Using data science to revolutionise insurance
Let’s talk about insurance for a moment. Do you really know how car insurance companies come up with annual premiums? For many of us who (thankfully) haven’t been in an accident for years, insurance is a begrudging purchase where we’ve not directly experienced the benefit. Each year we pay our annual premium, however we have little-to-no interaction with our insurer aside from lifestyle-oriented email communication. KOBA Insurance is setting out to change this – both from the way consumers pay for insurance, as well as through ongoing service touchpoints.
KOBA is part of a new global movement known as ‘User Based Insurance’, where consumers only pay for what they use. Every modern car creates and tracks huge amounts of data points each day, using this for onboard diagnostics, alerts, smart safety features, and every day driving features. This data was deleted everyday. There was nowhere for the data to go… until now. With almost every major car manufacturer having a ‘connected car’ program in the market, from myToyota Connect, FordPass, to Mercedes me connect, KOBA is joining the connected car movement to tap into driving data to make personalised services for you.
Seeking to empower consumers and ensure responsible adoption of this new dataset, here are 4 ways KOBA is looking to pioneer the connected car industry in Australia.
Transparent pricing: KOBA believes drivers won’t get in a driving collision if their car is parked and they aren’t driving. Using this theory, KOBA breaks up their annual premium into 2 categories: a driving premium which covers you for the risk of getting into a driving accident; and a fixed premium which covers you for accidents while parked. The fixed premium is all you pay if your car stays in the garage, providing coverage while the vehicle is stationary. When you drive, you pay an additional per-km rate (or driving premium), usually a few cents, for comprehensive insurance.
Fairer pricing: Traditionally, insurance prices are set at a portfolio level; meaning low risk drivers pay higher premiums to balance out the portfolio to subsidise high-risk drivers. KOBA is disrupting this outdated insurance model by putting drivers in control with real-time, data-driven insurance where drivers only pay for the insurance they use. Pay an upfront fixed cost to cover you while parked. Working from home so you’re only driving 50km a week to do the school-run, groceries and park work-out? You’ll only pay for those 50km.
Privacy and permissions are key: KOBA uses driving distance and location to create the customer’s premium payment calculations; allowing them to charge drivers per km driven. Driving habits measured through KOBA do not affect the price of your insurance coverage. Driving data belongs to the customer and is securely encrypted, with customers assured of their privacy. Any other data is collected for the benefit of the customer through personalised services. Future plans include a personalised monthly driving report that highlights ways to improve fuel efficiency and reduce the risk of speeding.
New data science algorithms KOBA strives to continue to improve their insurance service, creating new data science algorithms to provide personalised, beneficial tips related to car care, safety, and maintenance.
Today, great service by your insurer is largely confined to the time just after an accident; where getting you safe, healthy, and back on the road is the priority. KOBA’s goal is to create a service, not just for when you’ve been in a car accident, but to support you throughout your policy lifecycle.
Future plans for policyholder benefits include automatically calling emergency services if an impact that is severe enough is detected, it might also register critical information about the inciden t, including the exact time and location, to assist with any claims, as well as a digital mechanic health check for vehicles.
Read more at kobainsurance.com.au