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Are you ready for the next big thing in motor?

 

Are you ready for the next big thing in motor?

 

 

Telematics could transform motor insurance, and brokers who already have a foot in the market could cash in 

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At a recent meeting of the All Party Parliamentary Group on Insurance and Financial Services, there was much discussion of the benefits of telematics-based insurance. Mike Brockman, CEO of Insurethebox, told those in attendance: “Telematics completely changes the face of motor insurance.”

 

He predicted that in five years, telematics would be a major part of the insurance industry and, indeed, recent activity in that area of the market would suggest that telematics are very much on the up.

 

Among the companies to launch telematics products in the past couple of months are the AA, with Drivesave, and Equity, with Redtrack. These are by no means isolated occurrences – telematics are back on the agenda following Aviva’s attempt to enter the market in 2005, which ultimately failed.

 

And so it follows naturally that the question of how brokers are to deal with this shift in the landscape arises too.

 

Can brokers really sell telematics? There are those who feel that such products lend themselves more readily to the direct market but there are brokers in the UK who are already heavily involved in the telematics business.

 

Nigel Lombard, managing director at Motaquote, acknowledged that the company was in a good position for that very reason, and said that other brokers stand to do very well out of the current increase in interest.

 

I think brokers are in a very good place to act on a customer’s behalf, he said, explaining: We are probably in a more trusted position with the customer, which makes it easier to rebroke.

 

At renewal we can take the behavioural information the black box gathers from our customers and show them other insurers who might provide a better deal for them.

 

Changing up

 

It may not be an easy transition for brokers to make however there is a lot to be learned when it comes to any new technology.

 

Mr Lombard said: It needs to be explained thoroughly and it’s really important for brokers to understand that.

 

Initially, the hardest thing was to make sure our customers fully understood. They have a lot of questions. How does it work? Will it affect my car? How are you going to use my information?”

 

There is more to explain to the customers and brokers in turn need more information from those customers.

 

You have to ask different questions, and a few more questions. For instance, you now have to ask them ‘What type of roads do you drive on?’ and ask about when they do most of their driving, and establish how late they drive.”

 

Author: Caitlin Morrison 

Source: Insurance Age | 01 Mar 2012

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