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Mobile Telematics – The Game Changer for the Insurance Industry

May 18, 2021

Mobile telematics is a hardware-free way of consolidating driving data combined with AI and vehicle diagnostics. This allows for motor insurers to establish much cheaper usage-based programs to implement, with a very accurate data rendering. Insurers are also using this paradigm to present precise premiums and reward safe drivers with monetary savings. Let us delve into the workings of this system.

How Mobile Telematics Works

Technology is swiftly developing, impacting our lives in previously unimaginable ways. The auto insurance industry is one such sector that has observed incredible innovation over the past decade. Insurance companies have now adopted telematics technologies, prompting carriers to offer unparalleled programs that can facilitate discounts on insurance for drivers based on their driving etiquettes.

Telematics system includes a tracking device fixed in a vehicle that sends, receives, and collects telemetry data. The system works in tandem with onboard diagnostics and facilitates server communication through wireless networks. This device collects GPS data along with an array of other vehicle-specific data and sends it via a cellular network or satellite communication to a centralized server. The server evaluates the data and shares it with end-users via secure websites optimized for smartphones. This data includes location, speed, idling time, harsh acceleration or braking, and much more.

When examined for particular events and patterns, this information can provide in-depth insights for insurance providers. This data is bound to influence their coverage-the cost of it in particular.  Safe drivers are open to reap the rewards of such technology and stand to benefit the most. Aside from consideration in pricing, telematics technology unlocks the benefit of support in cases of crash and claims filing.

Advantages and Challenges of Mobile Telematics

The advantages of smartphone telematics are somewhat obvious. Insurance providers can classify and surmise risks by getting a clearer picture of how their clients realistically behave behind the wheel. They can also limit their risk exposure through loss prevention procedures helping them determine who should be paying more and who should be paying less for automotive insurance.

There are several distinct advantages to this practice, commencing with the exclusion of hardware costs for insurers. And because smartphones are becoming essentially omnipresent, it’s a system that can be efficiently and effectively implemented. Many of today’s smartphones come equipped with built-in sensors that can be used to accumulate advanced telematics data. In many cases, it’s a sincere process to complement these capabilities with other sensors, such as magnetometers, proximity sensors, and ambient light sensors. Another advantage of using smartphones is portability. Unlike other devices, a smartphone can be moved between vehicles quickly and easily, allowing an insurance provider to consolidate data about a driver. There’s also an added advantage of vehicle compatibility, as smartphone solutions can be used with virtually any type of vehicle.

However, there are a few challenges for insurance providers exploring mobile telematics. Smartphones rely on several different operating systems and platforms, ranging from Android to iOS. These platforms are constantly evolving and changing, thereby posing challenges for insurance providers and their telematics systems. Changing connectivity standards is another hurdle that can further make it difficult to maintain a consistent approach.  

Conclusion

In the end, mobiles give insurance providers affordable and secure access to a wealth of accurate data, assisting them in bringing usage-based insurance options to regions and people previously unfamiliar with the technology. With this rich insight, insurance companies can now develop more competitive pricing and premiums, giving them an advantage over other automotive insurance providers. Additionally, this permits them the opportunity to see how their pricing structure will increase and improve over time, constituting a game-changer indeed.

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