Forward-thinking insurers have been preparing to rely on the help of a wide range of technologies to enable them to innovate in today’s competitive world, one of which is telematics.
Telematics has been one of the challenges for the insurance industry, so it needs to change its vision and transform processes in order to use the data collected in a more efficient way and in turn generate a return on investment.
What is the telematics?
According to the article «What is telematics?«, it is a term that encompasses different technologies and includes the various telecommunication devices that support the sending, receiving and storing of data; devices integrated into automobiles that allow them to be tracked and controlled while in motion; and satellite navigation (and all its applications).
In the same sense, the word is mainly used in the context of vehicles, which implies the application of all these technologies to road cars.
Telematics is transforming the auto insurance market and the business model that has traditionally applied to auto insurance. Insurance companies around the world are learning from the experience of those who have already innovated in telematics in order to develop their own competencies.
General context
Insurers have spent the last 20 years exploring the potential of telematics and it is known that during 2020, 8.2 million U.S. auto policyholders will share driving data with an insurance company, this is evidenced by research from the IoT Insurance Observatory, a global think tank that has aggregated more than 100 «players,» including eight of the top 15 U.S. insurance insurers.
Insurer participation in the «telematics zone» has been steady over the past few years and this is known from the annual surveys of insurer members of the Novarica Research Council’s CIO.
Thus, the larger insurance companies that have implemented telematics have generally indicated positive experiences, which can be broken down as follows:
More than $1 billion in annual premiums written.
However, in the following articles, we want to expand in depth a vision of the subject, where we will explain what the past, present and future of telematics by insurance companies contemplates.
We will visit each element point by point and you will be able to learn about the changes and the reason for each one.