EY and Baseline collaborate on telematics solution for Australian and New Zealand insurers
Friday 6th February 2015 - EY has announced the signing of a new agreement with Baseline Telematics, a world leader in the fast growing insurance telematics industry. The non-exclusive agreement heralds the introduction of a new usage based insurance solution to the Australian and New Zealand market.
Baseline’s cloud based telematics platform is designed to help insurers quickly and cost-effectively implement usage-based products for their customers, such as pay-as-you-drive motor vehicle insurance programs. A smartphone app or a small plug-in device in the policyholder’s car provides real-time information – such as location, mileage, speed and sudden acceleration or braking – to insurers allowing them to rate and invoice insurance policies on a monthly basis, depending on usage and road safety. The system can also monitor and contextualise external factors such as ambient traffic speed, weather and time of day, and can also detect if a driver is texting while behind the wheel.
This innovative solution helps insurers better identify risk exposures, design differentiated products and put the control on pricing in the hands of their customers, who decide how much, and how well, they want to drive. A policyholder whose collected data shows safe driving habits can receive a lower premium than a customer exhibiting unsafe behaviour on the road. The information is available via a smartphone app, weekly email updates and on the insurers’ web portal, allowing customers many ways to see their driving habits and keep track of their insurance premiums. The immediacy of the feedback, along with the clear correlation to premiums, has also been shown to positively impact behavioural change among drivers.
Baseline’s technology is already being used successfully for both car and motorcycle insurance in many international markets such as Canada, France, Norway, parts of Latin America and the US. There have been trials and implementations for government insurers, commercial fleet insurers, driving schools and graduated drivers licensing programs. The solution also has the potential for expansion into other segments, such as life or health insurance (pay-as-you-live) and homeowners insurance (pay-as-you-dwell) in the future.
EY’s Insurance Strategy and Customer Advisory Lead, Walter Poetscher said the synergy between Baseline’s proven solution and EY’s experience with strategy, risk rating and whole of business integration made the two organisations a natural fit to bring this service to the Australian and New Zealand insurance market.
“EY is working with Baseline to provide an innovative and practical approach to usage-based insurance that will help Australian and New Zealand insurers take the idea from initial concept right through to market launch in a matter of months,” Poetscher said.
“Baseline’s turn-key solution has already proven to provide significant improvements in combined loss ratios, customer acquisition and service costs and customer retention for insurers in other markets. We are excited to now be collaborating with them to bring an end to end telematics solution to Australia and New Zealand.”
“Our recent Global Consumer Insurance survey found that Australian consumers wanted more frequent, meaningful and personalised communications from their insurers, with almost half (45%) indicating they want to be engaged by their insurer more than once a year, yet only half of those currently receiving this level of communication. Given the real-time application and regular contact points of the usage-based model, we think there will be a real appetite for this type of offering in the market,” Poetscher said.
Paul-André Savoie, President and CEO of Baseline Telematics said that, with insurers and policyholders rapidly embracing new technologies and looking for smart ways to reduce costs, usage-based insurance solutions will be on an important growth trend for the next decade.
“Pay-as-you-drive insurance is likely the most important thing to happen to car insurance since the invention of the car. Although usage-based insurance policies only currently account for less than one percent of the global automobile insurance market, this figure is set to increase dramatically in the coming years due to an impending need for insurers to design differentiated products and build stronger, more engaging and meaningful relationships with their customers, all while improving underwriting and rating methodologies in a highly competitive, and commoditised market,” Savoie said.
“Working with EY, we will now be able to offer very personalised and, most importantly, local support for Australian and New Zealand insurers regarding all the typical implementation needs, ranging from product design, project management, change management, actuarial analysis and market research.
“Our revenue model is designed to in such a way where we are only successful when our clients are successful. EY’s local support is a great assurance for both Baseline’s and our customers’ commercial success,” Savoie said.
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For over 20 years, Baseline Telematics has been to helping insurers around the world transform themselves beyond traditional paradigms, allowing them to deliver the most innovative, valuable, customer centric and cost effective telematics based insurance programs.
Baseline’s turnkey Usage Based Insurance platform is designed to run entire insurance operations, or integrate with existing ones as needed. The solution is designed so that it can be customised and implemented partially, in phases or end-to-end at launch. This modular approach enables insurers to manage any aspect of the customer lifecycle (quote, purchase, billing, renewals, claims), in an OmniChannel platform (web, mobile app, phone, chat), and get operations up and running within months.
Leveraging our highly recognised technology (Celent Innovation Award, Gartner Research) through our team and our global partnerships, we allow our clients to creatively and cost effectively discover and leverage telematics in a way which is specific to their own strategic objectives and local business and market conditions.
Since 2009, Baseline has been the leading Canadian provider of telematics based insurance platforms, and offers one of the most comprehensive solutions on the market today. For more information, visit www.baselinetelematics.com.