Telematics technology in your car
The experts agree; the global insurance industry is primed to undergo a host of technological changes over the coming years and in Australia we’re already seeing the effects of the insurtech craze.
In fact, according to PwC Australia’s 2017 Global Insurtech Report, approximately 45% of insurance providers have already partnered with insurtech players to provide innovative and consumer-friendly solutions to their customers.
One particular insurtech trend that is yet to reach its full potential downunder, however, is the use of telematics technology in the car insurance industry. A popular branch of technology that is beginning to take hold abroad, this particular piece of insurtech innovation has the potential to save lives, time and for the right kind of driver, a hell of a lot of money.
But what is ‘telematics’, where is it being used, how might it affect your car insurance premium and what might it do for road users in the future?
What is ‘telematics’?
‘Telematics’ is a broad umbrella term to describe the technology that allows for the long-distance communication of information.
But how does that relate to your car?
Well, the chances are that you’ve already got a bunch of telematics technology built (or installed aftermarket) in your current ride making it smarter and safer to drive. This is because the broadness of the term refers to things like GPS navigation, hands-free mobile phone systems and automatic driving assistance systems. Basically, any device that collects data and transports that over long distances in an instant can be seen as a telematics technology.
While these ‘smart’ technologies are already impacting your car insurance policies, the most exciting and potentially influential developments in telematics across the automotive industry are yet to fully take hold in Australia.
Where is telematics car technology currently being used?
Telematics technology is already installed in cars all around the world, with plans to have it rolled out on an even larger scale during the next few years. For example, eCall or emergency assistance devices, are already popularly used throughout Europe in countries like Slovenia, Sweden and Italy with claims of reducing emergency response time by as much as 50%. In fact, as of March 2018, every new car sold throughout the EU will be legally required to have an eCall device installed in the vehicle.
But it isn’t just eCall technology that comes under the telematics umbrella. In the UK and the US, insurers have already begun experimenting with the data insights that telematics devices can deliver to make more tailored car insurance premiums for their customers - sometimes this is known as black box insurance. Taking one British insurer as an example, Insure The Box require you to have the device installed before you’re officially covered, recording things like the kilometres you cover, when you’re on the road, how fast you drive and where you’re driving. You can also review your driving habits online, and claim rewards that come with being a safer driver.
While the eCall branch of telematics technology is less prolific down under, there has been some headway made over recent months. In December of 2017, Western Australian telecommunications firm, IMR Technologies announced a partnership with car dealer DVG Automotive to implement eCall technology in a test car and have these devices installed and sold in dealership vehicles throughout 2018.
These devices are being used more frequently, however, in fleet cars across the country. In April of 2017, Toyota Fleet Management announced a telematics offering for its fleet vehicles which would allow companies to have access to real-time data from their fleet cars in an attempt to promote safer driving practices, optimise fleet asset usage and simplify record-keeping processes for fleet managers.
How could telematics technology affect your car insurance premium?
Car insurance policies could get a serious makeover if telematics technology does indeed become more widespread in Australia. With a broad range of data being recorded about your driving habits, insurers would get a far more detailed idea of you as a driver, meaning a more tailored car insurance premium. Some of the benefits to come from your driving data could include:
- Usage-based car insurance - only pay for the kilometres you drive
- Savings for driving at safer times - pay less for driving during the day
- Savings for good driving habits - rarely brake suddenly or never speed and you could save
Aside from the benefits to your car insurance premium, Aussies could also have their claims process simplified with the on-boarding of eCall technology. At the moment, if you’re involved in an accident, you are required to manually jot down things like the details of any other drivers involved, number plates, the degree of damage and a description of the incident including when, where and how it occurred. But with eCall technology, the potential exists for your insurer to manage the entire claims process from the moment of impact, automating a lot of the tedious tasks that go with filing a car insurance claim.
What does the future hold for telematics technology?
This type of technology won’t making flying cars a possibility anytime soon, but the future certainly looks full of possibilities for road users, aside from slashing their car insurance premium or saving them a bunch of time on claims.
Stolen vehicle tracking and recovery
For the average Aussie, their car is probably their largest portable, and therefore steal-able, asset. But the days of worrying if your car will be nicked from the company car park or even worse, your own driveway, could soon be over. With a telematics device installed in your car, you would be able to use the GPS function to track its whereabouts remotely via web or cloud-based software, which means that if your car is stolen you’ll be able to see where the culprit is taking it, improving the chances of recovery.
The good news is that, over the long term, the sheer knowledge that these systems exist in vehicles could act as a serious deterrent for car thieves.
Emergency assistance (eCall)
Arguably the most important development that could come from this new technological trend, eCall technology has already been rolled out in parts of Europe and has the chance to save lives through a speedier, more efficient emergency assistance system.
Basically, when you’re involved in an accident the device installed in your car will be able to detect the sudden impact and will use your vehicle’s in-built voice call function to make an emergency call. Alternatively, you can also manually make this call via the simple press of a button if you’re in need of emergency assistance - the best news is that even if you’re unable to talk, the GPS function of the eCall technology will share your location with the respondents, meaning help is on its way.
Smarter driving in the future
No, your car still won’t fly, but this kind of technology could have serious implications on how we drive in the future. With data potentially being collected from such a large group of vehicles in the future, infrastructure and software aimed at using our roadways more economically could be developed. Some of the positives that could come from these big data insights include alerts for dangerous situations as well as areas of high-traffic to avoid on the road.
What are the potential problems with telematics technology?
Like many of its ‘big data’ brothers and sisters, telematics technology has attracted a myriad of criticisms, chiefly around the liability it could cause insurers, the privacy of its users and whether it will even be needed in the medium to long term.
First up, as a device that is already frequently used by fleet companies across the world, the issue of how liable a company or business may be for a reckless driver has been raised. Think for a moment, about a driver who is responsible for a death or serious injury on the road, only for their telematics data to reveal a long and riddled history with risky driving behaviours. Without legislation to address this kind of liability in Australia, telematics technology poses a problem for companies and insurers looking to implement the technology on a wider-scale.
Another issue surrounding this tech is the concerns over the privacy of individual consumers. While the data collected might nab you a cheaper car insurance premium, it is also an extremely comprehensive record of your daily travel and there are questions over how an insurance provider might use that data, not to mention whether online security systems are strong enough to combat any attempts to hack into what would be a very valuable database.
Driverless vehicles are on the way
And finally, some insurtech experts argue that telematics technology might not be worth investing in if we’re moving into an age of automated, driverless vehicles anyway. Who needs the data on driver behaviour if humans are no longer driving, right?
Whether telematics technology really takes off or not, Aussies will need a comprehensive car insurance policy to keep their precious set of wheels covered and while few providers offer eCall or black box tech right now, you can still find a feature-filled policy using Mozo’s car insurance comparison tables.