From Black Boxes to Smart Apps: Developments in Insurance Telematics
Insurance telematics involves integration of telecommunication and informatics to offer personalized and data-based insurance solutions to the end user. It uses smartphone apps, GPS-enabled apps, and more to collect data regarding the user. This data is analyzed to assess risk and customize premium. Insurance telematics helps track location and monitor driver behavior on different parameters such as location, braking patterns, distance, mileage, and speed. It also monitors the usage of mobile phones while driving. Insurers use this data along with usage-based insurance programs to tailor premiums for policyholders . Drivers regarded safe are rewarded with lower premiums, and drivers regarded risky are educated about safe driving practices and sometimes charged higher premiums. Usage-based insurance is the commonly adopted model by insurers in insurance telematics. It includes v ariations such as Manage-How-You-Drive, Pay-How-You-Drive, and Pay-As-You-Drive within the usage...