According to ABI Research, a technology marketing research firm, the compound annual growth rate of global insurance telematics subscribers will grow by 90 percent from 2010 to 2017. That's an increase from 1.85 million telematics users to a whopping figure of 89 million.
Dominique Bonte, group director of Telematics and Navigation at ABI Research said, “While insurance telematics or usage based insurance (UBI) is far from a recent phenomenon -- US-based Progressive was already trialing solutions back in 2002 -- a renewed interest in this market has occurred over the past two years, with an acceleration in uptake, as well as a dramatic change in the very nature of UBI, migrating from pay as you drive (PAYD) to pay how you drive (PHYD) based on continuous driver behavior monitoring and analysis.”
UBI is similar to the “OnStar” system we've seen in the past, allowing customers to communicate with their insurance companies and get things like emergency services, stolen vehicle tracking, teen driver monitoring, roadside assistance, and vehicle diagnostics. And insurance telematics is just that: A way for customers and their insurance companies to interact in an ideal manner. This also includes monitoring eye movement, among other things, to determine the behavior of drivers while on the road. Safer driving is rewarded, while distracted drivers are addressed.
UBI presents a fairer element in insurance policies, discriminating customers only on their risky behaviors on the road, instead of basing their premiums on inaccurate generalizations that discriminate against genders or the elderly. However, there are still many roadblocks in place preventing the technology from flourishing, like its own arbitrary concept of a “low-risk driver,” privacy, IP litigation, price of telematics hardware, customer's lack of understanding, and a lack of standards within the system.
Most UBI hardware solutions are slapped onto the vehicle's own OBD port, which is used for diagnostics. However, future products might be installed on the car in the manufacturing process, making it difficult to upgrade.
Miguel Leiva-Gomez is a professional writer with experience in computer sciences, technology, and gadgets. He has written for multiple technology and travel outlets and owns his own tech blog called The Tech Guy, where he writes educational, informative, and sometimes comedic articles for an audience that is less versed in technology.Edited by
Jennifer Russell
