Heritage’s new motor insurance solution uses telematics to speed up claims processing

Heritage Insurance Kenya has launched “Auto Correct”, a motor insurance policy that makes use of telematics capabilities together with data and analytics to promote safety and enhance customer engagement.

Auto Correct motor insurance is powered by telematics technology – a method of capturing and processing driving data. The device collects and transmits driving behaviour relating to acceleration, braking and cornering, all of which are key factors in evaluating how well or poorly a vehicle is driven.

(TOP: Heritage Insurance Kenya MD Godfrey Kioi – left – the firm’s non-executive director Gayling R. May during the launch of the Auto Correct solution in Nairobi).

A comprehensive formula makes use of the driving data collected to calculate an appropriate driving score. With the anticipated reduction in the overall claims to the company, the customer is expected to benefit through reduced cost of insurance achieved through premium cashback to the customer at the end of each policy year, based on the customers’ overall driving scores.

Heritage’s new solution is touted to be the beginning of better risk selection and pricing, where the cost of insurance is determined foreach individual, based on their driving, scores as opposed to one rate for all drivers.

All private motor vehicle owners are eligible for Auto Correct and may potentially get up to 15% cash back on annual paid premiums at the end of their policy period, if they drive safely. They will also accumulate loyalty points, which can be redeemed from time to time at selected service providers.

Auto Correct comes with a smart phone app, that provides, among other things, driving feedback, weekly, monthly and annual scores as well as the accumulation and management of loyalty points.  The app also provides information on where and how to redeem the loyalty points.

According to Godfrey Kioi, the MD of Heritage Insurance Kenya, which developed the solution in partnership with its technology partners, the customer is at the heart of this game-changing solution.

“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. The advent of the 4th Industrial Revolution is reshaping customer behaviour, creating a desire for personalisation and transparency from companies. With telematics, we can make more effective use of data to deliver enhanced customer experiences, while posting improved motor insurance results for our shareholders,” said Kioi.

Kioi hailed technology’s timely entry into the insurance market with digital technology being at the cusp of disruption across industry sectors, raising customer expectations and forcing insurance firms to rethink their service delivery.

“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. Usage-based insurance (UBI) and acceptance of telematics capability in modern vehicles is expected to outpace traditional insurance,” added Kioi.

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

Consumer opinion suggests that such innovation could help repair the existing mistrust and resultant high customer turnover in the insurance industry. This is due to the low confidence in insurance claims processes, which has affected long-term value optimization. Overall, the industry must adopt such innovation to redirect focus back to the end-customer experience.

The country’s insurance penetration rate, the contribution of insurance premiums to GDP, has been relatively low compared to the world’s average of 6.1 per cent and 3 per cent for Africa.

The internet and mobile phone revolution are expected to widen access to a diverse range of insurance products. In 2018, the number of active mobile subscriptions and internet users stood at 49.5 million and 43 million respectively. This presents a connectivity opportunity, touted to have a bottom-line impact on ease of enrolling and paying for insurance products.

With Auto Correct, Kenya, through Heritage Insurance 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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