More than nine in ten (95%) insurance chiefs can see clear benefits of using telematics and the data science that powers it – although UK insurers are falling behind their European counterparts in fully appreciating the impact that telematics can have beyond risk modelling and potentially reducing car insurance premiums.
At a time when GPS, smartphones and speeding have caused road deaths to hit a 10-year high – and use of in-car dash-cams has increased 20-fold in five years – telematics has a crucial role to play in helping motorists to drive more safely and enabling insurers to manage and predict risk more effectively. With this in mind, The Floow surveyed insurance decision makers in the UK, mainland Europe and the US, asking them how they thought telematics could help the motor insurance industry in the years ahead.
In the UK, decision makers had a clear, if narrow, sense on how telematics could help. Compared to their European counterparts, UK respondents were most likely to focus on improving risk modelling for high risk drivers (44% compared to 38% of decision makers in mainland Europe) and reducing insurance premiums for drivers (40% versus 34%).
Decision makers in mainland Europe were far more likely to identify a broader range of benefits that telematics could bring to the industry. Factors mentioned here included:
- Providing the data science that makes car sharing/ ride sharing a scalable reality (43% Vs. 20% in the UK)
- Improving the insurance industry's understanding of mobility (38% Vs. 20% in the UK)
- Managing traffic congestion (34% Vs. 18%)
As a result, European insurance decision makers were far more likely than their UK counterparts to see the difference that the adoption of telematics could make on improving road safety in general (47% compared to 20%). Moreover, The Floow’s research suggests that compared to the UK, European respondents were far more likely to identify a variety of benefits in harnessing telematics beyond lowering premiums and risk modelling.
David James, Chief Operating Officer at The Floow commented: “Our findings reveal differences in how insurers around the world quantify the value of telematics. Whilst those in mainland Europe are leaving no stone unturned, it appears that decision makers in the UK insurance industry are yet to look beyond the impact on insurance premiums.
“I have just returned from the Government’s visit to South Africa where The Floow signed a major new deal, which will see our technology play a significant role in helping the financial sector to tackle road accident propensity which is on the rise. Telematics helps insurers to re-think risk but in its fullest sense our technology enables much more. We are already advising Governments on congestion and pollution, our education programme is proven to make people better, more self-aware drivers – and as we enter a new age of smart mobility, telematics will be at the forefront of a new era in car sharing. Telematics will make roads safer and used properly by insurers telematics will become key to helping them retain customers and build loyalty. The impact telematics can have on lowering insurance premiums for high risk drivers is just the beginning of the telematics story.”