Insurance data analytics provider Verisk has launched a new version of its telematics scoring model, DrivingDNA Score. With an associated rating rule and expansive state rollout plan underway, the updated scoring model is designed to make usage-based insurance (UBI) market entry and expansion easier. To learn more about the technology and the company’s strategy for the market, Digital Insurance spoke with Joe Wodark, who was recently named vice president and general manager of Verisk’s Internet of Things (IoT) and telematics business.
Digital Insurance: What roles do you see the Internet of Things and telematics playing in the insurance market in the coming years?
Wodark: IoT and telematics will be the centerpoint of many rating plans and continue to rise in prominence. With higher scrutiny on traditional rating variables like credit, age, marital status, pay how you drive and how much you drive will become more heavily weighted. Beyond rising consumer demand for personalized pricing, the use of individual driving behaviors affords insurance buyers a level of control over their rates. Adjusting specific driving behaviors can result in visible savings on premiums. We will likely also see an emergence of home sensor data using in rating/underwriting.
DI: What are some of the top challenges in deploying these technologies, and how can they be addressed?
Wodark: Data access standardization and normalization will continue to be challenges. Discrepant data sources and inconsistent data granularity will limit the practical uses of this information in the insurance value chain. Experience has taught us that the process to transform raw, trip-level sensor data into insurance-ready insights is a tremendous undertaking. The data itself varies by make, model, telematics control unit (TCU), etc., and it takes significant effort to develop systems for cleansing and normalization at scale. In some cases, there may be a misconception that our platform is merely an aggregator. But we fundamentally believe that the rigorous data normalization processes we’ve pioneered are the key value-adds. We believe insurers benefit from an operating model that reduces or eliminates the burden of multi-source data preparation and management, letting them focus on writing business and core insurance operations.
DI: What are some of your top goals in your new position at the company?
Wodark: We must first continue to serve our customers and deepen and extend our relationships with them. Their needs are continually evolving. We must continue to be their trusted source of telematics expertise and evolve our solution set to meet their growing needs. We will continue to take an advisory role to help our customers along their telematics journey. We must also continue to meet the needs of our data partners.
DI: What’s new about DrivingDNA Score from previous offerings?
Wodark: Our DrivingDNA scoring model is different because it can support a broad range of telematics data sources—mobile, hardware dongle, connected car—and produce a score predictive of insurance risk, offering up to 5.5 times loss ratio “lift” over traditional variables. This means insurers can run a telematics program that gives consumers data collection optionality without the complication of multiple models. Another critical differentiator for the DrivingDNA Score is the expansive multi-state filing process, currently underway through our Insurance Services Office (ISO) advisory practice.
DI: How will the DrivingDNA brand and its portfolio impact the telematics industry?
Wodark: It’s already delivering significant value to our customers and the industry is taking notice. Our customers have cited a four times improvement in bind-rate when using our DrivingDNA product. They are writing more business, improving profitability, and simultaneously improving the customer experience.
