Moving the insurer from a reactive partner to a proactive partner- Nino Tarantino

30 November, 2016

In an exclusive interview with Telematics Wire, Nino Tarantino shares his thoughts on wide ranging topics related to telematics insurance and the benefits which the end-users are realizing through improved driving habit in addition to premium benefits.

Nino Tarantino, CEO, Octo Telematics, North America

Nino Tarantino, CEO, Octo Telematics, North America

Nino Tarantino is the North American CEO of Octo Telematics. Under his leadership and applied global telecommunications knowledge, North American operations passed 1.5 million telematics policies users throughout the U.S. and Canada just four years after its launch in 2011. Nino is also Board Director of the Connected Vehicle Trade Association (CVTA), a non-profit business league established to facilitate the interaction of the entities involved in the vehicle communication environment.

How is the UBI market in North America different when compared to market of Italy and United Kingdom?
The main difference is how they started. In Italy and the UK, the primary focus on UBI was on the benefits of reducing insurance costs, while in the US, we started with a focus on associating driver risk with better pricing – helping to create better, safer drivers and roads.

People are talking about UBI services beyond premium discounts. What are those “value-added” services that an insurance carrier would like to extend to its users in coming days?
Telematics offer so much more than simply UBI discounts! Telematics can make any car a “connected car,” and offer driver benefits and communications around:

  • Road conditions
  • Weather hazards
  • Driving Analysis
  • Safe driving tips
  • Vehicle maintenance needs/timing
  • Crash and claim on-demand assistance, analysis and service

And more. Telematics moves the insurer from a reactive partner to a proactive partner, improving the relationship between insurer and insured.

Do you see consumer data privacy as a deterrent in adoption of UBI?
No. At first, consumers might hesitate, but they did so with almost every piece of popular technology today. From Palm Pilots to iPhones, Snapchat to Twitter, privacy is always a question. Eventually, consumers decide that the benefits outweigh any hazards, and they realize that in order to garner the advantages, they have to share a little information – people are willing to give up a little privacy to save money and to gain valuable service, so it’s not really a deterrent to UBI adoption.

How does Octo secure the data it collects?
One of the most important considerations when choosing a telematics partner to power your UBI program is certification and standards. Does your chosen partner meet international standards and certifications? What is their experience in doing so? Meeting standards and certifications should be a fundamental principle of everything your technology partner does. Octo respects the enormous responsibility of the institutions, companies and individuals trusting it with information on their lives, health, property and driving habits, and operates at the highest levels of system security and data protection standards available. And as a global pioneer in t the insurance telematics sector, Octo is ready to adapt and comply with all news standards aiming to improve industry competitiveness and client safety.

Octo has invested heavily in data security. Our data security is managed through an Information Security Management System (ISMS) compliant and certified according to the norm ISO 27001, an international standard that must be complied with when designing and managing Security Information Management Systems (ISMS). It specifies standards of design, specification, physical and organizational security. This is a very stringent norm, typically used for the IT systems of banks, where losing data means losing money, and for military purposes, where the importance of information security is paramount. The ISO 27001 standard is a widely recognized standard for organizations where information security is indispensable and linked to financial exchange. Compliance of the ISMS regarding standards is certified by Quality and Environmental Certification Ltd.

Why is UBI important for both millennial and novice drivers? Is it true that UBI programs do not necessarily appeal to all ages?
UBI is important to anyone who cares about being a better driver, creating safer roads, and ensuring the best pricing in their automobile insurance policy. In August 2015, Willis Tower Watson reported that millennials show particularly strong interest in a UBI policy — 88 percent “interested” or “maybe,” compared to 74 percent for other survey participants. This could be because millennials are very cost conscious and socially aware, and they desire to do things that support those values.

A large number of people in the US do not know much about UBI? How do you think one can promote awareness about UBI?
A lot of this is up to the insurance companies, who need to be proactive in marketing their UBI programs. Letting consumers know they have choices in how their policies are priced is key.

Could you share some response on user driving habit when they subscribe your service?
Drivers tend to tailgate less, speed less, and drive more carefully – for example, less hard cornering, less hard breaking and less speeding. We’ve also seen that when telematics is used, fraud is diminished by 4-15% of total claim value. Late accident reporting is also down. Drivers have fewer – and less severe – claims, and the time to close claims is improved, getting policyholders back on the road in a safe vehicle faster than ever before. At the end of the day, telematics warns drivers of not only unsafe driving habits, but also unsafe roads or road conditions. This helps create better drivers. More good drivers on the road means less claims for insurers and less accidents for drivers.

136 billion+ miles of drive data and extensive crash data, compiled over years. Do you see your own response to the driver behaviour management improving over the years?
Absolutely. Our proprietary machine-learning algorithms are continuously improved by the collection of new data by benefiting insurers and drivers. We see driving patterns improve over time, evident in drivers’ improved scores and change in patterns such as less hard cornering, hard braking and tailgating. We also see a change in claims behavior and reductions in fraud. With telematics cutting down on fraudulent claims, insurers will see a benefit to the bottom line. For example, in 2014, on average, Octo solutions reduced claims management costs by an unprecedented 25% and cut claims processing time by 40%.

And actually, telematics can help improve road safety overall, going beyond just a driver’s patterns to include weather alerts, road condition alerts and even monitor a driver’s alert level. This technology is making our roads safer and improving the relationship between consumers and insurance companies.

By 2020 90% of cars would have embedded connectivity. What will this mean for insurance telematics segment?
Great things! As the automotive market evolves, so too, must the insurance industry. Telematics allows insurers to innovate their approach to claims, customer service and interaction – successfully moving from a low-touch “only when you need us” model to a high touch, “proactive and always there for you” business model, resulting in increased revenue, less risk and long lasting customer relationships.

We also see new opportunities even with the growing popularity of autonomous cars. There will be a stronger need to collect and analyze data from the connected, autonomous car because not only is there data in the information that comes from the car itself, but there is information that comes from the contact – the contextual data. In an accident, it’s important to understand what happened, the timing, the weather conditions, the traffic conditions, if there was some point of interest nearby, etc. In the future, with OEMs selling already connected cars, there is going to be more and more of a need for private companies that expressly analyze telematics data from connected cars.

Is Octo expanding its business in other emerging markets? Which new geographies can we expect Octo to be in next couple of years?
We expect to continue to serve the automotive industry and we foresee telematics’ value in home and health insurance as well. Currently, Octo is headquartered in London, with offices in Boston, Rome, Stuttgart, Madrid, and Sao Paulo. We serve several countries globally, including Canada and Mexico in North America.

Octo will continue to help the insurance industry evolve and grapple with IoT and how elements of it are affecting and changing their overall business models. For the first time since inception, insurance is being truly disrupted by technology. Telematics data is enabling insurers to add and broaden offerings through usage-based insurance, actuarial pricing, claims management, crash reconstruction and stolen vehicle recovery – all of which offer consumers additional reasons to interact with their insurance companies.

Insurance telematics is indeed a global market, as insurance follows cars. In the next few years we are committed to supporting that growth in the largest insurance telematics markets, such as the US, UK, Italy, China, Russia and Canada.

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