Page 28 - Insurance Times April 2023

characteristics like junction, crossing, intersection, flyover that help to study the behavior of a driver. Behavior based
etc. assessment throws up finer nuances of a driver's driving
characteristics or his or her driving style which determine
To address some such challenges, Insurance players have been how safe or risky a driver is on the road. Knowledge of these
trying to make gradual, yet important, strides in vehicle nuances act as a win-win for both the Auto Insurers and the
telematics technologies. Insureds. While for Auto Insurers, it could lead to bettering
the loss ratios with reduction in occurrence and severity of
Telematics Technology the accident or crash events, with real accurate timely
telematics data, this also ensures improvement in a driver's
Merriam-websters defines Telematics technology as "the
behavior leading to safe driving besides saving on premium
combination of information technology with
costs.
telecommunications especially the integration of
telecommunications networks in vehicles (as for collecting
When a vehicle is on the road, there are a variety of risks,
data on performance)".
gleaning the data of which throws many interesting insights
which can be used not only for rewarding safe drivers but
Telematics data refers to a variety of information that are
also driver coaching
collected in real time from drivers using various sensors that
1. Speeding - As per NHTSA (National Highway Traffic Safety
are either retrofitted in the vehicles (like On Board Diagnostic
Administration), for more than two decades, speeding
kits or OBDs) using OBD ports or using mobile applications.
has been the cause of approximately one-third of all
OBDs, due to them being hardware devices, are expensive
motor vehicle fatalities and in 2020, it was a contributing
and cannot be expected to be fitted in every vehicle. This is
factor in 29% of all traffic fatalities. While such aggressive
apart from other associated costs that come along with
speeding may be characterized by say traffic congestion
registering the devices and maintaining them, besides such
if one wants to avoid running late, contextualizing
devices becoming outdated in no time. Mobile based
speeding may throw reasonable predictions on what led
telematics app solutions are, hence, becoming more popular.
to it. Data from telematics may throw useful information
like if speed was within the posted speed limit given other
Factors driving Telematics Technology
ambient conditions being normal like fewer vehicles on
adoption the road, good road conditions, normal weather etc.
Current lingering inflation, due to geo-political conflict has
2. Cornering - Cornering, also referred as lateral
been driving customers to scout for more cost-effective digital
acceleration, is a measure of centripetal force applied
offerings with better coverages and experience. A survey
when a vehicle is moving on a curved road or is taking a
conducted by Nationwide in Dec 2020, found that around
right or a left turn. A sharp curvature needs slowing of
two-thirds of consumers were open to allowing telematics to
the speed so that a limited friction provides appropriate
capture driving behavior if it resulted in premium discounts.
acceleration to take a smooth turn. Too sharp a turn
Mobile App based Telematics comes as a usage-based offering
may lead, in extreme instances, to overturning of the
that makes the underwriting risk factors more deterministic
vehicle. Apart from additional wear and tear that the
and helps safe driving Insureds to save premium costs besides
vehicle may undergo, telematics data related to
offering them various engagement programs that enhance
cornering provides useful information of a driver's
customer experience like reward points, discount vouchers
behavior on the road.
on shopping etc.
3. Braking - Telematics data may give rich insights on
What data Telematics solution collects? harsh Braking where and when it took place. A hard
To scratch beneath the surface, a mobile based Telematics brake puts brake pads & other brake components into
app not only tracks information like geo-spatial data that great stress and results in early wear and tear of these
provides information on vehicle movement, but it also uses components. A hard braking behavior also indicates high
various sensors installed in smartphones such as risk of a driver losing control of the vehicle that may lead
accelerometer to track acceleration, gyroscope to track the to an unfortunate outcome.
rate of rotation across the three sensor axes, magnetometer
to track the ambient magnetic fields across three axes and 4. Acceleration - A hard acceleration apart from being a
host of other sensors to track a variety of useful information fuel guzzler, also leads to wearing off of the engine and

The Insurance Times April 2023 25