How Auto Insurance is Using Smartphones
Recent data from Newzoo’s Global Mobile Market Report has found that 77% of Americans use Smartphones to do a variety of activities from social media, web browsing, gaming apps such as Words With Friends, connecting fitness trackers, and even pay bills. Food delivery and grocery drop off app usage has surged during the pandemic. There’s no question that smartphones will continue to be the future which is the case for the auto insurance industry where several carriers are offering telematics applications for drivers.
In health and fitness, smartphones have provided an incredible resource. In the early stages of the pandemic, my son and I began using fitness trackers as a way to increase our health to a new level and stay engaged. In addition to virtual gym classes, we have been walking an average of four miles per day to supplement cardio workouts. Since, the easy access from my smartphone allows me to frequently check my step count and calories burned throughout the day to see where I am at. The app also allows users to compete in challenges with friends to see who can rack up the most steps! The health tracking app keeps me engaged in my exercise routine and positively helps me achieve my fitness goals.
In the insurance world, carriers are using telematics apps to gather valuable data. Telematics aims to improve policy ratings and loss predictions. Telematics is a method of collecting information about driving habits. The modern day smartphone app replaces the ‘plug in’ devices used in vehicles years ago. The metrics measure information on days and times traveled, how hard a driver brakes, the rate of acceleration and speed, among other factors surrounding driving behaviors. The collected data will provide personalized feedback about an individual’s driving habits which can also result in safe driver rewards or discounts on insurance premiums.
Telematics data provides additional underwriting information to insurance companies to be used in addition to the initial screenings used at the time an insured applies for coverage. Tracking the data will continue to assist insurance companies in calculating rates and predicting the number of claim losses. Improving the accuracy and quality of information used by insurance carriers will create more stable rates and possible discounts for consumers.
Telematics apps also allow families to promote safe driving with their new drivers. Additional features of telematics include GPS and trip mapping capabilities to assist young drivers develop safe driving habits. As the apps provide a driver rating score, many families share in friendly competition with their app usage, where each driver strives for great scores!
While, the response from customers who use telematics continues to remain positive, there are still some who are concerned about the privacy of telematics. To lessen those concerns, telematics promotes safe driving and can collectively make insurance premiums more affordable and consistent. If most drivers on the road know their driving behaviors are being tracked by their insurance company, they will be more likely to slow down, follow at safe distances and stay off cell phones while driving. As a result, there will be fewer accidents, fewer speeding tickets and less distracted drivers on the road. Further resulting in fewer claims, lower loss-rations, less rate increases, better premiums and a better world for all! Telematics is the one tool that can reduce dangerous driving and make our roads safer.
Our staff will soon be participating in a pilot telematics app from one of our insurance carriers to test the technology. We have created a friendly competition amongst ourselves; the driver from our staff with the best performance at the end of the program will win a gift card! The goal of the pilot program is to learn as much as we can about the use of telematics to properly guide and educate our clients. We’ll announce the winner on social media and in the next newsletter so stay tuned!
Telematics is the future; it will provide valuable data to be used by insurance companies to predict losses and stabilize rates ultimately benefiting consumers with discounted, consistent rate structures. Very much like the fitness trackers that keep us moving, the data is used to help us improve overall and represents positive change for everyone!
If you have any questions about telematics or to find out if your carrier offers an app give us a call! We are here to help promote safer driving for all!