to detect crashes means that we’re speeding up the process,” Young says.

The current claims process can be lengthy and involved, says Young. “This allows us to know about [the crash] sooner, and then with our machine-learning algorithm, make the decisions that are being made today, [only sooner].” 

The big difference between the current claims process and claims telematics is the ability to know there was a crash and collect facts about the claim sooner, he says. While many carriers have total loss models, Young notes they’re not being run until FNOL or a few days later. “We use those same total loss models, and we run them 60 seconds after the crash.” 

Claims telematics can also be leveraged for a proactive claims experience.  

“If we detect the crash, we reach out to the customer, they engage with us and say, ‘Yes, I was in the crash.’ ‘Yes, I need an ambulance,’ or ‘Yes, I need an ambulance and a tow truck,’ and then we leverage that to be proactive, reach out to them, and have them file a digital claim,” Young says. 

“A lot of the claims expense that carriers have is really this manual processing of claims,” he says, such as handling phone calls, asking questions and typing the answers into claims platforms.  

“With all the data that we have…we can prefill that claim with many of the data elements that, if you called into a carrier, you would have to answer manually.” 

While the pandemic has seen many drivers opting into usage-based insurance (UBI) and take advantage of its pay-as-you-drive benefits, Young sees claims telematics increasing in popularity for insurers.  

When carriers started their UBI programs, many encouraged policyholders to download standalone UBI apps.  

“These carriers are spending a lot of money to get somebody to download a separate app,” says Young. “What we’re seeing now is, many of the carriers are like, ‘Wait a second, we have core apps. Why are we paying to have them download this other app? Let’s have them download our app.’”  

“This year will be the start of crash and claims available for non-UBI [policyholders] and then that’ll accelerate next year and the year after,” he says. “You’re going to start to see much, much greater levels of telematics penetration in carriers as a result of this. It’s going to be [25]% to 50% at that point.”  

Feature image by iStock.com/ipopba