Transforming the Insurance Industry with Telematics Data


Insurance, for hundreds of years, has been concerning improving the chance of bad (and sometimes fine) things taking place with a group of individuals. For instance, taking a certain amount of premium from such people, paying claims during the bad events happened to several of those individuals. For 99.9% of those instants, data has been pretty inadequate, with insurers for the majority of the part having to depend upon the proxy rating factors, past outcomes & trust that their clients would utilize their very best efforts to keep away from the bad events happening.

New data, new relationship, new insights

At the moment, we have much more data – we have mapped the world, we are familiar with the surface conditions, local weather conditions some days into the future & the captain can generally find out his vessel’s current status down to the meter. Moreover, data through the vessel’s systems can appropriately be analyzed & failure predicted of main components well in advance of it happening, while data through the cargo itself can make sure all is good. To top that off, professionals can be in straight contact with the vessel at about any time throughout the voyage. The game has surely changed.

So, What Telematics actually is?

Today, insurance providers can put in a clever device into your vehicle which measures how good you drive the vehicle. By getting the device installed inside your vehicle, it’s feasible for you to demonstrate that you drive carefully. Afterwards, your premiums will be based on how conscientious and safe driver you are rather than paying for insurance just like the average driver.

How do insurers efficiently use the data of telematics?

It would be impractical & unwise to just dig into all those GBs of data and so many companies don’t possess the capacity to do that. For insurers to avail of the driving data, you will need to first aggregate the data & then classify it by extracting definite features from the data. An instance of feature extraction could involve computing the percentage of a definite vehicle driving in a certain area such as an urban area or a rural area or on a highway. The data which comes out from the feature extraction method should then be combined with the data your firm has used to write policies (age, claim history, place of residence and the like) into a system which combines them both. Once the data has been collected as well as unified, the data requires being analyzed through a robust quantitative technique. As the appropriate analytical software solution insurers will possess the power to get data insights into actionable, improved efficiency, bottom line savings, and better claims experiences for clients.

Or we can say that it’s time to combine the old world of insurance procedure into the high tech world of telemetric data collection. Possessing telematics data, professional insurers can perk up their risk-based costing by being competent to assess the actual risk profile of drivers. Moreover, we have seen professional insurers making use of telematics data to build reward-based programs. It has included the below-mentioned programs:

Pay how you drive (PHYD), Pay as you drive (PAYD) & mile-based vehicle insurance programs:

The mentioned programs are reliant on the type of vehicle which is utilized or measured against distance, time, behaviour & place. For instance, the more a vehicle driver is on the road, the extra he will need to pay. Through telematics data, the driving frequency can be observed and utilized in calculating the payment rate of the driver.

Status reward program:

Resembling the airline frequent flyer programs, vehicle drivers are provided with discounts & special offers depending on their status or the status of the group they are belonging to within the program. But, rather than flying miles being utilized to attain a higher status, a good behavior of the driver allows them to get more points.

Cashback, coupon and rebate programs:

In a definite time period, a driver can build up points for fine driving behavior. In the ending of the period or term, the driver can get cash back, coupons or rebates on his attained insurance policy but actually in case if he qualifies. In case his driving is under par, this may affect his insurance price for the next period.

USA insurance solution providers are now making the best use of Telematics data for the betterment of their clients.

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