What is the Future of Insurance Telematics in the UK?
The Meaning of Telematics Insurance:
Telematics insurance requires the installation of a device on the vehicle, called a “Black Box”. This device communicates with on board instruments to monitor a series of parameters like when the vehicle is driven, the distance driven,the speed of the vehicle during the journey etc. Insurance providers using GPS system can assess your driving ability your location, how long you've been driving for, how rapid or measured your acceleration is, how harsh or smooth your braking is? and many many more. All you need to do is have a Telematics 'Black Box' installed into your car. Let's get more familiar with Insurance Telematics Solution: Traxroot Logic
Future of UK Insurance Telematics Market :
With car insurance premiums expected to rise over the next few years in UK as drivers are increasingly looking to technology to reduce the cost of their insurance. For lowering the premium amount there’s one technology that is heading the way in 2020 that is telematics insurance. In the UK, young drivers are paying very high and unsustainable insurance premiums for many years, because time series demonstrate that the risk profile for a young and unskilled driver is drastically higher than the average.
One out of four drivers meet with an accident in the first year of driving
29% of the road accident involve at least one driver aged between 16 and 22.
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Therefore the most relevant benefit of using a Pay as you Drive Insurance also called as Insurance Telematics (especially for young drivers) is that the insurance premium is lower for those drivers that are more skilled or prudent than their peers, as they have lower probabilities to be involved into an accident. Therefore motor and car insurances are high in demand.
Next step in Telematics
Telematics means big business for the automotive industry in general. According to Mckinsey, vehicle telematics data could create US$1.5 trillion in future revenue for automakers. By charging premiums in exchange for cover, insurers can reinvest profits into other assets – Like Bonds, stocks, including short-term investments, thus diversifying their risk even further. For maintaining the safety of your vehicles read Fleet Management Software & Maintenance Solutions
Currently, It deal with driver behavior data collection data direct from the vehicle, via installed black boxes, ADAS (Advanced Driver Assistance Systems), IoT is proven to reduce accidents but as the technology tends to be in high end, newer vehicles – claims costs are higher for repair so, again, insurers have been reluctant to reward drivers with this tech through premium discounts. Learn more about 8 ways to improve Driver Behavior.
Next generation devices will provide video evidence of incidents leading to claims. It will therefore play a key role in helping the insurance industry tackle fraud, as well as improving the claims journey for both insurer and policyholder. Driver scoring will be enhanced through more accurate driver behavior monitoring. This will enable drivers to reduce their own risk, improving safety on our roads. Also check out - List of countries contributing to the success of usage-based insurance
Contact our Insurance Telematics Specialist today to know more about how Traxroot's Pay As You Drive (PAYD) Insurance programs can assist your company. We can help you set up a ready to market UBI program in less than 24 hours.