Our own Avner Freiberger, general manager, Innovation Center, Verisk Telematics, was one of several industry experts to participate in a panel — Create Better Drivers — at Insurance Telematics USA, a conference for insurers and the telematics industry.
Other panel participants included Philip Henville, senior vice president of solutions for Quindell; Kevin Henderson, chief executive officer, Indenseo; and Jon Verhaeghe, insurance telematics manager, Teletrac.
The panel explored whether usage-based insurance (UBI) can actually change a driver’s behavior and the challenges around developing the most effective feedback methods. The issues explored included:
- analyzing the required coaching for different consumer segments, such as personal auto and commercial fleets
- communicating regular feedback on “bad driving” practices in a nonjudgmental, constructive format to provide a positive customer experience
- evaluating the available interfaces for driver feedback, such as a web portal or real-time audio, to align feedback methods with customer preferences
Here are some key takeaways from the panel:
- Effectively coaching driver behavior depends upon accurate data, detailed analysis, and specific feedback. Coaching based on assessments of actual behavior gives drivers an understanding of that behavior and data they can use to improve. Accurate analysis will also give them confidence in the process.
- When analyzing driving behavior, you need to look at patterns, not single incidents. What at first review seems like bad driving could actually qualify as good behavior based on the circumstances.
- Data without context won’t help drivers understand what they did wrong. For example, UBI programs can report on an incident from 30 seconds before to 30 seconds after, giving a complete picture of what happened and generating feedback drivers can use.
- For commercial auto, fleet (or safety) managers are the key to success, and their engagement is critical. When fleet managers committed to the program and followed up with drivers regularly, negative incidents decreased dramatically. Make the collected data visible to those involved. Post risky behavior for all to see. Groups that embraced the public sharing of information performed better.
- For young drivers, design the program to appeal to their sensibilities. Concentrate on social media to communicate with them. Make the program fun and the application engaging. Use clear, text-like messages on the phone, and make sure information is easily and readily accessible. Use continuous feedback for this age group. That includes real-time incident reporting, direct discussions for serious infractions, and following up to make sure drivers correct deficiencies.
- Focus on consequences for both good and bad driving behavior:
– Discuss how driving behavior can affect insurance coverage, both positively (reduced premiums) and negatively (loss of insurance).
– In the United Kingdom, one program concentrated on the consequences of negative behavior and saw a major reduction in such behavior. U.S. programs tend to emphasize a more positive focus.
– Use positive feedback to make drivers feel more confident. Discuss how the telematics program can benefit them in other ways, such as with legal help or tracking engine performance. That encouraged good behavior in drivers.
- Most people can’t accurately judge their own driving behavior, but telematics data can determine whether a participant is a “safe” or “risky” driver. For example, people who’ve never had an accident or received a ticket might still qualify as bad drivers, while some people who drive fast may have a greater awareness of their surroundings and qualify as good drivers.
- There are differing opinions on real-time feedback:
– Some people think real-time feedback is a distraction and dangerous. They believe threshold-based programs, such as using devices that beep to indicate speeding, oversimplify the analytics and don’t give drivers confidence. Drivers need to understand the relation to risk, and program designers need to give drivers more credit when creating the program.
– Others believe threshold-based programs with warning systems can improve behavior because they provide instant feedback and can strengthen the correlation between driving behavior and consequences. Drivers can get used to warning systems so that they’re not distractions.
Overall, the panel agreed that reducing risk by improving driver behavior is one of the most important aspects of a UBI program. As proven in several Verisk studies, an incentive such as an insurance discount that depends on driving behaviors is a significant motivator to improve driving.