What the Clearinghouse is:
Ease of doing business: By removing the complex acquisition cost and processing of raw data from connected vehicles and drivers, the underwriter and agents’ workflow is streamlined.
Increased Efficiency: Near real-time availability of data from the driven environment, actual vehicle fitment of active safety systems, their usage and drivers through easily accessed web reports or system-to-system integration reduces the time/cost to quote and bind business.
Comprehensive vehicle specific and anonymized data: With access to over 65% of the telematics equipped commercial vehicles in your book today (generating over 74B miles of driving data in 2017) the Clearinghouse provides a complete picture of liability, injury and the actual driven exposure risk.
Unprecedented underwriting and pricing accuracy: Due to the expense of acquiring this data commercial auto insurers have not taken advantage of telematics data even though there’s 40x more data already available than in Personal Lines UBI. Our data shows 73% of vehicles involved in a claim have had a observable “near miss” within the prior 30 days. The Clearinghouse solves the fundamental problems with understanding heterogeneous commercial auto risk data at a granular level (not just selection benefits of the homogeneous fleets we find in Personal Lines UBI programs). Insurers from small businesses, to large fleets to captive programs need the actionable insights of a large data set such as the Clearinghouse to build proprietary models for rating and pricing. And, of course, proactively offer affordable and very effective risk control efforts. The best claim is the one we don’t have.
Privacy protection: With growing cyber threats affecting vehicles and mobile devices the Clearinghouse provides a layer of protection for the insurer and the policy holder that’s unprecedented in the UBI world, and even in the general area of fleet management. Each data transaction with the Clearinghouse can be verified with signature using the latest in distributed ledger technology.
A solution to the big data problem: Ford reports connected car sensors generate 25 gigabytes of data per hour, and Intel reports a typical autonomous vehicle generates 40 terabytes of data an hour. As part of the Clearinghouse your team can put proprietary predictive analytics, prognostics and machine learning to work on this data… and more!
What the Clearinghouse is not:
Contributory database of loss costs: The Clearinghouse is NOT a Data Exchange model that requires the carrier to divulge proprietary underwriting or claims information. The Clearinghouse is ONLY accessible by participating carriers for the vehicles they have chosen to quote or insure. The Clearinghouse provides participants access to both their data and the larger anonymized data set.
Quote platform or Comparative Rater: The Clearinghouse protects the business and ONLY shares the data with the P&C carrier or Captive or Re-insurer selected by the policy holder. Our experience has shown the policy holder must have ultimate control of what data they share and increases the likelihood they will share all their data by 400%. Comparative raters are the last thing we want for optimize the essential relationships needed to mine data analytics from the previously unconnected corners of business risk management.
What’s the Clearinghouse asking for:
Partner participation: The Clearinghouse must be funded by the beneficiaries of this data. We have attempted to fund with venture money but the upside relative to the risk just doesn’t make sense for such investors. The Clearinghouse should be funded by the partners with a simple, transparent annual subscription for shared ownership that ensures the Clearinghouse stays neutral, open and independent.
Fee structure: The Clearinghouse fees come in two parts. (1) An annual flat subscription fee based on total DWP for access to anonymized data (over 100B miles of data by the end of 2017) [about the same as you pay for VIN lookup services today such as IHS/POLK or CARFAX] and (2) a transaction fee [less than the cost of an MVR] for a full year’s worth of detailed driving data tied to a vehicle (and soon the driver where allowed by law).
Broad Industry Support: With over 30 vehicle OEMs selling connected vehicles, and over 170 installed devices and mobile apps used in daily operations of business small, medium and large that means over 200 different data connections to support without a Clearinghouse. But does our industry want a closed system where one of the traditional bureaus owns all that data and sells it back to you and your policy holder? Without such a Clearinghouse each of the 150+ TSP/Mobile App/OEM connections could cost a P&C carrier well over $15,000 per connection per year to build and maintain. We are advocating the Clearinghouse members share this $2.3M per year of cost in proportion to their DWP.