In the past, insurance companies determined driver rates based on factors such as gender or driving record. Now, the growing ability to collect, record, and analyze real-time data has created many new possibilities for enhanced data-driven decision making. Telematics insurance uses real-time data collection to track stolen cars, manage maintenance schedules, measure driver behavior, and help insurance companies understand their risk.
Let’s examine what happens when highly accurate location data is added into the mix. Here are four ways insurers can leverage accurate location and telematics data to enhance their offering.
1. Enrich driver databases
When a customer fills in a form for their insurance coverage on the insurer’s website, how can be sure that what they entered is accurate? There’s no way to know how careful they were when they keyed in the data - if they were clumsy, they could easily type in a U instead of an I. This has an impact when it comes to entering in street, state and even ZIP code information. To the customer, it’s not the end of the world, but to the insurer, it’s a piece of incorrect data that is entering their data warehouse and lowering overall data quality.
The issue of incorrect address data has always been a thorn in the side of insurers. However, tools like address validation can help businesses maintain data integrity and ensure they are extracting precise and meaningful insights. Loqate’s Verify solution focuses on helping data architects optimize the way address data is stored, formatted, and enhanced within the data warehouse. When running Verify, addresses are enhanced, parsed, and matched against Loqate’s curated global address repository. The data analyst can then be confident that each address has a unique quality stamp of accuracy in the form of an AVC code.
2. Accident Alert and Theft Recovery
In the case of younger drivers, assessing whether the car is at home or not is a significant factor. Most telematics systems are tuned to when the vehicle is in motion – transferring usage data such as travel time, time of day, and speed. This helps the insurer assess younger driver’s behavior, noting when they are most likely at risk.
An added bonus for the insurer is the ability to compare a home address with the actual geographical position of the car to see if it is at home, in a street, or a built-up area. Using this information can help shape a picture of the younger driver’s usage and behavior by sending text messages or in-app notifications. If the car’s at home at 10 pm, great - but if it’s parked elsewhere, it may prove more of a risk. Assessing these factors is not easy, which is why machine learning is adding the necessary logic to the process.
3. Map driver behaviors
Most modern vehicles come equipped with a small black telematic box. This box is continually recording and monitoring the driver’s performance, measuring factors like how, when, where, and how fast you drive. The SIM card inside the box operates the same as it does in your mobile phone – it sends us your data back to the insurer for analysis.
With a correct address and subsequent geocode stored in the insurers’ data warehouse, the data that comes back from the box can be compared against accurate data – such as a home address. The insurer can then make more informed decisions regarding their drivers and their habits. This information can be used in many ways, many rewarding for the more careful driver, including lower renewal premium costs, accident support, and safe driver bonuses.
This type of telematics usage has been around for some time, as demonstrated by Nationwide, who introduced SmartRide – a usage-based insurance program using an OBD device that plugs into the onboard diagnostic port of the vehicle to collect mileage information and driver behavior data. Participants were able to receive coaching and feedback based on driving behavior via a branded portal while also earning discounts up to 40% for safe driving and a 10% discount during the first policy period following enrollment.
4. Support asset management
What is the next piece of the jigsaw for insurers? Creating an accurate geocode with latitude and longitude coordinates for that given address. The more precise the address, the more accurate the system used to calculate the customer’s vehicle will be.
If the customer states in their application that their vehicle is stored in their driveway or garage overnight, this data can be verified through reverse geocoding. With Loqate, insurers can associate latitude and longitude coordinates to any address location for pinpoint precision. This enhances location datasets with the most accurate and up-to-date geospatial information. The most important reason for ensuring the address accuracy of an asset’s location is it plays a critical role in assessing the risk. For instance, determining whether the asset is located near a flood plain, wildfire zone, or being stored in the wrong location altogether.
For example, if a vehicle is located at the following verified address - 741 Mountain View Road, Ste 4 Rapid City, Pennington SD 57702-2539, then the geocode would be - 44.079650, - 103.252420. By translating an address into its exact latitude and longitude coordinates, the insurer can match the car’s location to the verified address of the customer.
Improved insight and efficiency
With any location-based software, such as telematics, it’s essential that the base data is correct. Although location data such as an address is only a small part of the bigger picture of customer insight, it provides many applications a foundation to build upon.
Loqate’s Global Partner Program can ensure that your data contains correct address information. Built by aggregating multiple data sources into a single master reference to any location worldwide, our solutions support the capture of accurate address data and can enrich any address with latitude and longitude coordinates for pinpoint precision.
Chat with our partner team to learn how Loqate can enhance your telematics data with the most accurate and up-to-date geospatial information.
