The Unseen Passenger: How Telematics Data Is Reshaping Private Passenger Auto Insurance
Insurers interested in tapping into telematics technology can benefit from more sophisticated hardware, speedier communications technology and the widespread use of cloud storage.
Telematics is evolving along multiple hardware paths, including fob, apps and even via auto-based wifi.
More sophisticated telematics technology has been matched by greater ease of storing and accessing data, thanks to the growing presence of cloud-based computing.
California's enhanced privacy legislation, which took effect in 2020, requires that those who collect data, such as telematics providers, to make that data available to the person being monitored.
Because many insurers are adopting telematics programs that operate via smartphones, some telematics providers have learned to interpret data that shows if a person is operating a vehicle or sitting elsewhere.
As auto manufacturers build more sophisticated safety devices into their cars, telematics providers will need to access to determine that they are present and operating.
Some drivers will find ways to provide misleading information, such as turning off systems or moving sensors. Insurers have learned to begin monitoring on a short-term basis, then extend programs only when information patterns fall within expected ra
Given that early hackers have shown their ability to penetrate vehicle systems, those setting up telematics programs have to employ state-of-the-art security practices, including revisiting security at each layer of access.
Insurers have spent decades attempting to assess drivers' likely behavior. Nothing tells that story like the data generated by telematic devices.
Customers will share their data, but only if insurers are clear about how it will be used and how its use will add value to the customer.
