"This ability is fostering new and innovative products that more accurately price risk and attracts profitable new customers, making the traditional segmentation of pricing auto insurance — based on average characteristics or certain populations' gender or age — completely obsolete", according to B.P. SURESH, Chief Executive Officer for Europe at NTT Data FA Insurance Systems.
"In addition to pricing, telematics and usage-based insurance (UBI) approaches are introducing opportunities for carriers to build and maintain richer relationships with customers than ever before, while also laying the foundation for better decisions and core business process optimization", he added.
Nevertheless, telematics increases the "big data" issue that insurers who opt for these types of products are facing by being flooded with a high volume of real time information.
"Tracking is all about collecting data on your car. From the braking to the temperature outside, it is getting data about your car to a third party database where it can be analyzed. Tracing is putting together the links in this data and gaining new insights from it. For example there may be "black spots" on the road where an unusual amount of people have accidents", SURESH explained.
That is where a Big Data Platform comes in to enable storing, analysis, visualization of the result of analysis. "SPaSE is the Big Data Processing Platform developed by NTT Data and applicable in various industries. It enables both real-time processing and batch processing realized by optimized combination of cutting-edge Open Source software and enables proper life cycle management of data".
The advantages of properly processed telematics data is usable especially in the motor insurance business are that they can generate accurate pricing, increased retention, claims control and new customers.