THE STORY BEGINS

From his office among the tall pines of suburban Atlanta, Georgia, Bill Madison, Chief Executive Officer of LexisNexis Risk Solutions Insurance business, talks about the origins of that revolution. At its heart is data, particularly the comprehensive US collection of insurance claim data housed in the LexisNexis Risk Solutions industry-leading Comprehensive Loss Underwriting Exchange (C.L.U.E.).

“It’s been a more than 30-year journey, and C.L.U.E. set the foundation of where we are today and ensured that we became embedded within the insurance market to provide innovative solutions that help them achieve their business objectives,” explains Madison. “If an insurer wants to better segment its market or be more efficient, we help them do that.”

Today, more than 350 insurance providers, including 95 of the top 100 of insurance carriers in the US, have a contractual relationship with LexisNexis Risk Solutions. The company manages more than 90 percent of all US insurance quotes, underwriting, and renewal transactions through those relationships. Its data set gets plied toward 2.5m insurance shopping events per day and the platform processes hundreds of thousands of claims per day. In the UK, LexisNexis Risk Solutions has data on more than 27m active motor policies – representing 97 percent of the market - and 550m policy transactions such as cancellations within its systems.

“This really underscores our mission as we’ve evolved through the years,” says Madison. “We’ve wanted to consolidate and automate this data, offering more impact for insurance carriers at the point of marketing as well as the point of the claim. Critical to this approach is our commitment to consumers and looking at what we offer to our customers across industries through the consumer’s lens. In auto insurance, we’re interested in taking out a lot of friction for both consumers and the insurers by offering insurers data assets that translate to a good marriage for both.”

In short, LexisNexis Risk Solutions has done two things. It has standardized large data sets to create a consumer insurance score, which is based on an assortment of factors, including several proprietary data points around individual financial, property and auto-related variables. In this way, it holds a deep understanding of how to use analytics and the technology backing it to understand consumers’ risk with depth and accuracy. It has also reduced time-to-decision dramatically, taking what was once a days-long process for auto, home and life insurance quotes down to minutes.

As the 2010s progressed, Madison and his team saw the growing potential of telematics. Adam Hudson, vice president and general manager, Connected Car, LexisNexis Risk Solutions, describes it as a wave of epiphany that hit the automotive industry all at once. “By 2016, automobile manufacturers were looking at everything that was changing within the automotive industry,” he said. “They recognized and were employing technologies through which they could play a deeper role in a driver’s life than just getting them from Point A to Point B, and they were talking openly about this.”

After purchasing the actual vehicle, the second-highest cost in total cost of ownership is the cost of auto insurance, and safer driving can result in lower insurance rates. And with more sophisticated hardware and software onboard a vehicle, LexisNexis Risk Solutions also noticed something else.

“Every manufacturer had its own standards and format for getting intelligence out of the car. We believed we could take that disparately arrayed data and normalize it, create solutions from it and monetize it, ultimately making it beneficial for car manufacturer, and most importantly the consumer and their insurance carrier,” explains Madison. “For the consumer, being more aware of driving patterns and safety systems, and gaining a better understanding of how we operate our vehicles was clearly beneficial and could lead to lowering that total cost of vehicle ownership.”

LexisNexis Risk Solutions formally launched its Connected Car business in 2018.

For insurers, LexisNexis Risk Solutions leverages its telematics exchange by collecting and managing driving behavior data from automakers, or any other 3^rd party source, with the consumer’s consent. Once in the exchange, the data can be normalized, no matter the type of mobile device or vehicle make and crucial data points such as when drivers brake hard, or if they drive beyond speed limits or what times of day they use their vehicle are analyzed, creating a picture of driving behaviour. LexisNexis Risk Solutions can also apply geospatial context to driving events to better understand how drivers respond in different situations such as neighborhoods versus highway driving. That picture can be shared with the insurance industry to offer discounts and other benefits.

Consider a driver, who is gentle on their vehicle, follows speed limits, minimizes hard braking (when an item on the front seat flies off) and fast acceleration. In the market today, this type of behavior would lend to being a safer driver, being less risky. On the other hand, there is a driver who exhibits riskier behaviour such as routine speeding, hard braking or hard acceleration in lower speed zones. This behaviour, which can be indicative of future claims loss, should place that driver in a separate risk class, and would not likely benefit from how they drive.

Intelligence like this enables mass yet one-to-one risk analysis and consumer pricing, which helps to solve a many-to-many challenge these two industries face in providing their shared consumer the best experience and the best price for the individual risk. It also improves risk prediction accuracy,  delivering a 79% additional lift above standard rating factors used by insurers today. Simply put – usage-based insurance programs offer car owners  the opportunity to take advantage of good driving behavior. And for parents, telematics and usage-based insurance offered by some insurers can provide some peace of mind in regards to their offsprings’ driving habits.

On the automotive manufacturer side, LexisNexis Risk Solutions had to enter a vertically integrated industry and make a case of street credibility blended with an opportunity that made good sense.

“The manufacturers have traditionally owned every part of the process of building a car since the days of Henry Ford,” said Pavan Mathew, senior director and head of automotive business development, U.S. Connected Car, LexisNexis Risk Solutions. “In that time, the parts and the systems were produced in factories and on land owned by the automaker who barged them down the river to the plant. They have had to be very humble in the emergent digital space, and moving outside their industry to get the help they need to make the most of their data.”

Still, LexisNexis Risk Solutions wasn’t a known entity or a consumer brand within the automotive supply chain and had to make the case that its leading presence in the insurance industry mattered. It had to highlight its ability to transform the car from a piece of accelerating hardware into a vehicle housing multiple, aha touchpoint moments with consumers.

“We had to say, in our world, we’re the equivalent of a Tier 1 partner – like a Bosch, a Continental – with the capability of connecting a vehicle subsystem to nearly every major insurance carrier. When they heard that story, manufacturers began coming on board,” said Mathew.

The story continues

In the US market in particular, cars are a second home to drivers who are demanding up-leveled user experiences from digital devices they rely on more and more for every area of life. For Mitsubishi Motors, LexisNexis Risk Solutions, made a lot of sense.

Mitsubishi Motors is using LexisNexis Risk Solutions as a centerpiece to a digital strategy for attracting, engaging and converting consumers to their lineup of cars. “We’re a challenger brand, and we want to make sure that we’re delivering,” says Bryan Arnett, director of digital product strategy at Mitsubishi Motor Corp. “We are seeking to provide digital solutions that offer immediate, real-world benefit to our customers.”

Using LexisNexis Risk Solutions as its core, the company developed a Mitsubishi RoadAssist+ app. The smartphone app collects driving data and sends it to the LexisNexis® Telematics Exchange where it is analyzed and returned to give drivers feedback on driving behavior. In the exchange, the data is also normalized and incorporated into insurance solutions that help insurers with risk assessment, helping to provide drivers ways to save money on purchasing or maintaining car insurance. The app provides feedback to drivers to help them improve their driving and understand risky behaviors such as speeding, hard braking, and hard acceleration.

Half of new car buyers recognize that the technology can help improve safety, and they expect to have lower car insurance premiums as a result. Mitsubishi’s app won the Juniper Research Future Digital Award, which “recognizes companies that deliver imaginative, innovative products or services with the potential to disrupt their ecosystems and provide significant benefits to their target audience and consumers.”

Bryan says that the brand-based impact of RoadAssist+ was due to its partnership with LexisNexis Risk Solutions. They quickly made Arnett’s team fluent in insurance, including its vernacular, business model and strategic approach.

“The chemistry with LexisNexis Risk Solutions was immediate, and we learned from each other quickly and effectively,” said Arnett. “In the end, we built this app together to provide value to both customers and insurance carriers. It was a true collaboration.”

While business to business stakeholders are on board with the approach to connected car with the LexisNexis Risk Solutions, the litmus test remains with the most important one: the consumer.

“Our customer engagement is phenomenal and has surpassed expectations,” said Mitsubishi’s Arnett. “We expected through our unveiling of RoadAssist+ we’d get about a 50 percent take rate on the app. It achieved 88 percent. It’s reducing the cost of ownership for our customers and giving people a way to save money on car insurance, particularly in areas where rates are high. When we issue recalls, we also have a way to notify customers with speed. When the car gets sold, we have an opportunity to track its entire life.”  

Mitsubishi’s Arnett agrees: “I think that with a partner like LexisNexis Risk Solutions, we can use the connected car to, for the first time, hear the voice of the consumer. And as a manufacturer, we can do something meaningful with that voice. We can deliver something that they want and need,” he said.

In the meantime, LexisNexis Risk Solutions is growing the scope of its offering to the automotive sector. Its experience with American automakers has opened new doors for opportunity beyond insurance. LexisNexis is using existing solutions and building new solutions to specifically address challenges automakers face, advancing a whole new side to the connected car business for LexisNexis. In addition to working with GM, Nissan and Mitsubishi in the US, they continue to expand in the US and in Europe. On the insurance side they’re evolving their connected car insurance presence in the UK while expanding presence in Brazil by working with Stellantis, known for its Fiat and Chrysler brands, to bring connected car data in for use in insurance solutions.

“We’re building new levels of trust across borders,” says Madison. “In doing so, we’re about the learning and about getting more and more knowledge extracted out of the vehicle for everyone involved.”

Back in Georgia, Katie Brewer-Calvert says telematics has encouraged her to drive more safely. “There’s a curve in the road near where I live and one of the times coming round it there was a truck stopped in the road. I had a great reaction time and braked quickly. I was proud of myself and my car’s brakes. But later I had a mark on my driving monitor app for breaking too hard. I realized that when I don’t know what is up ahead, I should drive with more caution rather than relying on my reaction time.”

Brewer-Calvert says the safer driving has translated into savings. “I am a big budgeter and I definitely prefer saving money to spending, so once I was aware of the additional discounts, I’ve had my driving monitor for 15 months, and I’ve already saved more than $1,500.”