Mr Gary Stephen Jackson of CSC Asia-Pacific paints a vivid vision of how an insurer can use telematics technology to give or update its customers with relevant information via a social group, thereby creating loyal customers, encouraging them to live healthier and saving money for everyone.
Imagine this. You are trying to catch your breath after finishing up one of the best runs you have had in weeks – you push a button on your iPhone to update your Facebook page to show your friends and family how far you ran, how many calories your burned, and the journey you travelled during your run.
This information is relayed via Bluetooth from a wrist band you wear – much like Jawbone Up – (http://jawbone.com/up) or the e-Pebble smartwatch – http://www.kickstarter.com/projects/597507018/pebble-e-paper-watch-for-iphone-and-android) .
This update pushes the information to your opted-in Running Community Facebook page you belong to, hoping to win today’s coveted “Best Run of the Day”.
Later, as you are riding in the taxi to get to your office, you get an email that says sadly you did not win today’s “Best Run of the Day” but you did qualify for a free smoothie at your favourite smoothie store, courtesy of your insurance company – which has a prominent banner ad displayed in the email.
Welcome to the future of Insurance Social Telematics.
What is Insurance Social Telematics?
Most people believe telematics only deals with car insurance especially in regards to allowing a black box to be installed in your car to monitor your driving habits. In turn, customers get a discount on their car insurance premium – as information is being relayed back to the insurance company about how fast you drive, the number of passengers, your usual journey to work. This information is then used as the basis for the inputs for the underwriting.
However, the underwriting rules that are generated by telematics devices for customers who volunteer should be excluded from the regular customer underwriting. Those with telematics devices know they are being watched and drive accordingly.
Yes, the risks are lower because they are more cautious but the relayed information does not really help analytics rules to be based on the regular, unwatched drivers.
Basically from an analytics perspective, you are creating an outlier group, not really changing behaviour.
On the other extreme, if you force all drivers to use telematics devices inside their cars, then they feel they are being monitored by the company and will seek out one of your competitors that offers them “freedom” for a relatively cheaper rate.
The business opportunity of Social Telematics
Social Telematics can be executed either as a “human monitoring” or “social building” experience.
What if you offer discounts to those drivers who want to be a part of a Commuting Social Group – that shares tips and tricks about traffic accidents, promoting car pooling, short cuts to common work destinations? And all this sponsored by an insurance company with telematic boxes supplied to help automatically update the social group with information – so the drivers can keep their hands on the wheel. This approach seems less intrusive in their lives and allows them “freedom” and “social community building”.
It also allows the insurance companies to see where the problems are by seeing the tips and tricks being offered by the customers themselves. And also if there is an accident, the claims process can become more efficient as the customers share information on the best ways to detail the accident, submit the claims and get more input on how the accident occurred.
This offers more than the math of the underwriting but allows the insurance company to know your customer. It also allows the customer to do what’s called “Social Advertising” as they influence others to become a customer as well.
The Self-Warehouse is Big Data
Most definitions of Big Data include Social Data at its core.
Remember though Big Data is not always about creating new data and/or hording all types of social, non-structured types of data. But in fact it is focused around the concept of creating instant action or context around a particular customer, transaction or interaction.
Social Data is data that shows the perception of your customer of who they were, who they are now and who they want to be. Social Data also shows the people they associate themselves with – and those they tend to be more like or who they are associated with by family
obligation.
More easily stated: Social Data is merely giving a personal context to the customer ID you have stored in your warehouse. This is giving rise to the Self-Warehouse concept.
A person’s context of themselves is a rolling eighteen-month (maximum) or six-month (minimum) self-perception warehouse. Social and telematics information should be parsed – broken into context but not kept forever. Why?
Think of who you were a year ago – nearly two years ago – do you still like the same things? Still go to the same restaurants? Still do the same exercises? Generally the answer is no. And the self-warehouse should reflect who they were recently, who they are now, and where they might be soon.
Never forget the number one rule of Social Data: people change.
Technology considerations of Social and Telematics
The biggest misconception around linking Social Data to operational information is hiring programmers to write code to link them together. DO NOT DO THIS! This is intrusive and can cause privacy concerns. The easiest, most cost effective way is to allow the customers themselves to link their operational details to their social profiles.
In other words, allow your customers to opt-in.
Allowing your customers to login to the insurance website via Facebook Connect – and if they do – they get added to a Healthy Lifestyle Social Group and based on their insurance product – Life or Property & Casualty – they get a telematics device based on their lifestyle – car telematics box or wrist band sent to their home to try for free.
Then the telematics device (if they choose to use it) will start relaying social telematics inputs.
The constant feed of inputs from a telematics device – whether it is a car black box or a wrist band monitoring your pulse, geographical coordinates, distance travelled – and making all these details relevant requires faster warehousing and analytics technologies.
It is recommended that only companies that are using in-memory analytics and in-memory appliance technologies to take on a telematics strategy. Traditional warehousing and analytics at the back end are incredibly difficult to maintain from an operational and cost perspective.
Also note - social telematics data is a little different than normal social data. Social telematics data should be broken into context based on two factors:
1) Does it change their Life Stage
2) Does it create a Life Event
Then the details that create one of these two factors – should be released and the Stage or Change remains until another Social Telematics event occurs again to modify their Life Stage or Life Event.
These life stages or life events should be used in regards to underwriting, cross-sell, up-sell events. And they make for an easier trigger mechanism to kick off campaigns around niche customer segments/demographics, encouraging being a better driver, and/or more pro-active healthier choices.
These life stages and life events also allow an insurance company to more easily create new sellable products more intimately focused on the customers while also promoting social community and “social advertising” as they use peer pressure from living healthier lifestyles – get more and more people to participate because of the discounts, the rewards, and the active community.
Where could Social Telematics take you?
So even though in the future, your customer might not win the “Best Run of the Day”. However, if they fall and break their leg because of construction mishap on their travelled running path, this information, being shared to a social community, will warn others who might travel the same path, to avoid it and find another running trail or be more cautious.
Then this customer’s agent being alerted about the accident without the customer having to reach out to him for a claim or having the iPhone app give details to the customer about the nearest insurance-friendly hospital and alerting the hospital or doctor prior to their arriving, allows for a smoother claim and a happier, healthier faster-recovered customer.
And the four other runners on the Running Community Page sponsored by you as the insurance company were saved from the pain and aggravation of injuring themselves. And you, the insurance company just saved huge amount of money of claims just by giving them the option.
Saving money, creating loyal customers who understand themselves better while at the same time creating a social community to keep encouraging them – which is made up of other customers and you – the company who first inspired them to live healthier.
Imagine that.
Mr Gary Stephen Jackson is Director of Business Analytics at CSC Asia-Pacific.