Insurtech Trendsetters: How Octo Integrated with Guidewire is Empowering Insurers to Offer Personalized Insurance

70% of U.S. auto insurers will be using telematics UBI by the end of 2020.*

Telematics UBI (usage-based insurance) tracks driving behavior through devices installed in a vehicle or through smart phones. The devices transmit data to the insurer in real time.  The data is most often used to help insurers determine insurance premiums.  Historically, auto insurance premiums have been based on specific risk proxies such as age, vehicle type, garage location, and crash history, rather than actual driving behavior.  Telematics provides insurers with the ability to break free from the past and provide personalized and fair pricing for drivers based on their unique driving behavior.  Guidewire integrated with telematics providers, like our solution partner OCTO, empowers insurers to more easily offer and manage personalized insurance.

Who?

Founded in 2002, OCTO (octotelematics.com) is a leading provider of telematic services and advanced data analytics for the insurance sector, and increasingly one of the leading companies offering solutions for Fleet Telematics and Smart Mobility. Today it has over 6 million connected users and the largest database of vehicle telematics data in the world, with over 280 billion miles of driving data collected and 480,000 claims and insurance events analysed. It also manages over 400,000 vehicle rentals per month.

What is the value proposition? 

Octo collects contextual driver and vehicle data and applies proprietary algorithms to provide insight to the insurer to help provide more personalized premium calculations.  Octo works with smartphone apps, aftermarket devices and connected cars.

CAA Insurance leveraged OCTO with Guidewire PolicyCenter and BillingCenter to deliver Canada’s first “pay-as-you-drive” insurance offering, CAA MyPace™.  Drivers enroll in CAA MyPace and pay their base rate plus their first 1,000 kilometers. They also install the CAA MyPace device in their car and download the MyPace app onto their phone.  CAA automatically reloads kilometers.  Watch this video for more information on CAA MyPace.

MyPace, powered by Guidewire and OCTO, exceeded CAA’s expectations of success!  They realized a 30% increase in auto policy sales and 71% of sales were to brand new customers.  Stay tuned for my InsurTalk podcast with the President of CAA on the launch of their UBI offering. 

When an insurer integrates an OCTO telematics-based program into PolicyCenter, each vehicle associated with that program on the policy is linked with OCTO through a unique identifier called the Voucher ID.  This enables OCTO to manage all of the various functions for each vehicle and enables administrators and CSRs to fully administer telematics-based programs natively right alongside traditional offerings.  Octo to track each vehicle separately. 

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OCTO can also be used on the claims side to detect a crash and support proactive FNOL (think automatically triggered and prefilled FNOL in ClaimCenter) as well as accident scene emergency services triage, reporting, reconstruction, and damage evaluation.

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What is the opportunity?

In our current work from home environment where policyholders aren’t commuting to work or regularly using their vehicles, UBI auto policies are in demand due to their cost-effective approach of only charging consumers for the miles they drive.  UBI is not just for millennials.  The most prevalent consumers of MyPace were retirees and families with 3 or more vehicles.

Telematics UBI offers more benefits than just personalized pricing.  From an insurer’s perspective, benefits include:

  • Improved risk selection - “good” drivers tend to opt for telematics.
  • Increased customer engagement and safety.
  • More sophisticated claims and fraud management.

And from a consumer’s perspective, UBI policies provide , gamified incentives, as well as useful driving feedback.

Want more detail?

Watch CAA’s Guidewire Innovation award video for more insight into their MyPace initiative. 

*https://www.statista.com/statistics/814347/telematics-ubi-use-among-car-...

Blog tags: #insurtech #innovation #guidewire

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