Telematics technology is so much more than the little black box. Several experts offer insight into the potential for innovation to minimise the need to make a claim altogether
The benefits of telematics technology are well established. At the beginning of this year, the British Insurance Brokers’ Association (BIBA) reported evidence from Marmalade, a specialist in telematics insurance for young drivers, which highlighted the impact of this type of policy on road safety. Marmalade’s telematics customers were three times safer than the UK average, with only one in 15 having an accident within the first six months of passing their test compared to the UK figure of one in 5.2.
Over the past 12 months, telematics has had a strong effect on pricing, too, according to Consumer Intelligence. Under-25s have seen the price of their annual policies fall by 11.9% as they benefit from the continuing growth of telematics. Around 61% of the most competitive policies for this age group are now offered by telematics providers. However, with younger drivers paying an average £1,635 a year compared with £413 for over-50s and £629 for motorists aged between 25 and 49, there is still more work to do.
Colin Smithers, CEO of Redtail Telematics, which specialises in the technology, underlines the potential of telematics. He says: “Current telematics technology is capable of delivering lower pricing for drivers through overall risk mitigation resulting from a combination of: driver behaviour management, fraud prevention by routing out false claims and aspects of claims, rapid in-depth insight into an accident, and First Notification of Loss (FNOL) to the insurer.”
RAC head of telematics Yioti Smith agrees, explaining that the technology allows insurers to quickly locate vehicles, to understand how incidents unfold and their severity, defend and detect fraudulent activity, and reduce claim duration.
But this isn’t enough for innovators who are looking to take the technology further. They aim to make prevention the unique selling point of telematics.
The RAC, for example, has given every driver who takes out its black box car insurance and opts for breakdown assistance cover, or who already has that service, automatic access to its new state-of-the art ‘connected’ breakdown service, which remotely transmits information from vehicles’ on-board diagnostics systems to the RAC, allowing important faults to be identified and fixed at the earliest possible opportunity.
Smith says: “The technology is allowing us to revolutionise the way in which we have been providing breakdown services for the last 120 years by enabling us to become proactive in our service delivery.”
“The benefits are centred around improving the customer’s experience and minimising their time off-the road, or by the side of it. In the event of a breakdown, the advanced insight provided by the ‘connected’ telematics device enables our patrol force to arrive better prepared as they already know the probable cause of the fault prior to inspecting the vehicle. Our proactive approach has also meant that we now find ourselves fixing more vehicles at people’s homes rather than on busy and dangerous roads, which is of course a clear advantage.”
SmartWitness is another innovator in telematics, specifically video, which CEO Paul Singh describes as “the next step in telematics”.
He says: “Telematics detects and reports on driving events only-video goes one step further and actually shows you why an event occurred, allowing you to use that evidence to identify driver training needs, provide post-incident analysis and support in the event of a claim.”
“Our technology provides FNOL with HD video within seconds of an incident occurring, allowing insurers and claims companies to make informed decisions on liability and to respond quickly, mitigating any increased costs due to delayed reporting and allowing them to take control of the claims process.”
For Redtail, too, telematics technology is becoming about prevention. Smithers says: “Telematics is no longer just about using black-box technology to simply monitor drivers. We can influence driver behaviour by assisting our insurance clients to determine those riskier aspects of a driver’s performance and actively engage on a regular basis with the driver about where there’s room for improvement. This includes both their driving style and the when and where as well, teaching a driver to avoid higher risk times and places where possible.”
“Outside of prevention, our ability to reconstruct crash details almost immediately means we can break down the causes as well as a range of other data to produce accurate insight, which reduces fraud and speeds up the claims process. It is simply astonishing how many hours and miles of difference there can be between the actual time and place of the accident and that told on the claim form.”
Going forward, further integration is high on the agenda for the RAC, as it works to increase the number of beneficiaries of telematics. Smith says: “The longer term plans for the RAC are all about integration of our technology, knowledge and know-how, with the vehicle manufacturers to ensure these benefits are not limited to just those with a black box installed. In the shorter term, we continue to work with insurers, leasing companies and other motoring service providers in order to differentiate and enhance existing offerings.”