He shared that the insurer is using telematics data to develop a nuanced and segmented pricing structure that will provide a great price for safe drivers and ensure a strong, low-risk book of business. Recently, Lemonade filed its new car insurance offering with several states and in these filings, the company shares how it plans to leverage telematics data.
In a filing with the state of Georgia, Lemonade writes that the program has been designed to attract responsible, tech-savvy insureds that are interested in the possibilities of telematics, LIC’s business model, and its other products. It continues by stating that it intends to utilize telematics to give policyholders more accurate and fair pricing and the program relies on the DriveAbility Score 3.0 developed by Octo.
Octo’s DriveAbility Score uses “actual claims experience from a pool of insurers” to predict the likely loss costs of an individual driver. The end-user output results in a final value (score), which can determine the profiling based on the accident risk factor. In the filling, Lemonade says that if none of the drivers on the policy have a Driver Score at the time of a new business quote, then they will be rated based on an initial telematics tier factor figure.
Beyond the initial score, Lemonade shares that it plans to collect telematics data using its mobile app. For this, the company has partnered with TrueMotion, which was recently acquired by Cambridge Mobile Telematics. As part of the effort, Lemonade is proposing a 10% participation discount to all customers who sign up for the telematics program. The collected data will be used to assign a new driver score and that score will be used to calculate the policy’s telematics tier which impacts the rate.
