Electronic Chat with Nino Tarantino, CEO- Americas, Insurance and Mobility Solutions (IMS)
Laura Mazzuca Toops | December 15, 2020
Carmine (Nino) Tarantino is CEO – Americas of IMS (Insurance and Mobility Solutions), part of Trak Global Group (TGG). IMS is a global provider of connected car solutions, services, and analytics to insurers, mobility operators, OEMs and governments. Its top product is the cloud-based IMS DriveSync® connected car platform. Before IMS, Tarantino launched Octo Telematics in North America, growing the business from start-up to the market leader. He was named Influencer of the Year at the 2018 TU Automotive Detroit and won best telematics service in 2017. Prior to Octo, he launched one of the first premium SMS and MMS (including the 2004 Olympics coverage) in North America and built the mobile premium content service under the brand name Flycell.
Your tech background includes network management for Telecom Italia in the ‘80s to launching one of the first premium SMS and MMS (including the 2004 Olympics coverage) in North America. What do you see as the biggest tech advances in recent years, and how do you see tech evolving in the near future?
Thinking about this in the context of the insurance space, which is a very data-driven industry, I believe one of the biggest tech advancements in recent years has been a growing ability to manage and analyze big data in near real time. Through telematics sensors, we are collecting and analyzing real-time data today which insurers have never had insight into before. This means a greater ability for our clients to proactively make timely recommendations and message coach drivers which will reduce accident frequency, keep users engaged as they work toward rewards, and providing the best customer experience possible, especially when it comes to rapid response times in the case of a crash or accident.
A better ability to handle data has been transformational, in my opinion. As a society, with more data, we are infinitely better equipped to make better decisions. That’s true in our approach to the market and to our ability to help our clients create more engagement through the use of intelligent technologies. The more data we collect, the more intelligence we can share among different players in any given ecosystem. Think, for example, about smart cities with connected cars, a managed repair network that includes repair shops, maintenance, roadside assistance, emergency services and more. More transparency in the process keeps users more engaged along the way.
What are the main benefits for insurers from IMS’s services?
Insurers spend millions of dollars each year implementing and maintaining technology solutions. It’s an investment that companies today must maximize at all costs. IMS is the only telematics technology provider with the firsthand insurance experience, via Carrot, and know how to improve engagement and drive true behavioral modification. This is the layer that is missing from so many telematics implementations today, and it is the next foray insurers must take to improve program success and help increase adoption of telematics. Speaking of ways to improve engagement over and above our new Engagement Toolset, IMS is the only provider to enable bespoke mobile app interfaces without the bespoke cost or time through our new One App mobile development framework. It’s a transformational technology and approach for insurers to ensure a truly engaging experience at the heart of the mobile app experience.
IMS also enables our insurer clients to look at telematics more holistically through a fully-connected claims approach that goes deeper than accident detection, deeply tackling claims liability and handling as well. Claims is the single largest cost center for any insurance company, so having the ability to truly improve larger areas of savings, including claims handling and liability, is a very attractive piece of the proposition, and a feature that is only available when they work with IMS.
Please explain the synergy between IMS and the launch of Carrot Insurance.
Both IMS and Carrot Insurance are subsidiaries of UK-based Trak Global Group. Carrot is a direct B2C insurer and sister company to IMS which is being used as a sandbox environment for proposition development and experimentation. Basically, Carrot is the way in which we take the risk so our customers don’t have to.
In recent weeks, IMS has launched a series of offerings developed in large part based on insights garnered from Carrot operations. The IMS Engagement Toolset, for example, is the industry’s most comprehensive suite of engagement tools, including rewards, coaching/messaging, and gamification, that leverage telematics data to help modify driving behavior and promote desired business outcomes, such as significantly increased user engagement and reduction of loss ratio values.
Based on the usage of this toolset in the Carrot sandbox, customers reported that 56 percent of drivers checked scores daily, and a full 88 percent of drivers checked scores weekly, resulting in a 39 percent reduction in accident potential. These high levels of engagement translate into overwhelmingly positive results for Carrot’s insurer customers and are evidenced by an average of 14 percent improvement in loss ratios for every two points of portfolio score improvement.
How has the advance of COVID changed your clients’ business, and where does IMS fit in?
The COVID-19 crisis has highlighted how important it is for auto insurers to offer customers flexible, personalized approaches to auto insurance which not only provide the desired coverage, but help customers proactively manage expenses as well. While driving distance, frequency, and length of trips decreased dramatically at the onset of the pandemic, many countries have seen driving behaviors edging back toward pre-lockdown levels as quarantine fatigue sets in for so many.
The technology sensors and solutions that IMS provides already enable mileage-based and usage-based insurance (UBI) programs for leading insurers in the U.S., Canada, and Western Europe. And, the demand for more personalized pricing means even more insurers are embracing the insurance telematics solutions and engagement tools offered by IMS for highly-accurate, personalized approaches they have never been able to offer before. Digital transformation within insurance has indeed taken off, and now, even the traditionally more change resistant claims departments have shifted to virtual, touchless modes of operation.
IMS enables Nationwide’s pay-per-mile insurance telematics program, SmartMiles®, for example, which bases insurance charges on miles driven and also allows drivers to earn up to a 10 percent discount for safe driving. With those kinds of propositions becoming more and more widespread, I have to believe that IMS plays a critical role in helping our insurer customers handle the changes brought about by the COVID-19 pandemic.
As the use of IoT continues to grow, how do you predict it will affect the insurance industry?
Due to COVID, more people are working from home than ever before, and clearly, behavior patterns have changed. As a result, individuals and businesses alike are looking at all facets of insurance and trying to understand the value being received for the premium being paid. As the use of IoT continues to grow and as insurers become increasingly comfortable with the concept and the technologies associated with it, I think the development of usage-based products becomes not only probable, but desired, for other lines of business besides auto.
Consumers are becoming increasingly sophisticated in the understanding of not only technology, but in ways it can be applied for their ultimate benefit. That translates into consumers beginning to demand very personalized approaches to insurance. So, the path to such options, through IoT, telematics, and digital transformation is the key to unlocking that degree of usage-based personalization.
What do you see as the most impressive advances in the telematics field in recent years, and where is it headed in the future?
There have been many advancements in the telematics field in the last five to ten years, but perhaps the most significant has been the realization that, if used intelligently as part of a usage-based insurance product or program, telematics technology can create significant user engagement, a better overall customer experience, and improvements in driving behavior as well. These things, in turn, have the ability to positively impact accident potential, loss ratios, profitability, and more.
As we close out 2020, we’re knocking on the door of UBI ‘3.0,’ where insurers will seek ways to drive true ROI from their investment in telematics technology. The key to ROI from UBI 3.0 will be both upstream – through truly engaging with customers and ‘nudging’ them towards safer driving - and downstream, in claims resolution. After all, telematics is fundamentally about predicting and reducing claims.
In claims, time is money, so speedy resolution equals huge cost benefits. Auto claims cost U.S. and European insurers about $360bn annually. The smart application of telematics data could potentially reduce this figure by $30bn, based on real-world evidence from Carrot, which has delivered near double-digit COR improvement for its capacity providers through the use of data in claims alone.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
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