One key ingredient for an insurer’s profitability is keeping claims as low as possible. By offering customers discounts for installing collision avoidance systems, insurers can lower both their premiums and their clients’ risk of collision.
An increasing number of fleets and individuals are installing collision avoidance technology, technology which has proven itself in the field. According to the Insurance Institute for Highway Safety (IIHS), vehicles equipped with forward collision warning systems experience 20 percent fewer front-to-rear collisions causing injuries, while vehicles equipped with lane departure warnings experience 21 percent fewer injury-causing lane departure collisions (single-vehicle, sideswipe and head-on)—numbers with significant implications for cost, productivity and insurance premiums.
In addition to providing warnings to drivers, these systems apparently further reduce collision rates by improving driving habits in general. A University of Missouri study showed that three weeks after installing collision avoidance systems, the number of lane departure warnings dropped by 43 percent and forward collision warnings by 57 percent, showing safer driving habits.
While the warnings themselves are provided to reduce collisions, the very fact of the warnings appears to improve driving behavior such that the warnings themselves are not even needed—a virtuous circle if ever there were one.
Some insurance companies are already starting to take notice of the above. Italy’s SARA Assicurazioni and Automobile Club Italia give their customers who install a collision avoidance system a 20 percent insurance premium discount and Russian insurer VSK has announced a program not only offering a 25 percent insurance premium discount to customers installing collision avoidance technology, but also increasing this discount for those showing improved driving habits as a result.
Qualitas Insurance noted in its 2015 Annual Report that they are encouraging installation of collision avoidance technology for the safety of their policyholders and third parties. Munich Reinsurance America offers subsidized collision avoidance technology to their customers and even initiated the Smart Mobility Program. This program includes a tool called Loss Detect. With Loss Detect, clients enter list a of claims and within seconds, Loss Detect will return a complete analysis of the incidents, including what amount of dollar losses could have been preventable. These reports are specifically tailored for each client and include recommendations to lower collision risk, ranging from driver coaching to the installation of a collision avoidance system. According to Munich Re, around 60 percent of insurance claims for collisions are preventable.
Some insurance brokers such as Research Underwriters, are encouraging clients to install collision avoidance technology and have seen real benefits to these programs. One client, Ambu-Trans Ambulette, was able to reduce collision-related losses by 91 percent and frequency of collision by 45 percent. Research Underwriters was able to negotiate better rates with the carrier, Atlas Financial Holding.
Clearly insurers benefit from fewer collision and less payouts but, perhaps even more importantly, insurers working with collision avoidance technology will be able to reduce premiums and gain a significant competitive advantage.
An Emerging Trend
This may well be the beginning of a significant trend. According to Accenture’s Technology Vision for Insurance 2017, “… insurers might partner with companies that provide a collision avoidance solution that uses a vision sensor to keep an eye on the road and warn drivers of potential danger. Thus, in addition to providing insurance theft and collision cover, insurers and ecosystems they are part of could play a role in keeping customers safe as they drive.”
One key ingredient for an insurer’s profitability is keeping claims as low as possible. By offering customers discounts for installing collision avoidance systems, insurers can both lower their premiums and their clients’ risk of collision. Insurers that take advantage of this opportunity will surely gain a significant competitive edge over the next few years. |WA
Insurers have been especially receptive to working with Mobileye (New York, NY). First, Mobileye offers an all-in-one solution including headway monitoring and warning to prevent tailgating, forward collision warning, lane departure warning, pedestrian and cyclist collision warning and speed limit indicator. Second, Mobileye’s technology can easily be retrofitted into existing vehicles at the fraction of the cost of purchasing new vehicles. For more information about working with Mobileye to lower premiums while increasing profitability, call (877) 867-4900 or e-mail email@example.com.