Usage based insurance: easy to start; as advanced as you need.
How Skymeter Insurance Works
Skymeter's metering service calculates the insurance bill each month, based on actual driving that month. The insurer has a simple three-step process: install meters, receive billing data, send bills. Since drivers are motivated to keep their meters working, to maintain coverage, meters may even be self-installed.
The meter gathers financial grade data on the use of vehicles. This means the information is good enough to charge per mile (or km), and the charge can be justified and sustained if challenged in court either by a single driver, or in the worst case, through a class action lawsuit. This data may also be useful in the claims settlement process. Skymeter has the capability to record the circumstances leading up to a crash, and to track the accelerations and trajectory after the crash.
Contact us for more details both on this "black box" capability, and also more advanced fraud detection tools.
Privacy is the biggest concern that drivers have with all GPS-enabled insurance services, including Skymeter. This is why Skymeter offers a fully privacy-protecting metering service. Part of this privacy protection includes making the raw driving data unavailable to the insurer except, e.g., to analyze a claim. With driver permission, data may be aggregated anonymously to build a database of risk factors for actuaries.
Potential Rating Factors Measured by Skymeter's Metering Service
Skymeter measures the time, distance, place, speed and acceleration of all driving, and the location and time of all parking. This information is then processed, based on rating information provided by the insurer, to generate the risk factors of interest to each insurer's underwriters.
For instance, an insurer may wish to charge for driving:
• per minute or mile (or km) traveled
• modified by the driver driving record
• modified by the vehicle type owned
• modified by the class of road (e.g., busy highway vs. country road)
• modified by the time of day (e.g., Friday night vs. Sunday morning)
• modified by the riskiness of the historical behavior (e.g., acceleration)
• modified by the riskiness of the current behavior
Insurers can also charge for parking:
• per hour parked at high risk locations (e.g., on street, in mall)
The modified mileage (or km) data replaces self-reported data on car use and residence location. Driver acceleration patterns can replace possibly discriminatory rating factors like age and sex. Acceleration patterns may even identify driving by an alternate driver, and automatically adjust rates.
Why Choose Skymeter?
The simplest way to offer usage-based insurance is via the odometer. Odometers are accurate on distance traveled to around 4%. Why? Because odometer distance is affected by the size and inflation level of the tires. That means your total risk-adjusted revenues may vary up or down by 4%, with a downwards bias if drivers game the system (e.g., they install larger-than-rated tires). Profit in a customer pool risks being completely eliminated by this error. Skymeter's Financial GPS eliminates this error and risk.
Odometers also do not differentiate by time of day, risk class of road, or actual driver behavior. Some systems combine odometers with CANBUS data from the car to get the driver behavior data. The CANBUS, however, cannot tell you if someone is traveling 60 miles/hr (110 km/hr) on a highway or on a city street. The two activities have very different risk profiles. A few firms have attempted or started usage-based insurance using conventional GPS to gather this data. According to some, this is a mistake: usage-based insurance is a financial transaction, and requires Financial Grade GPS.
Choose as many or as few rating factors as you wish. As you grow from
an easy-to-use starter system to sophisticated insurance pricing and advanced fraud detection, Skymeter can support you.
