Within an insurance telematics program, the redesign of claims management process is one of the key aspects to maximize the ROI of the initiative.

1. Motor telematics
– Loss ratio improvement –
Telematics offers to the Insurance Sector a broad set of opportunities and each player can develop
its own approach to address specific opportunities or to fix its weakness. Telematics is an effective
value creator in the insurance business - as described in my previous article – acting on five
different areas: Risk selection, Pricing risk based, Value added services, Loss control, Loyalty and
behavior modification programs.
The underwriting side was typically the entry point for telematics programs, but the market is
currently addressing the opportunity to generate value on the claims handling: the Insurance
Companies have the opportunity both to improve substantially the customer experience and to
improve loss ratio.
Focusing on the loss control side, there are three main telematics impacts:
1. quick and controlled process
2. objective information
3. loss prevention
1 Quick and controlled process
Insurance Companies can set-up proactive and speedy claims management processes through
telematics. The telematics solutions allow the insurer to move from the traditional reactive approach
towards a more proactive approach in relation to claims handling. The timely collection made by
the Insurance Company of an accurate notification, together with an early active control of the
process, are key to lowering the cost of the claim. A recent Tower Watson research shows how a
proactive claim handling process is the main driver for an effective loss containment.
2 Objective information
Telematics solutions provide structured and objective information about the claim, giving the
claims handler a better description of the crash dynamic (braking, speed, cornering, etc.). With
telematics, claims handling could move to a new paradigm: the systematic use of this new kind of
information around the crash with other contextual information could improve the effectiveness of
each step of the claims management process. This approach allows also to reduce and prevent the
frauds.
3 Loss prevention
Insurance Companies analyzing big data – also with machine learning approaches - and using this
new knowledge could develop a regular communication flow to the client based on predictive

2. approach about risk factor as bad driving habits, car maintenance issue, dangerous weather
conditions. Loss prevention could be the next innovation area to lower the loss expenses.
Within an insurance telematics program, the redesign of claims management process is one of the
key aspects to maximize the ROI of the initiative.