Insurance Telematics driven by the need to save money on transport costs

Motorists are all experiencing the pressures from higher oil and fuel prices. The past concerns and criticism of the “Big Brother” insurance system or insurance telematics seems to have disappeared – and might allow for savings through less expensive car insurance premiums!

On Insurance Chat we have discussed vehicle and insurance telematics in some detail and we expect that many further discussions will be taking place in boardrooms between insurers and telematics providers!

International Study

We would like to share a few interesting findings on the perception about insurance telematics amongst motorists in the UK. This appeared in a story by Leigh Jackson under the title “Three-in-four drivers willing to try telematics” and focused on research from Towers Watson.

Amongst the findings are the following:

  • More than 75% of drivers would be willing to pilot telematics schemes in order to save money on their insurance.
  • More than two-thirds of UK drivers aged over 35 would consider having a device fitted in their car.
  • Installing a telematics device came in second to ‘shopping around’ as a way of saving money on car insurance, with 48% selecting it as an option, in preference to reducing the level of cover or increasing the voluntary excess on a policy.

What about the concerns with regards to privacy?

Interesting findings on privacy concerns are:

  • Consumer interest in telematics is tempered by concerns over data privacy.
  • The length of time that an insurance company was permitted to hold data may have a big impact on acceptance levels.
  • If data were to be held for five years, only 11% of respondents said they would be interested in a policy and 55% said they would not.
  • If this retention period was reduced to a month, 23% said they would potentially buy a policy and only 26% would still reject the idea.

European Court of Justice ruling on Gender

The interest in Insurance telematics appear to have been boosted by the recent ruling by the European Court of Justice that it will be illegal to use gender as a basis for pricing insurance and pension products from December 2012.

As a result of the ruling, a large majority of respondents to the survey said they expected car insurance prices for women to rise significantly.

Peter Lee, who is leading the global telematics initiative within Towers Watson said: “The broad assumption has been made that because the gender ruling is likely to have the greatest impact on young women drivers, they will be an obvious customer group for telematics. This research shows that drivers of other ages, both men and women, are open to the idea.”

He added: “The findings show that many people are prepared to adjust their driving behaviour in particular to potentially save money by adopting the new telematics device technology.

“The challenge for insurers is to be creative as to how individual driving activity will translate into risk assessment measures and aligning these with the consumer proposition.”

Insurance Telematics in South Africa

South African vehicle telematics companies are well equipped to provide the technology required by insurance companies and are already providing this technology. The largest insurance companies in South Africa have all either revealed insurance telematics products or the intention to launch these products.

Earlier today insurance telematics and the opportunity for growth in the vehicle telematics industry also received recognition from South African technology company Altech. I would like to quote from the story “ Big Brother in Your Car”:

“CEO Craig Venter said reduced insurance premiums will be the bait. The machine will monitor how you drive, when you drive and where you drive. It is sensitive to hard acceleration, hard braking and swerving. It prefers daytime to night time driving and it has an aversion to ropy areas. Its data might well be vital in ascertaining the cause of accidents. “

Reference was also made to the sophisticated CMax system from Digicore ,  whilst Altech believes that its telematic machine from Octo, a Fiat subsidiary in Italy, will also deliver significant growth….

We would like to urge vehicle owners to contact their insurers to enquire how they too can benefit from insurance telematics products. If you drive responsible -You too should be able to pay less on car insurance!!

Also view:

Outsurance activates technology to reward safe driving behaviour

Vehicle and Insurance Telematics

What is Insurance Telematics and how will it impact on Car Insurance?

Pay as You Drive and Car Insurance

London Conference to focus on impact of Insurance Telematics

Vehicle Telematics, Accident Investigation and Fleet Management

Image from Ctrack

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