Property/casualty insurance information company Verisk Insurance Solutions is teaming with a technology firm to provide insurance companies with the ability to collect automobile odometer readings for insurance rating and usage-based insurance (UBI) programs.
The product, called OdometerConfirm, allows insurers to capture the actual odometer readings using a policyholder’s smartphone.
“Miles driven is an important nationwide rating factor for many auto insurance writers and is a mandatory rating factor in California,” said John Cantwell, vice president of auto underwriting at Verisk Insurance Solutions. “While annual mileage is an established predictor of loss costs, it’s always been one of the more difficult rating factors to confirm accurately and maintain through the life of a policy.”
The products combines Verisk’s data and analytics with Vehcon’s patented process that allows consumers to use a mobile app to capture vehicle identification numbers (VINs) and odometer data quickly. The data is automatically sent to Vehcon’s back-end systems, where Vehcon says the mileage data is extracted and validated before being reported to the insurance carrier.
Fred Blumer, CEO and founder of Vehcon, said the integration of the Vehcon’s service with Verisk’s data provides insurers “new possibilities to underwrite and rate auto insurance policies.” For example, he said, with the VIN information captured by Vehcon, Verisk’s rating symbols, prior claims, and coverage information, and vehicle registration data can be automatically pre-filled into the policy administration system along with the current mileage data.
According to a 2011 “premium leakage” study of premium rating errors by Quality Planing, a Verisk subsidiary, auto insurance companies could be missing out on more than $3 billion of revenue because of flawed mileage reporting by policyholders.
At the same time, according to the Consumer Federation of America (CFA), some low mileage drivers may be missing out on discounts. The group recently criticized large auto insurers Farmers, Progressive and Allstate that it said regularly fail to reward drivers with low mileage. State Farm is the only one of the top five auto insurers to consistently reward low mileage drivers, the group said.
Vehcon, which was founded in 2012 by experts in telematics and mobile application, is based in Atlanta.
*This story previously ran in our sister publication Insurance Journal.