Nationwide personal, commercial telematics leaders outline strategy
Nationwide has made numerous investments in and expansions of its personal and commercial lines usage-based insurance strategies over the past couple years, as the insurtech movement has introduced myriad new partners to the ecosystem. To break down where the company is now, and what the future holds for its UBI strategy, Digital Insurance interviewed Teresa Scharn, VP, product development for personal lines; and Pete Frey, commercial telematics manager; following is an edited version of that conversation.
Digital Insurance: Let's start with personal lines. SmartRide is the original UBI program -- what's the current environment behind it?
Teresa Scharn: SmartRide is a discount program where you get a 10% discount: You connect with us, you have that great experience over the first six months with driver coaching. Then at the end of six months, you can earn an additional discount, up to 40%. We started with a [OBD-II] device solution. IMS has been our partner with telematics from the very beginning and throughout our entire journey. We also have Octo as a device partner in a handful of states as well. We also have Cambridge Mobile Telematics as our mobile solution, starting that partnership in the middle of this year.
Digital Insurance: How do connected cars change the game for getting customers enrolled in UBI?
Teresa Scharn: We also have a connected car relationship with both Ford and Toyota, and we're getting data directly from them as well. We also have SmartRide Instant on GM: If a connected GM customer comes to Nationwide and gets a quote, we have a partnership with Verisk and GM to get that connected data with the customer's approval. If they have, 85 days of data, then we are able to apply that full discount (up to 40%) at point of sale. The discount is applied at point of sale versus needing to download an app or install the device to get that at first renewal.
Digital Insurance: What makes SmartMiles different?
Teresa Scharn: SmartMiles is a pay-per-mile program. The mobile works great for a discount program, but when customers are going to compare their odometer to their per-mile rate on their premium charge, we need tremendous accuracy, to have a better customer experience. So we only today have a device powering our smart miles program.
Digital Insurance: That is a good breakdown of the technology environment on the data-collection end. Are you working with a vendor for analyzing and scoring driving data, or is that all in-house?
Teresa Scharn: We started in 2011 with Willis Towers Watson, and by 2013 or 2014, we implemented our own model.
Digital Insurance: On the commercial side, what's in the works?
Pete Frey: We've got a couple of different programs that are on in production today, but they're both very young. They're all under our Vantage360 Umbrella. In late 2019, we had a soft launch of our first program in partnership with Cambridge. We do use their mobile phone and, and tag solution, which is just a little different than personal lines. Because of our need to identify rotating fleet drivers the tag was important for us. That program was aimed at small business because this is the area where they were looking for that value, looking for the discounts. It's a discount for participation with some very light fleet management tech capabilities. That's going into 10 states now.
Digital Insurance: What else falls under that umbrella?
Pete Frey: Our Vantage360 premier partner program, which is the partnership we have with Zubie and Azuga. These are direct to customer fleet telematics providers that are really good at medium to larger fleets. This is a subsidy program, so we don't offer premium discounts with this one. We offer subsidies to bring on that solution and share data with us, and we use the data to, help coach the drivers -- if they opt in for all of that. That's been working really well. These are dongle solutions, and they offer a little bit more fleet management capabilities. So again, for your larger fleets where you might have a safety manager or a fleet manager in place, this works really well.
Digital Insurance: How do these sides of the house work together to advance the strategy?
Pete Frey: We're pretty excited about the miles we're collecting and the vehicles that are enrolling, but we've got a long way to go. So we're trying to follow the lead of our personal lines partners in a lot of respects. They're paving the way. We're trying to do a lot of the same things beneath the surface from the data aspect, collecting the data, working with OEMs.
Teresa Scharn: The thing I'd say about an overarching strategy would be that we believe that there are going to be more and more partners, more and more data sources, and we're building solutions to easily enable being able to take in more data from different places. There's companies out there in the market that are working to be what we call these telematics data aggregators; we believe that that is a potential way to help us simplify some of these connections long-term as well.