ILC ARTICLE

Feature Interview: Peter Graham, Chairman and CEO, Kudo Insurance

10th May 2022

Peter Graham is no stranger to witnessing the motor insurance market being turned on its head having been at Direct Line, two US insurance start-ups, and then leading both esure Insurance and Legal and General GI as CEO through significant market transformations.

He is now on a mission to ‘change the game’ in personal lines insurance once again as he brings Kudo Insurance to the market, which utilises both telematics and driver scoring to offer the best drivers the best rates based on how they actually drive.

Here, we ask him about his plans for the company, and his take on the wider market.

Why do you think motor insurance is ready for disruption? 

Motor insurers are very unlikely to rank highly in any customer service survey, and as a result customers show little loyalty or engagement in return. Insurers also find it difficult to identify the best drivers and some use dated pricing methods to calculate premiums that don’t reward the drivers they most want – and need to maintain profitability.  

This often leads to them to carving out profits from ancillary products, administration fees, add-ons and claims-related income. Core product underwriting profitability does not seem to be the primary focus. 

As a result, customers don’t trust their insurers and even more worryingly the regulator has recently needed to step-in to stamp out certain practices. 

The industry also needs to take a close look at itself in terms of claims. By that I don’t mean claims handling and the cost of claims, I mean the frequency of claims. When do you hear an insurer speak about their Frequency Reduction Strategy?   

How will Kudo be different? 

Kudo uses the very latest mobile app-based telematics technology to track potential customer’s driving behaviour before we offer to insure them. Once we are happy that they are the kind of driver we want to insure, then we offer them a premium that rewards their good driving.  

We’ve carried out a detailed trial with a large UK insurer and proved this approach will deliver a significant reduction in claims frequency, and no doubt a further reduction in fault claims. 

Because a customer’s driving ability and behaviour is what matter most, the policy purchase process is also slick and succinct: once a Kudo customer has driven for 200 miles or two weeks, it only takes around 45 seconds and five questions to get on cover.

 Gamification in insurance is a growing trend. Is Kudo capitalising on this?

Absolutely. All our customers’ trips are tracked on a mobile app and scored, with feedback provided in a positive and fun way. Rewards are on offer for consistently good driving in the shape of ‘Kudo Koins’ which can spent any anything from Apple Watches to Amazon Vouchers.  

We keep Kudo customers engaged, regardless of if they are insured with us or not, with weekly challenges, competitions and, most appealing to some, the ability to compare and contrast driving scores with friends and family. Spouses no longer need to argue about who the best drier is, Kudo can provide a factual assessment. 

 Can you talk us through the claims experience with Kudo?

Our chief claims officer Stuart is adamant that claims is about two questions usually asked in the wrong order: are you covered and how can we help you?  

Firstly, we use the latest telematics claims alert solutions to make sure we can outbound FNOL calls rather than waiting for customers to call us. Therefore, we are proactive in capturing both our customer and third-party claims into our own Kudo solutions. 

 A Kudo claim will use the latest technology to make sure all our customers hear about is what we are going to do to help them. Validation is carried out virtually wherever possible and invisibly to our customers.  

 Are you concerned about rising insurance fraud? 

Fraud prevention should be very much technology and data led. Our vehicle and driver tracking offers Kudo so much in the way of data and understanding of driver behaviour that we will be able to use this to stop fraudulent people joining us in the first place. But if they do, we will be well placed to identify fraudulent behaviour associated with any claims using that same data.

We are also engaging with the latest claims tech solutions and providers to ringfence the fraud risk and make sure that our good drivers aren’t penalised by the odd bad apple. 

Motor insurance is incredibly competitive; why are you so confident of success?

We offer the best drivers the best premiums based on their driving ability, not unreliable risk rating factors. We also offer customers a fun experience and ongoing incentives to drive safely.  

When our customers do have a claim, we will use our mobile telematics and digital technology to create what we think is the most straightforward and customer-centric claims experience in the market.  This will mean claimants will want us to deal with their claims and no one else. 

In doing all of this, we create a win-win: low premiums, a great customer experience, and a market-leading combined operating ratio.