Insurers to Benefit with Data from Connected Vehicles

By Calvin Azuri
TMCnet Contributor

Automatic crash notification technology exists in over eight million connected vehicles on the road in North America. Auto insurers could leverage this technology to generate immediate savings. Little investment is needed for the same. All they need is to provide an earlier notification of a vehicle loss. This information has been presented by Dave Ferrick, senior vice president and general manager of Cross Country Automotive Services at the forum, "Creating Markets for Connected Vehicle Data.”

According to Ferrick, insurers and policy holders could realize immediate savings in accident claims costs. This can be done be providing access to relevant information about vehicle accidents to the insurers. The challenges of using location-based data from telematics-enabled vehicles for rate-setting purposes have been the focus of many discussions about telematics-based insurance.

In a press release, Ferrick said, "These are easy, first steps that deliver clear, tangible benefits to vehicle owners and makes them comfortable in entrusting the insurance industry with their data. In just about every roadside incident, consumers want help at the scene, want to contact their loved ones and, in significant accidents, want to notify their insurance carrier."

Local law enforcement authorities are handling almost every accident scene tow in the U.S. and Canada, noted Ferrick. Due to multiple towing events, insurers and policy holders have to incur high costs. Vendors who store the damage vehicles also have prices, response times and customer service levels which may fall short of insurance carrier benchmarks.

Air bag deployment and other in-vehicle crash sensors trigger automatic collision notification. A connected vehicle services provider learns of accidents through this notification. ATX Group, business unit of Cross Country is one such provider. ATX could notify auto insurance carriers with permission from the vehicle owner. The vehicle could be removed quickly from the accident scene. This can also enable a faster claims handling process.

Ferrick went on to say that "From the insurance carriers' perspective, the quicker they can process the claim, the quicker their policy holder gets the car back in the driveway. Accelerating the process directly translates into higher customer satisfaction with the carrier, reduced costs for towing and repair, and less risk of the claim resulting in disputes and higher claim costs."