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Telematics isn’t new to car insurance…we know that.
What is unique is Lemonade’s version of #telematics, leveraging technology and actual driving data to consistently reward good, safe drivers with killer prices. At our recent Investor Day, CEO Daniel Schreiber explained how it all works and why relying on traditional factors in pricing gives a “low-resolution image” of drivers:
✨ “Telematics changes the game in dramatic fashion—at least the Lemonade version of telematics. Because, at high-fidelity with precision instruments, we capture every mile driven, every foot or inch driven, every tap of the brake, every swerve of the steering wheel. Marital status, credit scores - they don’t hold a candle to the kind of insights we glean.”
More on it all ⤵️
Telematics changes the game in dramatic fashion. At least the lemonade version of Telematics. It's not a low resolution 2D card out, it's the full HD. It's the 4K. It's the 8K in a very deep and real sense. It's virtual reality. Because at High fidelity with precision instruments, we capture every mile driven. Now every foot or inch driven. Every type of the break, every swerve of the steering wheel. Every time somebody texts while driving. Marital status, credit scores, they don't hold a candle to the kind of insights that we glean. What's that got to do with killer prices? Everything. So let's have a look. Some illustrative data here. I've charted here 100. People. Who are being priced as cardboard cutouts and no wonder they have roughly similar on average proxies and therefore they end up with roughly similar average prices. The average price is 2348 and national average price pretty much. And there is some variation but not much. Now the actual variation of these self same drivers as captured by telemetry. Would make that curve would look more like this. People are wildly different in how they drive. Their gender doesn't begin to capture that. So, Jill. Should actually be paying 400, no sorry, $600.00 more than average. You can see she's got that phone in her hand. She may look good by way of her proxies, but she's a distracted driver. Telemetry will pick that up. The cardboard cut out misses it entirely. On the other hand, Jack, who's a young driver and maybe his proxies aren't so great, is actually a cautious person. The true price for Jack should be $400.00 lower than the average. Both of these entirely missed by the bulk of the industry. Now to put some proportionality around this. About 1/3 of drivers or worse than average. They're the ones who ruin it for everyone else. The problem is that traditional methods can't identify them, so we price them as average. When? Jill comes to Lemonade. She will not be delighted with the price she gets. She will tweet out this is not unbeatable price. This isn't killer prices. It's so much it's 20% more expensive than I got quoted at GEICO or Progressive or State Farm. And she's right. We're able to identify that she's a worse than average risk. She's better off being mispriced as average elsewhere. Good riddance. That will manifest itself as negative selection for our competitors. Jack on the other hand. Is one of a huge cohort. In fact, Jack is the majority. 2/3 of people are subsidizing 1/3. Again, insurers just can't identify them as such. Jack comes to lemonade. We see how he drives. We give him a 17% discount, a rate commensurate with the risk. He saves $400.00. He feels like he got killer prices. Welcome on board, Jack. That's exactly what positive selection looks like.
Capturing behavior is the first step… understanding the psychology behind it is the next frontier. This precision-driven approach to telematics is setting the stage for smarter, more compassionate solutions!
Great approach! I'm curious to see how customer behavior will shift once people realize that their driving habits directly impact their insurance costs. I believe the incentive will be strong enough to encourage safer driving, especially considering that distracted driving has now surpassed impaired driving as the leading cause of fatalities. It's a growing societal issue that telematics could help address.
Telematics as a differentiator in auto insurance 📊
With a treasure trove of connected car data, car manufacturers can personalise their insurance offerings like never before. They can understand exactly how vehicles are used and how drivers behave, which opens the door to insurance that is better aligned with customers' unique driving profiles.
This means more affordable coverage for consumers and stronger customer relationships for OEMs.
Look at what experts from the auto industry had to say below, and get all the details in Qover 's latest white paper 👉 https://hubs.ly/Q02ZkN1p0#OEMs#Automotive#AutomotiveInsurance#Telematics#Insurtech#EmbeddedInsurance#EmbeddedInsuranceOrchestration#AffinityInsurance
Telematics as a differentiator in auto insurance 📊
With a treasure trove of connected car data, car manufacturers can personalise their insurance offerings like never before. They can understand exactly how vehicles are used and how drivers behave, which opens the door to insurance that is better aligned with customers' unique driving profiles.
This means more affordable coverage for consumers and stronger customer relationships for OEMs.
Look at what experts from the auto industry had to say below, and get all the details in Qover's latest white paper 👉 https://hubs.ly/Q02ZkN1p0#OEMs#Automotive#AutomotiveInsurance#Telematics#Insurtech#EmbeddedInsurance#EmbeddedInsuranceOrchestration#AffinityInsurance
Telematics as a differentiator in auto insurance 📊
With a treasure trove of connected car data, car manufacturers can personalise their insurance offerings like never before. They can understand exactly how vehicles are used and how drivers behave, which opens the door to insurance that is better aligned with customers' unique driving profiles.
This means more affordable coverage for consumers and stronger customer relationships for OEMs.
Look at what experts from the auto industry had to say below, and get all the details in Qover's latest white paper 👉 https://hubs.ly/Q02ZkN1p0#OEMs#Automotive#AutomotiveInsurance#Telematics#Insurtech#EmbeddedInsurance#EmbeddedInsuranceOrchestration#AffinityInsurance
Exploring the Future of Connected Car Insurance at Insurance Innovators Summit in London Next Week!
Sebastien Fraysse, our Head of EU Sales, will take the stage for a fireside chat on Connected Motor: The Data Challenges and Opportunities on Nov 6th. Tune in to learn about the latest in connected car insurance, from regulatory impacts on data to the future of pay-how-you-drive (PHYD) models and in-car sensors.
#IISummit24#InsuranceInnovators#ConnectedCars#FutureOfInsurance
Implementing telematics can drastically improve your fleet operations. For example, by monitoring driver behavior, you can identify and address risky driving patterns, leading to fewer accidents and lower insurance premiums. Additionally, real-time vehicle tracking helps optimize routes, saving time and fuel costs. Embrace telematics for a safer, more efficient fleet.
#Telematics#FleetManagement#TruckingIndustry#Truckingfleets#Truckinginsurance
Capturing behavior is the first step… understanding the psychology behind it is the next frontier. This precision-driven approach to telematics is setting the stage for smarter, more compassionate solutions!