Car Insurance Companies are embracing Usage Based Insurance (UBI) due to the pressure is on for the car insurance market to reduce their operational costs to remain competitive due to price decrease, increasing comparability and mediators. The traditional methods of pre-screening drivers cannot truly reflect intentions and behavior, especially with the new EU regulation, where gender information is not allowed to be collected and considered in pricing the risk premiums. Over the past decade the profits of car insurance companies has quickly been reduced due to high risk exposure by very frequent driving and risky driving styles, along with the lack of ability to identify and reject fraudulent claims. Then there is theft and the inability to recover a stolen car pose a further challenge.
Car Insurance Companies Embrace Usage Based Insurance Solution
The Usage Based Insurance addresses the following challenges of car insurance companies: driver risk assessment, claim management, asset protection and the ability to innovate with new business models.
How it works? A specialized M2M telematics in car devices collect advanced information on the insured vehicles and thus provides a rich set of information to assess the driver risk exposure. This information bases both on the frequency and intensity of vehicle usage (Pay As You Drive) as well as the driving style itself (Pay How You Drive). Driver risk profiling allows for dynamic, performance oriented pricing and better customer segmentation. The resulting feedback mechanisms incentivize users to change their driving style in order to reduce their premiums.
The benefits of Usage Based Insurance is very clear as it helps to increase car insurance market share between 7 – 10% in medium to long term. Reduced theft claims are also another great benefit due to the protection of insured assets with remove remote vehicle immobilization that helps with vehicle recovery.
Global M2M Data Connectivity for Usage Based Insurance
They key part of any Usage Based Insurance solution is selecting the right M2M Data Connectivity partner. For a truly global solution the first choice is M2M Security SIMs with our 420+ roaming agreements allow a worldwide M2M service with the best network coverage option for M2M providers. We have built a M2M Resilience SIM service that solves the problems of network dependence and data signal loss, which is the key factor in making your Usage Based Insurance service work. Mobile networks do fail, sometimes for extended periods. M2M Security SIMs Resilience future-proofs M2M deployments through its unique Operator selection and steering capabilities.
Guarantee device connectivity
Your Usage Based Insurance device uses a M2M SIM is out in the field, it has network connection, albeit a weak one. GPRS attachment is not being maintained – despite your M2M operator promising multiple network options in that country. The SIM will not switch networks as it is already successfully connected to a mobile network. This leaves you in a difficult position and renders your Usage Based Insurance device totally inactive and opens you to high risk M2M Resilience you can mitigate the risk of problems like this occuring.
With M2M Resilience when data connectivity falls below a given threshold it will automatically activate an internal matrix is cross referenced with the available networks of not only M2M, but of 2 other global MNOs. A signal test is then performed in order to select the best connection for the situation and location.