Trails and trials of telematics devices
Last year, telematics seemed to be not only the hot new thing, but the new thing that scared people. What did it mean for the industry? Who would own the data? Most importantly, how could brokers sell a technology that sure, offers drivers a cost benefit in terms of lower premiums but doesn’t exactly make them stampede the way folks do for a Black Friday sale at a Des Moines Walmart? In some ways, telematics is still a technology in search of a market—at the very least, greater market penetration.
Not that it’s going away, far from it. But the new question is: what form will it finally settle on? The world’s often a confusing, bewildering place: you can now have a telematics app on your phone, we’ve learned some devices can be hacked (Metromile’s down in California), Ingenie’s using telematics to reach younger drivers, and why, why do studios still let Katherine Heigl make movies?
Okay, we can’t answer the last one, but someone in the industry passed along to Top Broker a list of 154 vehicles that are allegedly incompatible with the device used by Intact. The vehicles aren’t all ancient rust buckets— some are 2013 and 2014 models. To be clear, we’re not deliberately picking on the nice people at Intact. In fact, when we reached out to them, they pointed out they had 80,000 customers signed up for their program, but acknowledged in a formal response that “some vehicle models… are not compatible with the telematics device—largely due to the age of vehicle or electronics incompatibility.”
And like everyone else, they don’t have a crystal ball either. “As technology is constantly evolving, we are not in the position to predict the trend of device and vehicle compatibility going forward. Working with our telematics provider, our goal is and will remain to provide as many of our customers access to this program as we can.”
As one experienced old hand puts it, however, what may worry brokers out in the field is whether competition can service those vehicles if their insurer can’t. “Can anybody else do all vehicles?” he asks. “If Desjardins can do all vehicles, that should be a problem for brokers. If they can’t, then everyone must be faced with the same problem.” Is the answer to incompatibility “that we need to go to an app-based solution as opposed to an installed system? I’m not sure.”
And speaking of Desjardins, they don’t disclose hard numbers, but they do claim that one out of four of their new insurance clients enroll in the Ajusto mobile app program for smartphones. Of course, an app has its own inherent issue: you got to have it on for the thing to work and be useful.
IBAO president Michael Brattman doesn’t really consider any of this a problem. “Telematics is fairly new and increasing in popularity,” he told Top Broker. We put it to him that the persuasive case for telematics hasn’t quite found its traction with consumers, especially with new technologies and even driverless cars coming up fast. He concedes that while Intact’s 80,000 customers and no doubt similar numbers for Desjardins are great, “when you look at the fact that we’ve got 7.2 million drivers in Ontario who purchase their insurance from a broker, [and] that makes me think we probably have about 10 million drivers in Ontario, that’s not a big percentage.” But Brattman points out it’s still early days. “As a broker, I still have to educate people on [telematics], and there isn’t a huge knowledge outside our immediate industry of what that device entails and what it offers.” At least, not yet.