During 2013, general-purpose insurance companies faced a crunch in business growth as the automobile-insurance market underwent a gradual decline. Specialty insurers were gaining traction from niche customer groups. The client needed to come up with a differentiated product/service to fuel the company’s growth. The client’s gross profit margin in automobile and trailer insurance during Q1 & Q2 of 2014 had decreased by 7% and 9% respectively. An obvious business solution was to offer differentiated insurance premiums to different customer groups to help tailor the client’s offerings according to more profitable customer groups. Acquiring this capability depended on tracking driver behavior in each of the vehicle insured by the company. Another challenge that the client faced was filing multiple claims by customers who reported recurring accidents. This increased the service cost structure that the client had to bear. The company also wanted to promote safe driving by giving incentives to drivers for adopting a safer road behavior. Drivers would get bonus points for driving company insured vehicles safely. However, offering new services required the client to acquire real-time behavior observation technology to monitor each driver’s vehicle driving behavior.

• The client had a rough idea of what their company needed but was unsure of the technology solution that could deliver the business results. The client had numerous statistics regarding road accidents of vehicles insured through their company. The company however lacked a tangible method to track driver behavior at an individual level. Tracking driver behavior at an individual level had become essential for offering new premium packages.
• A significant percentage of automobiles and trailers, insured by the company, reported above-average accident ratio. It drove the company’s average profit margin from these vehicles as low as 2% per annum. To help identify the drivers who would likely exhibit risky driving behavior, thereby resulting in more number of accidents, Acme One analyzed that driver ranking and behavior monitoring was essential to categorize drivers. It would allow the client to offer lower insurance premiums to low-risk drivers and a higher insurance premium to high-risk drivers.
• After the initial assessment of the client’s business needs, the technology problem was narrowed down to the need for developing an innovative and real-time driver monitoring system.