Is Mobile Telematics Technology Promising for Auto Insurance?

Mobile technologies are needed to monitor driving habits in an age when millions of people die from road accidents.

WHO estimates that road accidents cause the deaths of 1.25 million people annually. WHO estimates that accidents will be the seventh leading cause for death globally. Do these numbers make it necessary to panic? What education is needed to reduce accident risk and prevent them from happening? Let us dwell deeper.

Bob Joop Goos is the chairman of International Organization for Road Accident Prevention. He says that more than 90% of all accidents are caused human error. Isn’t human error all about driving behaviour? A driver scorecard is necessary to improve driving skills and make driving safer. This will ensure that his insurance claims for any losses are handled quickly. Let’s now get into the technical details of improving driving habits. Let’s also discuss whether auto insurance must be paid a ‘fixed premium’, ‘pay as it goes’, or ‘pay what you drive’.

An average Alabama resident pays $1,500 per year. Imagine a person who lives in a city paying $1500 for more chances of getting into an accident than someone who lives in the suburbs and pays the same amount with less chance of being in one. Driving in the suburbs is easier than driving in cities. The suburban driver, who drives longer distances, will be able to drive less. The driver in the city is more likely to be involved in an accident. The suburban driver, on the other hand, is more likely to have his vehicle damaged. How does that make sense? You are now giving the option to choose from:

* Annual fixed premium
* Use-based Insurance (UBI), which is pay-per use

Which option will you choose? Everyone wants to save money; no one wants to lose. The majority of people will choose the second option. Because more customers use mobile devices, the reason is simple. To track their driving information, customers can use the mobile app on their mobile phones. Mobile telematics makes risk assessment easy. The application provides tips to help you make informed decisions about your driving habits, such as whether or not you will be driving during peak traffic hours.

The insureds can now pay as they drive (PAYD), or pay how they drive (PHYD), using digital technologies. What does this mean for the insurance industry? This area also needs discussion.

Mobile telematics technology combines technologies such as Global Positioning System (GPS), Cloud, and Big Data analytics. Drivers use data to improve their driving habits. This will help reduce accidents. This app provides information such as hard braking, acceleration, road types and driving smoothness. It also tracks phone distractions, traffic alerts, speed, mileage, speed, and other factors. Insurers can also offer personalized services to customers and increase their customer base by reducing processing times. With Usage-Based Insurance, you can enhance driving behavior. You will get support from the State and from businesses.

Let’s get more insight into this. While businesses are interested in productivity, the government is looking for productive citizens. Nobody wants their productive employees to get hurt or become a burden. In this situation, insurance companies, government, and businesses may collaborate to lower productivity risks. Road accidents are mainly caused by poor driving habits. Mobile telematics technology can improve driving behavior, reduce accidents risks, and ensure that workflow is not disrupted.

The automobile industry is also affected by mobile telematics technology. We all know that luxury cars come with telematics built in. However, smaller brands will charge more for accessories. These black box technologies are driving up the price of cars. Mobile telematics technologies can lower technology costs by integrating technologies such as Global Positioning System, Mobility Cloud, and Big Data analytics onto smart phones. Owners of vehicles would have an advantage.

Mobile technologies are a promising way to lower the risk of accidents, which is why they have been ranked seventh in the world by the government. This includes insurers, businesses, and the general public. Canada will host Insurance Telematics Canada 2016, which takes place at the Double Tree Hilton in Toronto on 28 and 29 April 2016. The event was attended by 43% of the insurance companies in 2015 The event will be a mix of auto tech and insurance, so we expect to see more attendees.