Amid the thousands of private auto rate filings submitted year-to-date, a few can be found from technology-focused startups looking to disrupt the insurance industry.
One of these is Metromile Inc., which S&P Global Market Intelligence recently profiled in light of its acquisition of an underwriting unit and subsequent fundraising. The company is writing in seven states, it said in September, and has "rapid state expansion plans in the coming year." As part of its business model, Metromile sends customers a free wireless device that measures the amount a user drives.
Root Insurance Co., meanwhile, allows customers to track their driving through a smartphone app, collecting mobile GPS data from the phone and therefore eliminating the need for a separate device. Unlike Metromile, Root takes into account the driver's habits, which it uses to offer low-cost insurance to safe drivers. A rate filing submitted to regulators in Ohio, where it is based, provides some additional details. Root plans to send its telematics data to Willis Towers Watson Plc, which will then send Root a WTW DriveAbility score for each app user. The insurer plans to target young, safe drivers who live in urban areas.
When developing its business model, Root obtained competitive information from Quadrant Information Services on several different carriers, including Progressive Corp., Allstate Corp. and Nationwide Mutual Insurance Co. Root concluded that Progressive offered the most competitive rates for the young driver segment, and through an algorithm developed in conjunction with Willis Towers Watson, Root plans to charge rates relatively close to Progressive on a segment-by-segment basis. Root writes through a carrier previously known as Club Insurance Co., which was in runoff prior to being acquired by Root's parent company, IBOD Co. Inc.
In Boston, another company is working on similar technology. Formerly known as Censio, TrueMotion Inc. provides an app and analytics for insurers to identify safer drivers and reward them with discounts. Although it is not a carrier itself, TrueMotion has submitted product filings to New Jersey and Pennsylvania insurance regulators. The purpose of these filings is to provide the insurers that TrueMotion works with a template for when they submit their own "me too" filings. "Me too" filings are when an insurer adopts another company's prior filing.
TrueMotion collects information from smartphones on driver behavior, including mileage, braking and time of day, as well as distracted driving indicators such as cell phone usage. The app, which must be active for 90 days, records GPS data and sensor data, which TrueMotion then analyzes and uses to develop driver scores, as described in one of the product filings.
Telematics are not exclusive to startups, however. When S&P Global Market Intelligence conducted research into the topic in November 2015, the majority of the leading private auto writers in the U.S. had adopted some form of telematics program.
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