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Cloud and Telematics

Industry observers believe that cloud will play a large role in enabling new and evolving business models in insurance, such as telematics.

“One thing that will drive future momentum of cloud is undoubtedly an explosion of usage-based insurance in the next few years,” says Accenture’s Michael Jackowski. “Carriers will be trying to move fast and furious to keep up, and there are tons of cloud-based telematics companies popping up.”

The problem for carriers is the infrastructure investment required to successfully implement a usage-based program. “If you tie yourself in knots studying the market, you’ll be behind,” says cloud consultant Michael Hugos. 

The solution for many companies will be to contract with cloud vendors offering the infrastructure of telematics devices and/or data. The future may see carriers using “driving scores” provided by cloud vendors in much the same way they utilize credit scoring today. 

“Insurers will turn to vendors who have a laser sharp focus on the device in the car, the reporting analytics, and the consumer-facing aspect of telematics,” Jackowski says. “They are going to let those companies worry about that while [insurers] deal with leveraging the data, which is what they do best.”

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