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Tesla’s Roadmap for Insurance: Australian insurers don’t be caught in the slow lane!

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3 November, 2021

Brad Shields,

Industry Director – Insurance and Government,

 Decision Inc. Australia

Would you be prepared to offer your car insurance policy holders a discount if you had access to data about their driving behaviour?

The conversation with your policy holders would be as follows:

Would you pay less for your car insurance if it was based on your driving behavior?

Right now, in Australia, insurance is based on a series of generic measures that try to predict your client’s risk. These measures include:

  • How often do they drive
  • Where they park at night
  • Age and gender
  • Whether they have had insurance refused or cancelled
  • Whether they have had an accident in the past
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Enter Elon Musk and Tesla.

Tesla’s are different in many ways and one is that the driver can choose to share driving data with Tesla. Musk is developing a system that Tesla calls “Full Self Driving (FSD)” which aims to eventually allow the car to travel from the start to the end of a journey without need the driver’s input. The system has been beta tested by a small number of drivers in the US for quite some time.

The next phase of the Beta is opening testing to more people, and here is where the data sharing comes in. Tesla is going to open the Beta to drivers that achieve a “Perfect Driving Score” over two weeks. It will determine that score based upon the follow five factors:

  1. Forward Collison Warnings
  2. Hard Braking
  3. Aggressive Turning
  4. Unsafe Following
  5. Autopilot Disengagements

At the Tesla Annual Meeting last week, Musk indicated that this same method would be the basis used to price risk into Tesla insurance. He also indicated the premiums would be 20-30% cheaper.

So here is the question. Would drivers be willing to trade driving data for a 20-30% reduction in insurance premiums?

So how does this apply to Australia? Clearly insurers in Australia might not have the access to data like Tesla. The Tesla message is that innovation is fundamental to growth.

 

Here are four areas where insurers in Australia can innovate:

1.  Better data gathering for new and existing clients

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Ask more of your clients when they first purchase and when they renew. Automate that process but concentrate on the user experience.

How often do they drive each week?
On average, how many people are in the car?
When was the last service?

When you ask, make it easy for the client to enter details. As an example, use address mapping to fill in the address accurately and with the minimum number of keystrokes.

2. Automate manual processes

 

Automate processes to turn repetitive, labour-intensive tasks into streamlined processes that don’t require human intervention, freeing staff for more customer-centric activities while increasing speed and accuracy.

Making it easy for clients to interact with you. A well developed app that allows clients to ask questions and get automated answers, submit a claim and renew policies will increase satisfaction and reduce costs.

3. Improve the claim capture process

 

Allow claimants to capture the correct information and images to speed up the claim process. Simplify the claims process using workflow allocation, automated communications, and follow up. Wouldn’t it be nice to develop a marketing campaign that says something like the following; “95% of our claims are approved within 5 minutes”, I know I would consider changing to a company that could do that!

 

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4. Develop better more insightful supplier quoting operations

 

Make it easy for your suppliers to quote on work. Leverage smart technologies and use a standard quoting format to make supplier evaluation and contract awarding easier.

An example would be using Robotic Programming Automation (RPA) to route quoting requests with attached images gathered during the claim process.

 

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The four innovations above will bring efficiency gains and process improvements that will do two great things for your business. First, your customers will have a better experience and second your staff will have more time to be better engaged with customers and opportunities to further innovate.

 

   Brad Shields

   Tel: 0407 272 353

   Email: b.shields@decisioninc.com

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