Telematic Insured Drivers to Increase to 19 Million by 2017

By Frank Griffin
TMCnet Contributing Writer

The use of telematics for insuring car drivers is a hotly debated topic. Although the technology would benefit the driver greatly, issues of privacy and information gathering methods by insurance companies has many consumers and leaders questioning this type of access by a private organization into the lives of their customers.

As Connected Cars become the norm car manufacturers are assessing whether they should share information about the vehicle with other industries such as insurance companies. The report written by SBD (Secured by Design) points out many of the possibilities and hurdles facing telematics as it applies to the automotive insurance industry.

Considering the uphill battle facing this technology and its application the report forecasts 19 million drivers will have insurance policies with a form of telematics in their vehicle by 2017. The vast majority of this growth will come from the U.S. and Europe.

The full adoption of telematics is not if but when, because auto manufacturers are introducing Connected Car technology into their models. The question becomes should insurance companies have access to this information to determine if they will insure the driver. This type of access gives an insurer driver behavior such as speeding, braking and maintenance of the vehicle. This data can be used to deny coverage or charge a premium based on guidelines the company sets.

Telematics uses hardware and software in a vehicle to gather information to communicate wirelessly about the vehicle. The application was intended to give the driver location information, road side service and vehicle recovery. As the technology started growing and it was being adopted by more car manufacturers insurance companies saw an opportunity to use the technology in their industry.

Once most of the issues including privacy are settled telematics will give the driver and insurance companies information which will greatly benefit both parties.

The report also looks at the positive and negative impacts of telematics insurance and suggests ways in which manufacturers and insurers can work together to increase the adoption of this technology. The conflict also extends between these two parties as they try to find out ways to control the data the vehicle is producing. Issues of FNOL (First Notification of Loss) can determine who is liable for damages to the vehicle whether there was an accident or mechanical failure.

The analyses by Vishnu Muralidharan points out the impact of telematics on fraudulent claims, problems insurance companies face, customer churn, regulations, and the global view and implementation in other countries.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.