Pilots have become a common way for insurers to evaluate UBI programs. This is, by and large, a good thing. A test-learn-refine-deploy model tends to bring more positive results. And insurance companies aren’t normally led by executives who leap before they look when it comes to running the business.
So if you’re the UBI champion, you already see the great value in designing and conducting a pilot, and/or can probably expect to be told to do so.
Plotting the right course
Here’s the thing: Your first and most important job in designing and conducting a pilot will be to get a solid understanding of what it can and can’t accomplish. Your second job will be to set expectations, based on that understanding, to your organization’s UBI stakeholders.
A UBI pilot is a stepping-stone toward the ultimate goal of production. And it should be designed to test two things: 1) Your telematics service provider (TSP): their app, their project management, and all their promises; and, 2) Your organization: your ability to onboard users, your distribution channels, your ability to manage the UBI funnel, your customer support, and your ability to create a brand-supporting engaging UX.
The bottom line on the bottom line
What many don’t grasp is what a UBI pilot cannot measure; and it’s equally important to set this expectation from the start. This includes cost benefit assumptions around customer self-selection, quoting, conversion, and retention lift along with the willingness of the company’s agent force to participate. Critically, a pilot likely can’t measure the predictivity of the UBI score.
While the emergence and growth of TSPs promises to “democratize” UBI by putting it within financial reach of many smaller / midsize carriers, their solutions are hardly plug-and-play. One eason for this is that the driver scoring models—which form the basis of most TSP offerings—typically lack a key ingredient: your loss data (or any loss data).
This is not to say that TSPs don’t provide value—they can and do. But you have to understand this limitation. And you need to make sure your TSP will be a long term partner; not one that gives you an off-the-shelf solution as it disappears into the ether.
Pointing your pilot in the right direction: best practices
My company, Kairos Telematics, has worked with both carriers and TSPs before, during, and after the pilot process. And through our experience, we’ve derived a series of best practices to help clients’ UBI pilots get and stay on the right path.
Define realistic objectives and establish meaningful KPIs. Understand what you can and can’t accomplish with your UBI pilot. You may not be able to thoroughly understand UBI pricing. But you can use the opportunity to evaluate your sales and fulfillment processes, programming and maintenance resources, and other expenses. Share these objectives with your team, your company leadership, and your TSP so everybody is on the same page.
Assign a pilot manager. A UBI pilot has a lot of moving parts, and needs a full time, dedicated manager who can focus on both the daily tasks and the long-term objectives. This should be someone with solid business and analytical skills who can keep your team on point, who can push a vendor, who can negotiate with IT for resources, and who can deliver both good and bad news to leaders. The pilot manager must be accountable and have specific job objectives that are known to the stakeholders.
Recruit pilot customers early, set expectations, and use participation incentives. You’ll need to spend a lot of energy here. In full production, typical UBI programs lose close to half of participants between the initial targeting and the policy renewal. You can likely expect similar results from a pilot … unless you work to engage your pilot customers early, communicate clearly about the overall flow of the pilot and specific expectations, and keep customers involved and “happy to help” with incentives for taking part.
Gather feedback frequently. The customer experience is critical to the success of your UBI program, and their feedback is absolute gold. Gather pilot customer feedback frequently through quick surveys (for example, frequent 1-2 question surveys through the duration of the pilot, followed by a longer survey at its completion). Feedback must be shared with and corrective action expected from the TSP.
Mimic production. To the greatest extent possible, have your UBI pilot mimic the program you envision for production. You need to understand how the process will work, and identify potential hiccups before your program goes live. This includes all of the following:
Registration emails and other pilot communications
Downloads from the App store (have your customers download the app as they would in production, not from a pilot microsite)
Call center training, support, and escalation procedures
App analytics
User engagement
Chart a parallel course for production. Laying the groundwork for production should happen in parallel with the pilot. This includes tasks such as preparing for your state filings, engaging IT to ensure API and policy system integrations, data prep, analytics, creating and implementing your agency training, and setting up focus groups.
Manage up, down, and around
Your pilot is a test of whether your TSP is a worthy partner, and whether your organization has what it takes to operate an effective and efficient telematics program.
This gets back to your most important job. You have to sell this realistic vision for your company’s UBI pilot to senior management, and have their understanding and buy in. Your team and other interested stakeholders need to understand it too.
Kairos Telematics can help you put these best practices to get and keep your UBI pilot on the right course. Visit https://www.kairostelematics.com/, or reach out to me directly through LinkedIn, to learn more.