Q&A: The challenges to selling – and delivering – UBI products

Before telematics, automotive insurance was easy: A customer went to a broker or online, purchased a plan, and the rest was paperwork. Today, not so much. Insurance companies are starting to leverage telematics to monitor driver behavior, and that requires a bit of a walkthrough for the customer.

As product manager for Esurance, a U.S. auto insurance provider, Inquimboy has been overseeing the implementation of telematics into Esurance’s auto insurance products.

He spoke with TU’s Jan Stojaspal about the benefits of usage-based insurance (UBI) over traditional automotive insurance products, about how to explain the new technology to customers, and how to make the process of driver scoring a positive experience.

UBI is such a different product from regular insurance. Can you go over some of the key differences?

We’re a direct insurer, so we sell policies online and over the phone. Customers are typically expecting just a purchase experience: We quote the policy, and they purchase. With UBI, it’s something actually more physical and tangible that they’re going to get.

So we take a little bit more [time] in terms of setting customer expectations and advising them that there’s going to be doing a little more than just purchasing the policy, that an actual box is going to show up at their doorstep.

We tell them: You’re going to get an OBD2 device, and you’re going to need to install it somewhere in your vehicle. Most folks don’t know where the onboard diagnostic (OBD) port is in their car, or even what it is.

So we make sure to set customer expectations up front, and then we remind them again after they’ve purchased a policy by sending them an email, letting them know that this is coming, this is what you need to do with the device. And then shortly after that, we do some follow-up with them, making sure they’ve received it and helping them any way they need.

I wouldn’t think it would require as much hand-holding. Is that information not available anywhere on your website?

We actually like to do a lot of hand-holding … just because it is such a different product. There’s something there that they need to handle. So we walk them through that process and provide as much advice as they need. And that goes a long way towards making it a smooth experience.

If they’re opting for a UBI product, they’re already expecting a different product. Do they just not expect the technical complexity?

A little bit of that. Not everyone is very car-savvy. And then there’s also the issue of what can happen during the purchase process. Say, a husband purchases the policy, but does his wife know what else is coming? She sees something from Esurance, ‘I don’t know what this is,’ it goes in the trash.

So having reminders and as much contact as possible without being annoying is definitely helpful in terms of getting the devices installed and getting [the customers] their discount and their value-added services as quickly as possible.

There’s also the part of evaluating the customer, which I imagine is another potential flashpoint. Can you talk a little about that?

With most UBI programs, their discount is ranked from 0% to 30%, and some even higher. And, for the most part, most drivers think they’re good drivers. I think I’m a good driver. I’m sure you think you’re a good driver.

But when that renewal for a discount comes up, some folks come into their information and see that they might not be as good a driver as they thought they were, and we have to walk them through [the information] and help them understand how the scoring works, [that] these are the data elements that we’re measuring, and this is what can impact the discount.

How can you make that a positive experience?

I think the positive side of that is that, for most UBI programs, customers have the opportunity to achieve a higher discount. So even if they might not have gotten the discount they’ve seen at first, they have an opportunity to improve their driving and get a higher discount the next term. It’s a learning experience as well. And they’re still getting a discount, so they’re saving money, which is always a good experience.

UBI isn’t just about educating potential customers. It is also about educating people within your company, like people who make the sales calls and send the follow-up emails. What is your experience on this front?

We did try the route of just general training, and that didn’t work itself out the way I had imagined it to. What we ended up doing is very UBI-centric training rather than having it lumped in with all this other training that takes place.

What was the hardest part of that to wrap your head around?

I think some of the major consumer issues that are being brought to the front here at the conference (Insurance Telematics USA 2013), like privacy, Big Brother and that kind of thing. And I certainly understand that. Privacy is a big topic during conversations with customers, so addressing the program as voluntary is very important.

Jan Stojaspal is the executive editor of Telematics Update.

For all the latest telematics trends, check out Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Insurance Telematics Europe 2014 on May 6-7 in London, Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, and Telematics Munich 2014 on Nov. 10-11 in Munich, Germany.

For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.

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