Launching a telematics program? Here are the KPIs you need to focus on.
More than a third of auto insurance customers are interested in joining a telematics program — one of the many reasons more insurers continue to embrace them. By incentivizing and rewarding safe driving, usage-based pricing models allow insurers to grow their customer base, retain the best drivers, and reduce loss ratios.
Despite these payoffs, now that the top-ten auto insurance carriers all have telematics programs, just having an offering isn’t enough. You need a program that will meet your business goals and satisfy customers.
Program implementation can be challenging, and to start your telematics program on the right foot, you need to target the right metrics. With the help of a partner that prioritizes the right KPIs, you can hit critical benchmarks for telematics program success and drive continuous improvement.
Here are the KPIs you should focus on, barriers to achieving these metrics, and strategies to help you reach them.
Greater marketing ROI
Insurance marketers know that a high marketing ROI requires reaching your ideal audience and providing aggressive pricing to close a higher percentage of consumers. But to acquire and retain the best customers, you need targeting levers and predictive data sources.
The challenge: Target audiences are often built on proxies of risk. These indicators are based on driving risk correlations, not actual driving data, meaning you could be targeting customers that aren’t suited for your business.
The Arity solution: We built a network of scored drivers using our access to billions of miles of driving data tied to actual claims data. These audiences provide information on drivers’ risk levels, allowing you to boost acquisition ROI by finding, connecting, and acquiring customers based on how they drive.
Increased program adoption
Customer adoption is key to a successful telematics program — you need a large number of participants to realize wide-scale risk reduction benefits and a decrease in claims expenses.
The challenge: Building a telematics program is one thing, but gaining buy-in from agents, internal stakeholders, and end users is another. Although the top-ten auto insurance carriers all have a telematics program, less than 10% of insurance customers are engaged in one.
The Arity solution: Arity partners with you to ensure you have the resources, educational tools, and expertise to engage with your agency force, internal stakeholders, and end users. As a result, you have the tools and resources you need — including program design, distribution, and enrollment best practices — to achieve internal buy-in and industry-leading take rates.
Price is one of the most important factors customers consider when selecting an auto insurance provider. With prices that reflect real driving behaviors, you can offer safe driving discounts that help you retain your most valuable customers.
The challenge: Without accurate driving scores, you might be pricing safe drivers with higher premiums than they deserve, negatively impacting retention and profitability.
The Arity solution: Arity’s vast dataset and risk modeling reflects the frequency and severity of accidents, so the premium discounts and pricing you offer are accurate and can improve overall retention on the safest drivers.
Loss ratio improvement
Reduction in expected losses and turnover shows you’re retaining low-risk drivers with competitive pricing and reducing your overall costs.
The challenge: Driving scores that are built without actual insurance loss data will not provide the same level of pricing insights as scores that include this data.
The Arity solution: With the Arity Drivesight® score, you can more accurately connect insurance pricing to driving habits. Combined with our technology solutions that motivate driver behavior change, our telematics solutions motivate driving behavior change that can reduce premiums by up to 30% on even the safest drivers.
Target the right metrics with Arity
Wherever you are in your telematics journey, these KPIs are critical to your long- and short-term success — and Arity is here to help you achieve them.
With more than 600 billion miles of driving behavior data and prebuilt data collection structures, we help you target the right metrics from the get-go. The result? You leverage the most predictive measure of driver risk to support long-term program growth.
For a more detailed description of the KPIs you need to target, check out “Target the metrics that matter: Four key performance indicators to focus on as you pursue a telematics program.”