Hyundai Motor America is the latest automaker to provide a usage-based insurance (UBI) program via the Verisk Data Exchange. General Motors, Ford, and Honda are already members of the exchange, according to Verisk, which provides predictive analytics and decision-support tools to companies in the insurance, energy, and financial services industries.
UBI programs incorporate individual driving behaviors into the calculation of insurance premiums, which results in discounts for safe driving. Companies have typically been collecting this driving information through third-party hardware and mobile applications, and the Verisk Driver Feedback platform gives them another option.
"As demand for more transparent auto insurance pricing grows, usage-based insurance is a powerful way for Hyundai drivers to have greater control over their insurance costs," says Manish Mehrotra, executive director, Digital Business Planning and Connected Operations, at Hyundai Motor North America.
When these drivers begin a quote with a participating insurer and consent to share data, Verisk provides a record of their historical telemetry. This enables the insurer to calculate a personalized driving discount at point of quote and eliminates the need for the multi-week “driving observation periods” typically associated with hardware- and mobile-based data collection models. The result is a streamlined UBI purchase experience for the driver.
“Verisk and automotive partners like Hyundai are using the power of connected cars to upend the traditional model for [UBI], creating a far more streamlined experience for consumers as well as efficiencies for insurers,” says Karthik Balakrishnan, senior vice president and general manager of Verisk’s telematics business.
“With UBI programs based on third-party dongles and mobile apps, consumers purchase a policy and are granted a benign participation discount,” Balakrishnan continues. “Only after the policy is bound does the device or app begin collecting the weeks of driving data needed to calculate a personalized discount. Perhaps the driver will qualify for the [maximum] discount, perhaps none at all. They won’t find out for weeks, and at the insurer’s expense of managing a dongle or mobile app program.”
The exchange is a cloud-based platform that connects multiple automakers and other data partners with insurers from across the industry, Balakrishnan says. The most significant value happens in the middle, he says, where Verisk employs advanced analytics, artificial intelligence, and unique loss data and insurance expertise to refine raw, multi-source driving data into insurance-ready telemetry information.
Driver Feedback provides users with an individualized score and recommendations that can improve driving safety. The predictive model was built using real-world driving behavior data and thousands of insurance claims, Verisk says. This information is stored in the Verisk Data Exchange.
Drivers of Blue Link connected Hyundai vehicles who opt to share their driving habits via the UBI program can see a number of potential benefits. For example, they can access their driving score and receive helpful feedback to improve their driving skills. Eligible drivers can receive UBI offers and discounts based on their personalized driving behavior, and can receive expedited UBI quotes.
The Verisk Data Exchange works directly with automakers, ingesting driving telemetry data from consenting drivers of connected vehicles. In many cases, automakers use the platform as an incentive for owner opt-in.
A number of leading insurance companies are already connected to the Verisk Data Exchange, according to Verisk. These insurers can anonymously deploy Discount Alert notifications to qualified drivers, giving them an opportunity to save money on insurance premiums with behavior-based discounts.
