Rowpoint Auto Insurance \\( { }^{1} \\) Greg Holland, the Chief Product Officer of Rowpoint Auto Insurance, was having a drink with Geoff Lombardy, the Chief Customer Experience Officer, on a dull evening in Melbourne. Greg has been thinking of improving the bottom line of the company by introducing a radical new product. His idea, like that of any business executive, is to be able to provide great customer experience at an attractive price point and yet make profit for the company. Greg has been going over some of the latest data on customer retention rate that Geoff has shared, and it is not looking pretty. A significant number of customers have recently left the company to go to the competitors. The primary reason appears to be the lower premiums offered by the competitors. The insurance industry is a very difficult one where customers can now easily compare competing offers and can choose the one that suits them best. In addition, customers want excellent service when they communicate with the company with their problems. In short, customers want lower premium and an excellent customer service. But these two competing objectives put pressure on the bottom line of the company. But this is the holy grail. How can the company achieve both these objectives at the same time? Both Greg and Geoff, having completed their MBA about three years back, remembered what their marketing professor had mentioned. \"Remember, ladies and gentlemen. If there is one thing you should take away from the marketing unit, then it is this. Not all customers are the same. Not all customers have the same needs and wants. The company that can figure out what each customer's needs are and can design offerings based on these, is more likely to be successful than the company that treats all their customers in the same way\". Greg nodded to Geoff and took a sip of the drink. \"What do you think, Geoff?\", Greg asked. \"Reckon, we can figure out customers' needs?\". Geoff pondered for a minute. Greg could see a twinkling in his eyes. \"He has come up with an idea!\" Greg thought to himself. Geoff took a sip of his drink and looked at Greg. \"Maybe there is a way\", he said. Greg leaned forward. \"Do share, mate.\". Geoff took few seconds to organize his thoughts. \"Our aim is to learn more about the drivers. Specifically, we want to identify the good drivers. Right?\". Greg nodded in agreement. Geoff stopped to take a short breath. And then he continued. \"I recently saw in the news about a telematic tracking instrument being sold by a technological company that can track driving habits and other information. So, how about we charge premium based on usage? We can track the driver's habit and charge premium accordingly.\" \"What information can this telematic tracking instrument pick up about the drivers?\" Greg asked. \"Give me a minute.\" Geoff picked up his smart phone. Then, he searched on Google for about a minute and then looked up to Greg. \"The instrument can gather data on speed, how fast drivers brake, timing and frequency of brake, their location data, how long they are on the road and on which days of the week and time of the day and many others\". \"Hmmm\", Greg said. \"This will help us to identify specific behaviours of the drivers and calculate the appropriate premium for each driver. Good drivers would benefit with lower insurance premium. People like to be rewarded for good behaviour and this will help us to do this.\" \"Right!\", Geoff said. \"We can install the telematic tracking instrument to our customers cars, and it will passively provide the data. This will be great!\". \"Moreover,\" Geoff continued, \"when drivers call the customer service, we will know who is calling, as well as their driving behaviour. This will help the customer experience team to devise specific solutions for the drivers and improve customer experience.\" \"Sounds like a plan.\" Greg said. \"I will go to office tomorrow and think of ways to expand on this idea. And I will also first run this past our chief data officer.\