Photograph — Financial Times

In a bid to promote safety and enhance customer engagement, Kenya’s Heritage Insurance has introduced the country’s first telematics motor insurance. The new service, Auto Correct, is powered by telematics technology, a method of capturing and processing driving data.

By making use of telematics capabilities together with data and analytics, the device collects and transmits driving behaviour patterns relating to acceleration, braking, and cornering.  A comprehensive formula then makes use of the driving data collected to calculate an appropriate driving score, ultimately evaluating how well or poorly a vehicle is driven. 

Based on overall driving scores, the customer is expected to benefit through reduced cost of insurance achieved through premium cashback at the end of each policy year. There is also an anticipated reduction in the overall claims to the company.

The new service is aimed at enhancing service delivery and significantly speed up claims payment, according to the company’s Managing Director, Godfrey Kioi. “Telematics is not limited to the pricing of motor insurance or driver behaviour. Our philosophy is cementing customer-centrism in the industry by engaging the customer and generating rewarding and memorable experiences,” Kioi said.

As revealed by Heritage Insurance, all private motor vehicle owners are eligible for Auto Correct, and if they drive safely, customers may potentially get up to 15 percent cashback on annual paid premiums at the end of their policy period. Clients will also accumulate loyalty points which can be redeemed from time to time at selected service providers.

Auto Correct comes with a smartphone app, which provides driving feedback, weekly, monthly and annual scores as well as the accumulation and management of loyalty points.  The app also gives information on where and how to redeem the loyalty points.

Kioi added that the service promises a “blend of intelligent black-box technology, driver feedback and attractive rewards aimed at improving driver behaviour, potentially reducing both accident frequency and the cost of insurance.”

Deploying digital technology in insurance

The entry of Heritage’s latest technology into the insurance market comes at a time when digital technology is on the verge of disruption across industry sectors.

“Our usage-based insurance (UBI) product, Auto Correct, is a feasible answer to the ever-changing customer journey and industry, which has seen the emergence of innovative customer channels and millennial adoption of new technologies,” Kioi stated, adding that UBI and the acceptance of telematics capability in modern vehicles is expected to outpace traditional insurance.

To enable ease of uptake, Heritage Insurance has provided an Insurance Premium Financing (IPF) payment solution, available on mobile phones. The value-added service is aimed at reducing the “perennial premium collection problem” in the insurance industry.

Among other benefits, this innovation has the potential to repair the existing mistrust and resultant high customer turnover in the insurance industry. It would also help address the issue of low confidence in insurance claims processes, which has affected long-term value optimization.

With Heritage Insurance’s Auto Correct, Kenya becomes the first country in East Africa and second in Africa – after South Africa – to launch a telematics motor insurance solution to the market, that also comes with a premium financing option.

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