‘Momentous trends’ set to ‘influence the market’ for telematics says The Floow chief exec

The telematics market is developing “some pretty momentous trends, which are going to influence the market”, says Aldo Monteforte, founder and chief executive at global telematics provider The Floow.

This includes vehicle manufacturers installing in-built sensors into cars on the production line. For Monteforte, “this unprecedented [use] of sensors gives access to a lot of data that insurers can turn into valuable insight and analytics in support of the [telematics] operating model”.

Monteforte additionally notes the “advent of autonomous vehicles” as a further industry-shaking trend, adding that “even though the delivery schedules for level four and level five [autonomous vehicles have] been pushed back by a few years, smarter cars are coming along and that is a new path for insurance companies, who are under pressure to develop an understanding of what is the risk profile of vehicles that are equipped with more intelligence?”

Meanwhile, “changes are taking place within [the] ownership model” too.

Monteforte continues: “We see less people insisting on buying a car [and] more people interested in buying a transportation service, either being driven by somebody or by borrowing somebody else’s car. This is a big impact on insurance.”

Prevention partnerships

A key thread running through these recent telematics trends is the collection and utilisation of data – Monteforte says that an increasing number of insurers are “more interested in using data not only to construct an accident when an accident has taken place, but to use data for preventative measures, to transform policyholders into partners in risk prevention, not just [be] a recipient of a product that often people do not enjoy buying”.

He explains: “There is now the opportunity, and I think insurers are responding, the more aggressive insurers who are at the forefront of continued innovation, to see themselves as enablers of safety, as partners in risk prevention, with the policyholder on the other side of the partnership.”

Getting to better grips with data is imperative if insurers wish to remain competitive in the face of firms such as Amazon, Apple and Tesla, Moneforte adds, as these firms have “developed such an intimacy with end users that it is almost frightening to reflect on”.

Monteforte says: “That data intimacy naturally lends itself to an understanding of risk on the individual consumer. So, the question is how big is the leap from understanding risk to underwriting risk? The leap is not that big. How do carriers who have been in the business from 10 to 100 years, depending on who you pick, remain relevant and competitive in this evolving marketplace, where data is [a] primary factor?”

Digital focus

Undeniably linked to the use of data is a focus on a more digital, mobile and app-centric customer experience, which is something Monteforte has seen a greater consumer appetite for since the implementation of the Covid-19 lockdown. “We have all started to do more through electronic media and through the internet, and of course financial products are not an exception in that regard,” he says.

Also tied to today’s pandemic climate, Monteforte is “seeing a lot of demand from consumers in terms of we want to pay for the risk that we actually generate, which takes you to products like pay per use or pay as you drive.

“[This] makes sense because I’m not in the world as much as I was, so I’m interested in an insurance partner that will effectively give me the flexibility to pay only for the amount of mobility that I consume and for the risk that I generate when I’m in the world”.