Insurance telematics is a type of data collection and analysis that exploits historical data to extract meaningful insights from (in-)consistencies in insurance provider coverage or practices. The primary goal of insurance telematics is to improve pricing by allowing policyholders to choose among multiple sustainable insurance products by enabling them to manually adjust premiums and charged miles based on individual driving behaviors and other driving factors.
The road to better insurance pricing based on drivers’ behavior
The race is on to understand how insurance telematics is evolving and how to incorporate new and emerging technology into products and services to improve customer value and prevent pricing volatility. This rapidly evolving competitive landscape demands that carriers acquire as much competitive edge as possible while minimizing their exposure to disruptions in their core business. With the increase of their ability to capture and transmit sensitive driving information, this requires them to adopt new and creative pricing models. The adoption of new and creative pricing mechanisms by carriers requires them to adapt to changing customer motivations and new and effective pricing strategies that reduce their exposure to adverse selection.
More advantages of insurance telematics
The use of telematics increases the reliability of vehicle diagnostics, allowing carriers to estimate vehicle economy and vehicle usage costs more accurately. Another possible application is to find lost or stolen vehicle technologies. Additionally, the devices can also be used to help prevent accidents, provide crash data, and document accidents.