Mobile apps and big data fuel this company’s growth
It was way back in the 1990s when Paul-André Savoie had his first taste of how powerful mobile technology could be for the auto insurance industry.
Savoie owned a company called Boomerang that used rudimentary cellphone technology to track down stolen cars. Boomerang was a huge hit with insurers, but Savoie could see it was only the beginning.
He watched as the price of GPS receivers and mobile telecom services fell steadily through the 2000s. By 2010, he was ready to strike. He launched a new company called Baseline Telematics to allow both insurance companies and policyholders to benefit from the collection of real-time data on driving habits.
It was a timely decision—Baseline has licensed its mobile app technology to more than 20 insurance companies, including some of the largest players in the world.
Analyzes real-time data from vehicles
At the heart of the technology is vehicle-tracking technology, known as telematics. It allows insurers to analyze real-time data transmitted from vehicles, handing out rewards for behaviours that lower the risk of accidents.
Savoie says drivers can choose between discounts for their safe driving behaviour or for their low mileage. The discounts can be as much as a 50% discount on their monthly car insurance premium. For insurers, usage-based insurance typically produces a 20% to 28% improvement in their loss ratio (losses divided by premiums), he says.
“Money motivates behaviour, and that’s typically what we see happening,” says Savoie, whose Laval, Quebec company employs 35.
Baseline’s app also allows consumers to do everything from their smartphone: From easily purchasing insurance, to filing claims and renewing their policy. The app is licensed to insurers on a white-label basis, meaning it is offered with an insurer’s own branding.
Savoie says the app can be downloaded by prospective customers of an insurance company. Then, in as few as 10 car trips, they can get a usage-based quote and buy the policy via their smartphone.
“It’s providing self-service to policyholders and a lot of that is powered by the telemetry and big data that we’re able to interpret and turn into a better user experience for customers.”
The increasing power of digital technologies
Savoie’s business highlights the role big data is playing in reshaping the reality of Canadian entrepreneurs. Companies now have the ability to collect and process huge amounts of data to uncover important business insights, thanks to powerful computers, the Internet and mobile communications.
The type of data companies can collect, and what they do with it, differs greatly according to business size and sector of activity. Nevertheless, a recent BDC study Future-proof Your Business underlines the important role data can play in growing your business and making it more competitive.
Driving behaviour monitored via mobile app
In Savoie’s case, his mobile app collects data on driving behaviors—speeding, harsh acceleration, harsh braking and aggressive cornering. It can also detect whether you’re distracted, using your phone to send texts or do some other activity while driving.
Insurance companies use this information and other data, such as who is driving, weather conditions and location of the car (in an urban or rural setting), and plug it into an algorithm that decides what premium reductions drivers merit given their behaviour on the road.
Baseline also uses its technology to allow life and health insurers to monitor lifestyle behaviours through smartphones and wearables. With the data, insurers can reward good health and lifestyle choices with lower premiums. The company is also exploring how insurers can use data to improve home insurance products.
Savoie says it’s all connected to emerging possibilities that mobile communications, the Internet and data analytics are creating.
“We are always looking at how we can improve existing business processes with this newfound real-time data stream.”
Four strategies to use the power of data in your business
1. Use data tools
Small businesses can understand customers better and capitalize on sales opportunities by using online surveys, social media listening software and free or low-cost web analytics tools, such as Google Analytics, that allow you to analyze website data.
These tools help you gather feedback from existing and potential customers, understand the impact of your online campaigns, track buzz on social networks and gain insights into your web traffic and search engine optimization performance"
2. Get a CRM system
A CRM system allows you to centralize all customer information, provide more personalized customer service and follow up with sales prospects. Benefits include an improved ability to anticipate clients’ needs, targeted reach, and increased sales through better client relationships.
Small businesses may want to get started with a free or low-cost CRM application.
3. Personalize your offering
Data collected from your website, CRM system or even online surveys can help you personalize your products and services according to your customers’ needs and tastes. Personalized offerings show your customers you know and appreciate them. What’s more, customers will generally pay more for a product that is personalized.
4. Improve efficiency with dashboards
By measuring your performance in key areas, you can evaluate how you are doing compared to internal goals or external benchmarks such as industry averages. Then, you can get started on improving your results. A good way to introduce a measurement system to your business is to select key performance indicators and then use them to create performance dashboards.