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How Telematics Has Revolutionized the Insurance Industry

How Telematics Has Revolutionized the Insurance Industry
Photo by Mike B: https://www.pexels.com/

The insurance industry progressed steadily over time until the introduction of telematics. This addition to driving and insurance has greatly impacted keeping drivers safe. It allows insurers to understand more information about their customers and their driving habits, so they can provide more personalized premiums.

To have car insurance with telematics, you could save money, become more in tune with your vehicle and aid your insurance company in getting to know you better. 

Read on to find out more about how telematics has changed the insurance industry… 

So, what is telematics?

Telematics is the joining of two sciences; telecommunications and informatics. By monitoring vehicles and equipment by using global positioning systems (GPS), it assesses the movements of a vehicle on a computerized map. 

This allows insurance companies to collect data from telecommunications (phone lines, cables, cellular networks), and with this data, they can track drivers’ road behavior and safety.

What did the industry look like before telematics? 

This question might have crossed your mind. It’s interesting to think about how much the industry has changed in the space of a few years. The development of telematics really took off in the early 2000s, but GPS technologies reached the consumer market in 1993 in the US. 

Previously insurance companies would only know the basic information about your driving and the facts, such as age, occupation, and average driving distance. This information would then be the base of your insurance package. Now, with telematics, the insurer will have a more well-rounded and accurate version of facts, therefore offering a more suited package. 

What are the benefits of telematics for a customer?

Vehicle telematics is installed to provide the most accurate information. Therefore, it can ensure vehicle and driver safety and security while on the road. Alongside this, there are various benefits to telematics, some of those being:

  • Improves efficiency and productivity. 
  • Reduces fuel consumption and operational expenses.
  • Promotes vehicle maintenance via alerts.
  • Streamlines organizational and customer communications.
  • Automates reports. 
  • Increases driver safety.

What are the benefits of telematics for an insurance company?

It’s not just the customer that benefits from telematics. It’s also the insurance company. This means that your insurer is more aware of your driving and vehicle, making sure there is an open and clear relationship between the two parties. Here are some ways telematics insurance can benefit a company: 

  • Alerts about any repairs needed or required to prevent maintenance, decreasing the chance of an accident.
  • Coached recommendations for customers to improve safety and reduce any risks. 
  • Creates more accurate and competitive pricing alongside improved pricing transparency. 
  • An overall improved communication network between parties. 
  • Greater personalization of a customer’s insurance plan based on their needs and performance. 

The future of telematics 

Photo by Nicole Tarasuk on Unsplash

You may be thinking, what more can be done to improve telematics? 

Well, insurers want to increase the use of video, including dashcam footage, in order to complement any collected data with some video context. This video data can also be used to evaluate and coach drivers on better driving skills and review certain situations that need videographic evidence. 

We hope this article has helped you understand more about how telematics has revolutionized the insurance industry and gain some knowledge on the history and benefits that telematics offers drivers and insurance companies! 

Featured Photo by Mike B: https://www.pexels.com/