There’s a lot of confusion out in the marketplace on just what telematics is and what it can do. Part of this confusion comes from the exponential rise in expectations by consumers who demand telematics-enabled ease of use as well as speed of use in almost every application. And part comes from the reduction in telematics hardware and software prices, creating challenges for solution providers to keep pace with those consumer demands.
In the simplest of terms, telematics represents the part of information technology that manages long-distance transmission of computerized information. As a genre, telematics encompasses telecommunications, vehicular technologies, road transportation, road safety, electrical engineering (sensors, instrumentation, wireless communications, etc.), and computer science (multimedia, Internet, etc.).
Today, its most popular role is in the auto industry, where drivers have come to expect a host of improvements in how their late-model vehicle behaves based on automated features and crash-avoidance technologies (from low tire pressure warnings and cruise control to blind-spot monitoring, pedestrian detection, forward-collision and lane departure warnings and more).
The “more” in this case is related to the insurance industry’s lifeblood of the connected car world–usage based insurance (UBI)–where telematics acts as the platform for pay-per-use, pay-as-you-drive and pay-how-you-drive insurance for teens and adults based on location, weather conditions, time, miles, speed, braking, lane changing, cornering, etc.
Against the larger goal of reducing auto claims frequency and severity, UBI takes the telematics theme to the next level–now insurers can reward safe driving based on the drivers’ actual behavior behind the wheel, and not just from the auto’s sensors perspective. In other words, the world of telematics, when combined with mobile technologies, machine learning and data science, is enabling insurers to transform from offering basic personal and commercial lines auto coverage to full UBI platforms that proactively embrace safety at the core.
How does that work? Let’s look at Travelers Insurance, which, as part of its UBI program, combines telematics with TrueMotion’s smartphone app to challenge its prospects and policyholders to “#ThinkSafe.” The insurer initially established its #ThinkSafe campaign with a focus on a range of personal lines insurance products. Aware of the volumes of loss data statistics available related to distracted driving (i.e., drivers are 12.2 times more likely to crash from dialing a phone, 6.1 times more likely to crash while texting, and 2.2 times more likely to crash while talking on the phone), Travelers singled out personal lines auto products to both retain policyholders with value-added services (such as the distracted driving feedback provided by the smartphone app) and to inspire drivers to do their best.
Another example is American Family. Telematics plays an obvious role in the insurer’s overall UBI campaign, but American Family also proactively embraces safety at its core, especially when it comes to younger drivers. And for good reason.
The New York Times’ Bruce Feiler quotes Nichole Morris, a principal researcher at the HumanFIRST Laboratory at the University of Minnesota, that among this age group, death in motor vehicle accidents outstrips suicide, cancer and other types of accidents. “Cars have gotten safer, roads have gotten safer, but teen drivers have not,” she said.
Charlie Klauer, a research scientist at the Virginia Tech Transportation Institute, said her research suggested many teenage accidents go unreported. “We believe one in four teens is going to be in a crash in their first six months of driving,” Dr. Klauer told Feiler.
As a natural extension of its UBI program, American Family understands the benefits mobile technologies can have when addressing the concern parents have over their teens’ distracted driving. American Family’s driver safety program — KnowYourDrive, uses telematics to collect data and rank each driver and, partnering with TrueMotion, enables customers who download and use their mobile app to receive feedback on their actual driving. This combined approach results in policyholder premium discounts based on their actual driving. In addition, TrueMotion Family, an app focused on helping teens become better and safer drivers. enables parents to see how and where their teens are driving, even when they are not in the car with them.
Based on True Motion’s latest research results based on actual driving from more than 27,000 adult and teen drivers who took 4.5million trips and logged more than 68 million miles during the first quarter, the average driver spends approximately 12 percent of each trip engaged in some manner with a smartphone, making both Travelers’ and American Family’s telematics and smartphone app-fueled UBI program campaigns a winner.