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LexisNexis has deepened its commitment to providing telematics solutions to the insurance industry through the acquisition of Wunelli, a UK-based provider of telematics data services. The deal brings complementary capabilities to LexisNexis that have the potential to deliver a highly differentiated offering at a time when insurers are actively exploring usage-based insurance (UBI), according to industry analysts.
“Our customers tell us they need a roadmap for how to get to UBI market, they need the ability to execute on a telematics program without having to build it from scratch and guidance on how to incorporate the information into their rating and underwriting,” comments Ash Hassib, SVP and GM, Auto and Home Insurance LexisNexis. “This acquisition enables us to deliver a complete package that includes technology, data management, plus the experience from Wunelli in executing UBI programs coupled with robust data and LexisNexis expertise in developing statistically sound models that helps carriers – whether large or small – build and implement UBI programs.”
The Wunelli acquisition represents a “big commitment” to the global telematics market, according to Karlyn Carnahan, research director, Celent. Wunelli brings not only data but also multiple devices and turnkey programs, which position LexisNexis to step in much deeper than they could prior to the acquisition. “Carriers worldwide are looking at telematics, trying to make decisions about whether to get involved and how to get involved,” Carnahan notes. “Having a variety of devices, data and guidance available allows carriers to consider ways of implementing telematics well beyond simple discounts and market segmentation and move into programs that can actually change driver behavior.”
Consumable and Actionable
Wunelli’s expertise in telematics data capture, data analysis and modeling expertise makes for an excellent complement to LexisNexis’ strength in general data aggregation, integration and delivery, according to Martina Conlon, a principal in New York-based research and advisory firm Novarica. “This positions LexisNexis to translate the telematics data into a form that is consumable and actionable, and leverage the existing infrastructure and integration hit has with hundreds of insurers today,” Conlon comments. “LexisNexis just gained significant speed-to-market for bringing a serious telematics offering to US insurers, and is laying the foundation for other information services that may emerge from the combined data of the two entities.”
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Wunelli brings to LexisNexis telematics expertise, solutions, scores and unique data assets, along with experience with hundreds of millions of miles of telematics data that can help to advance LexisNexis’ existing telematics offering and provide its customers with greater ROI and speed-to-market, according to Bill Madison, CEO of LexisNexis’ insurance vertical. “With usage-based insurance projected to grow to approximately 15 to 30 percent of the global auto insurance market in the coming years, our customers have communicated an increased need for a variety of telematics solutions to help them attract safer drivers, improve retention and avoid adverse selection,” he comments.
What has tended to slow all but the biggest auto insurance carriers’ adoption of telematics is are concerns about having sufficient data points to reliably calculate accurate pricing, suggests Monique Hesseling, partner, SMA. “Many carriers are dabbling in telematics, which allows them to build up process and efficiency, but it’s difficult to develop an adequate data set from a pilot of a couple of hundred cars, and that makes actuaries nervous,” she says. “If LexisNexis can provide data over multiple geographies, customer segments and car brands, it should allow carriers to be able to develop a more robust suite of telematics offerings – and give LexisNexis a strategic advantage.”
Novarica’s Conlon adds, “Plenty of companies offer proven telematics solutions, but LexisNexis may have the edge, being a one-stop shop for consumer, business, claims and now driving indicators data – as well as offering unique analytic products and services that leverage all of this data.