Usage-based insurance (UBI), once considered a fringe auto product by some, has found its way into the spotlight. Changes in mobility trends during the pandemic have increased consumer demand for UBI. In response, many insurers are adopting UBI as a strategic imperative, and are seeking this personalized behavioral data to enable more sophisticated and dynamic pricing.
Just as DNA forms the blueprint for organic life, DrivingDNA reveals distinct characteristics of driving risk using normalized telematics data and scores at point of sale.
To support the telematics journey, Verisk is excited to introduce DrivingDNA®, the new brand for our flagship point-of-sale telematics products. Drawing from millions of connected vehicles enrolled in the Verisk Data Exchange, hundreds of billions of trip-miles from consenting drivers, and alliances with numerous leading automakers, these purpose-built solutions have a demonstrated history of helping insurers overcome common product development and operational challenges.
DrivingDNA combines Verisk’s unmatched data attributes, advanced data management and predictive analytics capabilities, and role as a trusted advisory organization. Together, these products help insurers harness the power of personalized driving behaviors to deliver accurate, individualized pricing:
- The new DrivingDNA Score, an advanced predictive model and rating rule for behavior-based risk segmentation and pricing sophistication
- DrivingDNA Data, normalized driving behavior data attributes from multiple leading automakers
- Driving DNA Lab, a research and development environment where an insurer can study the lift and impact of Verisk’s score and telematics data attributes with information from its existing portfolio
Personalized driving traits are core to the UBI value proposition and DrivingDNA makes it easier for insurers to harness the power of these individualized telematics insights. Just as DNA forms the blueprint for organic life, DrivingDNA reveals distinct characteristics of driving risk through normalized telematics data and scores at point of sale.
The next-generation DrivingDNA® Score
At the center of the new portfolio is the new DrivingDNA Score, an advanced predictive model for behavior-based risk segmentation and pricing accuracy. Designed to sit atop insurers’ existing rating plans, the new score is a powerful predictor of future claims and can improve risk segmentation up to 5.5 times above traditional rating variables alone.
The DrivingDNA Score lays the foundation for expansive UBI programs that can accommodate telematics information from multiple data collection models. This lets insurers provide optionality to their customers–porting data from their connected car, OBD-II dongle, or mobile app–while retaining uniform performance through a single analytic.
Enabled by the growth of the Verisk Data Exchange, the DrivingDNA Score is a significant update to its predecessor, using 15 times more data for training and validation. The implications on performance and separation are impressive: A DrivingDNA Score can be calculated using as few as 10 weeks of data. Testing shows a 12 times difference in expected losses between the worst- and best-scoring groups.
When an eligible connected-car driver begins a quote, the DrivingDNA Score can enable a streamlined UBI purchase experience and help the insurer deliver the applicant’s personalized discount in near-real time. With millions of connected vehicles enrolled in the Verisk Data Exchange, historical data is already available for use. Insurers can bypass the driving observation period for new customers and get an accurate, updated score on a recurring basis at renewal or more frequently for pay-how-you-drive (PHYD) programs.
A new Verisk Distracted Driving Score is also available as an optional feature for insurers with mobile-based programs. This can adjust the DrivingDNA Score by measuring phone-handling events that have been contextualized by the speeds at which they occur.
With an associated rating rule and expansive state rollout plan already underway, the score makes UBI market-entry and expansion easier than ever with straightforward implementation and a single API. Verisk’s DrivingDNA scores and driving data attributes are available for testing in the new DrivingDNA Lab.
View the on-demand webinar: Next Generation Usage-Based Insurance Solutions for Speed-to-Market and Profitable Growth