Most insurance executives recognize that the value of telematics-driven claims is significant, but they don’t really know how exactly. To provide a more concrete example of how telematics reduces auto insurance claims costs for even a simple, single-vehicle collision, we’ve assembled a case study:
The traditional insurance claims process
A police officer arrives on the scene and determines that a tow is required, but not emergency services. The officer takes the driver’s statement. The officer calls their preferred towing provider who moves the vehicle to their storage yard. Your policyholder goes home and calls in the claim. You arrange for the policyholder to rent a car for work the next day. An adjuster is dispatched to the storage yard three days later where they review the vehicle and get quotes for repair. An offer is made to your policyholder who accepts, has the vehicle towed to a repair shop, and fixed. Overall your policyholder is without their car and uses a rental car for five days.
The telematics-driven claims process
Octo detects the accident, notifies you, and sends a push notification to the driver for verification of the accident. Octo also sends a push notification to designated family members. Via communication with the policyholder you determine that a tow is required, but not emergency services. You dispatch a tow truck from your preferred provider with negotiated lower rates. A push notification is initiated to verify the accident, collect crash scene and vehicle photos, and collect the policyholder’s statement. With the policyholder’s permission, the vehicle is towed directly to a preferred auto body shop for adjusting and repair. The preferred repair shop performs the repair at a pre-negotiated lower rate than local competitors and charges you less for adjustment due to your ongoing relationship. Overall, your policyholder is without their car and uses a rental car for three days.
Optimizing Claims Organizations’ Financial Results Through Telematics explores why the traditional method for optimizing claims outcomes is no longer sufficient, explains how telematics creates opportunities for sustainable improvements in claims costs, and details the financial impact of telematics on an insurers’ combined ratio.By using telematics, you can save over $700 (over 20%) on a very simple claim through proactive claim handling, faster cycle times, and the use of preferred providers. More complex claims offer even greater opportunities through bodily injury severity modeling, fraud prevention, and improved subrogation packages.