Connected Car Telematics and UBI (Continued)

Connected cars are disrupting auto insurance by providing very detailed vehicle usage and driver behavior data. Auto insurers can now access safety metrics like blind spot warnings, following-to-close alerts, and assisted braking events to better understand driver risks and how they relate to at-fault claims. However, there are still many scenarios where traditional or smartphone telematics are better sources of risk data.

Smartphone Telematics for Driver Behavior Data

Many older vehicles do not have wireless connections for sending telematics data to the vehicle manufacturer. For these vehicles, the only options are traditional aftermarket telematics devices or smartphone telematics. Insurers have found that requiring policyholders to install telematics devices greatly hurts adoption. As a result, smartphone telematics has become the preferred technology for capturing driver behavior data.

Track Drivers Not Vehicles

Many drivers use multiple vehicles for day-to-day transportation. Many traditional black box or dongle telematics solutions struggle with identifying a specific driver for a given trip. Drivers are forced to identify themselves to associate their trips to a specific vehicle. However, smartphone telematics stays with the driver and analyzes their driving behaviors in any vehicle they drive. All drivers need to do is download the telematic application and start driving.

Connected Vehicles Need Personal Engagement via Smartphone

Connected vehicles generate huge amounts of data. This data needs to be aggregated, normalized, analyzed, and the actionable information reported to drivers. Typically, the vehicle manufacturers will not do this because most drivers have multiple vehicles from various manufacturers. Drivers need a convenient way to receive the benefits of connected vehicle data, and the best way today is with a smartphone telematics app. These smartphone apps can often take telematics data from any source, analyze it, and communicate with drivers via their preferred communication technology, their phones.

Connected vehicle data is enabling insurers with rich driving behavior data. The depth and breadth of this data is astounding and will lead to safer drivers and innovative insurance products. However, for the foreseeable future there will be a place for smartphone telematics as there will always be a need for convenient digital customer engagement.

Please contact me if you would like to learn more about how innovative auto insurers are using smartphone telematics to improve policyholder engagement, reduce risk and claims, and launch UBI products

Harold Leitner VP, Business Development