Black Box Technology Demonstrates Another Shift in Insurance Trends
If you had the option to receive a personalized premium from your insurance company based on your driving record, would you opt for a monitoring device? Those who answer in the affirmative tend to be those individuals who know they are good drivers and believe the potential to save money exists.
A BBC News report recently took a look at a block box program offered by The Co-operative Insurance. When installed in your vehicle, the box monitors how safely you drive.
When testing the device, you’re encouraged to drive as you normally would. The black box then measures how fast you tend to drive, how you take corners, how you apply your brakes, and how safe you are overall.
If you drive well, you should theoretically save money on your insurance.
To test the device, Steph McGovern of the BBC had it installed in her own vehicle and invited viewers out for a ride with her. The results: she received an “excellent” rating. According to Grant Mitchell of The Co-operative Insurance, if such a result were to continue for a year, McGovern could enjoy a discount of as much as 20 percent on her insurance.
This technology can also be used to provide personalized premiums for customers. And while insurance companies cannot discriminate against particular segments of customers, they can provide those willing to be monitored with the means to reduce their rates.
For those who want to test the technology without making the commitment, a smartphone app for monitored driving is also available.
Monitored driving is just another change in the long stream of adjustments in the insurance industry. Most, however, have been driven by changes in customer behaviors. According to this TMC (News - Alert) article, for instance, consumers are increasingly turning to the Internet to purchase their insurance, allowing more customer-centric competitors to gain market share.
What does this mean for the current dominators in the market? For many, reducing their operating expenses to compete effectively with new competitors will be too difficult, making the shift to respond to new market conditions too slow. As consumerization and digitalization become a priority, massive changes in business processes and technologies are needed to meet customer demands and respond to regulatory pressures.
For those insurance companies unable to shift their focus to accommodate new trends and demands, the top of the food chain may soon become a distant memory.
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Edited by Braden Becker