I was in Chicago last week for Insurance Telematics 2012 andlistened to presentations from about two dozen speakers on howtelematics and usage-based insurance will affect both thecommercial lines and personal lines of insurance. Here's a samplingof quotes from the conference.

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1) “Don't overspend on the initialinfrastructure. Devices are a tool, not the solution.”

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This came from Robin Harbage, a director at Towers Watson, inhis keynote address. The advice is pretty straightforward;developing a strategy for UBI needs to be the first step forcarriers, not a trip around the software bar.

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2) “Know your customers; know yourmarket; know your abilities; know the ecosystem.”

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The quote is attributed to Nate Bryer, new product developmentmanager for Allstate Insurance, in describing the four A's that hefeels can lead to the successful use of UBI: Assemble, Assess, Aim,and Act.

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3) “The 2011 Ford Taurus has 10million lines of code written in it.”

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The amount of code written for new cars, according to DaveChronowski, product manager for Ford Connected Services, dwarfsthat of vehicles—think rockets here—that you might think need alittle more firepower under the hood than a mid-sized sedan. Withall that data readily available, it seems a shame not to get yourhands on it.

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4) “The human mind treats a newidea the way the body treats a strange protein; it rejects it.”

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OK, Nobel Prize-winning scientist Peter Medawar wasn't at thetelematics conference (he's been dead for 25 years), but JimStephens, a market analyst with the Illinois Department ofInsurance, borrowed the quote and substituted the words “humanmind” with the word “regulator” to get his point across about theneed for insurers to work closely with regulators beforeintroducing new ideas on underwriting.

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5) “Neither use is easier, but thechallenges are completely different.”

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Jim Noble, senior risk engineering consultant with the Zurichrisk engineering group, addressed the question of UBI in commerciallines products as opposed to personal lines. There's value forboth, but not a lot of similarities.

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And here's a bonus quote from Joe Armeni, vice president ofinsurance carrier solutions for technology provider Evogi: “By2019, one-third of all U.S. vehicles will be insured using UBI.Compare [UBI] to the use of credit scoring in underwriting: thosewho waited were left behind. The next two years are critical.”

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You should expect such predictions at a conference focusedspecifically on a single form of technology. Certainly there's noway of knowing for sure what will happen seven years from now, butthere seems to be little doubt that UBI is a breakthrough inunderwriting for automobile coverage.

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