Financial impact of telematics estimator

Estimate how telematics impacts your combined ratio

  1. Use the slider to select your organization’s auto combined ratio -OR- use advanced calculator
  2. Click the ‘Estimate combined ratio’ button
  3. Click through the interactive customized bar graph to understand the estimated impact of telematics for your organization
Combined ratio: 106%

  1. Fill out the information below (industry average values have been provided) -OR- use basic calculator
  2. Select your level of telematics investment
  3. Click the ‘Estimate combined ratio’ button
  4. Click through the interactive customized bar graph to understand the estimated impact of telematics for your organization
Incurred losses:%
Adjusting expenses:%
Defense and cost containment expenses:%
Operating expenses:%
Telematics expenses:
 Octo GlimpseOcto VantageOcto Surround

We will not store this data.

   Indemnity costs   Allocated loss adjusting expenses   Unallocated loss adjusting expenses   Telematics costs   Underwriting and administrative expenses
Click on an expense category to learn more.
Improvements in combined ratio only apply to policies enrolled in a telematics program.
For a full explanation download our white paper.
   Indemnity costs   Allocated loss adjusting expenses   Unallocated loss adjusting expenses
   Telematics costs   Underwriting and administrative expenses
Click on an expense category to learn more.
Improvements in combined ratio only apply to policies enrolled in a telematics program.
For a full explanation download our white paper.

Incurred losses

Insurers can expect their telematics-based policies to benefit from positive selection bias, resulting in both fewer and less severe accidents. In addition, when drivers know they are being monitored, they exhibit fewer risky driving behaviors, making a safe book of business even safer. Insurers using telematics have seen as much as a 40% reduction in accidents, 20-30% reduction in claims, and a 30% reduction in claims costs.

Additional resources:

 
 

Adjusting expenses

In addition to benefiting from fewer accidents and lower overall claims costs, insurers can expect significant savings on adjusting expenses. Telematics enables capabilities such as instant first notice of loss, crash reconstruction, and crash severity analysis which can help streamline the adjustment process. By combining this data with other digital tools such as app-based proactive claim reporting and photo-based adjusting, insurers have seen loss adjustment expense improvements between 5% and 10%.

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Defense and cost containment expenses

Cost containment expenses, including subrogation and fraud prevention, contribute significantly to an insurers’ combined ratio. Telematics combats fraud and improves arbitration win rates by providing objective data that insurers can use to identify what happened and refute what didn’t.

Additional resources:

 
 

Telematics costs

Whether you build a telematics program in house or partner with a telematics service provider, there will be a direct cost to your insurance telematics program including telematics devices, shipping and logistics, telecommunications, and program development. The cost of a telematics program varies widely depending on capabilities, value-add services, and devices but partnering with an enterprise-level provider can reduce costs through economies of scale.

Additional resources:

Operating expenses

Telematics will likely have some impact on operating expenses, but exactly how much is difficulty to quantify. Lower-premium telematics policies may reduce commissions paid or other acquisition expenses. Other general expenses may also change, based on how your program is built.

Additional resources:

 
 

About this tool

This tool utilizes publicly available data on the financial positions of insurance carriers, their public statements on the results of their telematics programs, and Octo’s own experience in implementing telematics. Industry average data was pulled from the Insurance Information Institute. For a full explanation of the inputs in this model, and their sources, download our white paper: Optimizing Claims Organizations’ Financial Results Through Telematics.

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