The Future of Risk: How Behavioural Monitoring Can Positively Impact The Future of Insurance

The Future of Risk: How Behavioural Monitoring Can Positively Impact The Future of Insurance

Article written by David James and Dr Lisa Dorn

How do we envision the future of insurance, mobility and risk in 2019?

The short answer is that it’s difficult to know because changes to technology are so fast-moving that its having an effect on everyone from insurers and local authorities to mobility providers and road users, including drivers, passengers and cyclists.

In the previous issue of Driven, our CEO Aldo Monteforte set out his strategic vision for The Floow and our future development, based on six key trends surrounding the future of mobility, to ensure that we remain focused on helping our clients to successfully progress in this new world.

One key area of Aldo’s strategic vision focuses on Behavioural Monitoring which allows us to better understand driver behaviour so risk can be priced more accurately, the future of our cities and road networks can be better planned with safety in mind and safer driving can be encouraged through driver education and the inclusion of social sciences into telematics propositions.

This makes sense for The Floow which is a company built on a mission to make mobility safer and smarter for everyone. This mission has steered the development of understanding into the benefits that incorporating social science techniques into our telematics propositions could have on improving risk profiles and road safety.

As a result, our Chief Education Officer and Associate Professor of Driver Behaviour at Cranfield University, Dr Lisa Dorn, began researching and developing what would later become FloowCoach, our driver coaching programme. This initially launched with the UK’s largest personal motor insurer, Direct Line Group, back in October 2015.

Photo by Alexa Suter on Unsplash

Encouraging Safety and Engagement

FloowCoach was designed to take the scores generated by The Floow’s world-class scoring algorithms and provide tailored feedback, education and coaching to the highest risk drivers, those in the bottom 10-20% who represent an increased risk of making a claim during the lifetime of the policy, with the end goal being to encourage safer driving behaviours.

FloowCoach is provided through a number of telephone-based coaching sessions which are delivered by our highly-trained behavioural coaches. Coaching is defined as the guided facilitation of behavioural change and found to be effective across hundreds of studies including hard to change habitual behaviours. Our coaches are trained to facilitate enhanced driver safety by developing the customer’s self-directed learning skills.

“Behavioural change techniques are the “active ingredients” of any intervention that lead to a change in behaviour...”

The FloowCoach programme itself takes the key elements that have led to successful coaching outcomes in previous research by using specific behavioural change techniques. The evidence pointed to how to influence risky driving habits through the use of behavioural change techniques. Behavioural change techniques are the “active ingredients” of any intervention that lead to a change in behaviour so several were woven into the structure and content of the FloowCoach programme from the outset.For example, during the coaching sessions, the customer is motivated to focus on what they consider to be the key benefits of improving their score.

Then achievable goals are agreed upon with progress against these goals being discussed and measured in subsequent sessions. Other key behavioural change techniques include positive reinforcement to motivate the customer towards further improvement over the duration of the programme.

The unique insights which we gain from including social sciences within our telematics insurance propositions provides insurers with a true understanding of the risk on their book plus it provides them with the opportunity to engage customers about their behaviour behind the wheel, in order to improve their scores and their risk profile.

We believe that this will encourage customer loyalty by supporting customers towards being safer drivers. Customers who make a positive change may then be given the opportunity to potentially gain a cheaper price for their insurance policy, or gain rewards and discounts.

Over the last three and a half years, The Floow has assisted more than 1300 drivers with FloowCoach, and our latest research shows that for every 100 drivers in the lowest-scoring decile who have completed this programme, 13 accidents are avoided compared to standard feedback mechanisms.

Our work on FloowCoach has led to further work in this area such as incorporating detailed journey feedback into our apps to help drivers easily access tips to help them improve their driving style. Additionally, we have developed a rewards module that can easily be incorporated into our standard FloowDrive product.

This module offers drivers points for successfully reaching or maintaining positive scores, which can be redeemed against a catalogue of rewards specified by the insurer according to the demographics of their customer base. Our research shows that reward programmes such as this can improve scores by as much as 54%, having a bigger behavioural impact, particularly for low-scoring drivers, than only offering an insurance discount at year end.

Continuing to Innovate

But despite all this work, insurance is widely viewed as a grudge purchase and loyalty to a provider can be low in markets such as the UK where purchasing decisions are driven by cost rather than service, brand heritage or expertise.

A recent study into consumer attitudes by customer engagement, loyalty and lifetime optimisation specialist, ELLO Media, found that 35% of UK consumers feel no loyalty to their insurance provider. Around 21% of consumers said they had switched insurance providers in the past year, with cost cited by 83% of those surveyed as the key influence in their decision.

But these figures will come as no surprise to many insurers. Last year, The Floow conducted a YouGov poll with insurance industry decision makers to understand their thoughts on the future of the insurance industry. When asked about their biggest concern, 30% said they were concerned about not being able to retain customers/ policyholders while 36% said their biggest concern was not being able to remain competitive on price.

All this data points to the key issue facing insurers at the moment, how do they remain competitive enough to attract new customers, whilst also providing a good experience in order to retain their existing policyholders?

While behavioural monitoring techniques like those mentioned above help insurers to deal with this issue, there is still a long way to go to create insurance propositions which truly add value to the lives of policyholders.

Where does The Floow sit in all this and how can we help insurers to deliver great customer experiences and remain competitive in a fast-changing market? For our behavioural monitoring solutions, we believe the answer to this lies in the power of digital…

Creating Seamless Customer Experiences with Behavioural Monitoring Techniques

Our aim is to remove all friction from the customer experience to make safe mobility easier for the driver to accomplish. One way to do this focuses on making use of automation tools to deliver driver coaching to app users in a timely and actionable format.

A great way of doing this would be through the use of the chatbot which many providers are already making use of across the insurance telematics market. Chatbots are seen as a highly engaging tool and sectors including banking and entertainment are using them to cultivate personalised engagement with their products and simplify the experience for the end-user.

A great example of how a chatbot has been used in an innovative way is Liberty South Africa’sLiberty Short-Term app, which was featured in the first issue of Driven. The chatbot they created is accessible via social media messaging platforms and is used throughout the lifecycle of the policy to handle tasks including generating a quote and handling issues which arise throughout the duration of the policy quickly and efficiently.

The chatbot also allows users to authenticate their identity by uploading identity documents such as a driver’s license to obtain their quote. Drivers then have the opportunity to prove their safety behind the wheel by passing an initial ‘driver test’ which requires drivers to record trips in the app over the course of 300km and during the course of the test, the driver receives regular feedback from the chatbot to help and encourage them to pass the test through driving behaviour improvements.

They are leading the way in the market by effectively using technology to target specific customers (in this case, young professionals) and improve the service received by a customer by simplifying processes and providing added value to the standard insurance experience.

For insurers, chatbots provide them with the opportunity to easily encourage drivers to engage with their driving behaviour and scores to develop improvements through the use of helpful tips and positive reinforcements. A chatbot is also a viable tool to support a coaching methodology alongside interacting with score feedback. The introduction of a chatbot for delivering driver coaching can allow policyholders to self-serve their insurance policy, putting the power in their hands to create the experience which works best for them.

In an article for insurancethoughtleadership.com, Insurance Practice Lead at Globant, Sean Kennedy, spoke about the importance of this; “By making it easier for customers to answer common questions and perform routine activities like filing a claim, chatbots reposition customers at the center of insurance processes.”

A chatbot can also compliment other digital customer engagement techniques such as rewards programmes (as mentioned previously) or engagement capabilities that seek to gamify the user experience within telematics solutions, such as leaderboards, streaks and badges.

Photo by Jaromir Kavan on Unsplash

How are we doing this?

Although these capabilities are not typically part of a standard insurance proposition, they can help to encourage engagement with telematics apps and driving behaviour, which is why The Floow is focusing our attention on understanding what it is that drivers, the end-users of these apps, want from their insurance provider.

As a result, user research has become a vital part of our product development cycle and after our recent move to agile we can input findings straight into future iterations of current products if we discover a clear need for a particular capability or require a change to a piece of functionality to make it more user friendly.

The findings gained from user research also prove valuable for our clients who benefit from these insights into the market, helping them successfully navigate the future of mobility and launch successful telematics insurance propositions that are of real value to their policyholders.

In Summary

The changes in technology can be difficult to understand or prepare for but they provide insurers with an opportunity to deliver an insurance experience that is rewarding and beneficial for the policyholder. Behavioural monitoring and change techniques provide insurance companies with the opportunity to offer their policyholders the tools to make positive improvements to their driving behaviours to become safer drivers on the roads.

At The Floow, we remain focused on this key area of our vision for the future of mobility, to ensure that the solutions we deliver now and in the future are successful in helping insurers to navigate this new world of mobility and customer expectations. Our focus is to become a true partner that our clients trust to deliver great solutions, providing them with the knowledge and capabilities to remain competitive and fulfil the ever-changing requirements of their customers.

All this combined allows us to work towards fulfilling our mission - to make mobility safer and smarter for all.