Telematics insurance policies and services provide greater value, reduced costs and improved safety
Insurance telematics is rapidly changing the panorama and outlook of the automotive insurance industry. It is steadily growing more popular and taking hold around the world, especially with younger tech-savvy drivers, but not only. In fact, insurance telematics targets all generations by delivering custom-tailored insurance policies based on “pay per use” models that provide significant savings over traditional costs, as well as a wide range of added value services such as emergency alerts and stolen vehicle recovery.
Today, the insurance telematics market remains wide open to new developments and further innovation. This, in fact, is one of Octo’s objectives: to transfer the full potential of telematics to the insurance sector, expand the range of automotive insurance products and provide innovative products and services that will satisfy the growing request for consumer safety.
And data from a wide range of different sources consistently shows that drivers – and especially younger drivers – are less likely to be involved in accidents if they are using a telematics-based insurance policy.
In the UK, the Co-operative Insurance has released data showing that young drivers are 20% less likely to have a crash when using telematics, while another insurer, Ingenie, claims that telematics reduces the chances of a young driver having a crash from “1 in 5” to “1 in 8.” Moreover, telematics also significantly lowers the cost of claims, which is a clear sign of a reduction in accidents.
Recent figures show that drivers in the UK are taking advantage of lower petrol prices to spend more time on the road. This, however, has indirectly caused car insurance premiums to rise. In the final three months of 2014, the cost of motor insurance policies rose by 2 per cent in Britain, the first consecutive quarterly increase since 2011, according to comparison website Confused.com.
Indeed, in the fall of 2014, with drivers in the UK driving on average 2 per cent more than in previous years and causing more accidents, insurers put an end to a four-year insurance policy price war.
However, while UK insurer RSA declared that low interest rates, swinging currency values and stiff competition amongst general insurers had reduced the progress of its turnaround plan in the first trimester, it revealed that motor insurance had risen a whopping 14 per cent thanks to the increased adoption of telematics or “black box” insurance devices monitoring driving habits.
Insurance telematics is also very popular in Italy, where Octo conceived and first launched automotive insurance telematics in 2005. Insurance premiums are very high in Italy due to the management costs related to widespread fraud. Insurance telematics, however, allows for a transparent relationship between insurance companies and their clients. This means that while the former abate their risk factors, the latter enjoy less expensive insurance policies. As a result, Octo currently provides insurance telematics services to 20 companies in Italy, alone.
A recent Digital Innovation Survey by Accenture entitled Seizing the Opportunities of Digital Transformation reviewing the opinions of 141 global insurance executives responsible for their company’s digital strategy revealed not only that insurers expect to reap significant benefits from digital innovation, but also, and perhaps most significantly, that digital transformers – those companies whose digital strategies, investments and activities are truly innovative – are setting the pace for the insurance sector.
And Octo Telematics is not only ready, but in place. To date, Octo, which collaborates with over 130 companies worldwide, has over 3 million active clients in Italy and 400,000 abroad, with an average 7000 new clients a day who choose an insurance policy connected to Octo telematics services.
For further information:
- Octo: What We Do
- Five Cutting-edge Telematics Trends