For most consumers, insurance cover is a relatively simple case of obtaining cover, paying the premium and, in the event of an accident, submitting a claim.

For insurance companies it’s a lot more complicated.

Risk assessment linked to profitability

For an insurance company to provide adequate cover for commercial and residential customers, while still turning a profit, it requires a lot of solid risk assessment work.

Risk assessment is a complicated job that involves trying to determine, with the most accuracy, how likely it is that a claim will be made, how much that claim could be, and the potential frequency of those claims.

Getting risk assessment wrong can make it very difficult for insurance companies to remain profitable, with several unwanted outcomes:

  • Financial losses, as claim payouts outweigh premiums
  • Losing a good rating
  • Failing to secure reinsurance

It’s not hard to understand why insurance companies take risk assessment so seriously, and why a significant amount of resources are focused on the process of getting it done right.

Fortunately technology is making it easier for insurance companies to calculate risk more accurately.

Better risk assessment makes a better insurance company

The advantages of improving the risk assessment process shouldn’t be underestimated. It can have several positive flow-on benefits for both an insurance company and its customers.

By equipping assessors with systems that can assist them to make more accurate, faster assessments, it makes their job easier while improving the profitability and service standards of the insurance company.

Better risk assessment is a lot about taking the guesswork out of making calculations, and removing the generalizations that often feature in premium calculations.

For example, charging all drivers the same premium is a generalization since it doesn’t take any variations, or risk factors, into account. It assumes all drivers are equally likely to make a claim. This is why insurance companies ask anyone who wants insurance a lot of questions, as it helps to calculate risk more accurately.

This is the reason younger drivers getting charged a higher premium, as well having a higher excess, since statistically they’re more likely to have an accident. Most accept that as a reasonable assessment. Insurance can also be based on a driver’s location. Someone living in a high-crime area will probably pay a higher premium since it is more likely their car will be stolen.

But what if you could take the risk assessment a step further and allocate the cost of insurance even more fairly?

Telematics provides more profitable risk assessment

Telematics, or GPS fleet tracking, allows insurance companies to offer accurate UBI (Usage-Based Insurance) packages that provide a lot of flexibility for anyone in the market for car insurance.

Generally it involves two things:

  • GPS tracking device fitted to the insured’s vehicle
  • Software application used by the insurance company to monitor and report on the insured’s driving

A telematics program like Telogis Fleet offers an easy way for insurance companies to monitor thousands of vehicle and driver metrics including:

  • Miles driven
  • When and where the vehicle has been driven
  • How the vehicle has been driving including speeding, harsh braking and acceleration

Installing telematics often has other, indirect, benefits that flow from monitored UBI insurance packages. Many drivers find that along with enjoying discounts on their premiums, it has also improved their driving habits. Similar to how a budget can help control spending, monitored driving that can be reported on makes drivers more conscious of how they drive, and can end up saving lives.

It also has benefits for insurance agents who can now offer clients very flexible cover that is perfectly customized and suited to their driving style, with a premium that reflects that.

Why choose Telogis to provide your insurance telematics?

Telogis offers insurance companies the peace of mind of working with a premium provider, focused on providing a better standard of support and service.

Telogis telematics is trusted and used by some of the world’s largest fleets with a rock-solid infrastructure to handle huge volumes of data in a secure way.

Its flexible, web-based application, Telogis Fleet, eases many of the pain points experienced by insurance companies when it comes to implementing a telematics solution:

  • Quality hardware devices — As a hardware-agnostic solution, Telogis Fleet is not limited to specific devices, which means you can opt for higher quality devices that are more reliable.
  • Top-level support — Telogis aims to always provide the best support and education for all its customers. Aside from phone and email support the
    application has extensive documentation to minimize the training needed for users.
  • Service delivery and implementation — Telogis has worked with a lot of large enterprises and knows the importance of follow-through and a successful implementation process.
  • Integration into existing systems — Most organizations fear taking on new software, worried that it will add an excessive burden to an already overloaded set of IT applications. Telogis Fleet eases that burden in two important ways:
    1. It is a fully web-based solution so there is no software to install, it can be used from anywhere that has internet access and requires no ongoing IT maintenance.
    2. it offers an API that employs common data-sharing protocols to make integration with existing insurer systems a lot easier.

Learn more about how Telogis helps insurance companies improve risk assessment accuracy, develop more flexible packages and recover stolen vehicles. Or contact Telogis now for personalized assistance.