Unveiling Driving Insights -
Absa’s partnership with Sentiance and how they boost loss ratios by +8%
Let's examine the effectiveness of Sentiance telematics proxies in comparison to traditional proxies.
In partnership with
Introduction
Absa, one of South Africa's largest insurance companies, has been running its Usage-Based Insurance (UBI) program for five years using Sentiance Mobility and Driving Insights. The program has been successful in providing better insights into driver behavior and risk factors, leading to a significant improvement in the current loss ratio.
Success story, summarized
An analysis of all data collected throughout the program showed that Sentiance telematics proxies to risk were more effective than many traditional proxies that Absa had been using and greatly improved their ability to predict claims. ABSA can now retain good drivers by giving additional discounts while maintaining profitability.
The analysis also showed that using Sentiance insights, an improvement in the current loss ratio will be realized by adjusting premiums accordingly for the riskiest cohort of drivers identified by the model.
Additionally, the miles driven as well as contextual data such as time-of-day and road type were also found to be important predictors of risk.
Conclusion
The use of telematics technology in insurance has been steadily increasing over the years. This success story shows that Sentiance driving mobility and driving insights provide greatly improved risk assessment compared to using only traditional proxies such as age, gender, address, and occupation. By using Sentiance telematics proxies to risk, Absa could improve its UBI program by providing user-specific discounts and premium increases that would accurately reflect an individual's risk profile. This would lead to fairer and more accurate pricing for customers and a reduction in the overall cost of claims for Absa.
8.3%
improvement in current loss ratio
30%
of customers get discounts
3Xs
more claims among night drivers
2Xs
more claims with drivers of bad legal scores
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