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The future of claims

Telematics data transmission could be used to automatize and expedite claims processing

Telematics has revolutionised the motor vehicle insurance industry and continues to provide new services and products, but perhaps there is one area that has pretty much remained unaffected: the claims process.

The telematics revolution began with usage-based insurance models that made policies more affordable for people who only used their car once in a while. Then, driving style monitoring made it possible to extend policy advantages and benefits to the most conscientious and safest drivers. Value-added services such as geo-location in case of theft and automatized emergency alerts in case of accidents made telematics insurance policies even more desirable.

Even insurance companies have begun using predictive analytics models to mine the vast trove of available telematics data in order to develop pattern recognition algorithms that allow them to understand what is happening on the roads and even accelerate claims processes, especially limiting the possibility of inadvertently clearing a fraudulent claim.

Interestingly, however, the initial step required in any insurance claims process – signalling the accident and providing the information – has hardly changed at all since the introduction of mandatory car insurance in the 1930s. Let’s take a closer look at this.

Telematics devices installed in vehicles allows us to monitor a vast series of data ranging from ambient temperature and road conditions to braking and speeding information and geo-location, as well as the precise timing of all monitored events.

However, if we collide with another vehicle, the normal claims process still requires us to manually fill out a collision form, deliver the form together with statements by the drivers involved – and those of any witnesses – to the insurance company. In the case of serious accidents, police need to intervene, make measurements, come to conclusions and write up their own report.

And yet, telematics data collection is always on – and it has all the answers. It allows us to detect crashes, even minor accidents. Geo-location allows us to monitor the direction and speed of all vehicles involved in an accident. Indeed, certain telematics products also include video recording capabilities. This means that telematics provides clear and precise information that comes without the bias of individual descriptions of what happened in an accident. And that is just what insurance companies need for claims processing.

So why not automatically transmit all the relevant data to insurance companies at the exact moment an accident occurs? Will automatized claims processing be the next frontier of telematics?

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