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Root and Data Exchanges 1
Root Insurance Company and Data Exchanges
Montague, Marc N.
Keller Graduate School of Management
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ROOT INSURANCE AND DATA EXCHANGES 2
Executive Summary
Auto insurance companies are needing to adapt to the modern, technology-driven world
that we currently live in. Customers are no longer staying loyal to insurance companies as long-
time customers are seeing their rates rise and never fall, and millennials are refusing to settle for
yesterday’s insurance pricing models. In order to understand how to price in the modern-era,
insurance companies need data to support rating their risks appropriately. The solution to this
problem is telematics and data exchanges.
Telematics for auto insurance has been around for quite some time, with leaders such as
Progressive offering the driving behavior tracking option for their customers for years. Though
customers have been hesitant in the past to allow large companies to track them and use their
information for data transformation, seeing the major benefits of reduced premiums and
discounts has changed the opinions of many. This is where companies such as Root have come
into play.
Root auto insurance determines the rates of their customers almost solely on their driving
behaviors. The process requires a potential customer to take a “test drive” with their mobile
application that allows Root to track driving habits over the course of a few weeks. After the
initial phase, Root will present the prospective customer with their premium, in which they can
decide whether or not they wish to pay that premium and move forward with their new policy.
Many other insurance companies have joined the telematics party, such as GEICO, State
Farm, USAA, Allstate, and the list continues on. The primary difference between these
companies and Root is that the former companies still prioritize traditional methods of auto
insurance pricing, such as: credit score, driving history, and demographics. The issue with this
information is that these are only correlations of a person’s driving ability, and not a direct
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ROOT INSURANCE AND DATA EXCHANGES 3
indicator into whether or not the potential customer is or is not a good driver that will cause
accidents moving forward. Root has taken it upon themselves to use formal driving behaviors
that many telematics technologies track to determine the majority of their pricing, behaviors like:
times of day one is driving, ride smoothness, speed, braking force and turn speed. All of this has
pushed Root into becoming a top contender
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ROOT INSURANCE AND DATA EXCHANGES 4
Introduction
The following report outlines the project plan for Root and demonstrates the need and
benefits of partnering with a specific technology solution, data exchanges. In order to execute the
plan and optimize the adaption of data exchanges with Root’s existing pricing platforms, the
company will need to form a team of approximately 20 people to start, with the potential to
expand. An Agile team would allow for the most efficient and effective approach, since this
project needs to be delivered with excellence in its execution and will need to be able to adapt
quickly without causing for major impediments along the way.
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ROOT INSURANCE AND DATA EXCHANGES 5
Organizational Background
Root was founded in March 2015 in a mission to tackle a major problem of the auto
insurance industry, pricing. By 2018, Root became the first insurance tech (InsurTech) startup
outside of the health-care sector to achieve unicorn status, which occurs when a privately held
startup is valued at over a billion dollars. Currnelty operating in 30 states, Root requires drivers
to download their mobile app and take a “test drive” lasting several weeks. This test drive allows
Root to monitor the drivers behaviors, then either passes or fails the driver. If the driver passes,
they receive customized pricing primarily based on the results of their test drive.
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ROOT INSURANCE AND DATA EXCHANGES 6
Business Problems or Opportunities Overview
Root, while they embrace the use of telematics in creating their insurance pricing, has a
major flaw in their current model. They require a consumer to take a “test drive” that takes up to
3 weeks, meaning that if they currently own a vehicle, they could be breaking state laws or
unsafely driving their vehicles without insurance. The other issue with their model, which can be
very brand-damaging and create a very unpleasant customer experience, is that users will have
no idea what their premium could be until the test drive is over. So if a customer is currently with
an insurance company, but is looking to switch, instead of being able to get a quote right away, or
even a ballpark, they must download Root’s mobile application, then drive for between two and
three weeks on average before even receiving their calculated premium.
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ROOT INSURANCE AND DATA EXCHANGES 7
Telematics
Telematics, as referred to in the paragraph above, is a technology used in many
industries. Telematics is in the family of machine-to-machine communication mechanisms, an
enabling technology stemming from telecommunication advances that reduce the cost of
connecting associated but remote endpoints. While telematics has been in the works since the
late 1990s, mass penetration into the auto and insurance industries began to populate greatly
within recent years. This technology allows for users to turn their driving behaviors into
quantitative data that companies can use in analytics; this data and analytics in turn allows
insurance companies to create more intelligent pricing models to rate consumers based primarily
on their driving behavior, versus state-wide commonalities and credit scores and other factors.
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ROOT INSURANCE AND DATA EXCHANGES 8
Overview of Technology Solution Category
In order to promote a more positive experience for customers, as well as boost confidence
in Root’s business model and encourage users to give the company a try without feeling like they
need to do too much work and prepare too much is to adapt a few technology solutions. The first,
Root Insurance Company has already begun, but is widely underusing, is utilizing data
exchanges. Data exchanges work directly with automotive companies such as Toyota, Ford,
GMC, and others that manufacturer vehicles. The relationships allow for the Original Equipment
Manufacturers (OEMs) to have internal or embedded telematics in their vehicles, and with
permission from customers share that data with the data exchanges. This will mean that Root can
have driving behavior data already preloaded for customers depending on the vehicle they drive
and the exchange they are partnered with.
Data is becoming the king of all industries, as data equals information. In the case of
vehicle telematics, insurance companies are racing to understand this data more and more every
day. The technology solution for insurance companies to capitalized on said data comes by way
of insurance data exchanges. Vehicle telematics provides data that insurers can analyze to
understand the impact of insurance premiums, coverage, and even liability in the case of the
accelerated rise of autonomous vehicles. What’s more is that internal vehicle telematics can
expedite the claims filing and review processes for both the insured and the insurer.
Vehicle telematics has traditionally come from the source of an OBD device, that is
plugged into the vehicle and continuously transmit driving behavior data. The data collected can
range based on the interest of the provider, but most commonly researched data points are
acceleration, braking, miles driven, and times of day driven. Through data exchanges, insurers
have a hub in which they can collect this information for specific vehicles, and can use their
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ROOT INSURANCE AND DATA EXCHANGES 9
actuarial documentation to create premiums, or simply offer discounts, Many insurers choose to
score the driving behaviors of the consumer, and offer potential discounts if the behavior score is
in specific ranges.
The problem that data exchanges solve is that insurers have required internal
development of a telematics behavior product, in which they must hire a company and spend
millions of dollars to acquire a device or technology of their own. What ends up happening is
each insurance company expends premium dollars of their customers to create a product that is
desirable for the insurance company to be able to start collecting driving data on their insureds.
The insurance companies are unable to force customers to use the telematics device, and many
consumers are wary of such devices, resulting in the insurance company offering discounts for
the customer to begin using the device and potentially earning larger discounts if they exhibit
positive driving behaviors.
Data exchanges can eliminate the expense of the development of the telematics
technology, offering insurance companies the opportunity to purchase solidified information
immediately. While a person drives their vehicle, supposing it has the capability of internal
telematics, this data can automatically share the driving data with the data exchanges. From
there, when a customer requests a quote with an insurance company, the driving behavior can be
made available to the insurance company which will allow for immediate quoting based on the
customers existing driving behavior. This provides a much more positive experience for both the
insurer and the insured as the customer will know their premium moving forward and not be
shocked with potential surcharges after their initial policy period, and the insurance company can
reduce agent time discussing the usage of the telematics in generating premiums for the customer
when they receive their renewals.
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ROOT INSURANCE AND DATA EXCHANGES 10
Alternative Solutions and Recommendations
Data exchanges provide a relief for auto insurance companies and consumers by offering
valuable telematics data that can offer more intelligent premium information to the insurance
company. This also allows for the customer to be rated appropriated based on how they drive,
instead of how everyone else around them drives. Insurance companies require that their
customer purchase a policy and elect to utilize a device or smartphone to collect telematics data,
then score them during the initial policy periods and revise their premium at renewal. While
many customers may receive discounts and simply be happy, some may wish to discuss the
amount of the discount or even if they are surcharged as a result of poor driving behavior. With
data exchanges, the telematics data can be available immediately to the insurance company,
giving a real quote to the customers right away and saving both parties much in the way of time.
The primary players currently in the data exchange business are Verisk Data Exchange
and LexisNexis Risk Solutions. Though the rise of data exchanges is apparently a slow uphill
climb, these two have signed on the majority of the major OEMs in the United States.
LexisNexis, as of this time, has partnered with the likes of General Motors, Nissan and
Mitsubishi, whereas Verisk Data Exchange has partnered with Hyundai, Honda and General
Motors.
LexisNexis Risk Solutions is a third-party vendor that provides many companies with
data already on important information about customers and prospective customers, such as credit
information and driving history. Continuing to seek opportunities to improve their business
model and build a case for insurance companies to create a relationship, LexisNexis is now one
of the top two companies for insurance telematics data. Offering data analytics capabilities,
maintaining usage-based insurance (UBI) continuity regardless of data sources and future
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ROOT INSURANCE AND DATA EXCHANGES 11
technological disruption are two of the benefits insurers can expect when partnering with
LexisNexis for their data exchange and telematics needs.
LexisNexis is a very well known and respected partner for many insurance companies.
One of the most commonly used reports that insurance companies order when a customer
requests insurance is a CLUE report, which stands for Comprehensive Loss Underwriting
Exchange. This details a customers insurance claims history, with details such as dollar amounts
and names of drivers. LexisNexis also offers insurance companies competitive intelligence
platforms such as InsurQuote, a program designed with rating information from companies that
participate and allows for comparisons of insurance companies books respectively.
LexisNexis offers some unique advantages in the data exchange world that companies
such as Root should be taking advantage of. Examples of this include: advisory services, driving
score, smartphone UBI applications, telematics software development kits, UBI program
delivery, and global telematics home. All of these combined make for lesser cost for insurance
company in terms having to hire on teams of analysts and IT personnel for modeling and
development.
The other key player in the game of telematics in the form of a data exchange is Verisk.
Offering the ability to match the insurers book of business to the exchange to determine the total
number of eligible vehicles in their database with driving behavior data, Verisk creates the
opportunity for insurance companies to have intelligible data at hand and ready to go when
needed. Verisk even has models set up so that insurers can essentially plug-and-play, with
scoring already implemented to help with premium and policy level details for the vehicles.
What’s more is that Verisk offers insurers their services for analyzing data sets to understand loss
cost, distribution of scores, average discounts and much more.
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ROOT INSURANCE AND DATA EXCHANGES 12
With over 160 billion miles tracked across over 6 million vehicles as of this report, Verisk
is well-versed on the art of tracking vehicles and the way they are being driven. Verisk has the
ability to take internal OEM telematics information, as well as application and plug-in device
telematics and create predictive analytics digestible by insurers to provide world-class usage-
based insurance (UBI) programs and even expedite the claims processes. Root can leverage their
technology to have instant access to Verisk’s exchange to get information on drivers such as
mileage, driving behavior, and Verisk’s own driving score, all with model-ready data that can be
aggregated down to the VIN level.
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ROOT INSURANCE AND DATA EXCHANGES 13
Performance Measurement Plan
In order to properly measure the success of implementing the utilization of data
exchanges for Root, we will timestamp exact dates to mark the start period. What is also
necessary is to track each customers entrance to the company and have a database that’s keeping
track of which customers are being rated from data available in our data exchanges, versus the
customers that are signing up for the two-week test drives. This data will be analyzed quarterly
and compared to company growth metrics, such as Net Premiums Written and Policies in Force
data to determine the success rate of the program.
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ROOT INSURANCE AND DATA EXCHANGES 14
Organizational Impact
The implementation of data exchanges will impact business processes greatly. Teams will
have to adjust their data analytics to capturing and analyzing data not only specific to the
customer pool in which data exchanges are used, but the queries will need to aggregate down to
comparing retention rate and acquisition rate. The company will need to hire analysts and data
scientists that can report to the company routinely the success rate of the program, and help to
keep metrics intact. Decision making will focus to keeping an eye on the new business model of
offering customers pricing up front, and while it may seem obvious that this would improve
customer experience, in the chance that less customers are signing up or more are leaving than
usual, much data analysis will need to be done and much decision making will be taking place.
This change will cause for Root to have to adapt Agile principles and will need to provide
training to employees. With the influx of data coming not only from the exchanges, but from the
customer base as a whole, employees will need to be willing and able to adapt frequently to
change and to create processes that can mold to current situations as and remove impediments
quickly as they arise. Root will need to bring in Scrum Masters or train existing Project
Managers to take on the role of keeping the teams moving with the new Agile mindset. Teams
will shift to Agile while dealing with data, so Root will have to stay aware of employee
satisfaction, which tends to take a slight turn when more work and major changes such as these
mentioned take place.
With time, the changes should create growth and opportunity for Root. With more
customers able to join the company and many being able to do business without having to wait
and not risking a sour taste from a negative test drive, Root should see an inflated customer
acquisition, which would in turn create job opportunities across the board from project managers
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ROOT INSURANCE AND DATA EXCHANGES 15
to data scientists. This will also allow for Root to begin investing more into their employees,
such as better health benefits and educational benefits not previously offered. These sorts of
benefits will provide the organization with higher employee retention and employer scores,
creating a path for more high-value talent to seek career opportunities with Root.
In summary, Root is an insurance company that has already taken the industry by storm.
Being the first insurtech to take on the unicorn status, there is a lot of already great opportunity
for this company to become a major player in the coming years. With solving major data,
pricing, and customer service issues all in one swoop with data exchanges, Root will be able to
take on many more customers and fill a major gap in their business. It will not be long once the
process is solidified for Root to start making its way to the top 10 insurer spot.
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ROOT INSURANCE AND DATA EXCHANGES 16
References
Root Insurance Company Joins the Verisk Data Exchange. (n.d.). Retrieved from
https://www.verisk.com/press-releases/2019/august/root-insurance-company-joins-the-
verisk-data-exchange/
Car insurance based on how you drive: Root Insurance. (n.d.). Retrieved from
https://www.joinroot.com/
Hakim, D. (n.d.). Insurance telematics: What is it? And why we should care. Retrieved from
https://www.verisk.com/insurance/visualize/insurance-telematics-what-is-it-and-why-we-
should-care/
Khemka, S. (n.d.). Hyundai becomes third major OEM to join the Verisk Data Exchange.
Retrieved from https://www.verisk.com/insurance/visualize/hyundai-becomes-third-
major-oem-to-join-the-verisk-data-exchange/
Insurance Data Exchanges: A Better Way Forward. (2018, June 28). Retrieved June 07, 2020,
from https://zendrive.com/blog/insurance-data-exchanges-better-way-forward/

Unformatted Attachment Preview

Root and Data Exchanges 1 Root Insurance Company and Data Exchanges Montague, Marc N. Keller Graduate School of Management ROOT INSURANCE AND DATA EXCHANGES 2 Executive Summary Auto insurance companies are needing to adapt to the modern, technology-driven world that we currently live in. Customers are no longer staying loyal to insurance companies as longtime customers are seeing their rates rise and never fall, and millennials are refusing to settle for yesterday’s insurance pricing models. In order to understand how to price in the modern-era, insurance companies need data to support rating their risks appropriately. The solution to this problem is telematics and data exchanges. Telematics for auto insurance has been around for quite some time, with leaders such as Progressive offering the driving behavior tracking option for their customers for years. Though customers have been hesitant in the past to allow large companies to track them and use their information for data transformation, seeing the major benefits of reduced premiums and discounts has changed the opinions of many. This is where companies such as Root have come into play. Root auto insurance determines the rates of their customers almost solely on their driving behaviors. The process requires a potential customer to take a “test drive” with their mobile application that allows Root to track driving habits over the course of a few weeks. After the initial phase, Root will present the prospective customer with their premium, in which they can decide whether or not they wish to pay that premium and move forward with their new policy. Many other insurance companies have joined the telematics party, such as GEICO, State Farm, USAA, Allstate, and the list continues on. The primary difference between these companies and Root is that the former companies still prioritize traditional methods of auto insurance pricing, such as: credit score, driving history, and demographics. The issue with this information is that these are only correlations of a person’s driving ability, and not a direct ROOT INSURANCE AND DATA EXCHANGES 3 indicator into whether or not the potential customer is or is not a good driver that will cause accidents moving forward. Root has taken it upon themselves to use formal driving behaviors that many telematics technologies track to determine the majority of their pricing, behaviors like: times of day one is driving, ride smoothness, speed, braking force and turn speed. All of this has pushed Root into becoming a top contender ROOT INSURANCE AND DATA EXCHANGES 4 Introduction The following report outlines the project plan for Root and demonstrates the need and benefits of partnering with a specific technology solution, data exchanges. In order to execute the plan and optimize the adaption of data exchanges with Root’s existing pricing platforms, the company will need to form a team of approximately 20 people to start, with the potential to expand. An Agile team would allow for the most efficient and effective approach, since this project needs to be delivered with excellence in its execution and will need to be able to adapt quickly without causing for major impediments along the way. ROOT INSURANCE AND DATA EXCHANGES 5 Organizational Background Root was founded in March 2015 in a mission to tackle a major problem of the auto insurance industry, pricing. By 2018, Root became the first insurance tech (InsurTech) startup outside of the health-care sector to achieve unicorn status, which occurs when a privately held startup is valued at over a billion dollars. Currnelty operating in 30 states, Root requires drivers to download their mobile app and take a “test drive” lasting several weeks. This test drive allows Root to monitor the driver’s behaviors, then either passes or fails the driver. If the driver passes, they receive customized pricing primarily based on the results of their test drive. ROOT INSURANCE AND DATA EXCHANGES 6 Business Problems or Opportunities Overview Root, while they embrace the use of telematics in creating their insurance pricing, has a major flaw in their current model. They require a consumer to take a “test drive” that takes up to 3 weeks, meaning that if they currently own a vehicle, they could be breaking state laws or unsafely driving their vehicles without insurance. The other issue with their model, which can be very brand-damaging and create a very unpleasant customer experience, is that users will have no idea what their premium could be until the test drive is over. So if a customer is currently with an insurance company, but is looking to switch, instead of being able to get a quote right away, or even a ballpark, they must download Root’s mobile application, then drive for between two and three weeks on average before even receiving their calculated premium. ROOT INSURANCE AND DATA EXCHANGES 7 Telematics Telematics, as referred to in the paragraph above, is a technology used in many industries. Telematics is in the family of machine-to-machine communication mechanisms, an enabling technology stemming from telecommunication advances that reduce the cost of connecting associated but remote endpoints. While telematics has been in the works since the late 1990s, mass penetration into the auto and insurance industries began to populate greatly within recent years. This technology allows for users to turn their driving behaviors into quantitative data that companies can use in analytics; this data and analytics in turn allows insurance companies to create more intelligent pricing models to rate consumers based primarily on their driving behavior, versus state-wide commonalities and credit scores and other factors. ROOT INSURANCE AND DATA EXCHANGES 8 Overview of Technology Solution Category In order to promote a more positive experience for customers, as well as boost confidence in Root’s business model and encourage users to give the company a try without feeling like they need to do too much work and prepare too much is to adapt a few technology solutions. The first, Root Insurance Company has already begun, but is widely underusing, is utilizing data exchanges. Data exchanges work directly with automotive companies such as Toyota, Ford, GMC, and others that manufacturer vehicles. The relationships allow for the Original Equipment Manufacturers (OEMs) to have internal or embedded telematics in their vehicles, and with permission from customers share that data with the data exchanges. This will mean that Root can have driving behavior data already preloaded for customers depending on the vehicle they drive and the exchange they are partnered with. Data is becoming the king of all industries, as data equals information. In the case of vehicle telematics, insurance companies are racing to understand this data more and more every day. The technology solution for insurance companies to capitalized on said data comes by way of insurance data exchanges. Vehicle telematics provides data that insurers can analyze to understand the impact of insurance premiums, coverage, and even liability in the case of the accelerated rise of autonomous vehicles. What’s more is that internal vehicle telematics can expedite the claims filing and review processes for both the insured and the insurer. Vehicle telematics has traditionally come from the source of an OBD device, that is plugged into the vehicle and continuously transmit driving behavior data. The data collected can range based on the interest of the provider, but most commonly researched data points are acceleration, braking, miles driven, and times of day driven. Through data exchanges, insurers have a hub in which they can collect this information for specific vehicles, and can use their ROOT INSURANCE AND DATA EXCHANGES 9 actuarial documentation to create premiums, or simply offer discounts, Many insurers choose to score the driving behaviors of the consumer, and offer potential discounts if the behavior score is in specific ranges. The problem that data exchanges solve is that insurers have required internal development of a telematics behavior product, in which they must hire a company and spend millions of dollars to acquire a device or technology of their own. What ends up happening is each insurance company expends premium dollars of their customers to create a product that is desirable for the insurance company to be able to start collecting driving data on their insureds. The insurance companies are unable to force customers to use the telematics device, and many consumers are wary of such devices, resulting in the insurance company offering discounts for the customer to begin using the device and potentially earning larger discounts if they exhibit positive driving behaviors. Data exchanges can eliminate the expense of the development of the telematics technology, offering insurance companies the opportunity to purchase solidified information immediately. While a person drives their vehicle, supposing it has the capability of internal telematics, this data can automatically share the driving data with the data exchanges. From there, when a customer requests a quote with an insurance company, the driving behavior can be made available to the insurance company which will allow for immediate quoting based on the customer’s existing driving behavior. This provides a much more positive experience for both the insurer and the insured as the customer will know their premium moving forward and not be shocked with potential surcharges after their initial policy period, and the insurance company can reduce agent time discussing the usage of the telematics in generating premiums for the customer when they receive their renewals. ROOT INSURANCE AND DATA EXCHANGES 10 Alternative Solutions and Recommendations Data exchanges provide a relief for auto insurance companies and consumers by offering valuable telematics data that can offer more intelligent premium information to the insurance company. This also allows for the customer to be rated appropriated based on how they drive, instead of how everyone else around them drives. Insurance companies require that their customer purchase a policy and elect to utilize a device or smartphone to collect telematics data, then score them during the initial policy periods and revise their premium at renewal. While many customers may receive discounts and simply be happy, some may wish to discuss the amount of the discount or even if they are surcharged as a result of poor driving behavior. With data exchanges, the telematics data can be available immediately to the insurance company, giving a real quote to the customers right away and saving both parties much in the way of time. The primary players currently in the data exchange business are Verisk Data Exchange and LexisNexis Risk Solutions. Though the rise of data exchanges is apparently a slow uphill climb, these two have signed on the majority of the major OEMs in the United States. LexisNexis, as of this time, has partnered with the likes of General Motors, Nissan and Mitsubishi, whereas Verisk Data Exchange has partnered with Hyundai, Honda and General Motors. LexisNexis Risk Solutions is a third-party vendor that provides many companies with data already on important information about customers and prospective customers, such as credit information and driving history. Continuing to seek opportunities to improve their business model and build a case for insurance companies to create a relationship, LexisNexis is now one of the top two companies for insurance telematics data. Offering data analytics capabilities, maintaining usage-based insurance (UBI) continuity regardless of data sources and future ROOT INSURANCE AND DATA EXCHANGES 11 technological disruption are two of the benefits insurers can expect when partnering with LexisNexis for their data exchange and telematics needs. LexisNexis is a very well known and respected partner for many insurance companies. One of the most commonly used reports that insurance companies order when a customer requests insurance is a CLUE report, which stands for Comprehensive Loss Underwriting Exchange. This details a customer’s insurance claims history, with details such as dollar amounts and names of drivers. LexisNexis also offers insurance companies competitive intelligence platforms such as InsurQuote, a program designed with rating information from companies that participate and allows for comparisons of insurance companies books respectively. LexisNexis offers some unique advantages in the data exchange world that companies such as Root should be taking advantage of. Examples of this include: advisory services, driving score, smartphone UBI applications, telematics software development kits, UBI program delivery, and global telematics home. All of these combined make for lesser cost for insurance company in terms having to hire on teams of analysts and IT personnel for modeling and development. The other key player in the game of telematics in the form of a data exchange is Verisk. Offering the ability to match the insurer’s book of business to the exchange to determine the total number of eligible vehicles in their database with driving behavior data, Verisk creates the opportunity for insurance companies to have intelligible data at hand and ready to go when needed. Verisk even has models set up so that insurers can essentially plug-and-play, with scoring already implemented to help with premium and policy level details for the vehicles. What’s more is that Verisk offers insurers their services for analyzing data sets to understand loss cost, distribution of scores, average discounts and much more. ROOT INSURANCE AND DATA EXCHANGES 12 With over 160 billion miles tracked across over 6 million vehicles as of this report, Verisk is well-versed on the art of tracking vehicles and the way they are being driven. Verisk has the ability to take internal OEM telematics information, as well as application and plug-in device telematics and create predictive analytics digestible by insurers to provide world-class usagebased insurance (UBI) programs and even expedite the claims processes. Root can leverage their technology to have instant access to Verisk’s exchange to get information on drivers such as mileage, driving behavior, and Verisk’s own driving score, all with model-ready data that can be aggregated down to the VIN level. ROOT INSURANCE AND DATA EXCHANGES 13 Performance Measurement Plan In order to properly measure the success of implementing the utilization of data exchanges for Root, we will timestamp exact dates to mark the start period. What is also necessary is to track each customer’s entrance to the company and have a database that’s keeping track of which customers are being rated from data available in our data exchanges, versus the customers that are signing up for the two-week test drives. This data will be analyzed quarterly and compared to company growth metrics, such as Net Premiums Written and Policies in Force data to determine the success rate of the program. ROOT INSURANCE AND DATA EXCHANGES 14 Organizational Impact The implementation of data exchanges will impact business processes greatly. Teams will have to adjust their data analytics to capturing and analyzing data not only specific to the customer pool in which data exchanges are used, but the queries will need to aggregate down to comparing retention rate and acquisition rate. The company will need to hire analysts and data scientists that can report to the company routinely the success rate of the program, and help to keep metrics intact. Decision making will focus to keeping an eye on the new business model of offering customers pricing up front, and while it may seem obvious that this would improve customer experience, in the chance that less customers are signing up or more are leaving than usual, much data analysis will need to be done and much decision making will be taking place. This change will cause for Root to have to adapt Agile principles and will need to provide training to employees. With the influx of data coming not only from the exchanges, but from the customer base as a whole, employees will need to be willing and able to adapt frequently to change and to create processes that can mold to current situations as and remove impediments quickly as they arise. Root will need to bring in Scrum Masters or train existing Project Managers to take on the role of keeping the teams moving with the new Agile mindset. Teams will shift to Agile while dealing with data, so Root will have to stay aware of employee satisfaction, which tends to take a slight turn when more work and major changes such as these mentioned take place. With time, the changes should create growth and opportunity for Root. With more customers able to join the company and many being able to do business without having to wait and not risking a sour taste from a negative test drive, Root should see an inflated customer acquisition, which would in turn create job opportunities across the board from project managers ROOT INSURANCE AND DATA EXCHANGES 15 to data scientists. This will also allow for Root to begin investing more into their employees, such as better health benefits and educational benefits not previously offered. These sorts of benefits will provide the organization with higher employee retention and employer scores, creating a path for more high-value talent to seek career opportunities with Root. In summary, Root is an insurance company that has already taken the industry by storm. Being the first insurtech to take on the unicorn status, there is a lot of already great opportunity for this company to become a major player in the coming years. With solving major data, pricing, and customer service issues all in one swoop with data exchanges, Root will be able to take on many more customers and fill a major gap in their business. It will not be long once the process is solidified for Root to start making its way to the top 10 insurer spot. ROOT INSURANCE AND DATA EXCHANGES 16 References Root Insurance Company Joins the Verisk Data Exchange. (n.d.). Retrieved from https://www.verisk.com/press-releases/2019/august/root-insurance-company-joins-theverisk-data-exchange/ Car insurance based on how you drive: Root Insurance. (n.d.). Retrieved from https://www.joinroot.com/ Hakim, D. (n.d.). Insurance telematics: What is it? And why we should care. Retrieved from https://www.verisk.com/insurance/visualize/insurance-telematics-what-is-it-and-why-weshould-care/ Khemka, S. (n.d.). Hyundai becomes third major OEM to join the Verisk Data Exchange. Retrieved from https://www.verisk.com/insurance/visualize/hyundai-becomes-thirdmajor-oem-to-join-the-verisk-data-exchange/ Insurance Data Exchanges: A Better Way Forward. (2018, June 28). Retrieved June 07, 2020, from https://zendrive.com/blog/insurance-data-exchanges-better-way-forward/ Name: Description: ...
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